TOMI (TOMZ) Q1 2026 Earnings Transcript

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DATE

Friday, May 8, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Halden Shane
• Chief Financial Officer — David Vanston
• Chief Operating Officer — Elissa Shane
• Operator

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TAKEAWAYS

• Revenue -- $1.6 million, up 5% year over year and 67% sequentially from Q4 2025.
• Applicator Sales -- 139% year-over-year growth and surpassed all of 2025’s full-year total within Q1 alone.
• BIT Solution Sales -- Maintained above 2025 levels, with a consistent 21% annual growth rate since 2024.
• Operating Expenses -- Reduced by 15% from Q1 2025, while maintaining full capacity.
• Operating Cash Flow -- Positive $296,000, a $572,000 improvement from an outflow of $276,000 in Q1 2025.
• Order Backlog -- Grew from $1.6 million at year-end 2025 to $2.2 million by Q1 close, highlighting new contract wins.
• Product Revenue -- Increased $300,000 or 31%, mainly from equipment and Custom Engineered System sales.
• Service Revenue -- Decreased $234,000 or 41%, attributed to timing for project completions and service engagements.
• Gross Profit Margin -- Approximately 50%, with margin compression driven by "strategic price discounts" and a shift toward lower-margin equipment.
• Order Pipeline -- Immediate integration sales pipeline stands at $4 million across 14 customers, with 7 orders received.
• Full Company Pipeline -- Potential opportunity range projected at $22 million to $33 million, with $9 million active or anticipated for this year.
• Significant Contract -- 440,000 annual purchase orders for recurring decontamination awarded by a global medical technology company.
• Equity Raise -- 336,147 shares issued for $149,000 in gross proceeds under the $20 million equity line of credit.
• Cash Position -- Ended Q1 with $280,000 in cash and $394,000 in working capital, compared to $88,000 and $1 million, respectively, at year-end 2025.
• Regulatory Advancements -- New BIT Solution and SteraMist IHP product authorizations secured in the UK, the Netherlands, Germany, Belgium, Denmark, and Hungary.
• Merger Agreement -- Signed a nonbinding LOI to acquire Carbonium Core, with former shareholders to receive 19.99% of TOMI's outstanding shares and preferred stock, implying a $120 million enterprise value.
• Backlog Sustainability -- Backlog continues to expand even as existing orders are fulfilled, demonstrating ongoing demand and execution.
• International Expansion -- Established Total Clean Air as preferred European partner; executed sales and regulatory clearances in the UK and EU member states.
• Food Safety Sector Progress -- Case study demonstrated up to 95% reduction in sanitization testing costs for an egg food manufacturer, and contract expansion opportunities in Mexican dairy facilities.
• Loss from Operations -- $626,000, an improvement of $128,000 from Q1 2025.
• Net Loss -- $811,000 or $0.04 per share, compared to $256,000 or $0.01 per share in Q1 2025, with prior period benefiting from $535,000 in nonrecurring employee retention credit and $83,000 in related interest.
• Gross Profit -- $832,000 or approximately 50% of revenue; prior period was $952,000 or "approximately [ 6% ] of revenue in Q1 '25" with margin difference due to mix and discounting strategy.
• Integration Pipeline -- Automated integration orders total $4 million, with an additional $5 million projected for mobile equipment, support services, and corporate deployment.
• Customer Example -- Merck holds approximately $1.2 million in open estimates across five locations, representing potential upside not included in near-term order guidance.
• Major Client Wins -- SteraMist hybrid system sold to an East Coast research university and a custom system to a UK pharmaceutical manufacturer.
• Backlog Increase Drivers -- Attributed to both new contract wins and growth in recurring revenue opportunities.
• Non-Recurring Loss Exclusion -- Excluding 2025 nonrecurring credits, management claimed, "a meaningful year-over-year operating improvement."
• BIT Solution and Applicator Model -- Expanded installed base supports the razor/blade consumable revenue model.
• Future Revenue Expectations -- CEO Halden Shane said, "most definitely, we should see growth through 2026 and into '27 and beyond."
• Gross Margin Outlook -- Shane stated, "we don't plan on providing these types of discounts again," and expects margin recovery.
• Honeybee Market Initiative -- TOMI is pursuing partnership with industry association to validate SteraMist's role in bee virus control.
• Profitability Timeline -- CEO Halden Shane stated, "I think within this year, we'll be profitable."
• Robotics & Drone Market -- Company's vision includes future applications of iHP technology in autonomous vehicles and drones for decontamination.
• Convertible Preferred Terms -- If fully converted at $1 per share, estimated post-merger shares outstanding would be "somewhere in the neighborhood of $32 million, maybe $31 million."

SUMMARY

TOMI Environmental Solutions, Inc. (NASDAQ:TOMZ) delivered topline growth and operational improvements, highlighted by a 5% year over year and 67% sequential rise in revenue, and a 15% reduction in operating expenses compared to the prior year. Strategic product mix and recurring revenue gains drove further growth, supported by new contracts, a $2.2 million backlog, and a rapidly expanding sales pipeline. The merger with Carbonium Core, under a nonbinding LOI and valued at $120 million, aims to diversify TOMI into the nuclear-grade materials sector, while also advancing TOMI's integration of its SteraMist platform through regulatory and international expansion. Each element of these financial and strategic advancements was directly stated in the transcript and is fully supported by management’s commentary, underscoring the company’s ongoing shift toward higher-margin, repeatable growth opportunities and expanded geographic reach.

• During Q1, TOMI secured regulatory clearance for key markets in the UK, Netherlands, Germany, Belgium, Denmark, and Hungary, expanding the company’s international operating footprint.
• Product and integration pipelines, per management, hold an active and anticipated opportunity value of $9 million for 2026, not including longer-cycle prospects like Merck’s $1.2 million in open estimates.
• The company’s positive operating cash flow was achieved via improved working capital management and increased deferred revenue from customer deposits, providing near-term liquidity support.
• Management’s stated expectation for 2026 is continued revenue acceleration, gross margin recovery, and profitability within the year, pending progress on regulatory, pipeline, and merger milestones.
• Recent success in the food safety vertical, confirmed by both cost reduction case studies and expanded contract wins in Mexico, further supports management’s forecast for broader sector adoption.
• Chief Executive Officer Halden Shane advised that SteraMist’s entry into the honeybee disease market is in progress, with active industry engagement and planned validation studies to address global pollinator decline.

INDUSTRY GLOSSARY

• BIT Solution: TOMI’s proprietary Binary Ionization Technology hydrogen peroxide-based mist used as a consumable in SteraMist disinfection systems.
• iHP: Ionized Hydrogen Peroxide, referring to TOMI’s cold plasma disinfection technology underpinning SteraMist devices.
• SteraMist: TOMI’s flagship line of disinfection and decontamination products, leveraging iHP technology.
• Custom Engineered System (CES): TOMI’s bespoke integration offering for advanced automated facility decontamination.
• SIS: SteraMist Integrated System, an automated disinfection platform for larger facility installations.
• ELOC: Equity Line of Credit, a capital-raising facility allowing TOMI to issue shares up to a defined limit.
• Backlog: Aggregate value of customer orders received and not yet fulfilled, indicating future revenue potential.
• Convertible Preferred Stock: A class of preferred equity that can be converted into common stock, used in TOMI’s proposed Carbonium Core merger structure.
• NSF Standards Department for Biological Safety Cabinets: Regulatory body establishing guidelines for safety cabinets in laboratories, relevant to TOMI’s BSC decontamination solutions.
• BSC: Biological Safety Cabinet, an enclosed workspace intended to protect operators and the environment from pathogens, targeted by SteraMist solutions.

Full Conference Call Transcript

Halden Shane: Thank you, John, and thank you all for joining us today. Q1 2026 marked a healthy start to the year, highlighted by a pivotal strategic development for TOMI. Our first quarter results demonstrated significant momentum across key metrics. Revenue increased by 5% year-over-year and 67% sequentially from Q4 of 2025. Notably, applicator sales in Q1 alone surpassed our total applicator sales for the entire year of 2025, representing a remarkable 139% year-over-year growth. This success underscores the effectiveness of our razor/blade consumable model as we expand our installed base. Additionally, BIT Solution sales have consistently grown by 21% annually since 2024 and remained above the 2025 levels in Q1 of 2026.

We also achieved a 15% reduction in operating expenses compared to Q1 of 2025, while maintaining our full capacity. The company also generated positive operating cash flow of $296,000, which is a $572,000 improvement over the same period last year. A notable trend this year is strengthening and dynamic nature of our integrated project pipeline, which continues to demonstrate meaningful momentum. This is the pipeline the company has highlighted since November of 2025 and which evolves as we advance or complete contracts. The expansion of this pipeline aligns closely with growth in our backlog, and we are disclosing only opportunities that suppliers have indicated are near signing. These opportunities tend to involve longer sales cycles.

While near-term closings are communicated as they firm up, they do not represent our entire potential opportunity. The trend is reflected in our backlog of orders. At year-end of 2025, TOMI reported $1.6 million in backlog, which grew by $0.5 million by the close of Q1 2026 and is currently at $2.2 million. This steady backlog expansion underscores the strength of our automated integrated system and the many service offerings we implemented. Critically, backlog growth continues even as we fulfill existing orders, illustrating demand and execution across sales. At the end of quarter 1, TOMI received 440,000 annual purchase orders for recurring decontamination services with a leading global medical technology company.

This contract involves quarterly professional IHP decontamination services for critical clean room and laboratory environments, aligning perfectly with our strategy to build a high-margin, repeatable revenue model in addition to increasing the backlog order number. In Q1, we achieved several other notable milestones. A private East Coast research university purchased and installed a SteraMist hybrid system for high-level decontamination of reusable medical equipment. We also sold a custom engineered system in the U.K. to an international pharmaceutical manufacturer, which was integrated into Total Clean Air's modular cleanroom platform, and we established Total Clean Air as our preferred European partner for SteraMist iHP technology when the U.K.

Health and Safety executive granted regulatory authorization for our BIT solution and SteraMist iHP products. The food safety sector is gaining real traction. We launched an important case study that demonstrated up to 95% reduction in sanitization testing costs for an egg food manufacturer. Our long-standing partner, Disinfect Care, secured a service contract at a major Mexican dairy facility where rigorous testing highlighted SteraMist iHP's efficacy while preserving product quality. Further, the end user is looking to expand its use of SteraMist iHP in Mexico to its other facilities. There are other positive food safety tests that the company has received to be discussed at a later date. This is all exciting stuff for us.

Regulatory advancements have also played a critical role in our progress. In February, we received official authorization from the U.K. Health and Safety Executive for our BIT solution and SteraMist IHP products for use in Great Britain and Northern Ireland. In March, we secured product authorization from the Dutch regulatory authority, making our first product approval within an EU member state and facilitating a streamlined recognition pathway across the EU. And this past week, we received notification of further approvals in Germany, Belgium, Denmark and Hungary. We anticipate many other regulatory wins in the near future.

On April 30, 2026, we executed a nonbinding letter of intent to merge with Carbonium Core, Inc., a U.S.-based producer of nuclear-grade graphite for advanced reactor technologies and AI data center infrastructure. Carbonium Core boasts a vertically integrated production platform and exclusive purification technology developed with Oak Ridge National Laboratory. This merger targets a specialty market currently dominated by foreign supply, coinciding with increasing domestic demand for non-Chinese origin graphite due to new U.S. FEOC regulations and federal support for advanced nuclear energy. To be clear, with this transaction, our country will become the leader in Generation 4 nuclear reactors, a class of advanced nuclear systems designed to offer significantly improved safety, efficacy and sustainability compared to current commercial plants.

These reactors are characterized by their ability to operate at a much higher temperature gas-cooled reactor pebble bed module, recognized as the world's first operational generation 4 reactor. These systems aim to overcome limitations of current technology by producing more fuel than they consume and ensuring that severe accidents resulting in radioactive release are physically impossible. Under the terms of the LOI, Carbonium Core would become a wholly owned subsidiary of TOMI. Former stockholders would receive TOMI common stock equal to 19.99% of shares outstanding prior to the merger, along with shares of a newly created series of convertible preferred stock, implying an enterprise valuation of $120 million.

We aim to finalize definitive agreements by May 30, 2026, with a 45-day exclusivity period in place. The strategic rationale for this transaction is compelling. It aims to diversify TOMI's business by merging a domestic platform focused on advanced nuclear-grade graphite, graphene and lithium materials with our existing SteraMist decontamination business. This integration has the potential to unlock significant long-term value for our shareholders while enhancing and expanding the SteraMist brand. Please note that the LOI is nonbinding and the completion of the transaction is subject to definitive agreement, due diligence and customary closing conditions, including stockholder approval. I'll now turn the call over to our Chief Financial Officer, David Vanston, for a review of our Q1 financial results.

David Vanston: Thank you, Dr. Shane. Our complete financial statements are in our Form 10-Q filed with the SEC and in today's press release. I will walk you through the key metrics for the 3 months ended March 31, 2026, compared to the same period in 2025. Revenue for Q1 '26 was $1.6 million, a 5% increase from $1.5 million in Q2 '25 and a 67% sequential increase over Q4 '25. Product revenue increased $300,000 or 31%, driven by higher equipment and CES-related sales. Service revenue decreased by $234,000 or 41%, reflecting the timing of decontamination project completions and service engagements in the period, which management views as temporary.

Gross profit was $832,000 or approximately 50% of revenue compared to $952,000 or approximately [ 6% ] of revenue in Q1 '25. The decrease in profit margins reflects strategic price discounts to drive equipment adoption and an unfavorable product mix shift towards lower-margin equipment sales. Management views these factors as temporary as growth in high recurring margin BIT solution consumables and applicator sales is expected to support margin recovery in future periods. Total operating expenses were $1.48 million, a reduction of $248,000 or 15% compared to $1.7 million in Q1 2025, reflecting lower general and administrative, selling, professional and consulting costs across the board.

The loss from operations was $626,000, an improvement of $128,000 compared to a loss of $754,000 in Q1 '25. The net loss was $811,000 or $0.04 a share per basic and diluted compared to a net loss of $256,000 or $0.01 per share in Q1 '25. It is important to note that Q1 '25 net loss included a nonrecurring employee retention credit of $535,000 and related interest of $83,000. Excluding these onetime items, Q1 '25 adjusted net loss would have been approximately 874% making Q2 '21, a meaningful year-over-year operating improvement. Cash flows.

Our net cash provided by operating activities was $296,000 for Q1 '26, an improvement of $572,000 from the $276,000 used in Q1 '25, primarily driven by improved working capital management and growth in deferred revenue from customer deposits. Net cash used in investing activities was $5,000. The net cash in financing activities was $98,000, reflecting $192,000 in repayments on the Agile Capital sale of future receipts agreement, partially offset by $94,000 in net ELOC proceeds. We ended the Q1 with cash of $280,000 and working capital of approximately $394,000 compared to a cash of $88,000 and working capital of $1 million at year-end '25. The $630,000 decline in working capital reflects the net loss incurred during the period.

Accounts receivable increased by $73,000 on higher revenue and inventories remained relatively flat. On the liability side, our accounts payable and accrued expenses increased by $993,000 and deferred revenue increased by $177,000, reflecting our deposit policy on customer orders. Our accumulated deficit as of March 31, 2026, is $58.9 million. During Q1, we raised $149,000 in gross proceeds through the issuance of 336,147 shares of common stock under our $20 million equity line of credit. I encourage investors to review our Form 10-Q in full, including the risk factors and notes to financial statements.

I will now turn the call over to our Chief Operating Officer, EJ Shane, for an update on what we expect in the next upcoming months and the rest of the year.

Elissa Shane: Thank you, David, and good afternoon, everyone. As Dr. Shane referenced, applicator sales increased at 139% year-over-year. This is a strong signal that customers are expanding their deployment of our patented cold plasma technology. The applicator is a critical component that enables our iHP to be used more broadly. This growth is a game changer. It shows customers are increasing their utilization of our tech. Customers who already own mobile fogging systems are expanding their use of iHP across additional areas within their facilities by acquiring more applicators, permanent or semi-permanent, driving higher sales of BIT solution, our consumable product.

The SteraMist Integrated System Platform, or SIS, Hybrid and our original Custom Engineered System, or CES, are essential to our integration pipeline. Collectively, it is these offerings that are expected to significantly boost BIT Solution revenues. Our current immediate integration sales and pipeline is currently at $4 million across 14 customers and 7 separate orders received with the remaining projects awaiting capital approvals. This is an update that reflects changes since our last call. Some customers have been removed due to completed sales in quarter 1, while 3 new customers have been added and 2 additional contracts have been secured. The 7 orders mentioned are all in various stages of manufacturing and delivery, which will impact revenue time lines.

The full company sales pipeline opportunities for all our offerings from mobile off-the-shelf capital equipment, automated integrated custom designs and iHP corporate service deployment is projected to be between $22 million and $33 million. This is the complete opportunity list. It includes interested parties who have received quotes or planned implementation and/or installations of iHP technology across all our industries. Dates are not yet set, but these are parties have expressed strong interest in SteraMist iHP.

Of this list, $9 million is categorized as active, approved or anticipated for purchase this year based on customer requests or the progression of the sales process. $4 million is allocated to automated integration orders, an additional $5 million is attributed to mobile off-the-shelf capital equipment, support service contracts and IHP corporate deployment. Based on the latest reports and trends that I just referenced, TOMI generated approximately $1.7 million in revenue in quarter 1, currently holds a backlog of $2.2 million. This includes only some of our integration automation pipeline, which stands at a total of $4 million, with a potential $5 million in mobile equipment sales. Conservatively, we anticipate $2 million in consumables and other smaller revenue streams.

Taken together, this yields a credible path for TOMI to achieve its projected 2026 revenue target. Our strong base of high-quality large customer base has been the key driver for these trends. These customers have helped in this potential growth through referrals, relocating projects and expanding SteraMist IHP adoption at their new facilities as well as expanding usage after initial purchases. A concrete example is Merck currently has approximately $1.2 million in open estimates across 5 different locations. While Merck is not included in the near-term numbers I cited earlier due to their longer decision cycles, they remain an active partner and are captured in the full opportunity pipeline.

Additionally, one of our first large pharmaceutical clients is approaching a decision on their CES proposal, which could represent the largest such installation to date and an uplift to future revenues for TOMI. On January 6, we announced that a private East Coast research university purchased and installed a SteraMist hybrid system. And this past week, we just received notification that we won a second award with them. And for my last example, a third site in Berlin, Germany is set to begin trials in June for an eye health customer that we onboarded in quarter 1 of last year. This customer is also utilizing an open monthly BIT Solution order, aligning perfectly with our business model.

Furthermore, none of this reflects opportunities tied to additional regulatory requirements. Our efforts regarding the food contact notification with the United States Food and Drug Administration, NSF Standards Department for Biological Safety Cabinets, the FDA 510(k) for medical devices and further European Union registrations, all of which hold substantial potential based on the current market demands. On May 1, we officially opened a task group with NSF, cleaning and sterilizing the biological safety cabinet sector. We want to be added to their informational annex G so that our partners are deploying SteraMist IHP to outperform legacy decontamination methods, including Sporiclens,, formaldehyde and VHP.

Ultimately, our goal is to enable these service providers worldwide to compete effectively by incorporating HP into their offerings for BSCs, which allows them to complete more treatments in a single day compared to the older technologies referenced. The food safety sector remains promising, but progress will depend on ongoing regulatory developments. For example, Nestle's planned expansion is contingent on obtaining additional international registrations beyond the European Union and on updating EU registration requirements to include an alternate class. We are engaging with three large customers who have expressed strong interest in our SCM for baby formula to deploy HP technology.

In parallel, we are conducting internal testing on dried ingredients for a current customer who already owns our handheld devices and exploring a scaled deployment. This testing phase aims to validate performance and readiness for a broader rollout. Last month, we attended INTERPHEX in New York City, one of the premier trade shows in the pharmaceutical, biotechnology and medical device industries. And at the show, we finalized the sale of a prominent American health care company, renowned for its innovative medications and premixed ready-to-use formulations.

In summary, we maintain that with a broader and more diverse range of SteraMist delivery systems, this growing integration pipeline, expanded support services designed to accelerate IHP qualification and ongoing referrals and expansions from our existing customer base that TOMI is well positioned to shift revenue mix positively and enhance profitability. I thank you all for your time and attention, and I hope this provides a clear sense of the progress and initiatives that we are pursuing. I will now turn the call back to our CEO, Dr. Halden Shane.

Halden Shane: Thank you, EJ. So as a special note, I want to talk about the United States of America is very hungry for rare earth minerals and materials that are mined and/or synthetically produced in America. The synthetic production of nuclear-grade graphite and the convergence of these technologies, whether it be nuclear-grade graphite, graphene or lithium present a transformative opportunity to address critical global challenges. TOMI's future is an advancement of [ autogomous ] systems, AI-powered robotics, [indiscernible] register, of course, and specialized disinfection drone technology manufactured with lightweight strong graphene shells and plenty of battery power will enable proactive solutions for ecological stability, logistics efficacy and public safety. Of a special concern of mine is the honeybee industry.

It is in dire straits. The association is seeing a lot of viral losses now, not just from the deformed wing virus or DWV, but real losses in bees because of what the industry refers to as dead outs, where the comb gets a virus and kills all the bees. Since 2007, there has been an 80% decline in bee populations. It could be devastating because it's not just concerning the DWV virus and its variants, but additional viruses such as chronic bee paralysis and Israeli acute paralysis. The iHP MicroMist can reach the entirety of the comb, including the nooks and crannies without leaving any damage to the wax.

Currently, the only available product in the market to alleviate these viruses is very expensive gamma irradiation process. The combs are very expensive, thus beekeepers don't want to dispose of the comb, you use gamma irradiation. An iHP disinfectant drone would certainly help save the pollinators of the world and ultimately the world. This is what we do, innovating for a safer world. Thank you all, and thank my small team for all the great work that they do. So looking ahead, TOMI enters Q2 of 2026 with strong commercial momentum and expanding recurring revenue base and a transformative strategic transaction underway.

Our focused strategy for the balance of the second quarter is to advance the Carbonium Core transaction towards definitive agreement and closing, drive recurring revenue growth through increased BIT Solution sales, open order policies and expanded iHP Corporate service contracts and strengthen balance sheet flexibility through our ELOC and additional financing initiatives. With that, operator, please open the call to any questions.

Operator: [Operator Instructions] Your first question is coming from Amit Dayal from H.C. Wainwright.

Amit Dayal: Great to see all the developments underway at the company. My first question is on the gross margin side. It was a little bit softer, I guess, because of some discounts on offerings. Just wanted to see how this will bounce back? And would you potentially need to continue providing those discounts at least for the hardware side of things to get initial orders with customers going?

Halden Shane: No. I know they will bounce back, and we don't plan on providing these types of discounts again.

Amit Dayal: Okay. Understood. And then the pipeline looks pretty robust, at least $4 million in sort of certain orders, it looks like. Sequentially, do you think we should expect revenues to grow from here through 2026? Or should we expect some lumpiness in how revenues are recognized?

Halden Shane: No, most definitely, we should see growth through 2026 and into '27 and beyond.

Amit Dayal: Okay. Any traction from these recent news flow around Hantavirus, et cetera? Has there been any follow-up with companies or customers from those developments for you guys?

Halden Shane: Not at the moment. But as you know, I mean, the Hantavirus is -- it's not close to us is where the ship is located. The interesting part about this is that they've let a lot of people off the ship, and there's usually like an 8-week period before you test positive for this. So we're prepared and ready to help and assist in any way. But at the moment, we haven't heard from anyone, and we can't get our equipment into the area quick enough to help the ship because, first of all, I mean, all the passengers, most of them have been disembarked.

Amit Dayal: Okay. Understood. Just last one for me on this transaction with Carbonium. How is the diligence going so far? And do we have the expertise to sort of properly investigate the technology these folks are offering? And then just a follow-up on that one is, will this be sort of a development stage entity you are acquiring? And how much more investments do you think it would need if you were to close the deal to progress that company to commercialization?

Halden Shane: Well, it's a lot of questions. Yes, it's in its early stages. We are forming a committee in the early part of next week to help with the due diligence. And again, we're aiming towards getting a definitive agreement and doing our due diligence. We're aware of the technology and its ability. And with Oak Ridge and some -- I don't want to get too ahead of Carbonium in releasing certain things, but we're pretty secure that this will go forward. And as far as investments, that's something that needs to be determined. We haven't quite yet come out with any numbers like that. And you can understand this is just the very early stages of this potential merger.

Operator: Your next question is coming from Todd Felte from StoneX Wealth Management.

Todd Felte: And, congratulations on a good quarter and on the Carbonium merger. I know I'm excited to see how that progresses. I did have two questions on it. The first is after the merger is approved and closed, I know there was a 19.9% shares of common stock that are going to them in addition to the convertible preferred. If all that convertible preferred was converted to common at $1, what would be the total shares outstanding?

Halden Shane: It's a good question. Probably somewhere in the neighborhood of $32 million, maybe $31 million. We haven't really done the exact pro forma on that yet, but I would have to say that would be the amount.

Todd Felte: Okay. And then second of all, I listened to a television interview that you had done with [ Sindo, ] the Head of Carbonium, and he was projecting revenues in 2028 of $1.4 billion to $1.5 billion. Is that correct? Or did I hear that wrong?

Halden Shane: No, you heard that correct. This is a huge industry, and they have the ability to capture it from the synthetic nuclear graphite end. And again, I don't want to get ahead of the curve with him, but what he said is $1.4 billion, $1.5 billion.

Todd Felte: Wow. Okay. And finally, outside of getting shareholder approval, are there any other major obstacles, assuming that your committee checks out on all the due diligence? Are there any other major obstacles on getting this to the closing line?

Halden Shane: There shouldn't be. Again, it's a deal. It's early, and you never know what obstacles get thrown at you, but we're hoping there aren't, and we're able to complete this in a relatively timely manner.

Operator: Your next question is coming from John Nelson.

John Nelson: On the quarter and progress being made on the TOMI business and also the potential from the Carbonium merger for the combined company. First question is, I saw the slide show from your 8-K on Carbonium Core, and they're projecting profitability, I believe, next year according to the slides. Is that -- am I correct on that?

Halden Shane: That's what I understand.

John Nelson: Yes, which would be phenomenal for them to get out of the gate this fast and still be profitable almost immediately. So anyway, thanks for confirming that. The other thing was in the slides was an independent valuation. Do you know who did that independent evaluation of the -- of Carbonium Core?

Halden Shane: It was done by a professional evaluation service. I don't know if I can -- I'd rather not publicly say until they approve it, but it was a very large 47-page evaluation and covered everything that we would want to see in it. So...

John Nelson: Yes. Do you think that they can -- after -- if you complete the merger, do you think they can release that or you can release that as a...

Halden Shane: Yes. Yes, I would think we would be able to, once that happens.

John Nelson: Excellent. The other questions relate to the TOMI business. The -- on the honeybee industry, you talked extensively about the concerns and how SteraMist can remedy significant amount of problems that the bee industry is facing. How do you plan to go after that market?

Halden Shane: Well, currently, I think I've mentioned this on prior calls. I have been trying to contact the association. I end up joining the association, and I follow everything that goes on in it. We -- recently, our marketing department reached out to an administrator, and they would like to do a study. So now I'm really excited that we got their attention. And hopefully, they'll be able to do this study fairly quickly. I know the industry is in dire straits to eliminate the effects of all these viruses, which are going ahead and causing death to the bees, which I mean, I don't think we want our kids to grow up in a world that doesn't have pollinators.

John Nelson: Yes. We definitely need it. So I was curious as to how quickly a study might be able to be accomplished. And I would think that the People would be extremely happy to get something that would help preserve their hives.

Halden Shane: Yes. I mean I think the real answer that they've been going with in the past is very expensive. And I think gamma irradiation, it gives you a new hive, I guess, but most beekeepers don't have that type of money where our solution would be fairly inexpensive for them to eliminate the mites, the viruses in the comb and to go ahead and protect it going forward. So that would be great to have this technology, which was innovative from the beginning to be able to protect the honeybee population around the world.

John Nelson: Definitely. Then do you have any specific goals as to timing to reach either profitability or positive cash flow over the next quarters...

Halden Shane: Yes. I think within this year, we'll be profitable.

John Nelson: Okay. Good. And then you mentioned in a previous press release, the -- going after the robotaxi market. And do you see that as being addressed by a -- just the SteraMist handheld units? Or do you think that there might be a possibility of actually kind of installing a fixed unit within the cab that could dispense SteraMist on a regular basis after every ride, for example?

Halden Shane: Yes. I think the -- I think it's too early. What our plan is initially is to mold our backpack using existing humanoid type robotics. And we know we can handle the software adaptation of it and go ahead and put our applicator in the left hand, replace the hand and put the applicator in there or trigger the hand to push the applicator and have the right hand to move objects or to move doors or open things and things like that. So I think that's going to be the fastest to market.

There are a lot of companies, not just Tesla and not just Waymo, but there are 5 or 6 companies worldwide that are starting to put out robotaxis. And as the world evolves, this seems -- this autonomous vehicle seems like something that's going to be around forever. So they do have to clean them and our technology would be the fastest and quickest way to get that done. As far as an installation, I don't know if the cost is going to be practical for them. It certainly would work for us. And they would need some time between each ride to disinfect or decontaminate the space.

And I don't know if their model is set up to wait because I'm in West Hollywood, L.A. area, and I use Waymo a lot, and they're always running 2 or 3 minutes late because they're dropping someone off. So it's possible that they could -- maybe if we could get the time down to, let's say, 3 minutes or 5 minutes that they could sterilize them between the routes. I mean it's possible today.

John Nelson: Okay. And with regards to use of SteraMist in closed spaces, the -- it would seem like SteraMist would be perfect for decontamination of airlines and cruise ships and even military vessels because of the risk of contamination infection. Is there is it just that, that market takes -- what kind of explanation do you have for the time lines of penetrating those kinds of enormous markets?

Halden Shane: So I think we'd have to be a much bigger company and to get grant writers to write grants for those markets, especially now they're building ships under the current administration, and it would be an ideal time to start implementing the technology of putting it into ships. I'm not sure what the stress test would be to see what stays in place in rough waters versus smooth waters and things like that. So I mean it's all possible, and I foresee in the future this happening, same way with aircraft. What I'm really more excited about is unmanned aircraft, as we all know, and we see in the military budget, there's $70 billion being put aside for drones.

When the technology started when I bought it from the defense contractor and the initial DARPA project, it was for the use of unmanned planes that were returned to earth or returned to ground or returned to ship. And that's what it was used for. So with the drone market blowing up like it has all over the world, this is the product to be used for the disinfection decontamination of unmanned aircraft around the world.

John Nelson: Are you working with any particular companies, even if you can't name them at this time regarding...

Halden Shane: Not a -- not at this time that I'm aware of. And I don't know if we can say, EJ, do you have a more unclassified answer to that?

Elissa Shane: Not at this time, Dr. Shane, I don't. Sorry, John. I'll keep you updated.

John Nelson: Appreciate it. And let's see. Is there anything else that has changed as far as the applicators or the equipment used in SteraMist or any new ways to use SteraMist either in the commercial or retail type settings?

Halden Shane: I'll let EJ answer it. I just tried it on my dog and he stopped barking. So that was positive.

Elissa Shane: Yes. No, there's not been any changes to the applicators itself. We just changed the way in terms of how we sold it with the integration projects and the stand-alone system. So there's multiple different versions of the applicators that we can now offer regardless of the industry you're referring to. So that's been helpful.

Halden Shane: You know I was kidding. I don't want to get a letter from...

Operator: We've reached our allotted time for Q&A. I'll now hand the conference back to management for closing remarks.

Halden Shane: Well, I just want to thank everybody for joining and for continuing the voyage with us and this amazing product in this amazing world. Have a great day, wherever you might be. Thank you.

Operator: Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

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