TSO3 Inc (fka TSTIF)

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TSO3 and Global Distributor Agree on Co-Commercial Strategy for North America Thursday, January 25, 2018

Quebec City, Canada and Myrtle Beach, United States, January 25, 2018 – TSO3 Inc. (TSX: TOS), (“TSO3” or the “Company”), an innovator in sterilization technology for medical devices in healthcare settings, announced today that, in a joint effort to increase sales to end users and optimize the customer experience, it has entered into a new agreement (the “Sales and Repurchase Agreement”) with Getinge Infection Control AB, its global distribution partner. The Sales and Repurchase Agreement allows the Company to sell its STERIZONE® VP4 Sterilizers and associated products and services directly into the United States and Canada and repurchase not less than 100 STERIZONE® VP4 sterilizers for $3.3 million, with an initial order of 30 units. Getinge will continue to sell its inventory in North America and the rest of the world and the parties have agreed to a customer selection mechanism to prevent the likelihood of channel conflict.

“Our relationship with Getinge has evolved over the past two years, and we believe these modifications to our relationship will add speed and flexibility to our joint sales and marketing efforts, while addressing inventory levels,” stated R.M. (Ric) Rumble, President and CEO of TSO3. “We look forward to continuing to support Getinge, and driving additional business while providing optimal support to all TSO3 customers.”

The Parties have also agreed to begin immediate negotiations on additional modifications to the distribution relationship with the objective of further increasing the speed, flexibility and effectiveness of the relationship. The Sales and Repurchase Agreement and the Exclusive Distribution Agreement signed between the Parties on November 25, 2015, will terminate on August 1, 2018 unless extended by mutual agreement. If agreement between the parties is not reached, TSO3 has agreed, by July 1, 2019, to repurchase Getinge’s remaining STERIZONE® VP4 Sterilizers at the same unit price in the Sales and Repurchase Agreement.

The Company is redirecting some of its internal resources toward sales and marketing, and has nearly completed the build out of the Company’s team of experienced sales, clinical and field service professionals. These professionals are now immediately tasked with selling and providing support directly to end users in the central sterilization (CSSD) department of acute care hospitals, as well as to develop additional opportunities in the gastrointestinal reprocessing market segment. Based on customer feedback the Company has received, the Company is already able to provide sales and customer support at industry leading levels. TSO3 will continue to support Getinge in the sale, support, installation and servicing of existing and future customers.

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 multi-channeled flexible endoscopes (with a maximum of four channels) of up to 3.5 meters in length, such as video colonoscopes 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 at http://www.tso3.com/en/products/sterizone-vp4/.