Spenda Limited (ASX:SPX) has announced a new binding agreement for a cornerstone investment by Capricorn Society Limited, raising $7.175 million via private placement, providing Spenda with the necessary funding to achieve its commercial ambitions.
Terms of the Agreement
Spenda intends to issue 592,975,206 shares at an issue price of $0.0121 per share to Capricorn, resulting in Capricorn owning 13.75% of the Company’s issued share capital upon completion of the placement.
The shares were offered at 9.97% discount to the 15-day VWAP and 7.7% discount to the 30-day VWAP.
The proceeds from the placement will be employed for investment in further product development and general working capital.
Capricorn is a member-based organisation with a network of over 26,000 Members and more than 2,000 preferred Suppliers in every State and Territory in Australia and New Zealand.
Capricorn’s Members are estimated to purchase $270 million in parts from the approved Supplier network per month, demonstrating the vast potential for Spenda and potential future earnings.
This investment comes hot on the heels of the recently signed 10-year Master Services and License Agreement (MSLA) between Spenda and Capricorn, for the provision of software and ecommerce payment infrastructure, following the successful completion of the Foundation Stage of the Digital Services Delivery initiative.
The MSLA lays a foundation for both companies to build further joint initiatives that can improve the digitisation of the automotive industry over a decade long horizon.
It’s reported that Capricorn has conducted extensive due diligence for the cornerstone investment, reflecting its confidence in Spenda’s unique payments software and the Company’s earnings potential over time.
This cornerstone investment ensures that Capricorn and Spenda are aligned in their desire to accelerate Spenda’s growth.
The Company is set to generate significant revenue from this venture, anticipating at least $2 million in revenue from software and services in calendar year 2024.
Software revenues are expected to significantly exceed the minimum $100,000 monthly revenue as Spenda’s software is rolled out to Capricorn’s 26,000 Members.
Capricorn’s (Automotive) CEO Bradley Gannon commented on the agreement.
“This is a significant and important investment for Capricorn,” he said.
“Our investment reflects the importance of our relationship with Spenda, the long history in which we have worked together and our confidence in the future success of Spenda as it further grows its client base.”
Spenda’s Chief Executive Officer and Managing Director, Adrian Floate, added, “After 21 years of collaboration and joint technology initiatives we have developed a very close trusted relationship,” he said.
“This investment is built on a solid foundation of past execution and belief in the future potential the Spenda platform represents to Capricorn, its network of members and suppliers and the wider opportunity to enable suppliers to get paid faster.”
“I am delighted to be in business with Capricorn and I am looking forwards to the many things we can do together in the coming years.”
SPX’s Australian Securities Exchange-listed share price is currently trading at $0.012 today (12.20pm UTC+ 8 hours).