One of the first companies to host a token sale, Factom, has notified creditors that it has entered receivership after an appeal for additional funding fell on deaf ears.
“[FastForward] has been notified by the directors of Factom that in a board meeting on 31 March 2020 they concluded that, in the absence of further funding, they now needed to begin the process of assignment of assets for the benefit of creditors,” reads the statement.
Although Factom’s Twitter page had fallen silent in the middle of January, alarm bells started ringing in March after the company told investors it would enter liquidation by the end of the month unless it received additional funding.
FastForward, which had the largest stake in Factom, said it was prepared to renegotiate its $6 million simple agreement for future equity (SAFE) to try and attract outside investment. Although it was willing to participate in another investment round, FastForward told Factom directors that it was not prepared to lead. Previously announced talks with investors were also unsuccessful.
Following a board meeting on March 31, Factom finally told investors it would begin the process of liquidation. As its biggest investor, FastForward is now receiver and will take the lion’s share of the company’s assets and intellectual property. A timetable for when Factom will eventually be wound up has not been disclosed.
Just last year, Factom said it was participating in a trial by the U.S. Energy Department to use blockchain technology to protect the country’s power grid. The company also released its own ‘PegNet’ stablecoin network.
FastForward, which is listed on the London Stock Exchange and has invested in a diverse range of tech startups, entered into a $6 million SAFE with Factom in 2018. In its near-six year history, Factom raised more than $18 million from investors.
In an announcement, FastForward director Ed McDermott admitted they were not altogether certain how Factom ended in such dire financial straits.
“We are extremely disappointed with this news from Factom,” he said in a statement. “As we go through the Receivership process and understand more of the events that led to this position our position as investors in Factom is expressly reserved.”
CoinDesk approached both Factom and FastForward for additional comment,but did not hear back by press time.
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