The former head of Serpentine Technologies has told Stockhead his “highest priority” is ensuring the ASX-listed company he once headed gets the $4.4 million it is allegedly owed by his new start-up.

Serpentine — which was founded by Canada-based entrepreneur Neil Patel as interior design marketplace Kabuni — sold most of its assets in October to Mr Patel’s new business, Print The Future.

Mr Patel (not to be confused with the marketing guru of the same name), is in the early stages of launching Print The Future, which plans to sell 3D-printed furniture.

Serpentine has told shareholders in several ASX announcements that Print The Future failed to pay the $4.4 million when it was due and it has “expressly reserved all of the company’s rights, powers, privileges and remedies … to recover such monies”.

But if it tries to enforce that debt, the likelihood of seeing the cash is slim.

Mr Patel told Stockhead his new business is set to launch sometime this year. He’s wary about giving a schedule as it’s early days yet.

His success depends on raising investment money for the startup — money that Serpentine has said a number of times over the last year they have first right over.

Mr Patel told Stockhead an expected capital raising — still to be finalised as either an Initial Coin Offering (ICO) or a backdoor listing in Canada — would include paying Serpentine, which he no longer has any involvement with.

“Making sure Serpentine are paid is my highest priority at present,” he told Stockhead.

Serpentine, now a listed shell company (ASX:S3R), is looking for an education, blockchain or tech play to sell into.

Former Serpentine boss Neil Patel explains his new business Print The Future.

Severe cash-burn

Kabuni was a Canadian company that floated in Australia in 2015 via a $7 million backdoor listing.

It was never profitable, burning through about $1.5 million a quarter. At its peak in the June quarter of 2016 it made $11,000.

In early 2017, aside from the severe cash burn and lack of customers, everything appeared to be business as usual until Mr Patel threw a curve ball: an offer to buy Kabuni’s US, Canada, and India subsidiaries for $6.5 million.

The idea was that Mr Patel would buy back the companies he’d originally built and take them back to Canada, to be the foundation for a new blockchain-based 3D printing business.

He’d raise $US25 million, according to Business in Vancouver, list the new business on the Nasdaq that year, pay off Kabuni, and his original assets would be reborn.

After some manoeuvring, the board accepted.

Cancelled Nasdaq listing

The final deal, with Mr Patel’s new company Print The Future (PTF), was $4.5 million for the Canadian and Indian businesses.

It was a hefty sum for PTF.

Forms lodged with the US Securities & Exchange Commission in July 2017 show that in February, PTF had assets of $US1000.

By September the arrangement had gone awry.

PTF failed to pay the first promissory note and owed $667,703.95.

It had also cancelled its Nasdaq listing, the key means through which it was going to pay for the Kabuni assets.

In an announcement on September 19, the Kabuni board said PTF was — and still is — required to pay back the Australia company with all of any money it receives, be it via share sales, borrowing or capital raising.

PTF had raised about $US120,000 from investors and $C160,000 in loans, but spent it on a variety of startup-related expenses.

Rising again?

By this stage the Australian shareholders were in deep: their company had $270,000 left in the bank and a single $1000 sales receipt that came in during the September quarter.

The board, now led by Ventnor Capital director Stuart Carmichael, forged ahead with the remainder of the deal, cleaning up the company’s affairs and raising $574,423 from shareholders to keep it ticking over.

PTF defaulted on the second $3.7 million note in November.

Kabuni — now Serpentine — will try to claw that money back if PTF does raise investment funding, or by taking its assets, or by converting the debt into equity.

Mr Patel told Stockhead PTF would launch a “large facility” that “will be one of the world’s most advanced 3D manufacturing facilities” sometime this year.

The company has been looking for investment since Serpentine’s announcement in September.

Mr Patel did not comment on whether the Australian claim on any investments raised, or the PTF assets, would impact on PTF’s ability to raise money in Canada.

Mr Patel also said he would not be venturing back to the ASX again.