Luther Medical Warrants to Provide New Capital

Luther Medical Products Inc. said it has completed a private placement of warrants expected to bring $1 million in new capital to the tiny Santa Ana-based maker of catheters and needles over the next year.

The warrants were sold to a Canadian investor who did not want to be identified, said Ron Luther, the company’s founder and chairman.

Luther said the warrants convert into one share each of common stock at an exercise price of $1 a share. Luther Medical closed unchanged in over-the-counter trading Wednesday at a bid price of $1.25 a share.

The warrants expire incrementally over the next year, and if exercised, would give the investor a 12% stake in the company, making him its second-largest shareholder, Luther said.

Although the investor does not wish to be identified, once his stake exceeds 5% of the company’s outstanding stock, federal securities law will require that his name and intent be publicly disclosed.

Proceeds will be used for development and marketing of several products, including a new trauma catheter that Luther said is designed for easy, high-volume use under combat conditions.

Luther Medical had a net loss of $122,000 during the fiscal 1987 first quarter that ended Sept. 30, compared with a net loss of $111,000 for the same period a year earlier. Quarterly revenues increased 95% to $80,000 from $41,000 a year before.