What impact might this order have on TOMI's cash flow and working capital needs?

Fundamental impact

The ARES Distribution order is described as “significant,” which should translate into a near‑term boost to TOMI’s operating cash flow. Because ARES is a global distributor of scientific and medical equipment, the contract likely involves the sale of TOMI’s disinfection and decontamination products on a volume‑based basis, generating recurring revenue rather than a one‑off sale. Assuming the order is booked in the current quarter, we can expect an uplift to net‑sales of at least a few‑percentage points versus the prior‑year quarter, tightening the cash‑conversion cycle. The inflow will help offset the company’s historically high working‑capital needs (large inventories of chemicals and consumables, plus accounts receivable tied to large institutional customers). In short, the order should improve liquidity, reduce short‑term borrowing, and may allow TOMI to modestly de‑leverage its balance sheet.

Trading implications

From a market‑technical perspective, TOMI’s shares have been trading near the lower end of the 20‑day moving average, with the 10‑day EMA still below the 20‑day EMA—a classic “bearish” setup. The order news is a positive catalyst that could trigger a short‑term bounce, especially if the market perceives the contract as a sign of expanding demand for disinfection solutions in the post‑pandemic medical supply chain. Traders can look for a break above the recent resistance at $4.20 (the prior week’s high) on volume to confirm the catalyst‑driven rally. If the price holds above that level, a swing‑trade to the next resistance around $4.70 is reasonable; a failure to break higher may keep the stock in a consolidation phase, suggesting a more cautious, position‑sizing approach. In summary, the order should improve TOMI’s cash‑flow outlook and ease working‑capital pressure, and the market is likely to reward the news with a short‑to‑medium‑term upside if the technical breakout materializes.