Syntonic Ltd Provided Update on Bridge Alliance Agreement

  • Apr 16, 2019 AEST
  • Team Kalkine
Syntonic Ltd Provided Update on Bridge Alliance Agreement

Seattle based software company, Syntonic Ltd (ASX: SYT) and Bridge Mobile Pte Ltd have agreed to terminate the Development Agreement which was previously disclosed on 6 March 2019. Following the release of this news, the share price of the company plunged by 12.5% in the intraday trade.

The agreement was regarding the development of a white-labelled and customised version of the Syntonic International Roaming Service™ for which Bridge would have compensated the Company for all engineering and support costs associated with the Bridgebranded service.

However, the agreement is now getting terminated as Syntonic and Bridge Alliance are unable to resolve issues involving confidentially provisions under the Agreement and Syntonic’s disclosure obligations under the ASX Listing Rules. This partnership would have helped the company in monetizing its Revenue Generation Platform.

The termination of the agreement will impact the company’s target of reaching cash flow breakeven in Q3 FY 2020. Further, the mobile industry interest in Syntonic’s International Roaming Service is expanding, which includes the recently announced disclosure with Smart Communications who is presently working with Syntonic to enhance the current licensing agreement with a more comprehensive international roaming solution.

While commenting on the termination, the company’s CEO Gary Greenbaum told that the company is disappointed that it will not be working with Bridge Alliance and it understands that as a member alliance it need to closely guard their marketing strategies. Unfortunately, this need was incompatible with the company’s obligation as a public company to keep its shareholders abreast of material developments.

He further assured that the company is focused on working closely with existing partners to deploy and launch their services in the coming months along with progressing new partnerships and business opportunities using Syntonic’s Revenue Generation Platform.

The company recently completed the allotment of 233,336,450 new fully paid ordinary shares in the Company in respect to a placement to existing and new sophisticated and professional investors.

The Placement successfully raised A$1.84 million (before costs) which will provide Syntonic with working capital to accelerate its growth to capture, manage, and support its pipeline of potential clients and will be utilised for (amongst other matters) expansion of the Company’s global sales and support team.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. At the time of writing, i.e., on 16 April 2019, the stock of the company traded at a price of A$0.007, down by 12.5% during the day’s trade with the market capitalisation of ~A$5.07 Bn. The counter opened the day at $0.007 and reached the day’s high of $0.008 and touched a day’s low of $0.007 with a daily volume of ~ 8,438,445. The stock has provided a year till date return of 54.55% & also posted returns of -22.73%, 21.43% & -15.00% over the past six months, three & one-month period respectively. It had a 52-week high price of $0.020 and touched 52 weeks low of $0.005, with an average volume of ~4,485,894.


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