TSO3 Reports Second Quarter 2019 Results
QUEBEC CITY and MYRTLE BEACH, SC, Aug. 12, 2019 /PRNewswire/ - TSO3 Inc. (TSX: TOS) ("TSO3" or the "Company"), an innovator in sterilization technology for medical devices in healthcare settings, reports financial results for the second quarter ended June 30, 2019.
2019 Second Quarter Financial Summary
Q2 2019 and Subsequent Commercial Activities
Definitive Arrangement Agreement and Going Concern
On August 12, 2019, TSO3 entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which 9402-4874 Québec Inc., a subsidiary of Stryker Corporation, will acquire all of the issued and outstanding common shares (the "Shares") of the Company for CAD$0.43 in cash per Share, subject to adjustment in the event the transaction expenses are greater than currently anticipated. The Company does not currently expect any adjustment to be made to the purchase price and in the event such an adjustment would be required, that it would be minimal. See the associated press release here.
The interim condensed consolidated financial statements as of June 30, 2019 have been prepared under the assumption that the Company will continue as a going concern for the next twelve months. The Company's ability to continue its operations and to realize assets at their carrying values is dependent upon its ability to generate additional revenue from the sale of sterilizers and consumables, attain further operating efficiencies, obtain additional equity and/or debt financing, and/or reduce expenditures. While TSO3 has been successful in the past in raising funds, there is material uncertainty which may cast significant doubt over the Company's ability to continue as a going concern. The interim condensed consolidated financial statements as of June 30, 2019 do not include any adjustments that might result from the outcome of this uncertainty.
Based on the Company's expected rate of cash consumption, in the event the transaction under the Arrangement Agreement is not completed, the Company estimates it will need additional capital in the last quarter of 2019 and its prospects for obtaining that capital are uncertain. The Company may be able to raise either additional debt financing or additional equity financing; however, the Company can make no assurances that it will be able to raise the required additional capital on acceptable terms or at all. Under the terms and conditions of the agreements on the debt with its lenders, the Company is subject to certain covenants, including a minimum liquidity covenant of $5.0 million. As at June 30, 2019, these covenants were met by the Company. Unless the Company succeeds in raising additional capital or successfully increases cash generated from operations, it is anticipated that the Company will be unable to continue operations through the end of the last quarter of 2019 without violating this minimum cash requirement.
Second Quarter of 2019 Results Disclosure
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 moisture-sensitive 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 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 long, multi-channel flexible endoscopes (with a maximum of four channels) of up to 3.5 meters in length - 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 at www.tso3.com.
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.
For more information about TSO3, visit the Company's website at www.tso3.com.
The statements in this release and oral statements made by representatives of TSO3 relating to matters that are not historical facts are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limited to, insufficient liquidity, completion of the transaction under the Arrangement Agreement, the ability of TSO3 to obtain financing on favorable terms, the limited history of sales or distribution of the Company, the evolution in customer demand for the Company's products and services, the plans for sales and marketing including the fact that the Company's customers may not commit to any purchases, the ability of the Company to obtain the required regulatory clearances to market its products, general business and economic conditions, the condition of the financial markets and other risks and uncertainties. Although TSO3 believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The complete versions of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect TSO3's actual or projected results are included in the Management's Discussion and Analysis for the year ended December 31, 2018, which is available on the Company's website. The forward-looking statements contained in this press release are made as of the date hereof, and TSO3 does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.
SOURCE TSO3 Inc.
Company Codes: Toronto:TOS