Investors

CEO's Message

Dear Valued Shareholders,

October marks the beginning of my fourth year here at TSO3. As the quarters go by, I am increasingly enthusiastic to provide you, the owners of the Company, updates on our activities. Once again, I believe that our achievements of Third Quarter (Q3) 2011 are a continued demonstration of the team’s ability to progress towards stated objectives.

In Q3 2011, the Company set another sales record. Indeed, it was the largest revenue generating quarter in the history of the Company. Our revenues exceeded that of Q2 and in fact, our revenues in Q3 alone exceeded the annual revenues recorded by the Company in each of fiscal years 2009 and 2010. This type of performance has been anticipated. But nevertheless, it is good to actually begin to see that what we have believed internally is now becoming a reality.

Contributing to these results was not only the continued shipment of sterilizers to Canadian and other international locations under regulatory clearance, but also the shipment of each of the supporting accessories and consumables in quantities to 3M ™ warehouses.

In Q3, we also began to reach out to original TSO3 customers, those who acquired the original “Ozone” only technology. Many have expressed a desire to upgrade to the new generation product under license with 3M. Working with our channel partner, we have agreed on terms that allow TSO3 to help with the transition of these accounts from their previous TSO3 125L Ozone Sterilizer to that of a new 3M™ Optreoz™ 125-Z. Customers have been made aware of the terms of this upgrade and we are seeing some early adopters to the program, as well as others that are now budgeting for this sterilizer “exchange”.

In Q3, the Company released the first customer reports concerning their satisfaction with the new sterilizer. It is gratifying to see the end-user attest to the benefits of our innovation and discontinue the use of competitive low temperature sterile reprocessing methods.

On the regulatory front, as many of you continue to monitor our progress towards obtaining required clearances to enter the US marketplace, I can say that the initial review of our submissions has been completed. As it was somewhat expected, additional dialogue has taken place around additional questions that have surfaced and progress is being made in addressing these questions. Once again, we feel that this is “normal” under the US regulatory agency’s process and remain confident in obtaining clearance for that market.

Lastly, as we look forward to the Fourth Quarter, we continue to see a backlog of orders for sterilizers and accessories, as well as increased quoting activities by 3M™ in multiple markets.

While there is still plenty of work ahead of us, we believe that we are on the right path with our talented and committed team; ready to meet more challenges.

As always I would like to thank you for your continued support, our employees for their commitment and the Board of Directors for their guidance and counsel. We will keep informing you on our progress.

R.M. (Ric) Rumble, CEO