NEXT Biometrics has resolved to prepare a bankruptcy petition after efforts to secure additional funding and sell assets from its legacy fingerprint sensor business failed to provide sufficient liquidity. The Norwegian company’s board intends to file the petition with the competent district court on Monday, October 12.
The decision follows a strategic shift toward the company’s next-generation Anywhere-in-Display technology. In July, NEXT said it would focus exclusively on that project and seek to divest its loss-making legacy sensor operations, using the proceeds to finance continued development.
NEXT sought to sell its remaining fingerprint sensor inventory and to sell or license related intellectual property, production equipment and know-how. It has entered into non-binding letters of intent with external parties, but none of those processes has been concluded.
After seeking fresh capital earlier this year, the company also sought financing from larger shareholders to bridge it through the end of the year. That would have allowed time for prototype development results, expected in mid-December, to become available. Those shareholders declined to provide additional funding at this stage because of uncertainty surrounding the research and development project.
NEXT had previously entered into a conditional convertible loan agreement with existing shareholders and its chief executive totaling NOK 13 million. The company has also implemented a cost-reduction program, cutting its annual operating cost run rate from approximately NOK 73 million at the start of the year to approximately NOK 41 million.
The full cash effect of those reductions is expected from December, and further cost cuts are planned for the coming weeks and months. The board said historical costs, continuing severance payments and a lack of revenue prevented NEXT from reducing expenditure or completing its divestments quickly enough to secure sustainable funding.
The board, which was complete and operational only from June 16, maintains that its July strategy was the right direction, but says the company’s capital resources were exhausted before it had enough time to execute the plan. It no longer sees a reasonable basis for assuming NEXT can continue as a going concern without new financing or a transaction providing sufficient liquidity.
The petition has not yet been filed. Until it is filed, the board and management will continue to evaluate any strategic and financial alternatives that may become available to the company.
Sources: Oslo Stock Exchange
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By the ID Tech Editorial Team
