BTI searches for cash infusion

Biomagnetic Technologies is soliciting additional equity capital to help the company stave off a looming cash shortage that could hurt the company's ability to continue operating beyond the end of February. The San Diego-based magnetic source imaging developer reported that cash is running out even as the company reported improved financial results for fiscal 1997 (end-September).

BTI announced on Jan. 15 that its cash resources would be exhausted by the end of next month. To shore up its cash position, BTI is seeking equity investment from international investors, and has already received $2.8 million from the sale of 5.5 million shares of newly issued stock. Of that investment, some $2 million was used in a debt-for-equity swap with BTI shareholder Dassesta International of Switzerland.

Ironically, BTI reported sharply improved financial results for 1997 as the company recognized revenue from long-delayed shipments of its Magnes 2500 Whole Head system. BTI reported revenues of $10.6 million, compared with $733,000 in 1996. The company's net loss for 1997 shrank to $5.2 million, compared with $15.6 million the year before.

Despite the cash shortage, BTI chairman Enrique Maso said the company made progress last year, finishing the Whole Head system and improving the clinical and economic rationale for magnetic source imaging. Maso said he is confident that BTI will be able to raise the funds needed to continue operating.