# EDGAR Filing Document

**Accession Number:** 0000314227
**File Stem:** 0001654954-23-003028
**Filing Date:** 2023-3
**Character Count:** 26270
**Document Hash:** afdf67f4062ca3d9870c99eb806adb0f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001654954-23-003028.hdr.sgml**: 20230316

**ACCESSION NUMBER**: 0001654954-23-003028

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230316

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230316

**DATE AS OF CHANGE**: 20230316

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TOMI Environmental Solutions, Inc.
- **CENTRAL INDEX KEY:** 0000314227
- **STANDARD INDUSTRIAL CLASSIFICATION:** INDUSTRIAL ORGANIC CHEMICALS [2860]
- **IRS NUMBER:** 591947988
- **STATE OF INCORPORATION:** FL
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39574
- **FILM NUMBER:** 23738728

**BUSINESS ADDRESS:**
- **STREET 1:** 8430 SPIRES WAY
- **CITY:** FREDERICK
- **STATE:** MD
- **ZIP:** 21701
- **BUSINESS PHONE:** 8005251698

**MAIL ADDRESS:**
- **STREET 1:** 8430 SPIRES WAY
- **CITY:** FREDERICK
- **STATE:** MD
- **ZIP:** 21701

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Ozone Man, Inc.
- **DATE OF NAME CHANGE:** 20071130

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RPS GROUP INC
- **DATE OF NAME CHANGE:** 19940818

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DAUPHIN INC
- **DATE OF NAME CHANGE:** 19940818

?xml version="1.0" encoding="utf-8"?tomz_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **March 16, 2023**

---

| |
|:---|
| **TOMI Environmental Solutions, Inc.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | | |
|:---|:---|:---|
| **Florida** | **000-09908** | **59-1947988** |
| (State or other jurisdiction <br>of incorporation) | (Commission <br>File Number) | (I.R.S. Employer <br>Identification No.) |

---

**8430 SPIRES WAY**

<u>**Frederick, Maryland 21701**</u>

(Address of principal executive offices) (Zip Code)

**<u>(800) 525-1698</u>**

(Registrant's telephone number, including area code)

**<u>Not Applicable</u>**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 **Item 2.02 Results of Operations and Financial Condition.**

On March 16, 2023, TOMI Environmental Solutions, Inc. issued a press release regarding its financial results for the year ended December 31, 2022. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1. No additional information is included in this Current Report on Form 8-K.

The information included in this Current Report on Form 8-K, including the exhibit hereto, shall not be deemed "filed" for purposes of, nor shall it be deemed incorporated by reference in, any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

**Item 9.01 Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| [99.1](tomz_ex991.htm) | [Press release issued March 16, 2023](tomz_ex991.htm) |

---

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **TOMI ENVIRONMENTAL SOLUTIONS, Inc.** | **TOMI ENVIRONMENTAL SOLUTIONS, Inc.** |
| Dated: March 16, 2023 | By: | /s/ Halden Shane |
|  |  | Halden Shane |
|  |  | Chief Executive Officer |

---

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| [99.1](tomz_ex991.htm) | [Press release issued March 16, 2023](tomz_ex991.htm) |

---

## Exhibit 99.1

**EXHIBIT 99.1**

![](tomz_ex991img2.jpg)

**TOMI ENVIRONMENTAL SOLUTIONS, INC. REPORTS 40% INCREASE IN** 

**FOURTH QUARTER REVENUE** 

- **Robust Pipeline in Life Sciences Sector Positions Business for Growth in 2023 –**

- **Significantly Reduced SG&A in The Quarter and Year -** 

- **58% Reduction in Net Loss and Slight Adjusted EBITDA Loss in The Fourth** 

**Quarter Reflect Operating Leverage In Business Model As Company Scales -** 

FREDERICK, MD, March 16, 2023 (BUSINESS WIRE) — TOMI Environmental Solutions, Inc.<sup>®</sup> ("TOMI") (NASDAQ: TOMZ), a global company specializing in disinfection and decontamination utilizing its premier Binary Ionization Technology (BIT) platform through its SteraMist brand of products, today announced its financial results for the fourth quarter and year ended December 31, 2022.

TOMI Chief Executive Officer, Dr. Halden Shane, stated, "2022 delivered continued growth in our revenue and sales pipeline as well as improved year over year financial operating results. We ended the year on a strong note as we grew fourth quarter sales by 40% compared to the same prior year period and saw 60% growth sequentially from the prior quarter. In fact, in the quarter ended December 31, 2022 we delivered our best financial results since 2020. Furthermore, we continue to see positive signs in the marketplace as our fourth quarter solution sales grew by 31% compared to our prior year fourth quarter. We expect solution sales to continue to increase, particularly as we grow our base of CES systems, which should have a positive impact on margins."

"Our recognized revenue and sales backlog for the year ended December 31, 2022, together, was $10.4 million and we saw 22% year over year growth in customer orders. The increase in sales was largely attributable to increased demand for our CES systems due to the success of our internal tech team's ability to deliver systems in the fourth quarter of 2022, as well as an increase in mobile equipment orders due to our expanded product line which now features our fourth generation environment system, SteraPak, Select Plus and CES system."

"The higher sales, gross profit and reduced operating expenses led to improved overall annual financial results as our loss from operations declined 41% year over year and we achieved 42% improvement in our loss per share in 2022.

"We entered 2023 with strong momentum and we will continue to focus on executing our strategies to grow revenues, expand business development and deliver improved results and values for our shareholders," Dr. Shane concluded.

**Financial Results for the year ended December 31, 2022, compared to December 31, 2021**

· Total net revenue was $8,338,000 compared to $7,754,000, an increase of $584,000, or 8%.

· Gross margin was 60.7% compared to 59.2%. The increase in gross profit was attributable to product mix in sales.

· Operating loss was ($2,882,000) compared to ($4,924,000). The improved operating loss was attributable to higher sales, increased gross profit and lower operating expenses.

· Net loss was ($2,880,000) or ($0.15) per basic and diluted share, compared to ($4,435,000) or ($0.25) per basic share.

· Adjusted EBITDA was a loss of ($1,899,000) compared to ($4,123,000). A table reconciling EBITDA to the appropriate GAAP financial measure is included with the Company's financial information below.

· Cash used in operations was ($1,234,000) compared to ($3,824,000), representing an improvement of $2,590,000.

**Financial Results for the three months ended December 31, 2022, compared to December 31, 2021**

· Total net revenue was $2,812,000 compared to $2,010,000, an increase of $802,000, or 40%.

· Gross margin was 58.6% compared to 54.5%. The increase in gross profit was attributable to product mix in sales.

· Operating loss of ($706,000) compared to ($1,734,000). The improved operating loss was attributable to higher sales, increased gross profit and lower operating expenses.

· Net loss was ($705,000) or ($0.04) per basic and diluted share, compared to ($1,660,000) or ($0.10) per basic share.

· Adjusted EBITDA was a loss of ($268,000) compared to ($1,573,000). A table reconciling EBITDA to the appropriate GAAP financial measure is included with the Company's financial information below.

**Balance sheet highlights as of December 31, 2022**

· Cash and cash equivalents were approximately $3.9 million.

· Deferred revenue was $0.7 million.

· Working capital was $8.8 million.

· Shareholders' equity was $11.4 million.

**Recent Financial Highlights:**

· Recognized revenue and customer sales backlog for the year ended December 31, 2022, together, was approximately $10,362,000.

· Received over $10,000,000 in sales orders from key global fortune 500 customers during 2022, representing 22% year over year growth compared to 2021.

· 8% year over year growth in recognized revenue for the year ended December 31, 2022, compared to 2021.

· 40% growth in recognized revenue for the three months ended December 31, 2022, compared the same period in 2021.

· 60% growth in 2022 fourth quarter sales compared to the third of quarter 2022.

· Customer sales backlog of $2,024,000 as of December 31, 2022.

**Recent Business Highlights:** 

· Received purchase order for an iHP Custom Engineered System (CES) from Avid Bioservices, Inc. (Avid) for implementation in Avid's new purpose-built viral vector development and manufacturing facility in Costa Mesa, California.

· Announced that SteraMist is to be utilized by a world-renowned influenza vaccine company that focuses on innovative research, transformative technologies, production, and distribution.

· Announced that the U.S. Department of Health and Human Services (HHS), the largest biomedical research agency in the world, has purchased SteraMist disinfection systems for its Africa-based Biosafety Level 3 Laboratory (BSL-3) laboratory.

· Announced that the National Health Services (NHS) Wales purchased SteraMist ionized Hydrogen Peroxide (iHP) technology, further expanding the Company's presence in Great Britain.

· Launched our fourth generation SteraMist Environment System. The system will now be 24 voltages, allowing for universal outlet usage and converting even more of the hydrogen peroxide BIT Solution to hydroxyl radicals, thus lowering H<sub>2</sub>O<sub>2</sub> PPM levels allowing for faster turnaround time. In addition, the unit will have eight (8) outputs where four (4) are dedicated to our regular process of injection, dwell, and aeration along with a light beacon status bar. Four (4) are programmable to meet the customer's needs for any external equipment they may desire to work with the system.

· Successfully completed a second 24-month storage stability, this one to meet US EPA requirements (first one was for EU BPR submission and had different methods/requirements). With the patented 7.8% product, our Binary Ionization Technology Solution is safe to ship by air and store under normal ambient conditions. The study will be submitted for EPA review, and the expiration date will be extended going forward upon EPA approval.

· Soli Organic Inc., one of the nation's largest commercial indoor organic growing companies, obtained multiple SteraMist systems to protect their controlled indoor growing food process from costly fungus, Botrytis. The combination of all SteraMist systems purchased will be used daily, on a continuous cycle, to disinfect everything from seed trays that the soil and plants sit in to the plants themselves.

**Conference Call Information**

TOMI will hold a conference call to discuss Fourth Quarter and Year End 2022 results at 4:30 p.m. ET today, March 16, 2023.

To participate in the call by phone, dial (877) 545-0523 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0016. Please use the participant access code: 105041. To access the live webcast or view the press release, please visit the Investor Relations section of the <u>TOMI website</u> or register at the following link: <u>https://www.webcaster4.com/Webcast/Page/2262/47852</u>

A replay of the teleconference will be available until Thursday, March 30, 2023, and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use replay access code: 47852. A replay of the webcast will be available for at least 90 days on the company's website, starting approximately one hour after the completion of the call.

**TOMI™ Environmental Solutions, Inc.: Innovating for a safer world®**

TOMI™ Environmental Solutions, Inc. (NASDAQ:TOMZ) is a global decontamination and infection prevention company, providing environmental solutions for indoor surface disinfection through the manufacturing, sales and licensing of its premier Binary Ionization Technology® (BIT™) platform. Invented under a defense grant in association with the Defense Advanced Research Projects Agency (DARPA) of the U.S. Department of Defense, BIT™ solution utilizes a low percentage Hydrogen Peroxide as its only active ingredient to produce a fog of ionized Hydrogen Peroxide (iHP™). Represented by the SteraMist® brand of products, iHP™ produces a germ-killing aerosol that works like a visual non-caustic gas.

TOMI products are designed to service a broad spectrum of commercial structures, including, but not limited to, hospitals and medical facilities, cruise ships, office buildings, hotel and motel rooms, schools, restaurants, meat and produce processing facilities, military barracks, police and fire departments, and athletic facilities. TOMI products and services have also been used in single-family homes and multi-unit residences.

TOMI develops training programs and application protocols for its clients and is a member in good standing with The American Biological Safety Association, The American Association of Tissue Banks, Association for Professionals in Infection Control and Epidemiology, Society for Healthcare Epidemiology of America, America Seed Trade Association, and The Restoration Industry Association.

For additional information, please visit <u>http://www.tomimist.com</u>/ or contact us at <u>info@tomimist.com</u>.

**Forward-Looking Statements**

This press release contain forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, expected sales pipeline; financial performance and operating results for 2023; upcoming launch of new products; expected growth in sales and market demand; revenue opportunities of CES products and brand recognition of our products. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, the impact of COVID-19 pandemic on our business and customers; our ability to maintain and manage growth and generate sales, our reliance on a single or a few products for a majority of revenues; the general business and economic conditions; and other risks as described in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed by us with the SEC and other periodic reports we filed with the SEC. The information provided in this document is based upon the facts and circumstances known at this time. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and we undertake no duty to update such information, except as required under applicable law.

**Use of Non-GAAP Financial Measures**

To supplement our unaudited consolidated financial statements presented on a basis consistent with U.S. GAAP, we disclose certain non-GAAP financial measures for our historical performance, including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. We define EBITDA as net income (loss), adjusted to exclude: interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure and is intended to serve as a supplement to our results provided in accordance with GAAP. We define Adjusted EBITDA as net income (loss), adjusted to exclude: interest, taxes, depreciation and amortization; stock-based compensation expense. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We believe that these historical non-GAAP financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. In addition, our management uses non-GAAP measures to evaluate our performance internally and to benchmark our performance externally against competitors. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. Although we believe that the use of non-GAAP financial measures enhances its investors' understanding of its business and performance, our use of non-GAAP financial measures should not be considered an alternative to GAAP basis financial measures and should be read in conjunction with the relevant GAAP financial measures. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. Because of these limitations, the non-GAAP financial measure used in this release should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP as set forth below. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial

measures to their most directly comparable U.S. GAAP financial measures.

**TOMI ENVIRONMENTAL SOLUTIONS, INC.**

 **CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
| **ASSETS** | | |
| Current Assets: | **December 31, 2022** | **December 31, 2021** |
| Cash and Cash Equivalents | $3866733 | $5317443 |
| Accounts Receivable - net | 2772340 | 1964776 |
| Other Receivables | 164150 | 235904 |
| Inventories | 4495999 | 4743280 |
| Vendor Deposits | 447052 | 288586 |
| Prepaid Expenses | 388359 | 343573 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Current Assets | 12134633 | 12893562 |
| Property and Equipment – net | 1335331 | 1488319 |
| Other Assets: |  |  |
| Intangible Assets – net | 1025736 | 956284 |
| Operating Lease - Right of Use Asset | 528996 | 583271 |
| Capitalized Software Development Costs - net |  | 10476 |
| Other Assets | 475103 | 341006 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Other Assets | 2029835 | 1891037 |
| Total Assets | $15499799 | $16272918 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY**  | **LIABILITIES AND SHAREHOLDERS' EQUITY**  | **LIABILITIES AND SHAREHOLDERS' EQUITY**  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts Payable | $1761750 | $1054040 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued Expenses and Other Current Liabilities | 728703 | 664608 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred Revenue | 699732 | 6000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Current Portion of Long-Term Operating Lease | 100282 | 91775 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Current Liabilities | 3290467 | 1816423 |
| Long-Term Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Long-Term Operating Lease, Net of Current Portion | 761132 | 861415 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Long-Term Liabilities | 761132 | 861415 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities | 4051599 | 2677838 |
| Shareholders' Equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cumulative Convertible Series A Preferred Stock; par value $0.01 per share, 1,000,000 shares authorized; 63,750 shares issued and outstanding at December 31, 2022 and December 31, 2021 | 638 | 638 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cumulative Convertible Series B Preferred Stock; $1,000 stated value; 7.5% Cumulative dividend; 4,000 shares authorized; none issued and outstanding at December 31, 2022 and December 31, 2021 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common stock; par value $0.01 per share, 250,000,000 shares authorized; 19,763,955 and 19,680,955 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively. | 197640 | 196810 |
| &nbsp;&nbsp;&nbsp;&nbsp; Additional Paid-In Capital | 57673559 | 56941209 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated Deficit | (46423637) | (43543577) |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Shareholders' Equity | 11448200 | 13595080 |
| Total Liabilities and Shareholders' Equity | $15499799 | $16272918 |

---

**TOMI ENVIRONMENTAL SOLUTIONS, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For The Three Months Ended** | **For The Three Months Ended** | **For The Year Ended** | **For The Year Ended** |
|  | **December 31,**  | **December 31,**  | **December 31,**  | **December 31,**  |
|  | **2022** | **2021** | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales, net | $2811501 | $2010033 | $8338099 | $7753582 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | 1164020 | 914758 | 3277644 | 3166891 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gross Profit | 1647480 | 1095275 | 5060455 | 4586691 |
| Operating Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional Fees | 144574 | 140165 | 536311 | 538093 |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and Amortization | 81502 | 68999 | 329164 | 294665 |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling Expenses | 595225 | 399329 | 1867013 | 1674466 |
| &nbsp;&nbsp;&nbsp;&nbsp; Research and Development | 97630 | 78055 | 352238 | 572700 |
| &nbsp;&nbsp;&nbsp;&nbsp; Consulting Fees | 69423 | 61026 | 215180 | 326614 |
| &nbsp;&nbsp;&nbsp;&nbsp; General and Administrative | 1365063 | 2081713 | 4642548 | 6104363 |
| Total Operating Expenses | 2353417 | 2829287 | 7942454 | 9510901 |
| Income (loss) from Operations | (705937) | (1734012) | (2881999) | (4924210) |
| Other Income (Expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain Upon Debt Extinguishment |  |  |  | 414583 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest Income | 891 | 378 | 1939 | 1076 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest Expense | - | - | - | (1034) |
| Total Other Income (Expense) | 891 | 378 | 1939 | 414625 |
| Income (loss) before income taxes | (705046) | (1733634) | (2880060) | (4509585) |
| Provision for Income Taxes | - | (74086) | - | (74086) |
| Net Income (loss) | $(705046) | $(1659548) | $(2880060) | $(4435499) |
| Net income (loss) Per Common Share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Basic | $(0.04) | $(0.10) | $(0.15) | $(0.25) |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted | $(0.04) | $(0.10) | $(0.15) | $(0.25) |
| Basic Weighted Average Common Shares Outstanding | 19763955 | 16843045 | 19743544 | 17538994 |
| Diluted Weighted Average Common Shares Outstanding | 19763955 | 16843045 | 19743544 | 17538994 |

---

The following is a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA (in thousands, except percentages; unaudited):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For The Three Months Ended** | **For The Three Months Ended** | **For The Years**  | **For The Years**  |
|  | **December 31,**  | **December 31,**  | **December 31,**  | **December 31,**  |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| Net income (loss) | $(705046) | $(1659548) | $(2880060) | $(4435499) |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest Income | (891) | (378) | (1939) | (1076) |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest Expense |  |  |  | 1034 |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and Amortization | 81502 | 68999 | 329164 | 294665 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other | - | - | - | - |
| EBITDA (Loss) | $(624435) | $(1590927) | $(2552835) | $(4140876) |
| Equity Compensation Expense | 356077 | 18354 | 653843 | 18354 |
| Other | - | - | - | - |
| Adjusted EBITDA (Loss) | $(268358) | $(1572573) | $(1898992) | $(4122522) |
| Net revenue | $2811501 | $2010033 | $8338099 | $7753582 |
| Adjusted EBITDA Margin | -10% | -78% | -23% | -53% |

---

INVESTOR RELATIONS CONTACT:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

tomi@imsinvestorrelations.com