Halden Shane
About Halden Shane
Dr. Halden S. Shane, 80, is Chief Executive Officer and Chairman of TOMI Environmental Solutions (ticker: TOMZ), serving since October 2007. He holds a B.S. from University of Miami (1969) and a Doctor of Podiatric Medicine from California College of Podiatric Medicine (1973), with multiple board certifications; prior to TOMI he led Tiger Management International (1992–2009) and founded Integrated Healthcare Alliance and Doctors Hospital West Covina . Under his tenure, TOMI’s revenue rose 5% in 2024 to $7.739M (2023: $7.355M), though net losses widened to ($4.48M) (2023: ($3.40M)); a $100 TSR measure improved to $24.31 in 2024 (from $23.38 in 2023 and $11.34 in 2022) . The company disclosed going‑concern doubt in 2024 and again in Q3’25 and received a Nasdaq bid‑price deficiency notice in March 2025 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Tiger Management International | President & CEO | 1992–2009 | Business management for private/public cos.; executive leadership experience . |
| Integrated Healthcare Alliance, Inc. | Founder & CEO | Not disclosed | Healthcare operations founding; operating experience . |
| Doctors Hospital (West Covina, CA) | Founder & General Partner | Not disclosed | Hospital founding/ownership; healthcare operations . |
| Private medical practice | Podiatric surgeon (ankle arthroscopy specialization) | Prior to corporate roles | Clinical and operational background . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Public company directorships (past 5 yrs) | — | — | No other public company directorships disclosed for Dr. Shane in TOMI’s proxy . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 605,000 | 499,125 (reduced to $423,500 from Jun 1–Dec 31, 2024, as part of cost-saving) |
| Cash Bonus ($) | — | — |
| All Other Comp ($) | 9,000 | 9,000 |
Notes:
- Employment agreement (effective Oct 1, 2020) sets base at $500,000, eligibility for a discretionary cash bonus and annual option grant; auto allowance up to $750/month .
Performance Compensation
- No formulaic incentive metrics disclosed; bonuses not paid in 2023–2024; equity grants (options/warrants) are used, with many awards vesting immediately (limits performance linkage) .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual cash bonus | Not disclosed | Not disclosed | Not paid (2023–2024) | $0 (2023–2024) | n/a |
| Stock options (2024) | n/a | n/a | 100,000 options @ $0.75 (grant-date FV $64,136) | Grant issued | Vested; expires 5/15/2034 |
| Stock options (2023) | n/a | n/a | 100,000 options @ $0.85 (grant-date FV $76,635) | Grant issued | Vested; expires 1/26/2033 |
Detailed 2024 year-end outstanding CEO equity (exercisable unless noted):
| Grant/Instrument | Securities (#) | Exercise Price | Status | Expiration |
|---|---|---|---|---|
| Warrants | 156,250 | $1.20 | Exercisable | 1/31/2025 |
| Warrants | 12,500 | $4.00 | Exercisable | 4/24/2030 |
| Warrants | 375,000 | $6.95 | Exercisable | 10/1/2030 |
| Options | 172,500 | $1.12 | Exercisable | 1/18/2032 |
| Warrants (modified) | 437,500 | $0.96 | Exercisable | 12/22/2032 |
| Warrants (modified) | 31,250 | $0.64 | Exercisable | 11/19/2032 |
| Warrants (modified) | 125,000 | $0.80 | Exercisable | 1/26/2034 |
| Options (2023) | 100,000 | $0.85 | Exercisable | 1/26/2033 |
| Options (2024) | 100,000 | $0.75 | Exercisable | 5/15/2034 |
Context on moneyness: TOMI reported its Nasdaq last sale price at $0.78 on April 9, 2025; thus the $0.64 strike was in-the-money, $0.75 near at-the-money, and higher strikes ($0.80+, $1.12+, etc.) were out-of-the-money at that date .
Equity Ownership & Alignment
| Component | Shares | Notes |
|---|---|---|
| Common shares owned directly (Dr. Shane) | 2,430,164 | |
| Common shares – Shane Family Trust | 187,500 | Dr. Shane co-trustee; shared voting/investment power |
| Common shares – spouse (Belinha Shane) | 125,000 | Disclaimed except to pecuniary interest |
| Options/warrants exercisable within 60 days | 1,510,000 | |
| Total common beneficial ownership | 4,252,664 (19.7% of common) | |
| Series A Preferred | 63,750 (100% of class) | |
| Total voting power (common + Series A) | 20.0% | |
| Pledging/Hedging policy | Hedging/monetization prohibited by insider trading policy | No pledging disclosure noted in proxy; none identified . |
Insider trading plans: Company disclosed no adoption/termination of Rule 10b5‑1 or non‑Rule 10b5‑1 trading arrangements by directors or officers during Q3 2025 .
Employment Terms
| Term | Detail |
|---|---|
| Agreement | 3‑year agreement effective Oct 1, 2020; auto‑renews for one‑year terms unless 120‑day notice . |
| Base salary | $500,000 base set in 2020 agreement; reduced to $423,500 from Jun 1–Dec 31, 2024 for cost savings . |
| Bonus | Eligible for discretionary cash performance bonus (no metrics disclosed; no bonus paid in 2023–2024) . |
| Equity | Annual issuance of option to purchase 31,250 shares from 2016 Plan at Board discretion; legacy signing bonus of 375,000 warrants (2020) . |
| Perquisites | Automobile expense reimbursement up to $750/month . |
| Change-in-control | If terminated as CEO as a result of a change in control: lump-sum severance equal to two years’ salary . |
| Clawback | Not disclosed in proxy; insider policy prohibits hedging/monetization . |
| Non-compete / Non-solicit | Not disclosed. |
Board Governance and Service
- Role/tenure: CEO and Chairman; Director since October 2007; Class III director (term expiring at 2026 annual meeting) .
- Committee roles: Dr. Shane is not listed as a member of Audit, Compensation, or Nominating & Governance committees (those are comprised of independent directors) .
- Dual-role implications: Board explicitly maintains combined CEO/Chair structure to provide a “clear chain of command”; this concentrates authority; absence of a disclosed lead independent director increases reliance on committee independence .
- Board independence: In 2025 the Board determined Messrs. Fragasso, Paul, and Dr. Lim are independent under Nasdaq/SEC rules; note: Mr. Paul provided advisory legal services via Harold Paul, LLC, receiving ~$93,750 in 2024, yet was deemed independent .
- Family relationship: COO/director Elissa J. Shane is Dr. Shane’s daughter (potential independence/related‑party perception risk) .
- Attendance: All incumbent directors attended at least 100% of Board and applicable committee meetings in 2024; directors attended the 2024 annual meeting .
Company Performance Context (for pay-for-performance assessment)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| TSR value of $100 investment (year-end) | $11.34 | $23.38 | $24.31 |
| Net Income (Loss) ($) | (2,880,060) | (3,402,592) | (4,476,762) |
| Revenue ($) | 2023 | 2024 |
|---|---|---|
| TOMI Revenues | 7,355,000 | 7,739,000 |
Additional current context: For the nine months ended Sept 30, 2025, TOMI reported revenue of $4.619M and net loss of ($1.943M); management reiterated going‑concern doubt and secured financing options (convertible notes; $20M equity purchase agreement with Hudson) .
Compensation Structure Analysis
- Heavy fixed-pay mix: Salary comprised the vast majority of CEO pay (2024: ~$499k salary vs. ~$64k option grant; no bonus), indicating low variable, performance‑contingent pay .
- Equity with immediate vesting: CEO options appear vested at grant (e.g., 2024 and 2023 awards), diminishing retention and performance alignment; a significant pool of older warrants/options remains outstanding with long-dated expirations .
- No disclosed performance metrics/targets: Proxy provides no formulaic metrics (e.g., revenue, EBITDA, TSR) or weighting for annual incentives; bonuses not paid in 2023–2024 .
- Change‑in‑control terms: 2× salary cash severance if terminated in connection with a CoC; no explicit equity acceleration disclosures for CEO in proxy (contrast: others have acceleration in certain cases), limiting clarity on golden‑parachute magnitude .
- Hedging/monetization prohibited: Policy reduces misalignment risk; no pledging disclosure .
Risk Indicators & Red Flags
- Going‑concern uncertainty and recurring losses (2024 10‑K; Q3’25 10‑Q) .
- Nasdaq bid‑price deficiency notice (Mar 28, 2025) .
- Concentrated insider control: 20% total voting power for Dr. Shane; family relationship on Board/management .
- Material weaknesses in internal controls (10‑K 2024; Q3’25 10‑Q) .
- Related‑party consideration: Legal fees to director Mr. Paul, while still deemed independent .
Director/Officer Ownership and Trading Signals
- Large exercisable derivative position (1.51M options/warrants exercisable within 60 days as of Sept 15, 2025) offers potential liquidity events; near‑term in‑the‑money exposure limited at reported $0.78 share price (Apr 9, 2025) largely to $0.64 strikes; $0.75 near at‑the‑money; most others out‑of‑the‑money at that date .
- No 10b5‑1 plan adoptions/terminations in Q3’25 suggest no pre‑programmed selling during the quarter .
Compensation Committee, Peer Group, Say‑on‑Pay
- Compensation Committee comprised of independent directors (Fragasso – Chair; Dr. Lim; Mr. Paul) .
- No compensation consultant, peer group, or target percentile disclosures found in the proxy .
- No say‑on‑pay results disclosed (smaller reporting company; proxy did not present such a vote) .
Investment Implications
- Alignment: Pay is salary‑heavy with immediately vesting options and no disclosed performance metrics, offering limited pay‑for‑performance linkage; equity overhang exists but many awards were out‑of‑the‑money at recent reported prices, tempering near‑term selling pressure .
- Governance: CEO/Chair dual role and family relationship on the Board/management elevate independence concerns; committee independence and full attendance partially mitigate, but reliance on committees is high .
- Retention/change‑in‑control: Severance (2× salary) under CoC termination is modest versus small‑cap norms; lack of disclosed performance/vesting hurdles suggests retention relies more on role/legacy equity than on unvested awards .
- Financial risk: Going‑concern warnings, Nasdaq compliance risk, and dependence on external financings (convertible notes; equity facility) are material overhangs, potentially influencing compensation design and insider behavior (e.g., limited cash bonuses, cost‑savings salary reduction) .
- Execution: 2024 revenue growth (+5%) amid larger net loss and 2025 YTD sales softness underscore execution risk; management highlights pipeline/backlog and new end‑markets, but capital intensity and working‑capital needs persist .
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