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December
21, 2007
VIA
EDGAR
Securities
and Exchange Commission
Division
of Corporation Finance
100
F Street N.E.
Washington,
D.C. 20549
Attn:
Cecilia Blye, Esq.
Re: AngioDynamics,
Inc.
Form 10-K for the Fiscal Year Ended June 2, 2007
Filed
August 14, 2007
File
No.0-50761
Ladies
and Gentlemen:
Set
forth below are responses to the comments provided in your letter to the
Chairman of the Board of AngioDynamics, Inc. (“AngioDynamics” or the "Company")
dated December 11, 2007 (the "Letter") from Cecilia Blye, Chief Office of Global
Security Risk. The responses set forth are keyed to the sequential
numbering of the comments in the Letter and to the headings used in the
Letter.
General
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1.
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Comment
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Enforcement
Information for November 2,
2007, available on the website of the Treasury Department's Office of Foreign
Assets Control (OFAC) indicates that your subsidiary, RITA Medical Systems,
LLC,
has settled, by a civil penalty, allegations that its predecessor, RITA Medical
Systems, Inc. ("RITA"), violated the Iranian Transactions Regulations between
October 2002 and January 2003. Your Form 10-K does not include any information
related to business contacts with Iran.
Please
describe for us the nature and extent of any past, current or anticipated
contacts with Iran, a country designated by the State Department as a state
sponsor of terrorism and subject to U.S. economic sanctions and export controls.
Describe both direct contacts and contacts through subsidiaries or through
other
indirect arrangements. Your response should include reasonably detailed
information regarding any products, technologies, and services sold or otherwise
provided into Iran, and any contacts, including any agreements and commercial
arrangements, with the Iranian government or entities affiliated with that
government.
Company
Response
AngioDynamics
acquired RITA Medical Systems, Inc. (RITA) on January 29, 2007, which was more
than four years after the transaction in question. RITA
develops, manufactures and markets products for patients with solid cancerous
or
benign tumors. These products employ radiofrequency energy to heat
tissue to the point of cell death; the tumorous tissue is said to be
“ablated”. For this purpose, RITA has received regulatory approval in
many major markets worldwide, including approval from the United States Food
and
Drug Administration for use of its products in the treatment of unresectable
liver lesions and for the palliation of pain associated with metastatic tumors
involving bone. The details of the Iran transaction are as
follows:
During
2002, RITA sales personnel had communications regarding a potential business
relationship with an Iranian distributor, Eshtoodkar Co. At that
time, RITA personnel were unaware of restrictions on trade with Iran, per
regulations of the Department of Treasury. On December 31, 2002,
prior to the shipment of product, Mrs. Yeganeh Nodiradeh of Eshtoodkar deposited
$16,920 into RITA’s account at Greater Bay Bancorp. RITA noted this
deposit on January 2, 2003 as part of its normal bank account reconciliation
process and, upon determining that the funds related to prospective business
in
Iran, RITA immediately asked that the funds be returned. RITA later
learned that Greater Bay’s security department had impounded the
funds. To the best of our knowledge, no shipment of RITA products to
Iran took place. On January 13, 2003, RITA notified Eshtoodkar that
it would be unable to do business unless and until RITA acquired approval to
export products to Iran from the Department of Treasury. RITA was not
able to obtain the appropriate approval and accordingly, did not ship product
to
Iran.
To
the best of our knowledge:
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RITA
has never shipped product to any person and/or entity in
Iran;
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we
are unaware of any current direct or indirect contacts by RITA within
Iran; and
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RITA
has no direct or indirect agreements and/or commercial arrangements
with
any person and/or entity in Iran.
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2.
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Comment
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Please
discuss the materiality of any contacts described in response to the foregoing
comments, and whether they would constitute a material investment risk for
your
security holders. You should address materiality in quantitative terms,
including, the approximate dollar amounts of any revenues, assets, and
liabilities associated with Iran for the last three years. Please also address
materiality in terms of qualitative factors that a reasonable investor would
deem important in making an investment decision, including the potential impact
of corporate activities upon a company's reputation and share value.
2
We
note, for example, that Arizona and Louisiana have adopted legislation requiring
their state retirement systems to prepare reports regarding state pension fund assets invested in, and/or
permitting divestment of state pension fund assets from, companies that do
business with countries identified as state sponsors of terrorism. The Missouri
Investment Trust has established an equity fund for the investment of certain
state-held monies that screens out stocks of companies that do business with
U.S.-designated state sponsors of terrorism. The Pennsylvania legislature has
adopted a resolution directing its Legislative Budget and Finance Committee
to
report annually to the General Assembly regarding state funds invested in
companies that have ties to terrorist-sponsoring countries. Your materiality
analysis should address the potential impact of the investor sentiment evidenced
by such actions directed toward companies that have business contacts with
Iran.
Your
qualitative materiality analysis
also should address whether, and the extent to which, the government of Iran,
or
persons or entities controlled by that government, have received cash or act
as
intermediaries in connection with any contacts.
Company
Response
As
discussed in the Company’s response to Comment 1 above, the only contact between
RITA and contacts in Iran was for an aggregate of $16,920 in
2002. RITA did not ship any product nor recognize any revenue
associated with this particular transaction. RITA turned the advance
payment received from Iran over to the bank upon learning of its
receipt. Accordingly, the contact had no financial implications to
RITA and given the nature of the Company's settlement with the Department of
the
Treasury and the fact that this was an isolated incident, we do not believe
that
a reasonable investor would deem the aforementioned activity in Iran as
quantitatively or qualitatively material to its investment in the
Company.
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3.
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Comment
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Please
describe for us any regulatory compliance programs you have in place that relate
to contacts with countries identified as state sponsors of terrorism.
3
Company
Response
Currently,
the Company has in place a program to ensure that it does not inadvertently
engage in business with contacts in countries identified as state sponsors
of
terrorism. In this regard, the Company maintains a formal listing of
international countries in which it can do business. None of the
countries on the list has been identified as state sponsors of
terrorism. When a purchase order is received by AngioDynamics from a
potential international customer, our customer service department can only
enter
an order if the country is listed within our control document. If the
country is not on the acceptable list, our internal procedure requires
customer service to verify that the country is not on the Office of
Foreign Assets Control Country Sanctions list before proceeding with the
order.
In
addition, the Company acknowledges that:
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The
Company is responsible for the adequacy and accuracy of the disclosure
in
the filings;
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Staff
comments or changes to disclosure in response to staff comments do
not
foreclose the Commission from taking any action with respect to the
filings; and
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The
Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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Please
feel free to contact the undersigned at 518-798-1215 if you would like to
discuss any of these issues.
Sincerely,
/s/
D. Joseph Gersuk
D.
Joseph Gersuk
Executive
Vice President and Chief Financial Officer