FirstWave Cloud Technology (ASX: FCT) has announced multiple strategic updates, including the launch of its AI-driven Open-AudIT v6, a significant CSIRO collaboration, and the securing of near-term liquidity through a capital raise and new loan facility.
FirstWave launched Open-AudIT v6 with a new free licensing tier, designed to drive commercial upgrades and monetise its existing user base.
Early adoption metrics show 5,991 downloads, a 6.09% commercial trial conversion rate and 194 open leads.
The company has a substantial freemium base, with approximately 20,000 active users on Open-AudIT.com and 19,000 on Open-AudIT.org.
FirstWave is actively transitioning from a traditional software vendor towards an AI-powered compliance platform.
Securing Near-Term Liquidity
In Q2 FY26, FirstWave raised a net AUD$2.66 million, significantly bolstering its cash reserves.
The company also secured a 3-year AUD$2.5 million loan facility with Partners for Growth.
A AUD$2.5 million convertible note was fully repaid, reducing outstanding debt obligations.
These funding efforts are expected to contribute to achieving cash positivity in Q3 FY26.
AI Collaboration and Development
FirstWave received AUD$264,982 in RUIC funding for its AI-powered compliance software development, in collaboration with CSIRO and UniSC.
The project aims to develop production-ready AI/ML models for predictive compliance, utilising live operational data.
This collaboration aligns with national priorities for cybersecurity and digital resilience.
The initiative holds potential to monetise advanced AI capabilities across FirstWave's extensive freemium user base, which encompasses more than 150,000 organisations in 178 countries.
Operational Restructuring and Sales Focus
Restructuring efforts were completed in Q2 FY26, incurring AUD$0.5 million in costs during the quarter.
The company anticipates ongoing quarterly savings of approximately AUD$0.45 million resulting from these restructuring activities.
The CEO is relocating to North America from February to March to accelerate sales efforts in key markets.
FirstWave has successfully renewed contracts with significant clients including NASA, Claro DR, and Telmex.
Annual Report Context: Goodwill Impairment
In FY2025, FirstWave recognised a non-cash goodwill impairment of AUD$10.39 million.
This impairment was related to legacy products and reflects accounting treatment under AASB 136.
The company clarified that this accounting adjustment does not impact future earnings potential or cash flow.
The impairment underscores FirstWave's strategic pivot towards monetising its Open-AudIT user base and compliance management solutions.
Execution Key to AI Monetisation
FirstWave has successfully shored up its financial position through capital raising and debt facilities, providing runway for its strategic pivot to AI-powered compliance management via Open-AudIT.
The company's ability to convert its large freemium user base into paying customers with the new v6 product and leverage AI collaborations will be critical for future growth and profitability.
