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Filed Pursuant to Rule 424(b)(3)
Registration No.: 333-155129
PROSPECTUS
WORLD
HEART CORPORATION
12,950,000
Common Shares
This prospectus relates
to the sale, transfer or other disposition of up to 12,950,000 common shares of
World Heart Corporation, or interests in the common shares, that some of our
selling shareholders or their transferees may dispose of from time to
time. The selling shareholders include those
holders named in the table entitled Selling Shareholders beginning on page 10
of this prospectus. The common shares
covered by this prospectus were previously issued in a private placement or
underlie certain common share purchase warrants that were previously issued in
that private placement.
Our common shares trade
on the NASDAQ Capital Market under the listing symbol WHRTD. On November 11, 2008, the last reported
sale price for the common shares on the NASDAQ Capital Market was $4.79. You
are encouraged to obtain current market quotations for our common shares. We
will not receive any proceeds in connection with the common shares, or
interests in the common shares, disposed of by the selling shareholders or
their transferees.
On October 27, 2008,
we completed a reverse stock split of the common shares on the basis of one
post-consolidated common share for each 30 pre-consolidated common shares. All numbers of common shares reflected in
this prospectus are shown on a post-consolidated basis, unless otherwise
noted. Common share numbers and per
share numbers set forth in documents filed with the Securities and Exchange Commission prior to
the reverse stock split that are incorporated by reference herein are not shown
on a post-consolidated basis.
The disposition of the
common shares, and interests in the common shares, covered by this prospectus
may be at fixed prices, at prevailing market prices at the time of sale, at
prices related to the prevailing market prices, at varying prices determined at
the time of the sale or at negotiated prices.
The selling shareholders
will pay all brokerage fees and commissions and similar expenses. We will pay all expenses (except brokerage
fees and commissions and similar expenses) relating to the registration of the
shares with the Securities and Exchange Commission.
AN
INVESTMENT IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. BEFORE PURCHASING ANY COMMON SHARES, OR
INTERESTS IN COMMON SHARES, YOU SHOULD CONSIDER CAREFULLY THE RISKS DESCRIBED
UNDER RISK FACTORS BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR
ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON
SHARES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this
prospectus is November 12, 2008.
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You should
rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized
anyone to provide you with additional or different information. If anyone provides you with additional,
different or inconsistent information, you should not rely on it. You should not assume that the information we
have included in this prospectus is accurate as of any date other than the date
of this prospectus or that any information we have incorporated by reference is
accurate as of any date other than the date of the document incorporated by
reference. Our business, financial
condition, results of operations and prospects may have changed since that
date.
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ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a shelf registration or
continuous offering process. Under this
shelf registration process, the selling shareholders may from time to time, in
one or more offerings, sell the common shares registered under the registration
statement of which this prospectus is a part.
This prospectus omits some of the information contained in the
registration statement and reference is made to the registration statement for
further information with regard to us and the securities being offered by the
selling shareholders. Any statement contained in the prospectus concerning the
provisions of any document filed as an exhibit to the registration statement or
otherwise filed with the SEC is not necessarily complete, and in each instance,
reference is made to the copy of the document filed.
All
references to we, us, our, WorldHeart or the Company in this
prospectus are to World Heart Corporation.
The WorldHeart logo, WorldHeart, and all product and service names used
herein are either registered trademarks or trademarks of World Heart
Corporation in the United States and/or other countries.
SUMMARY
This summary highlights information contained
elsewhere in this prospectus but might not contain all of the information that
is important to you. Before investing in our common shares, you should read the
entire prospectus carefully, including Risk Factors, and the documents we
incorporate by reference into this prospectus.
Our
business is focused on the development and sale of ventricular assist devices (VADs),
particularly our Levacor Rotary VAD (Levacor VAD or Levacor). VADs are
mechanical assist devices that supplement the circulatory function of the heart
by re-routing blood flow through a mechanical pump, allowing for the
restoration of normal blood circulation.
VADs
are used for treatment of patients with severe heart failure, including
primarily patients whose hearts are irreversibly damaged and cannot be treated
effectively by medical or surgical means other than transplant.
Bridge-to-Transplant therapy involves implanting a VAD in a transplant-eligible
patient to maintain or improve the patients health until a donor heart becomes
available. Destination Therapy is the implanting of a VAD to provide long-term
support for a patient not currently eligible for a natural heart transplant.
Bridge-to-Recovery involves the use of VADs to restore a patients cardiac
function, helping the natural heart to recover and thereby allowing removal of
the VAD.
We
are focused on the development of the Levacor Rotary VAD, the next-generation
rotary device that we acquired as part of our acquisition of the assets of
MedQuest Products, Inc. (MedQuest) in July 2005. It uses a
magnetically-levitated rotor resulting in no moving parts subject to wear,
which is expected to provide multi-year support. The Levacor VAD is in the
clinical development stage with an initial human feasibility clinical use
successfully completed in Europe during 2006. We are focused on activities
leading to the commencement of the U.S. clinical trial for the Levacor in
2009. As previously announced, after
more than 20 years in clinical use, we are phasing out our first generation
Novacor LVAS as it approaches the natural end of its life cycle.
Our
next-generation pulsatile VAD, the Novacor II, is currently in pre-clinical
development. The Novacor II is being designed as a small implantable heart
assist device to provide long-term pulsatile blood flow to patients suffering
from heart failure. The first animal implants of the Novacor II were
completed in 2005 and 2006. We intend to further the development of the Novacor
II after completion of the Levacor VAD design, contingent on our ability to
fund this program.
The
pediatric VAD (PediaFlow) is a small, magnetically levitated, rotary VAD
currently in pre-clinical development. Based on our proprietary technology, it
is intended for use in newborns and infants.
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The PediaFlow is being developed by a
consortium, including us, the University of Pittsburgh and LaunchPoint
Technologies, with funding provided primarily by the National Institutes of
Health.
The
technology embodied in the PediaFlow is also intended to form the basis for a
small, Minimally Invasive VAD (MiVAD). This device is aimed at providing
partial circulatory support to the relatively large population of patients in
an early stage of heart failure. Included in this population are patients who
do not respond to cardiac resynchronization therapy, and currently have no
optimal available therapeutic option.
On
July 31, 2008, we completed a $30.0 million private placement transaction
and recapitalization, initially announced on June 20, 2008, under the
terms of the Recapitalization Agreement (the Recapitalization Agreement)
dated June 20, 2008 and amended on July 31, 2008, among us, our
wholly owned subsidiary World Heart Inc. (WHI), Abiomed, Inc. (Abiomed),
Venrock Partners V, L.P., Venrock Associates V, L.P. and Venrock Entrepreneurs
Fund V, L.P. (collectively, Venrock), Special Situations Fund III QP, L.P.,
Special Situations Cayman Fund, L.P., Special Situations Private Equity Fund,
L.P., Special Situations Life Sciences Fund, L.P. and Austin W. Marxe
(collectively, SSF) and New Leaf Ventures II, L.P. (New Leaf). Under the
terms of the Recapitalization Agreement, we issued 10,000,000 common shares for
an aggregate purchase price of $30,000,000 (the Issuance), of which Venrock
invested $11,000,000, SSF invested $9,000,000 and New Leaf invested $10,000,000.
Simultaneously with the closing of the Issuance, Abiomed entered into a
Termination and Release Letter Agreement dated July 31, 2008 with us and
WHI and converted the full amount of principal and interest owed on the
$5,000,000 8% Secured Convertible Promissory Note (the Note) previously
issued to Abiomed by us and WHI into 2,866,667 of our common shares (the Conversion),
released the security interest in all of our assets and those of WHI that
secured the Note, terminated the warrant Abiomed held to purchase 113,333 of
our common shares, forgave other amounts owed to Abiomed by us and terminated
all previously existing agreements, arrangements and understandings with us.
The purchase price delivered by Venrock and SSF at the closing was offset by
repayment of the principal and interest owed on the bridge loan facility of
$1,400,000 that Venrock and SSF had previously provided to us. In connection
with the Issuance, the parties to the Recapitalization Agreement entered into a
Registration Rights Agreement dated July 31, 2008, as amended November 3,
2008, to register the common shares issued in connection with the Issuance and
the Conversion.
In
connection with the Recapitalization Agreement, we
applied
to the NASDAQ Stock Market, Inc. (NASDAQ) for an exception from
Marketplace Rule 4350 in reliance on Marketplace Rule 4350(i)(2),
which provides that NASDAQ may make an exception to the Marketplace Rules when
(i) the delay in securing shareholder approval would seriously jeopardize
the financial viability of the enterprise, and (ii) reliance by the
company on the exception is expressly approved by the audit committee comprised
solely of independent, disinterested directors. The audit committee of our
Board of Directors expressly approved such reliance. The Listings and
Qualifications Department of NASDAQ granted the requested exception permitting
us to issue 12,866,667 common shares contemplated in the Recapitalization
Agreement, which is significantly in excess of the approximately 76,667 common shares
which we would have been permitted to issue under Marketplace Rule 4350
without shareholder approval or this exception.
As
part of the recapitalization transaction, we paid an aggregate cash commission
of $750,000 and issued warrants dated October 10, 2008 to purchase an
aggregate of 83,333 common shares to our advisors, Pacific Growth Equities, LLC
and Stifel, Nicolaus and Company with an exercise price of $3.30 per
share. The issuance of the warrants was
subject to shareholder approval, which was received on October 9, 2008.
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On October 27, 2008, we completed a
reverse stock split on the basis of one post-consolidation share for each 30
pre-consolidation shares and commenced trading on a post-consolidation basis on
NASDAQ on October 28, 2008. The
number of common shares reflected in this prospectus is shown on a
post-consolidated basis, unless otherwise noted.
Common share numbers and per share numbers set forth in documents filed
with the SEC prior to the reverse stock split that are incorporated by
reference herein are not shown on a post-consolidated basis.
Our
head office is located at 7799 Pardee Lane, Oakland, California, USA, 94621 and
our head office telephone number is 510-563-5000. We also have operations at
4750 Wiley Post Way, Suite 120, Salt Lake City, Utah, USA, 84116.
RISK
FACTORS
You should carefully consider the following risk
factors in evaluating WorldHeart and our common shares. Additional risks and
uncertainties not presently known to us or that we currently consider not
material may also impair our business, financial condition and results of
operations. If any of the events described below actually occurs, our business,
financial condition and results of operations could be materially adversely
affected.
Risk Factors Relating to Our
Business
We will require significant capital
investment to continue our product development programs and to bring future
products and product enhancements to market, and if adequate funding is not
available, our financial condition will be adversely affected and we may have
to further curtail or eliminate our development programs and significantly reduce
our expenses or be forced to cease operations.
Our
investment of capital has been and will continue to be significant. Developing
our technology, future products and continued product enhancements, including
those of the Levacor Rotary VAD and other technologies, requires a commitment
of substantial funds to conduct the costly and time-consuming research and
clinical trials necessary for such development and regulatory approval. If
adequate funds are not available when needed, we may be required to delay,
reduce the scope of, or eliminate one or more of our research or development
programs or obtain funds through arrangements with collaborative partners or
others that may require us to relinquish rights to certain of our technologies,
potential products or products that we would otherwise seek to develop or
commercialize ourselves. In addition, while in November 2006, August 2007
and August 2008 we announced significant restructuring, cost reductions
and consolidation initiatives, we may be required to further reduce our
operating expenses, including but not limited to, reductions in salaries and/or
elimination of employees and consultants or cessation of operations. The
inability to obtain additional financing or enter into strategic relationships
when needed will have a material adverse effect on our business, financial
condition and results of operations.
We have had substantial losses since
incorporation and expect to continue to operate at a loss while our products
are under development, and we may never become profitable.
Since
our inception in 1996 through June 30, 2008, we have incurred cumulative
losses of approximately $305.2 million, a significant portion of which relates
to the costs of internally developed and acquired technologies. Our research
and development expenses have increased over the past year, primarily due to
our investment in the development programs for our next generation, Levacor
Rotary VAD. Our research and development activities will likely result in
additional significant losses in future periods. These expenditures include
costs associated with performing pre-clinical testing and clinical trials for
our next generation products, continuing research and development, seeking
regulatory
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approvals and, if we receive these approvals, commencing commercial
manufacturing, sales and marketing of our products.
We may be unable to obtain regulatory
approvals, which will prevent us from selling our products and generating
revenue.
Most
countries, including the United States, Canada and countries in Europe, require
regulatory approval prior to the commercial distribution of medical devices. In
particular, implanted medical devices generally are subject to rigorous
clinical testing as a condition of approval by the FDA and by similar
authorities in Canada (e.g., Health Canada), and in European and other
countries. The approval process is expensive and time consuming. Non-compliance
with applicable regulatory requirements can result in, among other things,
fines, injunctions, civil penalties, recall or seizure of products, total or
partial suspension of production, government refusal to grant marketing
approval for devices, withdrawal of marketing approvals and criminal
prosecution. The inability to obtain the appropriate regulatory approvals for
our products in the United States, Canada and the rest of the world will
prevent us from selling our products, which would have a material adverse
effect on our business, financial condition and results of operations.
There
can be no assurance that the FDA, Health Canada or any other regulatory
authority will act favorably or quickly in its review of our applications, if
and when made, and we may face significant difficulties and costs obtaining
such approvals that could delay or preclude us from selling our next-generation
products in the United States, Europe, Canada and elsewhere. Failure to
receive, or delays in receiving, such approvals, including the need for
extended clinical trials or additional data as a prerequisite to approval,
limitations on the intended use of our next-generation products, the
restriction, suspension or revocation of any approvals obtained or any failure
to comply with approvals obtained could have a material adverse effect on our
business, financial condition and results of operations.
We are dependent on a limited number
of products.
To
date, our revenues have resulted primarily from sales of the Novacor LVAS and
related equipment. With our restructurings announced in November 2006 and August 2007,
those revenues have continued to decline and we intend to phase out sales of
the Novacor LVAS by the end of 2008. Our future financial performance depends
primarily on our ability to realign our resources to focus on the development,
regulatory approval, introduction, customer acceptance and sales and marketing
of the Levacor Rotary VAD. Prior to any commercial use, our products currently
under development will require significant additional capital for research and
development efforts, extensive pre-clinical and clinical testing and regulatory
approval.
New
product development is highly uncertain and unanticipated developments, clinical
and regulatory delays, adverse or unexpected side effects or inadequate
therapeutic efficacy could delay or prevent the commercialization of the
Levacor Rotary VAD. Any significant delays in, or premature termination of,
clinical trials of our products under development would have a material adverse
effect on our business, financial condition and results of operations.
Market acceptance of our
technologies and products is uncertain and our selling and distribution
capability is limited and has been further reduced by our recent cost reduction
initiatives.
Our
next-generation Levacor Rotary VAD must compete with other products as well as
with other therapies for heart failure, such as medication, transplants,
cardiomyoplasty and total artificial heart devices. In addition, although we
believe that the Destination Therapy market opportunity for VADs is
significant, adoption rates have continued to be slower than anticipated.
We
have a limited number of technical support personnel compared with other medical
device companies in our industry segment, and our financial condition has
required us to make significant personnel reductions in those areas, which may
put us at a further competitive disadvantage in the
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marketplace.
Failure of our products to achieve significant market acceptance due to
competitive therapies and our very limited selling and distribution could have
a material adverse effect on our business, financial condition and results of
operations.
We face significant competition and
technological obsolescence of our products.
In
addition to competing with other less-invasive therapies for heart failure,
including medications and pacing technology, our products, if regulatory
approvals are obtained, will compete with ventricular assist technology being
developed and sold by a number of other companies. Competition from medical
device companies and medical device subsidiaries of healthcare and
pharmaceutical companies is intense and expected to increase.
Most
of our competitors have financial, technical, manufacturing, distribution and
marketing resources substantially greater than ours. Third parties may succeed
in developing or marketing technologies and products that are more effective
and more timely than those developed or marketed by us which could render our
technology and products non-competitive or obsolete, or we may not be able to
keep pace with technological developments or our competitors time frames, all
of which could have a material adverse effect on our business, financial
condition and results of operations.
In
addition, companies in similar businesses are entering into business combinations
with one another, which may create more powerful or aggressive competitors. We
may not be able to compete successfully as future markets evolve, and we may
have to pursue additional acquisitions or other business combinations or
strategic alliances. Increased competitive pressure could lead to lower sales
and prices of our products, and this could harm our business, results of
operations and financial condition.
There are limitations on third-party
reimbursement for the cost of implanting our devices.
Individual
patients will seldom be able to pay directly for the costs of implanting our
devices. Successful commercialization of our products will depend in large part
upon the availability of adequate reimbursement for the treatment and medical
costs from third-party payers, including governmental and private health
insurers and managed care organizations. Consequently, we expect that our
products will typically be purchased by healthcare providers, clinics,
hospitals and other users who will bill various third-party payers, such as
government programs and private insurance plans, for the healthcare services
provided to their patients.
The
coverage and the level of payment provided by third-party payers in the United
States and other countries vary according to a number of factors, including the
medical procedure, third-party payer, location and cost. In the United States,
many private payers follow the recommendations for Centers of Medicare and
Medicaid Services, which establish guidelines for governmental coverage of
procedures, services and medical equipment.
There
can be no assurance with respect to any markets in which we seek to distribute
our products that third-party coverage and reimbursement will be adequate, that
current levels of reimbursement will not be decreased in the future or that
future legislation, regulation or reimbursement policies of third-party payers
will not otherwise adversely affect the demand for our products or our ability
to sell our products on a profitable basis, particularly if the installed cost
of our systems and devices should be more expensive than competing products or
procedures. The unavailability of third-party payer coverage or the inadequacy
of reimbursement would have a material adverse effect on our business, financial
condition and results of operations.
If we cannot protect our
intellectual property, our business could be adversely affected.
Our
intellectual property rights, including those relating to our Levacor Rotary
VAD, are and will continue to be, a critical component of our success. The loss
of critical licenses, patents or trade secret protection for technologies or
know-how relating to our current product and our products in development could
adversely affect our business prospects. Our business will also depend in part
on our ability to
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defend
our existing and future intellectual property rights and conduct our business
activities free of infringement claims by third parties. We intend to seek
additional patents, but our pending and future patent applications may not be
approved, may not give us a competitive advantage and could be challenged by
others. Patent proceedings in the United States and in other countries may be
expensive and time consuming. In addition, patents issued by foreign countries
may afford less protection than is available under United States intellectual
property law, and may not adequately protect our proprietary information.
Our
competitors may independently develop proprietary non-infringing technologies
and processes that are substantially similar to ours, or design around our
patents. In addition, others could develop technologies or obtain patents,
which would render our patents and patent rights obsolete. Claims by
competitors and other third parties that our products allegedly infringe the
patent rights of others could have a material adverse effect on our business.
We could encounter legal and financial difficulties in enforcing our licenses
and patent rights against alleged infringers. The medical device industry and
cardiovascular device market, in particular, is characterized by frequent and
substantial intellectual property litigation. Intellectual property litigation
is complex and expensive and the outcome of this litigation is difficult to
predict. Any future litigation, regardless of outcome, could result in
substantial expense and significant diversion for our technical and management
personnel. An adverse determination in any such proceeding could subject us to
significant liabilities or require us to seek additional licenses from third
parties, pay damages and/or royalties that may be substantial or force us to
redesign the related product. These alternatives may be uneconomical or
impossible. Furthermore, we cannot assure you that if additional licenses are
necessary they would be available on satisfactory terms or at all. Accordingly,
an adverse determination in a judicial or administrative proceeding or failure
to obtain necessary licenses could prevent us from manufacturing or selling
certain of our products, any of which could have a material adverse effect on
our business, financial condition and results of operations.
We are exposed to product liability
claims.
Our
business exposes us to an inherent risk of potential product liability claims
related to the manufacturing, marketing and sale of the Novacor LVAS, and if
and when regulatory approvals are received, the Levacor Rotary VAD and other
future products, by device recipients or by their families. Claims of this
nature, if successful, could result in substantial damage awards to the
claimants, which may exceed the limits of any applicable insurance coverage held
by us. A successful claim brought against us in excess of, or outside of, our
insurance coverage would have a material adverse effect on our financial
condition. Claims against us, regardless of their merit or potential outcome,
could also have a material adverse effect on our ability to obtain physician
acceptance of our products, to expand our business or obtain insurance in the
future, which could have a material adverse effect on our business and results
of operations.
We face risks associated with our
manufacturing operations, risks resulting from dependence on third-party
manufacturers, and risks related to dependence on sole suppliers.
The
manufacture of our products is a complex operation involving a number of
separate processes and components. Material costs are high and certain of the
manufacturing processes involved are labor-intensive. The conduct of
manufacturing operations is subject to numerous risks, including reliance on
third-party manufacturers, unanticipated technological problems and delays. We,
or any entity manufacturing products or components on our behalf, may not be
able to comply with applicable governmental regulations or satisfy regulatory
inspections in connection with the manufacture of our products, which would
have a material adverse effect on our business, financial condition and results
of operations.
We
often depend on single-source third-party manufacturers for several of the
components used in our products. We do not have agreements with many of such
single-source manufacturers and purchase these components pursuant to purchase
orders placed from time to time in the ordinary course of business.
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We
are substantially dependent on the ability of these manufacturers to provide
adequate inventories of these components on a timely basis and on favorable
terms. These manufacturers also produce components for certain of our
competitors, as well as other large customers, and there can be no assurance
that such manufacturers will have sufficient production capacity to satisfy our
inventory or scheduling requirements during any period of sustained demand, or
that we will not be subject to the risk of price fluctuations and periodic
delays. Although we believe that our relationships with our manufacturers are
satisfactory and that alternative sources for the components we currently
purchase from single-source suppliers are currently available, the loss of the
services of such manufacturers or substantial price increases imposed by such
manufacturers, in the absence of readily available alternative sources of
supply, would have a material adverse effect on us. Failure or delay by such
manufacturers in supplying components to us on favorable terms could also
adversely affect our operating margins and our ability to develop and deliver
our products on a timely and competitive basis, which could have a material
adverse effect on our business, financial condition and results of operations.
We are dependent on key personnel.
As
a result of the specialized scientific nature of our business, we are dependent
on our ability to attract and retain qualified scientific, technical and key
management personnel. We face intense competition for such persons and we may
not be able to attract or retain such individuals. Our restructuring, cost
reduction and consolidation efforts in November 2006, August 2007 and
August 2008 may make it more difficult for us to attract and retain
qualified personnel.
Moving our operations may be
disruptive.
On
August 21, 2008, we announced a phased consolidation into a primary
facility at our current location in Salt Lake City, Utah. In this context, we eliminated five positions
at our facility in Oakland, including the position of Vice President of
Manufacturing, and we expect to eliminate approximately ten additional Oakland
positions and to relocate others to Salt Lake City. The consolidation plan includes a search for
a CEO to reside in Salt Lake City. The
consolidation of our operations may result in ongoing disruptions to our
operations and the loss of personnel who would be costly to replace. The loss of employees could also have a
significant impact on the continuity and progress of our research and
development programs. The costs and
possible disruptions that may result from this consolidation could have a
material adverse effect on our business, financial condition and results of
operations.
Risk Factors Relating to Our Common
Shares
The price of our shares is highly
volatile, and if we do not maintain compliance with NASDAQ minimum share price
requirements or other listing requirements, we may be delisted.
As
a small capitalization medical device company, the price of our common shares
has been, and is likely to continue to be, highly volatile. Future
announcements concerning us or our competitors, quarterly variations in
operating results, introduction of new products, delays in the introduction of
new products or changes in product pricing policies by us or our competitors,
acquisition or loss of significant customers, partners, distributors and
suppliers, changes in earnings estimates or our ratings by analysts, regulatory
developments, or fluctuations in the economy or general market conditions,
among other factors, could cause the market price of our common shares to
fluctuate substantially. There can be no assurance that the market price of our
common shares will not decline below its current price or that it will not
experience significant fluctuations in the future, including fluctuations that
are unrelated to our performance.
Currently
our common shares are quoted on the NASDAQ Capital Market under the symbol WHRT. We must satisfy certain minimum listing maintenance
requirements to maintain the NASDAQ Capital Market quotation, including a
series of financial tests relating to shareholders equity or net income
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or
market value, public float, number of market makers and shareholders, market
capitalization, and maintaining a minimum bid price of $1.00 per share.
On
March 31, 2008, we received a notice from NASDAQ stating that we were not
in compliance with Marketplace Rule 4310(c)(3). This rule requires us
to have a minimum of $2,500,000 in shareholders equity or $35,000,000 market
value of listed securities or $500,000 of net income from continuing operations
for the most recently completed fiscal year or two of the three most recently
completed fiscal years. In addition, on April 30,
2008, we received a notice from NASDAQ stating that for the last 30 consecutive
business days, the bid price of our common shares had closed below the minimum
$1.00 per share requirement for continued inclusion under Marketplace Rule 4310(c)(4).
The notice further stated that pursuant to Marketplace Rule 4310(c)(8)(D),
we will be provided 180 calendar days (or until October 27, 2008) to
regain compliance. On October 9,
2008 we obtained shareholder approval for a reverse stock split to increase our
share price and cure our bid price deficiency under Marketplace Rule 4310(c)(4). On October 27, 2008, we completed a
reverse stock split on the basis of one post-consolidated share for each 30
pre-consolidated shares in order to regain compliance.
On
July 31, 2008, we completed a $30.0 million private placement transaction
and recapitalization. This private placement cured our shareholders equity
deficiency or non-compliance with Marketplace Rule 4310(c)(3). In
addition, in August 2008, we initiated a phased consolidation plan which
we expect will reduce our expenses and increase the likelihood that we will
maintain compliance in the longer term. On September 11, 2008, following a
review by a NASDAQ Listing Qualifications Panel, NASDAQ determined that our
common shares will continue to be listed on the NASDAQ Capital Market.
On
October 29, 2008, we received a notice from NASDAQ stating that we were
not in compliance with Marketplace Rule 4310(c)(7). This rule requires us to have a minimum
of 500,000 publicly held shares. For
purposes of this requirement, the number of publicly held shares excludes
shares held by affiliates, including officers, directors, or ten percent
shareholders. The NASDAQ staff is
reviewing our eligibility for continued listing on the NASDAQ Capital Market
and had asked us to provide, on or before November 21, 2008, our specific
plan to achieve and sustain compliance with all the NASDAQ Capital Market
listing requirements, including the time frame for completion of the plan. We
intend to submit a specific plan to achieve and sustain compliance with
Marketplace Rule 4310(c)(7) by November 21, 2008.
If
the common shares were to be delisted, they would trade on the Over-the-Counter
Bulletin Board or in the pink sheets maintained by the National Quotation
Bureau, Inc., which are viewed by most investors as less desirable and
less liquid market places. This could make trading more difficult for our
investors, leading to lower trading volumes and declines in share price, which
would also make it more difficult and expensive for us to raise additional
capital.
The sales of common shares by our
shareholders could depress the price of our common shares.
If
our shareholders sell substantial amounts of our common shares in the public
market, the market price of our common shares could fall. These sales might
also make it more difficult for us to sell equity or equity-related securities
at a time and price that we would deem appropriate. We have undertaken to
register all of the common shares we issued in the private placement in July 2008
pursuant to a resale registration statement. We have also previously registered
for resale shares issued in connection with the prior private placements in
2006 and 2005. Sales by these shareholders could have an adverse impact on the
trading price of our common shares.
The concentration of our capital
stock ownership, following the completion of the recent private placement, may
limit your ability to influence corporate matters.
Our
common shares are held by a relatively small number of investors. After the completion of our $30.0 million
private placement financing in July 2008, four of our shareholders
collectively beneficially
8
Table of Contents
own
approximately 98% of our common shares.
These investors also have certain rights to designate members of our
Board of Directors and may exercise significant influence over all matters
requiring shareholder approval, including elections of directors and
significant corporate transactions, such as a merger or other sale of us or our
assets for the foreseeable future. This concentrated control may limit our
ability to influence corporate matters and, as a result, we may take actions
that our shareholders do not view as beneficial.
Inquiry from Ontario Securities
Commission regarding the Companys stock option granting practices may be
disruptive.
On July 7, 2008, we received an inquiry
from the Ontario Securities Commission (OSC) for information and a request for
the Company to perform an internal review with respect to our option granting
practices from January 1, 2001 to present. We are required to
provide requested information to the OSC by November 18, 2008. In
response to this request, on July 28, 2008, our Board of Directors
constituted a Special Committee to review our option granting practices and to
make recommendations to the Board with respect to any concerns, changes in
practices and related issues. We have
not yet completed our review or determined whether we will need to record any
non-cash adjustments to compensation expense related to prior option
grants. The continued review of our
historical option granting practices may require us to expend significant
management time and incur significant accounting, legal, and other expenses,
which could have a material adverse effect on our results of operations.
In addition, we, and our current and former directors and officers, may become
the subject of government inquiries, shareholder derivative and class action
lawsuits and other legal proceedings relating to our historical option granting
practices in the future. Should any of these events occur, they could require
us to expend significant management time and incur significant accounting,
legal and other expenses. This could divert attention and resources from the operation
of our business and adversely affect our financial condition and results of
operations.
Because we do not intend to pay, and
have not paid, any cash dividends on our common shares, our shareholders will
not be able to receive a return on their common shares unless the value of our
common shares appreciates and they sell them.
We
have never paid any cash dividends on our common shares and intend to retain
future earnings, if any, to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our common shares
in the foreseeable future. As a result, our shareholders will not be able to
receive a return on their common shares unless the value of our common shares
appreciates and they sell them.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference in this prospectus
include forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the Securities Act) and Section 21E
of the Securities Exchange Act of 1934, as amended (the Exchange Act). All
statements other than statements of historical fact are forward-looking
statements for purposes of these provisions, including statements regarding
our expectations with respect to future development plans for our
next-generation product candidates, particularly the Levacor Rotary VAD, the
timing and scope of pre-clinical testing and clinical trials, our ability to
secure additional funding or to form strategic partnerships, our cost reduction
efforts and their impact on our ability to maintain operations, as well as
other statements that can be identified by the use of forward-looking language,
such as believe, feel, expect, may, will, should, seek, plan, anticipate,
or intend or the negative of those terms, or by discussions of strategy or
intentions. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results and performance
to be materially different from any future results and performance expressed or
implied by
9
Table of Contents
these
forward-looking statements. Important factors that could cause our actual
results to differ materially from those expressed or implied by such
forward-looking statements include:
·
our need for additional significant financing in the future;
·
costs and delays associated with research and development, pre-clinical
testing and clinical trials for our products and next-generation product
candidates, such as the Levacor Rotary VAD,
·
our ability to manufacture, sell and market our products;
·
decisions, and the timing of decisions, made by health regulatory
agencies regarding approval of our products;
·
competition from other products and therapies for heart failure;
·
continued slower than anticipated Destination Therapy adoption rate for
VADs;
·
limitations on third-party reimbursements;
·
our ability to obtain and enforce in a timely manner patent and other
intellectual property protection for our technology and products;
·
our ability to avoid, either by product design, licensing arrangement
or otherwise, infringement of third parties intellectual property;
·
our ability to enter into corporate alliances or other strategic
relationships relating to the development and commercialization of our
technology and products;
·
loss of commercial market share to competitors due to our financial
condition;
·
our ability to remain listed on the NASDAQ Capital Market; and
·
other factors we discuss under the heading RISK FACTORS.
We
undertake no obligation to update publicly or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
USE
OF PROCEEDS
This
prospectus relates to the sale, transfer or other disposition of common shares,
or interests in the common shares, by the selling shareholders or their
transferees. We will not receive any
proceeds from any such disposition.
SELLING
SHAREHOLDERS
The
common shares being offered by this prospectus were previously issued in a
private placement or underlie certain common share purchase warrants that were
previously issued in that private placement.
On July 31, 2008, we completed a $30.0 million private placement
transaction and recapitalization under the terms of the Recapitalization
Agreement (as defined above). As part of the recapitalization transaction, we
issued warrants to purchase an aggregate of 83,333 common shares to our
advisors, Pacific Growth Equities, LLC and Stifel, Nicolaus and Company. The selling shareholders are parties to or
beneficiaries of a registration rights agreement with us, pursuant to which we
have agreed to register their common shares for resale. This prospectus covers up to 12,950,000 of
our common shares held by, or underlying common share purchase warrants held
by, the selling shareholders listed below.
The term selling shareholders includes the holders of our common
shares and of our common share purchase warrants listed below, and their
respective transferees, pledges, donees or other successors.
10
Table of Contents
The
table below contains information concerning the selling shareholders
beneficial ownership of our common shares, including common shares underlying
common share purchase warrants held by such selling shareholders, as of November 3,
2008. Beneficial ownership is determined
in accordance with Rule 13d-3(d) promulgated by the SEC under the
Exchange Act. The table below has been
prepared based solely on information provided to us by the selling
shareholders.
To
our knowledge, except for Pacific Growth Equities, LLC and Stifel, Nicolaus &
Company, Incorporated, none of the selling shareholders is a registered
broker-dealer.
The
Recapitalization Agreement provides that each of Abiomed, Venrock, SSF and New
Leaf will have the right to designate one person for election to our Board of
Directors, so long as such entity or group, as applicable, or its affiliates,
remains the beneficial owner of at least 5% of our outstanding common
shares. Abiomed will also have the right
to designate an observer to attend meetings of our Board of Directors at any
time it does not have a designee on the Board of Directors. All of Abiomeds rights of designation with
respect to our Board of Directors will terminate on the fifth anniversary of
the closing of the recapitalization transaction.
The
Recapitalization Agreement also provides Abiomed with certain distribution
rights. During the term of the
Recapitalization Agreement, we are required to negotiate in good faith with
Abiomed about distribution arrangements before engaging any third-party
distributors for our products. However,
we retain the right, without negotiating with Abiomed, to distribute our
products directly. In addition, if we
and Abiomed are unable to agree to terms on a potential distribution
arrangement, we are free to negotiate with third-party distributors without
giving revised terms to Abiomed. Abiomeds
distribution rights will terminate upon a change of control of us pursuant to
the terms of the Recapitalization Agreement.
The
registration statement of which this prospectus is a part has been filed
pursuant to the registration rights entered into as part of a private placement
which was completed on July 31, 2008.
Under
the terms of the registration rights agreement, we will pay all expenses of the
registration of the common shares, including SEC filing fees, except that the
selling shareholders will pay all underwriting discounts and selling
commissions, if any. Our expenses for
the registration of the common shares are estimated to be approximately $62,400.
Because
the selling shareholders may sell, transfer or otherwise dispose of all, some
or none of the common shares covered by this prospectus, we cannot determine
the number of common shares that will be sold, transferred or otherwise
disposed of by the selling shareholders.
For the purposes of the table below, we assume that the selling
shareholders will sell all common shares covered by this prospectus.
Except
as described below, the selling shareholders have sole voting and investment
power over the common shares listed in the table.
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Table of Contents
Selling Shareholders
Name
|
|
Number of Common
Shares Owned Before
the Offering
|
|
Number of
Common Shares
Offered
|
|
Percentage of
Common Shares
Owned After the
Offering (1)
|
|
Number of
Common Shares
Held After the
Offering
|
|
Venrock Associates (2)
3340 Hillview Avenue
Palo Alto, CA 94304
|
|
3,666,666
|
|
3,666,666
|
|
*
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
New Leaf Ventures II, L.P. (3)
7 Times Square, Suite 1603
New York, NY 10036
|
|
3,333,333
|
|
3,333,333
|
|
*
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Austin W. Marxe and David
M. Greenhouse (4)
153 East 53rd Street
New York, NY 10022
|
|
3,109,288
|
(5)
|
3,000,000
|
|
*
|
|
109,288
|
|
|
|
|
|
|
|
|
|
|
|
ABIOMED, Inc. (6)
22 Cherry Hill Drive
Danvers, MA 01923
|
|
2,866,666
|
|
2,866,666
|
|
*
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Growth Equities,
LLC (7)
One Bush Street
San Francisco, CA 94104
|
|
58,333
|
|
58,333
|
|
*
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Stifel, Nicolaus & Company (8)
One South Street
Baltimore, Maryland 21202
|
|
25,000
|
|
25,000
|
|
*
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
13,059,286
|
|
12,949,998
|
|
*
|
|
109,288
|
|
*
Less than 1%
(1)
Percentage ownership is based on 13,253,964
common shares outstanding as of November 5, 2008.
(2)
Venrock
Associates V, L.P. is the record owner of 3,308,433 common shares, Venrock
Entrepreneurs Fund V, L.P. is the record owner of 77,733 common shares, and
Venrock Partners V, L.P. is the record owner of 280,500 common shares.
Collectively, Venrock Associates V, L.P., Venrock Entrepreneurs Fund V, L.P.
and Venrock Partners V, L.P. (together, Venrock) are the record owners of
3,666,666 common shares (the Venrock Shares). As the general partners
of Venrock Associates V, L.P., Venrock Entrepreneurs Fund V, L.P. and Venrock
Partners V, L.P., respectively, Venrock Management V, LLC, VEF Management V,
LLC and Venrock Partners Management V, LLC (the General Partners) may be
deemed to own beneficially all of the Venrock Shares. Each General
Partner disclaims beneficial ownership of the Venrock Shares except to the
extent of their indirect pecuniary interest therein. In addition, Brian
Ascher, Michael Brooks, Eric Copeland, Anthony Evnin, Anders Hove, Bryan
Roberts, Ray Rothrock, David Siminoff, Anthony Sun, and Michael Tyrrell
(collectively, the Members) are the members of each of the General Partners
and may be deemed to own beneficially all of the Venrock Shares. Each
Member disclaims beneficial ownership of the Venrock Shares except to the
extent of their indirect pecuniary interest therein. Venrock is entitled
to a board nominee on our Board of Directors depending on certain ownership
requirements of our common shares. Anders Hove is a director on our Board
of Directors as a designee of Venrock.
(3)
As the sole general partner of New Leaf
Ventures II, L.P. (New Leaf), New Leaf Venture Associates II, L.P. (NLVA)
may be deemed to own beneficially the common shares owned by New Leaf. As the sole general partner of NLVA, New
Leaf Venture Management II, L.L.C. (NLV Management) may be deemed to own
beneficially the common shares owned by New Leaf. As the individual Managing Directors of NLV
Management, each of Philippe Chambon, Jeani Delagardelle, Ron Hunt, Kathleen
LaPorte Vijay Lathi and James Niedel also may be deemed to own beneficially the
common shares owned by New Leaf. Each of
NLVA, NLV Management and each of the foregoing Managing Directors disclaims
beneficial ownership of such common shares except to the extent of their
pecuniary interest therein, if any. New Leaf is entitled to a board nominee on
our Board of Directors depending on certain ownership requirements of our common
shares. Jeani Delagardelle is a director
on our Board of Directors pursuant to a designation by New Leaf.
(4)
Includes (i) 552,927 common shares held
by Special Situations Cayman Fund, L.P., (ii) 5,835 common shares held by
Special Situations Fund III, L.P., (iii) 1,525,504 common shares held by
Special Situations Fund III QP, L.P.,
12
Table of Contents
(iv) 556,170 common shares held by Special Situations Private
Equity Fund, L.P., (v) 133,333 shares of common stock owned by Special
Situations Life Sciences Fund, L.P., (vi) 333,333 shares held by Austin W.
Marxe and (vii) 2,186 shares held by David M. Greenhouse. Each of Messrs. Marxe and Greenhouse
have sole voting and investment power over the shares held in their respective
names. MGP Advisors Limited (MGP) is
the general partner of the Special Situations Fund III, QP, L.P. and the
general partner of and investment adviser to the Special Situations Fund III,
L.P. AWM Investment Company, Inc. (AWM)
is the general partner of MGP, the general partner of and investment adviser to
the Special Situations Cayman Fund, L.P. and the investment adviser to the
Special Situations Fund III, QP, L.P., the Special Situations Private Equity
Fund, L.P. and the Special Situations Life Sciences Fund, L.P. Austin W.
Marxe and David M. Greenhouse are the principal owners of MGP and AWM.
Through their control of MGP and AWM, Messrs. Marxe and Greenhouse share
voting and investment control over the portfolio securities of each of the
funds listed above. Special Situations Fund III QP, L.P., Special Situations
Cayman Fund, L.P., Special Situations Private Equity Fund, L.P. and Special
Situations Life Sciences Fund, L.P. (collectively, the Special Situations
Funds) are entitled to designate a nominee for election to our Board of
Directors so long as certain ownership requirements are met. Austin W. Marxe is a member of our Board of
Directors pursuant to a designation by the Special Situations Funds.
(5)
Includes 109,288 shares beneficially owned
before the offering that may be sold pursuant to our Registration Statement on Form S-3
filed with the SEC on December 26, 2006 (File No. 333-139662).
(6)
Based solely on the Schedule 13D filed on August 8,
2008, by ABIOMED, Inc. (Abiomed), Abiomed acquired 2,866,666 of our
common shares as a result of Abiomeds conversion of the full amount of
principal and interest owed on the US$5,000,000 8% Secured Convertible
Promissory Note (the Note) previously issued to Abiomed by us and WHI,
Abiomeds release of the security interest in all of our assets and those of
WHI that secured the Note, termination of the warrant Abiomed held to purchase
113,333 of our common shares, and forgiveness of other amounts owed to Abiomed
by us. Abiomed is a company publicly
traded on the NASDAQ Global Market under the symbol ABMD. Abiomed is entitled to designate a nominee
for election to our Board of Directors so long as certain ownership
requirements are met. Michael R. Minogue
is a director on our Board of Directors pursuant to a designation by Abiomed.
(7)
Richard Osgood, Steve Massocca and Thomas
Dietz are the principals of Pacific Growth Equities, LLC and possess sole
voting and investment control over the securities.
(8)
The Board of Directors of Stifel, Nicolaus &
Company, Incorporated (Stifel) possess sole voting and investment control over
the securities.
Information
about any other selling shareholders will be included in prospectus supplements
or post-effective amendments, if required.
Information about the selling shareholders may change from time to
time. Any changed information with
respect to which we are given notice will be included in prospectus supplements.
PLAN OF
DISTRIBUTION
The
selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded
or in private transactions. These
dispositions may be at fixed prices, at prevailing market prices at the time of
sale, at prices related to the prevailing market price, at varying prices determined
at the time of sale, or at negotiated prices.
The
selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:
·
ordinary
brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
·
block
trades in which the broker-dealer will attempt to sell the shares as agent, but
may position
13
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and
resell a portion of the block as principal to facilitate the transaction;
·
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
·
an
exchange or over-the-counter distribution in accordance with the rules of
the applicable exchange or other market;
·
privately negotiated transactions;
·
short
sales effected after the date the registration statement of which this
Prospectus is a part is declared effective by the SEC;
·
through
the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
·
broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
·
a
combination of any such methods of sale; and
·
any
other method permitted by applicable law.
The
selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock, from time to
time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
In
connection with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling stockholders may also sell shares
of our common stock short and deliver these securities to close out their short
positions, or loan or pledge the common stock to broker-dealers that in turn
may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers
or other financial institutions or the creation of one or more derivative
securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The
aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each
of the selling stockholders reserves the right to accept and, together with
their agents from time to time, to reject, in whole or in part, any proposed
purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from
this offering.
The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided that they meet the criteria and
14
Table of Contents
conform
to the requirements of that rule.
The
selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be underwriters
within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or
profit they earn on any resale of the shares may be underwriting discounts and
commissions under the Securities Act.
Selling stockholders who are underwriters within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements
of the Securities Act.
To
the extent required, the shares of our common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth
in an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
In
order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered
or qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.
We
have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act apply to sales of shares in the market and
to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will
make copies of this prospectus (as it may be supplemented or amended from time
to time) available to the selling stockholders for the purpose of satisfying
the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the
shares against certain liabilities, including liabilities arising under the
Securities Act.
We
have agreed to indemnify the selling stockholders against liabilities,
including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus.
We
have agreed with the selling stockholders to keep the registration statement of
which this prospectus constitutes a part effective until the earlier of (1) such
time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or (2) the
date on which the shares may be sold without restriction pursuant to Rule 144
of the Securities Act.
SHARE
CAPITAL
Our
authorized share capital consists of an unlimited number of common shares
without par value and an unlimited number of preferred shares without par
value, issuable in series. As of November 5,
2008, there were 13,253,964 common shares outstanding and no preferred shares
issued and outstanding.
Common Shares
Each
common share entitles its holder to one vote at meetings of our shareholders,
except meetings at which only the holders of another class or series of shares
are entitled to vote, to receive any dividends declared by the board of
directors (subject to the prior rights of holders of any preferred shares), and
to receive our property upon liquidation, dissolution or winding up. All outstanding common shares and preferred
shares are fully paid and non-assessable.
15
Table of Contents
On
October 9, 2008, our shareholders approved an amendment to our Articles of
Incorporation to consolidate our common shares on the basis of one new common
share for 30 existing common shares. On October 27,
2008, we filed Articles of Amendment effecting the share consolidation.
Preferred Shares
The
board of directors has the authority to issue an unlimited number of preferred
shares, issuable in series, and to determine prior to any such issuance the
price, rights, preferences, privileges and restrictions, including voting
rights, of those shares without any further vote or action by the
shareholders. Preferred shares may, at
the discretion of the board of directors, be entitled to preference over the
common shares and any other shares ranking junior to the preferred shares with
respect to the payment of dividends and distribution of assets in the event of
liquidation, dissolution or winding up.
If any cumulative dividends or amounts payable on return of capital are
not paid in full, preferred shares of all issued series would participate
ratably in accordance with the amounts that would be payable on such shares if
all such dividends were declared and paid in full or the sums which would be
payable on such shares on the return of capital if all amounts so payable were
paid in full, as the case may be.
ENFORCEABILTY OF CIVIL LIABILITIES
We
are a corporation organized under the laws of Canada. Several of our directors and the experts named
in this prospectus are residents of Canada and a portion of their assets and a
portion of our assets are located outside of the United States. As a result, it may be difficult for
investors to effect service of process within the United States upon the
directors, controlling persons, officers and experts who are not residents of
the United States or to enforce against them judgments of courts of the United
States based upon the civil liability under the Federal securities laws of the
United States. McCarthy Tétrault LLP,
our Canadian counsel, has advised us that there is doubt as to the
enforceability in Canada against us or against any of our directors or experts
who are not residents of the United States, in original actions or in actions
for enforcement of judgments of United States courts, of liabilities based
solely upon the Federal securities laws of the United States.
EXPERTS
Our
consolidated balance sheet as of December 31, 2007, and the consolidated
statements of loss, shareholders equity (deficiency) and cash flows for the
year ended December 31, 2007, have been incorporated herein by reference
in reliance upon the report of Burr, Pilger & Mayer LLP, independent
registered public accounting firm, as incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
Our
consolidated balance sheet as of December 31, 2006, and the consolidated
statements of loss, shareholders equity (deficiency) and cash flows for the
years ended December 31, 2006 and December 31, 2005, have been
incorporated herein by reference in reliance upon the report of
PricewaterhouseCoopers LLP, independent auditors, as indicated in their reports
with respect thereto, and included herein in reliance on the authority of that
firm as an expert in accounting and auditing in giving those reports.
LEGAL
MATTERS
The
validity of the common shares covered by this registration statement will be
passed upon by McCarthy Tétrault LLP, Ottawa, Canada.
16
Table of Contents
WHERE YOU CAN GET
MORE INFORMATION
This
prospectus, which constitutes part of the registration statement, does not
include all of the information contained in the registration statement. You should refer to the registration
statement and its exhibits for additional information. Whenever we make reference in this prospectus
to any of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits filed with the
registration statement for copies of the actual contract, agreement or other
document. We are subject to the
information and periodic reporting requirements of the Exchange Act and, as
required by the Exchange Act, we file annual, quarterly and current reports,
proxy statements and other information with the SEC.
You
may read and copy the registration statement, including the related exhibits,
the documents incorporated by reference into this prospectus and any document
we file with the SEC, without charge at the SECs public reference room 100 F
Street, N.E., Washington D.C. 20549. Our
SEC file number is 000-28882
.
Please call the SEC 1-800-SEC-0330 for further
information on the public reference room.
In addition, the registration statement and the documents incorporated
by reference into this prospectus are publicly available through the web site
maintained by the SEC at www.sec.gov.
The SEC website also contains annual, quarterly and current reports,
proxy and information statements and other information that issuers (including
us) filed electronically with the SEC.
Additional
information relating to us is available on the System for Electronic Document
Analysis and Retrieval (SEDAR) at www.sedar.com.
We
encourage you to review any documents and reports we will file after the date
of this prospectus as required by Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act.
INCORPORATION OF
DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into
this prospectus information contained in other documents that we file with it,
which means that we can disclose important information by referring to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below
and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act until the selling shareholders have sold all of
the common shares to which this prospectus relates or the offering is otherwise
terminated. Any information contained in a Current Report on Form 8-K that
is furnished to the SEC shall not be incorporated by reference into this
registration statement.
·
|
|
our Annual
Report on Form 10-KSB and 10-KSB/A for the year ended December 31,
2007;
|
·
|
|
our Quarterly
Report on Form 10-Q and 10-Q/A for the fiscal quarter ended
March 31, 2008;
|
·
|
|
our Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 2008;
|
·
|
|
our Definitive
Proxy Statement relating to our 2008 annual and special meeting of
shareholders filed on March 27, 2008;
|
·
|
|
our Current
Reports on Form 8-K filed on February 11, 2008, February 20,
2008, April 3, 2008, May 6, 2008, May 8, 2008, May 15,
2008, May 27, 2008, June 13, 2008, June 25, 2008, July 1,
2008, August 6, 2008, August 27, 2008, September 15, 2008,
October 15, 2008 and November 3, 2008; and
|
·
|
|
all of our filings
pursuant to the Exchange Act after the date of filing of the initial
registration statement and prior to effectiveness of the registration
statement.
|
17
Table of Contents
Each of these filings is available in electronic
format, through the SECs website at www.sec.gov. You may also request a copy of these filings,
at no cost, by writing or telephoning us.
Any requests should be directed to:
Jal S. Jassawalla
President and Chief Executive Officer
World Heart Corporation
7799 Pardee Lane
Oakland, California 94621
(510) 563-5000
This prospectus is
part of a registration statement that we have filed with the SEC. The
registration statement contains more information than this prospectus regarding
us and our common shares, including certain exhibits and schedules. You can
obtain a copy of the registration statement from the SEC at the address listed
above or from the SECs internet website. You should rely only on the
information incorporated by reference or provided in this prospectus or any
prospectus supplement. We have not authorized anyone else to provide you with
different information. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of these documents.
18
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