Cardo Medical Downsizes its Staff

Cardo Medical, Inc., an orthopedic medical device company based in Beverly Hills, Calif., plans a layoff of 15 of its 30 employees. In addition, the firm’s CEO, Andrew Brooks, M.D. and President and Chief Operating Officer, Michael Kvitnitsky, will forego their salaries for the foreseeable future.

The move was made to reduce its operating costs and preserve cash, while the company continues to seek alternative sources of capital or some other type of restructuring, officials said. Most recently, the Cardo’s execs have been looking for funding through a private placement, but were unsuccessful. The reduction in staff will result in a scaled-back level of operations and decreases in net sales going forward, according to the firm’s leadership.

“As previously disclosed in our public filings, the company has been exploring ways to raise additional capital during 2010 and unfortunately, to date, we have been unsuccessful,” Brooks said. “We deeply regret that we have had to terminate so many of our talented employees.”

Other alternative sources of capital the company is considering include selling some or all of the company’s assets, as well as looking for strategic alliances, Brooks noted.

“In the event we are unable to raise additional funds, we may have to terminate additional employees, further scale back or cease operations and seek other strategic or liquidity alternatives,” he said. “A special committee will be appointed by the board of directors to explore these alternatives.”

Cardo Medical was formed in February 2007 when it acquired the assets and operations of Accin Corporation, a product development company founded in 2005. Cardo Medical manufactures orthopedic implants used in knee, hip and spine surgeries. The company went public in 2008.