8-K

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: April 30, 2010

(date of earliest event reported)

VASCULAR SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 0-27605

Minnesota	41-1859679
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

6464 Sycamore Court
Minneapolis, Minnesota 55369

(Address of principal executive offices)

(763) 656-4300

(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:

o         Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)

o         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o         Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act ( 17 CFR 240.13e-4(c))

Item 1.01.  Entry into a Material Definitive Agreement.

On April 30, 2010 Vascular Solutions, Inc. (“Company”) completed the acquisition from two subsidiaries of Escalon Medical Corporation (“Escalon”) of the assets related to Escalon’s vascular access business, including the SMARTNEEDLE™ and pdACCESS™ Doppler guided needle products.  The aggregate acquisition price was $5.75 million, consisting of $5.0 million paid in cash at the closing on April 30, 2010, and $750,000 (the “Holdback Amount”) to be paid in cash upon successful completion of the transfer of the manufacturing process to the Company, which is expected to be complete within four months.  The Holdback Amount is subject to adjustment based on final inventory values to be determined after transition of the manufacturing process.  The Company also agreed to pay Escalon a one-time cash earn-out paymen t in an amount equal to 25% of the net sales of the VascuView TAP products sold between July 1, 2010 and June 30, 2011.  While the manufacturing process is being transitioned to the Company, Escalon has agreed to manufacture products for the Company under a short term supply agreement.

In connection with the acquisition, the Company entered into asset purchase agreements with two subsidiaries of Escalon, one for the acquisition of the tangible assets relating to Escalon’s vascular access business, including inventory, equipment and customer lists, and the other for the intellectual property associated with the business.  Each of these agreements contained representations, warranties, covenants, conditions and indemnification obligations of the parties customary for transactions of this size and type.  The Company plans to file these asset purchase agreements as exhibits to its Form 10-Q for the quarter ending June 30, 2010.

Item 9.01.  Financial Statements and Exhibits

(d)  

99.1 Press Release dated May 3, 2010 of Vascular Solutions, 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.

	VASCULAR SOLUTIONS, INC.
Date:  May 6, 2010	By:	/s/ James Hennen
		James Hennen
	Its:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated May 3, 2010 of Vascular Solutions, Inc.

EX-99.1

Exhibit 99.1

	NEWS RELEASE
For Release: 7:00 CDT, Monday, May 3, 2010	Contact:	Howard Root, CEO
		James Hennen, CFO Vascular Solutions, Inc. (763) 656-4300

VASCULAR SOLUTIONS ACQUIRES SMARTNEEDLE AND pdACCESS PRODUCTS
FROM ESCALON MEDICAL

Sales to transition immediately to Vascular Solutions’ direct U.S. sales force

Acquisition price of $5.75 million paid from existing cash balance

Acquisition expected to be immediately accretive -- Guidance raised for 2010

MINNEAPOLIS, Minnesota  --  Vascular Solutions, Inc. (Nasdaq: VASC) today announced that it has acquired the assets related to the SMARTNEEDLE™ and pdACCESS™ Doppler guided needle access business from Escalon Vascular Access, Inc., a division of Escalon Medical Corporation (Nasdaq: ESMC).  The SMARTNEEDLE and pdACCESS products consist of a hand-held monitor and one-time use needles designed to provide auditory ultrasound guided access to arteries and veins during catheterization procedures.  The original SMARTNEEDLE product was introduced in 19 92, with current annualized sales of the combined products of approximately $3.6 million.

Effective immediately, sales of the SMARTNEEDLE and pdACCESS products will transition to Vascular Solutions’ existing direct U.S. sales force.  Manufacturing of the products will be transitioned to Vascular Solutions’ existing facility in Minnesota over the next four months.  The acquisition price of $5.75 million consists of $5.0 million paid in cash at closing and $750,000 payable in cash upon successful completion of the transfer of the manufacturing processes. 

In addition to the SMARTNEEDLE and pdACCESS products, Vascular Solutions has acquired the assets related to the new VascuView TAP™ visual ultrasound system and will pay Escalon a one-time cash earn-out payment in an amount equal to 25% of the net sales of the VascuView TAP products sold between July 1, 2010 and June 30, 2011. 

“The SMARTNEEDLE and pdACCESS products have excellent clinical track records and serve an important niche in percutaneous procedures,” commented Howard Root, Chief Executive Officer of Vascular Solutions.  “The products fit nicely into our existing product portfolio and customer call point that can be reached by our existing 87 person U.S. sales force.  We are pleased to add these products into our sales bag as well as to evaluate the potential future applications of the VascuView TAP ultrasound technology within interventional procedures.  With this excellent fit, we expect the acquisition to be immediately accretive to our earnings and are therefore raising our guidance for 2010,” Mr. Root added .

The acquisition will be accounted for as a purchase of assets and technology in the second quarter of 2010.  On a preliminary basis, approximately $750,000 of the acquisition price is expected to be allocated to the assets acquired in the transaction, with $3,250,000 allocated to intangible assets and the remaining $1,750,000 allocated to goodwill.  The intangible assets will be amortized at the rate of approximately $90,000 per quarter.

Financial Guidance

As a result of the acquisition, guidance for net revenue for the second quarter of 2010 is being raised by approximately $500,000 to between $19.2 million and $19.5 million, with a corresponding net income of between $0.09 and $0.10 per fully diluted share.  For the full year of 2010, guidance for net revenue is being raised by approximately $2 million to between $78 million and $80 million, with a corresponding increase in net income of approximately $0.02 to between $0.55 and $0.59 per fully diluted share, including the $0.13 one-time litigation gain recognized in the first quarter.

About Vascular Solutions

Vascular Solutions, Inc. is an innovative medical device company that focuses on developing customized clinical solutions for coronary and peripheral vascular procedures.  The company’s product line consists of catheter (diagnostic and therapeutic) products, hemostat (blood clotting) products, and vein (varicose vein treatment) products, all used in catheterization procedures.  Vascular Solutions delivers its proprietary and distributed products to interventional cardiologists, interventional radiologists and vascular surgeons through its direct U.S. sales force and international distributor network.

The information in this press release contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Important factors that may cause such differences include those discussed in our Annual Report on Form 10-K for the year ended December 31, 2009 and other recent filings with the Securities and Exchange Commission. The risks and uncertainties include, without limitation, risks associated with the need for adoption of our new products, limited working capital, lack of sustained profitability, exposure to intellectual property claims, exposure to possible product liability claims, the development of new products by others, doing business in international markets, limited manufacturing experience, the availability of third party reimbursement, and actions by the FDA.

For further information, connect to www.vascularsolutions.com.

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