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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: FEBRUARY 20, 2007
(Date of earliest event reported)
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 (IRS Employer Identification No.)
of incorporation)
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 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective as of July 28, 2004, ATS Medical Sales, Inc. ("AMSI") and ATS Medical,
Inc. (the "Company") entered into a Loan and Security Agreement (the
"Agreement") with Silicon Valley Bank (the "Bank"), establishing a secured
revolving credit facility for $8.5 million. The credit facility under the
Agreement consisted of a $2.5 million three-year term and a two-year $6.0
million line of credit. The credit facility contained two financial covenants: a
liquidity ratio and a required minimum tangible net worth. The term loan carries
an interest rate of prime plus 1.0% with a minimum of 5.25%. The line of credit
carried an interest rate of prime plus 1.5% with a minimum rate of 5.75%.
On March 24, 2005, the Company entered into an amendment to the Agreement (the
"Amendment No. 1") with the Bank whereby amendments were made to the two
financial covenants of the Agreement, effective as of April 1, 2005. On March
29, 2006, the Company entered into another amendment to the Agreement
("Amendment No. 2") whereby the Bank agreed to waive the prohibition set forth
in Section 7.3 of the Agreement with respect to the Company's pending
acquisition of 3F Therapeutics, Inc., agreed to provide for advances of up to
$1,500,000 for the Company to use to finance or refinance eligible equipment,
agreed that the maximum aggregate advances under the Agreement could not exceed
$8,600,000, and agreed to change the tangible net worth requirements under the
Agreement to be at least $40,000,000. On August 15, 2006, the Company entered
into another amendment to the Agreement ("Amendment No. 3") whereby the Bank
agreed to extend the ending date by which the Company may purchase eligible
equipment pursuant to the new $1,500,000 advance amount from May 31, 2006 to
October 31, 2006, and agreed to extend the date by which the Company could
provide financial statements reflecting the impact of acquisition of 3F
Therapeutics, Inc. to the 30 days following the date of the closing of the
acquisition.
On February 20, 2007, the Company entered into another amendment to the
Agreement ("Amendment No. 4") with the Bank whereby the Company and the Bank
agreed to amend the Agreement in four respects. First, the committed revolving
line of credit under the Agreement was terminated and the Company satisfied its
outstanding advances and accrued interest on the revolving line of credit.
Second, section 2.1.7 of the Agreement, which addressed maximum aggregate
advances under the Agreement, was deleted in its entirety. Third, the unused
line fee provided for in Section 2.4(c) of the Agreement was eliminated with
respect to future fiscal quarters, and February 15, 2007 was established as the
end of the term of the committed revolving line for purposes of the unused line
fee. And fourth, amendments were made to the two financial covenants of the
Agreement, effective as of December 31, 2006. The Liquidity Ratio was decreased
to be equal to or greater than 1.60 to 1.00, and the tangible net worth
requirement was eliminated.
A copy of the Agreement was filed as Exhibit 10.1 to the Company's Form 10-Q for
the quarterly period ended September 30, 2004, a copy of Amendment No. 1 was
filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March
30, 2005, a copy of Amendment No. 2 was filed as Exhibit 10.1 to the Company's
Current Report on Form 8-K filed on March 30, 2006., and a copy of Amendment No.
3 was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
August 17, 2006. A copy of Amendment No. 4 is attached hereto as Exhibit 10.1
and is incorporated herein by reference. The description in this Current Report
on Form 8-K of Amendment No. 4 is qualified in its entirety by reference to the
attached copy of Amendment No. 4.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
10.1 Amendment Agreement, dated February 15, 2007, to the Credit Agreement
between Silicon Valley Bank and the Company, dated July 28, 2004.
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: February 23, 2007
EXHIBIT INDEX
10.1 Amendment Agreement, dated February 15, 2007, to the Credit Agreement
between Silicon Valley Bank and the Company, dated July 28, 2004.