Most of N-trig's 190 workers will be integrated into Microsoft Israel and will be part of a new research and development center, Calcalist said, without citing sources. Officials at N-trig and Microsoft in Israel could not be reached for comment.
"It provides another natural way to interact with the computer," said Bill Veghte, senior vice president for Microsoft's Windows business in a recent interview with the Wall Street Journal.
"The mouse, I think, is gone," Amichai Ben-David, CEO of N-trig said in the same interview. "I don't see a reason to have one."
N-Trig was founded in 1999 and has generally struggled since, hitting hard times after a failed IPO. In 2014, the company gave up on the IPO attempted and raised $4.4 millio. N-trig was valued at $75 million when it raised money privately last February.
N-trig had revenue of $36.7 million in 2013, up 38 percent from 2012. Revenue totaled $20.6 million in the first half of 2014, when it sold 1.3 million digital pens, more than three times the amount it sold in the same period of 2013.
Microsoft, which owns 6.1 percent of the company, signed a deal last year to integrate N-trig' s pen in its Surface Pro 3 tablets. Other investors in the company include Evergreen Venture Partners, Canaan Partners and Tamares.
Customers for N-trig's technology include Sony (6758.T), Fujitsu (6702.T), Hewlett-Packard (HPQ.N) and Lenovo (0992.HK) for use in smartphones, tablets and ultrabooks.
Reuters contributed to this report