Health tech company Exsurgo created a medical device, called Axon, to monitor brain signals. Photo / Supplied
Three promising New Zealand medical technology companies are in liquidation after unsuccessful attempts to raise further capital.
Auckland-based Upstream Medical Technologies and Christchurch-based Tiro Medical were placed in liquidation last week, following another firm – Exsurgo – entering receivership and liquidation in August.
All three were involved in developing tools for diagnostic and treatment decision-making and were looking to secure funding to advance production.
The companies had received funding grants from Callaghan Innovation in the initial stages before raising money from angel investors, venture capital firms and universities.
Upstream Medical had previously raised $2 million in 2023, including from deep tech investor Pacific Channel and the Booster Innovation Fund. The company, which was spun out of the University of Otago in 2015, had developed protein biomarkers used for heart disease diagnostics.
On August 28, shareholders resolved to appoint Raymond Cox and Gareth Hoole of Ecovis KGA as liquidators. In a report released on Friday, the liquidators said the company’s directors, David Christensen and Colin Dawson, had explained that the company was unable to raise further capital.
“The directors have advised the liquidators that the technology developed by the company required further capital to be introduced to take it to a fully commercial stage, but that there was not an appetite on the part of most of the shareholders to make that additional capital commitment.
Their first report identified assets of $111,309 and liabilities of $2.75m, including $1.4m of convertible notes yet to be converted. Unsecured creditors owed approximately $1.33m included Callaghan and Otago Innovation.
Upstream has 23 shareholders, including Pacific Channel with 40.14%, Otago Innovation Fund with 18.98%, and Colin and Anne Dawson with 10.27%. Dawson, who is an adviser to Pacific Channel, did not respond to a request for comment.
Cox and Hoole said they will seek to sell the company’s intellectual property and are in discussion with interested parties.
Tiro Medical went into liquidation at the same time after a shareholder resolution. Dawson is also a director of Tiro, with the company’s co-founders James Chase of Christchurch and Richard Wien of New York.
Tiro developed technologies to enable more accurate diagnoses and treatments across a range of medical areas, with an initial focus on the breast screening market.
Like Upstream, it was unable to raise further capital. Cox and Hoole were subsequently appointed as liquidators.
“The company received feedback from several parties that the capitalisation table was such that the existing entity was not fundable. The directors had funded operations for many months, but that situation had become unsustainable,” the liquidators said.
Their first report identified unsecured creditors were owed approximately $1.05m – mainly comprised of debt to Callaghan and advances made by directors. Tiro had originally raised $450,000 from Callaghan Innovation in 2015.
Meanwhile, Auckland-based Exsurgo went into receivership on June 9, with liquidators also appointed in August.
Founded in 2015 by Richard Little and Faisal Almesfer, the company developed a wearable medical device called Axon that provided real-time feedback for pain management and to help train the brain towards healthier patterns.
Exsurgo reportedly spent $15m to build Axon and completed two funding rounds after receiving an initial $300,000 grant from Callaghan Innovation in its early stages.
Receivers Neale Jackson and Daniel Stoneman said Exsurgo had commenced commercialisation of its products but required ongoing funding, which it had been unable to secure.
They were appointed by Pinewood Investments, a UK-based entity and 3% shareholder of Exsurgo.
According to the first receiver’s report, the company has assets of $1.14m and liabilities of $5.48m.
Pinewood, the only secured creditor, is owed $4.6m, with the remaining claims due to 10 employees owed a combined $605,039, Inland Revenue ($136,872) and trade creditors ($125,219), the report noted.
Duncan Bridgeman is the managing editor of NZME Business News, which includes the Business Herald and BusinessDesk.