Openn Negotiation Ltd (ASX:OPN) has had a busy morning with two developments in North America, including an agreement with The Canadian Real Estate Association (CREA) to conduct a pilot program for the Openn platform with CREA and its members, and preparing for the launch of the platform in Canada.
OPN has also secured a Subscription Agreement with leading US Multiple Listing Service (MLS) organisation, Triangle MLS Inc, for one million options.
Integrating platforms
Property technology company OPN, through its wholly-owned subsidiary, Openn North America Inc. has entered into a Pilot and Subscription Agreement with CREA.
The agreement is for 14 million unquoted options.
CREA is a national association for real estate professionals in Canada with more than 150,000 members working through provincial/territorial boards and associations, and operators of the REALTOR.ca platform.
Through the Pilot Agreement, OPN will conduct a pilot program with CREA’s members that will assist the platform’s launch into Canada.
The pilot program will showcase OPN’s ability to provide Canadian consumers with visibility into the real estate transaction process and includes integration with REALTOR.ca, Canada’s leading real estate platform.
REALTOR.ca had more than 1.9 billion property page views in 2021 alone.
“Through six-plus years of development, execution and innovation in the Australian market, we have proven that both the real estate professional and consumer benefit greatly from enhanced transparency," CTO of Openn and president of Openn North America Duncan Anderson said.
"We are thrilled by the opportunity to partner with CREA to introduce Openn Offers to the Canadian marketplace.”
Openn managing director Peter Gibbons said, “CREA is a tier 1 organisation and has proven to be a fantastic partner since our collaboration began in late 2021.
"Alignment between us is strong, as demonstrated by CREA’s investment in allocating resources to this pilot, deep integration and subscription for options. This partnership delivers tangible value to CREA members and profoundly de-risks our entry into the Canadian market.”
How the pilot agreement works
The pilot will run for an initial period of up to six months, during which Openn North America and CREA will test and evaluate the potential market fit and demand for the Openn platform with CREA members in Canada.
Testing will include the potential integration of the platform with REALTOR.ca.
The pilot will also allow Openn North America to consider any modifications to the Openn platform necessary for operation in the Canadian real estate market or offer process.
The companies will work together to raise awareness of the platform while seeking constructive feedback from members.
Certain offer information from property transactions conducted using the Openn platform (as mutually agreed by the parties) is to be displayed on REALTOR.ca.
All going well, the companies will look to extend the agreement beyond the initial six months and further expand their reach into Canada.
Subscription agreement with CREA
Under the Subscription Agreement, CREA has agreed to subscribe for 14 million subscription options in two separate tranches, with each subscription option entitling the holder to subscribe for one fully paid ordinary share OPN.
CREA will subscribe for 4 million of the first tranche of subscription options at an exercise price of:
- A$0.35, if exercised within 9 months of issue;
- A$0.50, if exercised after 9 months, but within 18 months, of issue; and
- A$0.65, if exercised after 18 months, but within 24 months, of issue. 50% of the shares (2 million) issued on exercise of the first tranche of subscription options will be subject to three years voluntary escrow.
CREA will subscribe for 10 million of the second tranche of subscription options, each of which will expire 24 months from the date of issue, and will have an exercise price equal to the higher of:
- A$0.35 and a 30% discount to the 10-day VWAP immediately prior to exercise.
30% of the shares (3 million) issued on exercise of the second tranche of subscription options will be subject to three years voluntary escrow.
Subscription agreement with MLS
OPN has also entered a Subscription Agreement with Triangle MLS Inc, which has agreed to subscribe for 1 million unquoted Openn options for an aggregate exercise price of between A$350,000 and AU$650,000, depending upon the time of exercise.
MLS organisations store and publish US property listing data for realtor members.
Triangle is the largest MLS in the North Carolina property market, representing approximately 16,000 registered real estate professional subscribers, with sold property volume of 47,000 in 2021.
OPN hopes to launch a pilot program with Triangle similar to its program with CREA, that will test and evaluate the Openn platform in the North Carolina real estate sales market, including the platform’s ability to address transparent offer management needs of Triangle’s Subscribers and consumers across North Carolina.
“Triangle MLS helped more than 47,000 buyers find a home last year. Every transaction involved a TMLS member delivering at least one offer to a seller. Managing those offers, especially when many come in at once, involves a myriad of details and can be difficult to sort out," Trinagle president and chair Matt Fowler said.
"Openn promises to bring a durable process to the management of those offers in a way that increases fairness and transparency."