TS03 Inc Trust Units TSTIF

RE:RE:RE:Tso3 is Hiring

[Drrwong]

Why are you so alarmed, Bossu?  You have never heard of developmental stage biotech companies hiring a 100-200 specialty sales force in preparation of a new product launch (vs. the 50 people they have in total during R&D phase of the company)??  In this case, this is less than 10 people!!  Don't forget RR has been in the industry for a long time, and he has a lot of contacts.  I wouldn't be surprised if he can poach some of the sales talent from other companies, especially when TSO3 has an exciting product to sell into an untapped, new market (where sales people can make a lot of $$).

Let's review what we know and what I think is likely to happen:
-  FDA approval of the duodenoscope claims by YE17
-  AAMI states its intention to move to terminal sterilization for all GI scopes in 1H18 (implementation guidelines to be phased in over 2-3 years)
-  These two will transform the GI market into a "real" market.  Given Getinge does not have any presence in the GI space because that market never existed, isn't it obvious for any responsible CEO to do all he/she can to capitalize on this opportunity?  Hiring 2-3 people is not going to do it!!
-  Like I said, I would like RR to hire even more people if the FDA/AAMI events do play out as expected next year--in order to maximize this "once in a lifetime" opportunity--at least for a micro-cap company like TSO3
-  TSO3 has $16mm USD cash, and they should turn cashflow positive by 2019 (sell-side estimates actually has it by YE18).  If you buy RR's argument that a new MB facility will not cost a huge amount (due to sales-lease back, etc.), then adding $2-3mm of OPEX in the next 1-2 years will not force the company to raise more equity.  Just remember many of these sales people will be compensated on their order book--so the more they get paid, the better TSO3 will do financially (with a lag of course, but surely) 

The key for me is how long it will take for AAMI to state its intention to change the guidelines.  Once that happens, I would load up if the stock is still under $3--this means I am not concerned about the cashburn or the sales ramp, because FDA/AAMI basically would have given a monopoly to TSO3 to the entire GI scope market (think of market size for 2000-3000 facilities doing 500k+ ERCP procedures a year in US alone, then add in colonoscopes, and then EU and RoW opportunities)