TOMI Environmental Solutions (TOMZ) risk factors, FY2024 10-K

Risk Related to Our Company and Business

1. 01We have a history of losses and may not be able to achieve profitability in the future
2. 02Our SteraMist® family of products currently accounts for the majority of our revenue, and our success is almost completely dependent on the success of our SteraMist® brand
3. 03our ability to achieve and maintain compliance with all regulatory requirements applicable to our SteraMist® products
4. 04We do not have long-term customer contracts, and our sales history or backlog cannot be relied upon as an indicator of our future sales
5. 05Our agreements with restoration industry specialists are not exclusive, which may allow for our competitors to sell their products and services to such specialists
6. 06Our success depends upon broad market acceptance of our technology that has not yet been achieved in the Hospital-Healthcare market
7. 07There is substantial doubt about the company’s ability to continue as a going concern
8. 08We are subject to a variety of risks associated with doing business internationally
9. 09If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed
10. 10Failure to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”), and similar laws associated with our activities outside of the United States could subject us to penalties and other adverse consequences
11. 11Our operations are subject to environmental laws and regulations that may increase costs of operations and impact or limit our business plans
12. 12Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have sufficient quantities of our products or such quantities at an acceptable cost and reduces our control over the manufacturing process
13. 13Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory
14. 14Our success depends on our ability to adequately protect our intellectual property
15. 15third parties may be able to develop or obtain patents for similar or competing technology
16. 16The risk of loss of the Company’s intellectual property, trade secrets or other sensitive business information or disruption of operations could negatively impact the Company’s financial results
17. 17We may be unable to enforce our intellectual property rights throughout the world
18. 18We face significant competition in our industry, some of which have longer operating histories, more established products or greater resources than we have currently
19. 19If the quality of our products do not meet the expectations of our customers, then our brand and reputation or our business could be adversely affected
20. 20Our long-term growth depends, in part, on our ability to enhance, develop, market and sell new products, and if we fail to do so we may be unable to compete effectively
21. 21We have a limited management team size which may reduce our ability to effectively manage our business operations as it grows
22. 22We are dependent on our key personnel, the loss of whom could adversely affect our operations, and if we fail to attract and retain the talent required for our business, we could be materially harmed
23. 23Our operations, and those of our suppliers, are subject to a variety of business continuity hazards and risks, any of which could interrupt production or operations or otherwise adversely affect our performance and results
24. 24Our products are subject to potential product liability claims which, if successful, could have a material adverse effect on our business, financial condition and results of operations
25. 25The misuse of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business
26. 26We may seek to grow our business through acquisitions of complementary products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, could harm our business, financial condition and operating results
27. 27The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members

Risk Related to Our Securities

1. 28Our stock price is volatile and there is a limited market for our shares
2. 29We do not intend to pay dividends for the foreseeable future
3. 30We have a substantial number of options, warrants, convertible notes and convertible preferred stock outstanding, which could give rise to additional issuances of our common stock and potential dilution of ownership to existing shareholders
4. 31Substantial future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price
5. 32We may not be able to maintain compliance with Nasdaq’s listing standards, which could limit shareholders’ ability to trade our common stock
6. 33We are a “smaller reporting company” under the U.S. federal securities laws, and the reduced reporting requirements applicable to smaller reporting companies could make our common stock less attractive to investors
7. 34Our anti-takeover provisions could prevent or delay a change in control of our company, even if such change in control would be beneficial to our shareholders
8. 35The concentration of our common stock ownership with our executive officers, directors and affiliates will limit your ability to influence corporate matters