Sonoma Pharmaceuticals Reports Financial Results for First Quarter of Fiscal Year 2018 Product revenue for first quarter up 49%, compared to the same period last year, driven by growth in U.S. derma

Sonoma Pharmaceuticals Reports Financial

Results for First Quarter of Fiscal Year 2018

Product revenue for first quarter up 49%, compared to the same period last year, driven by growth in U.S. dermatology sales

Conference Call Begins at 4:30pm

PETALUMA, Calif.-(August 8, 2017)-Sonoma Pharmaceuticals,

Inc. (NASDAQ: SNOA, warrants SNOAW), a specialty pharmaceutical company that develops and markets unique and effective solutions

for the treatment of dermatological conditions and advanced tissue care, today announced financial results for the first fiscal

quarter, ended June 30, 2017.

Total revenue was $3.8 million for the first quarter as compared

to $2.6 million for the same period last year. Product revenues of $3.6 million were up 49%, or $1.2 million, when compared to

the same period last year, driven by strong growth in the U.S. and international markets. The numbers in this press release reflect

the reclassification of the financial components of the Latin American operations as a discontinued business due to the sale of

this business in October 2016.

"We continue to make good progress executing on our corporate

strategy of growing our dermatology business with our expanding product lines and direct sales force," said Jim Schutz, Sonoma

Pharmaceuticals CEO. "This progress is evidenced by our current robust product portfolio and 66% growth in prescriptions

filled for the first fiscal quarter of 2018, compared to the same period last year. We believe our growing sales force coupled

with additional planned product launches provide a high level of confidence in our future revenue growth."

Business Highlights:

Financial Highlights:

Product revenues in the United States for the quarter ended June

30, 2017, of $1.9 million, increased by $486,000, or 35%, when compared to the same period in the prior year. This increase was

the result of higher sales of the company's dermatology and acute scar products, partly offset by a deline in the animal

Product revenue in Latin America for the quarter ended June 30,

2017, was $569,000. This amount reflects the sale of products to Invekra, following completion of Sonoma's asset sale to

Invekra in October 2016. Sonoma will continue to supply Invekra until its manufacturing facility is operational.

Product revenue in Europe and the rest of the world for the quarter

ended June 30, 2017, of $1.2 million, increased by $137,000 or 13%, as compared to the same period in the prior year, with increases

in Middle East, Europe, Hong Kong and Singapore, partly offset by decreases in China and India.

Sonoma reported gross profit of $1.8 million, or 46% of total revenue,

during the three months ended June 30, 2017, compared to a gross profit of $981,000, or 37% of total revenue when compared to the

same period in the prior year. The gross profit percentage increased as compared to last year, primarily due to the reclassification

of gross margin between the continuing and discontinued operations.

Total operating expenses of $5.1 million for the three months ended

June 30, 2017, increased by $655,000, or 15%, as compared to the same period in the prior year. Operating expenses minus non-cash

expenses during the first quarter of fiscal year 2018 were $4.7 million, up $570,000, or 14%, as compared to the same period in

the prior year. This increase in operating expenses was mostly due to higher sales, marketing and administrative expenses in the

United States related to the growth of a direct sales force in dermatology, partly offset by a decline in European expenses. A

key driver to the growth in operating expenses is the increase in the number of sales representatives, compared to the same period

Net loss from continuing operations for the quarter ended June 30,

2017, was $3.5 million, an increase of $330,000, as compared to net loss from continuing operations of $3.2 million for the same

period in the prior year. The operating loss minus non-cash expenses was $2.8 million, down $201,000, compared to $3.0 million

for the same period last year.

As of June 30, 2017, Sonoma had cash and cash equivalents of $12.6

million, as compared with $17.5 million as of March 31, 2017. The decline from March 31, 2017 consists primarily of $2.8 million

cash operating loss, increases of $630,000 of prepaid expenses (comprised mostly of taxes paid in Mexico), $157,000 of capital

expenditures and an increase in accounts receivables of $592,000.

Sonoma's management will hold a conference call today to discuss

first quarter fiscal year 2018 results and answer questions, beginning at 4:30 p.m. EDT. Individuals interested in participating

in the conference call may do so by dialing 877-303-7607 for domestic callers or 973-638-3203 for international callers. Those

interested in listening to the conference call live via the Internet may do so at http://ir.sonomapharma.com/events.cfm.

Please log on approximately 30 minutes prior to the presentation in order to register and download the appropriate software.

replay will be available for seven days following the conclusion of the call by dialing 855-859-2056 for domestic callers, or 404-537-3406

for international callers, and entering conference code 47563590. A webcast replay will be available on the site at http://ir.sonomapharma.com/events.cfm

for one year following the call.

Sale of Latin American Business and Impact on Accounting Treatment

With the sale of the Latin American business during the third quarter,

ended December 31, 2016, the components of the financial statements related to this transaction have been classified as a discontinued

business for accounting purposes and in accordance with this accounting treatment, the income statement and balance sheet have

been retroactively revised to reflect the revenue, expenses and balance sheet items of the continuing businesses for this fiscal

year and last fiscal year. All of the income statement categories related to Latin America have been condensed to a one line item

on the income statement as "Income from discontinued operations." Also, the discontinued balance sheets items have

been listed separately from the continuing operations. As a result, the comparison of results discussed in this press release relate

primarily to the continuing businesses in accordance with generally accepted accounting principles.

About Sonoma Pharmaceuticals, Inc.

Sonoma is a specialty pharmaceutical company

that develops and markets unique and effective solutions for the treatment of dermatological conditions and advanced tissue

care. The company's products, which are sold throughout the United States and internationally, have improved outcomes

for more than five million patients globally by reducing infections, itch, pain, scarring and harmful inflammatory responses.

The company's headquarters are in Petaluma, California, with manufacturing operations in the United States and Latin America.

European marketing and sales are headquartered in Roermond, Netherlands. More information can be found at www.sonomapharma.com.

Forward-Looking Statements

Except for historical information herein, matters set forth

in this press release are forward-looking within the meaning of the "safe harbor" provisions of the Private Securities

Litigation Reform Act of 1995, including statements about the commercial and technology progress and future financial performance

of Sonoma Pharmaceuticals, Inc. and its subsidiaries (the "Company"). These forward-looking statements are identified

by the use of words such as "believe," "achieve," and "strive," among others. Forward-looking

statements in this press release are subject to certain risks and uncertainties inherent in the Company's business that could

cause actual results to vary, including such risks that regulatory clinical and guideline developments may change, scientific

data may not be sufficient to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical

results may not be replicated in actual patient settings, protection offered by the Company's patents and

patent applications may be challenged, invalidated or circumvented by its competitors, the available market for the Company's products

will not be as large as expected, the Company's products will not be able to penetrate one or more targeted markets, revenues

will not be sufficient to fund further development and clinical studies, as well as uncertainties relative to varying product formulations

and a multitude of diverse regulatory and marketing requirements in different countries and municipalities, and other risks detailed

from time to time in the Company's filings with the Securities and Exchange Commission. The Company disclaims any obligation

to update these forward-looking statements, except as required by law.

Sonoma Pharmaceuticals and Microcyn

Technology are trademarks or registered trademarks of Sonoma Pharmaceuticals, Inc. All other trademarks and service marks are the

property of their respective owners.

Media and Investor Contact:

Sonoma Pharmaceuticals, Inc.

VP of Public and Investor Relations

SONOMA PHARMACEUTICALS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

SONOMA PHARMACEUTICALS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive