Emerging Businesses Case Studies
Medical Technology - Case Study
Key points:
- Helped raise $300K in equity in 45 days
- Helped restructure 90% of its trade debt with vendors in 60 days
Remergenz's customer, a medical technology company, had been in business for a little over one year. The company had a license for a unique patent-pending technology from a major Minnesota institution that had the promise of generating significant revenues and profits in the future. The company was struggling to raise money and continue its development. The company was also recently notified by several of its vendors that they were unwilling to continue providing work without being paid. The business suffered for the past six months under its current leader and was struggling to achieve any meaningful investment milestones.
The existing management of the company tried for six months to improve their situation with minimal success. At this time, the Board of Directors turned to Remergenz, Inc. for help evaluating the situation and taking corrective action. The first action was to develop a workout plan which also necessitated replacing the CEO. The next step was to deal with the past debts of the company (which had increased recently to over $280K) to pay as much of them off over time as was possible without crippling the company and making it nearly impossible to raise additional funds.
Remergemz worked with the existing management team as a small team to assess the company’s situation. During the next few weeks, the Remergenz team worked with the company's leaders to put a plan in place to stabilize the company, raise additional equity from existing investors, restructure its debts with current vendors, and help hire a new CEO. During this turbulent time, the company reached an investment milestone with its first pilot project, and quickly generated interest from another four-five companies. The company continued its progress and after 45 days a new CEO was hired. Today, the company is back on track achieving its investment milestones, raising money, completing its developments and securing additional pilot orders. The company now believes that it has pending pilot orders of nearly $250K in a quarter which is a significant milestone for such a young firm.
After a total of two months ending in the third quarter of 2008, Remergenz was able to help stabilize the situation in the company thus securing the company’s future. The company went on to close additional pilot sales with the potential of orders in the hundreds, and continue its developments thus increasing the value of the company several times.
Overall, Remergenz helped the company make it through some tough times where many companies go out of business. These financial results provided the company with a ROI (Return on Investment) for retaining Remergenz in excess of the 10x target set by Remergenz at the onset of the effort.
Disclaimer: Not all companies will achieve this level of turnaround and in this short period of time.