Six months ago the vital signs of local biometric technology firm Hoana Medical Inc. were not good. The company filed for bankruptcy, weighed down by a lack of cash and $7.3 million of debt. But now the firm has hitched itself to the automotive industry to pull off a financial turnaround.

Honolulu-based Hoana was established in 2001 as a spinoff of local research firm Oceanit and created what it called the LifeBed Patient Vigilance System, a bed mattress coverlet embedded with sensors that can measure and remotely transmit heart and respiratory rates of a patient.

The company said its product had been used by more than 100,000 acute-care hospital patients in facilities across the United States and was responsible for close to 4,000 interventions when hospital staff were alerted to patient problems.

But Hoana, which had raised $10 million to develop its hospital bed equipment, couldn’t keep up with expenses and filed Chapter 11 in December in hopes of reorganizing its finances after an effort to raise $30 million for continued development fell through.

At the time, Hoana realized it didn’t have the resources to get through federal Food and Drug Administration testing and regulatory approvals for a second-generation biometric hospital bed to remain competitive, so it looked at other potential uses for its technology more broadly tied to consumers.

“We have technology you can put on basically anything,” Edward Chen, Hoana’s president and chief operating officer, said in December when the company filed for bankruptcy. “We can start to monitor a person’s vital information through a piece of furniture now.”

In April the company sought U.S. Bankruptcy Court approval to assume an updated agreement with the U.S. subsidiary of the world’s sixth-largest automobile parts supplier, Faurecia, to adapt Hoana’s sensory technology for car seats.

The venture, if commercially successful, would earn Hoana a royalty of $1.40 for each seat.

Faurecia, based in France, also offered to provide Hoana with $500,000 in financing to help the company advance its work.

Jerrold Guben, Hoana’s bankruptcy attorney, said the proposal presents the best opportunity for the company to pay off creditors and emerge from bankruptcy, given that the sensory equipment could possibly be put into millions of cars.

“Last year Faurecia sold 11.2 million automotive seats,” Guben said, adding that the envisioned “seats of the future” will alert drivers to health issues, drowsiness and other things.

Mike McCrory, an attorney for Faurecia, told U.S. Bankruptcy Court Judge Robert Faris that his company believes in Hoana’s potential.

“We have great hopes for the outcome in the future for this relationship,” he said.

Faris approved the financing and royalty deal May 16.

The work with Faurecia, which will be carried out largely at a Faurecia facility in Michigan with support from Hoana, is not assured success and will take considerable time and money to realize.

The agreement gives the companies eight years to move from development work to commercial production, and will involve Faurecia spending considerable money on development “well beyond” what Hoana could afford. The agreement also allows Faurecia to convert its $500,000 investment into equity, an ownership stake, in Hoana.

“The costs of developing the wellness technology for automobile seats are far beyond the financial capacity of Hoana, and it is the (Faurecia agreement) which gives Hoana the opportunity to develop the wellness technology for automotive seats, without using Hoana’s funds,” Chen said in a court filing.

There was some concern from one Hoana creditor, CMT Investments, that Hoana might not be getting a fair value for sharing its technology with Faurecia, which in turn reduces prospects for CMT recovering its debt.

Guben criticized CMT’s position and suggested that CMT, which has had a contentious relationship with Hoana, was trying to scuttle the Faurecia deal without assisting in the effort to keep Hoana going.

Faris noted that Faurecia’s use of Hoana’s technology is limited to the automotive industry. Other potential applications, such as a contract Hoana has for making biometric sensing helicopter seats for the U.S. Department of Defense, remain in the hands of Hoana.