Advanced Medical Technology Corporation

491 Words2 Pages
Advanced Medical Technology Corporation (AMTC) was a manufacturing company and also develops and sold scientific medical instruments, needles and catheters that provide an alternative procedure to traditional surgical procedures and provides analysis and treatment with less risk and trauma at a lower cost. AMTC had been experiencing a rapid growth as they have a big allocation for their research and development that resulted in sales growth of more than 30% per year. Their operating manager, Mr. Haskins is very aggressive on expanding and in entering new markets that puts the company in a huge risk in terms of losing their competitive position and internal morale in case of a failure. In 1983, Biological Labs entered into an agreement with AMTC by paying AMTC $7 million in exchange for 5% of the outstanding shares and an additional 13% of the outstanding shares over a 5-year period for $12 million. After the payment is done, Biological Labs will have the right to merge with AMTC. In 1986, Mr. Haskins was requesting a loan for $8 million to the Western National Bank as he was dissatisfied with Sunnyvale Bank’s current loan arrangements and he feels that Sunnyvale Bank did not made any effort to review the company and they have been arbitrary in selecting the receivables that would become as collateral. AMTC needed the loan in order to fund for their expansion and the amount they received from Biological Labs would be insufficient. Mr. Winter, the vice president and loan officer of Western National Bank is unfamiliar with AMTC’s products but he had handled accounts of other companies on the same industry. Mr. Haskins presented all their financial statements and is like an open book for Mr. Winter to review. Based on the Aging accounts receivable report, AMTC have an outstanding receivables of $5.996 million and half of them were uncollected from 31-90+ days.

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