1389072--2/28/2008--HeartWare

related topics

{product, candidate, development}

{stock, price, share}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, operating}

{customer, product, revenue}

{provision, law, control}

{tax, income, asset}

{product, market, service}

{personnel, key, retain}

{operation, international, foreign}

{control, financial, internal}

{cost, contract, operation}

We may need substantial additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts. We have no products approved for commercial sale, and our success will depend heavily on the success of our clinical trial program for our lead device, the HeartWare LVAD System, particularly our US clinical trial which has not yet commenced. If the results of our international clinical trial are uncompetitive or we are unable to complete our US trial or if we experience significant delays in the completion of any of our clinical trials, our ability to obtain regulatory approval to commercialize our products and to generate revenues will be harmed. If either of our international or our US clinical trial does not demonstrate the safety and efficacy of the HeartWare LVAD System or if we do not receive regulatory approval in Europe, Australia and the United States, we will be unable to commercialize our product and generate revenues in those locations. Even if our international clinical trial is successful and we obtain foreign regulatory approvals, we will need to obtain FDA approval to commercialize our product in the United States, which will require us to receive FDA approval to conduct clinical trials in the United States and to complete those trials successfully. If we fail to obtain approval from the FDA, we will not be able to market and sell our products in the United States We may not meet regulatory quality standards applicable to our manufacturing and quality processes, which could have an adverse effect on our business, financial condition or results of operations. We plan to operate in multiple regulatory environments that require costly and time consuming approvals. Our LVADs may never achieve market acceptance even if we obtain regulatory approvals. If we fail to obtain an adequate level of reimbursement for our products by third party payers, there may be no commercially viable markets for our product candidates or the markets may be much smaller than expected. If hospitals do not conduct destination therapy procedures using our LVADs, market opportunities for our product will be diminished. We have limited sales, marketing and distribution experience. We have limited capabilities and manufacturing personnel, and if our manufacturing facilities are unable to provide an adequate supply of products, our growth could be limited and our business could be harmed. Our manufacturing facilities and the manufacturing facilities of our suppliers must comply with applicable regulatory requirements. If we fail to achieve regulatory approval for these manufacturing facilities, our business and our results of operations would be harmed. We rely on specialized suppliers for certain components and materials. We may not be able to effectively protect our intellectual property rights which could have an adverse effect on our business, financial condition or results of operations. Intellectual property litigation could be costly and disruptive to us. If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected. If we are unable to manage our expected growth, we may not be able to commercialize our product candidates. We compete against companies that have longer operating histories, more established or approved products and greater resources than we do, which may prevent us from achieving further market penetration or improving operating results. The competition for qualified personnel is particularly intense in our industry. If we are unable to retain or hire key personnel, we may not be able to sustain or grow our business. Product liability claims could damage our reputation or adversely affect our business. Investors could lose confidence in our financial reports, and the value of our ordinary shares may be adversely affected, if our internal controls over financial reporting are found not to be effective by management or by an independent registered public accounting firm or if we make disclosure of existing or potential significant deficiencies or material weaknesses in those controls. Fluctuations in foreign currency exchange rates could adversely affect our financial results. Risk Factors Related to Our Ordinary Shares There is no current trading market for our ordinary shares in the United States and no such market may develop. Conversion of our outstanding convertible note or other future issuances of our ordinary shares will dilute the ownership interests of existing shareholders. The price of our ordinary shares may fluctuate significantly. Your interests may differ or conflict with those of the Company s largest shareholder. If there are substantial sales of ordinary shares, our share price could decline. We do not intend to pay cash dividends on our ordinary shares in the foreseeable future. We are currently classified as a PFIC for US federal income tax purposes. As long as we remain a PFIC, US holders of our ordinary shares may be subject to adverse tax consequences. Some provisions of Australian law have anti-takeover effects that could discourage or prohibit the acquisition of us by others, even if such an acquisition would be beneficial to our shareholders.

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1389072--2/28/2008--HeartWare_LTD