A $21 million hearing care company has gone bankrupt, blaming a dispute with a major supplier.
ASX-listed Nuheara Limited, which specialises in wireless earphones that help customers improve their hearing, announced late on Wednesday afternoon that it has been placed into administration, with KPMG directors appointed to take over the running of the business.
“The decision was taken by the board of directors to best enable the company to complete its ongoing strategic review, given the upcoming maturity of its $2.5 million convertible note,” the company said.
This convertible bond is held by Realtek Semiconductor Corporation and has a maturity date of September 7, 2024.
‘The Company is disappointed that it has not been able to reach a satisfactory commercial agreement with Realtek in relation to the convertible bond.
‘In addition, the Company must receive a signed commercial agreement and royalty agreement pursuant to the May 17, 2022 letter of intent with Realtek.
“The managers will continue to work with Realtek to execute this agreement, which is considered important to the strategic review process.”
Realtek supplies the chips used in Nuheara products.
Nuheara’s IQbuds2 MAX product. Photo: Nuheara
A KPMG spokesman said the administrators were conducting an “urgent review” of the business and that Nuheara would continue to trade during the process.
The first meeting of creditors is scheduled for August 19.
The Perth-based company has 22 employees, including a sales representative in the US.
The company first listed on the ASX in 2016 and operates in the consumer wearables sector.
Nuheara has had a tough time in 2024. According to Market Index, its stock price has fallen by almost 30 percent this year. Its market capitalization was $21 million on Wednesday.
In 2020, the company launched its IQbuds2 MAX product at the Consumer Electronics Show in the US, where it won three innovation awards in the categories of wearables, home audio components and accessories, and health and wellness.
“IQbuds2 MAX sets a new standard in hearables technology by combining advanced headset technology, including active noise cancellation, with advanced hearing technology found in high-end hearing aids,” the company said on its website.
‘Nuheara, with its hardware and software products, is focused on solving the major hearing challenges we face in the global hearing care market.’
In May this year, Nuheara told investors it would restructure its “investment levels” as part of a review of the business.
“As part of this process, the company is shifting its strategy and is currently restructuring its investment levels, including limiting new manufacturing and marketing expenditures, with a priority on completing development of the new chip with Realtek and the next generation of the HP Hearing Pro product,” the company said.
The company has also conducted a review of resource levels and all costs associated with those resources.
“This lower investment will limit sales and revenues of current generation products, but it does reduce the amount of additional external capital expected to be required to complete the strategic review process.”