KFx Medical Corporation Closes $10 million Series B Financing

San Diego, CA, August 9, 2007 — KFx Medical Corporation, a developer of minimally invasive percutaneous repair systems for rotator cuff repair, has closed a Series B financing. Investors in the $10M Series B round included lead investor Alloy Ventures and returning investors Charter Life Sciences L.P, Arboretum Ventures, Montreux Equity Partners, and MB Venture Partners.

"The participation of Alloy Ventures and its partner Craig Taylor, along with the return of our previous investors is very rewarding," stated KFx president and CEO Tate Scott. "This financing enables us to further our goals as we begin the distribution of the most secure rotator cuff repair available."

Joining the KFx Board of directors is Craig C. Taylor, Managing Partner of Alloy. He joins Scott and former Vivant Medical CEO Rod Young, Barr Dolan of Charter, Tim Petersen of Arboretum and Dr. John Savarese of Montreux. MB Venture Partners Stephen Snowdy is a board observer.

Over four million people seek medical advice for shoulder pain every year; torn rotator cuffs alone account for more than 500,000 surgeries annually and have traditionally required many weeks of rehabilitation. Patients typically experience less pain and regain full range of motion more quickly with traditional minimally invasive techniques however these require surgeons to have advanced videoscopic skills. In contrast, KFx provides a simple system for surgeons which ensures a more anatomical repair and yields a better clinical outcome for the patient.

"We have followed the progress of KFx in development and in the clinic and are pleased to assist in expanding the use of this advanced system," Taylor stated.

About KFx Medical Corporation
Headquartered in Carlsbad, Calif., KFx Medical Corporation was founded in 2003 to develop clinically relevant solutions to rotator cuff repair. The company is privately held.

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Contact:

Tate Scott President & CEO KFx Medical Corporation 5845 Avenida Encinas, Ste 128 Carlsbad, CA 92008 760.444.8820 Tate.Scott@kfxmed.com