TS03 Inc Trust Units TSTIF

RE:RE:Pricing

[Drrwong]

@TNT: the TSO3 internally generated accounts are handled completely seperate from Getinge. 

We must remember TSO3 is marketing to accounts that Getinge had neglected.  A significant number of these accounts simply do not like Getinge for whatever reason (poor service in the past, FDA decree, personality conflict, etc.), hence handing them back to Getinge would NOT be a wise choice.

TSO3 will be handling the warranty/service of its own accounts, with an initial target of a technician for every 25 installed VP4s (obvioulsy this could change based on real life service data).  Is this an added cost?  Yes, but it is offset by higher servicing revenue.  We must remember TSO3 do not get any of the servicing revenue from Getinge accounts, except for the sale of replacement parts that have a decent margin.  In the internally generated accounts however, TSO3 will be recognizing the full $10-15k/year of servicing contracts.  This would be a good profit driver in the longer term once there is enough critical mass.  But at this early stage of a launch, it is more important to deliver world class quality of service.

Obviously all of these could change in the new distribution agreement with Getinge, if we are sticking with them...