Blockchain firm Factom has begun the process of dissolution following its failure to solicit additional funding to address its dire financial situation, according to a key investor.
Established in 2014, Factom offers data provenance and integrity solutions built on a trustless layer on top of the Bitcoin blockchain. As one of the first projects to conduct a token sale, the firm raised $140,000 through the sale of its Factoid tokens in 2015. Since its founding, Factom has collected approximately $16 million in funding.
On Thursday, the firm's biggest investor, FastForward, disclosed that Factom is now facing liquidation after unsuccessful attempts to secure additional funding.
"The Company 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," said the notice, which was published via the London Stock Exchange.
FastForward invested $6 million in Factom in a simple agreement for future equity. As reported by CoinDesk, FastForward previously signaled its willingness to put in more capital but was not ready to be the lead investor in the funding round while Factom faced financial difficulties.
However, Factom was unable to garner further investment and has now entered receivership to begin its dissolution process.
As the largest creditor possessing over 90% of Factom's shares, FastForward will control the receivership process and is working to select a receiver to take over Factom's assets.
FastForward Director Ed McDermott said that his team is still investigating the reasons behind Factom's current position.
"We are extremely disappointed with this news from Factom," McDermott said in the notice. "In light of this Dissolution Event under the SAFE we are taking swift action to protect our position as best we can in the circumstances albeit the ability to generate any meaningful return is uncertain."
"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," he added.