TOMI Environmental Solutions, Inc.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
TOMZ$2.15-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001654954-25-009631
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001654954-25-013088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 123 previous paragraphs and 136 current paragraphs.
67 unchanged; 36 reworded; 33 added; 20 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
The third quarter of 2025 delivered improved financial results as we achieved 95% growth in revenue over the second quarter of 2025, and we continue to see positive trends in the market with demand for our product lines and recurring sales. The growth in the third quarter revenue was primarily attributable to increased purchases of mobile equipment by our commercial service provider customers and our enhanced integration capabilities, while maintaining our custom engineered solutions. We believe that maintaining and expanding the use of our technology for our service providers, coupled with continued growth quarter over quarter in submissions of bids for integration and custom installations, and the building of our sales and technical teams, will drive increased adoption of our SteraMist iHP technology across all our registered industries and geographies.
Current report
As of September 30, 2025, our sales order backlog totaled approximately $0.9 million, which further increased to $1.3 million as of October 31, 2025. We are actively negotiating an additional $2 - $3 million in potential new contracts expected to close prior to year-end, reinforcing the strength of our business pipeline.
Current report
Revenue for the three months ended September 30, 2025, was $2,012,000, down 21% from $2,542,000 in the three months ended September 30, 2024. This was primarily driven by a timing reduction in iHP service sales from FY 2024 as a key customer restructured one of their sites during the prior year. This impact is temporary, and the customers’ operations and related service activity are expected to resume on a normal schedule. Importantly, year-to-date service demand remains robust, with quote activity and pipeline volume up approximately 35% year-over-year, particularly in Life Sciences and Food Safety. This trend supports our expectation for continued growth in the fourth quarter and beyond.
Current report
Gross profit margins remained strong at 61 % as a percentage of sales for the three months ended September 30, 2025, and for the same period last year. The consistency of the gross profit margins underscores the resilience of our product mix and disciplined cost management.
Current report
Our iHP technology continues to gain market recognition as the preferred decontamination solution for pharmaceutical, biotech and now aerospace applications. We successfully completed multiple high-profile installations this year; including but not limited to NASA’s Johnson Space Center, Virigina Commonwealth University (VCU), and University of Miami. These projects demonstrate the adaptability of our technology in high-containment environments. Underscoring TOMI’s competitive advantage, having successfully outperformed key hydrogen peroxide and harsh chemical gaseous competitors.
Current report
Automated, repeatable, and validated decontamination rooms and chambers continue to be in high demand as the pharmaceutical industry evolves. We believe our iHP technology is emerging as a benchmark for sterile environments, as evidenced by its adoption this year at companies such as AbbVie, Bausch & Lomb and others. As of the third quarter, the onshoring of pharmaceutical production positions us favorably in Virginia for the next few years, particularly with major commitments from Merck, Eli Lilly, and AstraZeneca who are establishing new production sites. Additionally, there is a strong industry push toward continuous bioprocessing, flexible and modular facilities, and AI-enabled manufacturing, all of which require decontamination systems that integrate seamlessly with automation and minimize downtime—such as our SteraMist Integrated Systems (SIS), Hybrid, and Custom Engineered System (CES).
Current report
We are continuing to see revenue growth amongst our distributors, and international partners, particularly in Europe, positioning us for continued growth and expansion, as we work towards finalizing our pending regulatory approvals in the EU and UK.
Current report
Positive Impact of New FDA Rule on our Food Safety Market
Current report
The FDA’s final rule broadening the permitted use of hydrogen peroxide (H₂O₂) as a direct food additive, including its recent expansion as a secondary direct food additive, is expected to positively impact our positioning in the food safety market. This regulatory change opens the door for using our iHP technology directly on food contact surfaces and the food products themselves, particularly in the ready-to-eat (RTE) segment, which represents a key focus area for SteraMist. We have observed significant momentum in the food industry, with customers expressing interest in applying our technology across various aspects of processing. Additionally, we have received interest from several universities in conducting studies on the direct treatment of food to reduce microbial loads or allergen residues. We believe this interest may continue to grow in the future, driven by industry trends toward 'natural' food additives and colorings.
Current report
Hudson Global Ventures Equity Purchase Agreement
Current report
On November 5, 2025, we entered into the Purchase Agreement with Hudson pursuant to which and upon the terms and subject to the conditions set forth therein, the Company has the right, but not the obligation, to sell to Hudson up to $20,000,000 of shares of its Common Stock, over the Commitment Period. Concurrently with entering into the Purchase Agreement, the Company also entered into a Registration Rights Agreement with Hudson, pursuant to which the Company agreed to register the issuances and sales of shares of Common Stock under the Purchase Agreement, the Registrable Securities (as defined in the Registration Rights Agreement), pursuant to a registration statement to be filed under the Securities Act of 1933, as amended.
Current report
At any time and from time to time during the Commitment Period, on any business day selected by the Company, the Company may direct Hudson to purchase shares of its Common Stock by delivering a Put Notice. The purchase price per share for each purchase of shares subject to a Put Notice will be equal to the lesser of (i) 92% of the average of the three lowest trading prices of the Common Stock on the Nasdaq Capital Market during the ten trading days immediately preceding the Put Date and (ii) 92% of the lowest closing price of the Common Stock during the Valuation Period as defined in the Purchase Agreement.
Current report
Under applicable Nasdaq rules, the Company may not issue or sell to Hudson under the Purchase Agreement shares of Common Stock in excess of 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”) without first obtaining stockholder approval as required by Nasdaq Rule 5635(d). The Company is not obligated to sell any shares to Hudson under the Purchase Agreement, and Hudson is not obligated to purchase any shares that would exceed the Exchange Cap. Pursuant to the Purchase Agreement, the Company agrees to issue 52,000 shares of Common Stock to Hudson as Commitment Shares in consideration for Hudson’s commitment to enter into the transaction.
Current report
The Purchase Agreement contains customary representations, warranties, covenants, and closing conditions. The Company may terminate the Purchase Agreement at any time by written notice to Hudson, subject to certain limitations.
Current report
On July 16, 2025, we announced the successful first installation of our new SteraMist Integration System – Standalone (SIS-SA) in the life sciences sector, beginning with pharmaceutical isolator market. Since this announcement, we have successfully integrated SteraMist iHP in two additional enclosures and anticipate a strong pipeline for further installations with both current and new manufacturing partners.
Current report
On August 11, 2025, we announced an additional win by our East Coast distributor, Ares Scientific, with a new university client and our SIS platform offerings. These developments further strengthen our pipeline in the academic vertical and acceptance to our SIS line.
Current report
On August 12, 2025, we announced a major new customer for the year. A key highlight from the announcement was the addition of a major company—comparable to Pfizer and Merck in the eye health industry—to our platform adopters. This client not only implemented SteraMist iHP technology at two site facilities in less than four months but has also placed open BIT Solution orders for 2026, which we expect to support ongoing revenue growth in this important sector in need of sterility.
Current report
On September 4, 2025, we announced our presence at the H.C. Wainwright Annual Global Investment Conference.
Current report
On September 16, 2025, we announced participation in the iAccess Alpha Virtual Best Ideas Fall Investment Conference 2025.
Current report
On September 16, 2025, we announced the appointment of Francesco Fragasso to our Board of Directors.
Current report
On September 18, 2025, we announced FDA broadens permitted use of Hydrogen Peroxide; Ruling significantly expands potential application of SteraMist iHP.
Current report
On September 24, 2025, we announced a specialized service provider for Healthcare and Mold Remediation. This was the first of three major service provider companies we onboarded in Quarter 3, all of which have shown strong potential for expanded use of SteraMist iHP technology in their franchises. Our SteraMist Pro Certified program continues to be well received, supporting our efforts to finally build a robust network of certified partners.
Current report
Our intellectual property (IP) portfolio represents a key strategic asset, supporting our global leadership in disinfection and decontamination technologies. We currently hold or have pending over 25 utility or design patents worldwide, providing protection for both the methods and systems underlying our SteraMist® BIT™ platform. Our U.S. patents extend protection through 2038.
Current report
Recent additions to our portfolio include patents for backpack decontamination units, mobile carts, and applicator technology in the United States, along with new protection in Singapore, Korea, and other jurisdictions. We continue to pursue additional filings to broaden our coverage across Europe, China, and Australia.
Current report
We also hold more than 30 design patents for our decontamination devices; covering applicators, chambers, carts, and surface-mounted systems; across major global markets including the United States, China, Japan, Korea, and the United Kingdom.
Current report
In addition, we maintain a robust trademark portfolio with over 200 trademarks registered or pending in multiple classes and countries. These marks cover the full range of our activities; from chemical formulations and sterilization equipment to services and training; reinforcing TOMI’s global brand presence.
Current report
Together, these patents and trademarks provide a comprehensive intellectual property framework that protects our core technology, supports market expansion, and strengthens our competitive position in critical sectors such as life sciences, aerospace, and biosecurity.
Current report
Net cash used in operations of approximately $577,000.
Current report
Net cash used in investing activities of approximately $133,000.
Current report
Net cash provided from financing activities of approximately $535,000.
Current report
Our service-based revenue for the three months ended September*** 30, 2025, and 2024, was $409,000 and $776,000, respectively, representing a decrease of $367,000 or 47%. For the nine months ended September ***30, 2025, and 2024, our service-based revenue was $1,364,000 and $1,423,000, representing a decrease of $59,000 or 4% when compared to the same prior period in 2024. The decrease in service revenue in the quarter was due to the timing of service jobs in the prior year period with a key customer who restructured one of their sites during the prior year. This impact is temporary, and the customer’s operations and related service activity are expected to resume on a normal schedule.
Current report
On November 5, 2025, we entered into an Equity Purchase Agreement with Hudson Global Ventures, LLC, pursuant to which and upon the terms and subject to the conditions set forth therein, we have the right, but not the obligation, to sell to Hudson up to $20,000,000 of shares of our common stock, par value $0.01 per share, from time to time over a 24-month period.
Current report
In July 2025, FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
Removed paragraphs (20)
Previous report
Our total recognized and deferred revenue for the three months ended June 30, 2025 amounted to $1,750,350, consisting of approximately $1,031,000 in recognized revenue in the quarter and deferred revenue of approximately $719,235 at the end of June 2025.
Previous report
Recognized revenue for the three months ended June 30, 2025, was $1,031,000, down 66% from $3,013,000 in the three months ended June 30, 2024. This was primarily driven by customers deferring capital expenditure projects due to the uncertain economic environment with the impact of announced and implemented tariffs on their supply chain and long term planning. This was not a factor in the second quarter of 2024, which had higher sales in mobile equipment of approximately $1.0 million and our Custom Engineered Systems or CES of approximately $0.5 million.
Previous report
Service-based revenue for the three months ended June 30, 2025 and 2024, was $378,000 and $285,000 respectively, representing an increase of $93,000 or 33%. Service-based revenue for the six months ended June 30, 2025 and 2024, was $955,000 and $656,000 respectively, representing an increase of $299,000 or 46%. The increase in service revenue was due to increased demand from current and new life sciences customers, expansion of services in additional industries being served by our products, and more stringent regulated procedures, resulting in quotes up 35% year over year, leading to expectations of continuing higher growth in the second half of the year.
Previous report
As of June 30, 2025, our sales order backlog totaled approximately** **$1.4 million. As of August 7, 2025, the combined total of recognized revenue, deferred revenue, and sales order backlog was approximately $4.6 million, with active projects on schedule for delivery in 2025. In addition, we are negotiating approximately $2 million in new custom and integrated contracts, with bids expected to close prior to year-end.
Previous report
Our iHP Corporate Service division, primarily utilized by our Life Science pharma customers, is a seasonal business dependent on customer shutdowns. This year, we are experiencing higher levels of demand for our Service Revenue. Our pipeline and the number of quotes for Service have increased approximately 35% year on year in both the Life Science division and now additionally in the Food Safety divisions have kicked in with increased demands, which will continue to underpin our future revenue growth.
Previous report
Our gross profit as a percentage of sales for the three months ended June 30, 2025 and 2024, was 66% and 62%, respectively. The improved gross profit margins were attributable to our product mix in sales including higher sales of solution and service offerings in the three months ended June 30, 2025 compared to the same period last year.
Previous report
With the successful completion of each project, our iHP technology is rapidly gaining popularity as the preferred decontamination solution for pharmaceutical and biotech companies. Further, as we continue to install our technology to these projects, the product line evolves into a comprehensive turnkey solution.
Previous report
In March 2025, we announced a significant contract to install a SteraMist iHP Custom Engineered System (CES) at a leading university in Rhode Island, valued at approximately $450,000. This new client was secured through our distributor, ARES Distribution, and underscores TOMI’s competitive advantage, having successfully outperformed key hydrogen peroxide competitors.
Previous report
We also announced in March the deployment of our SteraMist iHP technology at the NASA Johnson Space Center, marking the Company’s expansion into the aerospace sector. The deployment marked a significant advancement for SteraMist iHP technology, showcasing its potential for broader applications within the aerospace sector and beyond. This strategic partnership aligns with the Company’s ongoing SteraMistX campaign, which focuses on aerospace, military, and exploration fields utilizing iHP decontamination to elevate biosecurity biosafety standards. We are currently collaborating with the space center on a potential publication for a case study.
Previous report
We are also witnessing an increase in opportunities from our distributors. Ares Distribution on the East Coast of the United States, Avantor Sciences in the U.S., and agriculture sectors are acquiring new clients that could significantly impact the industry. Additionally, our long-term, well-established international partners in Germany, the Netherlands, and Italy have strong pipelines in place pending our final EU and UK registration approvals.
Previous report
We believe that we possess the best technologies in the world in the disinfection and decontamination space. The COVID-19 pandemic along with the needs of the pharmaceutical and vivarium space has provided us with the opportunity and experience to implement a clear strategy to develop and manufacture additional products to add to our portfolio. In addition, we continue to move our BIT technology as a standard in disinfection and decontamination globally. This should lead to increased market share, profitability, and capability strength, as is now evidenced by increasing demand for our services from the Food industries
Previous report
Our products are an environmentally friendly solution, and our processes address the concern of sustainability. Customers are requesting and discussing the positive results of our product and the environmentally friendly results compared to the caustic and environmentally damaging results of many other disinfectants.
Previous report
SteraMist has established a successful track record in fighting pandemics and outbreaks and implementing SteraMist for emergency preparedness is vital. The COVID-19 pandemic took the world by surprise, and history has shown that other pandemics and viruses are likely to follow. Using a proven and trusted disinfectant for emergency outbreaks and daily for preventative maintenance, such as SteraMist, can alleviate the threat of infections from spreading and could stop a possible outbreak.
Previous report
Many industries within our four key divisions (Life Sciences. Hospital Healthcare, Food Safety and Commercial), prioritize ease of use and automation, seeking repeatable, validated, and thoroughly tested disinfection and decontamination solutions. TOMI dedicated significant resources to developing a variety of options tailored to meet diverse budgetary requirements in response to this market demand. Among our offerings, the Custom Engineered System (CES) remains a favored choice, bolstered by a strong pipeline. For customers with budget-friendly alternatives, our Hybrid solutions and the newly introduced SteraMist Integrated System (SIS) have become preferred alternatives. As of the date of this report, our open opportunities for these three product offerings total approximately $15 million, of which $7 million are designated as high-priority. High-priority opportunities are those with which we are actively engaged through ongoing discussions on specifications, submitted formal proposals, or pursuits via established contractor relationships.
Previous report
Our portfolio includes more than 25 Utility or Design Patents worldwide which expire at various dates through the year 2038 for both method and system claims on SteraMist® BIT™, as well as design of devices. We continue to pursue further claims to additional capabilities in on-going United States and worldwide patent applications. We have obtained five related United States utility patents, giving us protection of our technology until the year 2038. We have most recently obtained patent protection for our backpack decontamination units and mobile carts in the United States. We recently filed for further patent protection in the United States for our applicator technology. We have also recently obtained protection for our decontamination technology methods in Singapore, and we will be extending our scope of protection from Singapore into Cambodia and Laos in the near future. We have also recently obtained further protections for our technology using an ionized hydrogen peroxide mist in Korea. We have obtained utility patents for our technologies in diverse countries such as Brazil, Japan, Korea, Israel, Australia, Taiwan, Canada, Mexico, Singapore, New Zealand, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Sweden and in the UK, and continue to pursue protections all over the world, including China and Europe.
Previous report
We have submitted utility patent applications in multiple jurisdictions and countries, including Europe, China, Brazil, Korea and Australia for further additional applications of SteraMist BIT, and a related application has already been determined novel and inventive in Taiwan, Korea, Japan, Israel, New Zealand, Australia, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Sweden and in the UK and Singapore. We have recently filed new patent pending applications on novel uses and enhancements of our technology in the United States, including enhanced mechanisms for our applications, as well as new forms of deployment for our technology. We have been awarded a design patent on our surface-mounted applicator device in the United States, China, Japan, Taiwan, and Korea. We have filed and have been granted or have pending acceptance on 32 separate design patents for our: Decontamination Chamber(s), Decontamination Applicator, Decontamination Cart, Applicator, and Surface Mounted Applicator 90-Degree Device. These patents are published around the world, including but not limited to the United States, China, Hong Kong, Europe, United Kingdom, Singapore, Taiwan, Vietnam, Canada, South Korea, and Japan. We are also pursuing IP protection for further applications of our SteraMist BIT in diverse fields in multiple jurisdictions, such as food decontamination in the US and, in installed systems for the application of iHP for the protection of buildings post outbreak or after a biological attack in the US, China, Europe and Japan. With worldwide attention on the etiology of SARs CoV2 coming from a lab leak, attention on the prevention and control of a leak or mishap should be on the mind of all the biological labs managers around the world. The fact that iHP and our BIT platform can be incorporated in new or existing buildings to create an “immune building” should assist in further lab applications of SteraMist in the biosecurity industry in the future. Our current patents with claims to systems already serve to provide protection for our technology in this area and our on-going pending applications will further enhance the scope of our intellectual property. Initial positive search reports for our filed improvement applicator designs in cell biology may be followed by national stage applications in many countries, such as Australia, Korea, Europe and China.
Previous report
Our products are sold around the world under various brand names and trademarks. We consider our brand names and trademarks to be valuable in the marketing of our products. As of today, we have over two hundred trademarks or trademark applications, (word and/or logo) registered or pending across the globe. TOMI registers marks in eight classes of specification of goods and services: Class 1 for Chemicals for Treating Hazardous Waste, Class 5 for Disinfectants, All-Purpose for Hard Surfaces and for Treating Mold, Class 7 for Handheld Power Operated Spraying Machines, Class 11 for Sterilizers for Medical Use and Air Purification, Class 35 for Business Consultation and Management Services, Class 37 for General Disinfecting Services, Class 40 for Chemical Decontamination and Manufacturing Services, and Class 41 for Providing Education Training and information related to biological and bacterial decontamination services. Recently, we have expanded our trademark protection into India.
Previous report
Our service-based revenue for the three months ended June 30, 2025 and 2024, was $378,000 and $285,000, respectively, representing an increase of $93,000 or 33%. For the six months ended June 30, 2025 and 2024, our service-based revenue was $955,000 and $656,000, representing an increase of $299,000 or 46% when compared to the same prior period in 2024. The increase in service revenue was due to increased demand from customers.
Previous report
The higher gross profit is attributable to the product mix in sales and growth in our SteraMist BIT Solution revenues in the current period.
Previous report
Research and development expenses for the six months ended June 30, 2025 were $129,000, as compared to $130,000 for the six months ended June 30, 2024, representing a decrease of approximately $1,000 or 1%.
Reworded paragraphs (36)
Previous wording
During the second quarter of 2025, our operating expenses increased by $77,000, or 4%, compared to the second quarter of 2024. The increase was primarily due to higher professional fees offset by reduced selling expenses when compared to the same prior year period.
Current wording
During the third quarter of 2025, our operating expenses increased by $141,000, or 10%, compared to the third quarter of 2024. The increase was primarily due to higher professional fees being offset by reduced selling expenses when compared to the same prior period.
Previous wording
In March 2025, we announced an OEM partnership with Pharma Biotech System Components LLC/Pharma Biotech System Components Ltd (PBSC), a premier manufacturer specializing in high containment, material decontamination, and cleanroom solutions. This collaboration enhances TOMI’s SteraMist Integrated System (SIS) product launched in the second half of last year. Through this OEM agreement, TOMI will now offer pass-through hatches and chambers integrated with iHP, specifically designed for optimized decontamination cycles. Our first chamber collaboration is set to be delivered in the fourth quarter of 2025.
Current wording
Our OEM partnership with Pharma Biotech System Components LLC/Pharma Biotech System Components Ltd (PBSC), further strengthens our product mix and route to market, enabling us to integrate our SteraMist Integrated System (SIS) product into advanced high containment, material decontamination, and cleanroom solutions. We expect to commence our first collaboration installation in the fourth quarter of 2025.
Previous wording
In evaluating sales related performance, management analyzes our revenue recognized for GAAP purposes which is presented in our quarterly and annual statement of operations as well as our sales orders we receive from customers during those same accounting periods. We define a “sales order” as a document we generate for our internal use in processing a customer order. Our sales orders essentially translate the format of the customer purchase orders we receive from our customers into the format used by us. We also evaluate our “customer sales backlog” which is defined as pending sales orders where revenue has not yet been recognized. Management believes analyzing the sales order and backlog metrics are useful in measuring our overall sales and business development performance as it gauges the overall volume of sales and business development activities. We also disclosed expected amount of potential sales under contract in current negotiation with customers, and such amount may be subject to risks and uncertainties as negotiation may not result in any order or enforceable contract.
Current wording
In evaluating sales related performance, management analyzes our revenue recognized for GAAP purposes which is presented in our quarterly and annual statement of operations as well as our sales orders we receive from customers during those same accounting periods. We define a “sales order” as a document we generate for our internal use in processing a customer order. Our sales orders essentially translate the format of the customer purchase orders we receive from our customers into the format used by us. We also evaluate our “customer sales backlog” which is defined as pending sales orders where revenue has not yet been recognized. Management believes analyzing the sales order and backlog metrics are useful in measuring our overall sales and business development performance as it gauges the overall volume of sales and business development activities. We also disclosed the expected amount of potential sales under contract or in current negotiation with customers, and such amount may be subject to risks and uncertainties as negotiation may not result in any order or enforceable contract.
Previous wording
On June 23, 2025, we announced the demonstration of SteraMist efficacy in combating honeybee colony collapse.
Current wording
On June 23, 2025, we announced the demonstration of SteraMist efficacy in combating Honeybee Colony collapse. Honeybees are essential pollinators, contributing $20–30 billion annually to the U.S. agricultural economy and $387 billion globally. The USDA and industry stakeholders continue to search for scalable, effective tools to mitigate this crisis. With SteraMist, TOMI is now positioned to play a key role in protecting global food security through environmental biosecurity in years to come.
Previous wording
During the six months ended June 30, 2025, our debt and liquidity positions were affected by the following:
Current wording
During the nine months ended September 30, 2025, our debt and liquidity positions were affected by the following:
Previous wording
Results of Operations for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024:
Current wording
Results of Operations for the Three and Nine Months Ended September 30, 2025, Compared to the Three and Nine Months Ended September 30, 2024:
Previous wording
Total revenue for the three months ended June 30, 2025 and 2024, was $1,031,000 and $3,013,000, respectively, representing a decrease of $1,982,000 or 66% compared to the same prior year period. Revenues for the six months ended June 30, 2025 and 2024, were $2,608,000 and $4,127,000, representing a decrease of $1,519,000 or 37% when compared to the same prior year period. The decrease in sales was attributable to delayed capital investment by customers due to economic uncertainty caused by announced and impending tariffs impacting their supply chain.
Current wording
Total revenue for the three months ended September*** 30, 2025 and 2024, was $2,012,000 and $2,542,000, respectively, representing a decrease of $530,000 or 21% compared to the same prior year period. Revenues for the nine months ended September ***30, 2025 and 2024, were $4,619,000 and $6,670,000, representing a decrease of $2,051,000 or 31% when compared to the same prior year period. The decrease in sales was attributable to and primarily driven by a timing reduction in iHP service sales in third quarter 2025 and year to date, as customer projects are being impacted by tariff uncertainty in their supply chains.
Previous wording
SteraMist Product-based revenues for the three months ended June 30, 2025 and 2024, were $653,000 and $2,728,000, representing a decrease of $2,075,000 or 76% when compared to the same prior year period. For the six months ended June 30, 2025 and 2024, our product-based revenue was $1,653,000 and $3,471,000, respectively, representing a decrease of $1,818,000, or 52% compared to the same prior year period. The lower product revenue was attributable to delayed capital investment by customers, as a result of impending tariffs causing economic uncertainty in their supply chain.
Current wording
SteraMist Product-based revenues for the three months ended September*** 30, 2025 and 2024, were $1,603,000 and $1,766,000, representing a decrease of $163,000 or 9% when compared to the same prior year period. For the nine months ended September ***30, 2025 and 2024, our product-based revenue was $3,255,000 and $5,247,000, respectively, representing a decrease of $1,992,000, or 38% compared to the same prior year period. The lower product revenue was attributable to delayed capital investment decisions by customers, as a result of the tariffs causing economic uncertainty in their supply chain.
Previous wording
Our domestic revenue for the three months ended June 30, 2025 and 2024 was $822,000 and $2,621,000, respectively, a decrease of $1,799,000 or 69%, when compared to the same prior year period. For the six months ended June 30, 2025 and 2024, our domestic revenue was $2,014,000 and $3,283,000, representing a decrease of $1,269,000 or 39% when compared to the same prior period in 2024. The lower product revenue was attributable to delayed capital investment by customers, as a result of impending tariffs causing economic uncertainty.
Current wording
Our domestic revenue for the three months ended September*** 30, 2025 and 2024 was $1,280,000 and $1,886,000, respectively, a decrease of $606,000 or 32%, when compared to the same prior year period. For the nine months ended September ***30, 2025 and 2024, our domestic revenue was $3,294,000 and $5,169,000, representing a decrease of $1,875,000 or 36% when compared to the same prior period in 2024. The lower product revenue was attributable to delayed capital investment by customers, as a result of impending tariffs causing economic uncertainty.
Previous wording
Internationally, our revenue for the three months ended June 30, 2025 and 2024, was $209,000 and $392,000, respectively, representing a decrease of $183,000 or 47% when compared to the same prior year period. For the six months ended June 30, 2025 and 2024, our international revenue was $594,000 and $844,000, representing a decrease of $250,000 or 30% when compared to the same prior period in 2024. The lower product revenue was attributable to delayed capital investment by customers, as a result of impending tariffs causing economic uncertainty.
Current wording
Internationally, our revenue for the three months ended September*** 30, 2025 and 2024, was $732,000 and $656,000, respectively, representing an increase of $76,000 or 12% when compared to the same prior year period. For the nine months ended September ***30, 2025 and 2024, our international revenue was $1,325,000 and $1,501,000, representing a decrease of $176,000 or 12% when compared to the same prior period in 2024. The lower product revenue was attributable to delayed capital investment by customers, as a result of impending tariffs causing economic uncertainty.
Previous wording
Cost of sales was $354,000 and $1,159,000 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $805,000 or 69%, compared to the prior year. Our gross profit as a percentage of sales was 66% compared to 62% in the same prior period, respectively.
Current wording
Cost of sales was $780,000 and $981,000 for the three months ended September*** ***30, 2025 and 2024, respectively, a decrease of $201,000 or 20%, compared to the prior year. Our gross profit as a percentage of sales was 61% compared to 61% in the same prior period, respectively.
Previous wording
Cost of sales was $979,000 and $1,602,000 for the six months ended June 30, 2025 and 2024, respectively, a decrease of $623,000, or 39%, compared to the prior year. Our gross profit as a percentage of sales was 62% compared to 61% in the same prior period, respectively.
Current wording
Cost of sales was $1,758,000 and $2,583,000 for the nine months ended September*** ***30, 2025 and 2024, respectively, a decrease of $825,000, or 32%, compared to the prior year. Our gross profit as a percentage of sales was 62% compared to 61% in the same prior period, respectively.
Previous wording
Professional fees were $184,000 and $84,000 for the three months ended June 30, 2025 and 2024, respectively, an increase of approximately $100,000 in the current year period. Professional fees were $403,000 and $282,000 for the six months ended June 30, 2025 and 2024, respectively, an increase of approximately $121,000 in the current year period. The increase is due to higher filing fees associated with our employee retention tax refunds, additional audit fees with regard to our annual 10K filing, and legal/recruitment fees incurred for the hiring of our new CFO.
Current wording
Professional fees were $185,000 and $105,000 for the three months ended September*** 30, 2025 and 2024, respectively, an increase of approximately $80,000 in the current year period. Professional fees were $589,000 and $387,000 for the nine months ended September ***30, 2025 and 2024, respectively, an increase of approximately $202,000 in the current year period. Primarily, the increase is due to filing fees associated with our employee retention tax refunds and additional audit, legal and compliance costs incurred in the current year.
Previous wording
Depreciation and amortization were $69,000 and $77,000 for the three months ended June 30, 2025 and 2024, respectively, representing a decrease of $8,000 or 10%. Depreciation and amortization were $138,000 and $154,000 for the six months ended June 30, 2025 and 2024, respectively, representing a decrease of $16,000, or 10%. The decrease in depreciation expense is due to a lower amount of fixed assets being depreciated in the current year period when compared to the same prior year periods.
Current wording
Depreciation and amortization were $69,000 and $70,000 for the three months ended September*** 30, 2025 and 2024, respectively, representing a decrease of $1,000 or 1%. Depreciation and amortization were $206,000 and $224,000 for the nine months ended September ***30, 2025 and 2024, respectively, representing a decrease of $18,000, or 8%. The decrease in depreciation expense is due to a lower amount of fixed assets being depreciated in the current year period when compared to the same prior year periods.
Previous wording
Selling expenses for the three months ended June 30, 2025 were $240,000, as compared to $366,000 for the quarter ended June 30, 2024, representing a decrease of approximately $126,000 or 34%. Selling expenses for the six months ended June 30, 2025 were $487,000, as compared to $655,000 for the six months ended June 30, 2024, representing a decrease of approximately $168,000 or 26%. The decline in selling expenses is due to a reduced marketing spend in the current year period.
Current wording
Selling expenses for the three months ended September*** 30, 2025 were $144,000, as compared to $227,000 for the three months ended September 30, 2024, representing a decrease of approximately $83,000 or 37%. Selling expenses for the nine months ended September 30, 2025 were $630,000, as compared to $882,000 for the nine months ended September ***30, 2024, representing a decrease of approximately $252,000 or 29%. The decline in selling expenses is due to a reduced marketing spend in the current year period.
Previous wording
Research and development expenses for the three months ended June 30, 2025 were $84,000, as compared to $62,000 for the three months ended June 30, 2024, representing an increase of approximately $22,000 or 35%. The increase in research and development expenses is due to additional costs incurred to maintain the Company’s patent and trademark portfolio in the current year period.
Current wording
Research and development expenses for the three months ended September*** 30, 2025 were $11,000, as compared to $56,000 for the three months ended September 30, 2024, representing a decrease of approximately $45,000 or 80%. Research and development expenses for the nine months ended September 30, 2025 were $139,000, as compared to $186,000 for the nine months ended September ***30, 2024, representing a decrease of approximately $47,000 or 25%. The decrease in research and development expenses is due to a reduction in allocated costs to R&D projects offset by additional expenses incurred to maintain the Company’s patent and trademark portfolio in the current year period.
Previous wording
Consulting fees were $63,000 and $23,000 for the three months ended June 30, 2025 and 2024, respectively, representing an increase of $40,000, in the current period. Consulting fees were $166,000 and $137,000 for the six months ended June 30, 2025 and 2024, respectively, representing an increase of $29,000, or 21%, in the current period. The increase in consulting fees is due to the hiring of additional consultants in the current year period.
Current wording
Consulting fees were $73,000 and $44,000 for the three months ended September*** 30, 2025 and 2024, respectively, representing an increase of $29,000, or 66% in the current period. Consulting fees were $238,000 and $181,000 for the nine months ended September ***30, 2025 and 2024, respectively, representing an increase of $57,000, or 31%, in the current period. The increase in consulting fees is due to the hiring of additional consultants in the current year period.
Previous wording
General and administrative expenses were $1,169,000 and $1,121,000 for the three months ended June 30, 2025 and 2024, respectively, an increase of $48,000 or 4% in the current period. The increase was primarily attributable to an increase in credit loss expense offset by a decrease in various G&A accounts and equity compensation due to cost-cutting initiatives which were implemented during the current year.
Current wording
General and administrative expenses were $1,072,000 and $910,000 for the three months ended September*** ***30, 2025 and 2024, respectively, an increase of $162,000 or 18% in the current period. The increase was primarily attributable to an increase in credit loss expense offset by various reductions due to cost-cutting initiatives implemented during the current year.
Previous wording
General and administrative expenses were $2,194,000 and $2,271,000 for the six months ended June 30, 2025 and 2024, respectively, a decrease of $77,000, or 3% in the current period. The decrease was primarily attributable to a decrease in salaries, various G&A accounts, and equity compensation offset by an increase in credit loss expense.
Current wording
General and administrative expenses were $3,266,000 and $3,181,000 for the nine months ended September*** ***30, 2025 and 2024, respectively, an increase of $85,000, or 3% in the current period. The increase was primarily attributable to an increase in credit loss expense offset by various reductions due to cost-cutting initiatives implemented during the current year.
Previous wording
Other income was approximately $535,000 and $0 for the six months ended June 30, 2025, and 2024. Other income consisted of employee retention tax credits received in the current year period.
Current wording
Other income was approximately $535,000 and $0 for the nine months ended September*** ***30, 2025, and 2024. Other income consisted of employee retention tax credits received in the current year period.
Previous wording
Interest income was approximately $1,000 and $2,000 for the three months ended June 30, 2025, and 2024, respectively. Interest income was approximately $84,000 and $12,000 for the six months ended June 30, 2025, and 2024. The increase for the six months was due to interest income in connection with the employee retention tax credits received in the current year period.
Current wording
Interest income was approximately $1,000 and $3,000 for the three months ended September*** 30, 2025, and 2024, respectively. Interest income was approximately $86,000 and $15,000 for the nine months ended September ***30, 2025, and 2024. The increase for the nine months was due to interest income in connection with the employee retention tax credits received in the current year period.
Previous wording
Interest expense was $106,000 and $93,000 for the three months ended June 30, 2025, and 2024, respectively. Interest expense was $225,000 and $187,000 for the six months ended June 30, 2025, and 2024, respectively. The increase in interest expense was due to the issuance of additional convertible notes in the current year periods.
Current wording
Interest expense was $130,000 and $94,000 for the three months ended September*** 30, 2025, and 2024, respectively. Interest expense was $356,000 and $280,000 for the nine months ended September ***30, 2025, and 2024, respectively. The increase in interest expense was due to the issuance of additional convertible notes in the current year periods.
Previous wording
Provision for income tax was $0 for the three and six months ended June 30, 2025 and 2024.
Current wording
Provision for income tax was $0 for the three and nine months ended September*** ***30, 2025 and 2024.
Previous wording
As of June 30, 2025, we had cash and cash equivalents of approximately $569,000 and working capital of $2,810,000. Our principal capital requirements are to fund operations, invest in research and development and capital equipment, and the continued costs of compliance with public company reporting requirements. We have historically funded our operations through funds generated through operations and debt and equity financing. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and may include operating and financial covenants that would restrict our operations. We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all.
Current wording
As of September*** ***30, 2025, we had cash and cash equivalents of approximately $490,000 and working capital of $2,493,000. Our principal capital requirements are to fund operations, invest in research and development and capital equipment, and the continued costs of compliance with public company reporting requirements. We have historically funded our operations through funds generated through operations and debt and equity financing. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and may include operating and financial covenants that would restrict our operations. We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all.
Previous wording
For the six months ended June 30, 2025 and 2024, we incurred losses from operations of ($1,887,000) and ($1,105,000), respectively. Cash used in operations for the six months ended June 30, 2025 and 2024 was ($463,000) and ($1,558,000), respectively.
Current wording
For the nine months ended September*** 30, 2025 and 2024, we incurred losses from operations of ($2,209,000) and ($956,000), respectively. Cash used in operations for the nine months ended September ***30, 2025 and 2024 was ($577,000) and ($1,453,000), respectively.
Previous wording
A breakdown of our statement of cash flows for the six months ended June 30, 2025 and 2024 is provided below:
Current wording
A breakdown of our statement of cash flows for the nine months ended September*** ***30, 2025 and 2024 is provided below:
Previous wording
Cash used in operations for the six months ended June 30, 2025 and 2024 was $463,000 and $1,558,000, respectively. The decrease was primarily attributable to management action on working capital with a focus on accounts receivable and inventory.
Current wording
Cash used in operations for the nine months ended September*** ***30, 2025 and 2024 was $577,000 and $1,453,000, respectively. The decrease was primarily attributable to management action on working capital with a focus on accounts receivable and inventory.
Previous wording
Cash used in investing activities for the six months ended June 30, 2025 and 2024 was $67,000 and $99,000, respectively. The decrease was attributable to patent and trademark costs incurred in the current year period compared to property and equipment purchased in the prior year period.
Current wording
Cash used in investing activities for the nine months ended September*** ***30, 2025 and 2024 was $133,000 and $105,000, respectively. The increase was attributable to patent and trademark costs incurred in the current year period compared to property and equipment purchased in the prior year period.
Previous wording
Cash provided by financing activities for the six months ended June 30, 2025 and 2024 was $435,000 and $28,000, respectively. The increase is attributable to the proceeds from the issuance of convertible notes in the current year period.
Current wording
Cash provided by financing activities for the nine months ended September*** ***30, 2025 and 2024 was $535,000 and $28,000, respectively. The increase is attributable to the proceeds from the issuance of convertible notes in the current year period.
Previous wording
For the six months ended June 30, 2025 and 2024, our net loss was approximately $1,493,000 and $1,280,000, respectively, and the cash used in operations was approximately $463,000 and $1,558,000, respectively. As of June 30, 2025, we had approximately $569,000 of cash and cash equivalents and an accumulated deficit of $55.8 million. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements in this Form 10-Q are issued. While we cannot predict our liquidity position beyond the next twelve months, we are expecting our business opportunities and customer base to continue to expand and grow, which may provide us with additional liquidity to fund our operations. We continue to consider and pursue various financing transactions such as equity and debt offerings, and we expect to raise additional capital through the sale of convertible debt securities as described in more detail below. However, there can be no assurance that we will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to the Company, as our ability to raise capital may be affected by various factors, including general market conditions, volatility of our stock price, investor interests and expectations, and our financial performance.
Current wording
For the nine months ended September 30, 2025 and 2024, our net loss was approximately $1,943,000 and $1,221,000, respectively, and the cash used in operations was approximately $577,000 and $1,453,000, respectively. As of September 30, 2025, we had approximately $490,000 of cash and cash equivalents and an accumulated deficit of $56.2 million. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements in this Form 10-Q are issued. While we cannot predict our liquidity position beyond the next twelve months, we are expecting our business opportunities and customer base to continue to expand and grow, which may provide us with additional liquidity to fund our operations. We continue to consider and pursue various financing transactions such as equity and debt offerings, and we expect to raise additional capital through the sale of convertible debt securities as described in more detail below. However, there can be no assurance that we will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to the Company, as our ability to raise capital may be affected by various factors, including general market conditions, volatility of our stock price, investor interests and expectations, and our financial performance.
Previous wording
During the six months ended June 30, 2025, we entered into securities purchase agreements (the “2025 SPA”) (the “2025 SPA”) with certain accredited investors (collectively, the “Investors”) pursuant to which we sold an aggregate of $435,000 of convertible promissory notes to Investors (the “Note”) in private placement transactions. The 2025 SPA allows us to offer and sell in multiple closings up to an aggregate principal amount of $3,000,000 of Notes. The Notes are due on the fifth anniversary of their issuance and bear interest at a rate of 12% per annum, payable in equal monthly installments. The Notes are convertible at any time into shares of the Company’s common stock, at the option of the holder at a conversion price of $1.25 per share, as adjusted, which shall not exceed $1.55 per share. In addition, the Company can require Investors to convert the Notes at the then current conversion price at any time after 90 days from the issue date if the Common Stock has a closing bid price of $1.55 per share or higher on the Nasdaq Capital Market for any twenty (20) days within a thirty (30) day period of consecutive trading days, or if a “fundamental change” occurs (as defined in the SPA). The Notes are unsecured and senior to other indebtedness of the Company subject to certain exceptions. The offer and sale of the Notes pursuant to the 2025 SPA is not registered under the Securities Act of 1933, as amended (the “Securities Act”), as it is exempt from registration pursuant to Section 4(a)(2) thereof and Rule 506(b) promulgated thereunder. We also entered into registration rights agreements with the Investors pursuant to which we agreed to register the resales of shares of common stock issuable upon conversion of the Notes.
Current wording
During the nine months ended September 30, 2025, we entered into securities purchase agreements (the “ 2025 SPA”) with certain accredited investors (collectively, the “Investors”) pursuant to which we sold an aggregate of $535,000 of convertible promissory notes to Investors (the “Note”) in private placement transactions. The 2025 SPA allows us to offer and sell in multiple closings up to an aggregate principal amount of $3,000,000 of Notes. The Notes are due on the fifth anniversary of their issuance and bear interest at a rate of 12% per annum, payable in equal monthly installments. The Notes are convertible at any time into shares of the Company’s common stock, at the option of the holder at a conversion price of $1.25 per share, as adjusted, which shall not exceed $1.55 per share. In addition, the Company can require Investors to convert the Notes at the then current conversion price at any time after 90 days from the issue date if the Common Stock has a closing bid price of $1.55 per share or higher on the Nasdaq Capital Market for any twenty (20) days within a thirty (30) day period of consecutive trading days, or if a “fundamental change” occurs (as defined in the SPA). The Notes are unsecured and senior to other indebtedness of the Company subject to certain exceptions. The offer and sale of the Notes pursuant to the 2025 SPA is not registered under the Securities Act of 1933, as amended (the “Securities Act”), as it is exempt from registration pursuant to Section 4(a)(2) thereof and Rule 506(b) promulgated thereunder. We also entered into registration rights agreements with the Investors pursuant to which we agreed to register the resales of shares of common stock issuable upon conversion of the Notes.
Previous wording
The SEC defines critical accounting estimates as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and the most demanding of our judgment. We consider the following estimates to be critical to an understanding of our consolidated financial statements and the uncertainties associated with the complex judgments made by us that could impact our results of operations, financial position and cash flows.
Current wording
The SEC defines critical accounting estimates as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and the most demanding of our judgment. We consider the following estimates to be critical to an understanding of our consolidated financial statements and the uncertainties associated with the complex judgments made by us that could impact on our results of operations, financial position and cash flows.
Previous wording
As of June 30, 2025, and December 31, 2024 we had contract balances and unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed in the amounts of $719,235 and $211,724, respectively.
Current wording
As of September 30, 2025, and December 31, 2024 we had contract balances and unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed in the amounts of $309,752 and $211,724, respectively.
Previous wording
We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating long-lived assets for impairment, we measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If our long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We base the calculations of the estimated fair value of our long-lived assets on the income approach. For the income approach, we use an internally developed discounted cash flow model that includes, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the three and six months ended June 30, 2025 and 2024.
Current wording
We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating long-lived assets for impairment, we measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If our long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We base the calculations of the estimated fair value of our long-lived assets on the income approach. For the income approach, we use an internally developed discounted cash flow model that includes, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the three and nine months ended September 30, 2025 and 2024.
Previous wording
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company will adopt ASU 2023-09 in its fourth quarter of 2025 using a prospective transition method.
Current wording
In December 2023, FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company will adopt ASU 2023-09 in its fourth quarter of 2025 using a prospective transition method.
Previous wording
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). In January 2025, ASU No. 2025-01 was issued to clarify the effective date for all public business entities. The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements once adopted. We are currently evaluating the provisions of this ASU.
Current wording
In November 2024, FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). In January 2025, ASU No. 2025-01 was issued to clarify the effective date for all public business entities. The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements once adopted. We are currently evaluating the provisions of this ASU.