Labcon purports to terminate chip supply agreement
Melbourne, July 16, 2020 AEST (ABN Newswire) - Bluechiip Limited (
ASX:BCT) a leader in the development of sample-tracking technology for harsh environments, today announced that key customer Labcon North America has provided notice to Bluechiip purporting to terminate the chip supply agreement it has with Bluechiip. Bluechiip considers that the termination is unlawful.
Labcon has also asserted in its correspondence a claim for damages in the region of US$500,000 which Bluechiip categorically refutes.
Bluechiip had, at Labcon's request, been negotiating in good faith to reach a mutually acceptable and more flexible position, including possible deferral of contracted minimums in the current environment.
Negotiations with Labcon have now ceased and as a result Bluechiip has instructed its lawyers to pursue all rights and remedies available to it under the supply agreement, including, but not limited to, recovery from Labcon of an outstanding balance of US$3.5million which Bluechiip considers is now immediately due and payable.
Bluechiip CEO Andrew McLellan said: 'The COVID-19 pandemic has had a significant impact on both Bluechiip's and Labcon's abilities to engage customers. We are very disappointed in Labcon's decision not to perform its obligations under our agreement. Bluechiip directors have no alternative but to enforce Bluechiip's rights under the supply agreement to the fullest extent possible.
Mr McLellan said Bluechiip will now seek further sales channels, including selling direct to end-customers, and building a stronger portfolio of products. 'In recent months Bluechiip has made significant progress on several fronts, including renewed activity in North America. In May a Bluechiip-enabled system was installed remotely for a customer in Chicago. A key customer trial, which was put on hold from March to June, has recommenced this week. And we are scheduled to install Bluechiip systems into customers for formal evaluation throughout August. Last month we also delivered a new system to China. That these activities happened during varied lock downs across the world is hugely encouraging.'
Mr McLellan said Bluechiip continued seeing significant interest among Original Equipment Manufacturers (OEMs) . 'Potential OEM partners have continued to undertake market research and build internal business cases throughout the lock downs. We are heartened by increased activity over the last month,' he said.
Internally, Bluechiip is maintaining a focus on R&D, increasing efficiencies in chip production, broadening its product offering with multiple chip configurations and size formats and refining its reader and software platforms. The company is in a strong position financially with over $A7.9M cash in the bank at financial year end and expects to emerge from the current COVID-19 challenges better positioned to improve market penetration.
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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