A $21 million hearing healthcare company has filed for bankruptcy, blaming its troubles on a disagreement with a key supplier.
ASX-listed Nuheara Limited, which specialises in wireless headphones that enable customers to enhance their hearing, announced it was moving into voluntary administration late on Wednesday afternoon, appointing administrators from KPMG to take control of the company.
“The decision was made by the board of directors to enable the company to better conclude its ongoing strategic review, given the impending maturity of its $2.5 million convertible bond,” the company said.
This convertible note 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 regarding the convertible bond.
‘Furthermore, the Company has not yet received an executed commercial and royalty agreement pursuant to the May 17, 2022 MOU 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 IQbuds2 MAX product. Image: Nuheara
A KPMG spokesman said administrators were conducting an “urgent assessment” of the business and Nuheara would continue to operate throughout the process.
The first creditors’ meeting is scheduled for August 19.
The Perth-based company has 22 employees, including a US sales representative.
It first listed on the ASX in 2016 and competes in the consumer wearables sector.
Nuheara has struggled in 2024, with its shares down nearly 30 percent so far this year for a market capitalization of $21 million as of Wednesday, according to Market Index.
In 2020, the company launched its IQbuds2 MAX product at the US Consumer Electronics Show, where it received three innovation awards in the categories of wearables, home audio components and accessories, and health and wellness.
‘IQbuds2 MAX sets a new standard in hearing device technology by combining high-end headphone technology, including active noise cancellation, and sophisticated hearing technology found in high-end hearing devices,’ the company states on its website.
‘Through its suite of hardware and software products, Nuheara is dedicated to solving key hearing challenges that exist in the global hearing healthcare market.’
In May this year, Nuheara told investors it would restructure its “investment levels” as part of a business review.
“As part of this process, the company is changing its strategy and is currently restructuring its investment levels, including limiting new production and marketing expenses, with a prioritization on completing the development of the new chip with Realtek and the next generation of the HP Hearing Pro product,” the company said.
‘The company has also carried out a review of resource levels and all costs associated with these resources.
‘Accordingly, while this reduced investment will limit sales and revenues of current generation products, it reduces the level of additional external capital expected to be required to complete the strategic review process.’