SYDNEY: Dotz Nano Limited has entered into a landmark three-year purchase agreement with Breathe Medical Manufacturing Ltd, anew specialist Canadian manufacturer of high-quality surgical face masks and personal protective equipment (PPE).
Under the agreement, Dotz will supply its ‘Secured by Dotz’ authentication solution for face masks in the USA and Canadian markets, and enable the implementation of its authentication solution at Breathe Medical’s manufacturing facilities.
An initial purchase order of US$1 million (A$1.35 million at time of signing) is scheduled for delivery in Q1 2021. The agreement outlines a minimum purchase order of US$1.25 million (A$1.69millionat time of signing) for Q2 2021 and subsequent 10 quarters, with Dotz to issue invoices for the quarterly minimum which must be paid by Breathe Medical regardless of actual orders received.
Minimum quarterly purchase orders of US$2.5million (A$3.37 million at time of signing) per quarter are required for Breathe Medical to maintain its exclusivity. The total contract value range of this agreement is between US$13 million and US$24.6million over the initial three-year term.
If at the end of an annual period Breathe Medical has failed to purchase the minimum order quantity to maintain exclusivity, then Breathe Medical must place an order for the shortfall. If Breathe Medical fails to place a shortfall order, Breathe Medical may lose its exclusivity or Dotz may terminate the agreement. Breathe Medical has also agreed to provide Dotz with a letter of credit from an agreed bank to guarantee its minimum order each quarter.
Following the initial three-year term, the agreement automatically renews for successive one year terms if not terminated by one of the parties. Either party can terminate the agreement with 90days’ written notice. Dotz will keep the market informed as to the agreement’s progress via its quarterly activities reports.
Canada-based Breathe Medical was established in March 2020 and services the North American medical, chemical manufacturing and food and beverage processing industries with its high-quality surgical face masks to ASTM (American Society of Testing and Materials) Levels 1, 2 and 3 standards.
Its main manufacturing facility in British Columbia has capacity for monthly production of 60 million surgical masks and 30 million N95 and KN95 masks.
As part of the agreement, Breathe Medical will become the sole distributor of the “Secured by Dotz” authentication solution for face masks in the USA and Canada for a three-year period with an auto renewal for addition alone year periods, subject to the minimum annual sales targets described above being met.
In response to recent interest in Dotz’s authentication solutions, and the growing pipeline of new business opportunities, Dotz has upscaled its production capacity to meet its obligations under the agreement and service new and existing clients.
Commenting on the landmark agreement with Breathe Medical, Dotz Chairman Bernie Brookes AM said: “This landmark agreement is Dotz’s fourth international commercial agreement in as many months, demonstrating the quality of our unique end-to-end technology in improving supply chain management within the PPE industry. The Breathe Medical agreement aligns with Dotz’s long-term global commercialisation strategy of partnering with key manufacturers and distributors in specific markets.”
Dotz CEO Uzi Breier said: “We are proud and delighted to be partnering with Breathe Medical. High-quality surgical face masks are essential to preventing the spread of COVID-19. Our agreement will ensure that frontline and other essential workers in Canada and the USA will be able to authenticate the quality of their masks on-site and in real-time, as well as the general public. We are scaling up to deliver on this landmark order to ensure on-time and smooth delivery to fulfill Breathe Medical’s requirements.”
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