N-trig, which develops, manufactures, markets, and distributes chips for touch screen interfaces and digital pens, is putting an end to the prolonged period without any equity offerings on the Tel Aviv Stock Exchange (TASE). The company today submitted a draft prospectus for an IPO, although the expected volume and company value for the offering have not yet been published.

Estimates are that the company is likely to raise $20 million. Following its most recent financing round in February 2014, N-trig was valued at $75 million.

The company lost $8.56 million in 2013, and its net loss in the first half of 2014 was $5.43 million. In an opinion attached to the draft prospectus, the company auditors note that the company had a negative cash flow from current activities of $4.42 million in the first half of 2014, and that its capital deficit was $117.5 million as of the end of June. In addition, the company does not meet the criteria for raising capital from a banking corporation. "These factors… arouse significant doubt about the company's existence as a going concern," the auditors write.

The company's field of business, digital pens and the chips used in them, has been growing rapidly in recent years, as part of a global trend towards laptops and tablets with touch screens, and the fact that leading device manufacturers regard the digital pen as a means of differentiation and a source of additional profit.

This year, N-trig signed an agreement with Microsoft, under which the US software giant announced it would install N-trig's digital pen as part of the launching of its Surface Pro 3 product. This agreement has great strategic importance for N-trig.

N-trig's technology is based on a single sensor that facilitates both touch identification and pen identification. The mobile devices industry's need for small and lightweight products is creating a growing demand for digital pen products having only one sensor. N-trig's digital pen achieves superior performance, saves on costs and energy consumption, and provides a high-quality user experience.

Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2014

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