TOMI Environmental Solutions (TOMZ) FY2025 10-K Risk Factors: 5 New, 6 Dropped

What the changes say

Cash fell to $88,000, making going-concern uncertainty and 12% convertible-note obligations central risks.
SteraMist equipment now depends on one manufacturer, while demand errors could cause inventory write-downs or order shortfalls.
New risks broaden exposure to geopolitical disruption, climate regulation, extreme weather, financial controls, and environmental-product requirements.

What changed since the prior 10-K

New

NewRisk Related to Our Company and Business
We are subject to risks associated with international conflicts, geopolitical instability, and related economic disruptions
International conflicts, sanctions, trade restrictions, and geopolitical instability could disrupt supply chains, energy markets, international customers, and operations.
NewRisk Related to Our Company and Business
Climate-related risks, evolving environmental regulations, and increased focus on environmental, social and governance matters could adversely affect our business, financial condition and results of operations
New climate and environmental requirements or extreme weather could raise costs, require product or process changes, and disrupt suppliers and customers.
NewRisk Related to Our Company and Business
We rely on demand forecasts to place orders with our third-party suppliers. Accurately predicting demand is inherently uncertain and may be adversely affected by factors outside our control, including competitive product introductions, shifts in customer preferences and changes in general economic conditions
Incorrect demand forecasts could leave TOMZ with obsolete inventory or supplier capacity shortfalls, with obsolete-inventory reserves at $500,000 in 2025.
NewRisk Related to Our Company and Business
If we are unable to develop and maintain an effective system of internal controls over financial reporting, or if the requirements of being a public company strain our resources, we may not be able to accurately report our financial results in a timely manner
Weak financial reporting controls or public-company compliance demands could delay or misstate results and undermine investor confidence.
NewRisk Related to Our Securities
Our outstanding convertible notes impose financial obligations, carry risks of dilution upon conversion, and may adversely affect our ability to raise additional capital
The $3.1 million of 12% convertible notes creates recurring interest obligations, dilution risk, and potential default or acceleration with only $88,000 cash.

Dropped

DroppedRisk Related to Our Company and Business
Failure 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
DroppedRisk Related to Our Company and Business
Our operations are subject to environmental laws and regulations that may increase costs of operations and impact or limit our business plans
DroppedRisk Related to Our Company and Business
Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory
DroppedRisk Related to Our Company and Business
We 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
DroppedRisk Related to Our Company and Business
We 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
DroppedRisk Related to Our Company and Business
The 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

Reworded

100% rewrittenRisk Related to Our Securities
We 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
Potential dilution increased from 5.7 million securities-related shares to approximately 6.0 million, adding 66,666 unvested RSUs vesting through May 2027.
84% rewrittenRisk Related to Our Securities
We may not be able to maintain compliance with Nasdaq’s listing standards, which could limit shareholders’ ability to trade our common stock
The risk now identifies two concurrent Nasdaq deficiency proceedings, a May 18, 2026 compliance deadline, and a possible shareholder-approved reverse split.
80% rewrittenRisk Related to Our Company and Business
Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have enough of our products or such quantities at an acceptable cost, and reduces our control over the manufacturing process
SteraMist manufacturing shifted from two manufacturers to a single manufacturer, making disruption immediately threaten customer orders and revenue.
Was: Our 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
61% rewrittenRisk Related to Our Company and Business
We have a history of losses and may not be able to achieve profitability in the future
The 2025 loss decreased to $3.7 million, but accumulated deficit rose to $58.1 million and headcount cuts could impair development and growth.
58% rewrittenRisk Related to Our Company and Business
There is substantial doubt about the Company’s ability to continue as a going concern
Cash declined from $665,000 to $88,000, while 2025 losses were $3.7 million and operating cash use was $1.2 million.
52% rewrittenRisk Related to Our Company and Business
We are subject to a variety of risks associated with doing business internationally
The description now focuses on international sales through representatives and distributors rather than significant international operations and manufacturing.
22% rewrittenRisk Related to Our Company and Business
Our success depends on our ability to adequately protect our intellectual property
The risk is substantively unchanged, with only minor wording edits to the list of reasons intellectual-property protection may fail.
22% rewrittenRisk Related to Our Company and Business
If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed
The export-control risk removes the reference to laws in the United States and elsewhere, without adding a new consequence.
21% rewrittenRisk Related to Our Company and Business
We have a limited management team size which may reduce our ability to effectively manage our business operations as it grows

All 34 risk factors

Headings as the filing states them, in filing order.

Risk Related to Our Company and Business

01We have a history of losses and may not be able to achieve profitability in the future61% rewritten
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
03our ability to achieve and maintain compliance with all regulatory requirements applicable to our SteraMist ® products
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
05Our agreements with restoration industry specialists are not exclusive, which may allow our competitors to sell their products and services to such specialists
06Our success depends upon broad market acceptance of our technology that has not yet been achieved in the Hospital-Healthcare market
07There is substantial doubt about the Company’s ability to continue as a going concern58% rewritten
08We are subject to a variety of risks associated with doing business internationally52% rewritten
09We are subject to risks associated with international conflicts, geopolitical instability, and related economic disruptions New
10If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed22% rewritten
11Climate-related risks, evolving environmental regulations, and increased focus on environmental, social and governance matters could adversely affect our business, financial condition and results of operationsNew
12Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have enough of our products or such quantities at an acceptable cost, and reduces our control over the manufacturing process80% rewritten
13We rely on demand forecasts to place orders with our third-party suppliers. Accurately predicting demand is inherently uncertain and may be adversely affected by factors outside our control, including competitive product introductions, shifts in customer preferences and changes in general economic conditionsNew
14Our success depends on our ability to adequately protect our intellectual property22% rewritten
15third parties may be able to develop or obtain patents for similar or competing technology
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
17We may be unable to enforce our intellectual property rights throughout the world
18We face significant competition in our industry, some of which have longer operating histories, more established products or greater resources than we have currently
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
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
21We have a limited management team size which may reduce our ability to effectively manage our business operations as it grows21% rewritten
22Our 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
23Our 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
24The 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
25If we are unable to develop and maintain an effective system of internal controls over financial reporting, or if the requirements of being a public company strain our resources, we may not be able to accurately report our financial results in a timely mannerNew

Risk Related to Our Securities

26Our stock price is volatile and there is a limited market for our shares
27We do not intend to pay dividends for the foreseeable future
28We 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 shareholders100% rewritten
29Our outstanding convertible notes impose financial obligations, carry risks of dilution upon conversion, and may adversely affect our ability to raise additional capitalNew
30Substantial future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price
31We may not be able to maintain compliance with Nasdaq’s listing standards, which could limit shareholders’ ability to trade our common stock84% rewritten
32We 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
33Our 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
34The concentration of our common stock ownership with our executive officers, directors and affiliates will limit your ability to influence corporate matters

TOMI Environmental Solutions (TOMZ) risk factors, FY2025 10-K

What the changes say

What changed since the prior 10-K

All 34 risk factors

Other TOMI Environmental Solutions 10-Ks