News & Events

Placement and Non Renounceable Rights Issue

Sunshine Heart, Inc. (ASX: SHC) is pleased to announce a A$3.7 million Placement to be followed by an A$11 million Non-Renounceable Rights Issue to raise up to a total of A$14.7 million.

 Placement

Sunshine Heart has secured commitments from US based institutional investors for a placement of A$3.7 million through specialist US healthcare group Summer Street Research Partners (“Placement”). The Placement is on the following terms:

·         133,421,569 million shares (Shares) at 2.8 cents per share; and

·         for every 2 shares subscribed for in the Placement, investors will be granted an unlisted option, exercisable at 3.2 cents per share for a period of 4 years from the date of grant.

The Placement is subject to the approval of shareholders, which will be sought at an Extraordinary General Meeting (EGM) of shareholders to be held on Monday 25 October 2010. Sunshine Heart will seek approval from shareholders at the EGM to issue up to 392,857,142 shares under the Placement. This provides Sunshine Heart with the flexibility to issue 259,435,573 additional shares under the Placement for a period of up to 3 months after the EGM, potentially raising up to a further A$7.3 million. If these additional shares are fully subscribed, the total size of the capital raising would increase to A$22 million.

 

At the request of the US based investors, the Company has agreed that it will seek a listing on Nasdaq. The purchase agreement governing the purchase of the shares provides that US investors in the Placement will be issued a further option pursuant to which they will have the right to subscribe for 1 new share at 3.2 cents per share for every 10 shares they subscribe for in the Placement, if the Company has not filed an application to register the shares with the US Securities Exchange Commission and filed an application to list on Nasdaq by 30 September 2011.

Rights Issue

Following the EGM, the Company intends to launch a non-renounceable rights issue (Rights Issue) at 2.8 cents per share to raise up to approximately A$11 million. The Rights Issue will not be underwritten.

It is proposed that:

·         shareholders will be granted an unlisted option, exercisable at 3.2 cents per share for a period of 4 years from the date of grant, to subscribe for 1 share for every 2 shares subscribed for in the Rights Issue; and

·         a top-up facility will be offered whereby eligible shareholders may apply for additional shares over and above their entitlement.

The Rights Issue will only proceed if shareholders approve the Placement and an increase to the authorised issued capital of the Company at the EGM.

The Company’s major shareholders, GBS Venture Partners and CM Capital have indicated their intention to take up their entitlement in the Rights Issue. The entitlements of GBS Venture Partners and CM Capital amount to approximately 51.72% of the Rights Issue which ensures a minimum A$5.68 million will be raised through the Rights Issue.

Shares issued under the Placement will not be eligible to participate in the Rights Issue.

Additional information

The funds raised through the Placement and the Rights Issue will be used primarily as follows:

·         advance the regulatory trials in the US by:

�?� concluding the current feasibility clinical trial and six-month patient follow up;

 

�?� preparing the application for the larger FDA pivotal trial, negotiating the protocols and applying for FDA approval to start the trial. This trial is the precursor to approval to market the C-Pulse in the United States

·         prepare and apply for CE Mark approval which will allow marketing of the C-Pulse device in certain countries outside the United States;

·         complete development of tools for minimally invasive C-Pulse procedure;

  ·         continue product development of:

 �?� the single unit C-Pulse system which integrates the current two unit system consisting of battery pack and driver into one smaller and lighter unit; this is targeted for completion in 2011 ;

 �?� C-Pulse II, which represents a completely implantable second generation system;

 �?� preliminary work on the Sync-Pulse system which would offer the ability to directly connect to pacemaker and ICD technology to potentially offer a new therapy; 

·         hire personnel required to support the above objectives;

·         file an application to list on a US stock exchange; and

·         provide working capital for the Company.

 The Placement and the Rights Issue will be managed by Summer Street Research Partners Inc., in the United States and RBS Morgans in Australia.