NOTE 9. SHAREHOLDERS’ EQUITY

Our Board of Directors (the “Board”) 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 by us before any payment is made to the holders of our common stock. Furthermore, the Board could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of our common stock.

Reverse Stock Split 

Terms of the Split

On July 20, 2026, the Company effected a 1-for-3 reverse stock split of its Common Stock and Series A Preferred Stock (the “Reverse Stock Split”), pursuant to authority granted by shareholders on June 4, 2026 and a ratio approved by the Board of Directors on May 19, 2026. Articles of Amendment effecting the Reverse Stock Split were filed with the Florida Secretary of State on July 17, 2026, effective July 20, 2026. Every three shares of Voting Stock outstanding immediately prior to the effective time were automatically converted into one share. The Reverse Stock Split did not change par value or the total number of authorized shares of Common Stock or Preferred Stock. No fractional shares were issued; fractional shares were instead rounded up to the nearest whole share at the individual shareholder account level, which may cause the aggregate post-Split share count to differ immaterially from the amount produced by applying the 1-for-3 ratio on an aggregate basis.

New CUSIP and Impact on Outstanding Options and Warrants

Our Common Stock continues to trade on The Nasdaq Capital Market under the symbol “TOMZ,” under a new CUSIP number, 890023302. The Reverse Stock Split also effected a proportionate reduction in the number of shares of Common Stock issuable upon exercise of our outstanding options and warrants, with a corresponding adjustment to each instrument’s exercise price.

Retroactive Restatement

All share and per share amounts (including shares outstanding, weighted average shares, and earnings per share) presented in the accompanying condensed consolidated financial statements have been retroactively restated for all periods presented, in accordance with ASC 260, Earnings Per Share, and ASC 855, Subsequent Events. As of June 30, 2026, prior to giving effect to the Reverse Stock Split, the Company had 24,427,465 shares of Common Stock outstanding; on a retroactively adjusted post-split basis, this amount is presented herein as 8,142,577 shares.

This retroactive treatment has also been applied to the presentation of Common Stock, Preferred Stock, and Additional Paid-in Capital as of June 30, 2026 and December 31, 2025, with the par value of the retired shares reclassified to Additional Paid-in Capital as if the Reverse Stock Split had occurred at the beginning of the earliest period presented. The Reverse Stock Split was legally effected on July 20, 2026; accordingly, the corresponding ledger reclassification entry will be recorded in the Company’s accounting records in the third quarter of 2026.

Common & Preferred Stock

Convertible Series A Preferred Stock

Our authorized Convertible Series A Preferred Stock, $0.01 par value, consists of 1,000,000 shares. As of June 30, 2026 and December 31, 2025, there were 21,250 shares issued and outstanding. 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. As of June 30, 2026 and December 31, 2025, 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 January 2026, we issued 16,667 shares of Common Stock valued at approximately $40,000 to members of our Board - 10,000 shares related to the first quarter of 2026 and 6,667 shares which were accrued during the fourth quarter of 2025 (See Note 11 – Director Compensation).

During April 2026, we issued 10,000 shares of Common Stock valued at approximately $16,500 to members of our Board (See Note 11 – Director Compensation)

Note 9 (continued). Equity Purchase Agreement — Hudson Global Ventures, LLC 

Terms of Agreement

On November 5, 2025, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Hudson Global Ventures, LLC (“Hudson Global”), pursuant to which the Company has the right, but not the obligation, to sell to Hudson Global up to $20,000,000 of shares of Common Stock over a 24-month Commitment Period. The terms and conditions of the Purchase Agreement, including pricing, the Exchange Cap, and the Commitment Shares, are described in Note 10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The shares were issued pursuant to the Form S-3 registration statement (File No. 333-291563) and the prospectus supplement dated December 11, 2025. The Company intends to use the proceeds for working capital and general corporate purposes.

Exchange Cap Waiver

ELOC Purchase Agreement – Exchange Cap Waiver On June 4, 2026, in accordance with Section 607.0704 of the Florida Business Corporation Act, shareholders holding a majority of the Company’s outstanding voting power approved, by written consent, the issuance of shares of Common Stock to Hudson under the ELOC in excess of 4,043,018 shares (the “Exchange Cap”), representing 19.99% of the Company’s outstanding Common Stock as of the date the ELOC Purchase Agreement was executed. This approval permits the Company to direct sales of Purchase Shares to Hudson Global under the $20,000,000 ELOC Purchase Agreement in excess of the Exchange Cap in compliance with Nasdaq Listing Rule 5635(d). Pursuant to Rule 14c-2 of the Exchange Act, this corporate action became effective on June 25, 2026, twenty calendar days after the Company’s Information Statement on Schedule 14C was first mailed to shareholders of record on June 5, 2026.

During the six months ended June 30, 2026, pursuant to the ELOC, we issued an aggregate of 1,345,642 shares of Common Stock, generating aggregate gross proceeds of $2,105,381 and aggregate net proceeds of $1,943,099 (net of $162,282 in offering and issuance costs).

Share and per-share amounts have been retroactively adjusted to reflect the Company’s 1-for-3 reverse stock split effective July 20, 2026. Shares issued under the ELOC are presented on a post-reverse-split basis. The Exchange Cap of 4,043,018 shares reflects the pre-reverse-split shareholder approval obtained on June 4, 2026. Gross and net proceeds were unaffected by the reverse stock split.

Gross proceeds under the ELOC totaled $2,105,381 ($1,943,099 net of transaction costs). The Put dated 3/31/2026 was identified as having been processed in error and subsequently corrected, resulting in a $23,355 receivable from Hudson Global Ventures, LLC included within other current assets as of June 30, 2026. Excluding this $23,355 receivable, net cash proceeds received during the six months ended June 30, 2026 were $1,919,744.

Note 9 (continued). Option & Warrant tables & RSU’s

Stock Options

The following table summarizes stock options outstanding as of June 30, 2026: 

Options outstanding and exercisable by price range as of June 30, 2026 were as follows:

RSU Forfeiture — Former Chief Financial Officer

On May 11, 2026, the Company’s former Chief Financial Officer, David Vanston, passed away. As of the date of his death, Mr. Vanston held 22,222 shares (as adjusted for the Reverse Stock Split) of unvested RSUs granted under the 2016 Plan, which were subject to his continued service with the Company. In accordance with the terms of the award and the 2016 Plan, the unvested RSUs are now null and void. Compensation expense had been recognized only on the vested portion of the award; accordingly, the forfeiture did not require any adjustment to previously recognized stock-based compensation expense. Mr. Niroshan Srirathan was appointed Interim Chief Financial Officer effective May 16, 2026.

Stock Warrants

The following table summarizes the outstanding common stock warrants as of June 30, 2026:

Warrants outstanding and exercisable by price range as of June 30, 2026 were as follows:

There were no unvested warrants outstanding as of June 30, 2026.