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TSO3 Announces a Cdn $7.5 Million Firm Underwritten Private Placement

June 22, 2005

Québec City, June 22, 2005 – TSO3 Inc. (“TSO3”) (TSX: TOS) announces that it has accepted an offer from Canaccord Capital Corporation on behalf of a syndicate of underwriters (the “Underwriters”) pursuant to which the Underwriters have agreed to purchase 3,750,000 units (the “Units”) on a firm underwritten private placement basis, at a price of Cdn $2 per Unit (the “Issue Price”) for gross proceeds to TSO3 of Cdn $7.5 million. Each Unit will consist of one common share and one half of one common share purchase warrant. Each whole warrant will be exercisable at a price of Cdn $2.50 for a period of two years from the closing date. The Underwriters will have the option to purchase up to an additional 1,250,000 Units at the Issue Price for additional gross proceeds of Cdn $2.5 million until 48 hours prior to the closing date. Should the Underwriters fully exercise their option, TSO3 would receive a total amount of Cdn $10 million. The Underwriters will receive broker warrants of TSO3 allowing them to subscribe a number of shares of TSO3 equal to 7% of the total number of shares subscribed, at $2 per share, for a period of 18 months after the closing of the offering.

The offering is scheduled to close on or about July 7, 2005 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of The Toronto Stock Exchange.

The net proceeds of the offering will be used by TSO3 to support the commercialization phase of its first product, the 125L Ozone Sterilizer, in North America.

“This commitment is without a doubt a testimonial of the market's trust in our first product and in our Company’s future”, stated Jocelyn Vézina, CEO at TSO3. “We are very pleased with this deal that solidifies our financial foundations as we are introducing our very first product into the market ».

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About TSO3

TSO3 Inc. is located in Québec City, Québec, Canada, and was founded in 1998. TSO3 currently has 48 employees, 19 of whom work exclusively in the Research and Development department. The Company’s mission is to develop and market innovative and comprehensive sterilization solutions.

TSO3 has perfected an innovative sterilization process using ozone as the sterilizing agent. The first product based on this technological platform is the 125L Ozone Sterilizer, which is intended for hospital sterilization units. The 125L – named after its 125-litre/4.3-cubic-foot capacity – was designed to sterilize heat and moisture-sensitive surgical and diagnostic devices which are expensive and in high demand from the surgical suite. The ozone sterilization process is a safe, efficacious, fast and cost-effective response to evolving sterilization needs.

The 125L Ozone Sterilizer by TSO3 was cleared for commercialization by Health Canada and more recently by the U.S. Food and Drug Administration (FDA). TSO3 expects the first sales in 2005.


The statements in this release and oral statements made by representatives of TSO3 relating to matters that are not historical facts (including, without limitation, those regarding the timing or outcome of any financing undertaken by TSO3) are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limited to, general business and economic conditions, the condition of the financial markets, the ability of TSO3 to obtain financing on favourable terms and other risks and uncertainties.

The TSX has neither approved nor disapproved the information contained herein and accepts no responsibility for it.

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.


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Source: TSO3 Inc.

Information: Caroline Côté
Director, Corporate Communications
and Investor Relations
Phone: (418) 651-0003, Ext. 237
Email ccote@tso3.com
© 2005-2008 TSO3. All Rights Reserved.