Australian listed independent software vendor (ISV) Flamingo Ai has caved to cash burn pressure and sold off its assets for $200,000.
The six-year-old publicly listed company told investors it had failed to raise any “substantial” capital to ease its high cash burn rate and continue serving customers in Australia and the United States.
As such, Flamingo Ai, which offers an artificial intelligence assistant and cloud-based software platform to financial and insurance enterprises, has sold its assets to Rymamay Investments.
The $200,000 will cover the assumed employment of certain employees and their accrued entitlements.
Rymamay will also pay a nominal consideration of $100 and an entitlement to 20 per cent of any research and development or other Australian government rebate for work undertaken by Flamingo Ai up to 31 May 2020.
In total this will see Ryanmay pay roughly $1.4 million in cash to Flamingo Ai. The purchase is subject to the buyers’ due diligence checks, which are due to end on 31 May.
Founded in 2016 by Dr Catriona Wallace, Flamingo Ai previously looked to have a rosey future ahead, boasting virtual assistant clients such as Nationwide Mutual Insurance Company, Liberty Mutual, AMP, CHUBB, CUA, WISR and MetLife Asi.
Flamingo successfully raised $15 million in the second quarter of 2017 and $3 million in 2016.
However, in its recent half year report, the company posted a loss of $2.2 million after making just $345,000 in revenue.
Its sale will now see Wallace exit the company as head of business development, although she will remain on its board.
Company CEO, Olivier Cauderlier will continue to work for Rymamay in an unspecified role. In its shareholder update, Flamingo Ai added that it expects to continue with key contracts and client responsibilities in both Australia and the US.