Hemo-Tech Inc. Analysis

Hemo Tech Inc. (HT) is a service provider to hospitals and medical professionals. This company is specialized in sales and manufacture of medical equipment. The model BIO-7 had been patented as a new developed high technology with the purpose to substantially improve the efficiency in the reduction of contamination risk at the minimum level when extract and stock blood samples. It is important to mention that Hemo is the only corporation in the United States of America who offers this vanguard technology. Exist another Hemo Tech’s competitor with the same infrastructure who offers a previous version of the equipment, the model BIO-02.

The company is currently engaged in a contract service with Extract Co. some of the excerpts specify the following:

- The equipment. Hemo is obligated to deliver five units of BIO-07 to Extract Co. during the following 15 days and provide with their respective product description manual. Additionally, the units are subject to acquire individually.

- Equipment Supplies. The agreement includes to deliver 50 boxes with the Extract Co.’s allowance to separately purchase additional units with a discount of 33% off during the three following years from the effective date.

- Monitor and test services. In order to ensure the proper functionality of the technology, in weekly basis Hemo is obligated to monitor and test its functionality in accordance to the FDA safety guidelines. Extract Co. has been enabled to extend the contract service for three years after the effective date.

- The Compensation includes a payment for $4.5 to Hemo upon execution of the contract.

- An annual payment for $ 1 million per year for concepts of screen and report service.

- Optional payment exist for $600,000 in the event of yearly renewal. Also, $2000 per box of supplies when exceed the initial 50 boxes delivered.

- Responsibilities for installation and technology improvements. The equipment installation must not exceed 15 days from the delivery. For the following five years of contract, Hemo Tech Inc. is obligated to replace damaged monitors. Further, Hemo is not obligated for technology development.

- Warranty. Hemo Tech warrants the proper functionality of the equipment according to manual specifications for the following year from installation.

- Safety and Representation. In the event of any change with respect to FDA Safety Standards dispositions. Hemo will take on its behalf any repair, replacement, and or modification cost required by law during the three years after effective day of the contract.

Extract pretends exclusivity for the equipment due to the significant commercial benefits to attract highly qualified and skilled personnel. They believe that the exclusivity won’t affect Hemo Tech’s revenues