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ASX / MEDIA ANNOUNCEMENT RESPIRI 27 January 2021 December 2020 Quarterly Cash Flow and Quarterly Activities Report Respiri Limited ( ASX : RSH ) ( " Respiri ” or the “ Company ” ) , an eHealth SaaS Company supporting respiratory health management , today announces the Appendix 4C quarterly cash flow and activities for the 3 month period ended 31 December 2020 . Operating Highlights The December quarter was an exceptionally productive and busy period for Respiri , with a resolute focus on the Australian launch of wheezo , in partnership with Cipla which was achieved on time and on budget , despite significant COVID - 19 headwinds including a complete lockdown in the State of Victoria . In addition , the Company successfully completed a major manufacturing cost - out initiative with its manufacturing partner Entech Electronics , resulting in a reduction in the costs of goods sold by up to 85 % on prior levels . Additionally , the Company negotiated changes to payment terms that are expected to materially improve the Company's working capital requirements in CY2021 and beyond , whereby payment will now be made on delivery of manufactured units as opposed to upfront payment terms with Entech . Based on pharmacy - level feedback and in consultation with Respiri's Australian exclusive sales and marketing partner Cipla , the Company revised down the wheezo unit pricing and increased the monthly subscription fee to drive demand for patients more sensitive to upfront device costs . As a result , Cipla have committed to increase the initial minimum order quantity by 250 % to 7,000 units . Over a two year period , this change is expected to deliver a 9 % increase in average customer gross margins and 18 % over the life of a customer . The Company continues to develop and improve upon the wheezo technology platform by way of investment into Research and Development . In October , the Company filed an additional patent application based on improvements made to the wheezoTM algorithm over the last 6 months by the Company's development team . The additional Intellectual Property ( IP ) relates principally to a method of processing recordings of a subject's breathing , whereby an analysis algorithm processes the sound signal and marks periods containing pitch that is characteristic of wheeze via the trachea while concurrently eliminating background noise . The result is an improved level of detection and a standardised and reproducible measure of wheeze . The Company continues to progress its clinical development plans , which aims to standardise wheeze definition through objective measures and not subjective assessments . In December , the Company announced a sales and marketing partnership with the Pharmacy 4 Less group of pharmacies for the sale of wheezo devices commencing in early 2021 across their pharmacy network . With a network of over 100 stores across Australia , the Pharmacy 4 Less group is built on a foundation of professional expertise and personal service . Respiri will support the group with a commitment to build a relevant training program focused on asthma management using wheezo . Respiri also successfully onboarded the Pharmacy Platform Group during the quarter and is the leading independently owned pharmacy services business in Australia , operating across all sectors of the pharmacy industry . The Group has combined Advantage Pharmacy , Chemist Discount , Pharmacy Respiri Limited | ABN 98 009 234 173 | Level 9 , 432 St Kilda Road , Melbourne VIC 3004 | Page | 1