Spenda Secures $3.5M Convertible Loan with 10% Discount Conversion Terms
Spenda Limited has locked in a $3.5 million convertible loan facility with Obsidian Global GP, LLC, aiming to strengthen its working capital and edge closer to operational break-even.
- Convertible loan facility totaling $3.5 million with staged drawdowns
- Conversion terms include a 10% discount and price caps between $0.003 and $0.015
- Facility secured by a general charge, subordinated to Capricorn
- No interest charged on the loan with a two-year maturity
- Issuance of placement shares and options as part of the agreement
Strategic Funding to Support Growth
Spenda Limited (ASX – SPX), a technology company specializing in embedded electronic payment solutions for supply chains, has executed a $3.5 million convertible loan facility with Obsidian Global GP, LLC. This funding arrangement is designed to provide the company with the necessary working capital and capital expenditure resources to continue its growth trajectory and narrow the gap to operational break-even.
Structure and Terms of the Facility
The facility is structured with an initial $1.25 million drawdown upon execution, followed by a $500,000 tranche available for immediate use. A further $1.75 million may be drawn after six months, contingent on mutual agreement and shareholder approval. Notably, the loan carries no interest and matures in two years, with repayment options including a premium if settled early.
Conversion of the loan into shares is permitted after a 60-day lock-up period, at a 10% discount to the 15-day volume weighted average price (VWAP) prior to conversion notice, bounded by a floor price of $0.003 and a ceiling of $0.015. This mechanism balances investor protection with potential dilution for existing shareholders.
Security and Additional Incentives
The facility is secured by a general charge over Spenda’s assets, subordinated to Capricorn’s security interests. Additionally, Obsidian will receive placement shares and options, including 20 million options exercisable at $0.0175 over three years, enhancing their stake and aligning incentives with the company’s future performance.
Management Perspective and Market Context
Chairman Peter Richards expressed gratitude for Obsidian’s continued support, emphasizing the strategic nature of this funding to help Spenda reach operational break-even. The company has carefully considered alternative funding options and concluded that this convertible loan facility offers the most commercially viable path forward without immediate dilution pressures.
Spenda’s integrated platform, which streamlines supply chain payments and financing, positions it well in the evolving fintech landscape. This capital injection should provide the runway to accelerate product development and market penetration.
Bottom Line?
Spenda’s new convertible loan facility marks a pivotal step in its funding strategy, but investor eyes will remain on execution and shareholder approval for future tranches.
Questions in the middle?
- Will Spenda secure shareholder approval for the $1.75 million tranche after six months?
- How will the market respond to potential share dilution from conversion and placement shares?
- What milestones must Spenda achieve to reach operational break-even within the loan term?
