A $21m hearing healthcare company has gone bust, blaming a fallout with a key supplier for its woes.
ASX-listed Nuheara Limited, which specialises in a wireless earbud that allows customers to augment their hearing, announced its move into voluntary administration late on Wednesday afternoon, appointing KPMG administrators to take control of the firm.
“The decision was taken by the board to best enable the company to conclude its ongoing strategic review, given the impending maturing of its $2.5m convertible note,” the company stated.
“This convertible note is held by Realtek Semiconducter Corporation and has a maturity date of September 7, 2024.
“The company is disappointed that it has been unable to reach a satisfactory commercial agreement with Realtek, regarding the convertible note.
“Separately, the company has yet to receive an executed commercial and royalty agreement, pursuant to the May 17, 2022 memorandum of understanding with Realtek.
“The administrators will continue to work with Realtek to execute this agreement, which is considered important to the strategic review process.”
Realtek supplies the chips that go into Nuheara’s products.
A KPMG spokesman told NewsWire the administrators were conducting an “urgent assessment” of the business and Nuheara would continue to trade throughout the process.
A first creditors’ meeting is booked for August 19.
The Perth-based company has 22 employees, including a sales representative in the US.
It first listed on the ASX in 2016 and competes in the consumer wearables sector.
Nuheara has struggled in 2024, with its stock falling almost 30 per cent year-to-date for a market capitalisation of $21m as of Wednesday, according to Market Index.
In 2020, the company launched its IQbuds2 MAX product at the Consumer Electronics Show in the US, where it received three innovation awards in the wearables, home audio components and accessories and health and wellness categories.
“IQbuds2 MAX sets a new standard in hearables technology by combining high end headset 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 major 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 review of the business.
“As part of this process the business is shifting its strategy and is currently restructuring its investment levels, including limiting new production and marketing spend, with a prioritisation on the completion of the new chip development with Realtek and the next generation of the HP Hearing Pro product,” the company said.
“The company has also undertaken a review of resourcing levels and all costs associated with these resources.
“Accordingly, while this reduced investment will limit sales and revenue of current generation product, it reduces the level of additional external capital expected to be required to complete the strategic review process.”