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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 13, 2006
ATS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-18602
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MINNESOTA 41-1595629
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
3905 ANNAPOLIS LANE N.
MINNEAPOLIS, MINNESOTA 55447
(Address of principal executive offices, including zip code)
(763) 553-7736
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02 RESULTS OF OPERATION AND FINANCIAL CONDITION.
On June 19, 2006, ATS Medical, Inc. (the "Company") issued a press release
reporting that the Company intends to restate its audited financial statements
for the year ended December 31, 2005 and its unaudited financial statements for
the quarter ended March 31, 2006 to reflect separate accounting for embedded
derivatives within its 6% Convertible Senior Notes due 2025 (the "Notes"). The
full text of the press release is furnished as Exhibit 99 hereto and is
incorporated herein by reference.
As previously reported in a Form 8-K filed on June 9, 2006, John R. Judd,
the Company's Chief Financial Officer, has accepted a position with another
company and will be leaving the Company later this month. In the press release
issued on June 15, 2006, the Company noted that Mr. Judd's resignation was not
related to the restatement of these financial statements.
The information in Item 2.02 of this Current Report on Form 8-K, including
the exhibit hereto, is not deemed "filed" for purposes of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be deemed to be incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as expressly set forth by specific reference in such
filing.
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) In October 2005, the Company sold $22.4 million aggregate principal
amount of the Notes, which are convertible into shares of the Company's common
stock at any time at a conversion price of $4.20 per share. If fully converted,
the Notes would convert into 5,333,334 shares of the Company's common stock. The
Company does not currently have enough shares of unissued, authorized common
stock to settle all of the Notes upon conversion. On June 13, 2006, the
Company's management determined that, because of this lack of sufficient
authorized shares, this conversion right must be bifurcated and separately
accounted for under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities, and should be treated as a derivative that
must be marked-to-market through earnings. Therefore, the Company concluded that
its previously filed financial statements for the year ended December 31, 2005
and the quarter ended March 31, 2006 should no longer be relied upon and should
be restated. While the exact amounts involved have not been finalized, the
Company's management believes that net loss for the year ended December 31, 2005
and the quarter ended March 31, 2006 will be reduced. Management's conclusion
that the financial statements should no longer be relied upon was discussed with
Ernst & Young LLP, the Company's independent registered public accounting firm,
and the Company's Audit Committee at a meeting held on June 13, 2006. At that
meeting, the Audit Committee accepted and agreed with management's determination
regarding the need for restatement of the financial statements for the year
ended December 31, 2005 and the quarter ended March 31, 2006.
The Company will file with the Securities and Exchange Commission an
amended Form 10-K for the fiscal year ended December 31, 2005 and an amended
Form 10-Q for the quarter ended March 31, 2006, which will include restated
financial statements. The Company intends to file such amended reports as soon
as practicable.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
99.1 Press Release, dated June 19, 2006, of ATS Medical, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATS MEDICAL, INC.
By: /s/ Michael D. Dale
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Michael D. Dale
Chief Executive Officer
Date: June 19, 2006
EXHIBIT INDEX
99.1 Press Release, dated June 19, 2006, of ATS Medical, Inc.