FirstWave Finalizes $2.5M Facility with 12.5% Interest and Equity Options

New Capital Injection

FirstWave Cloud Technology Limited (ASX – FCT) has finalized a $2.5 million loan facility with global credit investor Partners for Growth VII, L.P. This fresh capital injection follows a recent $2.85 million equity raise, collectively strengthening the company’s financial position as it pivots towards AI-powered compliance management solutions.

The loan terms offer a six-month interest-only period at a fixed annual rate of 12.5%, followed by 30 monthly principal and interest repayments. The facility is secured by a senior lien over all company assets, underscoring the lender’s confidence in FirstWave’s growth trajectory.

Replacing Previous Debt

This new facility replaces the previous credit arrangement with Fenja Capital Partners. FirstWave has settled the Fenja debt with a $2.4 million cash payment and the issuance of 120 million fully paid ordinary shares at $0.007 each. This restructuring reduces the complexity and dilution associated with the prior facility, providing greater flexibility for future capital access.

Equity Options and Shareholder Approval

Partners for Growth has been granted a five-year call option to subscribe for ordinary shares valued at up to $750,000, exercisable on a cashless basis. Additionally, a put option allows PFG to require FirstWave to repurchase these securities for $350,000, subject to shareholder approval and compliance with regulatory share buy-back provisions. An extraordinary general meeting will be convened to seek this approval, a key step that investors will watch closely.

Strategic Outlook

FirstWave’s management highlights the partnership with PFG as a catalyst for the company’s next growth phase, particularly in monetising its extensive user base of approximately 150,000 organisations leveraging its free open-source software. The focus on AI-driven compliance management aligns with broader industry trends towards automation and regulatory technology, potentially unlocking new revenue streams.

With marquee clients including Microsoft, Telstra, and NASA, FirstWave’s strengthened balance sheet and strategic capital structure position it well to capitalize on emerging market opportunities. However, the ultimate impact will depend on execution and shareholder endorsement of the equity options.