TOMI Environmental Solutions (TOMZ) 10-K 29 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 29, 2018	Jun. 30, 2017
Document And Entity Information
Entity Registrant Name	TOMI Environmental Solutions, Inc.
Entity Central Index Key	314,227
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	Yes
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		122,349,958
Entity Public Float			$ 7,626,132
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,017

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current Assets:
Cash and Cash Equivalents	$ 4,550,003	$ 948,326
Accounts Receivable, net	1,835,949	1,521,378
Inventories (Note 3)	3,518,884	4,047,310
Deposits on Merchandise (Note 10)	0	147,010
Prepaid Expenses	270,419	104,448
Total Current Assets	10,175,255	6,768,469
Property & Equipment - net (Note 4)	712,822	611,807
Other Assets:
Intangible Assets - net (Note 5)	1,548,532	1,918,040
Security Deposits	4,700	4,700
Total Other Assets	1,553,232	1,922,740
Total Assets	12,441,310	9,303,016
Current Liabilities:
Accounts Payable	751,730	735,879
Accrued Expenses and Other Current Liabilities (Note 13)	267,136	278,413
Accrued Interest (Note 6)	80,000	0
Customer Deposits	3,062	30,120
Deferred Rent	781	8,541
Total Current Liabilities	1,102,709	1,052,953
Convertible Notes Payable, net of discount of $55,625 at December 31, 2017 (Note 6)	5,944,375	0
Total Long-Term Liabilities	5,944,375	0
Total Liabilities	7,047,084	1,052,953
Commitments and Contingencies
Stockholders’ Equity:
Cumulative Convertible Series A Preferred Stock; par value $0.01, 1,000,000 shares authorized; 510,000 shares issued and outstanding at December 31, 2016 and 2015	5,100	5,100
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, 2017 and December 31, 2016	0	0
Common stock; par value $0.01, 200,000,000 shares authorized; 122,049,958 and 120,825,134 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively.	1,220,499	1,208,251
Additional Paid-in Capital	42,139,675	41,367,946
Accumulated Deficit	(37,971,049)	(34,331,234)
Total Stockholders' Equity	5,394,225	8,250,063
Total Liabilities and Stockholders' Equity	$ 12,441,310	$ 9,303,016

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Stockholders' Equity ( Deficiency):
Cumulative Convertible Preferred Stock Series A, Par Value	$ 0.01	$ 0.01
Cumulative Convertible Preferred Stock Series A, Shares Authorized	1,000,000	1,000,000
Cumulative Convertible Preferred Stock Series A, Shares Issued	510,000	510,000
Cumulative Convertible Preferred Stock Series A, Shares Outstanding	510,000	510,000
Cumulative Convertible Preferred Stock Series B, Stated Value	$ 1,000	$ 1,000
Cumulative Convertible Preferred Stock Series B, Shares Authorized	4,000	4,000
Cumulative Convertible Preferred Stock Series B, Shares Issued	0	0
Cumulative Convertible Preferred Stock Series B, Shares Outstanding	0	0
Cumulative Convertible Preferred Stock Series B, Dividend Percentage	7.50%	7.50%
Common Stock; Par Value	$ 0.01	$ 0.01
Common Stock; Shares Authorized	200,000,000	200,000,000
Common Stock; Stock Issued	122,049,958	120,825,134
Common Stock; Stock Outstanding	122,049,958	120,825,134

CONSOLIDATED STATEMENT OF OPERA

CONSOLIDATED STATEMENT OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Sales, net	$ 4,993,668	$ 6,343,432
Cost of Sales	1,927,773	2,610,500
Gross Profit	3,065,895	3,732,931
Operating Expenses:
Professional Fees	876,880	516,926
Depreciation and Amortization	607,127	586,384
Selling Expenses	1,256,465	1,512,752
Research and Development	454,089	184,259
Equity Compensation Expense (Note 7)	649,348	614,696
Consulting fees	210,538	307,040
General and Administrative	2,774,916	3,380,025
Other	(319,388)	0
Total Operating Expenses	6,509,975	7,102,082
Loss From Operations	(3,444,080)	(3,369,150)
Other Income (Expense):
Amortization of Debt Discounts	(6,279)	0
Gain on Disposition of Property and Equipment	0	12,000
Grant	0	199,891
Interest Income	1,800	0
Interest expense	(191,256)	0
Total Other Income (Expense)	(195,735)	211,891
Net Loss	$ (3,639,814)	$ (3,157,259)
Loss Per Common Share
Basic and Diluted	$ (0.03)	$ (0.03)
Basic and Diluted Weighted Average Common Shares Outstanding	121,372,605	120,557,102

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) - USD ($)	Series A Preferred	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2015	510,000	120,063,180
Beginning Balance, Amount at Dec. 31, 2015	$ 5,100	$ 1,200,632	$ 40,391,215	$ (31,173,974)	$ 10,422,974
Equity based compensation			614,696		614,696
Common stock issued for services provided, Shares		761,954
Common stock issued for services provided, Amount		$ 7,620	362,035		369,654
Warrants exercised, Amount					0
Net Loss				(3,157,259)	(3,157,259)
Ending Balance, Shares at Dec. 31, 2016	510,000	120,825,134
Ending Balance, Amount at Dec. 31, 2016	$ 5,100	$ 1,208,252	41,367,946	(34,331,233)	8,250,063
Equity based compensation			635,223		635,223
Common stock issued for services provided, Shares		249,824
Common stock issued for services provided, Amount		$ 2,498	35,602		38,100
Warrants exercised, Shares		975,000
Warrants exercised, Amount		$ 9,750	39,000		48,750
Warrants issued as part of debt private placement			61,904		61,904
Net Loss				(3,639,814)	(3,639,814)
Ending Balance, Shares at Dec. 31, 2017	510,000	122,049,958
Ending Balance, Amount at Dec. 31, 2017	$ 5,100	$ 1,220,500	$ 42,139,675	$ (37,971,049)	$ 5,394,225

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash Flow From Operating Activities:
Net Loss	$ (3,639,814)	$ (3,157,259)
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
Depreciation and Amortization	607,127	586,384
Amortization of Debt Discount	6,279	0
Equity Based Compensation	635,223	614,696
Value of Equity Issued for Services	38,100	369,653
Reserve for Bad Debts	200,000	255,000
Gain on Disposition of Property and Equipment	0	(12,000)
Decrease (increase) in:
Accounts Receivable	(514,572)	(361,802)
Inventory	204,622	(2,755,688)
Prepaid Expenses	(165,971)	(27,718)
Deposits on Merchandise	147,010	295,348
Other Assets	0	36,613
Increase (Decrease) in:
Accounts Payable	15,851	(286,004)
Accrued Expenses	(11,277)	159,598
Accrued Interest	80,000	0
Deferred Rent	(7,760)	(6,203)
Advances on Grant	0	(210,503)
Customer Deposits	(27,058)	(4,991)
Net Cash Used in Operating Activities	(2,432,241)	(4,504,876)
Cash Flow From Investing Activities:
Purchase of Property and Equipment	(14,829)	(474,866)
Proceeds on Disposition of Property and Equipment	0	12,000
Net Cash Used in Investing Activities	(14,829)	(462,866)
Cash Flow From Financing Activities:
Proceeds from Exercise of Warrants	48,750	0
Proceeds from Convertible Notes	6,000,000	0
Net Cash Provided by Financing Activities	6,048,750	0
Increase (Decrease) In Cash and Cash Equivalents	3,601,679	(4,967,742)
Cash and Cash Equivalents - Beginning	948,326	5,916,068
Cash and Cash Equivalents - Ending	4,550,003	948,326
Supplemental Cash Flow Information:
Cash Paid For Interest	111,256	0
Cash Paid For Income Taxes	800	800
Non-Cash Investing and Finance Activities:
Establishment of discount on convertible debt	61,904	0
Transfer of equipment from inventory to property and equipment	$ 323,805	$ 103,553

1. DESCRIPTION OF BUSINESS

1. DESCRIPTION OF BUSINESS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 1. DESCRIPTION OF BUSINESS	TOMI Environmental Solutions, Inc. (“TOMI”, the “Company”, “we”, “our” and “us”) is a global provider of infection prevention and decontamination products and services, focused primarily on life sciences including healthcare, bio-safety, pharmaceutical, clean-room and research. TOMI provides environmental solutions for indoor and outdoor surface decontamination through the sale of equipment, services and licensing of its SteraMist™ Binary Ionization Technology® (“BIT™”), which is a hydrogen peroxide-based mist and fog registered with the U.S. Environmental Protection Agency (“EPA”). TOMI’s mission is to help its customers create a healthier world through its product line and its motto is “innovating for a safer world” for healthcare and life.

2. SUMMARY OF SIGNIFICANT ACCOU

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Principles of Consolidation The accompanying consolidated financial statements include the accounts of TOMI and its wholly-owned subsidiary, TOMI Environmental Solutions, Inc., a Nevada corporation. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassification of Accounts Certain reclassifications have been made to prior-year comparative financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or financial position. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the accompanying consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, inventory, fair values of financial instruments, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. Fair Value Measurements The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities. Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and convertible debt. All these items were determined to be Level 1 fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximated fair value because of the short maturity of these instruments. The recorded value of convertible debt approximates its fair value as the terms and rates approximate market rates (See Note 6). Cash and Cash Equivalents For purposes of the statement of cash flows, cash and cash equivalents includes cash on hand held at financial institutions and other liquid investments with original maturities of three months or less. At times, these deposits may be in excess of insured limits. Accounts Receivable Our accounts receivable are typically from credit worthy customers or, for certain international customers, are supported by pre-payments. For those customers to whom we extend credit, we perform periodic evaluations of them and maintain allowances for potential credit losses as deemed necessary. We have a policy of reserving for doubtful accounts based on our best estimate of the amount of potential credit losses in existing accounts receivable. We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Bad debt expense for the years ended December 31, 2017 and 2016 was $263,882 and $285,030, respectively. At December 31, 2017 and December 31, 2016, the allowance for doubtful accounts was $500,000 and $300,000, respectively. As of December 31, 2017, two customers accounted for 24% of accounts receivable. Two customers accounted for 22% of net revenues for the year ended December 31, 2017. As of December 31, 2016, one customer accounted for 10% of accounts receivable. One customer accounted for 10% of net revenues for the year ended December 31, 2016. Inventories Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist primarily of finished goods and raw materials. At December 31, 2017 and December 31, 2016, we did not have a reserve for slow-moving or obsolete inventory. Deposits on Merchandise Deposits on merchandise primarily consist of amounts paid in advance of the receipt of inventory (see Note 10). Property and Equipment We account for property and equipment at cost less accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally three to five years. Depreciation for equipment, furniture and fixtures and vehicles commences once placed in service for its intended use. Leasehold improvements are amortized using the straight-line method over the lives of the respective leases or service lives of the improvements, whichever is shorter. Accounts Payable As of December 31, 2017, one vendor accounted for approximately 45% of total accounts payable. As of December 31, 2016, two vendors accounted for approximately 49% of total accounts payable. One vendor accounted for 73% and 78% of cost of goods sold for the years ended December 31, 2017 and 2016, respectively. Accrued Warranties Accrued warranties represent the estimated costs, if any, that will be incurred during the warranty period of our products. We make an estimate of expected costs that will be incurred by us during the warranty period and charge that expense to the consolidated statement of operations at the date of sale. Our manufacturer assumes warranty against product defects for one year from date of sales, which we extend to our customers upon sale of the product. We assume responsibility for product reliability and results. As of December 31, 2017 and 2016, the warranty reserve was $5,000 and $0, respectively. Income Taxes Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits, which are, on a more likely than not basis, not expected to be realized in accordance with ASC guidance for income taxes. Net deferred tax benefits have been fully reserved at December 31, 2017 and 2016. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. Loss Per Share Basic loss per share is computed by dividing the Company’s net loss by the weighted average number of shares of common stock outstanding during the period presented. Diluted loss per share is based on the treasury stock method and includes the effect from potential issuance of shares of common stock, such as shares issuable pursuant to the exercise of options and warrants and conversions of preferred stock or debentures. Potentially dilutive securities as of December 31, 2017 consisted of 11,111,100 shares of common stock from convertible debentures, 35,501,411 shares of common stock issuable upon exercise of outstanding warrants, 200,000 shares of common stock issuable upon outstanding options and 510,000 shares of common stock issuable upon conversion of outstanding shares of Preferred A stock (“Convertible Series A Preferred Stock”). Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Potentially dilutive securities as of December 31, 2016, consisted of 37,076,413 shares of common stock from outstanding warrants, 200,000 shares of common stock from options and 510,000 shares of common stock from convertible Series A preferred stock. Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Basic loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional common shares were dilutive. Options, warrants, preferred stock and shares associated with the conversion of debt to purchase an aggregate of approximately 47.3 million and 37.8 million shares of common stock were outstanding at December 31, 2017 and 2016, respectively, but were excluded from the computation of diluted loss per share due to the anti-dilutive effect on net loss per share. For the Year Ended December 31, 2017 2016 Net loss $ (3,639,814 ) $ (3,157,259 ) Adjustments for convertible debt - as converted Interest on convertible debt 191,256 - Amortization of debt discount on convertible debt 6,279 - Net loss attributable to common shareholders $ (3,442,279 ) $ (3,157,259 ) Weighted average number of common shares outstanding: Basic and diluted 121,372,605 120,557,102 Net loss attributable to common shareholders per share: Basic and diluted $ (0.03 ) $ (0.03 ) Revenue Recognition Revenue is recognized when: (1) persuasive evidence of an arrangement exists; (2) service has been rendered or delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the services rendered or products delivered and the collectability of those amounts. Provisions for discounts to customers, and allowance, and other adjustments will be provided for in the same period the related sales are recorded. Stock-Based Compensation We account for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”), ASC 718, “Compensation—Stock Compensation.” Under the provisions of FASB ASC 718, stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized as expense over the requisite service period. On July 7, 2017, our shareholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan authorizes the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance units/shares. Up to 5,000,000 shares of common stock are authorized for issuance under the 2016 Plan. Shares issued under the 2016 Plan may be either authorized but unissued shares, treasury shares, or any combination thereof. Provisions in the 2016 Plan permit the reuse or reissuance by the 2016 Plan of shares of common stock for numerous reasons, including, but not limited to, shares of common stock underlying canceled, expired, or forfeited awards of stock-based compensation and stock appreciation rights paid out in the form of cash. Stock-based compensation will typically be awarded in consideration for the future performance of services to us. All recipients of awards under the 2016 Plan are required to enter into award agreements with the Company at the time of the award; awards under the 2016 Plan are expressly conditioned upon such agreements. For the year ended December 31, 2016, the Company issued options to purchase 100,000 shares of common stock out of the 2016 Plan. In addition, for the year ended December 31, 2017, the Company issued 200,000 shares of common stock out of the 2016 Plan. Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We maintain cash balances at financial institutions which exceed the current Federal Deposit Insurance Corporation limit of $250,000 at times during the year. Long-Lived Assets Including Acquired Intangible Assets We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating long-lived assets for impairment, we measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If our long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We base the calculations of the estimated fair value of our long-lived assets on the income approach. For the income approach, we use an internally developed discounted cash flow model that includes, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the years ended December 31, 2017 and 2016. Advertising and Promotional Expenses We expense advertising costs in the period in which they are incurred. Advertising and promotional expenses for the years ended December 31, 2017 and 2016, were approximately $66,000 and $130,000, respectively. Research and Development Expenses We expense research and development expenses in the period in which they are incurred. For the years ended December 31, 2017 and 2016, research and development expenses were approximately $454,000 and $184,000, respectively. Shipping and Handling Costs We include shipping and handling costs relating to the delivery of products directly from vendors to the Company in cost of sales. Shipping and handling costs, which include third-party delivery costs relating to the delivery of products to customers, are classified as a general and administrative expense. Shipping and handling costs included in general and administrative expense were approximately $119,000 and $143,000 for the years ended December 31, 2017 and 2016, respectively. Business Segments We currently have one reportable business segment due to the fact that we derive our revenue primarily from one product. A breakdown of revenue is shown below: Net Revenue Product and Service Revenue Year Ended December 31, 2017 2016 SteraMist Product $ 4,101,000 $ 5,727,000 Service and Training 893,000 616,000 Total $ 4,994,000 $ 6,343,000 Revenue by Geographic Region Year Ended December 31, 2017 2016 United States $ 3,495,000 $ 4,012,000 International 1,499,000 2,331,000 Total $ 4,994,000 $ 6,343,000 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Scope Of Modification Accounting

3. INVENTORIES

3. INVENTORIES	12 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
NOTE 3: INVENTORIES	Inventories consist of the following at: December 31, 2017 December 31, 2016 Raw materials $ - $ 13,031 Finished goods 3,518,884 4,034,279 $ 3,518,884 $ 4,047,310

4. PROPERTY AND EQUIPMENT

4. PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 4. PROPERTY AND EQUIPMENT	Property and equipment consists of the following at: December 31, December 31, 2017 2016 Furniture and fixtures $ 91,216 $ 91,216 Equipment 1,192,293 866,803 Vehicles 56,410 56,410 Computer and Software 113,319 100,175 Leasehold Improvements 15,554 15,554 1,468,792 1,130,158 Less: Accumulated depreciation 755,969 518,350 $ 712,822 $ 611,808 For the years ended December 31, 2017 and 2016, depreciation was $237,619 and $216,876, respectively.

5. INTANGIBLE ASSETS

5. INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 5. INTANGIBLE ASSETS	Intangible assets consist of Patents and Trademarks related to our Binary Ionization Technology. All of these assets were pledged as collateral for the convertible notes as described below in Note 6. The patents are being amortized over the estimated remaining lives of the related patents. The trademarks have an indefinite life. Amortization expense was $369,508 and $369,508 for the years ended December 31, 2017 and 2016, respectively. Definite life intangible assets consist of the following: December 31, 2017 December 31, 2016 Intellectual Property and Patents $ 2,848,300 $ 2,848,300 Less: Accumulated Amortization 1,739,768 1,370,260 Intangible Assets, net $ 1,108,532 $ 1,478,040 Indefinite life intangible assets consist of the following: Trademarks $ 440,000 $ 440,000 Total Intangible Assets, net $ 1,548,532 $ 1,918,040 Approximate amortization over the next five years is as follows: Twelve Month Period Ending December 31, Amount 2018 $ 370,000 2019 370,000 2020 368,000 2021 - 2022 - $ 1,108,000

6. CONVERTIBLE DEBT

6. CONVERTIBLE DEBT	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 6. CONVERTIBLE DEBT	In March and May 2017, the Company closed a private placement transaction in which it issued to certain accredited investors unregistered senior callable convertible promissory notes (the “Notes”) and three-year warrants to purchase an aggregate of 999,998 shares of common stock at an exercise price of $0.69 per share in exchange for aggregate gross proceeds of $6,000,000. The Notes bear interest at a rate of 4% per annum. $5,300,000 in principal matures on August 31, 2018 and $700,000 in principal matures on November 8, 2018, unless earlier redeemed, repurchased or converted. The maturity dates of these notes were extended in February and March of 2018 (See note 16). The Notes are convertible at the option of the holder into common stock at a conversion price of $0.54 per share. Subsequent to September 1, 2017, we may redeem the Notes that are scheduled to mature on August 31, 2018 at any time prior to maturity at a price equal to 100% of the outstanding principal amount of the Notes to be redeemed, plus accrued and unpaid interest as of the redemption date. Prior to November 8, 2018, we may redeem the Notes that are scheduled to mature on such date at any time prior to maturity at a price equal to 100% of the outstanding principal amount of the Notes to be redeemed, plus accrued and unpaid interest as of the redemption date. Interest on the Notes is payable semi-annually in cash on February 28 and August 31 of each year, beginning on August 31, 2017. Interest expense related to the Notes for the year ended December 31, 2017 was $191,256. The warrants were valued at $62,559 using the Black-Scholes pricing model with the following assumptions: expected volatility: 104.06% -111.54%; expected dividend: $0; expected term: 3 years; and risk-free rate: 1.49% - 1.59%. The Company recorded the warrants’ relative fair value of $61,904 as an increase to additional paid-in capital and a discount against the related debt. The debt discount is being amortized over the life of the Notes using the effective interest method. Amortization expense for the year ended December 31, 2017 was $6,279. Convertible notes consist of the following at December 31, 2017: December 31, 2017 Convertible notes $ 6,000,000 Initial discount (61,904 ) Accumulated amortization 6,279 Convertible notes, net $ 5,944,375

7. STOCKHOLDERS' EQUITY

7. STOCKHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 7. STOCKHOLDERS' EQUITY	Our board of directors may, without further action by our shareholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of such preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of our common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of our common stock. Convertible Series A Preferred Stock Our authorized Convertible Series A Preferred Stock, $0.01 par value, consists of 1,000,000 shares. At December 31, 2017 and 2016, there were 510,000 shares issued and outstanding, respectively. The Convertible Series A Preferred Stock is convertible at the rate of one share of common stock for one share of Convertible Series A Preferred Stock. Convertible Series B Preferred Stock Our authorized Convertible Series B Preferred Stock, $1,000 stated value, 7.5% Cumulative dividend, consists of 4,000 shares. At December 31, 2017 and 2016, there were no shares issued and outstanding, respectively. Each share of Convertible Series B Preferred Stock may be converted (at the holder’s election) into two hundred shares of our common stock. Common Stock During the year ended December 31, 2016, we issued 761,954 shares of common stock valued at $369,654 for professional services rendered. During the year ended December 31, 2017, the Company issued 249,824 shares of common stock valued at $38,100 for professional services rendered, of which the Company issued 200,000 shares that were valued at $32,000 and issued to our board of directors (See Note 10). In August 2017, warrants to purchase 375,000 and 600,000 shares of common stock were exercised, which resulted in gross proceeds to the Company of $18,750 and $30,000, respectively. Stock Options In February 2016, we issued options to purchase an aggregate of 100,000 shares of common stock to four directors, valued at $54,980 in total. The options have an exercise price of $0.55 per share and expire in February 2026. The options were valued using the Black-Scholes model using the following assumptions: volatility: 224%; dividend yield: 0%; zero coupon rate: 1.47%; and a life of 10 years. The following table summarizes stock options outstanding as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 200,000 $ 0.76 100,000 $ 0.96 Granted — — 100,000 0.55 Exercised — — — — Outstanding, end of period 200,000 $ 0.76 200,000 $ 0.76 Options outstanding and exercisable by price range as of December 31, 2017 were as follows: Outstanding Options Average Weighted Exercisable Options Range Number Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 2.10 40,000 2.01 40,000 $ 2.10 $ 0.05 20,000 3.03 20,000 $ 0.05 $ 0.27 40,000 7.01 40,000 $ 0.27 $ 0.55 100,000 8.10 100,000 $ 0.55 200,000 6.16 200,000 $ 0.76 Stock Warrants For the year ended December 31, 2016, we recognized total equity-based compensation of approximately $394,000 on warrants issued to the CEO in connection with his current and previous employment agreements (Note 9). For the year ended December 31, 2016, we recognized $39,000 in stock compensation expense for the warrants issued to the CEO in February 2014 that vested in February 2016. In addition, on March 31, 2016, we issued warrants to purchase up to 250,000 shares of common stock to the CEO with a term of five years that vest upon issuance and have an exercise price of $0.50 per share. We utilized the Black-Scholes method to fair value the warrants to purchase up to 250,000 shares of common stock received by the CEO totaling approximately $129,000 with the following assumptions: volatility, 162%; expected dividend yield, 0%; risk free interest rate, 1.47%; and a life of 5 years. The grant date fair value of each warrant was $0.51. On June 30, 2016, we issued warrants to purchase up to 250,000 shares of common stock to the CEO with a term of five years that vest upon issuance and have an exercise price of $0.42 per share. The Company utilized the Black-Scholes method to fair value the warrants to purchase up to 250,000 shares of common stock received by the CEO totaling approximately $99,000 with the following assumptions: volatility, 157%; expected dividend yield, 0%; risk free interest rate, 1.17%; and a life of 5 years. The grant date fair value of each warrant was $0.40. On September 30, 2016, the Company issued warrants to purchase up to 250,000 shares of common stock to the CEO with a term of five years that vest upon issuance and have an exercise price of $0.32 per share. We utilized the Black-Scholes method to fair value the warrants to purchase up to 250,000 shares of common stock received by the CEO totaling approximately $66,000 with the following assumptions: volatility, 155%; expected dividend yield, 0%; risk free interest rate, 1.27%; and a life of 5 years. The grant date fair value of each warrant was $0.27. On December 31, 2016, we issued warrants to purchase up to 250,000 shares of common stock to the CEO with a term of five years that vest upon issuance and have an exercise price of $0.27 per share. We utilized the Black-Scholes method to fair value the warrants to purchase up to 250,000 shares of common stock received by the CEO totaling approximately $61,000 with the following assumptions: volatility, 146%; expected dividend yield, 0%; risk free interest rate, 1.95%; and a life of 5 years. The grant date fair value of each warrant was $0.24. For the year ended December 31, 2016, we recognized total equity-based compensation of approximately $73,000 on warrants issued to the CFO in connection with his current and previous employment agreements (Note 11). For the year ended December 31, 2016, we recognized $22,000 in stock compensation expense for the warrants issued to the CFO under his previous agreement with the Company. In addition, on January 26, 2016, we issued warrants to purchase up to 100,000 shares of common stock to the CFO with a term of five years that vest upon issuance and have an exercise price of $0.55 per share. We utilized the Black-Scholes method to fair value the warrants to purchase up to 100,000 shares of common stock received by the CFO totaling approximately $51,000 with the following assumptions: volatility, 164%; expected dividend yield, 0%; risk free interest rate, 1.47%; and a life of 5 years. The grant date fair value of each warrant was $0.51. For the year ended December 31, 2016, we recognized equity compensation expense of approximately $92,000 related to the vested and accrual of unvested warrants contracted to an employee pursuant to his employment agreement with the Company that were issued in April 2016. We utilized the Black-Scholes method to fair value the 300,000 warrants received by the employee totaling approximately $139,000 with the following assumptions: volatility, 159%; expected dividend yield, 0%; risk free interest rate, 1.47%; and a life of 5 years. The grant date fair value of each warrant was $0.46. In March and May of 2017, in connection with the issuance of the Notes, we issued three-year warrants to purchase up to an aggregate of 999,998 shares of common stock at an exercise price of $0.69 per share (see Note 6). On June 30, 2017, we issued warrants to purchase up to 15,000 shares of common stock at an exercise price of $0.10 per share to the members of the Scientific Advisory Board with a term of five years, which vested upon issuance. The Company utilized the Black-Scholes method to fair value the warrants received by the members of the Scientific Advisory Board at $1,400 with the following assumptions: volatility, 150%; expected dividend yield, 0%; risk free interest rate, 1.83%; and a life of 5 years. The grant date fair value of each share underlying the warrant was $0.09. During the first and second quarter of 2017, we recognized approximately $23,000 in equity compensation expense for the vested and unvested portion of a warrant issued to a former employee pursuant to his agreement with the Company. In September 2017, the employee resigned from his position with the Company. Accordingly, the unvested portion of his warrant was terminated and the $22,000 in equity compensation expense was reversed. In June 2017, we modified the terms of outstanding warrants to purchase 4,000,000 shares of common stock. Pursuant to a settlement agreement, the term of the warrants was increased by 2 years and the exercise price was modified to $0.12 per share (decrease of $0.03 per share). Pursuant to ASC 718, the modified terms of the warrants resulted in approximately $196,000 in incremental equity compensation expense for the year ended December 31, 2017. We utilized the Black-Scholes method to fair value the warrants under the original and modified terms with the following range of assumptions: volatility, 81%-97%; expected dividend yield, 0%; risk free interest rate, 1.28%; and a life of 0.33 - 2.33 years, respectively. The grant date fair value of each share of common stock underlying the warrant was $0.01 and $0.06, respectively. In July 2017 we issued a warrant to purchase 250,000 shares of common stock to the CEO at an exercise price of $0.10 per share pursuant to his employment agreement with the Company. The warrant was valued at approximately $23,000 and has a term of 5 years. We utilized the Black-Scholes method to fair value the warrant received by the CEO with the following assumptions: volatility, 153%; expected dividend yield, 0%; risk free interest rate, 1.90%; and a life of 5 years. The grant date fair value of each share of common stock underlying the warrant was $0.09. In October 2017, we issued warrants to purchase up to 10,000 shares of common stock at an exercise price of $0.17 per share to the members of the Scientific Advisory Board with a term of five years, which vested upon issuance. The Company utilized the Black-Scholes method to fair value the warrants received by the members of the Scientific Advisory Board at approximately $1,500 with the following assumptions: volatility, 147%; expected dividend yield, 0%; risk free interest rate, 1.98%; and a life of 5 years. The grant date fair value of each share underlying the warrant was $0.15. In December 2017 we issued a warrant to purchase 3,500,000 shares of common stock to the CEO at an exercise price of $0.12 per share pursuant to his employment agreement with the Company. The warrant was valued at approximately $412,000 and has a term of 5 years. We utilized the Black-Scholes method to fair value the warrant received by the CEO with the following assumptions: volatility, 145%; expected dividend yield, 0%; risk free interest rate, 2.23%; and a life of 5 years. The grant date fair value of each share of common stock underlying the warrant was $0.12. The following table summarizes the outstanding common stock warrants as of December 31, 2017 and December 31, 2016: December 31, 2017 December 31, 2016 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Outstanding, beginning of period 37,076,413 $ 0.31 35,676,413 $ 0.30 Granted 4,774,998 0.24 1,400,000 0.42 Exercised (975,000 ) 0.05 — — Expired (5,375,000 ) 0.13 — — Outstanding, end of period 35,501,411 $ 0.33 37,076,413 $ 0.31 Warrants outstanding and exercisable by price range as of December 31, 2017 were as follows: Outstanding Warrants Exercisable Warrants Range Number Average Weighted Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 0.10 265,000 4.54 265,000 $ 0.10 $ 0.12 7,500,000 3.28 7,500,000 $ 0.12 $ 0.15 250,000 0.01 250,000 $ 0.15 $ 0.17 10,000 4.82 10,000 $ 0.17 $ 0.26 100,000 0.49 100,000 $ 0.26 $ 0.27 250,000 4.00 250,000 $ 0.27 $ 0.29 10,125,613 2.80 10,125,613 $ 0.29 $ 0.30 11,925,800 0.75 11,925,800 $ 0.30 $ 0.32 250,000 3.75 250,000 $ 0.32 $ 0.33 75,000 0.75 75,000 $ 0.33 $ 0.42 250,000 3.50 250,000 $ 0.42 $ 0.50 325,000 2.57 325,000 $ 0.50 $ 0.55 100,000 3.08 100,000 $ 0.55 $ 0.62 75,000 0.55 75,000 $ 0.62 $ 0.69 999,998 2.21 999,998 $ 0.69 $ 1.00 3,000,000 2.34 3,000,000 $ 1.00 35,501,411 2.15 35,501,411 $ 0.33

8. RELATED PARTY TRANSACTIONS

8. RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 8. RELATED PARTY TRANSACTIONS	In May 2017, we entered into an agreement with 41 North International LLC to provide consulting services in the areas of sales management and business development. The term of the agreement is for six months and provides for automatic monthly renewals. Either party can terminate the agreement after 6 months with 30 days written notice. The agreement provides for a $20,000 monthly fee as an advance against commissions. No sales or commissions were made under the consulting agreement in 2017.

9. COMMITMENTS AND CONTINGENCIE

9. COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 9. COMMITMENTS AND CONTINGENCIES	Lease Commitments In September 2014, we entered into a lease agreement for office and warehouse space in Frederick, Maryland. As part of the lease agreement, we received a rent holiday in the first 5 months of the lease. The lease also provides for an escalation clause pursuant to which the Company will be subject to an annual rent increase of 3%, year over year. The lease expired on January 31, 2018 and is currently on a month to month basis. The Company accounts for the lease using the straight-line method and recorded $45,709 in rent expense for the years ended December 31, 2017 and 2016. Approximate minimum annual rents under the lease are as follows: Period Ending January 31, Amount 2018 $ 4,000 $ 4,000 Legal Contingencies We may become a party to litigation in the normal course of business. In the opinion of management, there are no legal matters involving us that would have a material adverse effect upon our financial condition, results of operations or cash flows. In addition, from time to time, we may have to file claims against parties that infringe on our intellectual property. Product Liability As of December 31, 2017, and December 31, 2016, there were no claims against us for product liability.

10. CONTRACTS AND AGREEMENTS

10. CONTRACTS AND AGREEMENTS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
10. CONTRACTS AND AGREEMENTS	Manufacturing Agreement In November 2016, we entered into a new manufacturing and development agreement with RG Group Inc. The agreement does not provide for any minimum purchase commitments and is for a term of two years with provisions to extend. The agreement also provides for a warranty against product defects for one year from the sale to the end user. As of December 31, 2017 and 2016, balances due to RG Group, Inc. accounted for approximately 45% and 31% of total accounts payable, respectively. At December 31, 2017 and 2016, we maintained required deposits with RG Group, Inc. in the amounts of $0 and $147,010, respectively. Agreements with Directors In March 2017, we increased the annual board fee to directors to $30,000, to be paid on a quarterly basis, with the exception of the audit committee chairperson, whose annual fee we increased to $35,000, also to be paid on a quarterly basis. In addition, we issued to each of our four board members 50,000 shares of common stock in April 2017. The 200,000 shares of common stock were valued at $32,000 for the year ended December 31, 2017. In December 2017, we increased the annual board fee to directors to $40,000 in cash, to be paid on a quarterly basis, with the exception of the audit committee chairperson, whose annual fee we increased to $45,000, also to be paid on a quarterly basis. The board fee also includes the issuance of 75,000 shares of common stock on an annual basis. At our 2017 Annual Meeting of Shareholders, our shareholders elected Mr. Ronald E. Ainsworth to our board of directors, to serve as a Class I director. The term of his service as director commenced on July 7, 2017 and will expire at our 2018 Annual Meeting of Shareholders, unless Mr. Ainsworth sooner resigns or is removed. In his capacity as a director, Mr. Ainsworth is entitled to an annual fee in the amount of $30,000 paid on a quarterly basis and the grant of 50,000 shares of our common stock. Mr. Ainsworth is a principal in 41 North International, LLC (see Note 8). The agreement with 41 North was terminated on October 31, 2017. Other Agreements In June 2015, we launched the TOMI Service Network (“TSN”). The TSN is a national service network composed of existing full service restoration industry specialists that have entered into licensing agreements with us to become Primary Service Providers (“PSP’s”). The licensing agreements grant protected territories to PSP’s to perform services using our SteraMist™ platform of products and also provide for potential job referrals to PSP’s whereby we are entitled to referral fees. Additionally, the agreement provides for commissions due to PSP’s for equipment and solution sales they facilitate to other service providers in their respective territories. As part of these agreements, we are obligated to provide to the PSP’s various training, ongoing support and facilitate a referral network call center. As of December 31, 2017, we had entered into 69 licensing agreements in connection with the launch of the TSN. The licensing agreements contain fixed price minimum equipment and solution orders based on the population of the territories granted pursuant to the licensing agreements. n May 2015, we were awarded a grant by the United States Agency for International Development (“USAID”) in the amount of $559,000 for the development of SteraMist™ Mobile Decontamination Chambers to fight the Ebola epidemic. The grant is based on milestones set forth in the agreement between the Company and USAID. In May 2016, we completed the USAID grant by completing the sixth and final milestone and received gross proceeds in the amount of $559,003 during the period of the agreement. The Company incurred costs in connection with the grant through December 31, 2016 in the amount of $359,112. The proceeds received as part of the grant in excess of the costs incurred has been presented on our statement of operations in the amount of $199,891 for the year ended December 31, 2016.

11. INCOME TAXES

11. INCOME TAXES	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Note 11. INCOME TAXES	The Company’s income tax expense consisted of: For the Year Ended December 31, December 31, 2017 2016 Current: United States $ - $ - Foreign - - - - Deferred: United States - - Foreign - - Total $ - $ - The Company’s net income (loss) before income tax consisted of: For the Year Ended December 31, December 31, 2017 2016 United States $ (3,639,814 ) $ (3,157,259 ) Foreign - - Total $ (3,639,814 ) $ (3,157,259 ) Our income tax expense differed from the amounts computed by applying the United States statutory corporate income tax rate for the following reasons: On December 22, 2017, the 2017 Tax Cuts and Jobs Act (“Tax Act”) was enacted into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We are required to recognize the effect of the tax law changes in the period of enactment, such as re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. The Tax Act did not give rise to any material impact on the consolidated balance sheets and consolidated statements of operations due to our historical worldwide loss position and the full valuation allowance on our net U.S. deferred tax assets. In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act The reconciliation of taxes at the federal and state statutory rate to our provision for income taxes for the years ended December 31, 2017 and 2016 was as follows: For the Year Ended December 31, 2017 December 31, 2016 Loss before income tax $ (3,639,814 ) $ (3,157,259 ) US statutory corporate income tax rate (federal and state) 39.45 % 39.45 % Income tax expense computed at US statutory corporate income tax rate Income tax expense computed at US statutory corporate income tax rate (1,435,907 ) (1,245,539 ) Reconciling items: Effect of U.S. tax law change (1) 1,793,212 Change in valuation allowance on deferred tax assets (675,889 ) 1,258,389 Provision to prior year tax return 69,767 (250,994 ) Incentive stock options and warrants 256,168 242,498 Amortized debt discount 2,477 - Meals and Entertainment 5,825 8,595 Other (15,653 ) (12,949 ) Income tax expense $ - $ - (1) Due to the Tax Act, our U.S. deferred tax assets and liabilities as of December 31, 2017 were re-measured from 35% to 21%. The change in tax rate resulted in a decrease to our gross U.S. deferred tax assets which is offset by a corresponding decrease to our valuation allowance. Components of our deferred income tax assets (liabilities) are as follows: December 31, 2017 December 31, 2016 Deferred tax assets: Reserve for Bad Debt $ 140,000 $ 118,000 Inventory Capitalization 94,000 152,000 Accrued Vacation 31,000 8,700 Deferred Rent - 3,400 Property and Equipment 21,000 - Intangible Assets 208,000 237,000 Net operating losses 3,724,000 4,380,000 Valuation Allowance (4,218,000 ) (4,893,700 ) Deferred Tax Assets - 5,400 Deferred tax liabilities: Property and Equipment $ - $ (5,400 ) Net Deferred Tax Assets and Liabilities $ - $ - Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits, which are, on a more likely than not basis, not expected to be realized; in accordance with ASC guidance for income taxes. As of December 31, 2017, we recorded a valuation allowance of $4,218,000 for the portion of the deferred tax assets that we do not expect to be realized. The valuation allowance on our net deferred taxes decreased by $676,000 during the year ended December 31, 2017, primarily due to the effect of the U.S. tax law changes offset by additional U.S. deferred tax assets incurred in the current year that cannot be realized. Management believes that based on the available information, it is more likely than not that the U.S. deferred tax assets will not be realized, such that a valuation allowance is required against U.S. deferred tax assets. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. For income tax purposes in the United States, we had available federal net operating loss carryforwards ("NOL") as of December 31, 2017 and 2016 of approximately $13,898,000 and $11,148,000 respectively to reduce future federal taxable income. For income tax purposes in the United States, we had available state NOL carryforwards as of December 31, 2017 and 2016 of approximately $11,506,000 and $8,756,000 respectively to reduce future state taxable income. We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. As of December 31, 2017 and 2016, the management of the Company determined there were no reportable uncertain tax positions.

12. ACCRUED EXPENSES AND OTHER

12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	Accrued expenses and other current liabilities consisted of the following at: December 31, December 31, 2017 2016 Commissions $ 115,506 $ 172,735 Payroll and related costs 43,484 40,264 Director fees 27,750 19,000 Accrued Warranty 5,000 - Other accrued expenses 75,396 46,414 Total $ 267,136 $ 278,413

13. ACCRUED WARRANTY

13. ACCRUED WARRANTY	12 Months Ended
	Dec. 31, 2017
Accrued Warranty
NOTE 13. ACCRUED WARRANTY	Our manufacturer assumes warranty against product defects for one year from the sale to customers, which we extend to our customers upon sale of the product. We assume responsibility for product reliability and results. The warranty is generally limited to a refund of the original purchase price of the product or a replacement part. We estimate warranty costs based on historical warranty claim experience. The following table presents warranty reserve activities at: December 31, December 31, 2017 2016 Beginning accrued warranty costs $ - $ - Cost of warranty claims 5,731 - Settlement of warranty claims (5,731 ) - Provision for product warranty costs 5,000 - Ending accrued warranty costs $ 5,000 $ -

14. CUSTOMER CONCENTRATION

14. CUSTOMER CONCENTRATION	12 Months Ended
	Dec. 31, 2017
Risks and Uncertainties [Abstract]
14. CUSTOMER CONCENTRATION	The Company had certain customers whose revenue individually represented 10% of more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% of more of the Company’s accounts receivable. As of December 31, 2017, two customers accounted for 24% of accounts receivable. Two customers accounted for 22% of net revenues for the year ended December 31, 2017 As of December 31, 2016, one customer accounted for 10% of accounts receivable. One customer accounted for 10% of net revenues for the year ended December 31, 2016

15. LITIGATION SETTLEMENT

15. LITIGATION SETTLEMENT	12 Months Ended
	Dec. 31, 2017
Litigation Settlement
NOTE 15. LITIGATION SETTLEMENT	In July 2017, we settled our litigation with Astro Pak Corporation (“Astro Pak”) relating to our patents and intellectual property rights. Astro Pak has agreed that we are the sole owner of ionized hydrogen peroxide decontamination and sterilization technology, patents, and products, which we market under the brands Binary Ionization Technology® (BIT™) and SteraMist™. We sued Astro Pak and its wholly owned subsidiary SixLog Corporation (“SixLog”) in California federal court for infringing our United States Patent Nos. 6,969,487 and 7,008,592 and violating our intellectual property rights by, among other things, indicating that our technology and patents were proprietary to SixLog and marketing our patented equipment with SixLog labels. Astro Pak and SixLog agreed to cease this conduct and pay us a cash settlement. Astro Pak also agreed to assign its iHP mark to us, complementing our existing trademark and trade name protection. Finally, Astro Pak and SixLog agreed to remove from the web or take steps to remove any assertions or suggestions that they own or developed ionized hydrogen peroxide technology or patents, or that they provide any ionized hydrogen peroxide products or services.

16. SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
NOTE 15. SUBSEQUENT EVENTS	We have evaluated subsequent events through the date the financial statements were issued and up to the time of filing of the financial statements with the Securities and Exchange Commission. Effective January 1, 2018, we appointed Elissa J. Shane as Chief Operating Officer. . Pursuant to her employment agreement, Ms. Shane will receive an annual base salary of at least $200,000, subject to annual review and discretionary increase by the Compensation Committee of the Board. Ms. Shane is eligible to receive an annual cash bonus and other annual incentive compensation, and the agreement provides that we will issue Ms. Shane annually an option to purchase at least 250,000 shares of common stock pursuant to the 2016 Plan. Additionally, in connection with the execution of her employment agreement, on January 5, 2018, we issued Ms. Shane an option under the 2016 Plan to purchase 100,000 shares of common stock at an exercise price of $0.12 per share. Her employment agreement also provides that we will reimburse Ms. Shane for reasonable and necessary business and entertainment expenses that she incurs in performing her duties. During the term of her employment, Ms. Shane will also be entitled to up to four weeks of paid vacation time annually, which will accrue up to six weeks, and to participate in our benefit plans and programs, including but not limited to all group health, life, disability and retirement plans. Ms. Shane is also entitled to the sum of $750 per month as a vehicle allowance. The initial term of her employment agreement is three years, which may be automatically extended for successive one-year terms, unless either party provides the other with 120 days’ prior written notice of its intent to terminate the agreement. On January 29, 2018 Dr. Boh Soon Lim was elected to our Board of Directors. His term is up to three years depending upon the assigned class of directors and thereafter for three years upon reelection, unless prematurely concluded by mutual consent, or otherwise as provided. In February and March 2018, the maturity date of the convertible promissory notes was extended. The maturity date for $5,300,000 of principal on the convertible promissory notes was extended to April 1, 2019 and the maturity date on $700,000 in principal of the convertible promissory notes was extended to June 8, 2019. (See Note 6)

2. SUMMARY OF SIGNIFICANT ACC23

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2017
Summary Of Significant Accounting Policies Policies
Principles of Consolidation	The accompanying consolidated financial statements include the accounts of TOMI and its wholly-owned subsidiary, TOMI Environmental Solutions, Inc., a Nevada corporation. All significant intercompany accounts and transactions have been eliminated in consolidation.
Reclassification of Accounts	Certain reclassifications have been made to prior-year comparative financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or financial position.
Use of Estimates	The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the accompanying consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, inventory, fair values of financial instruments, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities.
Fair Value Measurements	The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities. Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and convertible debt. All these items were determined to be Level 1 fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximated fair value because of the short maturity of these instruments. The recorded value of convertible debt approximates its fair value as the terms and rates approximate market rates (See Note 6).
Cash and Cash Equivalents	For purposes of the statement of cash flows, cash and cash equivalents includes cash on hand held at financial institutions and other liquid investments with original maturities of three months or less. At times, these deposits may be in excess of insured limits.
Accounts Receivable	Our accounts receivable are typically from credit worthy customers or, for certain international customers, are supported by pre-payments. For those customers to whom we extend credit, we perform periodic evaluations of them and maintain allowances for potential credit losses as deemed necessary. We have a policy of reserving for doubtful accounts based on our best estimate of the amount of potential credit losses in existing accounts receivable. We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Bad debt expense for the years ended December 31, 2017 and 2016 was $263,882 and $285,030, respectively. At December 31, 2017 and December 31, 2016, the allowance for doubtful accounts was $500,000 and $300,000, respectively. As of December 31, 2017, two customers accounted for 24% of accounts receivable. Two customers accounted for 22% of net revenues for the year ended December 31, 2017. As of December 31, 2016, one customer accounted for 10% of accounts receivable. One customer accounted for 10% of net revenues for the year ended December 31, 2016.
Inventories	Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist primarily of finished goods and raw materials. At December 31, 2017 and December 31, 2016, we did not have a reserve for slow-moving or obsolete inventory.
Deposits on Merchandise	Deposits on merchandise primarily consist of amounts paid in advance of the receipt of inventory (see Note 10).
Property and Equipment	We account for property and equipment at cost less accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally three to five years. Depreciation for equipment, furniture and fixtures and vehicles commences once placed in service for its intended use. Leasehold improvements are amortized using the straight-line method over the lives of the respective leases or service lives of the improvements, whichever is shorter.
Accounts Payable	As of December 31, 2017, one vendor accounted for approximately 45% of total accounts payable. As of December 31, 2016, two vendors accounted for approximately 49% of total accounts payable. One vendor accounted for 73% and 78% of cost of goods sold for the years ended December 31, 2017 and 2016, respectively.
Accrued Warranties	Accrued warranties represent the estimated costs, if any, that will be incurred during the warranty period of our products. We make an estimate of expected costs that will be incurred by us during the warranty period and charge that expense to the consolidated statement of operations at the date of sale. Our manufacturer assumes warranty against product defects for one year from date of sales, which we extend to our customers upon sale of the product. We assume responsibility for product reliability and results. As of December 31, 2017 and 2016, the warranty reserve was $5,000 and $0, respectively.
Income taxes	Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits, which are, on a more likely than not basis, not expected to be realized in accordance with ASC guidance for income taxes. Net deferred tax benefits have been fully reserved at December 31, 2017 and 2016. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted.
Loss Per Share	Basic loss per share is computed by dividing the Company’s net loss by the weighted average number of shares of common stock outstanding during the period presented. Diluted loss per share is based on the treasury stock method and includes the effect from potential issuance of shares of common stock, such as shares issuable pursuant to the exercise of options and warrants and conversions of preferred stock or debentures. Potentially dilutive securities as of December 31, 2017 consisted of 11,111,100 shares of common stock from convertible debentures, 35,501,411 shares of common stock issuable upon exercise of outstanding warrants, 200,000 shares of common stock issuable upon outstanding options and 510,000 shares of common stock issuable upon conversion of outstanding shares of Preferred A stock (“Convertible Series A Preferred Stock”). Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Potentially dilutive securities as of December 31, 2016, consisted of 37,076,413 shares of common stock from outstanding warrants, 200,000 shares of common stock from options and 510,000 shares of common stock from convertible Series A preferred stock. Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Basic loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional common shares were dilutive. Options, warrants, preferred stock and shares associated with the conversion of debt to purchase an aggregate of approximately 47.3 million and 37.8 million shares of common stock were outstanding at December 31, 2017 and 2016, respectively, but were excluded from the computation of diluted loss per share due to the anti-dilutive effect on net loss per share. For the Year Ended December 31, 2017 2016 Net loss $ (3,639,814 ) $ (3,157,259 ) Adjustments for convertible debt - as converted Interest on convertible debt 191,256 - Amortization of debt discount on convertible debt 6,279 - Net loss attributable to common shareholders $ (3,442,279 ) $ (3,157,259 ) Weighted average number of common shares outstanding: Basic and diluted 121,372,605 120,557,102 Net loss attributable to common shareholders per share: Basic and diluted $ (0.03 ) $ (0.03 )
Revenue Recognition	Revenue is recognized when: (1) persuasive evidence of an arrangement exists; (2) service has been rendered or delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the services rendered or products delivered and the collectability of those amounts. Provisions for discounts to customers, and allowance, and other adjustments will be provided for in the same period the related sales are recorded.
Stock-Based Compensation	We account for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”), ASC 718, “Compensation—Stock Compensation.” Under the provisions of FASB ASC 718, stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized as expense over the requisite service period. On July 7, 2017, our shareholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan authorizes the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance units/shares. Up to 5,000,000 shares of common stock are authorized for issuance under the 2016 Plan. Shares issued under the 2016 Plan may be either authorized but unissued shares, treasury shares, or any combination thereof. Provisions in the 2016 Plan permit the reuse or reissuance by the 2016 Plan of shares of common stock for numerous reasons, including, but not limited to, shares of common stock underlying canceled, expired, or forfeited awards of stock-based compensation and stock appreciation rights paid out in the form of cash. Stock-based compensation will typically be awarded in consideration for the future performance of services to us. All recipients of awards under the 2016 Plan are required to enter into award agreements with the Company at the time of the award; awards under the 2016 Plan are expressly conditioned upon such agreements. For the year ended December 31, 2016, the Company issued options to purchase 100,000 shares of common stock out of the 2016 Plan. In addition, for the year ended December 31, 2017, the Company issued 200,000 shares of common stock out of the 2016 Plan.
Concentrations of Credit Risk	Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We maintain cash balances at financial institutions which exceed the current Federal Deposit Insurance Corporation limit of $250,000 at times during the year.
Long-Lived Assets Including Acquired Intangible Assets	We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating long-lived assets for impairment, we measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If our long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We base the calculations of the estimated fair value of our long-lived assets on the income approach. For the income approach, we use an internally developed discounted cash flow model that includes, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the years ended December 31, 2017 and 2016.
Advertising and Promotional Expenses	We expense advertising costs in the period in which they are incurred. Advertising and promotional expenses for the years ended December 31, 2017 and 2016, were approximately $66,000 and $130,000, respectively.
Research and Development Expenses	We expense research and development expenses in the period in which they are incurred. For the years ended December 31, 2017 and 2016, research and development expenses were approximately $454,000 and $184,000, respectively.
Shipping and Handling Costs	We include shipping and handling costs relating to the delivery of products directly from vendors to the Company in cost of sales. Shipping and handling costs, which include third-party delivery costs relating to the delivery of products to customers, are classified as a general and administrative expense. Shipping and handling costs included in general and administrative expense were approximately $119,000 and $143,000 for the years ended December 31, 2017 and 2016, respectively.
Business Segments	We currently have one reportable business segment due to the fact that we derive our revenue primarily from one product. A breakdown of revenue is shown below: Net Revenue Product and Service Revenue Year Ended December 31, 2017 2016 SteraMist Product $ 4,101,000 $ 5,727,000 Service and Training 893,000 616,000 Total $ 4,994,000 $ 6,343,000 Revenue by Geographic Region Year Ended December 31, 2017 2016 United States $ 3,495,000 $ 4,012,000 International 1,499,000 2,331,000 Total $ 4,994,000 $ 6,343,000
Recent Accounting Pronouncements	In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Scope Of Modification Accounting

2. SUMMARY OF SIGNIFICANT ACC24

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2017
Summary Of Significant Accounting Policies Tables
Loss per share	For the Year Ended December 31, 2017 2016 Net loss $ (3,639,814 ) $ (3,157,259 ) Adjustments for convertible debt - as converted Interest on convertible debt 191,256 - Amortization of debt discount on convertible debt 6,279 - Net loss attributable to common shareholders $ (3,442,279 ) $ (3,157,259 ) Weighted average number of common shares outstanding: Basic and diluted 121,372,605 120,557,102 Net loss attributable to common shareholders per share: Basic and diluted $ (0.03 ) $ (0.03 )
Reportable business segment	Product and Service Revenue Year Ended December 31, 2017 2016 SteraMist Product $ 4,101,000 $ 5,727,000 Service and Training 893,000 616,000 Total $ 4,994,000 $ 6,343,000 Revenue by Geographic Region Year Ended December 31, 2017 2016 United States $ 3,495,000 $ 4,012,000 International 1,499,000 2,331,000 Total $ 4,994,000 $ 6,343,000

3. INVENTORIES (Tables)

3. INVENTORIES (Tables)	12 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
INVENTORIES	Inventories consist of the following at: December 31, 2017 December 31, 2016 Raw materials $ - $ 13,031 Finished goods 3,518,884 4,034,279 $ 3,518,884 $ 4,047,310

4. PROPERTY AND EQUIPMENT (Tabl

4. PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2017
Property And Equipment Tables
PROPERTY AND EQUIPMENT	December 31, December 31, 2017 2016 Furniture and fixtures $ 91,216 $ 91,216 Equipment 1,192,293 866,803 Vehicles 56,410 56,410 Computer and Software 113,319 100,175 Leasehold Improvements 15,554 15,554 1,468,792 1,130,158 Less: Accumulated depreciation 755,969 518,350 $ 712,822 $ 611,808

5. INTANGIBLE ASSETS AND ASSET

5. INTANGIBLE ASSETS AND ASSET ACQUISITION (Tables)	12 Months Ended
	Dec. 31, 2017
Intangible Assets And Asset Acquisition Tables
Definite life intangible assets	December 31, 2017 December 31, 2016 Intellectual Property and Patents $ 2,848,300 $ 2,848,300 Less: Accumulated Amortization 1,739,768 1,370,260 Intangible Assets, net $ 1,108,532 $ 1,478,040
Indefinite life intangible assets	Trademarks $ 440,000 $ 440,000 Total Intangible Assets, net $ 1,548,532 $ 1,918,040
Approximate amortization over the next five years	Twelve Month Period Ending December 31, Amount 2018 $ 370,000 2019 370,000 2020 368,000 2021 - 2022 - $ 1,108,000

6. CONVERTIBLE DEBT (Tables)

6. CONVERTIBLE DEBT (Tables)	12 Months Ended
	Dec. 31, 2017
Convertible Debt Tables
Convertible Notes and Warrants potential future financing and fundamental transactions	December 31, 2017 Convertible notes $ 6,000,000 Initial discount (61,904 ) Accumulated amortization 6,279 Convertible notes, net $ 5,944,375

7. STOCKHOLDERS' EQUITY (Tables

7. STOCKHOLDERS' EQUITY (Tables) - Options [Member]	12 Months Ended
	Dec. 31, 2017
Summary of stock options outstanding	December 31, 2017 December 31, 2016 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 200,000 $ 0.76 100,000 $ 0.96 Granted — — 100,000 0.55 Exercised — — — — Outstanding, end of period 200,000 $ 0.76 200,000 $ 0.76
Options outstanding and exercisable by price range	Outstanding Options Average Weighted Exercisable Options Range Number Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 2.10 40,000 2.01 40,000 $ 2.10 $ 0.05 20,000 3.03 20,000 $ 0.05 $ 0.27 40,000 7.01 40,000 $ 0.27 $ 0.55 100,000 8.10 100,000 $ 0.55 200,000 6.16 200,000 $ 0.76
Summary of outstanding common stock warrants	December 31, 2017 December 31, 2016 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Outstanding, beginning of period 37,076,413 $ 0.31 35,676,413 $ 0.30 Granted 4,774,998 0.24 1,400,000 0.42 Exercised (975,000 ) 0.05 — — Expired (5,375,000 ) 0.13 — — Outstanding, end of period 35,501,411 $ 0.33 37,076,413 $ 0.31
Warrants outstanding and exercisable by price range	Outstanding Warrants Exercisable Warrants Range Number Average Weighted Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 0.10 265,000 4.54 265,000 $ 0.10 $ 0.12 7,500,000 3.28 7,500,000 $ 0.12 $ 0.15 250,000 0.01 250,000 $ 0.15 $ 0.17 10,000 4.82 10,000 $ 0.17 $ 0.26 100,000 0.49 100,000 $ 0.26 $ 0.27 250,000 4.00 250,000 $ 0.27 $ 0.29 10,125,613 2.80 10,125,613 $ 0.29 $ 0.30 11,925,800 0.75 11,925,800 $ 0.30 $ 0.32 250,000 3.75 250,000 $ 0.32 $ 0.33 75,000 0.75 75,000 $ 0.33 $ 0.42 250,000 3.50 250,000 $ 0.42 $ 0.50 325,000 2.57 325,000 $ 0.50 $ 0.55 100,000 3.08 100,000 $ 0.55 $ 0.62 75,000 0.55 75,000 $ 0.62 $ 0.69 999,998 2.21 999,998 $ 0.69 $ 1.00 3,000,000 2.34 3,000,000 $ 1.00 35,501,411 2.15 35,501,411 $ 0.33

9. COMMITMENTS AND CONTINGENC30

9. COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Minimum annual rents	Period Ending January 31, Amount 2018 $ 4,000 $ 4,000

11. INCOME TAXES (Tables)

11. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2017
Income Taxes Details 3
Schedule of Components of Income Tax Expense	The Company’s income tax expense consisted of: For the Year Ended December 31, December 31, 2017 2016 Current: United States $ - $ - Foreign - - - - Deferred: United States - - Foreign - - Total $ - $ -
Schedule of Income (Loss) before Income Tax, Domestic and Foreign	For the Year Ended December 31, December 31, 2017 2016 United States $ (3,639,814 ) $ (3,157,259 ) Foreign - - Total $ (3,639,814 ) $ (3,157,259 )
Schedule of Effective Income Tax Rate Reconciliation	For the Year Ended December 31, 2017 December 31, 2016 Loss before income tax $ (3,639,814 ) $ (3,157,259 ) US statutory corporate income tax rate (federal and state) 39.45 % 39.45 % Income tax expense computed at US statutory corporate income tax rate Income tax expense computed at US statutory corporate income tax rate (1,435,907 ) (1,245,539 ) Reconciling items: Effect of U.S. tax law change (1) 1,793,212 Change in valuation allowance on deferred tax assets (675,889 ) 1,258,389 Provision to prior year tax return 69,767 (250,994 ) Incentive stock options and warrants 256,168 242,498 Amortized debt discount 2,477 - Meals and Entertainment 5,825 8,595 Other (15,653 ) (12,949 ) Income tax expense $ - $ -
Schedule of Deferred Tax Assets and Liabilities	December 31, 2017 December 31, 2016 Deferred tax assets: Reserve for Bad Debt $ 140,000 $ 118,000 Inventory Capitalization 94,000 152,000 Accrued Vacation 31,000 8,700 Deferred Rent - 3,400 Property and Equipment 21,000 - Intangible Assets 208,000 237,000 Net operating losses 3,724,000 4,380,000 Valuation Allowance (4,218,000 ) (4,893,700 ) Deferred Tax Assets - 5,400 Deferred tax liabilities: Property and Equipment $ - $ (5,400 ) Net Deferred Tax Assets and Liabilities $ - $ -

12. ACCRUED EXPENSES AND OTHE32

12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2017
Accrued Expenses And Other Current Liabilities Tables
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following at: December 31, December 31, 2017 2016 Commissions $ 115,506 $ 172,735 Payroll and related costs 43,484 40,264 Director fees 27,750 19,000 Accrued Warranty 5,000 - Other accrued expenses 75,396 46,414 Total $ 267,136 $ 278,413

13. ACCRUED WARRANTY (Tables)

13. ACCRUED WARRANTY (Tables)	12 Months Ended
	Dec. 31, 2017
Accrued Warranty Tables
Warranty reserve activity	December 31, December 31, 2017 2016 Beginning accrued warranty costs $ - $ - Cost of warranty claims 5,731 - Settlement of warranty claims (5,731 ) - Provision for product warranty costs 5,000 - Ending accrued warranty costs $ 5,000 $ -

2. SUMMARY OF SIGNIFICANT ACC34

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Summary Of Significant Accounting Policies Details
Net loss	$ (3,639,814)	$ (3,157,259)
Adjustments for convertible debt - as converted
Interest on convertible debt	191,256	0
Amortization of debt discount on convertible debt	6,279	0
Net loss attributable to common shareholders	$ (3,442,279)	$ (3,157,259)
Weighted average number of common shares outstanding: Basic and diluted	121,372,605	120,557,102
Net loss attributable to common shareholders per share: Basic and diluted	$ (0.03)	$ (0.03)

2. SUMMARY OF SIGNIFICANT ACC35

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Net Revenue	$ 4,994,000	$ 6,343,000
SteraMist Product [Member]
Net Revenue	4,101,000	5,727,000
Service & Training [Member]
Net Revenue	893,000	616,000
United States [Member]
Net Revenue	3,495,000	4,012,000
International [Member]
Net Revenue	$ 1,499,000	$ 2,331,000

2. SUMMARY OF SIGNIFICANT ACC36

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Bad debt expense	$ 263,882	$ 285,030
Allowance for doubtful accounts	$ 500,000	$ 300,000
Potentially dilutive securities, outstanding warrants	35,501,411	37,076,413
Potentially dilutive securities, outstanding options	200,000	200,000
Potentially dilutive securities, convertible Series A preferred stock	510,000	510,000
FDIC insured amount	$ 250,000
Advertising and promotional expenses	66,000	$ 130,000
Research and development expenses	454,089	184,259
Shipping and handling costs	$ 119,000	$ 143,000
2016 Equity Compensation Plan [Member]
Shares issued under plan	200,000

3. INVENTORIES (Details)

3. INVENTORIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 0	$ 13,031
Finished goods	3,518,884	4,034,279
Inventory, end of period	$ 3,518,884	$ 4,047,310

4. PROPERTY AND EQUIPMENT (Deta

4. PROPERTY AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Property And Equipment Details
Furniture and fixtures	$ 91,216	$ 91,216
Equipment	1,192,293	866,803
Vehicles	56,410	56,410
Computer and Software	113,319	100,175
Leasehold Improvements	15,554	15,554
Property and Equipment Gross	1,468,792	1,130,158
Less: Accumulated depreciation	755,969	518,350
Property and Equipment Net	$ 712,822	$ 611,807

4. PROPERTY AND EQUIPMENT (De39

4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment
Depreciation	$ 237,619	$ 216,876

5. INTANGIBLE ASSETS AND ASSE40

5. INTANGIBLE ASSETS AND ASSET ACQUISITION (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
INTANGIBLE ASSETS
Intellectual property and patents	$ 2,848,300	$ 2,848,300
Less: Accumulated Amortization	1,739,768	1,370,260
Intangible Assets, net	$ 1,108,532	$ 1,478,040

5. INTANGIBLE ASSETS AND ASSE41

5. INTANGIBLE ASSETS AND ASSET ACQUISITION (Details 1) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Intangible Assets And Asset Acquisition Details 1
Trademarks	$ 440,000	$ 440,000
Total Intangible Assets	$ 1,548,532	$ 1,918,040

5. INTANGIBLE ASSETS AND ASSE42

5. INTANGIBLE ASSETS AND ASSET ACQUISITION (Details 2)	Dec. 31, 2017USD ($)
Amortization
2,018	$ 370,000
2,019	370,000
2,020	368,000
2,021	0
2,022	0
Total	$ 1,108,000

5. INTANGIBLE ASSETS AND ASSE43

5. INTANGIBLE ASSETS AND ASSET ACQUISITION (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
INTANGIBLE ASSETS
Amortization expense	$ 369,508	$ 369,508

6. CONVERTIBLE DEBT (Details)

6. CONVERTIBLE DEBT (Details)	Dec. 31, 2017USD ($)
Convertible Debt Details
Convertible notes	$ 6,000,000
Initial discount	(61,904)
Accumulated amortization	6,279
Convertible notes, net	$ 5,944,375

7. STOCKHOLDERS' EQUITY (Detail

7. STOCKHOLDERS' EQUITY (Details) - Warrant [Member] - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of Option
Outstanding, beginning of year	200,000	100,000
Granted	0	100,000
Exercised	0	0
Outstanding, end of year	200,000	200,000
Weighted Average Exercise Price
Outstanding, beginning of year	$ 0.76	$ 0.96
Granted	0	0.55
Exercised	0	0
Outstanding, end of year	$ 0.76	$ 0.76

7. STOCKHOLDERS' EQUITY (Deta46

7. STOCKHOLDERS' EQUITY (Details 1)	12 Months Ended
	Dec. 31, 2017$ / sharesshares
2.10 Range [Member]
Options outstanding and exercisable by price range
Number	40,000
Average Weighted Remaining Contractual Life in Years	2 years 1 month 6 days
Exercisable Options, Number	40,000
Weighted Average Exercise Price, Exercisable Options | $ / shares	$ 2.1
0.05 Range [Member]
Options outstanding and exercisable by price range
Number	20,000
Average Weighted Remaining Contractual Life in Years	3 years 11 days
Exercisable Options, Number	20,000
Weighted Average Exercise Price, Exercisable Options | $ / shares	$ 0.05
0.27 Range [Member]
Options outstanding and exercisable by price range
Number	40,000
Average Weighted Remaining Contractual Life in Years	7 years 4 days
Exercisable Options, Number	40,000
Weighted Average Exercise Price, Exercisable Options | $ / shares	$ 0.27
0.55 Range [Member]
Options outstanding and exercisable by price range
Number	100,000
Average Weighted Remaining Contractual Life in Years	8 years 1 month 6 days
Exercisable Options, Number	100,000
Weighted Average Exercise Price, Exercisable Options | $ / shares	$ 0.55
Option Member
Options outstanding and exercisable by price range
Number	200,000
Average Weighted Remaining Contractual Life in Years	6 years 1 month 28 days
Exercisable Options, Number	200,000
Weighted Average Exercise Price, Exercisable Options | $ / shares	$ 0.76

7. STOCKHOLDERS' EQUITY (Deta47

7. STOCKHOLDERS' EQUITY (Details 2) - Common Stock Warrant [Member] - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of Warrants
Outstanding, beginning of year	37,076,413	35,676,413
Granted	4,774,998	1,400,000
Exercised	(975,000)	0
Expired	(5,375,000)	0
Outstanding, end of year	35,501,411	37,076,413
Weighted Average Exercise Price
Outstanding, beginning of year	$ 0.31	$ 0.30
Granted	0.24	0.42
Exercised	0.05	0
Expired	0.13	.00
Outstanding, end of year	$ 0.33	$ 0.31

7. STOCKHOLDERS' EQUITY (Deta48

7. STOCKHOLDERS' EQUITY (Details 3)	12 Months Ended
	Dec. 31, 2017$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	35,501,411
Average Weighted Remaining Contractual Life in Years, Warrant	2 years 1 month 24 days
Exercisable Warrants, Number	35,501,411
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.33
0.1 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	265,000
Average Weighted Remaining Contractual Life in Years, Warrant	4 years 6 months 14 days
Exercisable Warrants, Number	265,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.1
0.12 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	7,500,000
Average Weighted Remaining Contractual Life in Years, Warrant	3 years 3 months 11 days
Exercisable Warrants, Number	7,500,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.12
0.15 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	250,000
Average Weighted Remaining Contractual Life in Years, Warrant	4 days
Exercisable Warrants, Number	250,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.15
0.17 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	10,000
Average Weighted Remaining Contractual Life in Years, Warrant	4 years 9 months 25 days
Exercisable Warrants, Number	10,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.17
0.26 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	100,000
Average Weighted Remaining Contractual Life in Years, Warrant	3 months 26 days
Exercisable Warrants, Number	100,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.26
0.27 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	250,000
Average Weighted Remaining Contractual Life in Years, Warrant	4 years
Exercisable Warrants, Number	250,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.27
0.29 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	10,125,613
Average Weighted Remaining Contractual Life in Years, Warrant	2 years 9 months 28 days
Exercisable Warrants, Number	10,125,613
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.29
0.3 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	11,925,800
Average Weighted Remaining Contractual Life in Years, Warrant	9 months
Exercisable Warrants, Number	11,925,800
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.3
0.32 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	250,000
Average Weighted Remaining Contractual Life in Years, Warrant	3 years 9 months
Exercisable Warrants, Number	250,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.32
0.33 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	75,000
Average Weighted Remaining Contractual Life in Years, Warrant	9 months
Exercisable Warrants, Number	75,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.33
0.42 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	250,000
Average Weighted Remaining Contractual Life in Years, Warrant	3 years 6 months
Exercisable Warrants, Number	250,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.42
0.5 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	325,000
Average Weighted Remaining Contractual Life in Years, Warrant	2 years 6 months 25 days
Exercisable Warrants, Number	325,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.5
0.55 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	100,000
Average Weighted Remaining Contractual Life in Years, Warrant	3 years 29 days
Exercisable Warrants, Number	100,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.55
0.62 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	75,000
Average Weighted Remaining Contractual Life in Years, Warrant	6 months 18 days
Exercisable Warrants, Number	75,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.62
0.69 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	999,998
Average Weighted Remaining Contractual Life in Years, Warrant	2 years 2 months 16 days
Exercisable Warrants, Number	999,998
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 0.69
1 Range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding warrants, Number	3,000,000
Average Weighted Remaining Contractual Life in Years, Warrant	2 years 4 months 2 days
Exercisable Warrants, Number	3,000,000
Weighted Average Exercise Price, Exercisable Warrants | $ / shares	$ 1

7. STOCKHOLDERS' EQUITY (Deta49

7. STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Stockholders Equity Details Narrative
Cumulative Convertible Preferred Stock Series A, Par Value	$ 0.01	$ 0.01
Cumulative Convertible Preferred Stock Series A, Shares Authorized	1,000,000	1,000,000
Cumulative Convertible Preferred Stock Series A, Shares Issued	510,000	510,000
Cumulative Convertible Preferred Stock Series A, Shares Outstanding	510,000	510,000
Convertible Preferred Stock Series B, Stated Value	$ 1,000	$ 1,000
Convertible Preferred Stock Series B, Shares Authorized	4,000	4,000
Convertible Preferred Stock Series B, Shares Issued	0	0
Convertible Preferred Stock Series B, Shares Outstanding	0	0
Convertible Preferred Stock, Dividend Percentage	7.50%	7.50%

9. COMMITMENTS AND CONTINGENC50

9. COMMITMENTS AND CONTINGENCIES (Details)	Dec. 31, 2017USD ($)
Notes to Financial Statements
2,018	$ 4,000
Total	$ 4,000

9. COMMITMENTS AND CONTINGENC51

9. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Commitments And Contingencies Details Narrative
Rent expense	$ 45,709	$ 45,709

11. INCOME TAXES (Details)

11. INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Current:
United States	$ 0	$ 0
Foreign	0	0
Total current taxes	0	0
Deferred:
United States	0	0
Foreign	0	0
Total deferred taxes	0	0
Total	$ 0	$ 0

11. INCOME TAXES (Details 1)

11. INCOME TAXES (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Taxes Details 3
United States	$ (3,639,814)	$ (3,157,259)
Foreign	0	0
Total	$ (3,639,814)	$ (3,157,259)

11. INCOME TAXES (Details 2)

11. INCOME TAXES (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Taxes Details 3
Loss before income tax	$ (3,639,814)	$ (3,157,259)
US statutory corporate income tax rate	39.45%	39.45%
Income tax expense computed at US statutory corporate income tax rate	$ (1,435,907)	$ (1,245,539)
Reconciling items:
Effect of U.S. tax law change (1)	1,793,212	0
Change in valuation allowance on deferred tax assets	(675,889)	1,258,389
Provision to prior year tax return	69,767	(250,994)
Incentive stock options and warrants	256,168	242,498
Amortized debt discount	2,477	0
Meals and Entertainment	5,825	8,595
Other	(15,653)	(12,949)
Income tax expense	$ 0	$ 0

11. INCOME TAXES (Details 3)

11. INCOME TAXES (Details 3) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Reserve for Bad Debt	$ 140,000	$ 118,000
Inventory Capitalization	94,000	152,000
Accrued Vacation	31,000	8,700
Deferred Rent	0	3,400
Property and Equipment	21,000	0
Intangible Assets	208,000	237,000
Net operating losses	3,724,000	4,380,000
Valuation Allowance	(4,218,000)	(4,893,700)
Deferred Tax Assets	0	5,400
Deferred tax liabilities:
Property Plant and Equipment	0	(5,400)
Net Deferred Tax Assets and Liabilities	$ 0	$ 0

11. INCOME TAXES (Details Narra

11. INCOME TAXES (Details Narrative) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Income Taxes Details Narrative
Net operating loss carryforwards	$ 13,898,000	$ 11,148,000
State net operating loss carryforwards	$ 11,506,000	$ 8,756,000

12. ACCRUED EXPENSES AND OTHE57

12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Accrued Expenses And Other Current Liabilities Details
Commissions	$ 115,506	$ 172,735
Payroll and related costs	43,484	40,264
Director fees	27,750	19,000
Accrued Warranty	5,000	0
Other accrued expenses	75,396	46,414
Total	$ 267,136	$ 278,413

13. ACCRUED WARRANTY (Details)

13. ACCRUED WARRANTY (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Accrued Warranty Details
Beginning accrued warranty costs	$ 0	$ 0
Cost of warranty claims	5,731	0
Settlement of warranty claims	(5,731)	0
Provision for product warranty costs	5,000	0
Ending accrued warranty costs	$ 5,000	$ 0