An interim examiner has been appointed by the High Court to a Galway-based manufacturer of wearable technology devices.
Bio-Medical Research Ltd (BMR) produces devices including muscle strengthening EMS (Electrical Muscle Stimulation) machines marketed under the Slendertone and The Flex Belt brands in over 20 countries. Over 10 million devices have been sold worldwide.
BMR and its parent company Bio-Medical Research Group Ltd (BMRG) employ 60 people, most of them based at the Galway plant.
In the petition on behalf of the directors seeking court protection, BMR and BMRG say that turnover and profitability had been impacted significantly from 2019 with reduced sales in Japan a significant factor.
A falloff in its performance in 2021, in addition to the Japan situation, was also due to Brexit, a global shortage of semiconductors which are a key component of its products, as well as issues with the Apple operating system iOS14.
In 2021, it made a loss after tax of some €5.2m, with net liabilities standing at some €386,000.
The position deteriorated further in 2022 with net liabilities rising to nearly €700,000 by January and, as matters stand, BMR projects a loss of some €3m in 2022.
However, the court heard, an independent expert's report say that it can return to profit next year on the basis of the successful implementation of the management's restructuring proposals or other such proposals as can be formulated by the examiner.
As of now, BMR has €8.6 million of overdue trade creditors and is paying cash on delivery with its main suppliers.
It says it will require third party investment and/or the sale of its premises in Parkmore Business Park West, Co Galway, which is secured in favour of Bank of Ireland (BoI). If sold, the proceeds will be sufficient to repay the €1.3 million debt to BoI, it says.
It had warehoused a PAYE/PRSI debt of just over €1 million up to January 31st last.
It owes €8 million lender, Beechbrook Capital which holds first ranking security over all BMR with the exception of the premises. Interest due to Beechbrook has not been paid since July 2021.
Management, in July 2021, entered into discussions with BMR's major creditors. It also attempted to raise €2.5 million from existing shareholders but this only succeeded in raising some €19,700.
External investment was also sought and a number of interested parties have indicated they would invest if BMR and BMRG went through some level of restructuring.
The independent expert believes the companies have a reasonable prospect of survival as a going concern subject to a number of conditions being met.
Mr Justice Denis McDonald appointed Nicholas O'Dwyer of Grant Thornton as interim examiner following the presentation of the petition by Stephen Brady BL, for the companies.
He adjourned the matter to next month.
Separately, the judge admitted an action by Netherlands logistics company, CH Robinson Europe BV, for judgment against BMR for just over €1 million due for services it says it provided to the Galway company.
