TSO3 announces financial results for third quarter 2012 and updates on activities

TSO3 announces financial results for third quarter 2012 and updates on 
activities 
Stock symbol: TSX: TOS
Outstanding shares: 65,888,182 
US Regulatory 


    --  Completed further experiments to reinforce the United States
        (US) regulatory filing for clearance of the STERIZONE(®) 125L+
        Sterilizer;
    --  Progressed in compiling data and completing answers to
        questions from the Agency with the support of regulatory
        consultants.

Partnership
    --  Continued negotiations with Getinge Infection Control
        (GETINGE), a division of worldwide Getinge AB for a new
        commercial agreement for the worldwide distribution and service
        of TSO(3) products.

Product Development
    --  Advanced development of the STERIZONE(®) 80L Sterilizer to
        address the need for a smaller-sized device (OR Sub-Sterile
        Area).

QUEBEC CITY, Nov. 7, 2012 /CNW Telbec/ - TSO(3) Inc. ("TSO(3)") (TSX: TOS) an 
innovator in low temperature sterilization technology for medical devices in 
healthcare settings, posted today its revenues for the third quarter of 2012 
ended September 30, 2012.

In the third quarter of 2012, sales amounted to $66,236, as compared to 
$1,100,892 for the same quarter of 2011. In Q3-2011, 90% of the sales, or 
$995,802, were to the 3M Company who had started marketing the STERIZONE(®) 
125L+ Sterilizer under the brand 3M Optreoz™ 125-Z Sterilizer in June 
2011. For the nine-month period ended September 2012, sales amounted to 
$1,103,782, as compared to $1,888,308 for the same period in 2011. The lower 
sales in the third quarter of 2012 and for the first nine months of fiscal 
2012 are primarily the result of a virtual elimination of sales to the 3M 
Company since the middle of the second quarter of 2012.

"On August 7, we released that we had signed a letter of intent with Getinge 
Infection Control for the global distribution and service for our products, 
and we are still actively negotiating at this time. Our aim is to sign an 
agreement that will be the right one for our shareholders and reflects not 
only the opportunity in currently cleared markets but also the global 
opportunity post US regulatory clearance. We will make sure to update you on 
the status of negotiations in the upcoming weeks", commented R.M. (Ric) Rumble 
President and CEO of TSO(3).

"In the meantime, and as we have said repeatedly, obtaining US regulatory 
clearance for the sale of the products in that market remains our top priority 
and we are currently very active in providing the Agency with additional 
information to support our submission and gain clearance", added Mr. Rumble.

Q3 2012 Conference Call

TSO(3) will host a telephone Conference Call today, November 7, 2012 at 10:30 
a.m. (ET). Analysts and Institutional Investors are invited to participate in 
the call. The numbers to dial for access are 514-807-9895 (Montréal area), 
647-427-7450 (Toronto area) or the Toll-Free number 1 888 231-8191. Please 
dial-in with the following identification number to join the conference call: 
59331726. Other interested parties may listen to the live Webcast of the 
Conference Call accessible via CNW's Website at: 
http://www.newswire.ca/en/webcast/detail/1059897/1152235

The Webcast will be archived for 90 days.

SUMMARY OF RESULTS
Periods ended September 30
(Unaudited, IFRS Basis)
                                    THIRD QUARTER           NINE MONTHS
                                  2012       2011       2012       2011
                                     $          $          $          $

Revenues                                                               

  Sales                         66,236  1,100,892  1,103,782  1,888,308

  License Revenue                    -     52,568  1,690,971    157,706

Total Revenues                  66,236  1,153,460  2,794,753  2,046,014

Expenses                                                               

  Operating                    320,714  1,095,488  1,531,193  1,974,141

  Customer Support and
  Communications               150,944    185,668    471,596    665,496

  Research and Development   1,020,923  1,090,846  3,062,125  3,034,189

  Administrative               779,313  1,080,613  2,528,691  2,760,141

  Financial Revenues          (57,979)   (49,089)  (129,893)  (154,295)

  Financial Expenses            12,669     11,368     26,665     23,570

Total Expenses               2,226,584  3,414,894  7,490,377  8,303,242

Net Loss before Income
Taxes                        2,160,348  2,261,434  4,695,624  6,257,228

  Income Taxes                       -          -          -          -

Net Loss and Comprehensive
Loss                         2,160,348  2,261,434  4,695,624  6,257,228

Basic and Diluted Net Loss 
per Share                         0.03       0.04       0.07       0.11

Weighted Average Number of
Shares Outstanding          65,888,182 58,325,099 62,932,071 58,125,854

RESULTS ANALYSIS

In the following paragraphs, the Company analyzes the variations between 
periods ended September 30, 2012 and 2011.

REVENUES

Sales

In the third quarter of 2012, sales amounted to $66,236, as compared to 
$1,100,892 for the same quarter of 2011. In Q3-2011, 90% of the sales, or 
$995,802, were to the 3M Company who had started marketing the STERIZONE(®) 
125L+ Sterilizer under the brand 3M™ Optreoz™ 125-Z Sterilizer in June 
2011. The lower sales in the third quarter of 2012 are the result of a 
virtual elimination of sales to the 3M Company since the middle of the second 
quarter of 2012.

In September 2011, the Company launched an upgrade program whereby users of 
the 125L Ozone Sterilizers could trade-in their sterilizers to acquire, at a 
discounted price, 3M™ Optreoz™ 125-Z Sterilizers. As a result of that 
well adopted program, Q4-2011 and Q1-2012 sales were positively impacted. In 
Q2-2012, after the program had ended, the smaller installed base of 125L Ozone 
Sterilizers generated fewer consumables and service revenues to TSO3 with the 
consequence that sales to clients other than 3M decreased to minimal levels.

For the nine-month period ended September 2012, sales amounted to $1,103,782, 
as compared to $1,888,308 for the same period in 2011. The lower sales in 
2012 are again the result of marketing activities virtually halted since the 
middle of the second quarter of 2012.

License Revenue

Until June 2012, TSO(3) was recognizing revenue over the expected initial term 
of its agreement with the 3M Company by amortizing the payments it had 
received from 3M under that agreement. In June 2012, as a result of the 
termination of the 3M agreement, all unamortized license payments were 
recognized as revenue. Therefore, in Q3-2012, there was no license revenue, as 
compared to $52,568 in Q3-2011.

For the nine-month period ended September 30, 2012, license revenue amounted 
to $1,690,971, as compared to $157,706 for the same period in 2011. The 
increase from 2011 to 2012 is also due to the recognition of $1,583,833 as 
income the unamortized deferred license revenue from 3M.

EXPENSES

Operating

Operating expenses include all of the expenses incurred in connection with the 
supply chain department. In Q3-2012, operating expenses amounted to $320,714, 
as compared to $1,095,488 in Q3-2011. The decrease in operating expenses 
between Q3-2012 and Q3-2011 was the result of lower sales.

In the first nine months period of 2012, operating expenses amounted to 
$1,531,193 as compared to $1,974,141 in the corresponding period in 2011. 
Again the variation in operating expenses was primarily due to lower sales.

Customer Support and Communications

Beginning in 2012, TSO3 has regrouped all activities related to corporate 
communications, customer service and technical assistance, including support 
to 3M's sales and marketing activities.

Expenses incurred for these activities amounted to $150,944 for the third 
quarter of 2012. In Q3-2011, the corresponding amount was $185,668 and was 
made up of (1) $79,577 in technical service expenses originally reported as 
part of operating expenses, (2) investor relations expenses formerly 
reported under administrative expenses and (3) expenses primarily incurred in 
connection with marketing activities conducted by TSO3 prior to the commercial 
launch by 3M.

The cost for customer support activities and corporate communications was 
lower in Q3-2012 than in Q3-2011 due to smaller technical support expenses.

For the nine-month period ended September 30, 2012, these expenses amounted to 
$471,596, as compared to $665,496 for the corresponding period in 2011.

Research and Development

For the quarter ended September 30, 2012, research and development expenses 
amounted to $1,020,923, as compared to $1,090,846 for the same period in 2011.

For the nine-month period ended September 30, 2012, these expenses amounted to 
$3,062,125, as compared to $3,034,189 in 2011.

Although on a year-to-year basis these expenses have been relatively stable, 
there has been a reallocation of resources starting in Q2-2012 away from new 
product development and towards work related to the filings with the US 
regulatory agency.

Administrative

In the third quarter of 2012, the administrative expenses amounted to 
$779,313, as compared to $1,080,613 in the same quarter of 2011.

For the nine-month period ended September 30, 2012, these expenses amounted to 
$2,528,691, as compared to $2,760,141 for the corresponding period in 2011.

Variations are mainly due to reduction in staff and other costs more than 
offsetting the increases in professional fees and in stock exchange listing 
fees resulting from the April 24, 2012 equity issue.

Liquid Assets

As at September 30, 2012, cash, cash equivalents and temporary investments 
amounted to $14,785,723, as compared to $11,384,373 as at December 31, 2011. 
This increase primarily reflects the net cash proceeds of $8,152,193 from the 
equity issue completed on April24,2012 and the absorption of cash used by 
the operations.

Third Quarter Disclosure

The 2012 Third Quarter Report is available on TSO(3)'s website at the 
following address 
http://www.tso3.com/en/investors/financial_reporting/quarterly_reports/ and 
full Q3 disclosure will shortly be available on SEDAR (www.sedar.com).

About TSO(3)

TSO(3), founded in Québec City in 1998, specializes in the research and 
development of innovative, high-performance medical instrument sterilization 
technology with high commercial potential. TSO(3) designs products for 
sterile processing areas in the hospital environment and offers an 
advantageous replacement solution to other low-temperature sterilization 
processes currently used in hospitals.

For more information about TSO(3), visit the Company's Web site at www.tso3.com

The statements in this release and oral statements made by representatives of 
TSO(3) relating to matters that are not historical facts (including, without 
limitation, to those regarding the timing or outcome of any financing 
undertaken by TSO(3)) 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 TSO(3) 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.





Caroline Côté Director - Investor and Business Relations Tel.: 
418651-0003, ext.: 237 ccote@tso3.com

SOURCE: TSO3 INC.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/07/c5579.html

CO: TSO3 INC.
ST: Quebec
NI: HEA ERN CONF 

-0- Nov/07/2012 11:30 GMT