Life science company eSense-Lab (ASX: ESE) has signed a $10 million five-year sales agency agreement with water chemistry technology developer Blue Science Solutions for the distribution of its terpenes-based sanitiser products into the US market.
The agreement marks the beginning of eSense’s expansion plans into the world’s largest consumer market for products based on terpenes, which are naturally-occurring chemical compounds that generate the flavour and fragrance synthesised by plants and have medicinal applications.
During the initial 12-months of the agreement, Blue Science has agreed to maintain minimum sales commitments of A$3 million of all terpenes-based products developed by eSense in conjunction with Blue Science and other third parties in the cleaning and disinfecting solutions sector exclusively in the US market.
It will utilise its experience in North American markets to define suitable sales and distribution channels, as well as act as the exclusive US agent for eSense products.
$10 million commitment
If the agreement is renewed after the initial period, Blue Science’s sales commitment will increase to $10 million worth of products over five years through its network, with Blue Science receiving an “arm’s length” standard commission on all sales.
In return, eSense will issue to Blue Science 10 million CHESS depositary interests (CDIs), representing approximately 2% of eSense’s issued and outstanding CDIs, at an issue price of $0.01 each.
eSense said it hopes to finalise product formulations and pricing within the next three months and expects its first product to be ready for manufacture before year-end.
The company anticipates the product will require basic US Food and Drug Administration registration as a no-rinse hand decontaminating solution.
Established in 2013, Blue Science implements the basic concepts of electrolysis in the development of non-toxic cleaning and disinfecting solutions for consumer, commercial and institutional applications.
The company has gained regulatory approval in the US and Canada for its products and is currently in the regulatory review process for Australia, New Zealand and the European Union.
Blue Science is headquartered in Florida, with offices in Virginia, Minnesota and California.
It has manufacturing facilities in the US and Canada, and licensed and trained distributors in Australia, New Zealand and South Korea.
eSense said the sales agency agreement with Blue Science will give it access to a team of scientists including professional hygienists, enzyme and organic chemists who have a proven track record in developing commercially-viable products.