Business
Sells majority of US Hydrofinity customer base
Sells majority of US Hydrofinity customer base.
About this update from Xeros Technology Group Plc
[{"type":"text","content":"\n \nRNS Number : 3231I Xeros Technology Group plc 08 August 2019 \n\n \n8 August 2019\n \nXeros Technology Group plc \n \nXeros sells majority of US Hydrofinity customer base \n \nXeros Technology Group plc (AIM: XSG, 'Xeros', 'the Group'), the developer and provider of water saving and effluent reduction technologies with multiple commercial and domestic applications, has signed two agreements to sell the majority of its Hydrofinity US commercial laundry customer portfolio of leased machines to Eastern Laundry Systems ('ELS') and Wash IQ ('WIQ'), previously known as Viking Services. \n \nHydrofinity will receive an up-front payment of $109,000 in cash and on-going license fees for the provision of XOrbsTM to ELS and WIQ. The proceeds from the transaction will fund on-going Hydrofinity working capital. \n \nIn 2018, these lease contracts generated an adjusted gross loss[1] of $376,000. The commercial washing machines and associated lease contracts had no value on the Group's balance sheet, the value having been written down during 2018 following the invention and patenting of Xeros' new XDrumTM design for commercial washing machines. \n \n164 commercial washing machines installed with Hydrofinity customers and their corresponding lease contracts have been sold to ELS and WIQ. As previously announced in November 2018, ELS already held exclusive rights to take over the servicing of Hydrofinity customers in nine states across the East Coast of the United States. Since December 2018, WIQ held the same exclusive rights for servicing of Hydrofinity customers in California and Arizona.\n \nThis agreement reflects the Hydrofinity strategy to reduce its physical presence in markets and to move to a full licensing model. The Group expects further sales of smaller portfolios to similar regional distributors in the US over the coming months.\n \nMark Nichols, CEO of Xeros commented: \n \n\"As part of our strategy to implement a licensing model for all our applications, we completed the transfer of sales and service to our channel partners in the US earlier this year in order to improve customer service and reduce our costs. \n \n\"This sale of the majority of our existing Hydrofinity lease agreements in the US to channel partners means we will be paid ongoing fee...