TSO3 announces financial results for first quarter 2013

Stock symbol: TSX: TOS 
Outstanding shares: 72,888,182 
Company to hold Annual General Meeting of Shareholders today in Montreal 
US Regulatory 

    --  Following a 60-day review of TSO(3)'s 510(k) submission by the
        U.S. Regulatory Agency, the latter recognizes the uniqueness of
        the technology developed by TSO(3) and recommends the de novo
        classification pathway.

    --  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
    --  Ramped effort on STERIZONE(®) 80L Sterilizer development to
        address the need for a smaller-sized device (OR Sub-Sterile

    --  Closed $7,000,000 bought deal with a syndicate of underwriters
        co-led by Desjardins Securities Inc and Cannacord Genuity Corp.
        and including Byron Capital Markets Ltd. and Laurentian Bank
        Securities Inc.

QUEBEC CITY, May 8, 2013 /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 financial results for the first quarter 
of 2013 ended March 31.

In the first quarter of 2013, sales amounted to $76,000, as compared to 
$728,000 for the same quarter of 2012. In Q1-2012, 44 % of the sales, or 
$322,000, were to the 3M Company who had started marketing the STERIZONE(®) 
125L+ Sterilizer under the brand 3M Optreoz™ 125-Z Sterilizer in June 2011. 
In Q1-2013, 66% of the sales, or $50,000, were to the 3M Company. Since the 
termination by TSO(3) of the agreement with the 3M Company in June 2012, sales 
have been limited to consumables for the installed base of 3M Optreoz™ 125-Z 
Sterilizer and 125L Ozone Sterilizers, as well as service.

"On April 17, 2013, we announced the recommendation from the U.S. Regulatory 
Agency to pursue the de novo classification pathway for the approval to market 
the STERIZONE(®) 125L+ Sterilizer in the United States (US)", commented R.M. 
(Ric) Rumble President and CEO of TSO(3).

''The US Regulatory agency recognizes the quality of the science provided and 
the uniqueness of the technology developed by TSO(3). The de novo process will 
allow the TSO(3) STERIZONE(®) 125L+ Sterilizer to become the new industry 
standard. From what we understand of the de novo classification process at 
this time, we have all the reasons to believe that this new classification 
will not impact our overall timeline for approval'' concluded Mr. Rumble.

Annual General Meeting of Shareholders

TSO(3) will hold its Annual General Meeting of Shareholder, this afternoon at 
3:00 pm (EDST) at the McCord Museum (J.Armand-Bombardier Theatre), 690 
Sherbrooke Street West, Montreal (Québec). A webcast of this event will be 
accessible at http://www.newswire.ca/en/webcast/detail/1135287/1238569.

The Webcast will be archived for 90 days.

Periods ended March 31 (Unaudited, IFRS Basis)
                                                          FIRST QUARTER
                                                     2013          2012
                                                        $             $


  Sales                                            76,059       727,722

  License Revenue                                       -        52,569

Total Revenues                                     76,059       780,291


  Supply Chain                                    254,691       839,597

  Customer Support and Communications             124,671       136,643

  Research and Development                      1,010,943     1,021,465

  Administrative                                  817,168       817,448

  Financial Income                               (39,426)      (33,020)

  Financial Costs                                   7,884         7,006

Total Expenses                                  2,175,931     2,789,139

Net Loss before Income Taxes                  (2,099,872)   (2,008,848)

Income Taxes                                            -             -

Net Loss and Total Comprehensive Loss                      
attributable to Shareholders                  (2,099,872)   (2,008,848)

Basic and Diluted Net Loss per Share               (0.03)        (0.03)

Weighted Average Number of Shares Outstanding  68,065,960    58,785,682

In the following paragraphs, the Company discusses the variations of certain 
accounts within the first quarter of 2013 and the first quarter of 2012.



In Q1-2013, sales amounted to $76,059, as compared to $727,722 in Q1-2012. In 
Q1-2012, 44% of the sales were to the 3M Company and the remainder was 
primarily sales made as part of the upgrade program launched and executed by 
TSO3 in September2011. In Q1-2013, sales of $50,000, or 66% of the total, 
were made to the 3M Company.

The reduction in sales in Q1-2013 as compared to Q1-2012 is the result of the 
end of the upgrade program in Q1-2012 and the termination, by the Company, of 
its Distribution Agreement on June 15, 2012. Since the end of Q1-2012, after 
the upgrade program was completed, the smaller installed base of 125L Ozone 
Sterilizer generated fewer consumables and service revenues to TSO3 with the 
consequence that sales to clients other than 3M decreased to minimal levels.

Subsequent to termination of the distribution agreement with the 3M Company, 
TSO3 had other non-exclusive discussions to secure an alternative partnership 
with a channel partner. The Company's strategy has not been to invest 
resources in developing its own sales organization and, as a result of the 
foregoing; its sales have been reduced to minimal levels.

License Revenue

Until June 2012, TSO3 was recognizing revenue over the expected initial term 
of its agreement with the 3M Company by amortizing the payments it had 
received 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 Q1-2013, there were no license revenue while in Q1-2012, license 
revenue amounted to $52,569.


Supply Chain

Supply Chain expenses include all of the expenses incurred in connection with 
(1) the outsourcing services provided by the Supply Chain Department to all 
departments, (2) production, (3) related quality control and assurance, and 
(4) shipping.

For the three-month period ended March 31, 2013, the Supply Chain expenses 
amounted to $254,691, as compared to $839,597 for the same period in 2012. The 
variation is due to the reduction in sales which has led to reduced sourcing 
activities and staff reductions. Staff has been reallocated to other 

Customer Support and Communications

For the quarter ended March 31, 2013, the customer support and communication 
expenses amounted to $124,671, or substantially the same as the $136,643 
expense incurred during the same period in 2012.

Research and Development

Starting in Q2-2012, there has been a reallocation of research and development 
resources away from new product development and towards work related to the 
filings with the US regulatory agency. Further to the refiling of its 510(k) 
submission in January 2013, the Company re-emphasized work related to new 
product development.

For the quarter ended March 31, 2013, research and development expenses were 
$1,010,943, or substantially the same as the $1,021,465 incurred during the 
first quarter of 2012. However, the composition of the expenses changed as 
there were (1) fewer experiments and compatibility studies in 2013 than in 
2012, but (2) more work in 2013 than in 2012 in connection with the 
optimization of the new products and the protection of the Company's 
intellectual property.


For the quarter ended March 31, 2013, the administrative expenses amounted to 
$817,168, or virtually the same as the $817,448 incurred during the first 
quarter of 2012. Several variations were offsetting each other, the largest 
ones being a reduction in salaries due to personnel reduction, and an increase 
in professional fees.

Liquid Assets

As at March 31, 2013, cash, cash equivalents and short-term investments 
amounted to $17,074,627, as compared to $12,807,190 as at December 31, 2012. 
The variation was the result of the stock issue closed on March 4, 2013 as 
well as the absorption of the negative cash flow for Q1-2013.

First Quarter Disclosure

The 2013 First 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 Q1 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 solutions 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, 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 

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

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


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CO: TSO3 Inc.
ST: Quebec

-0- May/08/2013 10:30 GMT

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