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 News Release - October 9, 2007

Spinal Restoration, Inc. Closes $16 Million Series B Financing

Sante Health Ventures and MB Venture Partners Join Prior Investors

AUSTIN, Texas--(HSMN NewsFeed)--Spinal Restoration, Inc., a privately held spine company based in Austin, announced today that it has closed a $16 million Series B round of equity financing. Sante Health Ventures and MB Venture Partners joined Series A lead and founding investors Austin Ventures and Path4 Ventures in the round. Spinal Restoration will utilize the funds to complete an IDE clinical trial of the Biostat(TM) Disc Augmentation System, a new minimally invasive, biologic treatment for discogenic low back pain.

"We continue to be very impressed with the local management team at Spinal Restoration as well as the groundbreaking technology being developed to help restore patients' lives," commented Joe Aragona, General Partner, Austin Ventures.

Spinal Restoration estimates that more than 1 million patients suffer from chronic discogenic low back pain each year; yet, there is no widely accepted treatment for discogenic pain outside of spinal fusion. "Spinal Restoration has captured a unique solution to an enormous unmet need within the spine health market which offers a very attractive investment opportunity," says Gary Stevenson, Managing Partner of MB Venture Partners.

Kevin Lalande, Managing Partner for Sante Health Ventures, and Mr. Stevenson will join the company's Board of Directors. Mr. Lalande adds, "Spinal Restoration has made significant progress toward initiating its IDE clinical trial. The founders of Sante Health Ventures have followed this company since inception and we are pleased to have the opportunity to become an investment partner."

Gary Sabins, President and CEO of Spinal Restoration, closes by saying, "The founders of Sante Health Ventures have deep healthcare investment experience and we are honored that they have chosen to lead this financing round. MB Venture Partners brings highly focused investment expertise in the musculoskeletal medical device and biotechnology areas making them an ideal investment partner at our current stage. The addition of these two very experienced healthcare investment firms to our highly regarded original investment partners is testament to the progress achieved by the company and the unique investment opportunity Spinal Restoration represents."

About Spinal Restoration

Spinal Restoration restores patients' lives by delivering new therapies that address unmet needs in spine health management. These therapies are minimally invasive, early interventions with clinically proven results. The company is working with a diverse, highly regarded group of clinical and scientific advisors to develop the Biostat(TM) Disc Augmentation System, a proprietary resorbable biologic and delivery system for the treatment of chronic disc pain. Visit www.spinalrestoration.com for more information.

About Sante Health Ventures

Sante Health Ventures is a new venture capital firm founded in 2006 by a group of partners with deep healthcare investment and operations experience. In addition to capital, the firm provides its portfolio executives with additional healthcare domain expertise, an extensive network of relationships and singular industry focus. Sante invests exclusively in early-stage medical technology, healthcare services and healthcare IT companies. Visit www.santeventures.com for more information.

About MB Venture Partners

MB Venture Partners is a Memphis, Tennessee venture capital firm that provides venture capital and strategic direction to life sciences companies. The firm invests in medical device and biotech companies at various stages of development and is especially interested in product solutions for musculoskeletal disease. The firm's portfolio of healthcare investments includes GTx (NASDAQ:GTXI ), BioMimetic Therapeutics (NASDAQ:BMTI ), AxioMed Spine Corporation, KFx Medical, Anulex Technologies, Cayenne Medical and Applied Spine Technologies. Visit www.mbventures.com for more information.

About Austin Ventures

Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. With $3 billion under management, AV is the most active venture capital firm in Texas, and one of the most established in the nation. With a focus on business services, information services, computer and communications hardware, and enterprise software, Austin Ventures invests at all stages of company development, from $100,000 "planned experiments" to $50+ million investments in management buyouts. Visit www.austinventures.com for more information.

About Path4 Ventures

Founded in 2004, Path4 Ventures LLC is a management-centric venture capital company based in Austin, Texas. The company identifies, creates and develops opportunities in the healthcare industry utilizing a "hands-on" management style by taking an active role in the technologies and opportunities in which it invests. Visit www.path4.com for more information.


Source: Spinal Restoration

Issuer of this News Release is solely responsible for its content.
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