Appendix 4C - Quarterly
Melbourne, April 28, 2020 AEST (ABN Newswire) - Bluechiip Limited (
ASX:BCT) today released its quarterly cash flow report for the quarter ended 31 March 2020.
ACTIVITIES REPORT FOR THE QUARTER ENDED 31 MARCH 2020
Corporate and Business highlights
- The Company is financially well positioned with cash of $8.9m as at 31 March 2020, with no borrowings.
- Bluechiip is responding with measures to mitigate the impacts of COVID-19 while also exploring opportunities to strongly position the business when the operating environment returns to some degree of normalcy.
- Cash receipts and expenses slowed during the quarter, especially in March.
- We are seeing early signs of emergence from suppliers and customers, while negotiations with potential new Original Equipment Manufacturers (OEMs) continue to progress, albeit more slowly in the current environment.
- Operationally, the Company has taken the opportunity to reallocate resources to previously identified research and development (R&D), which is also tax effective, while managing cash through reduced sales and marketing and employment overheads.
- Implementation of Quality Systems to meet ISO 9001 compliance is on track.
Additional information
The Company recorded net sales revenue of $68K in the March 2020 quarter, which included the monthly scheduled delivery of chips to OEM partner Labcon in January and February, with deliveries in March suspended by the COVID-19 pandemic. Sales receipts of $66K were recorded for the quarter ended 31 March 2020, mainly from the sales of chips, readers, software and services in the December quarter.
Sales deliveries during the quarter were impacted by the COVID-19 pandemic, with contracted orders temporarily put on hold as many customers' operations were disrupted, mainly in North America and Europe.
R&D costs remained the largest cash outflow during the March 2020 quarter, including spend focused on ongoing improvements to the chip performance and efficiency. Net operating cash outflow for the quarter increased to $1,838K from $1,072K in the previous quarter, primarily due to the increased R&D activities. The prior quarter's net operating cashflow reflected the receipt of approved R&D Tax Incentive 2018/2019 of $1.233m.
Outlook
The Company is responding to the impact of COVID-19 pandemic by progressively reviewing and implementing a number of measures including:
- Resizing the cost base, while preserving our valued talent pool, including reduced expenses relating to sales and marketing activities and operating on a four-day work week;
- Cutting all non-essential operating expenses and re-negotiating with current suppliers on supply terms to conserve cash;
- Applying for relevant initiatives and support programmes announced by both Federal and State governments;
- Focusing R&D activities on improving the quality, performance and scalability of chips. This is expected to attain higher quality and yield with the aim of achieving economies of scale and lowering production costs as the Company approaches full volume production up to and over 5-10 million chips a year;
- Reallocating the technical sales team resources to R&D activities with the aim of further improving our products; for example, improving our multi vial readers functionality by addressing market feedback to meet current and potential OEM partners' requirements arising from the sales of developer kits in previous quarters. The developer kits enable potential OEM partners to integrate Bluechiip's technology into their own products;
- Reducing, temporarily, the scale of production in response to the slowdown in sales activity, while continuing to build stocks with the expectation that when markets normalise, Bluechiip is well positioned for a return to growth;
- Progressing negotiations with potential OEM partners;
- Working on further patent applications to add to Bluechiip's existing 9 patent families comprising 25 granted patents;
- Ongoing implementation of Quality Systems to meet ISO 9001 compliance.
To view the full report, please visit:
https://abnnewswire.net/lnk/1R6H7PPX
About Bluechiip Limited
Bluechiip Ltd (ASX:BCT) understands that every sample - stem cells, blood, eggs, sperm and other biospecimens - is critical, so our objective is to manage each one with optimal quality in the most efficient way. Bluechiip's advanced management solution is the only one that provides sample temperature with ID in cryogenic environments to. Most importantly, this delivers confidence in every sample.
Bluechiip's unique patented technology is a MEMS-based wireless tracking solution that contains no electronics. It represents a generational change from current tracking methods such as labels (hand-written and pre-printed), barcodes (linear and 2D), and Radio Frequency Identification. Bluechiip tags are either embedded or manufactured into storage products such as vials or bags. Each product can be easily identified, and critical information such as sample temperature, is detected by readers and stored in the Bluechiip software. In addition to functioning in extreme temperatures, the Bluechiip(R) Advanced Sample management solution can survive autoclaving, gamma irradiation sterilization, humidification, centrifuging, cryogenic storage and frosting.
Bluechiip's technology has applications in healthcare, including in cryogenic storage facilities (biobanks and biorepositories), pathology, clinical trials and forensics. Other key markets include cold-chain logistics/supply chain, security/defence, industrial/manufacturing and aerospace/aviation.
Bluechiip: Delivering confidence in every sample.
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