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- Spenda (ASX:SPX) inks a binding term sheet to enter a 10-year service agreement with Capricorn to provide software and ecommerce payment infrastructure
- The agreement is contingent on the completion of the final stage of the DSD initiative’s foundation phase
- Upon completion, Spenda will receive $443,000 upfront, as well as $1.3 million in initial development fees as part of preparations for a broader commercial launch, scheduled for mid to late 2024
- Two companies entered an eight-week contract for Spenda to complete the final phase of the DSD initiative (foundation stage)
- SPX shares are up 19.2 per cent, trading at 1.6 cents at 11:58 am AEDT
Spenda (ASX:SPX) has entered into a binding term sheet for a 10-year service agreement with Capricorn, aimed at delivering software and e-commerce payment infrastructure.
The agreement is contingent on the successful completion of the final stage of the Digital Services Delivery (DSD) initiative’s foundation phase, which is expected to occur in late 2023.
Based on the agreed terms, once completed, Spenda is slated to receive $443,000.
Additionally, the company is set to receive $1.3 million in initial development fees as part of preparations for a broader commercial launch, scheduled for mid to late 2024.
Spenda will also pocket a minimum monthly recurring revenue of $100,000 from software licensing fees, with the potential for scalability over the next decade.
Both parties have also agreed to the option of extending the agreement for up to 20 years.
In May 2023, Spenda was selected as Capricorn’s preferred supplier for the initial phase of the DSD initiative, which was successfully completed in August 2023.
The two companies have now entered an eight-week contract for Spenda to complete the final phase of the DSD initiative (foundation stage), which includes a proof of concept (PoC) related to security and the platform.
“The signing of this binding term sheet with Capricorn represents a transformational commercial opportunity for Spenda,” SPX CEO and Managing Director Adrian Floate said.
“Over the past five months, we have been working closely with the Capricorn team to deliver a payments solution to enable all Capricorn Members to access ecommerce payment solutions that are powered by Spenda.”
On or Before January 31, 2024, Capricorn also has the option to subscribe to up to 412 million Spenda shares through a private placement at 1.75 cents per share, representing a 77 per cent premium to the 30-day VWAP of 0.9 cents. This placement has the potential to raise up to $7.2 million.
SPX shares were up 19.2 per cent, trading at 1.6 cents at 11:58 am AEDT.
