Q4 2024 TOMI Environmental Solutions Inc Earnings Call
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Speaker Change: Thank you for holding your conference will begin momentarily. Please continue to hold your conference will begin in one moment. Thank you.
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Speaker Change: Yeah.
Speaker Change: Greetings and welcome to the told me Environmental Solutions, Inc. Fourth quarter 2024 financial results Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Speaker Change: And then wanted to require operator assistance during the conference. Please press star zero on your telephone keypad.
Speaker Change: Please note this conference is being recorded.
Speaker Change: I will turn the conference over to your host John Nesbitt from IMS Investor Relations you may begin.
Speaker Change: Thank you for joining us today.
Speaker Change: On the call today is telling me as chief executive.
Speaker Change: Officer, and chairman of the board Dr. Hulton Shan.
Dr. Shane: D J, Shane Tommy's, Chief operating officer, and Nick <unk> interim Chief Financial Officer, Dr. Shane will provide an overview of recent business highlights financials and future plans you J, Nick will be available for question and answers.
Dr. Shane: A telephone replay of today's call will be available through Monday April 28, 19.
Dr. Shane: 2025, with the details of which are included in the company's press release dated April 14th and webcast replay.
Dr. Shane: Also will be available at Tommy's website, www dot Deramus Dot com. Please note that information contained within this presentation is relevant only to a day of which was recorded April 14th 2025 and were therefore advised.
Dr. Shane: Time sensitive information may no longer be accurate at the time of any replay certain written or oral statements made by management of Tony May constitute forward looking statements as defined in the private Securities Litigation Reform Act of 1995. These forward looking statements should be evaluated in light of important risk factors that could cause actual results to differ materially.
Dr. Shane: We anticipate results the information provided in this conference call is based upon the facts and circumstances known at this time the company undertakes no obligation to update these forward looking statements. After the date of this call.
Speaker Change: Dish and Tony will discuss certain non-GAAP financial measures. During this call companies as non-GAAP measures because it believes they provide useful information about operating performance that should be considered by investors, who can judge in conjunction with the mandated GAAP measures.
Speaker Change: A reconciliation of these non-GAAP measures is comparable to comparable GAAP measures is included in the earnings release dated April 14th 2025.
Speaker Change: Now I'll turn the call over to Thomas <unk>, Chief Executive Officer, Chairman of the Board Dr. Albert Chen. Please go ahead.
Speaker Change: Thank you John.
Speaker Change: Good afternoon, everyone and thank you for joining the tell me environmental earnings call.
Speaker Change: First of all.
Speaker Change: I wanted to just state that you have been having some very strong earthquake in southern California that should be an interruption in the call will be picked up on the east coast.
Speaker Change: We recognize the importance of the timely reporting and we apologize for any inconvenience that this extension we filed caused to our investors and stakeholders, we expect to be back on track with timely filings going forward consistent with how we have been over the years.
Speaker Change: During the quarter and the year, we recognized some one time non cash expenses.
Speaker Change: What can be impacted on GAAP.
Speaker Change: We have reviewed this but importantly, our business strategy remains on track our pipeline is healthy our preliminary first quarter results are much improved over the first quarter last year.
Speaker Change: We are making progress in our key initiatives of expanding the Steri missed IHT brand to the world. We remained optimistic about our future and are excited to highlight some of the early successes. We have achieved in 2025, demonstrating the growth we are experiencing.
Speaker Change: We've established valuable partnerships in key global markets for our cutting edge technology.
Speaker Change: And we have a clear path ahead to deliver profitability with the best outcomes for our customers create new opportunities and enhanced value for our shareholders through improved execution and disciplined operational performance.
Speaker Change: The year 2025 has already demonstrated early wins and progress.
Speaker Change: <unk> from our 2024 initiatives in product development.
Speaker Change: Application usage and the expanded range of services, we now offer and have streamlined let's.
Speaker Change: Let's highlight some of the accomplishments from 2024, some of which is not fully reflected in our financial results. The disinfection decontamination industry prioritizes ease of use.
Speaker Change: Automation and validated solutions, regardless of the industry vertical.
Speaker Change: Important to differentiate between our full area custom engineered systems, the es and our hybrid projects versus our latest staring this integrated system SaaS offering.
Speaker Change: These full automation systems span both categories and this line of products should significantly enhance our best solution razor razor blade business model.
Speaker Change: We have successfully maintained our expanding pipeline for custom engineered systems, while also introducing the hybrid offering to the market.
Speaker Change: In 2024, we actively worked and supported in some fashion seven different custom projects many of which had been previously reported on we have secured our first 2025 CES deal collectively these eight deals are valued at approximately three points.
Speaker Change: 7 million.
Speaker Change: Please note that this figure does not represent revenue recognized in any one year or quarter as project completion timing does not directly aligned with deliverables to each project.
Speaker Change: Currently we are in discussions regarding our CES and hybrid systems across 46 different projects.
Speaker Change: A record for our company with 12 of these being very active.
Speaker Change: As we finalized timelines.
Speaker Change: We anticipated closing five of these deals in 2025, which should yield around one 4 million. While this revenue won't be fully recognized in 2025 review these are significant wins for our future.
Speaker Change: To further invest in turnkey solutions in October 24th we formally launched the steadiness integrated system or SaaS platform.
Speaker Change: Product offerings, which includes the SaaS standalone or S. I S. S. A.
Speaker Change: Since this October launch the pipeline of opportunities for this project.
Speaker Change: Product has grown to over $1 million.
Speaker Change: We successfully delivered our first standard S. I S. Using our legacy during this environment system collaborating with an OEM from Italy to the University of Virginia at the end of 2020 for this long time user of Steri missed IHT has.
Speaker Change: Already expressed interest in another SaaS purchase for early 2026.
Speaker Change: Additionally, I'm pleased to announce that we have secured contracts for three more SaaS offerings. This year totally approximately 575000 in sales in Q1 2025, we established our first formal relationship with the OEM.
Speaker Change: DBS see biotech a global company headquartered in Singapore, while continuing to engage with other partners to further enhance our SaaS strategy.
Speaker Change: In 2024, we signed six additional partners across the various regions, including Malaysia, India, Italy, Canada, South Korea, and the United Kingdom, notably our Malaysian partner is leading the way in standardizing treatments.
Speaker Change: For BMO chambers in biosafety level, three rooms, using our IHT decontamination technology with the new SaaS.
Speaker Change: <unk> S a.
Speaker Change: We currently have four additional proposals with them with the next set to close this summer these opportunities average $140000 per proposal.
Speaker Change: In 2024, we successfully onboard is a distributor in India, a longstanding goal for tell me given the significant growth in genetic drug manufacturing and vaccine supply. The region has recently experienced this.
Speaker Change: This partnership brings decades of experience in clean room manufacturing and showcased our staring the systems to numerous high interest opportunities.
Speaker Change: They also designed clean room equipment, and we will collaborate on procuring and supplying turnkey IHG chambers in the future.
Speaker Change: Additionally, our new partner in Italy shares similar expertise.
Speaker Change: And that supported our existing OEM partnership as stated above.
Speaker Change: We remain dedicated to these partnerships alongside our other 30 partners worldwide. It's noteworthy that we only established distribution channels in the United States at the end of 2023.
Speaker Change: 2024, our distribution, who reinsurance resulted in 13 parkins, leading to approximately 930000 in sales for the year we.
We anticipate our newer partners, achieving similar or greater results paving the way for substantial future revenue growth for the company.
Speaker Change: Our IHT corporate service Division has strengthened significantly.
Speaker Change: As we secured contracts extending through 2026.
Speaker Change: We have retained customers, who while not under formal contracts have been using our services for several years. It's.
Speaker Change: It's important to note that these facilities often change their service deployment plans.
So maintaining our current customer base is a substantial win especially with some clients have and utilize our service since 2016.
Speaker Change: In Q3, 2024, we achieved record breaking performance in IHT services.
Speaker Change: And Q1, 2025 is showing a 42% increase compared to the same period last year.
Speaker Change: To further enhance our presence in IHT service deployment, we partnered with environments also known as E. M. A Q a long time user of our technology.
Speaker Change: Made a significant investment to over a million dollars into IHT equipment to serve the west coast of the United States last year, they purchased $14000 in bed solution and to date. This year. They have already invested over 8000, demonstrating their commitment as our partner.
Speaker Change: We are actively monitoring and addressing many of the challenges faced in the global food market.
Speaker Change: While we cannot disclose specific company names due to N D A's.
Speaker Change: I'd like to highlight two examples.
Speaker Change: And egg White manufacturing company that purchased their first study pack in 2024.
Speaker Change: Since ordered four additional units in 2025.
Speaker Change: Additionally, a multinational food and beverage corporation, one of the largest publicly traded food companies globally has expressed interest and are starting this technology.
We have conducted numerous studies and the Steri package now in use at their locations in Arizona.
Speaker Change: Switzerland.
Speaker Change: Germany and soon South Africa.
Speaker Change: We are also.
Nurturing interest from our customer for potential expansion into Brazil, Chile and Mexico.
Speaker Change: While the Steri pack technology is cost effective it does not generate significant revenue individually. However, these sales increase our base and drive our razor razor blade model for high margin solution usage.
Speaker Change: Tommy continues to prove the effectiveness of Steri missed IHT technology in the food industry through collaborations with prominent organizations on these studies that explore its expanded applications and benefits.
Speaker Change: One notable collaboration involves a leading health and hygiene producer where in 2024, we developed a specialized application for spray and conveyor belts to enhance decontamination processes for package goods targeting pathogens like Salmonella and listeria.
Speaker Change: St Jude a customer since 2021.
Speaker Change: Expanded their use of Steri Ms surface units in 2024 by purchasing three additional systems to be placed throughout their facility.
Speaker Change: Our health purchased Steri packs for one Pennsylvania location in 2022 and added two more packs. So the second location in 2024.
Speaker Change: In 2025, they are exploring the expansion of Steri mess with the purchase of additional Steri packs to a third P. A hospital.
Speaker Change: And their children's hospital.
Speaker Change: In 2020 for Bon Jour.
Speaker Change: <unk> expanded their use from their facility in Georgia in the United States to Mexico.
Speaker Change: Princess Toby has committed customer.
Speaker Change: Initially purchased in Brazil in 2022 with an additional 200000 dollar investment for our South African location in Q3 of 2024.
Speaker Change: Marketing their fourth site utilizing steri missed IHT. They plan further expansions in 2025 at both the Brazil, and South Africa and facilities and we are continuing discussions with four other locations worldwide.
Speaker Change: As previously reported.
Speaker Change: In Q4 of 2020 for our full room Fogger device was integrated into their Switzerland operations.
Speaker Change: And international firm with the presence across the Americas Asia Pacific and Europe.
Speaker Change: This organization's core business spans solutions for semiconductors life Sciences and data centers.
Speaker Change: We have diversified the told me service network TSN, but continue to support our T. S. N members now known as General service providers. This change allows us to focus on growth in the commercial industry and enables us to expand our offerings to all service providers interested and deliver.
Speaker Change: Marine our fast non toxic non corrosive IHT disinfection technology positioning ourselves as our service providers as leaders in environmental health and safety services.
Speaker Change: We launched <unk> Pro certified program a program available to all customers across various divisions, including notable names such as Merck and Servicemaster, we anticipate by the end of 2025. This program will greatly enhance our referral database promote the utilization of staring this products.
Speaker Change: Facilitate expansion with current customers and educate all clientele under proactive needs for effective disinfection and decontamination and many uses of Steri missed IHT.
Speaker Change: We have completed studies on foot and mouth disease virus is known as F. M D Z and African swine fever, with the department of Homeland Security.
Speaker Change: This could be very timely as some countries in the EU, specifically, Hungary, and Slovakia is on high alert as they're dealing with the largest outbreak in 50 years of F. M. D V foot and mouth disease virus. This is affecting cloven who've animals.
Speaker Change: Like cattle sheep.
Speaker Change: <unk>.
Speaker Change: Pigs.
Speaker Change: Thus, requiring greater disinfection services and more stringent border control disinfection.
Speaker Change: I'm very impressed Prime Minister Victor or ban said it couldn't be ruled out that the disease has been released and hungry as a potential biological attack we.
Speaker Change: We are contacting local authorities to offer help if it turns out to be correct, we could be dealing with potential spread to other countries.
Speaker Change: We also continue to collaborate with the army to minimize emergency roost bond exposure to synthetic opioids, including Sentinel and then 2024, we initiated studies in reducing bacterial counts on cannabis flowers with our partners sterile grow and a globally.
Speaker Change: <unk> recognized company with decades of experience in the industry.
Speaker Change: Additionally, we are addressing mycotoxin.
Speaker Change: Critical initiative.
Speaker Change: Often overlooked and public health discussions.
Speaker Change: In 2024 with significantly expanded parts.
Speaker Change: The port services for customers offering a comprehensive range of options.
Speaker Change: From basic training to full validation packages, we are committed to keeping all services in house.
Creating an additional revenue stream.
Speaker Change: Customers can choose from one or multiple service packages.
Speaker Change: <unk> Ken distinct offerings.
Speaker Change: Company their capital equipment purchases.
Speaker Change: Reminder, that a full comprehensive validation service package starts at $30000 or a standard full room area Fogging.
Speaker Change: All of our services typically offer clearer revenue forecast, which is becoming evident in 2025.
Speaker Change: We are excited to announce several notable clients in 2024. This includes government entities like NASA.
Speaker Change: Themed universities, such as Tufts University of Toronto, Michigan State, Oregon State University of Pennsylvania, We're also partnering with leading 503 be compounding pharmacies.
Speaker Change: D D M O's and laboratories like.
Drug delivery also known as disc Gen Pharmaceuticals, bio Nova scientific.
Speaker Change: In market.
Speaker Change: Nevertheless, therapeutics and lab core. Additionally.
Speaker Change: Additionally, we welcomed <unk> the worlds.
Speaker Change: Largest producer of medicine, and vaccinations for pets and livestock.
Speaker Change: Edge, well personal care in consumer care nationwide, Oregon recovery transplant alliance or Nara in Oregon and tissue Transportation company.
Speaker Change: Sensing technologies in food and beverage and added a well known nationwide service provider.
Speaker Change: From voice.
Speaker Change: On a GAAP basis, we achieved a 5% year over year revenue growth importantly, well.
Speaker Change: Ordering expenses rose, we reduced costs across the organization in 2024, which puts us in a stronger position to reach sustained profitability going forward.
Speaker Change: R&D expenses were reduced by 41% advertising sales commissions were reduced by 17% and consulting expenses were reduced by 20%.
Speaker Change: Cash flow for 2024 was lower than desired. However, we anticipate improved collections in 2025 due to better execution and timing of progress payments.
Speaker Change: Our priority is to operate the company as efficiently as possible.
Speaker Change: And we are currently reviewing candidates for a permanent CFO position.
Speaker Change: I also want to thank Nick Jennings for his contributions and assistance as an interim CFO, while we seek a qualified candidate to maximize our long term potential and deliver the best value for all involved with told me.
Speaker Change: We achieved positive cash flow in Q3, driven by stronger accounts receivable turnover and tighter expenditure management and we are laser focused on returning to sustainable positive cash flow as soon as possible.
Speaker Change: I'll now provide a brief overview of our financial results for the full year of 2024 compared to the prior year period also a table reconciling non-GAAP to the appropriate GAAP financial measures is included with today's press release.
Speaker Change: Our GAAP revenue rose two 7.739 million in 2024.
Speaker Change: That was up from 7.355 million in 2023, driven by increased demand for our mobile systems and higher IHG corporate service revenue.
Speaker Change: non-GAAP revenue was approximately $8 million, reflecting nearly a 6% increase over 2023.
Speaker Change: The difference between GAAP and non-GAAP revenue in 2024 was primarily attributed to the allowance for some returns in sales.
Speaker Change: It's also important to note the 8 million and non-GAAP revenue was net of the three orders that were returned in the fourth quarter, which contributed to lower reported revenue.
Speaker Change: These customers remain in contact with US the returns was due to changes in the scope of views and we chose to accommodate our customers.
Speaker Change: One such accommodations always proven to be a wise decision as we recently received an order for $180000, which was about $70000 above the original scope of work previously ordered in 2024.
Speaker Change: Our mobile equipment sales totaled approximately $3 8 million in 2024, reflecting a 23% growth compared to 2023.
Speaker Change: Our service generated around 2 million a 23 increase from the previous year. This solution sales reached approximately 900000.
Speaker Change: Mark in 9% growth Additionally, support and maintenance for current customers or any notable 28% increase indicating that customers are using our equipment more frequently for regular operations.
Speaker Change: non-GAAP gross margins were 60% compared to 59% in the prior year, our GAAP gross profit was 46% down from 58% primarily due to the increase in our inventory reserves.
Speaker Change: It's worth noting that a fully assembled equipment really has no in life to it and we consider ourselves an emergency service provider.
Speaker Change: GAAP operating loss was 4.105 million compared to 3.349 million prior year non-GAAP operating loss was $1 million 678000, compared to 2.785 million in the prior year.
Speaker Change: Sure.
Speaker Change: GAAP net loss was $4 million 477000, or 22 cents per basic and diluted share compared to 3.403 million or 17 cents per basic and diluted share.
Speaker Change: non-GAAP non loss was $2 million.
Speaker Change: 50000, or 10 cents per basic and diluted share.
Speaker Change: Compared to $2 million 838000, or <unk> 14 per basic and diluted share in the prior year.
Speaker Change: As of December 31, 2024, our cash and cash equivalents stood at approximately 665000 with a working capital of $3 8 million and shareholder equity of $4 million.
Speaker Change: Looking to 2025, we plan to continue to nurture our pipeline of CES hybrid and SaaS sales.
Enhance our sales infrastructure by establishing new distribution channels.
Speaker Change: Recruit independent Representatives, and most importantly, bringing in qualified business developers to manage our growing customer base and support new sales.
Speaker Change: Positively impacting our revenue in 2025 and beyond.
Speaker Change: Daily at a faster pace than in 2024.
Speaker Change: Tony has initiated a project with a major corporation focused on decontamination of heart monitor team devices.
Speaker Change: This initiative underscores our strengthened relationship with Oems and showcases the capabilities of our SaaS product offerings.
Speaker Change: Additionally, it aligns with our commitment to advancing health care initiatives and meeting regulatory requirements for medical devices, representing another significant market opportunity.
Speaker Change: This order received this year is valued at approximately $288000.
Speaker Change: We are still in the early stages of addressing ethylene oxide or SaaS and OEM partnerships developed in 2024 may facilitate the transition away from this highly toxic chemical.
Speaker Change: With global monitoring of E T H as a potential threat industries, especially in food safety are actively seeking alternatives.
Speaker Change: The European Union has already banned Eth ethylene oxide in certain applications.
Speaker Change: We have already collaborated with some partners on trial runs as a replacement for ethylene oxide supporting the shift away from this and other sterilization methods in the medical device industry.
We have already expanded into a new market in 2025 with Alger seat addressing protozoan.
Speaker Change: Silly contamination, we aim to explore further expansion opportunities this year with them and other partners in the agricultural sector.
Speaker Change: We are exploring a partnership at the University of Iowa, again, together statistical data on Steri missed iht's effectiveness against C. Auris, which we know we can eliminate.
Speaker Change: But we always aim to expand our study publications with customers.
Speaker Change: We will continue to seek out strong global partners in 2025 focus on rebuilding our brand and Panama, Nigeria, and Israel with new partners as well as establishing additional relationship in Australia, and adding distributors in Costa Rica and Brazil.
Speaker Change: We will continue to build on positive trend and best solution sales, which is already demonstrating a 200% increase year to date compared to the same period last year, a growth that is organic and not driven by contract demands or unnecessary bulk purchases.
Speaker Change: We will continue to build on positive trends in IHT corporate service deployment, which currently maintains a 1 million dollar pipeline with open proposals for 2025.
Speaker Change: We will continue to play a role in restoring structure.
Speaker Change: Structures impacted by smoke and hazardous particulates during the California wildfires through our service providers.
Speaker Change: We will also continue to support the food safety.
Speaker Change: Industry by identifying ways that steri Miss IHT can address significant needs within this vast market.
Speaker Change: Continue to achieve compliance recognition and validation by third vendor management and compliance management platforms, such as <unk> that are high wire ISN net world. This will hopefully lead to new avenues for told me to engage with broader network of industry leaders.
Speaker Change: And shows our customers told me as a culture of continuous improvement and enhancing its service and integration offering and staying ahead of evolving industry standards.
Speaker Change: We will continue to uphold our strong portfolio.
Speaker Change: Of intellectual properties, which include over 25 utility and design patents worldwide extending to 2038, along with 32 design patents and more than 200 trademark trademark applications globally.
Speaker Change: As we continue to exceed.
Speaker Change: The acceptance for additional 1% hydrogen peroxide label with the EPA for direct food applications. We are also actively pursuing a separate label that incorporates the referenced F. M D Z and African swine fever studies completed in 2024. Additionally, we are working on obtaining.
Speaker Change: A distinct EPA label to support growth within the cannabis and food safety industries.
Speaker Change: We have already taken steps to prepare for potential price increases and manufacturing our equipment due to tariffs by collaborating with our partners to share the cost of goods rather than absorbing it entirely. Additionally, we are closely monitoring our current customer base that relies on government grant funding.
Speaker Change: To use our equipment, including in the field of oxidation for the use of Biofuels.
Speaker Change: Diverse Italia of our technology and the diverse industries, we serve as an important factor.
Speaker Change: Even in one or two sectors experienced slowdowns, others typically see growth.
Speaker Change: Instance, our commercial division experienced significant expansion in 2020.
Speaker Change: Our goal is to sustain growth across all sectors and with our current offerings, both equipment and services alongside growth in business development.
Speaker Change: Pairing new and maintaining current registrations and intellectual property building, our project management and engineering departments, we can make a meaningful impact for years to come.
Speaker Change: The study missed pro certified program available to all clients across all industries and countries will empower the usage of Steri missed IHT and educated users on proper cleaning practices earlier. This year, we started a straw.
Speaker Change: <unk> marketing initiatives and are developed comprehensive training courses. Furthermore, we plan on partnering with third party vendors to offer related accessories like monitoring devices and air scrubbers to enhanced cleaning protocols.
Speaker Change: We anticipate this program to grow in membership in 2026. The company has made substantial progress in laying the groundwork for future success, and we plan to keep capturing the significant market opportunities before us leveraging our razor razor blade model with increasing high.
Speaker Change: Margin fifth solution, and delivering consistent and growing profitability to our shareholders.
Speaker Change: Date, Invoiced and open bookings for 2025 total approximately $3 2 million.
Speaker Change: As mentioned earlier, we have observed positive trends in our bid solution and IHG corporate service revenues, we look forward to showcase chasing these trends in.
Speaker Change: In our customer an integrated projects along with our support service figures throughout the year and beyond.
Speaker Change: Staring with IHT. This transformative technology serves for critical industries supporting everything from a routine cleaning and complex clean room decontamination to patient health care environments, Biohazard managements and border control operations as well as an educational.
Speaker Change: Platform, our network of domestic international service providers is vital and advancing the mission and expanding our impact across.
Speaker Change: <unk> diverse markets for IHT.
Speaker Change: I want to thank my team.
Jay: Thank you Jay.
Speaker Change: And everybody involved from an administrative and from telling me.
Jay: And I'll now open the call for <unk>.
Speaker Change: <unk>. Thank you.
Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
Speaker Change: You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please while we poll for questions. Once again, please press star one if you would like to ask a question.
Speaker Change: Or comment.
Martin Dial: Our first question comes from Martin Dial with H C. Wainwright. Please proceed.
Speaker Change: Okay.
Speaker Change: Of course.
Speaker Change: Hum.
Speaker Change: How much.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: I can't hear the question Martin.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: It seems to be a bad connection maybe go to the next caller.
Speaker Change: Once again, if you have a question or comment please indicate so by pressing star one on your Touchtone phone.
Speaker Change: The next question comes from Todd felt.
Todd Felt: With stone ex wealth management. Please proceed.
Speaker Change: Hey, guys congratulations on a good and productive year in the recent contract wins.
Speaker Change: I know you spoke about some of your revenue backlog or are you able to give any guidance for revenues. This year and earnings per share was affected by a lot of things, but maybe some margin information.
Speaker Change: Well I think Todd I think the margins should remain around what they've been in Nick is that correct.
Speaker Change: Yeah.
Speaker Change: As far as guidance.
Speaker Change: Yeah, <unk> you want to talk about what we have going to the rest of 25%.
Speaker Change: Sure as stated on the script, a lot of our goals and initiatives around our strategy.
Speaker Change: We go next and counterpart CES. So it's starting to happen is we're able to build the pipeline based on the deliverables of these projects on both the equipment and in the servicing on that occurred thereafter.
Gwen: So we started this year with a four between CES and lastly, I'll say Gwen.
Gwen: That we're working with our OEM chamber part and will be delivered throughout the year up until the end on the left hand of the deliberate mall, which is our servicing.
Gwen: So that's starting to build and we expect additional lines to follow that and keep going throughout the year and moving into 2026.
Gwen: Okay, and as you progress forward and get more and more of these contract wins.
Speaker Change: Do you expect your a razor razorblade model margins to be improved and your margins on the bid solution to further increase.
Speaker Change: Yeah, absolutely and even this year that alone on that solution is it's a good mix between a gallon, which support our mobile units and are built and are in the 55 gallon drums, which support.
Speaker Change: And our customers.
Speaker Change: So we're starting to see a good mix across all of the solution offerings.
Speaker Change: Okay, and I know the Kennedy Johnson Space Center win was a big one for you guys or making any other inroads for government contracts.
Speaker Change: Can some of those expand and become much larger.
Speaker Change: Absolutely can we're definitely driving towards that marketing specific to them.
Speaker Change: Several effects.
Speaker Change: <unk> brand and that's going to be a good.
Speaker Change: Goodbye.
Speaker Change: For that and they're willing to work with us on it which is nice.
Speaker Change: Okay ill hop back in the queue. Congratulations on a great year guys. Thank you.
Speaker Change: Thanks, so much.
Speaker Change: Yeah.
Speaker Change: The next question comes from John Nelson Private Investor. Please proceed.
John Nelson: Hi, everybody Hey, Joanne.
Speaker Change: Yeah.
Speaker Change: First question is do you expect any.
Speaker Change: Ramifications from the tariff situation to impact your company.
Speaker Change: Okay.
Speaker Change: I don't think so.
Speaker Change: We haven't and we are making some.
Speaker Change: Yeah.
Speaker Change: Deals with keeping prices the way they are again tariffs are unknown and it's obviously, a very hot topic and it's a very fluid situation. So.
Speaker Change: If they do you know, we'll go ahead and make an announcement for such but at the moment we're not.
Speaker Change: Okay.
Speaker Change: You have a.
Speaker Change: Amazing risk.
Speaker Change: <unk>.
Speaker Change: Opportunities.
Speaker Change: For 2025 that you've listed in.
Speaker Change: Pretty good detail.
Speaker Change: The.
Speaker Change: Is the cash level.
Speaker Change: At the end of the year.
Speaker Change: Adequate to.
Speaker Change: Address these opportunities.
Speaker Change: Yes.
Speaker Change: Well, we're looking to do a raise.
Speaker Change: But we listed in the K, which just came out.
Speaker Change: So with the rails and our current book of business, along with the cash we have and the existing accounts.
Speaker Change: Accounts receivable, we think we will have no problem.
Speaker Change: Okay.
Speaker Change: And I haven't seen the 10-K yet.
Speaker Change:
Speaker Change: What is the.
Speaker Change: And does it given our amount or a vehicle that you're going to be using looking at this it's the same similar to what we've raised a couple of years ago with the convertible notes at 12%.
Speaker Change: About 3 million $3 5 million.
Speaker Change: Okay.
Speaker Change: Then.
Speaker Change:
Speaker Change: Let's see.
Speaker Change: I was also going to ask you if you're if you Hana investigated establishing a credit line, but it's you've got the.
Speaker Change:
Speaker Change: Cash lined up that kind of negates that.
Speaker Change: Is the.
Speaker Change:
Scope of the.
Speaker Change: You mentioned the three orders that were returned.
Speaker Change: Was that.
Speaker Change: Just due to a project getting canceled or can you provide any more details on that and I mean, it sounds like a very unusual one time event.
Speaker Change: Yeah, exactly where you'd be interested in it.
Speaker Change: Absolutely was we've had no returns to date this year and it just seems as if there were some clients that we think very highly of that learned.
Speaker Change: Uh huh.
Speaker Change: A little bit more about our technology and and we wanted to you know go.
Speaker Change: Go ahead and accommodate them.
And.
Speaker Change: One other had to do with the federal grant that the.
Speaker Change: Was it removes or poles and.
Speaker Change: Prior to it of that here.
Speaker Change: So.
Speaker Change: You know we're comfortable I mean, we had to make.
Speaker Change: Counting.
Speaker Change: GAAP.
Speaker Change: GAAP accounting.
Speaker Change: Since policies and and you know in the K as you'll see and we.
Speaker Change: We did what we had to do.
Speaker Change: Okay.
Speaker Change: And any sense from you you had mentioned they again and then divest in the past about the.
Speaker Change: F D a and a 1% solution.
Speaker Change: For treating.
Speaker Change: Produce and other food products is do you have any sense as to a how close we might be on any kind of ruling for that I mean would you expect some kind of either confirmation or.
Speaker Change: Negation this year.
Speaker Change: Kind of in 2020 nine fine yeah hard to say at the moment because of the administration and all the new changes within the various regulatory agencies like the EPA and the S. T a.
Speaker Change: So I don't want to.
Speaker Change: I'll ask okay, I hate I hate using the term circle back, but I'd have to circle back on that.
Speaker Change: Okay.
Speaker Change: And have there been any.
Speaker Change: Further.
Speaker Change: Hum modifications in sterile pack or have have you kind of reached a stage, where that's kind of that you've reached your gold standard for the sterile pack and that's.
Speaker Change: Mature.
Speaker Change: Basically you're going to continue to market without the need for any adaptations.
Speaker Change: Or are there any validation that has passed.
Speaker Change: At the moment.
Speaker Change: We're marketing the service pack is fairly simple and it's fairly inexpensive.
Speaker Change: We are considering doing some upgrades to our surface units.
Speaker Change: And software basis. So you know we're always going.
Speaker Change: Going ahead, and keeping our inventory up to date and are ready to be sold.
Speaker Change: Okay.
Speaker Change: And just one last comment.
Speaker Change: And you know the I think the.
Speaker Change: Growth of your product has always been a matter of gaining awareness.
Speaker Change: Throughout the various potential markets and it sounds like you.
Speaker Change: You really are.
Speaker Change: Yeah.
Speaker Change: Making huge progress on that over the last.
Speaker Change: Gear, and especially over the last quarter. So congrats on that.
Speaker Change: And onward and upward.
Speaker Change: Yeah definitely and.
Speaker Change: Congratulations AJ.
AJ: Thank you. Thank you Jay and Anne Nick two for filling in.
AJ: Thank you and thank everybody on the team.
AJ: Appreciate it thank you.
Speaker Change: Youre welcome.
AJ: Is it for me.
Speaker Change: We have reached the end of the question and answer session and I will now turn the call over to management for closing remarks.
Speaker Change: Well I just want to thank everybody for hanging in and for listening to the call and look forward to the future in this company.
Speaker Change: Genuine to stride.
Speaker Change: The direction that we just announced on the call. So have a wonderful day morning, wherever you are evening and we'll keep in touch.
Speaker Change: Thank you.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.