UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC20549

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**FORM 10-KSB/A(AMENDMENT NO. 1)**

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**ANNUAL REPORT UNDER SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2006Commission File No. 0-28882**

 

**WORLD HEART CORPORATION**

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| **Canada**                                                       |   | **52-2247240**                       |
|------------------------------------------------------------------|--------|--------------------------------------|
| (State or other  Jurisdiction of  Incorporation or Organization) |   | (I.R.S.Employer  Identification No.) |
|                                                             |   |                                 |
| **7799 Pardee  Lane  Oakland, California, USA**             |   | **94621**                            |
| (Address of  Principal Executive Office)                         |   | (Zip Code)                      |

 

**(510) 563-5000**

(Issuer’s TelephoneNumber) 

 

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**Securitiesregistered under Section 12(b) of the Exchange Act:**

| **Title of each class**      |   | **Name of  each exchange on which registered** |
|------------------------------|--------|------------------------------------------------|
| Common Shares,  no par value |   | The Nasdaq Stock  Market LLC                   |

 

**Securitiesregistered under Section 12(g) of the Exchange Act: None**

Check whether the issuer is not required to filereports pursuant to Section 13 or 15(d) of the Exchange Act. o

Check whether the issuer (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Actduring the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days.

| Yes x |   | No o |
|-------|--------|-----------|

Check if there is no disclosure of delinquent filersin response to Item 405 of Regulation S-B contained in this form, andno disclosure will be contained, to the best of the registrant’s knowledge, indefinitive proxy or information statements incorporated by reference inPart III of this Form 10-KSB or any amendment to this Form 10-KSB. o

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act).

| Yes o |   | No x |
|------------|--------|-----------|

 

The issuer’s revenues for its most recent fiscal yearended December 31, 2006 were $8,616,038.

The aggregate market value of the voting andnon-voting common equity held by non-affiliates computed by reference to theprice at which the common equity was sold, or the average bid and asked priceof such common equity, as of March 1, 2007 was $12,779,480.

The number of common shares outstanding as of March 1,2007 was 115,072,749.

Transitional Small Business Disclosure Format (Check one):      Yes o         No x

 

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**EXPLANATORY NOTE**

We are filing this Amendment No. 1 on Form 10-KSB/Afor the year ended December 31, 2006 to amend our Form 10-KSB originally filedwith the Securities and Exchange Commission on March 29, 2007.  We are filing this amendment solely for the purposeof providing information required by Part III of Form 10-KSB.  These items were not included in the originalForm 10-KSB because we anticipated that the information would be provided inour Proxy Statement for our 2007 Annual Meeting of Shareholders to be filedwithin 120 days after the end of our 2006 fiscal year.  In addition, in connection with the filing ofthis Amendment No. 1 and pursuant to Rules 12b-15 and 13a-14(a) underthe Exchange Act, we are including with this Amendment No. 1 certain currentlydated certifications.

Unless otherwise expressly stated, this Amendment No.1 does not reflect events occurring after the filing of the original Form10-KSB, or modify or update in any way disclosures contained in the originalForm 10-KSB.

**TABLE OF CONTENTS**

PART III

| Item 9.  |   | Directors,  Executive Officers, Promoters, Control Persons and Corporate Governance;  Compliance With Section 16(a) of the Exchange Act. |   | 2  |   |
|----------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----|--------|
| Item 10. |   | Executive  Compensation.                                                                                                                           |   | 5  |   |
| Item 11. |   | Security  Ownership of Certain Beneficial Owners and Management and Related Shareholder  Matters.                                                  |   | 11 |   |
| Item 12. |   | Certain  Relationships and Related Transactions, and Director Independence.                                                                        |   | 15 |   |
| Item 13. |   | Exhibits.                                                                                                                                          |   | 15 |   |
| Item 14. |   | Principal  Accountant Fees and Services.                                                                                                           |   | 18 |   |

 

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**PART III**

**Item 9.**                          Directors,Executive Officers, Promoters, Control Persons and Corporate Governance;Compliance With Section 16(a) of the Exchange Act.

**DIRECTORS**

Set forth below isthe name, age and biographical information for each person serving as andnominated by the Board of Directors as recommended by the Corporate Governanceand Nominating Committee as a director. Each elected director holds office until the next annual meeting ofshareholders and until his or her successor is elected and has qualified.  Directors may hold the office until theirdeath, resignation or removal.

**C.Ian Ross** (65), has served as our director sinceFebruary 2000.  He currently servesas Chairman of our Board of Directors and is on a number of BoardCommittees.  From July 1999 toSeptember 2003, Mr. Ross was Senior Director, Administration in theDean’s Office at the Richard Ivey School of Business, University of WesternOntario, with responsibility for managing the support functions for thebusiness school.  SinceSeptember 2003, Mr. Ross has been a professional companydirector.  He currently serves as adirector of the following companies: Ontario Power Generation, which is awholly-owned business corporation charged with managing and operating Crownprovincial electricity generation assets, GrowthWorks Canadian Fund Ltd.(Chair), a labour-sponsored venture capital corporation, PetValuCanada Inc. (Chair), a specialty retailer of pet food and pet supplies,Comcare Health Services, a community-based company providing health caresolutions, and e-Just Systems Inc. (Chair), a management systemsdevelopment company providing software to police and the courts.

**WilliamC.****Garriock**(68), has served as our director since December 2003.  Since 2003, Mr. Garriock has been aprofessional company director.  From 2000to 2003 he was the Chairman of MDS SCIEX, the analytical instrument division ofMDS Inc.  He was also the Presidentof MDS SCIEX from 1994 to 1999.  Mr.Garriock was the Executive-at-Large for MDS Inc., a health and life sciencescompany, from 2000 to 2003.  From 1993 to1994, he was Vice President and Managing Partner (Pharmaceuticals) of MDSHealth Ventures Inc.  For theprevious 18 years, he was the President and CEO of Miles Canada Inc.(now Bayer Canada Inc.), a pharmaceutical, diagnostics and consumerproducts company.  Mr. Garriock currentlyserves as Chair or director of public and private companies, including CipherPharmaceuticals Inc., a pharmaceutical development company.

**RobertJ. Majteles** (42), has served as our director sinceSeptember 2003.  Mr. Majteles is theManaging Partner of Treehouse Capital, LLC, an investment firm he foundedin 2001.  Currently, Mr. Majteles ison the Board of Directors of Adept Technology, Inc., MacrovisionCorporation, Phoenix Technologies Ltd., Unify Corporation and U.S. Auto PartsNetwork, Inc.  In addition,Mr. Majteles received a law degree from Stanford University and anundergraduate degree from Columbia University. Mr. Majteles is also a lecturer at Haas School of Business at theUniversity of California, Berkeley and at Stanford Law School, StanfordUniversity.

**MichaelSumner Estes, Ph.D.** (63), has served as our director sinceApril 2007.  Since 2006, Dr. Estes hasserved as the Chairman of the Board of Directors of Medical Entrepreneurs II,Inc., a company that develops and manufactures replacement heart valves.  From 2001 until 2005, Dr. Estes worked as anindependent consultant to Corazon, Inc., a company formed to develop newtechnology for the less invasive treatment of heart disease caused by calciumdeposits.  From 1996 to 1999, Dr. Esteswas the President and Chief Executive Officer of Orquest, Inc., a companyinvolved in bone replacement technology. From 1979 to 1995, Dr. Estes held executive positions with AmericanHospital Supply Corporation and Baxter Healthcare Corporation, includingresponsibility for the worldwide Cardiovascular Group at BaxterHealthCare.  Dr. Estes is currently on theBoard of Directors of nContact, Inc., a private cardiovascular company.

**JalS. Jassawalla** (61) has served as our director sinceDecember 2005 and has been President and Chief Executive Officer sinceJuly 2004.  From June 2003 toJuly 2004, Mr. Jassawalla was our Executive Vice President and ChiefTechnical Officer and was responsible for research and development, clinicalaffairs, clinical and technical support and quality.  Mr. Jassawalla was a co-founder ofNovacor Medical Corporation in 1979 and became an employee in June 2000when WorldHeart acquired the Novacor division of Edwards Lifesciences LLC,formerly Baxter Corporation.

**EXECUTIVEOFFICERS**

Setforth below is the name, age and biographical information for each of ourexecutive officers.

**JalS. Jassawalla** (61) has served as our President and ChiefExecutive Officer since July 2004. Mr. Jassawalla’s biographical information is included above in thediscussion of WorldHeart directors.

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**A.Richard Juelis** (58) was appointed our Vice President, Financeand Chief Financial Officer in June 2005. He previously held the same position with Cellegy Pharmaceuticals, Inc.,a public pharmaceutical company from 1994 to March 2005.  Mr. Juelis has held domestic and internationalfinancial and general management positions with both major and emerging healthcare companies.  He is currently on theboard of directors of Adept Technology, Inc., a public company thatmanufactures robot systems, motion control and machine vision technology.

**PietJansen, M.D.** (47) joined WorldHeart in February 2004 asour Chief Medical Officer.  He wasappointed Managing Director for Europe in July 2004.  Prior to joining WorldHeart, Dr. Jansen wasthe Vice President, Clinical Programs at Orqis International GmbH from 2003 toFebruary 2004.  He was VicePresident, Clinical Affairs at Jarvik Heart Inc. from 2001 to 2003.  From 1997 to 2001, Dr. Jansen worked for theNovacor Division of Edwards Lifesciences LLC, formerly Baxter Corporation.

**JohnJ. Vajda** (67) joined WorldHeart in June 2005 as our VicePresident of Manufacturing.  Mr. Vajdawas previously the Director of Operations at Centaur Pharmaceuticals, Inc. fromJanuary 1997.  In February 1998he became Vice President, Operations and one year later he was appointed SeniorVice President, Operations.  In thatcapacity, he was responsible for process development, manufacturing,engineering, facilities and quality control. Before working for Centaur, Mr. Vajda was Director of Operations forOculex Pharmaceuticals, Inc. and ChemTrack, Inc.  Prior to that, he was employed for 17 yearsby the Dow Chemical Co. in several executive positions.

**PhillipJ. Miller** (58) was appointed our Vice President, Research andDevelopment in November 2004.  Mr.Miller became an employee in June 2000 when WorldHeart acquired theNovacor Division of Edwards Lifesciences LLC, formerly Baxter Corporation.  Previously, he was the Director of BiomedicalEngineering at Edwards Lifesciences commencing in 1973.

**PratapS. Khanwilkar** (44) joined WorldHeart in August 2005 asthe Vice President, Rotary Systems and Business Development when WorldHeartpurchased MedQuest Products, Inc.  Priorto that, Mr. Khanwilkar was Chief Executive Officer and a co-founder ofMedQuest from 1993.  Mr. Khanwilkar has22 years of medical device development and commercialization experience andmore than 50 publications in scientific, engineering and medical journals.  Most recently, he was recognized as a 2006Fellow of the American Institute of Medical and Biological Engineering.

**SECTION 16(a) BENEFICIALOWNERSHIP REPORTING COMPLIANCE**

Section 16(a) ofthe Exchange Act requires our directors and executive officers, and people whoown more than ten percent of our stock, to file reports of ownership andreports of changes in ownership with the SEC. All of these people are required by SEC regulation to provide us with acopy of all Section 16(a) reports they file.

We reviewed thereports that were filed during the fiscal year ended December 31, 2006.  Only one report by a director or officer ofWorldHeart was filed late.  PratapKhanwilkar inadvertently filed one late report. He reported ownership of WorldHeart stock that was distributed to him byMQP Dissolution, Inc. on January 25, 2006. This distribution was in connection with our acquisition of MedQuestProducts, Inc. in 2005.

There were twoother late filings by the holders of more than ten percent of our stock ofwhich we are aware.  The first was apurchase of 78,410 common shares on April 7, 2006 by Special SituationsFunds.  This transaction was disclosed onApril 12, 2006.  The othertransaction, by MedQuest Products, Inc., involved sales of a total of 125,000common shares on January 6 and January 9, 2006 and a distribution of5,000,000 common shares on January 25, 2006.  These transactions were disclosed onMarch 3, 2006.

**CORPORATE GOVERNANCE**

TheBoard of Directors has a Compensation Committee, an Audit Committee, aCorporate Governance and Nominating Committee and a Strategic PlanningCommittee.

*AuditCommittee*

The AuditCommittee assists the Board of Directors in its oversight of the quality andintegrity of our accounting, auditing and reporting practices.  The Audit Committee’s role includesoverseeing our internal accounting and auditing processes and communicates withmanagement about our business, financial risk and compliance with legal,ethical and regulatory requirements.  TheAudit Committee is responsible for reviewing all of our financial filings andrelated disclosures, including financial press releases.  The Audit Committee is also responsible forthe appointment, compensation, retention, and oversight of the independentauditors we engage to prepare and issue audit reports on our financialstatements and also approves all non-audit expenditures.  The Committee relies on the expertise andknowledge of management and the independent auditor in carrying out its

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oversight responsibilities.  During most of 2006, the Audit Committee wascomposed of three directors:  John F.Carlson (Chair), C. Ian Ross and William C. Garriock.  On November 10, 2006, Robert J. Majtelesreplaced Mr. Carlson and Mr. Ross became Committee Chair due to Mr. Carlson’suntimely death.  The Audit Committee metseven times during the year.  All membersof the Audit Committee are independent as determined by the Board of Directorsin accordance with the Nasdaq Stock Market corporate governance rules.  Mr. Carlson was an independent directorduring his term with the Audit Committee.

*AuditCommittee Financial Expert*

The Board ofDirectors has determined that each member of the Audit Committee has sufficientknowledge in financial and auditing matters to serve on the Audit Committee andthat C. Ian Ross is an “audit committee financial expert” as currently definedby the rules of the Securities and Exchange Commission regulating thesedisclosures.  Prior to his passing away,Mr. Carlson was an “audit committee financial expert”.  The specific responsibilities and functionsof the Audit Committee are described in the Amended and Restated AuditCommittee Charter.

*CompensationCommittee*

The CompensationCommittee has three principal responsibilities. First, to review, approve and recommend to the Board of Directors theannual goals, objectives and compensation of the President and Chief ExecutiveOfficer and to evaluate performance against those goals and objectives.  Second, to oversee the performance evaluationof our other executive officers and approve and recommend theircompensation.  Third, to oversee theadministration of our equity-based compensation and approve grants of equitycompensation under our employee stock option plan.  The Committee also produces a report onexecutive compensation that is required to be included in our proxystatement.  During 2006, the CompensationCommittee was composed of three directors: Robert J. Majteles (Chair), C. Ian Ross and William C. Garriock,and met three times during****the****year. All members of the Compensation Committee are independent as determinedby the Board of Directors in accordance with the Nasdaq Stock Market corporategovernance rules.  The Board of Directorshas adopted a written Compensation Committee Charter.

*CorporateGovernance and Nominating Committee*

The CorporateGovernance and Nominating Committee also has three principalresponsibilities.  First, to determinethe slate of director nominees for election to the Board of Directors and torecommend candidates to fill other vacancies that may occur.  Second, to review the composition of thecommittees of the Board of Directors. And third, to monitor compliance with and recommend changes to our compliancewith corporate governance regulatory requirements.  This includes issues of significance toWorldHeart and our shareholders.  Duringmost of 2006, the Corporate Governance and Nominating Committee was composed ofthree****directors:  C. Ian Ross (Chair), John F. Carlson andWilliam C. Garriock. On November 10, 2006, Robert J. Majteles replaced Mr.Carlson due to Mr. Carlson’s untimely death. The Corporate Governance andNominating Committee met once during the year. All members of the Nominating Committee are independent as determined bythe Board of Directors in accordance with the Nasdaq Stock Market corporategovernance rules.  The Board of Directorshas adopted a written Corporate Governance and Nominating Committee Charter.

Although no established specific minimumqualifications for director nominees have been adopted, the CorporateGovernance and Nominating Committee reviews the backgrounds and qualificationsof directors and potential nominees.  TheCommittee annually reviews the nominees for the Board provided by the Board ofDirectors.  This review considers thenominees in relation to the current composition of the Board and also considersour current circumstances.  The committeealso considers director candidates who are recommended by our shareholders.  Any shareholder may recommended a candidatefor director by contacting the Corporate Governance and NominatingCommittee.  This process, however, isseparate and distinct from the SEC requirements that must be met by ashareholder in order to have a shareholder proposal included in our proxystatement.  To date, the CorporateGovernance and Nominating Committee has not received any recommendations fromshareholders requesting consideration of a candidate for inclusion among theslate of nominees in our proxy statement.

*Strategic Planning Committee*

TheStrategic Planning Committee’s overall responsibility is to assist the Board ofDirectors in its long range financial and strategic planning efforts.  The Strategic Planning Committee has three primaryresponsibilities.  First, to conduct ourstrategic decision making.  Second, tofocus our financial resources on initiatives with the greatest opportunity fortechnical, commercial and financial success. The Committee bases these decisions on its evaluation of markets and thefactors required to succeed in those markets. Lastly, it is the responsibility of the Strategic Planning Committee toidentify the resources required to ensure the success of our strategicplan.  All members of the Board of Directorsare members of the Strategic Planning Committee.  The Committee did not meet separately during2006, however, the issues normally addressed by the Committee were addressed bythe full Board.  The

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specific responsibilities and functions of the StrategicPlanning Committee are further described in our Strategic Planning CommitteeCharter.

*Code ofConduct and Ethics*

Wehave adopted a written code of business conduct and ethics that applies to ourprincipal executive officer and principal financial and accounting officer, orpersons performing similar functions. We intend to disclose any amendments to,or waivers from, our code of business conduct and ethics that are required tobe publicly disclosed pursuant to rules of the Securities and ExchangeCommission and Nasdaq by filing such amendment or waiver with the Securitiesand Exchange Commission.

**Item 10.**                   ExecutiveCompensation.

The followingtable shows all compensation awarded to, earned by, or paid to Jal S.Jassawalla, our Chief Executive Officer, to A. Richard Juelis, our ChiefFinancial Officer and to Piet Jansen and Phillip J. Miller, our two other mosthighly compensated executive officers at the end of fiscal year 2006 and onemore individual who would have been most highly compensated if he had been anexecutive officer at the end of 2006 (the “Named Executive Officers”).  The table is for the fiscal year endedDecember 31, 2006.

**SUMMARYCOMPENSATION TABLE**
|                                                | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** **             | ** ** | **All Other** | ** ** | ** ** | ** ** |
|------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|------------------------|------------|--------------------|------------|------------|------------|
| ** **                                     | ** ** | ** ** | ** ** | **Salary** | ** ** | **Bonus**  | ** ** | **Option Awards** | ** ** | **Compensation**   | ** ** | **Total**  | ** ** |
| **Name and Principal Position** | ** ** | ** ** | ** ** | **Year**   | ** ** | **($)**    | ** ** | **($)**                | ** ** | **($)**            | ** ** | **($)**    | ** ** | **($)** | ** ** |
| Jal. S. Jassawalla                             |       | 2006       |       | $          | 267,000    |       | —     |                   | $          | 87,200             | (1)        | $     | 4,005      | (4) | $ | 358,205 |   |
| President and Chief                            |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| Executive Officer                              |       |       |       |       |       |       |       |                   |       |               |       |       |       |
|                                           |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| A. Richard  Juelis                             |       | 2006       |       | $          | 200,000    |       | —     |                   | —     |               | $     | 923        | (4)        | $ | 200,923 |   |
| Vice President,  Finance and                   |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| Chief Financial  Officer                       |       |       |       |       |       |       |       |                   |       |               |       |       |       |
|                                           |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| Piet Jansen, M.D. (7)                          |       | 2006       |       | $          | 213,487    |       | —     |                   | —     |               | $     | 53,700     | (2)        | $ | 267,187 |   |
| Chief Medical Officer                          |       |       |       |       |       |       |       |                   |       |               |       |       |       |
|                                           |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| Phillip J. Miller                              |       | 2006       |       | $          | 160,000    |       | —     |                   | —     |               | $     | 11,051     | (4)(6)     | $ | 171,051 |   |
| Vice President, Research                       |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| and Development                                |       |       |       |       |       |       |       |                   |       |               |       |       |       |
|                                           |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| John Marinchak                                 |       | 2006       |       | $          | 159,509    |       | $     | 50,036                 | (5)        | —             |       | $          | 55,580     | (4) (3) | $ | 265,125 |   |
| Vice President, Marketing                      |       |       |       |       |       |       |       |                   |       |               |       |       |       |
| and Sales                                      |       |       |       |       |       |       |       |                   |       |               |       |       |       |
|                                                |            |            |            |            |            |            |            |                        |            |                    |            |            |            |  |  |  |  |  |  |  |

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(1)             Representsthe FAS 123R value (with respect to the 2006 fiscal year) of an option topurchase 100,000 of our common shares granted to Mr. Jassawalla on April 25,2006 at an exercise price of $1.13 per share. The option vests in full on thefirst anniversary of the grant date. For additional information on thevaluation assumptions with respect to this options, refer to Note 10 of ourfinancial statements in our Form 10-KSB for the year ended December 31, 2006,as filed with the SEC on March 29, 2007. These amounts represent the fair value on the grant date for theseawards, and do not correspond to the actual value that will be recognized byMr. Jassawalla.

(2)             Representsa $50,000 advance for relocation expenses paid to Dr. Jansen in 2006 in US dollars.  Also includes $1,200 in car allowances and$2,500 in health care benefits paid to Dr. Jansen in Euros which were convertedto US dollars using the monthly average exchange rate for each pay period.

(3)             Includesseverance accrued in 2006 and paid in January 2007 in the amount of $49,231 andcar allowance in the amount of $6,092. Mr. Marinchak left WorldHeart in November 2006.

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(4)             Includes401(k) plan employer matching contributions.

(5)             Representscommissions paid in 2006 for Novacor LVAS sales.

(6)             Includes$5,351 in royalties accrued in 2006 on the sales of the Novacor LVAS pursuantto a royalty agreement between Mr. Miller and WorldHeart datedApril 22, 1998.

(7)             In2006, Dr. Jansen lived and worked in Holland and was paid in Euros. This amountwas converted to US dollars using the monthly average exchange rate for eachpay period.   Dr. Jansen is paid onceeach month.

**NARRATIVE DISCLOSURES TO SUMMARYCOMPENSATION TABLE**

It is our policy to award stock options at an exerciseprice equal to the closing price of our common stock on the business day priorto the date of the grant in accordance with the terms of ourshareholder-approved 2006 Equity Incentive Plan, formerly known as World HeartCorporation Employee Stock Option Plan. The Compensation Committee has not granted options with an exerciseprice that is less than the closing price of our common stock one business dayprior to the grant date.  For purposes ofdetermining the exercise price of stock options, the grant date is deemed to bethe date on which the Compensation Committee approves the stock optiongrant.  In 2007, we began grantingperformance share awards to our employees, including our named executiveofficers.

Weentered into an employment arrangement with Mr. Jal S. Jassawalla onJune 23, 2000.  This arrangement wasupdated on July 28, 2004 and again on October 25, 2004.  As of July 28, 2004, Mr. Jassawallais entitled to receive a base salary of $267,000 a year.  Mr. Jassawalla was granted 787,255options on September 23, 2004.  As partof this grant, he forfeited previously granted options for 105,397 commonshares and was granted 1,000,000 options on January 31, 2005.  All of these stock options are vested andexercisable.  On April 25, 2006, Mr.Jassawalla received an additional stock option to purchase 100,000 commonshares which vests in full on the first anniversary of the date of grant.  He is eligible to receive additional optiongrants under our 2006 Equity Incentive Plan and is entitled to a severancepayment of 104 weeks of his regular salary.

Weentered into an employment agreement with Mr. Richard Juelis on May 27,2005.  Mr. Juelis is entitled to receivean annual salary of $200,000.  Hereceived an initial stock option grant for 275,000 common shares and iseligible to receive future option grants pursuant to our 2006 Equity IncentivePlan.  We amended our agreement with Mr.Juelis on April 4, 2007.  Under theamended agreement, Mr. Juelis’ salary is reduced an average of 37.5% over asix-month period, and a special bonus, payable in part in our common shares andin part in cash, will be paid in relation to the successful completion of aproject to monetize certain of our Canadian tax loss carryforwards and toprepare for reincorporation in the United States.  If the monetization project is successfullycompleted, Mr. Juelis would be entitled to receive 5% of the total monetizationproceeds received by us.  The firstone-third of 5% of the total monetization proceeds would be payable in ourcommon shares (the “Special Bonus Shares”), issuable under our 2006 EquityIncentive Plan and determined by dividing the cash equivalent of one-third ofthe 5% of the total monetization proceeds by the closing trading price pershare on the day before the date of determination.  The Special Bonus Shares will vest uponentering into a definitive agreement for the purposes of monetization, with theremaining two-thirds of the 5% of the total monetization proceeds payable incash upon the receipt by WorldHeart of the total monetization proceeds, prorata, in one or more tranches.  TheSpecial Bonus Shares also may be issued in the event that the Board ofDirectors determines that, despite Mr. Juelis’ efforts and contribution to themonetization project, the transaction is not completed due to events outside ofMr. Juelis’ control and certain other conditions are met, including approval ofa resolution by our Board of Directors to proceed with the reincorporation inthe United States.  In that case, thedetermination of the number of the Special Bonus Shares will be made by theBoard of Directors based upon the targeted or anticipated monetizationproceeds.  Mr. Juelis was also awarded agrant of up to 50,000 performance shares (the “Performance Shares”) pursuant tothe terms and conditions of the 2006 Equity Incentive Plan.  The Performance Shares are earned upon theachievement by Mr. Juelis of certain performance milestones related to ourstrategic and financing goals and activities. These Performance Shares will be fully vested when paid, which shall beimmediately upon achievement of the performance milestones, and not later thantwo and a half months after the end of the fiscal year in which theCompensation Committee or the Board of Directors determines that theperformance goals have been achieved.

Weentered into an employment arrangement with Mr. Phillip Miller onJune 23, 2000.  This arrangement wasupdated on October 12, 2004.  As ofOctober 2004, Mr. Miller is entitled to receive a yearly base salaryof $160,000.  Mr. Miller was granted180,000 options on September 23, 2004. As part of this grant, he forfeited previously granted options for 5,716common shares, and was granted 145,000 options on January 31, 2005.  Mr. Miller is also eligible to receive futureoption grants under our 2006 Equity Incentive Plan.  Under the October 12, 2004 arrangement,Mr. Miller retained his rights from a royalty agreement that we enteredinto on April 22, 1988 entitling him to certain payments on the sale ofNovacor LVAS kits.

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Weentered into an employment arrangement with Piet Jansen, M.D. onDecember 9, 2003.  That arrangementwas updated on October 12, 2004, and again on July 12, 2006.  Under the current agreement, as the Corporation’sChief Medical Officer, he receives an annual base salary of $205,000 andreceived an advance of $50,000 in 2006 for reimbursement of moving expenses forhis relocation to Oakland, California. The initial term of employment under the current agreement is eighteenmonths from July 12, 2006, during which time Dr. Jansen may be terminated forcause (as defined in the agreement). After the initial eighteen months, Dr. Jansen’s employment will be atwill.  If, following a change of controlat WorldHeart (as defined in the agreement) but before the initial eighteenmonth term ends, Dr. Jansen is terminated, he is entitled to receive asseverance the remainder of his compensation that he would have been paid forthe first eighteen months.

Weentered into an employment arrangement with Mr. John Marinchak onOctober 6, 2003.  The agreement wasupdated on October 12, 2004.  As ofOctober 2004**,**Mr. Marinchak was entitled to receive an annual salary of $160,000.  Mr. Marinchak was also entitled toreceive commissions based on our sales of Novacor LVAS kits.  The computation of these commissions wasadjusted from time to time. Mr. Marinchak was granted 160,000 options on September 23,2004.  As part of this grant, heforfeited previously granted options for 18,256 common shares, and was granted100,000 options on January 31, 2005.  Mr.Marinchak left the Company on November 14, 2006 and received $49,231 asseverance, equivalent to 16 weeks of his regular pay, in the first quarter of2007.

*Employment Agreement of Executive Officers Who arenot Named Executive Officers*

Weentered into an employment arrangement with Mr. Pratap Khanwilkar onJanuary 31, 2005, which became effective on July 29, 2005 upon theclosing of our acquisition of MedQuest Products, Inc.  As of July 29, 2005, Mr. Khanwilkar isentitled to receive an annual salary of $165,000.  Mr. Khanwilkar was granted options for425,000 common shares on July 29, 2005 and is also eligible to receivefuture option grants pursuant to our 2006 Equity Incentive Plan.

We entered into anemployment arrangement with Mr. John Vajda on June 9, 2005.  Mr. Vajda is entitled to receive a baseannual salary of $150,000. Mr. Vajda was also granted options for 250,000 common shares and isalso eligible to receive future option grants pursuant to our 2006 EquityIncentive plan.

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**OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END TABLE**

Thefollowing table sets forth information about stock options held by our NamedExecutive Officers at the end of fiscal year 2006.  There were no other equity incentive planawards outstanding at December 31, 2006.

**OPTION AWARDS**
|                    | ** ** | **Number of  Securities  Underlying  Unexercised  Options (#)** | ** ** | **Number of  Securities  Underlying  Unexercised  Options (#)** | ** ** | **Option Exercise** | ** ** | **Option Expiration** | ** ** |
|--------------------|------------|---------------------------------------------------------------------------|------------|---------------------------------------------------------------------------|------------|--------------------------|------------|----------------------------|------------|
| **Name**           | ** ** | **Exercisable**                                                           | ** ** | **Unexercisable**                                                         | ** ** | **Price ($)**       | ** ** | **Date**                   | ** ** |
|               |       |                                                                      |       |                                                                      |       |                     |       |                       |       |
| Jal S. Jassawalla  |       | 885                                                                       |       | —                                                                    |       | $                        | 9.23       |                       | 3/3/2012   |   |
|                    |       | 819                                                                       |       | —                                                                    |       | $                        | 9.45       |                       | 3/3/2012   |   |
|                    |       | 787,225                                                                   |       | —                                                                    |       | $                        | 1.30       |                       | 9/23/2013  |   |
|                    |       | 1,000,000                                                                 |       | —                                                                    |       | $                        | 1.48       |                       | 1/31/2014  |   |
|                    |       | —                                                                    |       | 100,000                                                                   |       | $                        | 1.13       |                       | 4/25/2015  |   |
|               |       |                                                                      |       |                                                                      |       |                     |       |                       |       |
| A. Richard Juelis  |       | 275,000                                                                   |       | —                                                                    |       | $                        | 1.15       |                       | 5/27/2014  |   |
|               |       |                                                                      |       |                                                                      |       |                     |       |                       |       |
| Piet Jansen, M.D.  |       | 240,000                                                                   |       | —                                                                    |       | $                        | 1.30       |                       | 9/23/2013  |   |
|                    |       | 85,000                                                                    |       | —                                                                    |       | $                        | 1.48       |                       | 1/31/2014  |   |
|               |       |                                                                      |       |                                                                      |       |                     |       |                       |       |
| Phillip J. Miller  |       | 161                                                                       |       | —                                                                    |       | $                        | 9.23       |                       | 3/3/2012   |   |
|                    |       | 109                                                                       |       | —                                                                    |       | $                        | 9.45       |                       | 3/3/2012   |   |
|                    |       | 180,000                                                                   |       | —                                                                    |       | $                        | 1.30       |                       | 9/23/2013  |   |
|                    |       | 145,000                                                                   |       | —                                                                    |       | $                        | 1.48       |                       | 1/31/2014  |   |
|               |       |                                                                      |       |                                                                      |       |                     |       |                       |       |
| John Marinchak (1) |       | 160,000                                                                   |       | —                                                                    |       | $                        | 1.30       |                       | 11/13/2009 |   |
|                    |       | 100,000                                                                   |       | —                                                                    |       | $                        | 1.48       |                       | 11/13/2009 |   |

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(1)             Mr.Marinchak left WorldHeart in November 2006.

**NARRATIVE DISCLOSURES TO OUTSTANDINGEQUITY AWARDS TABLE**

InDecember 2005, in preparation for the adoption of FAS 123R, the Board ofDirectors approved the acceleration of vesting of all stock options thenoutstanding, with the exceptions of the stock options held by non-employeedirectors.

No options had been exercised by our named executive officers in 2006.

8

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**DIRECTOR COMPENSATION TABLE**

The following table sets forth information aboutcompensation  of our non-employeedirectors for the fiscal year 2006.
| ** **          | ** ** | **Fees Earned or**                 | ** ** | **Options**                  | ** ** | ** **                  | ** ** |
|---------------------|------------|----------------------------------------------|------------|------------------------------|------------|-----------------------------|------------|
| **Name**            | ** ** | **Paid in Cash ($) **(3) | ** ** | **Awards ($) **(1) | ** ** | **Total ($) **(3) | ** ** |
|                |       |                                         |       |                         |       |                        |       |
| C. Ian Ross         |       | 66,373                                       |       | 41,970                       |       | 108,343                     |       |
|                |       |                                         |       |                         |       |                        |       |
| William C. Garriock |       | 46,152                                       |       | 41,970                       |       | 88,122                      |       |
|                |       |                                         |       |                         |       |                        |       |
| Robert J. Majteles  |       | 60,091                                       |       | 41,970                       |       | 102,061                     |       |
|                |       |                                         |       |                         |       |                        |       |
| John F. Carlson (2) |       | 53,140                                       |       | —                       |       | 53,140                      |       |

----

(1)             Representsthe FAS 123R value (with respect to fiscal year 2006) of the stock options topurchase our common shares.  The optionsvest annually over three years. For additional information on the valuationassumptions with respect to these options, refer to Note 10 of our financialstatements in our Form 10-KSB for the year ended December 31, 2006, as filedwith the SEC on March 29, 2007.  Theseamounts represent the fair value of the awards on the grant date and do notcorrespond to the actual value that will be recognized by the directors.

(2)             Mr.Carlson passed away in November 2006.

(3)             Non-employeedirectors were paid on a quarterly basis. Amounts were converted from Canadiandollars to US dollars using the average exchange rate for each quarter.

**NARRATIVE DISCLOSURES TO DIRECTOR COMPENSATION**

During 2006 each ofour non-employee directors received an annual cash fee of Cdn $15,000.  The Chairman of the Board of Directorsreceives an additional cash fee of Cdn $48,000, the Chair of the AuditCommittee receives an additional cash fee of Cdn $30,000, and the Chairs ofeach of the other committees (other than the Chair of the Corporate Governanceand Nominating Committee) receive an additional cash fee of Cdn $25,000.  An additional Cdn $1,000 per diem fee is paidfor meetings attended in person and a Cdn $500 per diem fee is paid formeetings attended by telephone, with a daily maximum of Cdn $1,000.  In the fiscal year ended December 31, 2006,the total compensation paid to non-employee directors was Cdn $286,752 of whichCdn $69,250 was for 2005 compensation paid in 2006.  Non-employee directors are also entitled tobe reimbursed for travel and other expenses incurred in attending meetings ofthe Board of Directors or of a Committee.

Each of ournon-employee directors also receives stock option grants under our 2006 EquityIncentive Plan.  Options granted underthis plan are nonstatutory stock options. During 2006, we did not grantoptions to the non-employee directors. No options were exercised by the directors in 2006.

On April 4, 2007the Board of Directors adopted a new directors compensation plan effective atthe beginning of 2007.  Under theprogram, each of our non-employee directors receives an annual cash fee of Cdn$25,000.  The Chairman of the Board ofDirectors receives an additional cash fee of Cdn $40,000, the Chair of theAudit Committee receives an additional cash fee of Cdn $15,000, and the Chairsof each of the other committees, excluding the Corporate Governance andNominating Committee, receive an additional cash fee of Cdn $7,500.  An additional Cdn $1,000 per diem fee is paidfor meetings attended in person and a Cdn $500 per diem fee is paid formeetings attended by telephone, with a daily maximum of Cdn $1,000.

Michael SumnerEstes, Ph.D. joined our Board of Directors in April 2007. Upon his appointmentto the Board, Dr. Estes received an option to purchase 100,000 common shares,vesting annually over three years, at an exercise price per share of $0.34, inaccordance with our 2006 Equity Incentive Plan, pursuant to which the optionwas granted.

9

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Upon consummation of our 2003 common share and warrantfinancing, the Special Situations Funds exercised its right to designate adirector nominee and designated Robert J. Majteles to serve as a member of ourBoard of Directors.  Mr. Majteles joinedthe Board of Directors in 2003, and was subsequently reelected to serve on theBoard at the 2005 and 2006 annual shareholders meetings. Mr. Majteles serves onthe Board of Directors of Adept Technology, Inc.  Mr. Richard Juelis, our Chief FinancialOfficer, also serves on the Board of Directors of Adept Technology.  Special Situations Funds, our second largestshareholder, is also a significant shareholder of Adept Technology.  Mr. Majteles is the founder of TreehouseCapital, LLC, an investment firm. Special Situations Fund III, L.P., Special Situations Cayman Fund, L.P.,Special Situations Private Equity Fund, L.P. and Special Situations Fund, L.P.have entered into an agreement with Mr. Majteles and Treehouse Capital pursuantto which Treehouse Capital, through Mr. Majteles, provides certain managementand financial advisory services for the funds on request.  If Mr. Majteles’ services are requested bythe funds with respect to a particular portfolio investment, Treehouse Capitalis entitled to ten percent of the funds’ net gain (as defined) or net loss (asdefined) on the investment during the term of the agreement, offset by certainfees that may be paid by the portfolio company to Treehouse Capital or Mr.Majteles directly.  Under the agreement,Mr. Majteles is required to act independently of the funds in discharging hisfiduciary duties to shareholders of any company for which he serves as a memberof the Board of Directors and also is obligated not to disclose to the funds oruse for his own benefit any confidential information he obtains in connectionwith his service for a particular portfolio company.  Mr. Majteles does not have or share voting ordispositive power over any securities held by the funds.  Mr. Majteles has agreed to serve as a memberof our Board of Directors pursuant to this agreement.

10

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**Item 11.**    Security Ownership of CertainBeneficial Owners and Management and Related Shareholder Matters.

**EQUITY COMPENSATION PLANINFORMATION**

The following tableprovides information with respect to our 2006 Equity Incentive Plan, formerlyknown as the World Heart Corporation Employee Stock Option Plan, which was theonly equity compensation plan in effect as of December 31, 2006.  This Plan was initially adopted inDecember 1996 and was amended and restated several times.  The most recent amendments were approved byour shareholders on December 20, 2006. These amendments increased the number of common shares available underthe Plan by five million common shares, from 9,772,505 to 14,772,505, and gaveus the ability to grant restricted stock awards, restricted stock unit awards,stock appreciation rights and performance shares to our and our subsidiaries’directors, employees and consultants.
| ** **                                              | ** ** | **Number of shares to be  issued upon exercise of  outstanding options,  warrants and rights** | ** ** | **Weighted-average  exercise price of  outstanding options,  warrans and rights** | ** ** | **Number of shares remaining  available for future issuance  under equity compensation  plans (excluding shares  reflcted in column a)** | ** ** |
|---------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Plan Category**                                  | ** ** | **(a)**                                                                                                                                          | ** ** | **(b)**                                                                                                    | ** ** | **(c)**                                                                                                                                                                                                   | ** ** |
| Equity compensation  plans approved by shareholders     |       | 6,621,396                                                                                                                                        |       | $                                                                                                          | 1.73       |                                                                                                                                                                                                      | 8,151,109  |   |
|                                                    |       |                                                                                                                                             |       |                                                                                                       |       |                                                                                                                                                                                                      |       |
| Equity compensation  plans not approved by shareholders |       | —                                                                                                                                           |       | —                                                                                                     |       | —                                                                                                                                                                                                    |       |
| Total                                                   |       | 6,621,396                                                                                                                                        |       | $                                                                                                          | 1.73       |                                                                                                                                                                                                      | 8,151,109  |   |

 

11

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**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT**

The table belowsets forth information regarding the beneficial ownership of common shares asof April 25 2007 by: (i) each person or entity known by us to ownbeneficially more than 5% of our outstanding common shares; (ii) eachNamed Executive Officer named in the Summary Compensation Table;(iii) each director and nominee for director; and (iv) all of ourexecutive officers and directors as a group. Beneficial ownership is determined in accordance with the rules of theSEC.  The number of common shares used tocalculate the percentage ownership of each listed person includes the commonshares underlying options, warrants or other convertible securities held bythem that are exercisable within 60 days of April 25, 2007. 
| **Name and Address of Beneficial Owner**                                           | ** ** | **Amount and Nature  of Beneficial  Ownership** | ** ** | **% of  Outstanding  Shares **(1) | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------|------------|---------------------------------------------|------------|
| Austin  W. Marxe and David M. Greenhouse (2)153 East 53rd Street  New York, NY 10022                        |       | 33,744,701                                                     |       | 28.9                                        | %          |
|                                                                                                        |       |                                                           |       |                                        |       |
| Maverick  Venture Management, LLC (3)737 Bryant StreetPalo Alto, CA 94301                                   |       | 28,007,033                                                     |       | 24.3                                        | %          |
|                                                                                                        |       |                                                           |       |                                        |       |
| Entities  afffiliated with BC Advisors, LLC (4)300 Crescent Court, Suite 1111  Dallas, TX 75201             |       | 11,000,000                                                     |       | 9.6                                         | %          |
|                                                                                                        |       |                                                           |       |                                        |       |
| SF  Capital Partners Ltd (5)c/o Stark Offshore Management LLC  3600 South Lake Drive  St. Francis, WI 53235 |       | 10,837,648                                                     |       | 9.4                                         | %          |
|                                                                                                        |       |                                                           |       |                                        |       |
| Jal S. Jassawalla (6)                                                                                       |       | 2,318,929                                                      |       | 1.9                                         | %          |
| A. Richard Juelis (7)                                                                                       |       | 275,000                                                        |       | *                                           |       |
| Piet Jansen, M.D. (8)                                                                                       |       | 525,000                                                        |       | *                                           |       |
| Phil Miller (9)                                                                                             |       | 540,270                                                        |       | *                                           |       |
| William C. Garriock (10)                                                                                    |       | 86,668                                                         |       | *                                           |       |
| C. Ian Ross (11)                                                                                            |       | 87,533                                                         |       | *                                           |       |
| Robert J. Majteles (12)                                                                                     |       | 86,668                                                         |       | *                                           |       |
| Michael Sumner Estes,  Ph.D.                                                                                |       | —                                                         |       | *                                           |       |
| John Marinchak (13)                                                                                         |       | 260,000                                                        |       | *                                           |       |
|                                                                                                        |       |                                                           |       |                                        |       |
| All Directors and Executive Officers as a Group (11 persons)(14)                                            |       | 5,157,623                                                      |       | 4.3                                         | %          |

 

*                    Lessthan one percent.

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(1)           Thistable is based upon information supplied by officers, directors and principalshareholders and Schedules 13D and 13G filed with the SEC. Unless otherwiseindicated in the footnotes to this table and subject to community property lawswhere applicable, we believe that each of the shareholders named in this tablehas sole voting and investment power with respect to the shares indicated asbeneficially owned.**** Unless otherwise indicated, the principaladdress of each of the shareholders named in this table is:  c/o World Heart Corporation, 7799 PardeeLane, Oakland, California 94621. Applicable percentages are based on 115,072,749 shares outstanding on April 25, 2007, adjusted asrequired by rules promulgated by the SEC.

12

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(2)           Includeswarrants to purchase 316,915 common shares and 5,878,103 common shares held bySpecial Situations Cayman Fund, L.P., warrants to purchase 76,622 common sharesand 1,750,683 common shares held by Special Situations Fund III, L.P., warrantsto purchase 874,124 common shares and 17,651,468 common shares held by SpecialSituations Fund III QP, L.P., and warrants to purchase 345,726 common sharesand 6,851,060 common shares held by Special Situations Private Equity Fund,L.P. MGP Advisors Limited (“MGP”) is the general partner of the SpecialSituations Fund III, QP, L.P. and the general partner of and investment adviserto the Special Situations Fund III, L.P.  AWM Investment Company, Inc.(“AWM”) is the general partner of MGP, the general partner of and investmentadviser to the Special Situations Cayman Fund, L.P. and the investment adviserto the Special Situations Fund III, QP, L.P., the Special Situations TechnologyFund, L.P., the Special Situations Technology Fund II, L.P., the SpecialSituations Private Equity Fund, L.P. and the Special Situations Life SciencesFund, L.P.  Austin W. Marxe and David M. Greenhouse are the principalowners of MGP and AWM.  Through their control of MGP and AWM, Messrs.Marxe and Greenhouse share voting and investment control over the portfoliosecurities of each of the funds listed above. Special Situation Funds, ourlargest shareholder, is entitled to two nominees on our Board of Directorsdepending on certain ownership requirements of our common shares. Mr. RobertJ. Majteles, one of our directors, serves on our Board of Directors as adesignee of the Special Situations Funds. Under an agreement between TreehouseCapital, LLC, an investment firm founded by Mr. Majteles, and the SpecialSituations Funds, Mr. Majteles is required to act independently of the Funds indischarging his fiduciary duties to shareholders of any company for which heserves as a member of the Board of Directors and also is obligated not todisclose to the Funds or use for his own benefit any confidential informationhe obtains in connection with his service as a director for a particularportfolio company. Mr. Majteles does not have or share voting or dispositivepower over any securities held by the Funds. Mr. Majteles has agreed to serveas a member of our Board of Directors pursuant to this agreement.

(3)           Themanagers of Maverick Venture Management, LLC are Kevin R. Compton and Gayla J.Compton who share voting and dispositive power over the shares, but disclaimbeneficial ownership, except to the extent of their pecuniary interest therein.Maverick, our second largest shareholder, is entitled to two nominees on ourBoard of Directors if Maverick’s shareholdings are at least 25% of our issuedand outstanding common shares and is entitled to one nominee on the Board ifMaverick’s shareholdings are between 15% and less than 25%. Under an agreementwith Maverick, the number of directors may not exceed seven. To date, Maverickhas not nominated any directors to serve on our Board.

(4)           Commonshares are held by (i) WS Capital, L.L.C., a Texas limited liabilitycompany (“WS Capital”), for the account of (1) Walker Smith Capital, L.P.,a Texas limited partnership (“WSC”), (2) Walker Smith Capital (Q.P.),L.P., a Texas limited partnership (“WSCQP”), (3) Walker SmithInternational Fund, Ltd., a British Virgin Islands exempted company (“WSInternational”), and (4) HHMI Investments, L.P., a Delaware limitedpartnership (“HHMI”), (ii) WSV Management, L.L.C., a Texas limited liabilitycompany (“WSV”), for the account of (1) WS Opportunity Fund, L.P., a Texaslimited partnership (“WSO”), (2) WS Opportunity Fund (Q.P.), L.P., a Texaslimited partnership (“WSOQP”), and (3) WS Opportunity Fund International,Ltd., a Cayman Islands exempted company (“WSO International”) and (iii) BCAdvisors, LLC, a Texas limited liability company (“BCA”), for the account of(1) SRB Greenway Capital, L.P., a Texas limited partnership (“SRBGC”),(2) SRB Greenway Capital (Q.P.), L.P., a Texas limited partnership(“SRBQP”), and (3) SRB Greenway Offshore Operating Fund, L.P., a CaymanIslands limited partnership (“SRB Offshore”). WS Capital is the general partner of WS Capital Management, L.P., aTexas limited partnership (“WSC Management”), which is the general partner ofWSC and WSCQP and the investment manager for WS International and HHMI.  WSV is the general partner of WS VenturesManagement, L.P., a Texas limited partnership (“WSVM”), which is the generalpartner of WSO and WSOQP and the agent and attorney-in-fact for WSOInternational.  Reid S. Walker and G.Stacy Smith are principals of WS Capital and WSV, and Patrick P. Walker is aprincipal of WSV.  BCA is the generalpartner of SRB Management, L.P., a Texas limited partnership (“SRBManagement”), which is the general partner of SRBGC, SRBQP and SRBOffshore.  Steven R. Becker is the soleprincipal of BCA.  Pursuant to a letteragreement, Steven R. Becker may collaborate with Reid S. Walker and G. StacySmith on investment strategies from time to time.  Reid S. Walker and G. Stacy Smith are thebeneficial owners of an aggregate of 5,000,000 shares of Common Stockbeneficially owned by WS Capital and WSC Management for the accounts of WSC,WSCQP and WS International and HHMI and by WSV and WSVM for the accounts ofWSO, WSOQP, WSO International.  PatrickP. Walker is the beneficial owner of 2,000,000 shares of Common Stockbeneficially owned by WSV and WSVM for the accounts of WSO, WSOQP, WSOInternational.  WS Capital and WSCManagement are the beneficial owners of 3,000,000 shares of Common Stockbeneficially owned for the accounts of WSC, WSCQP, WS International andHHMI.  WSV and WSVM are the beneficialowners of 2,000,000 shares of Common Stock beneficially owned for the accountsof WSO, WSOQP and WSO International. Steven R. Becker is the beneficial owner of 6,000,000 shares of CommonStock beneficially owned by BCA and SRB Management for the accounts of SRBGC,SRBQP and SRB Offshore.  BCA and SRBManagement are the beneficial owners of 6,000,000 shares of Common Stockbeneficially owned for the accounts of SRBGC, SRBQP and SRB Offshore.

13

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(5)           Includeswarrants to purchase 691,244 common shares. The shares and the warrants areheld directly by SF Capital Partners Ltd. Messrs. Michael A. Roth andBrian J. Stark are the Managing Members of Stark Offshore Management, LLC,which acts as an investment manager and has sole power to direct the managementof SF Capital. Through Stark Offshore, Messrs. Roth and Stark possessvoting and dispositive power over the shares but disclaim beneficial ownershipthereof.

(6)           Includesoptions for 1,888,929 common shares. All of those options are exercisablewithin 60 days of April 25, 2007.  Alsoincludes 430,000 shares held by Jal S. Jassawalla and Janette Diane Jassawalla,Trustees for the Jassawalla Family Trust U/A DTD 06/28/94.

(7)           Includesoptions for 275,000 common shares. All of those options are exercisable within60 days of April 25, 2007.

(8)           Includesoptions for 325,000 common shares. All of those options are exercisable within60 days of April 25, 2007.

(9)           Includesoptions for 325,270 common shares. All of those options are exercisable within60 days of April 25, 2007.

(10)         Includesoptions for 86,668 common shares. All of those options are exercisable within60 days of April 25, 2007.

(11)         Includesoptions for 87,033 common shares. All of those options are exercisable within60 days of April 25, 2007.

(12)         Includesoptions for  86,668 common shares. All ofthose options are exercisable within 60 days of April 25, 2007.

(13)         Includesoptions for 260,000 common shares. All of those options are exercisable within60 days of April 25, 2007.

(14)         Includesan aggregate of 3,859,567 options held by executive officers and directors as agroup that are exercisable within 60 days of April 25, 2007.

14

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**Item 12.**                    Certain Relationships and Related Transactions, andDirector Independence.

**TRANSACTIONS WITH RELATED PERSONS**

Wehave entered into certain employment agreements with Messrs. Jassawalla,Juelis, Miller, Marinchak, Khanwilkar and Vajda and with Dr. Jansen.  The details of these employment agreementsare described above under the heading “Item 10. Executive Compensation—Narrative Disclosures to Summary CompensationTable.”

Mr. Robert J.Majteles serves on our Board of Directors as a designee of the SpecialSituations Funds, our second largest shareholder.  The details of Mr. Majteles relationship andagreements with the Special Situations Funds are described above under theheading “Item 10.  ExecutiveCompensation—Director Compensation.”

Maverick Venture Management,LLC, our largest shareholder, is entitled to two nominees on the Board ofDirectors if Maverick’s shareholdings are at least 25% of the issued andoutstanding common shares of WorldHeart and is entitled to one nominee on theBoard if Maverick’s shareholdings are between 15% and less than 25%.  We have also agreed with Maverick that thenumber of our directors shall not exceed seven. Currently, Maverick has nonominees on the Board.

**DIRECTOR****INDEPENDENCE**

The discussionconcerning the independence of our directors under the heading “Directors,Executive Officers, Promoters, Control Persons and Corporate Governance;Compliance With Section 16(a) of the Exchange Act—Corporate Governance” isincorporated herein by reference.

**Item 13.**                            Exhibits.
| Exhibit 2.1 |   | Asset Purchase Agreement between World Heart  Corporation and MedQuest, dated as of January 31, 2005 (incorporated by  reference to the Corporation’s Report on Form 6-K dated February 1,  2005).                                                              |
|------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 3.1 |   | Article of Continuance, dated December 14, 2005  (incorporated by reference to the Corporation’s report on Form 8-K dated  December 14, 2005 (Commission File No. 000-28882)).                                                                                       |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 3.4 |   | By-laws of the Corporation (incorporated by  reference to the Corporation’s report on Form 8-K dated December 21,  2005 (Commission File No. 000-28882)).                                                                                                                 |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 4.1 |   | Form of Common Share Certificate (incorporated by  reference to the Corporation’s report on Form 10-KSB for the year ended  December 31, 2005 (Commission File No. 000-28882)).                                                                                           |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 4.2 |   | Registration Rights Agreement, dated  September 22, 2003, between the Corporation and the purchasers named  therein (incorporated by reference to Exhibit 4.2 to the  Corporation’s Registration Statement on Form F-3 (Commission File No.  333-111512)). |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 4.3 |   | Warrant Indenture, dated September 22, 2003,  between the Corporation and CIBC Mellon Trust Company (incorporated by  reference to Exhibit 4.3 to the Corporation’s Registration  Statement on Form F-3 (Commission File No. 333-111512)).            |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 4.4 |   | U.S. Purchase Agreement for Units, dated  September 22, 2003 (incorporated by reference to Exhibit 4.4  to the Corporation’s Registration Statement on Form F-3 (Commission  File No. 333-111512)).                                                        |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 4.5 |   | Agency Agreement, dated September 22, 2003,  between the Corporation and Research Capital Corporation (incorporated by  reference to Exhibit 4.5 to the Corporation’s Registration  Statement on Form F-3 (Commission File No. 333-111512)).               |
|             |   |                                                                                                                                                                                                                                                                                |
| Exhibit 4.7 |   | Registration Rights Agreement, dated  September 15, 2004, between the Corporation and the purchasers named  therein (incorporated by reference to Exhibit 4.2 to the  Corporation’s Registration Statement on Form F-3 (Commission File No.  333-119750)). |

 

15

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| Exhibit 4.9       |   | Purchase Agreement, dated as of January 31,  2005, between the Corporation and Maverick Venture Management, LLC  (incorporated by reference to the Corporation’s Report on Form 6-K dated  February 1, 2005).                                                                        |
|-------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 4.10      |   | Registration Rights Agreement dated as of July 29,  2005, between the Corporation, MedQuest Products, Inc. and Maverick Venture  Management, LLC. (incorporated by reference to Exhibit 4.1 to the  Corporation’s Form 10-QSB for the period ended June 30, 2005 (Commission File  No.000-28882)).       |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 4.11      |   | Form of Registration Rights Agreement dated as of  November 13, 2006, between the Corporation and the investors named therein  (incorporated by reference to Exhibit 4.1 to the Corporation’s Form S-3  (Commission File No. 333-138872)).                                                               |
| Exhibit 4.12      |   | Form of Purchase Agreement, dated as of November 13,  2006, between the Corporation and the investors named therein (incorporated  by reference to Exhibit 4.2 to the Corporation’s Report on Form S-3  (Commission File No. 333-138872)).                                                          |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.1 |   | Restated and Amended Distribution Agreement, dated  December 31, 2003, between the Corporation and Edwards Lifesciences LLC  (incorporated by reference to Exhibit 99.1 to Amendment No. 1 the  Corporation’s Registration Statement on Form F-3 (Commission File No.  333-111512)). |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.2 |   | Consulting Agreement, dated July 13, 2004,  between the Corporation and Synergistic Business Solutions (incorporated by  reference to Exhibit 10.2 to the Corporation’s Form 10-KSB/A for the year  ended December 31, 2004 (Commission File No. 000-28882)).                                       |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.3 |   | Letter Agreement, dated June 23, 2000, as  amended on October 12, 2004, between the Corporation and Phillip J.  Miller (incorporated by reference to Exhibit 10.7 to the Corporation’s Form  10-KSB/A for the year ended December 31, 2004 (Commission File No.  000-28882)).                  |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.4      |   | Letter Agreement, dated October 6, 2003, as  amended on October 12, 2004, between the Corporation and John Marinchak  (incorporated by reference to Exhibit 10.6 to the Corporation’s Form 10-KSB/A  for the year ended December 31, 2004 (Commission File No. 000-28882)).                    |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.5 |   | Employment and Arbitration Agreement dated 2006  between the Corporation and Petrus Jansen (incorporated by reference to the  Corporation’s Form 10-QSB for the period ended June 30, 2006 (Commission File  No. 000-28882)).                                                                            |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.6      |   | Letter Agreement dated June 23, 2000, as  amended on October 28, 2004, between the Corporation and Jal S.  Jassawalla (incorporated by reference to Exhibit 10.1 to the Corporation’s  Form 10-QSB for the period ended March 31, 2005 (Commission File No.  000-28882)).                      |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.7      |   | Letter Agreement dated January 24, 2005, between the  Corporation and Pratap Khanwilkar (incorporated by reference to Exhibit 10.3  to the Corporation’s Form 10-QSB for the period ended June 30, 2005  (Commission File No. 000-28882)).                                                               |
|              |   |                                                                                                                                                                                                                                                                                                          |
| Exhibit 10.8      |   | Letter Agreement, dated May 19, 2005, between the  Corporation and John Vajda (incorporated by reference to Exhibit 10.1 to the  Corporation’s Form 10-QSB for the year ended June 30, 2005 (Commission File  No. 000-28882)).                                                                           |
| Exhibit 10.9      |   | Letter Agreement dated May 27, 2005, between the  Corporation and A. Richard Juelis (incorporated by reference to Exhibit 10.1  to the Corporation’s Form 10-QSB for the period ended June 30, 2005  (Commission File No. 000-28882)).                                                                   |

 

16

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| Exhibit 10.10     |   | Form of indemnification agreement (incorporated by  reference to the Corporation’s report on Form 8-K dated December 21, 2005  (Commission File No. 000-28882)).                                                                                                                                                      |
|-------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.11     |   | License Agreement dated March 31, 1999, as amended  on June 8, 2005, between the Corporation and the University of Utah Research  Foundation (incorporated by reference to the Corporation’s report on Form  10-KSB for the year ended December 31, 2005 (Commission File No. 000-28882)).                            |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.12     |   | License Agreement dated March 31, 1999, between the  Corporation and the University of Virginia Patent Foundation (incorporated by  reference to the Corporation’s report on Form 10-KSB for the year ended  December 31, 2005 (Commission File No. 000-28882)).                                                      |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.13     |   | License Agreement dated February 13, 2002, between  the Corporation and University of Pittsburgh (incorporated by reference to  the Corporation’s report on Form 10-KSB for the year ended December 31, 2005  (Commission File No. 000-28882)).                                                                       |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.14     |   | Operating Agreement of Heart Lung Institute, LLC  dated October 13,1998, as amended July 15, 2005, between the Corporation and  the Heart and Lung Research foundation (incorporated by reference to the  Corporation’s report on Form 10-KSB for the year ended December 31, 2005  (Commission File No. 000-28882)). |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.15     |   | World Heart Corporation 2006 Equity Incentive Plan  (formerly known as World Heart Corporation Employee Stock Option Plan)  (incorporated by reference to Exhibit 99.2 to the Corporation’s Form 8-K  dated December 20, 2006 (Commission File No. 000-28882)).                                                       |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.16     |   | Form of Stock Option Grant Notice to World Heart  Corporation 2006 Equity Incentive Plan (incorporated by reference to Exhibit  99.1 to the Corporation’s Form 8-K dated February 7, 2007 (Commission File  No. 000-28882)).                                                                                          |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 10.17     |   | Form of Restricted Stock Award Agreement to World  Heart Corporation 2006 Equity Incentive Plan (incorporated by reference to  Exhibit 99.2 to the Corporation’s Form 8-K dated February 7, 2007 (Commission  File No. 000-28882)).                                                                                   |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 14.1      |   | Amended and Restated Code of Conduct of the  Corporation, adopted on October 26, 2004. (incorporated by  reference to Exhibit 99.1 to the Corporation’s Form 10-KSB for the year ended  December 31, 2004 (Commission File No 000-28882).                                                              |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 21.1      |   | List of All Subsidiaries of World Heart Corporation.  *                                                                                                                                                                                                                                                                    |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 23.1      |   | Consent of Independent Accountants. **                                                                                                                                                                                                                                                                                     |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 24.1      |   | Power of Attorney (reference is made to the  signature page to the Form 10-KSB filed with the Securities and Exchange  Commission on March 29, 2007). *                                                                                                                                                                    |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 31.1 |   | Certification of Principal Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **                                                                                                                                                                                                           |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 31.2 |   | Certification of Principal Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **                                                                                                                                                                                                           |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 32.1 |   | Certification of Principal Executive Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.  1350. **                                                                                                                                                                                          |
|              |   |                                                                                                                                                                                                                                                                                                                       |
| Exhibit 32.2 |   | Certification of Principal Financial Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,  18 U.S.C. 1350. **                                                                                                                                                                                     |

 

*                   Previouslyfiled.

**            Filedherewith.

17

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**Item 14.**                   PrincipalAccountant Fees and Services.

Forthe years ended December 31, 2006 and 2005, the fees billed to us for auditwork and other services performed by PricewaterhouseCoopers LLP, excludingtaxes and out-of-pocket expenses, were as follows:
| ** **              | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------|------------|--------------------------------------------|------------|
| ** **              | ** ** | **2006**                                   | ** ** | **2005** | ** ** |
|                    | ** ** | ** **                                 | ** ** | ** ** | ** ** |
| Audit Services          |       | Cdn$389,000                                |       | Cdn$228,000 |   |
|                    |       |                                       |       |   |   |
| Audit-Related  Services |       | 52,000                                     |       | 167,000 |   |
|                    |       |                                       |       |   |   |
| Tax Services            |       | 101,000                                    |       | 88,000 |   |
|                    |       |                                       |       |   |   |
| Other Services          |       | 4,000                                      |       | 154,000 |   |
|                    |       |                                       |       |   |   |
| Total                   |       | Cdn$546,000                                |       | Cdn$637,000 |   |

 

**AUDIT FEES**

During the lasttwo fiscal years ended December 31, 2006 and December 31, 2005, the aggregatefees billed by PricewaterhouseCoopers LLP for the professional servicesrendered for the audit of our annual financial statements and for the reviewsof the financial statements included in our Forms 10-QSB or services that arenormally provided by PricewaterhouseCoopers LLP in connection with statutoryand regulatory filings or engagements for such fiscal years were approximatelyCdn $389,000 and  Cdn $228,000,respectively.

**AUDIT-RELATED FEES**

During the lasttwo fiscal years ended December 31, 2006 and December 31, 2005, the aggregatefees billed by PricewaterhouseCoopers LLP for assurance and related servicesthat are reasonably related to the performance of the audit or review of ourfinancial statements and not otherwise reported above under “Audit Fees” wereapproximately Cdn $52,000 and Cdn $167,000, respectively.  These services primarily related to theManagement Information Circular (Proxy) filing.

**TAX FEES**

During the lasttwo fiscal years ended December 31, 2006 and December 31, 2005, the aggregatefees billed by PricewaterhouseCoopers LLP for tax compliance, tax advice andtax planning were approximately Cdn $101,000 and  Cdn $88,000, respectively.  These services included assistance with taxreturn preparation and review, federal, state and international tax compliance,strategic tax planning services and services with our internationalsubsidiaries.

**ALL OTHER FEES**

Duringthe last two fiscal years ended December 31, 2006 and December 31, 2005, theaggregate fees billed by PricewaterhouseCoopers LLP for products andprofessional services other than those described above were approximately  Cdn $4,000 and Cdn $154,000,respectively.  These services includedtax planning related to our acquisition of MedQuest Products, Inc.,reorganization, planning, tax monetization and support for the resolution ofthe ongoing Provincial Sales Tax audit.

**PRE-APPROVAL POLICIES AND PROCEDURES**

Underits charter adopted by the Board of Directors on December 16, 2003, theAudit Committee has the authority and responsibility to review and approve inadvance all auditing services of the independent auditors, including relatedfees and terms, and all non-audit service mandates, including related fees andterms, to the extent permitted by applicable laws, regulations andpolicies.  The Audit Committee maydelegate to one or more members of the Audit Committee the authority to pre-approvenon-audit services to be provided by the independent auditors provided that anysuch approvals made by the designated individuals will be reported to the fullAudit Committee at its next scheduled meeting. All of the services described above were pre-approved by the AuditCommittee.

**AUDITORS’ INDEPENDENCE**

The Audit Committee hasdetermined that the rendering of all the aforementioned services byPricewaterhouseCoopers LLP were compatible with maintaining the auditors’independence.

18

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**SIGNATURES**

In accordance with Section 13or 15(d) of the Exchange Act, the registrant caused this report to besigned on its behalf by the undersigned, duly authorized.
|        | WORLD HEART  CORPORATION               |
|--------|----------------------------------------|
|   | (Registrant)                           |
|   |                                   |
|   |                                   |
|   | By /s/ JAL S. JASSAWALLA  ,            |
|   | President and  Chief Executive Officer |
|   | (Signature and Title)                  |
|   |                                   |
|   | Date: April 27, 2007                   |
|        |                                        |  |

 

In accordance with the Exchange Act, this report hasbeen signed below by the following persons on behalf of the registrant and inthe capacities and dates indicated.
| Name                              | ** ** | **Title**                                    | ** ** | **Date**       |
|-----------------------------------|------------|----------------------------------------------|------------|----------------|
|                              |       |                                         |       |           |
| /s/ JAL S. JASSAWALLA             |       | President, Chief Executive Officer and       |       | April 27, 2007 |
| Jal S. Jassawalla                 |       | Director                                     |       |           |
|                              |       | (principal executive officer)                |       |           |
|                              |       |                                         |       |           |
| /s/   A. RICHARD JUELIS |       | Vice President, Finance and Chief Financial  |       | April 27, 2007 |
| A. Richard Juelis                 |       | Officer                                      |       |           |
|                              |       | (principal financial and accounting officer) |       |           |
| *                                 |       |                                         |       |           |
| William C. Garriock               |       | Director                                     |       | April 27, 2007 |
|                              |       |                                         |       |           |
| *                                 |       |                                         |       |           |
| Robert J. Majteles                |       | Director                                     |       | April 27, 2007 |
|                              |       |                                         |       |           |
|                              |       |                                         |       |           |
| Michael Sumner Estes              |       | Director                                     |       | April 27, 2007 |
|                              |       |                                         |       |           |
| *                                 |       |                                         |       |           |
| C. Ian Ross                       |       | Chairman of the Board and Director           |       | April 27, 2007 |

 
| *By: /s/                            |  A. RICHARD  JUELIS |   |   |
|-------------------------------------|--------------------------|--------|--------|
| A. Richard Juelis, Attorney-in-Fact |                     |   |

 

19

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**EXHIBIT INDEX**
| Exhibit 23.1      |   | Consent of Independent Accountants.                                                                                                                   |
|-------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |                                                                                                                                                  |
| Exhibit 24.1      |   | Power of Attorney (reference is made to the  signature page to the Form 10-KSB filed with the Securities and Exchange  Commission on March 29, 2007). |
|              |   |                                                                                                                                                  |
| Exhibit 31.1 |   | Certification of Principal Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                         |
|              |   |                                                                                                                                                  |
| Exhibit 31.2 |   | Certification of Principal Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                         |
|              |   |                                                                                                                                                  |
| Exhibit 32.1 |   | Certification of Principal Executive Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.  1350.                        |
|              |   |                                                                                                                                                  |
| Exhibit 32.2 |   | Certification of Principal Financial Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.  1350.                   |

 

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