Effective July 1, 2020, Retractable Technologies, Inc. (“RTI”) entered into a Technology Investment Agreement (“TIA”) with United States Government Department of Defense, U.S. Army Contracting Command-Aberdeen Proving Ground, Natick Contracting Division & Edgewood Contracting Division (ACC-APG, NCD & ECD) on behalf of the Biomedical Advanced Research and Development Authority (BARDA) (“Government”) for $53,664,286.00 in Government funding to RTI for expanding domestic production of needles and syringes.
The principal purpose of the TIA is for Government investment to fund increasing RTI’s manufacturing capacity for hypodermic safety needles and corresponding syringes in response to the worldwide COVID-19 global pandemic. The Government award is an expenditure type TIA whereby the Government will make payments to RTI for expenditures for equipment and supplies made by RTI in carrying out the purpose of the expansion of RTI’s domestic production. RTI’s contributions under the terms of the TIA to enhance domestic capacity of pandemic essential technology include providing facilities, technical expertise, labor and maintenance of the TIA funded equipment for a 10 year term.
What happened
Retractable Technologies (NYSEMKT:RVP) shares are soaring 22% at 3:55 pm EST on Wednesday after announcing $53.6 million in U.S. government funding to increase syringe and needle manufacturing capacity to meet potential demand related to the COVID-19 coronavirus.
So what
The healthcare company, which manufacturers syringes and needles designed to improve patient safety, was awarded the contract on behalf of the Biomedical Advanced Research and Development Authority (BARDA). In exchange for the funding, Retractable Technologies will "increase its manufacturing capacity for hypodermic safety needles and corresponding syringes."
The U.S. government payments will be used to buy equipment and supplies necessary to ramp production, and the company has agreed to provide facilities, expertise, labor, and maintenance for equipment bought through this agreement for 10 years.
Previously, Retractable Technologies reported in May that future results "may be materially affected" by a $83.8 million order for automated retraction safety syringes from the U.S. Department of Health and Human Services on May 1. Management anticipates fulfilling this order during 2020 and 2021.
Now what
Needles and syringes are essential to patient diagnosis and treatment, and COVID-19's rapid spread has revealed capacity gaps that the U.S. government is attempting to fill via financing agreements like this one.
Retractable Technologies didn't disclose a timeline for this new funding, so investors will want to pay particular attention to its next quarterly update for insight. Nevertheless, these agreements are significant given Retractable Technologies revenue was just $11.2 million in the first quarter of 2020, up from $7.9 million in the same quarter last year.
Since the company's already profitable, with first-quarter net income of $322,773, up from a loss of $129,211 one year ago, this company is worth watching.
The principal purpose of the TIA is for Government investment to fund increasing RTI’s manufacturing capacity for hypodermic safety needles and corresponding syringes in response to the worldwide COVID-19 global pandemic. The Government award is an expenditure type TIA whereby the Government will make payments to RTI for expenditures for equipment and supplies made by RTI in carrying out the purpose of the expansion of RTI’s domestic production. RTI’s contributions under the terms of the TIA to enhance domestic capacity of pandemic essential technology include providing facilities, technical expertise, labor and maintenance of the TIA funded equipment for a 10 year term.
What happened
Retractable Technologies (NYSEMKT:RVP) shares are soaring 22% at 3:55 pm EST on Wednesday after announcing $53.6 million in U.S. government funding to increase syringe and needle manufacturing capacity to meet potential demand related to the COVID-19 coronavirus.
So what
The healthcare company, which manufacturers syringes and needles designed to improve patient safety, was awarded the contract on behalf of the Biomedical Advanced Research and Development Authority (BARDA). In exchange for the funding, Retractable Technologies will "increase its manufacturing capacity for hypodermic safety needles and corresponding syringes."
The U.S. government payments will be used to buy equipment and supplies necessary to ramp production, and the company has agreed to provide facilities, expertise, labor, and maintenance for equipment bought through this agreement for 10 years.
Previously, Retractable Technologies reported in May that future results "may be materially affected" by a $83.8 million order for automated retraction safety syringes from the U.S. Department of Health and Human Services on May 1. Management anticipates fulfilling this order during 2020 and 2021.
Now what
Needles and syringes are essential to patient diagnosis and treatment, and COVID-19's rapid spread has revealed capacity gaps that the U.S. government is attempting to fill via financing agreements like this one.
Retractable Technologies didn't disclose a timeline for this new funding, so investors will want to pay particular attention to its next quarterly update for insight. Nevertheless, these agreements are significant given Retractable Technologies revenue was just $11.2 million in the first quarter of 2020, up from $7.9 million in the same quarter last year.
Since the company's already profitable, with first-quarter net income of $322,773, up from a loss of $129,211 one year ago, this company is worth watching.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.