OAKLAND, Calif., May 9 /PRNewswire-FirstCall/ -- (Nasdaq: WHRT, TSX: WHT) Since January 2008, World Heart Corporation (the "Company") has aggressively pursued various financing alternatives to raise additional capital, including through equity financing transactions and corporate collaborations, in order to continue operations. At April 30, 2008, the Company had cash and cash equivalents of approximately $0.5 million and current liabilities of approximately $2.6 million. On May 2, 2008, the Company learned that its potential primary investor may not be able to give its assurance of commitment to allow the Company to access capital to meet current financing needs. This information resulted in the Company making the determination that its available cash would be insufficient to pay the Company's obligations as they become due, which constitutes an event of default under the Company's secured convertible promissory note in the amount of $5.0 million issued on December 11, 2007 to Abiomed, Inc. This event of default under the note results in the outstanding principal balance of the note, together with accrued but unpaid interest and any other amounts owing under the Abiomed note documents, becoming immediately due and payable to Abiomed. The note is secured by security agreements entered into by the Company and the Company's wholly-owned subsidiary, World Heart, Inc. ("WHI"), in favor of Abiomed, that grant a security interest in all of their respective assets. Abiomed could exercise its remedies under law and under the security agreements, including foreclosing on the assets of the Company and WHI. An event of default also permits Abiomed to terminate the clinical and marketing support services agreement.
The Company has an immediate need for additional capital in order to satisfy its obligations and to continue operations. The Company continues to aggressively pursue various financing alternatives but its efforts to raise additional capital have not been successful as of the date of this report. The Company estimates that it has cash available to continue operations only through the latter part of May 2008. If the Company is unable to secure additional funding, it will be forced to take extraordinary business measures which could include filing for bankruptcy, ceasing operations and liquidating assets.
On May 5, 2008, the Company was informed by Robert J. Majteles that he is resigning from the Board of Directors and all of the committees of the Board, effective immediately. The Company intends to reconstitute all of the committees of the Board, such that Mr. William C. Garriock, Dr. Michael Estes and Mr. Gary Goertz, the three remaining independent directors, will be members of each of the committees.
On April 29, 2008, the Company held its Annual Meeting of Shareholders
where proposals for shareholders' vote were presented for the following
(1) to receive and to consider the Company's audited consolidated
financial statements for the year ended December 31, 2007, that have
been prepared in accordance with generally accepted accounting
principles in the United States, together with the report of the
(2) to elect directors to serve until the next annual meeting of the
shareholders or until their successors are elected or appointed,
unless the office is vacated earlier;
(3) to appoint Burr, Pilger & Mayer LLP as independent auditors of the
Company and to authorize the directors to fix their remuneration; and
(4) to approve conversion of the secured promissory note in the principal
amount of up to US$5,000,000, previously issued to Abiomed
convertible at Abiomed's option into the Company's common shares at
US$1.748948 per share, subject to adjustments, including any
conversion of interest owed, and approval of the exercise of a five
year warrant to purchase up to 3,400,000 common shares of the
Company, exercisable at US$0.01 per share, issued to Abiomed in
connection with the secured promissory note.
The election of directors, the appointment of the auditors and the conversion of the note and exercise of the warrant issued to Abiomed were carried by a majority of the votes at the meeting in person or by proxy. A copy of the Voting Results, which includes the percentage outcome of the votes cast, is furnished as Exhibit 99.1 to this report and incorporated herein by reference.
About World Heart Corporation
WorldHeart is a developer of mechanical circulatory support systems. The Company is headquartered in Oakland, California, USA with additional facilities in Salt Lake City, Utah and Herkenbosch, Netherlands. WorldHeart's registered office is Ottawa, Ontario, Canada.
Any forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include any statements regarding the Company's ability to regain compliance with the NASDAQ Capital Market listing requirements, as well as other statements that can be identified by the use of forward-looking language, such as "believes," "feels," "expects," "may," "will," "should," "seeks," "plans," "anticipates," or "intends" or the negative of those terms, or by discussions of strategy or intentions. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including without limitation: the Company's immediate need for additional capital, risks in product development and market acceptance of and demand for the Company's products; delisting from the NASDAQ Stock Market if compliance with the listing standards, including the Minimum Bid Price Rule and other minimum standards, is not regained; and other risks detailed in the Corporation's filings with the U.S. Securities and Exchange Commission, including without limitation its Annual Report on Form 10-KSB for the year ended December 31, 2007.
|SOURCE World Heart Corporation|
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