Listed authentication company Dotz Nano (ASX: DTZ) has secured a landmark three-year purchase agreement with Canada-based PPE manufacturer Breathe Medical Manufacturing, valued at up to US$24.6 million (A$33.21 million).
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 US$1 million (A$1.35 million) purchase order of Dotz’s authentication solution, which includes ValiDotz security taggants, Inspec readers and smart trackable QR codes, is scheduled for delivery in Q1 2021. The agreement also outlines minimum purchase orders of US$1.25 million (A$1.69 million) for Q2 2021 and the subsequent 10 quarters.
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 additional one year periods, subject to minimum quarterly purchase orders of US$2.5 million (A$3.37 million) being met.
Depending on exclusivity, the total contract value range is between US$13 million and US$24.6 million over the initial three-year term.
Canada-based Breathe Medical 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 and its customers include the Canadian Government.
The ‘Secured by Dotz’ authentication solution provides Breathe Medical with verification capabilities throughout the supply chain and differentiates its ‘Made in Canada’ face masks. The taggants will be added to face mask polybags, boxes and cases and can also be inserted directly into the face mask fabric.
Dotz said it has upscaled its production capacity to fulfil the agreement and service new and existing clients.
Commenting on the 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.”
Dotz CEO Uzi Breier added, “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.”
Breathe Medical CFO, 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.”