Welcome to the Annual Meeting of the Shareholders

Size: px

Start display at page:

Download "Welcome to the Annual Meeting of the Shareholders"

Vernon Baldwin
6 years ago
Views:

1 Welcome to the Annual Meeting of the Shareholders

2 Forward-looking Statement The statements contained in this presentation and oral statements made by representatives of TSO 3 Inc. ( Company ) relating to matters that are not historical facts are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limited to, general business and economic conditions, the Company s limited history of sales or distribution, the ability of the Company to obtain the required regulatory clearance to market its products on a worldwide basis, the outcome of patent applications, the condition of the financial markets, the ability of the Company to obtain financing on favorable terms and other risks and uncertainties. Risks and uncertainties about the Company s business are more fully discussed in the disclosure materials filed with the securities regulatory authorities in Canada, which are available on SEDAR under the issuer profile of the Company at You are urged to read these materials. Although management of the Company believes that the conclusions, estimates or projections reflected in such forward-looking information are reasonable and represent the Company s conclusions, estimates or projections at this time, such information involves unknown risks and uncertainties which may cause the Company s actual results to differ materially from the Company s conclusions, estimates or projections expressed or implied by such forward-looking information. You are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we do not undertake to update any forward-looking statement. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful. All Dollars in USD, unless noted otherwise. US Pats. No. 9,101,679 / 9,474,815 / 9,480,763 / 9,480,765 US Pat. Applications No. 14/820,965; 15/247,450 Canada 2,767,726 EU Pat. EP 2,601,976; EP2,609,937; EP2,482,859; EP2,601,979 Japan Pat. 5,480,975; 5,785,208; 5,785,211; 5,855,045 Corresponding patents granted or pending in other countries STERIZONE registered trademarks of TSO 3 Inc. TSO 3 Inc., All rights reserved for all countries. No part of this publication may be reproducedor translated in any form or by any means,without the prior written permission of TSO 3 Inc. 2

3 Germain Carrière Chairman of the Board 3

4 Agenda of the Meeting Appointment of secretary and scrutineer Verification of the validity of the Meeting Conformity of deadline of Notice Quorum General Meeting Election of Directors Appointment of the Independent Auditors Ratify, confirm and approve the Advance Notice By-Law Other Review of Business, by R.M. (Ric) Rumble, president and CEO Financial Results for the period ended December 31, 2017, by Glen Kayll, CFO 4

5 Election of the Directors 5

6 DR DOUGLAS DIETER DIRECTOR SINCE APRIL 2018 CLAUDE MICHAUD DIRECTOR SINCE MARCH 2013 JEFFREY POMPEO DIRECTOR SINCE FEBRUARY 2017 JEAN-PIERRE ROBERT DIRECTOR SINCE MAY 2015 DR LINDA ROSENSTOCK DIRECTOR SINCE FEBRUARY 2017 RICHARD (RIC) RUMBLE PRESIDENT AND CEO, DIRECTOR SINCE OCTOBER 2008 STEVE WEST DIRECTOR SINCE NOVEMBER

7 Appointment of the Independent Auditors 7

8 Approval of the Advance Notice By-Law 8

9 Agenda of the Meeting Appointment of secretary and scrutineer Verification of the validity of the Meeting Conformity of deadline of Notice Quorum General Meeting Election of Directors Appointment of the Independent Auditors Ratify, confirm and approve the Advance Notice By-Law Other Review of Business, by R.M. (Ric) Rumble, president and CEO Financial Results for the period ended December 31, 2017, by Glen Kayll, CFO 9

10 Richard (Ric) Rumble PRESIDENT AND CEO 10

encompass the sale, production, maintenance, research, development and licensing of sterilization processes, related

11 Who are we and what we do? DESIGNS PRODUCTS FOR STERILE REPROCESSING AREAS IN MEDICAL FACILITIES COMPATIBILITY TESTING SERVICE TSO 3 s activities encompass the sale, production, maintenance, research, development and licensing of sterilization processes, related consumable supplies and accessories for medical devices that are sensitive to heat and moisture. MANUFACTURE STERIZONE VP4 STERILIZER RESEARCH AND DEVELOPMENT DISTRIBUTION GETINGE AND TSO 3 CO-COMMERCIALIZATION AGREEMENT 11

12 Mission Statement A Sterile Device for Every Patient 12

13 Richard (RIC) RUMBLE PRESIDENT AND CEO GLEN KAYLL CFO HAROLD TESSMAN COO BRADLEY CATALONE CSO CINDY CLARK SVP GLOBAL COMMERCIALIZATION 13

14 2017 Areas of Progress Demonstarted operationnal efficiency Established a base of initial installations Applied for expanded claims 14

15 2018 A transitional year Revamp/Reinforce Commercial Strategy Drive Penetration Open GI Market 15

16 Deliver Predictable Growth STERIZONE VP4 Sterilizer One Unit Sale = $ Recurring Revenue NEW TECHNOLOGY STERIZONE VP4 STERILIZER SOLUTION TM STERIZONE Test Pack TRANSPORT CART LOADING RACK 16

17 There existed an Inventory overhang at the end of 2017 large enough to impact the exclusive distribution agreement TSO 3 Options included: Do Nothing Reset Agreement Cancel Agreement outright let it work its way through combined collective action and restate expectation for future discard relationship altogether 17

18 FIRST STEP: ACT Actions: Get control of options a) Co-commercialization Agreement b) Set Termination date for existing Agreement Evaluate options a) Go Alone b) Go with others c) Stay engaged globally/regionally Get Started: Drive Awareness a) Materials b) Promotion c) Publications d) Trade Show Recruit a field based organization focused on Customer Adoption - Experienced - Process driven - Metric Managed - Heavy Commission Define targeted customer - Split market with Getinge bed facilities - Heavy OR/Robotic/Ortho 18

Features Dual Chemistry Dynamic delivery Large capacity Advantages Simple Single Cycle Operation Large Loads Mixed Loads Lower Cost

19 TSO 3 Next Generation Technology- Position Correctly The STERIZONE VP4 Sterilizer is a dual sterilant, low-temperature sterilization system that uses vaporized hydrogen peroxide (H 2 O 2 ) and ozone. Features Dual Chemistry Dynamic delivery Large capacity Advantages Simple Single Cycle Operation Large Loads Mixed Loads Lower Cost Lower Risk Higher Throughput Ability to Process Full Instrument Sets Benefits Lowest cost per instrument sterilized Cost avoidance Expandability Leverage existing inventory Reduce reputational risk 19

Sterilizers = 3+ of the Competition in Throughput The Least Expensive Option In the Market

20 Proven Value Proposition* New Metric: Cost per Instrument Sterilized, not Cost per Cycle Competition STERIZONE VP4 Sterilizer Saves up to 50% in Operating Costs 2 STERIZONE VP4 Sterilizers = 3+ of the Competition in Throughput The Least Expensive Option In the Market Today * Actual customer results. Results may vary depending on the customer and use profile. 20

21 Opportunity One Core Technology Two Markets Established Base Business Operating Room & Central Sterile Supply Department U.S. ~ 10,000 Hospitals & Ambulatory Surgery Centers 1 Canada ~ 1,400 Hospitals 2 Europe ~ 15,000 Hospitals 3 OR/CSSD $6.0B+ 6 TOTAL ADDRESSABLE MARKET GI 50M+ Procedures/year 7 Emerging Opportunity Gastrointestinal ~ 15 million colonoscopies performed annually 4 > 500,000 ERCP Procedures (endoscopic retrograde cholangiopancreatographies) performed annually 5 1) The American Hospital Association, US Dept. of Health and Human Services, 2) Statistica.com 3) Eurostat 4) Centers for Disease Control and Prevention 5) US Food & Drug Administration 6) Market and Market, June ) Becker s GI & Endoscopy 35 Statistics About GI/Endoscopy 21

22 Sales and Maketing activities in works Special pricing programs New cost of ownership tool Co-promote with Getinge Targeted Corporate Account collaboration Digital ads (June) IAHCSMM, Infection Control Today, Healthcare Purchasing News, Health Facilities Management Trade Shows SGNA, APIC Sales Agent Recruitment o VA/NC/SC, SoCA, NoCA, New England Collaborations o Third Party Service Providers 22

Current Sales Funnel - April 2018 500 + Identified accounts Targeting Completed Robotics' / Ortho / CV Usage ALL

23 Current Sales Funnel - April Identified accounts Targeting Completed Robotics' / Ortho / CV Usage ALL CONTACTED 30 Budgeting Quotes Sent (excess of 40 total units) Currently working 5+ detailed quote - Delivery, install, service 23

24 Opportunity One Core Technology Two Markets Established Base Business Operating Room & Central Sterile Supply Department U.S. ~ 10,000 Hospitals & Ambulatory Surgery Centers 1 Canada ~ 1,400 Hospitals 2 Europe ~ 15,000 Hospitals 3 OR/CSSD $6.0B+ 6 TOTAL ADDRESSABLE MARKET GI 50M+ Procedures/year 7 Emerging Opportunity Gastrointestinal ~ 15 million colonoscopies performed annually 4 > 500,000 ERCP Procedures (endoscopic retrograde cholangiopancreatographies) performed annually 5 1) The American Hospital Association, US Dept. of Health and Human Services, 2) Statistica.com 3) Eurostat 4) Centers for Disease Control and Prevention 5) US Food & Drug Administration 6) Market and Market, June ) Becker s GI & Endoscopy 35 Statistics About GI/Endoscopy 24

Advancement STERIZONE VP4 Sterilizer = Market Change

25 How Change Happens Patient and Medical Facility Demand Patient Safety Litigation Cost Reduction Technology Advancement STERIZONE VP4 Sterilizer = Market Change Regulatory Change FDA Regulation Advancement Industry Dialogue and Guidelines 25

26 Duodenoscopes Attempts to deal with Identified Risk Pentax Medical February 7, 2018 Urgent Medical Device Correction and Removal (USA only) Replace elevator mechanism, O-ring seal & distal cap January 17, 2017 Design issues that could lead to increased risk of infection February 19, 2016 FDA Safety Communication Updated reprocessing protocols Olympus Canada November 1, 2017 Quality issue with application of adhesive during previous repair Immediately discontinue Distal cap Adhesive O-ring seal Elevator mechanism Olympus America Inc. January 15, 2015 Urgent Medical Device Removal and Corrective Action Replace forceps elevator mechanism FujiFilm July 21,2017 Urgent Medical Device Correction and Removal Replacement of Forceps elevator mechanism, O-ring seal, distal cap 26

27 Inaction on The Part of Scope Manufacturers 2015 OEM s instructed to conduct Post Market Surveillance Studies Compliance Level = 0% Impact FDA WARNING Letters Issued Failure to Comply may result in Seizure Injunctions Civil Money Penalties 27

28 Compatibility FROM THE SCOPE MANUFACTURERS Following the established Methods and Supplemental Recommendations If you chose to use a reprocessing method not recommended in this manual, the local institution and/or physicians must assume responsibility for its safety and efficacy. Make sure to carefully inspect each piece of endoscopic equipment for irregularities (damage) prior to each patient procedure. Do not use the equipment if any irregularity is found. Reprocessing Technique HLD/PA 2 X s HLD/PA ETO + HLD/PA Average Number of Cycles Between Repairs

GI Commercialization Approach Value Proposition to Hospital Improve Patient Safety Manage Reputational Risk Manage Litigation Risk Future Proofing the CSSD Evidence Based

Claim addition Sterilize Known/Suspected Contaminants Establish Frequency of Sterilization Strong Evidence for Sterilization of Leverage CSSD Installation Endoscopes

29 GI Commercialization Approach Value Proposition to Hospital Improve Patient Safety Manage Reputational Risk Manage Litigation Risk Future Proofing the CSSD Evidence Based Practice Leverage Existing Industry Leading Claims Colonoscopes and Gastroscopes Higher Efficiency Processing of Smaller Scopes Support current submission for Duodenoscope Claim addition Sterilize Known/Suspected Contaminants Establish Frequency of Sterilization Strong Evidence for Sterilization of Leverage CSSD Installation Endoscopes Presented at Stakeholder Move to G.I. Placements Meeting - AAMI, September 2017 «Strong Evidence for Sterilization of Endoscopes presented at Stakeholder Meeting» AAMI, September

30 Agenda of the Meeting Appointment of secretary and scrutineer Verification of the validity of the Meeting Conformity of deadline of Notice Quorum General Meeting Election of Directors Appointment of the Independent Auditors Ratify, confirm and approve the Advance Notice By-Law Other Review of Business, by R.M. (Ric) Rumble, president and CEO Financial Results for the period ended December 31, 2017, by Glen Kayll, CFO 30

31 Glen Kayll CFO 31

Key Stats (TSX: TOS) Stock Price(5/4/18) CAD$0.88 Market Cap CAD$81.8M Cash & ST Investments (mrq) $10.0M 52 Week High-Low CAD$3.30-$0.72 Enterprise Value CAD$71.8M Total Assets (mrq) $18.1M Avg.

32 Key Stats (TSX: TOS) Stock Price(5/4/18) CAD$0.88 Market Cap CAD$81.8M Cash & ST Investments (mrq) $10.0M 52 Week High-Low CAD$3.30-$0.72 Enterprise Value CAD$71.8M Total Assets (mrq) $18.1M Avg. Daily Vol. (3 mo.) 0.17M Date Founded 1998 Total Debt (mrq) $0.0M Shares Outstanding M Employee Count 73 Total Liabilities (mrq) $9.3M Warrants Outstanding 0 Fiscal Year End December 31 Total Equity (mrq) $8.8M Float (est.) ~99.5% Total Revenue (mrq) $0.3M Institutional Holdings ~30.9% Gross Profit (mrq) $(0.3)M Net Loss (mrq) $(4.5)M Data sources: Yahoo! Finance, Ipreo, company estimates (mrq) = most recent quarter at March 31, ) Issued and outstanding at March 31, 2018 EPS (mrq) $(0.05) 32

33 Fiscal Year 2017 (USD) Fiscal Year 2017 (USD) Revenue R&D Regulatory Claims Efforts $13,3M $19,7M Product Development Non-cash amortization growth $3,5M $6,2M Gross Profit Sterilizer Sales to Getinge Consumables sales grow SG&A $7,7M Expansion of Team $8,7M $4,1M Travel $6,5M Professional fees Non-cash amortization growth

34 First Quarter 2018 (USD) $4,2M Revenue Regulatory Claims Efforts Product Development Non-cash amortization growth Q1 18 -Expenses begin to be redirected to sales and marketing $1,4M R&D $1,7M $0,3M Q Q Gross Profit No Sterilizer Sales to Getinge Deferred license fee revenue Sales to Hospitals Continue Consumables Revenues Grow Q Q SG&A $1,6M -$0,3M Q Q Expansion of Sales and Marketing Travel and Training Non-cash amortization growth Q1 18-Expenses begin to be redirected from G&A toward sales and marketing $2,2M $2,6M Q Q

35 Capital Position (USD) Balance Sheet As At March 31, 2018 Cash, CE and Investments $10 million Debt Warrants Nil Nil Cash Flow Q Operations excl non-cash working capital Non-cash working capital Capex Intangible and Tangible ($3.9 million) ($0.9 million) ($0.1 million) 35

36 2018 Outlook Key Priorities: Deliveries to End Customers and Market Adoption - TSO 3 Sales and Marketing: direct to customer and distributor support - Modest direct to customer sterilizer sales in 2018 by TSO 3 while building for the future - Sales to end customers by TSO 3 and Getinge continue leading to consumables revenue growth - No anticipated sterilizer sales to Getinge in 2018 Reallocation of resources from G&A and R&D - More focused CTS and reduced product development and regulatory work/consultants - Continued focus on administrative improvement License fee revenue recognition in form reflective of the negotiations with Getinge 36

37 Thank you! Questions? TSO 3 Inc., 2018 All rights reserved for all countries. No part of this publication may be reproduced or translated in any form or by any means, without the prior written permission of TSO 3 Inc. - STERIZONE are registered trademarks of TSO 3 Inc. U.S. Pats. No. 6,589,479 / 7,582,257 / 7,588,720 / 7,608,217 / 9,101,679 / 9,402,928 / 9,427,485 / 9,474,815 / 9,480,763 / 9,480,764 / 9,480,765 / 9,814,795 US Pat. Applications No. 14/916,622; 14/955,452; 15/247,450 Corresponding patents granted or pending in other countries

TSO 3 Reports Record Fourth Quarter and Full Year 2016 Results

TSO 3 Reports Record Fourth Quarter and Full Year 2016 Results Québec City, March 21, 2017 TSO 3 Inc. (TSX: TOS) ("TSO 3 " or the "Company"), an innovator in sterilization technology for medical devices