Financings in Brief: U.S. Medical Products
This article was originally published in The Gray Sheet
Executive Summary
U.S. Medical Products: Austin, Texas-based manufacturer of total joint replacements and related instrumentation enters a funding agreement with Smith Management Company of New York City. Under the agreement, U.S. Medical will receive up to $750,000 in a convertible, secured loan and up to an additional $2.3 mil. in secured debt and equity financing. If the promissory notes are converted, Smith would own 80% of the fully diluted outstanding shares in the company. The funds, which augment $4 mil. in gross proceeds raised in an initial public offering that closed last May ("The Gray Sheet" March 7, 1994, p. 12), will "provide the additional capital to overcome" a cash shortage caused by "unanticipated delays in FDA approvals and delays by vendors in delivering products to the company." The delays affected the introduction of U.S. Medical's Consensus total knee system, cleared by FDA via 510(k) in September; the device is being unveiled at the American Academy of Orthopedic Surgeons' Feb. 16-20 annual meeting...