In July 2020, software company Future First Technologies (ASX: FFT) invested $2.5 million in shares in tailored payment solutions company 1derful, gaining an 8.8% equity stake in the company. Come 2021, it invested a further $1.25 million.
Now, the Company’s stake hangs in the balance as it has received word that 1derful has been placed in external administration. Though FFT has no operational involvement with 1derful, it is a shareholder, and the carrying value of those shares is $2.67 million.
For a company with a market cap of $7.14 million, this is troubling news.
Founded in 2019, 1derful is a FinTech company functioning in the BNPL (buy now, pay later) and blockchain space. BNPL has been on the decline for a while, with fewer people interested. What’s more, in May 2023, the Australian government said it would be regulating the BNPL segment as a credit product, compelling BNPL providers to conduct background checks on users. This has made it a stricter environment for companies in the BNPL space.
This is not the only bitter pill the Company has had to swallow recently. In September 2023, Future First was called out by the ASX for issuing 700,000 shares to former non-executive director Nicole Ferro without shareholder approval. The shares were previously issued to Nicole Ferro through the FFT Employee Share Trust with shareholder approval. The breach was the result of an administrative oversight.
As a remedial measure, the 700,000 shares in the FFT Employee Share Trust were reallocated to another individual.
In FY23, the Company’s revenue stood at $3.7 million, with negative cashflows of $1.5 million. Its earnings amounted to $225k.
At the same time, FFT saw its CEO Adrian Rudman step down, replaced by two CEOs, as the Company adopted a co-CEO model. The two CEOs are Damian Smith and Lucas Murtagh. Moreover, its asset and work management platform, Asset Vision, signed a contract of up to four years with the South Australian State Government to provide a maintenance management system (MMS). The road maintenance directorate will use this to order work from industry partners and for surveillance officers to ensure the work is being undertaken. Its contract revenue for the first year comes to $347k.
In FY24, the Company wants to focus on developing its artificial intelligence (AI) division and grow its verticals to defence, water, telecom, energy and more. Moreover, as it makes Asset Vision its sole focus, the Company reported that it will be formally changing its name. This re-brand may be coming at the right time for Future First Technologies.
Alinda is a Business Reporter for The Sentiment
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