June 2018 Quarterly Report
ACTIVITIES REPORT FOR THE QUARTER ENDED 30 JUNE 2018
Highlights during the quarter
- Highest ever sales revenue of $232,384 and sales receipts of $185,862 for the quarter;
- Recorded total sales revenue of $561,544 and sales receipts of $511,650 for the year compared to $237,773 and $262,190 respectively in prior year;
- Receipt of income from the delivery of over 140,000 Bluechips to Labcon North America (Labcon), a USA-based licenced Original Equipment Manufacturing (OEM) partner;
- Research & Development (R&D) Advance of $600,000 secured by the provision of R&D Tax Incentive 2017/2018 was obtained and fully drawn-down; and
- Cash balance at 30 June 2018 $1.20M, from $1.58M at 31 March 2018
Bluechiip provides the following updates on the Company's activities during the quarter ended 30 June 2018.
Business Progress Update
Bluechiip has recently completed building the first batch of advanced-prototype multi vial readers (MVRs) able to read a box of 100 samples at once, with its manufacturing partner, Planet Innovation. They were exhibited at the recent International Society for Biological and Environmental Repositories (ISBER) conference in Dallas and at the International Society for Stem Cell Research (ISSCR) conference held in Melbourne. The MVRs received very positive interest; units have already been shipped to customers and early adopter sites.
The MVR is important to meet the cryogenic industry's need to handle high volumes of samples which translates into derivative demand for our chips. In this quarter, the Company has shipped over 140,000 chips to its customers.
Commentary on the Cash Flow Report
Bluechiip recorded sales revenue of $232,384 and sales receipts of $185,862 for the quarter, delivering both the highest quarterly sales revenue and sales receipts since its listing on the ASX. This has resulted in final aggregated four (4) quarters sales revenue of $561,544 and sales receipts of $511,650 compared to corresponding quarters in previous financial year of $237,773 and $262,190 respectively. This represents a respective increase of 136% and 95%.
Net operating cash outflow for the June 2018 quarter was $936,423, compared to net operating cash inflow of $13,074 for the March 2018 quarter. This was mainly attributable to the increase in R&D activities during the quarter and consequently the corresponding increase in employee numbers. In the prior quarter, the net operating cash inflow position benefited from the receipt of $775,504 received for the R&D Tax Incentive 2016/2017.
During the quarter, investing activities were related to the purchase of equipment to enhance the company's research and development activities in relation to its chips.
The financing activities for the quarter primarily reflect the Company obtaining and fully drawing-down an R&D Advance of $600,000, which is secured against R&D Tax Incentives receivable for the 2017/2018 financial year which is expected to be at least $1m.
The Company remains focused on the following:
- Fulfilling the purchase orders received from customers and the receipt of subsequent cash inflows arising from them;
- Ongoing delivery of chips as part of the fulfilment of the $1m sales order received from our partner, Labcon. This has allowed Labcon to commence the manufacturing of Bluechiip enabled consumables;
- Scaling its production of chips with the aim of achieving economies of scale and bringing down the production cost of chips;
- Advancing negotiations for the licensing of Bluechiip's technology and securing new licence agreements with other OEM partners in addition to the existing licence agreement with Labcon for the delivery of Bluechiip technology and support services;
- Expand the use of Bluechiip technology in China through further sales of our developer kits through our mainland China-based distributor;
- Build a sales system that utilises Bluechiip's continually expanding OEM pipeline in the USA, Europe and APAC markets;
- Research and development to meet our current and potential OEM partners' requirements, arising from the sales of developer kits to them in prior quarters. The developer kits enable potential OEM partners to integrate Bluechiip's technology into their own products; and
- Progress work on registering further patents to add to our existing 25 confirmed patents.
About Bluechiip Ltd
Bluechiip Ltd (ASX:BCT) has developed a wireless tracking solution for the healthcare and life science, security, defence and manufacturing industries which represents a generational change from current methods such as labels (hand-written and pre-printed), barcodes (linear and 2D) and microelectronic integrated circuit (IC)-based RFID (Radio Frequency Identification).
The unique tag is based on MEMS technology and contains no electronics. The tag can either be embedded or manufactured into a storage product, such as vials or bags. Easy identification, along with any associated information from the tag such as temperature can be detected by a reader, which can also sense the temperature of the tagged items. The traditional identification technologies have significant limitations. Whereas a barcode requires a visible tag or line-of-sight optical scan, bluechiip(R) technology does not. Unlike labels, barcodes and RFID, the bluechiip(R) technology can sense the temperature of each item a tag is attached to, or embedded in.
The bluechiip(R) technology has initial applications in the healthcare industry particularly those businesses which require cryogenic storage facilities (biobanks and biorepositories). bluechiip(R) offers the only technology that enables accurate and reliable tracking of products including stem cells, cord blood, and other biospecimens. In addition to functioning in extreme temperatures, the bluechiip(R) tracking solution can survive autoclaving, gamma irradiation sterilization, humidification, centrifuging, cryogenic storage and frosting.
The bluechiip(R) technology has other healthcare applications in pathology, clinical trials and forensics. Several other key markets outside of healthcare include cold-chain logistics/supply chain, security/defence, industrial/manufacturing and aerospace/aviation.
Further information is available at http://www.bluechiip.com