BlueChiip Limited (ASX:BCT), Managing Director, Andrew McLellan provides an update on its MEMS (micro-electro-mechanical) based tracking tags, range of applications and sales.
Rachael Jones: Hello, I'm Rachel Jones for the Finance News Network. Joining me today from Bluechiip is managing director Andrew McLellan. Andrew, welcome to FNN.
Andrew McLellan: It's a pleasure to be here Rachael.
Rachael Jones: First up, could we start with an introduction to Bluechiip?
Andrew McLellan: Yeah, Bluechiip Limited is a Melbourne-based technology company that develops and manufactures wireless tracking and temperature tracking technology, which is used to identify and trace very valuable samples like blood, serum, IVF samples, sperm, egg, that are used in the bio preservation and biological space.
Rachael Jones: Now let's talk about the technology. What does it do, and what is the range of applications?
Andrew McLellan: The Bluechiip technology is a very unique technology. It's actually covered by 25 granted patents, and we have a number of patents in process of application. The core technology is what's called a micro electrical mechanical system, in which there's 52 beams that are different lengths. They're mechanical beams, and they are turned on at the point of manufacturer. The best way to think about that is that it's like a piano. You play different strings on a piano, and it gives you a different cord. That's exactly how the one millimetre cube Bluechiip managed device behaves. We turn those strings on and off at the point of manufacture. As the temperature changes, the frequency response of those beams also changes, and we get a temperature response.
What's really unique about the technology is that it survives and operates down into liquid nitrogen conditions, very harsh environments that are down minus 196 degrees C. Other technologies do not work in those conditions, so radio frequency or standard electronics absolutely do not work, and we operate and work in that. We can be sterilized in a sterilization sense, and we have wide ranging applications, especially in the bio preservation space.
Rachael Jones: Now to your products, what can you tell me about the chips?
Andrew McLellan: The chips we put onto an antenna, and then we embed them into our partners' products, into moulded plastic vials that contain the biological samples. We can put them onto blood bags and other applications. Also, with the chips, we also have a range of readers, and the readers are different formats. We have a bench top reader, which reads one sample at a time. We also have a mobile reader, which can identify a box, or can identify a single sample, and that can be used mobiley around a facility. And then we also have what we call a box reader, where you can take some samples directly out of liquid nitrogen storage and put them onto a hundred sample reader, and it'll identify and record the temperature of each one of those samples. And then, across the whole lot of that, we have a software infrastructure, which we connect the readers and provide a database that we can actually track, and get a history record of the sample, and the temperature trace right through the whole process.
Rachael Jones: Now to your sales, can you give me an update?
Andrew McLellan: Yeah. Look, it's been a really interesting time. I joined the business three years ago, and we changed our strategy from a direct to market sales approach to actually an OEM strategy where we go and partner with the large organisations around the world. To date, we've now got 21 developer kits that have sold into the market that translated into three agreements with OEM partners. We've got our first OEM partnership, actually had put in a million dollar standing order as of December last year. We're now in a position where we're delivering chips on a monthly basis, and that's growing quite substantially.
Rachael Jones: Andrew, what is the company's strategy?
Andrew McLellan: The company's strategy is to partner with OEM partners. These are companies that are encumbered in the marketplace. They operate globally, major markets being North America and Europe, with a growing Asia, and China we've certainly gotten a bit of interest out of. Our strategy is very much to partner with those companies. Companies like Labcon, companies like Genea Biomedics, companies like Planet Innovation, and a range of others to actually incorporate the Bluechiip technology into their project. They can take it to market. They've got the sales forces. They've already got the incumbent customers. That's absolutely the strategy, and that's gaining a lot of traction, especially in the last two years.
Rachael Jones: Last question now, Andrew. Why should investors consider Bluechiip for their portfolio?
Andrew McLellan: Look, Bluechiip is a fantastic investment. We have a very unique technology, and it's covered very strongly by 25 granted patents. We've now progressed to have a strategy and an operational model that's actually working and gaining traction with three OEM partnerships that are on board. We're now in the position where every month we're delivering chips, and that's increasing in volume as we move forward. And into the future, as our partners launch and release products, that will increase dramatically. We are a technology company. We've this year, to date, we've done over $300,000, which is still small. We've got a million dollar standing order from Labcon North America as a partner, and we've got a market opportunity that's well over $200 million just in that specific space with a large number of adjacent market opportunities.
Rachael Jones: Andrew McLellan, thanks for the update.