• Strategic partnership with PHNXX to expand into new market segments
• Synertec to provide software and engineering support, earn recurring revenue
• Cross-company sales cooperation to expand opportunities for both companies

Synertec Corporation Limited (ASX:SOP) has announced a strategic partnership and investment in PHNXX Pty Ltd, a Victorian company targeting low-cost, agricultural applications for its unique, containerized Battery Energy Solar System. The strategic rationale for the partnership includes Synertec providing Software as a Service, exposure to large market segments not targeted by Synertec, cross-company sales cooperation, and potential cost-out of the supply chain. Under the partnership, Synertec will be entitled to 50% of the gross profit that PHNXX earns from the sale or lease of the Licensed Products to a customer referred by Synertec, as well as a one-off integration fee and an ongoing annual subscription fee for each Licensed Product sold or leased. Synertec has also entered into a convertible note agreement to co-invest and subscribe for convertible notes in PHNXX alongside French multinational utility group, Engie, and the Victorian Government. The partnership will allow Synertec to expand its engineering offering from non-critical to critical microgrid applications, and the companies will cooperate to utilize common componentry and fabrication facilities to drive costs down.

The collaboration will allow Synertec to refer and recommend PHNXX applications and earn upfront and recurring revenue from the licensing of the modified Powerhouse control system installed on each PHNXX unit sold. Conversely, PHNXX will refer and recommend opportunities that are more suited to Powerhouse, expanding the opportunities for each company.