Stock symbol: TSX: TOS
Outstanding shares: 72,888,182
Company to hold Annual General Meeting of Shareholders today in Montreal
-- 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
-- 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.
-- 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
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)
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.
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 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
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
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
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.
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
full Q1 disclosure will shortly be available on SEDAR (www.sedar.com).
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.
SOURCE: TSO3 Inc.
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