Robert McWhirter TSO3 Inc TOS-T COMMENT Jul 21, 2016

An interesting method of sterilizing medical equipment. They are now seeking FDA approval for sterilization of ‘the sake’ for those over 50. There are more details coming out tomorrow. The debt level is low. It is part of the fight against super bugs.

This company does sterilization equipment and they just got FDA approval. The stock didn’t do anything for 4 or 5 years, and have now done extremely well. Thinks they will be able to deploy this in many hospitals globally. Over the next few quarters, as more and more people see the company, the stock should continue to do well.

This has really interesting technology. They build sterilization units. The recent move in the stock from $2.20 to $3.70 was because they got FDA approval for using their technology in a new area that the market didn’t expect. They’ve just started commercially shipping these units. They get a price for their units, but they also get a recurring revenue from the consumables, such as trays, etc. A great business model if they can get into enough hospitals and locations. They have a reselling partner that is committed to about 100 units of the sterilizers, and the market is expecting that to ramp up to multi-hundreds over the next few years. If this continues to work, it has a long runway to go.

Sold his holdings too early. Had thought valuations were getting a little stretched. They have a device that cleans something that goes into an area which can be fairly high in bacteria levels. On a further pullback, he would look at owning again.

Colonoscopy equipment sterilization. You would want to be one of the earlier patients in the day of your test. Equipment is sanitized, but not sterilized. This company has the sterilization equipment. He thinks they will get bought out when they ramp up.

It has been a 10 year overnight success. Sterilizing against super bugs is becoming a bigger and bigger issue. The demand could be quite significant be the catalyst it needs. It could be a takeover candidate as they become more native in hospitals.

They have done well this year and then came off recently. He bought some at a warrant expiry and then exited some time later. He thought there was not enough visibility.

He exited the story and has not gotten back in. He felt it had had quite a run up and then there was a sell-through issue. He did not know how many sterilizers actually went into hospitals for sterilization. With FDA approval it should put lights and fire under the stock. It is not cheap especially when you don’t have revenue metrics.

They make fancy dishwashers for hospitals. They lost a big partnership that was distributing their product globally. No one knows what it is worth. He has been short the company because they have keep having promise but don’t get deliveries.