In its first foray into a long-term agreement with a variable pricing model, digital marketing and loyalty solutions company Snipp Interactive (TSX-V: SPN)(OTCQB: SNIPF) has penned a five-year agreement with an unnamed hospitality company. The model protects Snipp from any downside by setting a floor at $400,000, while presenting the opportunity to benefit from upside success with a program that grows in membership.
Through its integrated marketing platform, Snipp offers software solutions including promotions, loyalty, rewards and data analytics.
After a multi-year downtrend, shares of Snipp have been trending upward as the Toronto-based company has gained some traction in the hospitality space, landed a six-figure extension with a major power solution manufacturer and launched initiatives into the cannabis industry.
In the agreement announced today, Snipp says the loyalty program is "projected to rapidly grow," with conservative estimates from the client pointing to a recurring revenue stream in the range of $500,000 to $1 million. In 2017, Snipp posted a 15% increase in revenue from 2016 to $12.88 million.
Additionally, Snipp disclosed that due to additional investor interest, it increased the size of its non-brokered private placement from 25 million shares at 10 Canadian cents each to 35 million shares at 10 Canadian cents each for total gross proceeds of $3.5 million. Insiders are expected to comprise more than half of the final tranche.
In Thursday morning action, shares of SPN are trading ahead a penny, or 7.4% at C$0.145. Last September, shares were trading as low as 6.5 cents.
