TSO3 Announces Closing of US$20 million Financing with Courage Capital

Myrtle Beach, United States and Quebec City, Canada August 1st, 2018 – TSO3 Inc. (TSX: TOS) (“TSO3” or the “Company”), an innovator in sterilization technology for medical devices, today announced that TSO3 and a fund (the “Fund”) of which Courage Capital Management LLC, (“Courage”) is the investment advisor, have entered into a binding US$20 million debt financing to fund commercialization initiatives for its STERIZONE® VP4 Sterilizer, 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 certain colonoscopes, gastroscopes and duodenoscopes. Courage is a Nashville, TN headquartered alternative asset management firm with a 20-year track record of investments in health care services, medical devices, and pharmaceuticals.

Concurrent with the Courage financing, TSO3 and Getinge Infection Control AB (“Getinge”) mutually decided not to renew the distribution agreements between the parties, and have agreed to: 1) provide TSO3 unrestricted independent commercialization of its STERIZONE® VP4 Sterilizers; 2) the Company’s purchase of approximately 230 STERIZONE® VP4 Sterilizers, 220 of which are from Getinge’s inventory, for $33,000 per sterilizer; 3) transfer Getinge’s existing sales pipeline to TSO3 in exchange for shared economics at the completion of sale; and 4) transition to TSO3 the service, maintenance and consumables sales of all existing STERIZONE® VP4 Sterilizer customers in the United States and Canada. Getinge and TSO3 envision maintaining an ongoing collaborative relationship where TSO3 supplies and supports the STERIZONE® VP4 Sterilizer to satisfy Getinge customers looking for a total sterilization solution.

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 moisturesensitive 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 3 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 multichanneled 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.

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.

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