The High Court has appointed an interim examiner for a Galway-based maker of wearable tech devices.
io-Medical Research Ltd (BMR) produces devices including Electrical Muscle Stimulation (EMS) muscle strengthening devices marketed under the Slendertone and The Flex Belt brands in more than 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 based at the Galway plant.
In the motion on behalf of the administrators seeking court protection, BMR and BMRG claim that revenue and profitability were significantly affected from 2019, with reduced sales in Japan being a significant factor.
A decline in its performance in 2021, in addition to the situation in Japan, was also due to Brexit, a global shortage of semiconductors which are a key part of its products, as well as problems with the system of operating Apple iOS14.
In 2021, it made a post-tax loss of €5.2 million, with a net liability of €386,000.
The situation deteriorated further in 2022 with net liabilities reaching almost €700,000 in January and as things stand BMR expects a loss of €3 million in 2022.
However, according to the court, an independent expert’s report indicates that it may return to profit next year based on the successful implementation of management restructuring proposals or other similar proposals that may be formulated by the examiner.
To date, BMR has 8.6 million euros in arrears and pays 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 favor of Bank of Ireland.
If sold, the proceeds will be enough to repay the €1.3 million debt to the Bank of Ireland, it says.
She had stored a PAYE / PRSI debt of just over one million euros until January 31.
It owes €8 million to the lender Beechbrook Capital, which holds first-ranking sureties on all the BMRs with the exception of the premises. Interest due to Beechbrook has not been paid since July 2021.
Management began discussions with BMR’s main creditors in July 2021. He also attempted to raise €2.5 million from existing shareholders, but this only managed to raise €19,700.
External investment was also sought and a number of interested parties indicated that they would invest if BMR and BMRG went through some level of restructuring.
The independent expert believes that the companies have a reasonable prospect of survival as a going concern provided a number of conditions are met
Judge Denis McDonald has appointed Nicholas O’Dwyer of Grant Thornton as Interim Examiner following the presentation of the motion by Stephen Brady BL, for the Companies.
He adjourned the case to next month.
Separately, the judge allowed a claim by Dutch logistics company CH Robinson Europe BV for judgment against BMR for just over €1 million owed for services it says it provided to the Galway company. .