• Sale of Invoice Finance Portfolio to Grapple for $2m
• Return of $2.3m first loss capital
• Balance sheet recapitalisation and $4.3m in available working capital
• Referral agreement with Grapple to generate revenue

Spenda Limited (ASX:SPX), an innovative software company providing software and electronic payment solutions across supply chains and trading networks, has executed an Asset Sale Agreement with Grapple Invoice Finance Fund Pty Ltd ('Grapple') for the sale of the Company's invoice finance loan book ('the Asset') via its subsidiary Spenda Cash Flow Pty Ltd ('SCF'). The Agreement will see Grapple acquire SCF's assets for a total consideration of $2m, with an initial payment of $500,000 and the remaining $1.5m to be paid over 10 months and a balloon payment of $750,000 subject to portfolio performance. The sale will result in a reduction of ~$50,000 p.m. in gross profit, which is offset by cost reductions associated with the operations portfolio. Continuing growth in other product lines are expected to increase the overall operating margin of the business. The sale will also result in the return of the Company's committed first loss capital of ~$2.3m. Spenda and Grapple are executing a referral agreement for an initial period of 24 months, under which Grapple will pay the Company a referral commission. Certain Spenda employees key to the ongoing management and servicing of the loan book will transfer across to Grapple on completion. The Company will pay a break-fee of $170,000 to the Company's credit provider for the early termination of the facility.

The sale of the loan book is the first step in the Company's restructuring its balance sheet and releasing capital whilst realizing value through bringing forward future cashflows. With the software now capable and proven in managing financing flows, credit processes, risk management and payment reconciliation, the Company can now enable third party lending products to be onboarded on to the platform via revenue sharing agreements as executed with Grapple. The Company has removed the capital constraints associated with being the counterparty to loan / financing related product offerings.