MINNEAPOLIS, Dec. 22 ATS Medical, Inc.(Nasdaq: ATSI), a manufacturer and marketer of state-of-the-art cardiacsurgery products and services, today announced that it has closed a $20million equity financing with Essex Woodlands Health Ventures. In connectionwith the financing, ATS Medical issued and sold to Essex Woodlands 8,510,639shares of its common stock at a purchase price of $2.35 per share, andwarrants to purchase 2,533,192 shares of common stock at an exercise price of$2.475 per share during the first year after the closing, $2.85 per shareduring the second year, and $3.10 thereafter.
"With ATS Medical's technological innovation, strong product portfolio andexperienced management team, the company is positioned to be a leader in thecardiac surgery market. We are excited about the opportunity to invest in ATSMedical and share in its success," said Martin Sutter, Co-Founder and ManagingDirector at Essex Woodlands, who has joined ATS Medical's Board of Directors.Essex Woodlands, a premier venture capital firm which invests exclusively inhealthcare, has offices in London, New York Palo Alto and Houston.
"With this financing, we have significantly strengthened our balance sheetand added one of the most respected healthcare investors in the United Statesto our shareholder base," said Michael Dale, President and Chief ExecutiveOfficer of ATS Medical. "In addition, this financing will allow the company tosettle a longstanding dispute and related litigation on terms we believe servethe best interest of shareholders. We are pleased to be eliminating theuncertainty and distraction of ongoing litigation."
ATS Medical announced today the settlement of its lawsuit with Carbomedicswhich began in 2007 and is related to its supply agreement with Carbomedicsfor certain mechanical heart valve components. Carbomedics' original claimsagainst the company totaled more than $22 million. As part of the Carbomedicssettlement, ATS Medical will pay $3.0 million to Carbomedics on December 29,2008, and an additional $4.5 million on April 30, 2009. Under the terms of thesettlement, ATS Medical maintains all rights to manufacture, market and sellthe ATS Open Pivot(R) mechanical heart valve. Satisfaction of the settlementterms will conclude all related matters with Carbomedics and preclude anyfuture litigation on the matter in question.
Fourth Quarter Outlook
Excluding the expenses related to settlement of this litigation, ATSMedical believes that it will generate adjusted operating profit for thefourth quarter consistent with its prior guidance for GAAP operating profit.
About ATS Medical
ATS Medical, Inc. provides innovative products and services focused oncardiac surgery. The Company, global in scope, is headquartered inMinneapolis, Minnesota. More than 160,000 ATS Open Pivot(R) Heart Valves,which utilize a unique pivot design resulting in exceptional performance andlow risk profile, have been implanted in patients worldwide. The ATS 3f(R)brand encompasses multiple tissue heart valve product offerings at varyingsteps from market introductions to clinical trials to development projectsthat incorporate less invasive valve replacement technology. ATS Medical'sfocus on serving the cardiac surgery community is further strengthened byofferings that include ATS Simulus(R) annuloplasty products for heart valverepair and ATS CryoMaze(TM) surgical ablation products. The ATS Medical website is http://www.atsmedical.com.
This Press Release contains forward-looking statements that may includestatements regarding intent, belief or current expectations of the Company andits management. Actual results could differ materially from those projected inthe forward-looking statements as a result of a number of important factors,including the results of clinical trials, the timing of regulatory approvals,the integration of 3f Therapeutics and the surgical cryoablation business ofCryoCath Technologies, Inc., regulatory actions, competition, pricingpressures, supplier actions and management of growth. For a discussion ofthese and other risks and uncertainties that could affect the Company'sactivities and results, please refer to the Company's filings with theSecurities and Exchange Commission, including its Form 10-K for the year endedDecember 31, 2007 and its most recent quarterly report on Form 10-Q.
SOURCE ATS Medical, Inc.