Davstar Industries Ltd.: The Costa Mesa designer...

Davstar Industries Ltd.: The Costa Mesa designer and manufacturer of medical products has issued $1 million in preferred stock to FoxMeyer Health Corp., a Texas company that entered a financing agreement with Davstar earlier this year.

FoxMeyer loaned Davstar $1 million in March, and agreed to invest an additional $4 million in Davstar convertible preferred stock. FoxMeyer’s remaining investment in preferred stock and the issuance of warrants to purchase 1.6 million shares of Davstar’s common stock at $2 per share are pending shareholder approval.

FoxMeyer also previously agreed to distribute Davstar’s urology products through its national network of Health Mart pharmacies. Davstar’s stock lost 19 cents a share Monday to close at $2.875 on the American Stock Exchange, while FoxMeyer was unchanged, closing at $19 a share on the New York Stock Exchange.