Birtcher Medical Systems

Previously announced negotiations for a private placement of $7 mil. from an institutional investor are in jeopardy. The financially troubled Irvine, California-based company announced Nov. 3 that its board had agreed to provide information about the company to an unnamed third party who had expressed interest in acquiring the firm. The third party suitor's identity and proposed terms remain undisclosed due to "the preliminary nature of the inquiry." Birtcher says that the institutional investor has informed the company that "it interprets Birtcher's actions as an election not to proceed with the proposed private placement," and will pursue legal means to recover fees and expenses stemming from the matter. Birtcher had made public its negotiations for the private placement, consisting of $7 mil. in convertible preferred stock, at the same time it announced its 1993 losses of $20.6 mil. ("The Gray Sheet" Sept. 26, p. 10). Birtcher says it "does not believe its actions violate the terms of its agreement with the institutional investor and has informed the investor that it wishes to continue negotiation with respect to the proposed private placement."