824068--3/14/2008--ATS_MEDICAL

related topics

{product, candidate, development}

{product, liability, claim}

{financial, litigation, operation}

{property, intellectual, protect}

{cost, operation, labor}

{acquisition, growth, future}

{operation, international, foreign}

{product, market, service}

{competitive, industry, competition}

{control, financial, internal}

{stock, price, operating}

In 2002, we began using a combination of direct sales persons and independent manufacturing representatives to sell our products in the United States. If our U.S. sales strategy is not successful, we will not be able to continue our operations as planned. We currently depend on the marketing and sales efforts of international independent distributors. We are dependent upon sales outside the United States, which are subject to a number of risks including a drop in sales due to currency fluctuations. We have a history of net losses. If we do not have net income in the future, we may be unable to continue our operations. Purchase accounting treatment of the merger with 3F and acquisition of the surgical cryoablation assets of CryoCath could result in net losses for the foreseeable future. If we do not receive shareholder approval to issue an equity warrant to Alta Partners VIII, L.P. ( Alta ) in exchange for their cash warrant, our cash balances may be insufficient to settle the cash liability upon exercise, we may need to raise additional equity or incur debt to settle this liability and our earnings may be adversely affected. We have a history of regularly raising funds and incurring debt to fund net losses. If our current cash and investment balances are inadequate to carry us to profitability, we may need to raise equity or incur debt in the future. The market for prosthetic heart valves is highly competitive, and a number of our competitors are larger and have more financial resources. If we do not compete effectively, our business will be harmed. Our future results will be harmed if the use of mechanical heart valves declines or if our tissue heart valves cannot be successfully marketed. Our business may be adversely affected if we are unable to maintain our strategic distribution arrangements. We ultimately may experience a delay in introducing, or may not successfully complete development of, products that are currently under development, resulting in harm to our business. New products or technologies developed by others could render our product obsolete. The acquisition of the surgical cryoablation assets of CryoCath may result in a loss of customers and suppliers. We license patented technology and other proprietary rights from CarboMedics. If these agreements are breached or terminated, our right to manufacture the ATS mechanical heart valve could be terminated. A delay or interruption in our manufacturing of pyrolytic carbon components could delay product delivery or force us to cease operations. Because we have limited manufacturing experience with some of our products, we may not realize the expected cost savings related to manufacturing our own products. In addition, we could experience production delays and significant additional costs. We are reliant upon CryoCath for the supply of products of our surgical cryoablation business. Our business could be seriously harmed if third-party payers do not reimburse the costs for our products. We may face product liability claims, which could result in losses in excess of our insurance coverage and which could negatively affect our ability to attract and retain customers. Our business would be adversely affected if we are not able to protect our intellectual property rights. We may be sued by third parties claiming that our products infringe on their intellectual property rights. Any such suits could result in significant litigation or licensing expenses or we might be prevented from selling our product. We may encounter litigation that could have a material impact on our business. We are subject to extensive governmental regulation, which is costly, time consuming and can subject us to unanticipated delays or could ultimately preclude us from marketing and selling our products. The price of our common stock has been volatile, which may result in losses to investors.

Full 10-K form ▸

824068--3/14/2008--ATS_MEDICAL_INC