We'll go ahead and get started. Good afternoon, everyone. Welcome back to Sidoti's end-of-the-year conference. My name is Daniel Harriman. I'm an analyst here at Sidoti. This afternoon, we're going to hear from TOMI Environmental Solutions. The ticker is TOMZ, trades on the NASDAQ. With us today, we have the company's CEO, Dr. Halden Shane, and the company's CFO, David Vanston. As always, we're going to give them about 20 minutes to go through their presentation, after which time I'm going to open it up for Q&A. If you do have any questions at any time during the presentation, I encourage you to type that into the Q&A box. And time permitting, we'll get to as many questions as we can. But please join me in welcoming TOMI to the conference. And with that, Dr. Shane, I'll turn it back to you.
Thank you, Daniel. And good afternoon to everybody. SteraMist, a disinfection decontamination company, we are innovating for a safer world. So we have a product that has been around for a little bit of time. We are a vision and value proposition: faster, safer, eco-friendly cleaning and disinfection company. We beat out our competitors with speed, safety, and efficacy. We're extremely fast, and we have no residue. It's environmentally friendly, with only oxygen and humidity as the byproduct. This product came out of DARPA. We went ahead and bought it from L3, a defense contractor. And we've been moving it up the chain of growth in relationship to product development and our partners who are our clients and who have bought and continue to buy our equipment and our solution. So you can see the slide I'm showing you with a significant number of our premier clients.
These clients are in all types of industries, whether it's laboratory, scientific, healthcare, police departments, government agencies, most of the regulatory agencies that have allowed us to have our regulations or became partners or became customers of us, including the FDA, USDA, most of the NIHs, Department of Homeland Security, USAMRIID, and NASA, along with our premium clients: Pfizer, Merck, Fresenius Kabi, Thermo Fisher, Bausch + Lomb, Philips, St. Luke's, St. Jude Children's Hospital, Nestlé, and it goes on. So our product, you might be asking, what is it? We take a low-percentage hydrogen peroxide, 7.8%, and it's converted through a cold plasma arc. This arc alters the chemistry of the solution into a hydroxyl radical by destroying the double bond. That hydroxyl radical contacts pathogens and creates a disruption.
This is a death of a spore or an activation of a virus or goes ahead and destroys fungus, fungal cells, mycoplasms, et cetera, all of the bad stuff that we don't want in our environment or on our sub-objects or in our space. So it requires no wipe. It doesn't leave any residue. It's a quick try. All our technology is portable and scalable from our handheld to our integrated units, which we'll see in a few minutes. So again, it was developed by DARPA for the neutralization of weaponized anthrax. We have a worldwide registration with 32 granted patents, 200-plus trademarks, intellectual properties, and we are registered in 50 states and 30-plus countries. The market opportunity for this company is great. Global market size, they're in the trillions, whether it's the biotech industry, food and beverages, commercial services, or healthcare, and the global size just keeps growing.
Our only two real major competitors would be STERIS and Bioquell. They're in the hydrogen peroxide and create sterilization similar to what we do at a six log and greater kill. Also, you have hundreds of EPA-registered, less effective types of disinfectants that are in this space. We, as a company, have five market segments. We don't—they're divisions, but they're not accounting-type divisions. The first and the one that produces the most revenue is the biotechnology, life sciences. This could be anything like the pharmaceutical, the variant, a clean room, a BSC, cell and gene therapy, blood and tissue banks, or government use. The next, which is growing in revenue and catching up to life sciences, is our food safety. This can be manufacturing, packaging, processing, transport, storage, grocery stores, dairy, coffee, prepared food, and the survival of honeybees. These industries are very much in the need of our product.
We have a partner with USDA that has published many papers on this that you can get online. The honeybee survival is extremely important because there's a mite that is killing the honeybee, and we're able to go ahead and save the colony and the bee by using our product on this mite. We go into the commercial services, which is everything that your mind can think of: hospitality, to buildings, to education, to mass transit, to aviation, residential, cosmetic, and even space travel. Healthcare product can be used in any room, ICU, medical facilities, operating room, veterinarian, medical devices, and EMS and outpatient centers. We did a study at UCLA, all of you on our product over a three-year period, where we divided the ICU floor into two halves, 18 rooms, I believe, on each side.
And they used only SteraMist to do a 55-minute terminal clean against their normal terminal clean. And we had zero infection rate over the three-year period. So it definitely works. We also have a service division in the U.S. and Canada. And these are professional remediators and/or cleaners, where we educate them on our product. And they do everything from mold remediation to crime scene cleanup, biohazard cleanup, disaster recovery, even neutralizing warfare agents, ricin, mustard gas, et cetera. So let's move on and tell you why SteraMist has many advantages over the rest of the disinfection decontamination market. We have a six log and greater kill, 99.999%. It's a rapid kill, less than five seconds on our mobile and portable equipment, and within minutes on our larger-based large room equipment. We have superior material compatibility. There is no wipe, no mixing with our product, and no residue.
One of the keys is number six is a submicron particle, which basically means the competitors have large, large types of particles that they produce. It's almost like a droplet that you'll get when you're in a real bad rainstorm, where we produce a very fine droplet like in a very, very mild rain, where it gets around the bacteria, it gets around the virus, and it's able to oxidize and kill it in a much faster and safer way. We have broad efficacy on our product. It moves like a gas, which means if you open up a cabinet and/or a drawer or something like that, it will go inside and go around anything it can come in contact with. It's very cost-effective, and it's very good for daily use and preventive maintenance. Our business model is based on a razor razor blade model. It's a high-margin solution.
We have equipment sales. When we increase our installed base, we have a recurring base of revenue. This last year, for the first half, we increased by 40%, 2025, 2024. Our growth margins are somewhere around 60%-62%, and we hope they will stay that throughout the life of the company. Something new with us is our OEM partners, where we have partners that are well-known around the world for making laboratory equipment. And these partnerships are starting to place our technology into their equipment. So it would be like you buy a piece of laboratory equipment from a partner, and you tell them you want to have a disinfection unit put in, and they will be able to put this in isolators, sterilizers, biosafety cabinets, material transfers, and wraps.
These partnerships were recently put in place in the end of 2024, and they have helped, and they're building our $21 million integration and built-in pipeline, which is shortening the sales of our equipment to the public. SteraMist, we do everything from the beginning to the end: endless markets, consumable business model, and demand preparedness and emergency use. Our product overview is in four categories. As you can see, our surface spraying system, which is SteraPak, which came out of COVID, and our surface unit, which is mostly used by professional remediators and professional cleaners. It's a portable unit that has a 30-foot extension cord, and you're able to move it in a little larger gallon versus the 32-ounce that the SteraPak has. So both these are considered surface spraying systems, and we also have our whole room fogging unit, which is automated.
It has repeatable fogging four times faster than the competition. This is our environment system, and we have recently fabricated a SteraMist Transport model. We also have custom integration units, SteraMist Hybrid engineered system, and you'll see below our SteraMist Integrated System. And what this means is we're able to install this into buildings similar to what the DARPA grant was to have in a safe, immune building where, in a touch of a button, you can immune a building from any type of weaponized material or pathogen. Our SIS platform options come standalone. We have them for the pharmaceutical industry, for manufacturing, and for data centers and supercomputing. Using these assets enhance our consumable business model and provide customer base a range of solutions. The next slide you'll see are the visuals of our equipment from the surface unit and the SteraPac.
By the way, the surface unit was what we inherited from the L3 transaction. We bought the assets way back that we went ahead and took through the regulatory processes. And the surface unit has gone through many, many upgrades and divisions and enhancements. We also have the environment unit, which stands alone in the SIS. And we have our typical environments unit for both air and surface for larger rooms, about 3,000 cubic feet. Also, our SteraMist Hybrid, and again, the equipment in the OEM end where they manufacture these types of life science equipment and build our technology inside of them where they're able to move it up and sterilize multiple ones. We also have custom engineered, which is a panel that we listen to our customers, and we design it to their needs.
This system can go everywhere that you need it to go in any room. It's fixed once it gets to the room, and the applicators are installed in the ceiling. We also have a hospital unit that you can move around from room to room. This is our broad-based products. Our razor-blade model uses our BIT solution as the consumable. It comes in 32-ounce, one-gallon, five-gallon, 55-gallon sizes. It's central to our business model. It has our highest margins in our offering. We have achieved a 40% growth, like I said earlier, in the first six months of 2025 compared to the same period in 2024. We do everything designed in-house, deployed service, and we do qualifications and validations. We started in 2020 with the birth of our hybrid, and we've moved up through.
It takes a couple of years to pitch this. Once we do, it takes a while to develop it. And then for those companies, the Pfizer and Merck, et cetera, to start validating and putting it in their process. Currently, we have about equal to 2024 for the first six months of 2025. And we recently sent out a press release that we have a few million dollars in products that we hopefully will close before the end of the year that will be launched or delivered in 2026. So this is our custom integration life science market. We have a lot of things going for us. There's a shift away from ethylene oxide, which would be great for our product because our product has the only by-product of oxygen and humidity.
There are a lot of regulatory tailwinds and biosecurity needs because of what happened out of COVID with a big surge in high containment labs post-COVID, especially in North America, Europe. There's a lot of work in Asia-Pacific in biologics and cell gene therapy, which our equipment is very good at. There's a big need for isolators in sterile environments with new drugs and biologicals. From a regulatory stringency problem, we have FDA and EMA compliance, and USP 797-800 follow those guidelines along with EU GMP Annex 1 revisions and Annex 2. Academically, there's about $20 billion annually allocated to infectious disease research, and we expect to have a big piece of that market going forward. We have a case study with Philips where we're working with them on eliminating the human aspects of disinfecting and repackaging some heart monitors.
So by monitoring their system and using SteraMist, we're applying and using the data to help them with, help us really with the FDA 510(k) submission, which should be fine once we get these submitted materials. This market is a $24 billion market in 2024, and it looks like it's going to increase to a $56 billion market by 2033. We should be able to have a nice piece of this market by going ahead and disinfecting, decontaminating medical devices without damaging the medical device. And there was a paper published on masks that Dana-Farber, Harvard, and MIT did showing how delicate we were during COVID where we could go ahead and reprocess masks up to six to eight times without damaging any materials. So this is a great start for us in going forward with our FDA 510(k) submission.
The food safety market has stricter regulations, which it should because of a lot of the recalls that are going on pertaining to Listeria, Salmonella, and outbreaks. It's costing food markets $7 billion a year, and our product can help with the sanitation and disinfection compliance. They need less of a decontamination than the life safety, but we're able to give them both levels of it with stricter residue testing and especially with what's come out recently with the use of hydrogen peroxide as an alternative to decontaminating and disinfecting food directly. So that should be a big help with us going forward in the agri-food area. Life science industry is starting to develop more labs, and they're building a lot more. Going to our case study, Nestlé is a great case study for us. We started with them a couple of years ago.
They were expanding into facilities around the world with our EU partner. We're working directly with Colombia, Brazil on future purchases. Currently, we're in four facilities: Arizona, Germany, Switzerland, and South America, with the ability to purchase about 25 more across the world in the very near future, so egg life also is another food safety where Rose Acre Farms, the second largest egg producer, is using our product on spray and conveyor belts and spot treatments on hard-to-reach areas. Healthcare industry, we're all familiar with what went on with COVID. There's just a lack of resources. What we need to do is we're expanding our sales department to cover healthcare. We're in dozens of hospitals, but we should be in almost every hospital.
Whether it's an outbreak or just doing terminal cleans, we're faster with better coverage in a shorter time period with less environmental damage for any type of affected pathogen that causes HAIs, C. diff, or C. auris, which is a fungus that's spreading through a lot of U.S. hospitals right now. It is a challenge for them, but it's not a challenge for us to alleviate. Trinity Health St. Francis did a study, and they went ahead and showed the total facility before SteraMist had 16 C. diff cases. After using SteraMist routinely, they had one C. diff case. That's pretty good evidence that there's a huge reduction of Clostridium difficile with the use of SteraMist in a healthcare environment. On a commercial end, we have enhanced training programs for the professional. SteraMist Pro Certified.
We give on-site training on how to use our product, how to develop protocols to ensure proper disinfection delivery, both in biohazard remediation and emergency preparedness. We have hundreds of these professionals throughout the U.S. and Canada that currently use our product and are very, very happy with having that in their toolbox. Revenue growth, our revenues increased 38% over pre-COVID levels. We are a very small company. Our revenue sometimes can be frustrating and lumpy to people and investors, but I just recommend stay with the program as we need to grow. We need to grow. We need capital to grow. And we're in the process, if you've been reading some of the announcements that I've put out there, of achieving that in the very near future. Service is a big part. iHP Corporate Service dominance is accounting for about 7%-90% of the total service revenue annually.
Our support service has increased, and our overall stability services have grown post-pandemic by 50%. So we are showing improvements in all of these areas. And again, this is very dependent on having more technicians and being able to support and having the company grow in the right direction. So our sustainable growth drivers and our market expansion pipeline, year over year, we're mitigating seasonal revenue fluctuations, which is the lumpiness to it. Also, these products take a long time to develop. It looks as if this SIS and our built-ins are the products of the future for the life sciences and even some of the food safety. And with a larger sales force, we'll be able to go ahead and attack all the other verticals. With our premier client list, we're getting a lot of referrals for other verticals.
And I think that the years ahead are going to be great years for our product and for SteraMist's expansion. We have a clear roadmap to capitalize on market opportunities and executing now. Again, sales team increase and demand, enhanced knowledge, the network, validation, case studies, technical trainers, regulatory, and marketing. It's all helping, and we're executing now on that. Our growth drivers in our pipeline is $21 million across our product and service line with an active spec design for next year in 2027 of about $7 million near-term is about $5 million in 2025. And year-to-date bookings were about $5 million. So we'll see what ends up getting shipped out and what we end up with going forward into 2026. We have about a break-even of about $12 million. Expenses are mainly fixed, and our margins are playing staying about 62%.
The razor blade model will be working and is working. There is a tremendous increased probability of an outbreak, epidemic, or pandemic. We are ready. We have the inventory to help like we did in COVID where we were doing tremendous revenue. There are 44 countries now experiencing issues, whether it's MERS, SARS, COVID, Ebola, influenza, H1N1, H7N9, Lassa fever, Middle Eastern respiratory syndrome, resistant TB, invasive bacteria, measles. We're there to help. And I think that in the future, you'll be reading a lot about our product and its applications in controlling outbreaks or epidemics or pandemics. And the future is ours to grab. Thank you for your attention.
Thank you so much for all that information. And we're kind of short on time, but I'm going to try to. If you do have any questions, please feel free to type those into the box.
But, Doc, I've got a few of my own, if that's okay. I know we don't have much time here, but you just finished with kind of the razor blade model. And I'm just curious how you think investors should think about equipment sales feeding long-term high-margin consumable growth.
So, David, you want to answer that?
Yes. I think the most important thing to remember is the equipment sales are still at a very satisfactory margin. They drive the install base that then underpins and supports the actual recurring revenue of the solution, which is at the moment at a higher margin.
Okay. Perfect. And then you mentioned building credibility in some of these case studies with major names across pharma, food safety, healthcare. And I'm just curious how you think those strong relationships and that name brand is going to help drive broader adoption in the market.
That's a good question. And that, I think, goes back to my initial company's initial concept. Instead of going after the smaller players in the market, we went after the larger ones, which obviously has refrained or eliminated large revenue growth, but has given us the foot in the door of these big players who are referring us to their counterparts and to their other divisions throughout the world. So I think that now that we've done this, that they have all validated and have bought pieces and are rebuying pieces of equipment with constant solution orders, that the future has a lot of positive things for us as a company. As those names are important, they're all in the S&P 500, and many of them are in the top 10 pharmaceutical companies or food companies of the world.
So as we grow and we need to enlarge as a company, we will benefit from those premier client names and the validation and the hard work that our team has done and we have done as a company to get this product expanded into their facilities successfully.
Perfect. And then I'll close on this one, but I think it's a good one. And you talked about this in the very beginning of the presentation, but for investors newer to the story, can you just remind us of what the core advantage SteraMist brings over traditional disinfection methods? Why do you think customers, why do you think it's resonating with the customers right now?
Well, because they're saving in equipment.
They don't have to replace their laboratory equipment as frequently as they were doing with the 40- and 50-year-old technologies that they've been using, which is the vaporized hydrogen peroxide and activated hydrogen peroxide products, because ours is gentle. Ours is quicker. Ours doesn't leave a residue. Ours has an eco-friendly name to it because it's only byproducts is water and humidity. So those are the real reasons. It's faster. They can do more laboratory tests between uses because they can quickly decontaminate their lab space versus the way they used to where it took days. So those are all the answers. This is the right product. It's the right technology to replace old 40- and 50-year-old technology going forward, and it's an amazing product.
We can put this in a whole home, into a whole building, and literally have an immune building, which is what the DARPA plan was when they did the initial grant. We're very fortunate to be steering this technology into the future, into space travel, and into the areas that everybody wants to have, which is a healthy, safe home working environment free of pathogens so we don't have repeats of COVID.
That's excellent. Thank you for closing with that. Well, Dr. Shane and David, thank you so much for your time today. For those of you in the audience, thank you for your participation. We enjoyed hearing more about TOMI Environmental Solutions, and we hope to see you again at conferences in the future. Hope everybody has a wonderful day, and thanks again for joining us.
Thank you, Daniel. You do the same.