October 4, 2018 Odette Audet

TSO3 Provides a Commercialization Update

Myrtle Beach, S.C. and Quebec City, Canada – October 4, 2018 – TSO3 Inc. (TSX: TOS) (“TSO3” or the “Company”), an innovator in sterilization technology for medical devices in healthcare settings, provided an update regarding the Company’s commercialization of the Company’s STERIZONE® VP4 Sterilizer.  Readers are encouraged to visit the TSO3 website, www.tso3.com, to read the letter to shareholders posted on October 4, 2018, which outlines the Company’s progress to date and provides additional supporting information.

The Company has completed the majority of the tasks associated with the termination of the exclusive distribution agreements with Getinge Infection Control AB (See press release issued August 1, 2018). This includes:

  • Sales. The Company has hired a sales leader and supplemented its team of direct sales representatives with three independent sales organizations that have been trained and are actively quoting business in key territories.
  • Service. The Company has supplemented its team of technical service technicians with seven independent service organizations that can collectively provide established accounts with field service that includes 4-hour telephone support and 24-hour on-site response.
  • Inventory Repurchase. The Company has completed the repurchase of 230 STERIZONE VP4 Sterilizers from the inventory of its former distributor.
  • Funding. The Company has completed the $20 million financing which was announced on August 1, 2018 to fund its commercialization initiatives (see press release).

The Company also reports that:

  • Inventory. It currently has 238 STERIZONE VP4 Sterilizers in inventory.
  • Install base. More than 50 STERIZONE VP4 Sterilizers are currently installed in customer locations in North America. If units ordered or shipped but not yet installed are included, this number exceeds 80.
  • Pipeline. The Company’s pipeline of opportunities (200+ units quoted) exceeds the Company’s inventory of units, and is growing. These quotes include traditional capital purchase offers as well as flexible purchasing options for customers.
  • Awareness. The Company is increasing visibility for its products by attending industry-related events and conferences and through the publication of papers in scientific journals.

The Company will be providing a full update with respect to the third quarter of 2018 and subsequent events during its regularly scheduled conference call in early November 2018.

About the STERIZONE VP4 Sterilizer

The STERIZONE VP4 Sterilizer is a low-temperature sterilization system that utilizes the dual sterilants of vaporized hydrogen peroxide (H2O2) and ozone (O3) to achieve terminal sterilization of heat and moisture-sensitive medical devices. Its single pre-programmed cycle can sterilize a large number and wide range of compatible devices, creating a cost-effective sterilization process with error-free cycle selection. The device’s unique Dynamic Sterilant Delivery System™ automatically adjusts the quantity of injected sterilant based on the load composition, weight and temperature. This capability removes the guesswork and potential for human error, as there is no need to sort instruments and choose the appropriate cycles as with other machines.

The STERIZONE VP4 Sterilizer is the only terminal sterilization method that is FDA cleared to sterilize multi-channeled flexible endoscopes (with a maximum of four channels) of up to 3.5 meters in length, such as video colonoscopes, duodenoscopes and gastroscopes – an industry first for any medical device sterilization process.

The STERIZONE VP4 Sterilizer is also the only cleared low temperature sterilizer that can process a mixed load consisting of general instruments, single channel flexible endoscopes, and single or double channel rigid endoscopes in the same cycle with load weights of up to 75 lb. The ability to run mixed loads significantly reduces labor costs by minimizing the amount of instrument sorting required, while maximizing the device turns (more productivity from increased throughput capacity).

More information about the STERIZONE VP4 Sterilizer is available through TSO3‘s website, under the Products section at www.tso3.com.

About TSO3

Founded in 1998, TSO3‘s activities encompass the sale, production, maintenance, research, development and licensing of sterilization processes, related consumable supplies and accessories for heat-sensitive medical devices. The Company designs products for sterile processing areas in the hospital environment that offer an advantageous replacement solution to other low temperature sterilization processes currently used in hospitals. TSO3 also offers services related to the maintenance of sterilization equipment and compatibility testing of medical devices with such processes.

For more information about TSO3, visit the Company’s website 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 are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limited to, the limited history of sales or distribution of the Company, the ability of the Company to obtain the required regulatory clearances to market its products, 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. Although TSO3 believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The complete versions of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect TSO3’s actual or projected results are included in the Management’s Discussion and Analysis for the year ended December 31, 2017, which is available on the Company’s website. The forward-looking statements contained in this press release are made as of the date hereof, and TSO3 does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.


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