Investment Thesis
TOMI Environmental Solutions faces severe structural insolvency with stockholders' equity of just $550 against $7.5M in liabilities (debt/equity of 5700x), indicating near-term financial distress risk. The company is experiencing a sharp 27.2% revenue decline with deeply negative operating margins (-37.9%) and net losses (-$810.6K), demonstrating deteriorating business fundamentals. While positive operating cash flow provides temporary relief, the unsustainable balance sheet leverage and profitability collapse suggest elevated default risk.
Strengths
- Gross margin of 50.3% demonstrates viable unit economics if volume stabilizes
- Positive operating cash flow of $295.6K and free cash flow of $290.2K provide near-term liquidity buffer
- Minimal capital expenditure requirements ($5.3K) reduce cash burn needs
Risks
- Stockholders' equity of $550 on $7.5M liabilities creates structural insolvency and extreme bankruptcy risk
- Debt-to-equity ratio of 5700x indicates unsustainable financial leverage with virtually no equity cushion
- Revenue contraction of 27.2% YoY combined with -$810.6K net loss signals accelerating business deterioration
- Negative interest coverage ratio (-6.7x) means operating losses cannot support debt service obligations
- Quick ratio of 0.40x and current ratio barely above 1.0 suggest emerging liquidity constraints
Key Metrics to Watch
- Revenue trend reversal and path to profitability
- Changes in stockholders' equity and debt levels
- Operating cash flow sustainability given negative earnings
- Debt covenant compliance and refinancing needs
Financial Metrics
Revenue
1.7M
Net Income
-810.6K
EPS (Diluted)
$-0.04
Free Cash Flow
290.2K
Total Assets
7.5M
Cash
280.0K
Profitability Ratios
Gross Margin
50.3%
Operating Margin
-37.9%
Net Margin
-49.0%
ROE
-147,390.0%
ROA
-10.9%
FCF Margin
17.5%
Balance Sheet & Liquidity
Current Ratio
1.09x
Quick Ratio
0.40x
Debt/Equity
5,700.00x
Debt/Assets
100.0%
Interest Coverage
-6.66x
Long-term Debt
3.1M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-16T10:29:25.321557 |
Data as of: 2026-03-31 |
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