MINNEAPOLIS, May 20 /PRNewswire/ -- Oxboro Medical International, Inc. (Nasdaq: OMED) announced today that net sales for its second fiscal quarter ended March 31, 1999, were $1,387,916, an increase of 13% as compared to the second quarter of the prior fiscal year. However, due primarily to an inventory adjustment of ($900,553), the Company incurred a net loss of ($1,013,508) for its second fiscal quarter of 1999, as compared to a net loss of ($109,616) in the second quarter of fiscal 1998. Medical sales increased by approximately 4% to $1,198,553. Outdoors sales increased by 160% to $189,363. Because of the net loss of ($1,013,508) for the quarter, the Company's shareholders' equity was reduced to $1,776,277, which is below the minimum capital requirement of $2,000,000 for continued listing in the NASDAQ Small Cap Market. The Company, which expects to have approximately 60 days to restore its shareholders' equity to a level above $2,000,000, will consider various alternatives in order to increase its capital, including a rights offering to its shareholders. The Company, after an evaluation process, has determined that certain royalty agreements with former officers are invalid and may seek, through litigation or otherwise, to terminate such agreements. The Company has received a notice from Larry A. Rasmusson, the Company's former CEO, claiming that it is in default under one of such agreements. If such agreements and the notice of default from Mr. Rasmusson are eventually found to be valid, the Company may lose the right to manufacture and distribute certain products, which could have a material adverse effect upon its business and financial performance. Oxboro Medical International, Inc. develops, assembles, and markets medical and surgical devices and, through its wholly-owned subsidiary, Oxboro Outdoors, Inc., develops, assembles, and markets outdoor recreational products. Oxboro Medical International, Inc. Results for Quarters ended March 31, 1999 and 1998 2nd Quarter Ended 3/31 FY 1999 FY 1998 Percentage Change Net Sales $1,387,916 $1,226,800 13% Net earnings (loss) (1,013,508) (109,616) (825%) Basic and diluted earnings (loss) per share $(.47) $(.04) (1,075%) Forward-looking Statements The Company may from time to time make written or oral "forward-looking statements", whether in its news releases, its filings with the SEC or in its reports to stockholders, or elsewhere. "Forward-looking statements" are statements such as those contained in projections, plans, objectives, estimates, statements of future economic performance, and assumptions related to any of the foregoing, and may be identified by the use of forward-looking terminology, such as "may, "expect," "anticipate," "estimate, "goal," "continue," or other comparable terminology. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties relating to the Company's future performance that may cause the actual results, performance or achievements of the Company, or industry results, to differ materially from those expressed or implied in any such "forward-looking statements". Various factors and risks (not all of which are identifiable at this time) could cause the Company's results, performance or achievements to differ materially from that contained in the Company's forward-looking statements, and investors are cautioned that any forward-looking statement contained herein or elsewhere is qualified by and subject to the warnings and cautionary statements contained above and in its filings with the SEC. The Company does not undertake and assumes no obligation to update any forward-looking statement that may be made from time to time by or on behalf of the Company. For Further Information, see Form 10Q-SB, Quarterly Report, http://www.sec.gov  