April 2, 2012 writer


stock symbol: TSX: TOS
Outstanding shares: 58 785 682

TSO3 Announces $7.8 million bought private placement

Quebec City, April 2, 2012 – TSO3 Inc. (TSX: TOS) (“TSO3” or the “Corporation”) an innovator in sterilization technology for medical devices in healthcare settings, is pleased to announce it has entered into an agreement with a syndicate of underwriters led by Desjardins Capital Markets and Canaccord Genuity Corporation and including Byron Capital Markets (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a bought deal private placement basis, 6,000,000 units (the “Units”) in the capital of TSO3 at the price of $1.30 per Unit (the “Issue Price”) for aggregate gross proceeds to TSO3 of $7,800,000 (the “Offering”).

Each Unit will be comprised of one common share and one-half of one common share purchase warrant of the Corporation (each whole warrant, a “Warrant”). Each Warrant will entitle the holder thereof to purchase one additional common share of the Corporation at a price of $2.00 per common share for a period of 12 months following the Closing Date, as defined below. The Corporation has also agreed to grant the Underwriters an option to purchase up to an additional 900,000 Units at the Issue Price for additional aggregate gross proceeds to TSO3 of $1,170,000, exercisable in whole or in part, at any time up to 48 hours prior to the Closing Date (the “Underwriters’ Option”). If the Underwriters’ Option is exercised in full, the aggregate gross proceeds to TSO3 will be $8,970,000. The net proceeds from the Offering will be used to support working capital and other general corporate purposes, as well as to pursue the commercial launch of the new OR product.

“We believe that it is a responsible decision to proceed with this equity issue in order to strengthen our cash position at this time”, said R.M. (Ric) Rumble, President and CEO of TSO3. “While there have been delays on the regulatory front, we are still aggressively pursuing US clearance and remain extremely confident in our success. We also wish to remain on track with current initiatives such as the OR product regulatory filings and launch, as well as cost reduction and other efforts in support to the current product roll-out”, added Mr. Rumble. “We believe that this equity issue is right-sized as to allow us to continue funding our efforts while minimizing dilution”, concluded Mr. Rumble.

The Warrants are subject to an accelerated expiry if, at any time after August 24, 2012, the published closing trade price of the Common Shares on the Toronto Stock Exchange is equal or superior to $2.50 for any 10 consecutive trading days, in which event the Corporation may give the holders a written notice that the Warrants will expire at 5:00 p.m. (Montreal Time) on the 30th day from the receipt of such notice.

The Offering will be completed by way of a Private Placement to accredited investors in each of the Provinces of Canada and in the United States pursuant to applicable registration exemptions (the “Qualifying Jurisdictions”).  The Offering is expected to close on or about April 24, 2012 (the “Closing Date”) and is subject to the satisfaction of certain conditions, including receipt of all applicable regulatory approvals including the approval of the Toronto Stock Exchange.

The Corporation has agreed to pay the Underwriters a cash fee equal to 8.0% of the gross proceeds from the Offering. As additional compensation, the Underwriters will be issued compensation options (the “Compensation Options”) equal to 5.0% of that number of Units issued in connection with the Offering (including upon exercise of the Underwriter’s Option). Each Compensation Option will be exercisable to acquire one common share at the exercise price of $1.30 for a period of 18 months following the Closing Date, subject to regulatory approval.

The Common Shares being offered have not been and will not be registered under the U.S. Securities Act of 1933 and state securities laws. Accordingly, the Common Shares may not be offered or sold to U.S. persons except pursuant to applicable exemptions from registration.  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, founded in Québec City in 1998, specializes in the research and development of innovative, high-performance medical instrument sterilization technology with high commercial potential. TSO3 designs products for sterile processing areas in the hospital environment and offers an advantageous replacement solutions to other low temperature sterilization processes currently used in hospitals.

For more information about TSO3, visit the Company’s Web site at www.tso3.com

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.


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