TUSTIN — Ron Luther's prized gift from close friends at his 60th birthday bash in April was a customized Monopoly game, dubbed Ronopoly.
Each space marked a major event in Luther's life--his discharge from the Marines, his daughter's birth--and in his company--his first patent, his founding of Luther Medical Products Inc. All the spaces are filled, but Luther said his story hasn't ended.
"We're going to have to get a new game," Luther said. "I'm not over yet."
Luther said his company, which holds more than two dozen patents for special needles and catheters, is once again on the verge of taking off.
In March, the company struck a deal with Pharmacia Deltec, a St. Paul, Minn., firm that will market a Luther catheter line worldwide. Then the company reached a settlement in a product-infringement suit against Gesco International, a Texas firm that will quit selling a Luther-pioneered needle in July.
"There is no reason we shouldn't be profitable from now on," Luther said in a subtle Southern accent left over from his Missouri upbringing. "We have the markets, the partners and the resources. They're all there now. We've literally run out of excuses."
Excuses were needed previously.
For Ronald B. Luther, a former Marine pilot, has sent his company flying high before. Each announcement of a major deal, of more financing, has raised the hopes of executives and investors who later saw those dreams dashed.
In its 12 years as a public company, Luther Medical has had just one profitable year, 1990, when it earned a modest $16,000. More recently, it hit one of its low points, posting a loss of $766,360 for the fiscal nine months ended March 31. It attributed the loss to an inventory write-down and legal fees associated with the Gesco settlement.
But just as Luther refused to die when his plane plunged off the side of an aircraft carrier into the sea, he has refused to let his company go under.
"Ron Luther is a survivor," said Robert Van Roijen, an original investor in Luther Medical and partner in Secor Investments, a Washington-based venture capital firm. "Somehow, he always came up with the money."
While many entrepreneurs would simply file for bankruptcy protection, he said, Luther has continued to seek more capital and has used his own money to keep the company going.
"They've had so many false starts, and it's taken so long," said Larry Butler, senior vice president of Cruttenden & Co., an Irvine investment banking firm.
"He's been in the trenches for 10 years, and now it is falling on deaf ears," he said. "But they are at the point where the time has finally come. The local community really doesn't understand what it means. We're going to have a real company here."
Luther started his company in 1979 and took it public the next year, raising $1.9 million by selling 19 million shares for 10 cents each. Luther, who has always been the single-largest shareholder, ended up with 20% of the stock.
Since then, however, Luther has relied mainly on his ability to persuade private investors to buy new stock in private placements to keep his company flush with cash. Luther Medical has raised about $4.4 million through nine private placements over the years, reducing Luther's own stake to 11.8%.
Among those investments:
* In 1983, the company raised $200,000 by selling 500,000 new shares to Med-Tech Ventures Inc., a division of Warner-Lambert Co. in New Jersey.
* In 1984, Med-Tech increased its stake by paying $6,250 to buy 62,500 more new shares. Med-Tech eventually divested itself and got out of the medical-products business.
* In 1985, the company raised $400,000 by selling to Secor Investments 216,500 shares of convertible debentures--essentially loans that can be converted later to stock.
* In 1986, Canadian investor Fred Davies exercised an option to buy new shares over two years, eventually putting more than $1 million into Luther Medical's coffers. He eventually sold most or all of his holdings.
* In 1991, the company raised $400,000 by selling 113,116 new shares to Belcor Inc., an Irvine investment firm.
* Also in 1991, the company raised $500,000 in a private placement to Gandalf Partners, an investment firm in the Netherlands. The company has 200,000 shares, plus warrants to buy 100,000 more new shares.
Cruttenden itself gained a small stake in Luther Medical's success. It handled the private placements to Belcor and Gandalf last year and ended up with 36,887 shares of stock to sell to its brokerage clients.
The latter investments, coupled with a reverse stock split last year that provided one share for every seven shares outstanding, sent the company's price from about $3 a share to nearly $10 a share in March. It has dropped since and closed Friday at $6.625 a share.