The board at Flinders University-founded medical avatar software platform Clevertar has agreed to pump in funding to clear the spinout's outstanding liabilities to creditors including the university.
Clevertar, an Australia-based digital avatar platform operator spun out of Flinders University, has received a A$400,000 ($275,000) capital injection from its board of directors, InDaily reported today.
The company, spun out of Flinders University’s Centre for Knowledge and Interaction Technologies in 2012, offers avatars powered by conversational artificial intelligence (AI) that guide medical patients through consultations without the need for a professional.
With $900,000 in liabilities owed to its five creditors, Clevertar entered voluntary administration in March 2019.
Flinders Partners, the university’s commercialisation arm, is reportedly owed $318,000, while health and enterprise services provider Konica Minolta has declined to renegotiate its $415,000 loan to the business.
Flinders University was approached by Clevertar’s administrator, Michael Basedow, over the possibility of repurchasing the company’s intellectual property, but concluded the assets were of “little value” in their current form.
Basedow’s assessment also revealed Clevertar’s attempts to raise capital had floundered, and it had relied on parties associated or known to its directors for funding.
He said: “As a result, I determined that the IP had limited value and it was not commercially beneficial to prepare and advertise the business for sale over an extended period.”
The $275,000 investment by Clevertar’s directors was supplied under a deed of company arrangement with its creditors, which should allow the business to clear its balance sheet.
Under the agreement, Clevertar’s unsecured creditors will at most receive a 1.7% dividend. Its 11 employees may still receive full salaries, however this is yet to be confirmed.
The company had raised more than $1.4m in capital altogether as of October 2018, according to a press release.
Jim Birch, director of the board of directors, conceded Clevertar’s platform possesses little value as a standalone product but said the spinout would instead reframe its proposition around the strength of its software and talent base.
He told InDaily: “The fact that the directors are back in control of the company and we are prepared to support the company financially, you can treat that as a vote of confidence.
“The directors are very confident that we can make this work. We have got lots of demand, I think, in areas where there are large transactions.”
A spokesperson for the university said: “[Flinders Partners] made a substantial financial and in-kind contribution to Clevertar’s development, giving it the foundation it needed to seek broader investment and support.”
“The company directors clearly believe there is value in the entity and the technology it has developed and that it is possible to turn the company around to profitability so that this technology can continue to make a difference in the lives of those living with chronic illnesses.
“Flinders believes AI in healthcare has significant potential.”
– Feature image courtesy of Clevertar