Mail Stop 6010
June 1, 2005
Michael D. Dale
President and Chief Executive Officer
ATS Medical, Inc.
3905 Annapolis Lane, Suite 105
Minneapolis, Minnesota 55447
Re: ATS Medical, Inc.
Amendment No. 1 to Registration Statement on Form S-3
Filed May 9, 2006
File No. 333-129521
Dear Mr. Dale:
We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your filings in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. We note your response to prior comment 1. Please note that all
outstanding comments, including those in our May 12, 2006 letter
must
be resolved before we may accelerate the effective date of your
registration statement.
2. It is unclear how your response to prior comment 2 addresses
the
concern that the title of the securities for which your offering
is
facilitating a public market alerts investors to your ability to
redeem the securities. For example, how would your revision to
the
prospectus alert secondary market purchasers in a manner
comparable
to a more complete title to the securities? Therefore, we reissue
prior comment 2.
Fee Table
3. We note your response to the fourth bullet point of our prior
comment 4. Based on your response to that comment, and the terms
and
provisions of the indenture and the notes, it appears that there
are
no intervening preconditions to the implementation of the
automatic
conversion and the decision to acquire the shares in the automatic
conversion is made when the notes are purchased. If so, the
offering
of the shares that could be issued in the event that the automatic
conversion is implemented commences with the offering of the notes
and you should revise your registration statement to include the
offer of all shares underlying the notes as part of your offer of
the
notes themselves.
Risk Factors, page 8
4. We note your disclosure in response to prior comment 22.
Please
add a separate risk factor to highlight the risk to investors
created
by the uncertain tax effects of the securities.
Your warrants may be subject to resale limitations imposed by the
securities laws of some states, page 17
5. As requested by our prior comment 26, please identify the
states
in which sales of the warrants will not be permitted.
If we do not receive shareholder approval, page 18
6. We note your response to comment 12; however, it is
inappropriate
to register an offering of securities to the public when you do
not
have the legal authority to issue the securities.
Conversion Rate Adjustments, page 21
7. We note your response to prior comment 15. Please include the
substantive portions of your response in your prospectus.
8. We have reviewed your response to our prior comment 16 and are
unable to concur with your analysis that the reduction in the
conversion price of the notes or of the exercise price of the
warrants would not constitute a tender offer under the facts and
circumstances you have described. We will not have further
comment
on this issue at this time, however, if you revise your current
disclosure to also indicate that you will conduct any such
reductions
in the conversion price of the notes or the exercise price of the
warrants in compliance with all applicable federal securities
laws.
9. We note the revisions you have made in response to our prior
comment 18. Your disclosure addressing the mechanics of the
adjustments you may make in the conversion rate does not clarify
the
business purpose and effect of those adjustments. As such, we
reissue the prior comment.
Notes, page 34
10. We note your response to prior comment 22 and the related
revisions. However, from your disclosure on page 35 that "you
intend
to take the position," counsel`s opinion regarding the tax
treatment
is unclear. Please revise.
Selling Securityholders, page 40
11. We note your response to our prior comment number 25. With
respect to each of the selling stockholders that is an affiliate
of a
broker-dealer, please revise your prospectus to state, if true,
that
such seller purchased the securities in the ordinary course of
business, and at the time of the purchase of the securities to be
resold, the seller had no agreements or understandings, directly
or
indirectly, with any person to distribute the securities.
Exhibits 5
12. We note your response to prior comment 29. We do not object
to
the statement in the exhibit regarding capacity. However, as to
the
other assumptions, it remains unclear how you have satisfied your
obligation under Regulation S-K Item 601(b)(5) to provide an
opinion
on which investors can rely to determine whether the securities
are
binding obligations if your exhibit excludes factors that affect
whether the obligations are binding.
13. Please expand your response to prior comment 30 to:
* identify with specificity each clause to which the exclusion
applies,
* tell us why provisions in the registration rights agreement are
relevant to the opinion required by Regulation S-K item 601(b)(5),
and
* explain why clause (ii) is necessary given the exclusions in
clause
(iii).
Also, please tell us about the limitations on rights of
acceleration
mentioned in clause (iii) and where you have disclosed those
limitations in your prospectus.
* * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Please contact Tim Buchmiller at (202) 551-3635 or me at
(202)
551-3617 with any questions regarding our comments.
Sincerely,
Russell Mancuso
Branch Chief
cc: Timothy S. Hearn, Esq. (via fax)
Michael D. Dale
ATS Medical, Inc.
June 1, 2006
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