Inlet Medical, Inc. Completes $1.5 Million Private Placement

EDEN PRAIRIE, Minn., Nov. 21 /PRNewswire/ -- Inlet Medical Inc., a privately held medical device company based in Eden Prairie, Minn., has closed on $1.5 million of Series E Participating Preferred stock. The round was lead by Quatris Fund, a Minneapolis venture capital fund focused on early-stage companies in the Upper Midwest and Minnesota. Most of the investors in this transaction had invested previously in Inlet Medical.

Inlet Medical specializes in developing and marketing laparoscopic surgical instruments to gynecologists who perform pelvic reconstructive surgery in women. As many as 5 million women in the United States may be able to benefit from the procedures offered through the company's product offerings. Inlet Medical believes its potential U.S. market is greater than $5 billion.

"We are pleased with the progress we have made at Inlet Medical. This round of financing gives us the means to get to profitability," said Lee Jones, Inlet Medical president and chief executive officer. "For the first quarter ended September 30, 2002, we generated revenue of $618,000, an increase of 105 percent over the same period last year. We plan to use the proceeds from this private placement to launch two products this quarter, to expand our sales and marketing organization, and for working capital."

Jones noted that revenue for the year ended June 30, 2002, was $1.9 million, a 58 percent increase over $1.2 million in fiscal 2001. Since the previous financing round in November 2001, Inlet Medical has increased its sales and marketing organization by hiring marketing staff members and four direct sales representatives. In addition, the company has implemented an in-house telephone sales program that expands its geographic sales reach."Inlet Medical is addressing a large unmet need for minimally invasive surgical correction of common painful pelvic conditions in women," said Erwin Kelen, partner in the Quatris Fund. "The company has the innovative products and experienced management team to make the most of the opportunities in this market."

Inlet Medical's primary gynecology product is the Metra PS® laparoscopic instrument set, which is used for the UPLIFT procedure, a minimally invasive surgical procedure designed to help women with a retroverted (tipped) uterus, a condition in which the uterus is tilted toward a woman's back, instead of forward toward her belly. A retroverted uterus can cause pain during intercourse or during menstruation.

The ELEVEST® procedure kit is used to treat a prolapsed uterus by shortening and strengthening the round and uterosacral ligaments. Uterine prolapse occurs when the uterus drops from its normal position toward or into the vagina and is commonly caused by childbirth or the aging process. The normal treatment is to have a hysterectomy. The ELEVEST procedure gives women who wish to keep their uterus another option. An estimated 3 million women in the United States suffer from uterine prolapse. Inlet Medical recently added the uterine prolapse application to its patient Web site and has received a strong response from women seeking an alternative to either living with the problem or to having a hysterectomy. The new AVESTA™ surgical kit is designed to shorten and strengthen the uterosacral ligaments to support the vagina in post-hysterectomy patients.

The above procedures are minimally invasive, that is, performed laparoscopically through small openings in the abdomen; maintain the normal alignment of pelvic organs; and should not affect sexual function. Each of these products has marketing clearance from the U.S. Food and Drug Administration and is reimbursed under existing procedure codes for physician and hospital fees. The company has also launched marketing clinical studies at five medical centers across the nation to confirm the efficiency of the ELEVEST and AVESTA products.

About Inlet Medical Inc.