Dotz Nano up 35% on signing landmark face mask authentication agreement for North America

Dotz Nano up 35% on signing landmark face mask authentication agreement for North America

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Dotz Nano Ltd (ASX:DTZ) has been up to 35% higher after entering an agreement granting Breathe Medical Manufacturing Ltd exclusivity in USA and Canada to supply the advanced 'Secured by Dotz' authentication solution for respiratory face masks and other PPE equipment. This three-year purchase agreement with the new specialist Canadian manufacturer of high-quality surgical face masks and personal protective equipment (PPE) will also enable the implementation of Dotz's authentication solution at Breathe Medical's manufacturing facilities. Investors responded positively with shares up 35% to a new three-year high of A$0.27. “Landmark agreement” 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.” This agreement follows Dotz signing distribution agreements with UEG in Hong Kong, V2Tech in Australia and TT Medical Group across eight countries in Europe, Africa and the Middle East Authentication solution The ‘Secured by Dotz’ authentication solution, which includes ValiDotz security taggants, Inspec readers and smart trackable QR codes, provides Breathe Medical with verification capabilities throughout the supply chain and differentiates its' ‘Made in Canada’ face masks. Taggants will be added to face mask polybags, boxes and cases and can also be inserted directly into the face mask fabric. Dotz chief executive officer Uzi Breier said: “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 fulfil Breathe Medical’s requirements.” Agreement terms An initial purchase order of US$1 million is scheduled for delivery in quarter one of 2021. Additional terms include: A minimum purchase order of US$1.25 million for quarter two 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$2.5 million per quarter are required for Breathe Medical to maintain its exclusivity; and For the initial three-year period of the agreement, the total minimum order amount is US$13 million, and to maintain exclusivity a total minimum amount of US$24.6 million. Following the initial three-year term, the agreement automatically renews for successive one-year terms if not terminated by one of the parties – with either party able to terminate the agreement with 90 days’ written notice. “Demand for high-quality masks” Breathe Medical chief financial officer Robert Balazs said: “Demand for high-quality surgical face masks has increased substantially due to the pandemic with inferior and counterfeit PPE unable to provide the necessary protection for North America’s frontline and essential workers. “Country of origin manufacturing is increasingly important, and our agreement with Dotz provides further quality assurance to our North American consumers that they are purchasing high-quality and locally-made Breathe Medical surgical masks. “This agreement coincides with our increased manufacturing capability to 90 million units a month, and introduction of new product lines for use in hospitals, dental offices and other manufacturing facilities.”

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