Snipp Interactive Inc. (OTCQB: SNIPF) (TSX-V: SPN), a global provider of digital marketing promotions, rebates and loyalty solutions, is pleased to announce that it has entered into a 5-year loyalty services agreement with a hospitality company based on a variable pricing model with a guaranteed floor.
Apart from gaining traction in the well-established hospitality space, this Agreement marks Snipp’s first foray into a five-year long-term agreement based on a variable pricing model, with a guaranteed floor. This allows the company to enjoy the upside associated with programs that grow their membership over time versus taking fixed fees.
“With the popularity of this particular loyalty program, which is projected to rapidly grow and based on conservative projections provided by our Client, we are optimistic that this agreement will result in a consistent recurring revenue stream for the company estimated to be anywhere between $500,000 and $1,000,000. Given that this is our first entry into a variable pricing model, we have protected ourselves against any possible downside with a guaranteed floor of $400,000,” said Atul Sabharwal, Chief Executive Officer at Snipp. “This year we are extremely focused on exploiting opportunities in new industries such as Hospitality and Cannabis, as previously discussed. There is a clear market need in both of these industries for software solutions such as ours that are cost effective, scalable and based on flexible business models.”
The Company is also pleased to announce that due to additional investor interest, the Company has increased the size of the non-brokered private placement (the “Financing”), previously announced on March 2, 2018. The Financing will now be comprised of up to 35,000,000 common shares ("Shares") at a price of CAD $0.10 per Share, for gross proceeds of up to CAD $3.5 million. Closing of the Financing will occur in tranches. The Company has already closed four tranches to date, comprised of 25 million shares at a price of CAD $0.10 per Share for gross proceeds of CAD$2.5 million. The Company is expecting insider participation of over 50% of this final tranche.
All Shares issued pursuant to the Financing will be subject to a four-month hold period under applicable securities laws in Canada, as well as the policies of the TSX-V, where applicable. Finder's fees may be payable to certain finders in connection with the Financing, subject to the approval of the TSX-V. The net proceeds raised through the Financing will be used for sales & marketing and general working capital purposes.
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