TOMI Environmental Solutions, Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
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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.
Jun 30, 2026 · Filed Aug 14, 2026
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Item 1A. Risk Factors
Except as set forth below, there have been no material changes to the risk factors previously disclosed under Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on May 15, 2026, and Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026.
We may not be able to maintain compliance with Nasdaq’s listing standards, which could limit shareholders’ ability to trade our common stock.
As a listed company on Nasdaq, we are required to meet certain financial, public float, bid price, and liquidity standards on an ongoing basis. If we fail to meet these continued listing requirements, our common stock may be subject to delisting, which may materially impact our liquidity and make it more challenging for shareholders to buy and sell our shares.
We are currently subject to a Nasdaq delisting proceeding relating to two concurrent Nasdaq deficiencies. On November 17, 2025, we received a deficiency notice that our closing bid price had been below the minimum $1.00 per share requirement under Nasdaq Listing Rule 5550(a)(2) for 30 consecutive business days (the “Bid Price Requirement”). We had until May 18, 2026, to regain compliance, but did not regain compliance by that date.
Additionally, as of June 30, 2026, the Company's total stockholders' equity was $1,428,436, which was below the $2,500,000 minimum required under Nasdaq Listing Rule 5550(b)(1) (the “Minimum Equity Requirement”). On November 21, 2025, the Company received a deficiency letter from the Listing Qualifications Department (the "Staff") of the Nasdaq Stock Market notifying the Company that, based on its Form 10-Q for the period ended September 30, 2025, which reported stockholders’ equity of $2,206,482, the Company no longer complied with the Minimum Equity Requirement, and that the Company did not meet the alternatives of market value of listed securities or net income from continuing operations. We submitted a compliance plan within the required 45-day period; however, we did not regain compliance with the Minimum Equity Requirement by May 18, 2026.
On May 19, 2026, the Company received a letter from the Staff notifying the Company that, because it failed to regain compliance with each of the Bid Price Requirement and Minimum Equity Requirement, the Common Stock will be delisted from Nasdaq. The Company appealed the Staff’s delisting determination to a Nasdaq Hearings Panel, which stayed any further delisting action through the hearing and any extension the Hearings Panel may grant. On June 30, 2026, a hearing was held before the Nasdaq Hearings Panel and the Company is currently awaiting the Nasdaq Hearings Panel’s decision.
In the event that we are unsuccessful in the Staff’s delisting determination to the Nasdaq Hearings Panel, or we fail to satisfy any conditions or requirements imposed by the Nasdaq Hearings Panel in connection with any extension that may be granted, we will be delisted from Nasdaq, and the value of your shares may be materially adversely affected, which would impair your ability to sell or purchase your shares when you wish to do so.
We may not complete the proposed Merger within the time frame we anticipate or at all, which could have an adverse effect on our business, financial results and/or operations.
The proposed Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control. The Closing is expected to take place during the third quarter of 2026, subject to the satisfaction or waiver of the closing conditions under the Merger Agreement. There can be no assurance that the Merger will be completed. If the Merger is not completed for any reason, our ongoing business may be materially adversely affected, and we would be subject to a number of risks, including the following:
| · | we may experience negative reactions from the financial markets, including negative impacts on our stock price, and it is uncertain when, if ever, the price of the shares would return to the prices at which the shares currently trade; |
| · | we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting employees, customers, partners, suppliers and others with whom we do business; |
| · | we will still be required to pay costs relating to the Merger, such as legal, accounting, financial advisory and other professional services fees, which may relate to activities that we would not have undertaken other than in connection with the Merger; |
| · | completion of the Merger is conditioned upon completion of the Financing Transaction (as defined in the Merger Agreement) resulting in gross proceeds to the Company of not less than $10,000,000 prior to the Closing, and there can be no assurance that the Financing Transaction will be completed; |
| · | Carbonium may terminate the Merger Agreement if our Common Stock is delisted from The Nasdaq Capital Market prior to the Closing; |
| · | while the Merger Agreement is in effect, we are subject to restrictions on our business activities, including requirements to use commercially reasonable efforts to conduct our business and operations in the ordinary course of business and restrictions on certain actions without Carbonium’s prior written consent, which could prevent us from taking certain actions with respect to our business that we may otherwise consider advantageous; |
| · | while the Merger Agreement is in effect, we are subject to restrictions on our ability to solicit, initiate or knowingly encourage certain acquisition proposals or inquiries or enter into certain alternative acquisition transactions, subject to the terms and exceptions set forth in the Merger Agreement, which could prevent us from pursuing other strategic opportunities; and |
| · | matters relating to the Merger require substantial commitments of time and resources by our management, which could result in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to us. |
If the Merger is not consummated, the risks described above may materialize, and they may have a material adverse effect on our business operations, financial results and stock price, particularly to the extent that the current market price of our Common Stock reflects an assumption that the Merger will be completed.
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