18 13:30 Escalon(R) Medical Corporation Offers to Purchase Series A 6%
ESMC.O>
Escalon(R) Medical Corporation Offers to Purchase Series A 6% Convertible
Preferred Stock
WAYNE, Pa., Nov. 18 /PRNewswire/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced that it has agreed to terms with the holders of
its Series A 6% Convertible Preferred Stock for an option to simultaneously
force the holders to convert a portion of the Preferred Stock into
225,000 shares of the Company's Common Stock and to redeem the remaining
outstanding shares of its Preferred Stock for a price of $818,000 plus accrued
and unpaid dividends.
"The option to convert a portion of the preferred shares and redeem
the remaining preferred shares is an economically attractive use of the
Company's cash and will also help to eliminate the current overhang in Escalon
Medical's stock. With a string of five consecutive quarters of
profitability and considerable momentum in our research and development
efforts, we remain encouraged by the Company's continued progress," said
Richard J. DePiano, the Company's Chairman and Chief Executive Officer.
The holders of the Preferred Stock have agreed not to transfer the
Preferred Stock to any other third party other than the Company prior to the
expiration of this Option, which is January 30, 1999.
The exercise of the Option is conditioned upon shareholder approval
of the issuance of the 225,000 shares of Common Stock and the execution of
definitive documentation. The price of the Option was $100,000, which the
Company deposited in escrow upon the execution of the term sheet
setting forth the terms of the Option. Upon execution of definitive
documentation, the escrow money will be released to the holders of the
Preferred Stock in exchange for their placing all of the outstanding Preferred
Stock in escrow until the Company either exercises the Option or the Option
expires. In the event the Company exercises the Option, the escrow money will
be credited against the amounts owed to the holders for redemption of the
outstanding Preferred Stock.
Escalon Medical issued 1,350 shares of Series A 6% Convertible
Preferred Stock on December 31, 1997. At present 818 shares of the Series A
6% Convertible Preferred Stock remain outstanding.
Mr. DePiano concluded, "Over the coming months, we expect to file
INDs with the FDA to begin clinical trials for our two research and
development projects, povidone-iodine 2.5% solution, a broad spectrum
antimicrobial for the prevention of neonatal conjunctivitis, and Ocufit SR(R),
our ophthalmic drug delivery device. Strategic partnerships will continue to
be important component of our strategy. The progress at IntraLase, our
collaboration with the University of Michigan on ultrafast lasers for
refractive surgery, exemplifies this strategy. IntraLase has made
considerable progress in a short time, with clinical patient testing on
IntraLase's first ultrafast laser scheduled to begin in the next month. We
are also on track to complete the acquisition of the Vascular Access Business
Unit of CardioVascular Dynamics, which will serve to diversify our markets
while adding to Escalon's bottom line."
Founded in 1987, Escalon develops, markets and distributes ophthalmic
medical devices and pharmaceuticals and is developing its ophthalmic drug
delivery system. Escalon has headquarters in Wayne, Pa., and manufacturing
operations near Milwaukee, Wis.
Note: This press release contains statements that are forward-looking,
including statements about the Company's future profitability and stock price
and the effect of the Option on the Company. They are based on the Company's
current expectations and are subject to a number of uncertainties and risks,
and actual results may differ materially. The uncertainties and risks
include whether the Company is able to secure shareholder approval, whether
the Company is able to secure financing to be able to execute its option to
redeem the Preferred Stock, whether the Company and the holders of the
Preferred Stock can agree on definitive documentation regarding the option and
general economic conditions. Further information about these and other
relevant risks and uncertainties may be found in the Company's report on Form
10-K, and its other filings with the Securities and Exchange Commission, all
of which are available from the Commission as well as other sources.
SOURCE Escalon Medical Corporation
-0- 11/18/98
/NOTE TO EDITORS: To receive additional information on Escalon Medical
Corp., via fax, at no charge, dial 1-800-PRO-INFO and enter code ESMC/
/CONTACT: Richard J. DePiano, Chairman and CEO of Escalon Medical
Corporation, 610-688-6830; General Info., Alison Ziegler, or Analyst Info.,
Nicole Salas, both of the Financial Relations Board, 212-661-8030/
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5929 11/18/98 13:15 EST prnewswire.com
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