TSO3, Getinge Infection Control ink global distributor agreement for STERIZONE VP4 Sterilizer

US$7.5 Million Up-Front License Fees and Performance Minimums Highlights of Agreement

TSO₃ Inc. (TSX: TOS), an innovator in sterilization technology for medical devices in healthcare settings, has granted Getinge Infection Control AB, a global leader in infection control solutions, exclusive global distributor rights to its FDA-cleared, STERIZONE^® VP4 Sterilizer for US$7.5 million, plus performance minimums.

The performance requirements are multi-year and based on a formula for minimum unit shipments, with the minimum annual commitments reaching in excess of 10% of the estimated annual global replacement market within the first five years. TSO₃ estimates the annual replacement market worldwide totals more than 3,000 units or $450 million annually. Getinge will also receive ongoing technical support from TSO₃ as part of the Agreement.

"This exclusive partnership with a top global provider of infection control devices and services represents a phenomenal endorsement of the unmatched ability our STERIZONE^® Sterilization System to sterilize the most challenging loads and complex devices used in healthcare today," said TSO₃ president and CEO, R.M. (Ric) Rumble. "It comes after Getinge has established a strong sales pipeline in the United States over the last several months, which resulted in the first shipments being recorded in Q3 of 2015."

According to Joacim Lindoff, President and CEO of Getinge Infection Control : "The STERIZONE^® VP4 Sterilizer uniquely addresses an unmet global need for cost effective, high throughput sterilization of complex medical devices used in hospital environments. Our initial customer experience with the product line has been excellent. We're now laying plans for a global rollout, designed to leverage the global reach of Getinge's subsidiaries and distributors partnerships across six continents."

The STERIZONE^® VP4 Sterilizer developed by TSO₃ is a dual sterilant, low temperature sterilization system that utilizes vaporized hydrogen peroxide (H₂O₂₎ and ozone. Its single cycle can sterilize a large number and wide range of compatible devices, thereby allowing for a cost effective and error-free sterilization process. TSO₃'s unique Dynamic Sterilant Delivery System™ automatically adjusts the quantity of injected sterilant based on the load composition, weight and temperature. With its large 75 lb. load capacity and short cycle time, the STERIZONE^® VP4 Sterilizer can enhance throughput and lower sterilization cost.

The STERIZONE^® VP4 Sterilizer was cleared for commercialization in the United States in December 2014. The product recently received clearance in Canada to terminally sterilize multichannel flexible endoscopes, which are some of the most complex medical devices used in healthcare.

The additional claims allowed for the STERIZONE^® VP4 Sterilizer comes at a time when government health agencies are applying increasing pressure on healthcare providers to improve their vigilance with device reprocessing, especially as an aging patient population is leading to an increased use of colonoscopes and other medical devices used during minimally invasive surgery procedures. The growing concerns are based upon the increasing number of reported cases where use of the less robust disinfection process resulted in the transmission of infection, some of which involved antibiotic resistant microbes that led to the patient's injury or death.

Desjardins Capital Markets acted as exclusive financial advisor to TSO₃ in the context of the agreement.