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. 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 -- Ramped effort on STERIZONE(®) 80L Sterilizer development to address the need for a smaller-sized device (OR Sub-Sterile Area). Financing -- 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. SUMMARY OF RESULTS Periods ended March 31 (Unaudited, IFRS Basis) FIRST QUARTER 2013 2012 $ $ Revenues Sales 76,059 727,722 License Revenue - 52,569 Total Revenues 76,059 780,291 Expenses 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 RESULTS ANALYSIS In the following paragraphs, the Company discusses the variations of certain accounts within the first quarter of 2013 and the first quarter of 2012. TOTAL REVENUES Sales 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. EXPENSES 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 departments. 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. Administrative 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 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 418651-0003, Ext. 237 firstname.lastname@example.org SOURCE: TSO3 Inc. To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/May2013/08/c4561.html CO: TSO3 Inc. ST: Quebec NI: MTC ERN CONF -0- May/08/2013 10:30 GMT
TSO3 announces financial results for first quarter 2013
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