**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,DC 20549**

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**FORM 10-KSB/A**

**(AMENDMENT NO. 1)**

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**ANNUALREPORT UNDER SECTION 13 OR 15(D) OFTHE SECURITIES EXCHANGE ACT OF 1934**

**Forthe fiscal year ended December 31, 2005**

**CommissionFile No. 0-28882**

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**WORLD HEART CORPORATION**

| **Canada**                               |   | **52-2247240**       |
|------------------------------------------|--------|----------------------|
| (State or other  Jurisdiction of         |   | (I.R.S. Employer     |
| Incorporation or  Organization)          |   | Identification  No.) |
| **7799 Pardee Lane**                |   | ** **           |
| **Oakland,  California, USA**            |   | **94621**            |
| (Address of  Principal Executive Office) |   | (Zip Code)      |
| **(510) 563-5000**                  |
| (Issuer’s  Telephone Number)        |

 

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

| Title of each class | ** ** | **Name of each exchange on which registered** |
|------------------------------------|------------|-----------------------------------------------------------------------------|
| None                               |       | None                                                                        |

 

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

| Title of each class |
|------------------------------------|
| Common Shares, no  par value       |

 

Check whether the issueris not required to file reports pursuant to Section 13 or 15(d) ofthe Exchange Act. o

Checkwhether the issuer (1) filed all reports required to be filed by Section 13or 15(d) of the Exchange Act during the past 12 months(or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for thepast 90 days.

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

 

Check if there is nodisclosure of delinquent filers in response to Item 405 ofRegulation S-B contained in this form, and no disclosure will becontained, to the best of the registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-KSBor any amendment to this Form 10-KSB. o

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).

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

 

The issuer’s revenues forits most recent fiscal year ended December 31, 2005 were $11,645,954.

The aggregate market valueof the voting and non-voting common equity held by non-affiliates computed byreference to the price at which the common equity was sold, or the average bidand asked price of such common equity, as of March 15, 2006 was$24,677,138. 

The number of commonshares outstanding as of March 15, 2006 was 55,479,549.

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

 

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**EXPLANATORY NOTE**

World Heart Corporation (the “Company” or “WorldHeart”)is filing this Amendment No. 1 on Form 10-KSB/A for the year ended December 31,2005, which amends the Company’s Form 10-KSB originally filed with theSecurities and Exchange Commission on March 27, 2006, and is being filedsolely for the purpose of providing information required by Part III of Form 10-KSB.These items were not included in the original Form 10-KSB because theCompany anticipated that the information would be provided in the Company’sProxy Statement for its 2006 Annual Meeting of Shareholders to be filed within120 days after the end of the Company’s 2005 fiscal year. In addition, inconnection with the filing of this Amendment No. 1 and pursuant to Rules 12b-15and 13a-14(a) under the Exchange Act, we are including with this AmendmentNo. 1 certain currently dated certifications. 

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

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**TABLEOF CONTENTS**

| ***PART III*** | ** ** | ** **                                                                                                        | ** ** | ** ** |
|----------------|------------|-------------------------------------------------------------------------------------------------------------------|------------|------------|
| Item  9.       |       | Directors,  Executive Officers, Promoters and Control Persons; Compliance With Section 16(a)  of the Exchange Act |       | 2          |
| Item  10.      |       | Executive  Compensation                                                                                           |       | 6          |
| Item  11.      |       | Security  Ownership of Certain Beneficial Owners and Management and Related Shareholder  Matters                  |       | 12         |
| Item  12.      |       | Certain  Relationships and Related Transactions                                                                   |       | 13         |
| Item 13.       |       | Exhibits                                                                                                          |       | 14         |
| Item  14.      |       | Principal  Accountant Fees and Services                                                                           |       | 17         |

 

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**Part III**

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

**Directors**

Set forth below is the name, age and biographicalinformation for each person serving as and nominated by the Board of Directorsas recommended by the Corporate Governance and Nominating Committee as adirector. Each elected director holds office until the next annual meeting ofshareholders and until his or her successor is elected and has qualified, oruntil such director’s earlier death, resignation or removal.

**C. Ian Ross** (64), has served as a director of the Company sinceFebruary 2000. He currently serves as Chairman of the Board of Directorsof WorldHeart and is on a number of Board Committees. From July 1999 to September 2003,Mr. Ross was Senior Director, Administration in the Dean’s Office at theRichard Ivey School of Business, University of Western Ontario, withresponsibility for managing the support functions for the business school. SinceSeptember 2003, Mr. Ross has been a professional company director. Hecurrently serves as a director of 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.

**John F. Carlson** (67), has served as a director of the Company sinceDecember 2003. Mr. Carlson is the former Chair and Chief ExecutiveOfficer of Cray Research, Inc., a supercomputer manufacturer and apredecessor to the business of Cray Inc., holding those positions from1992 to 1995. Mr. Carlson joined Cray Research, Inc. in 1976 holdingseveral positions, including Chief Financial Officer. He received his CPAcertificate in 1966. Since 2000, Mr. Carlson has been a professionalcompany director. He currently serves as a director on a number of private andpublic company boards, including BioNumerik Pharmaceuticals Inc., apharmaceutical company focused on the design and development of small moleculedrugs for treating patients with cancer, BioEnergy Inc., a life sciencescompany utilizing proprietary platform technologies to improve cardio-vascularhealth and tissue function, Excorp Medical, Inc. (Chair), a medical devicecompany developing a bio-artificial liver system intended for use in hospitalintensive care units, and Superconductor Technologies Inc., a wirelessinfrastructure company.

**William C.** Garriock (67), has served as a director of the Company sinceDecember 2003. Since 2003, Mr. Garriock has been a professionalcompany director and the retired Chair (from 2000 to 2003) and former President(from 1994 to 1999) of MDS SCIEX, the analytical instrument division ofMDS Inc. He was the Executive-at-Large for MDS Inc, a health and lifesciences company from 2000 to 2003. From 1993 to 1994, he was Vice Presidentand Managing Partner (Pharmaceuticals) of MDS Health Ventures Inc.following 18 years as President and CEO of Miles Canada Inc. (nowBayer Canada Inc.), a pharmaceutical, diagnostics and consumer productscompany. Mr. Garriock currently serves as Chair or director of public andprivate companies, including Biomedical Photometrics, a private company, andCipher Pharmaceuticals Inc., a pharmaceutical development company.

**Robert J. Majteles** (41), has served as a director of the Company sinceSeptember 2003. Mr. Majteles founded Treehouse Capital, LLC, afirm focused on blending value and growth investment disciplines to make activeinvestments in later-stage technology companies in 2001. Currently, Mr. Majtelesis on the Board of Directors of Adept Technology, Inc., MacrovisionCorporation, Vertical Communications, Inc., and Unify Corporation. Mr. Majtelesreceived a law degree from Stanford University and an undergraduate degree fromColumbia University. In addition, Mr. Majteles is a lecturer at the Lester

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**Centerfor Entrepreneurship, Haas School of Business, University of California,Berkeley and is a Member of the Board of Trustees of the Head-Royce School,Oakland, California.**

**Jal S. Jassawalla** (60) has served as a director of the Company since December 2005and has been President and Chief Executive Officer of the Company since July 2004.From June 2003 to July 2004, Mr. Jassawalla was Executive VicePresident and Chief Technical Officer of the Company and was responsible forresearch and development, clinical affairs, clinical and technical support andquality. Mr. Jassawalla was a co-founder of

Novacor MedicalCorporation in 1979 and became an employee when the Company acquired theNovacor division of Edwards Lifesciences LLC, formerly Baxter Corporation,in June 2000.

**Executive Officers**

Set forth below is the name, age and biographicalinformation for each executive officer of the Company.

**Jal S. Jassawalla** (60) has served as the President and ChiefExecutive Officer of the Company since July 2004. Mr. Jassawalla’sbiographical information is set forth above.

**A. Richard Juelis** (57) was appointed Vice President, Finance andChief Financial Officer in June 2005. He previously held the same positionwith Cellegy Pharmaceuticals, Inc., a public pharmaceutical company from1994 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 the board of directors of Adept Technologies, Inc.,a public company manufacturing flexible automation and robotic equipment.

**Piet Jansen** (46) joined the Company in February 2004 asChief Medical Officer and was appointed Managing Director, Europe, in July 2004.Prior to joining the Company, Mr. Jansen was the Vice-President, ClinicalPrograms at Orqis International GmbH from 2003 to February 2004 and atJarvik Heart Inc. as Vice President, Clinical Affairs from 2001 to 2003. From1997 to 2001, Mr. Jansen worked for the Novacor Division of EdwardsLifesciences LLC, formerly Baxter Corporation.

**John J. Vajda** (66) joined the Company in June 2005 as VicePresident, Manufacturing. Prior to joining the Company, Mr. Vajda was atCentaur Pharmaceuticals, Inc. from January 1997 as Director ofOperations and became Vice President in February 1998. One year later, hewas appointed Senior Vice President of Operations in charge of processdevelopment, manufacturing, engineering, facilities, and quality control. Previousto Centaur, Mr. Vajda was Director of Operations for OculexPharmaceuticals, Inc. and ChemTrack, Inc. and spent 17 years with theDow Chemical Co. in several executive positions.

**John Marinchak** (44) joined the Company in October 2003 asDirector of Sales, North America and was appointed Vice President, Marketingand Sales in July 2004. Prior to joining the Company, Mr. Marinchakwas Director of Sales at Cardica, from May 2003. From 1999 to May 2003,he was the Western Area Sales and International Sales Manager with ThoratecCorporation.

**Phillip J. Miller** (57) was appointed Vice President, Research andDevelopment in November 2004. Mr. Miller became an employee in June 2000when the Company acquired the Novacor Division of Edwards Lifesciences LLC,formerly Baxter Corporation. Prior to joining the Company, Mr. Miller wasDirector, Biomedical Engineering at Edwards Lifesciences LLC commencing in1973.

**Pratap S. Khanwilkar**(43) joined the Company in August 2005 as Vice-President Rotary Systems &Business Development upon the Company’s acquisition of MedQuest Products, Inc.Prior to joining the Company, Mr. Khanwilkar was Chief Executive Officerand a co-founder of MedQuest from 1993. Mr. Khanwilkar has more than 50 publicationsin scientific, engineering and medical journals and, most 

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**recently,he was recognized as a 2006 Fellow of the American Institute of Medical &Biological Engineering (AIMBE).**

**Board of Directorsand Committees of the Board**

The Board of Directors has a Compensation Committee,an Audit Committee, a Corporate Governance and Nominating Committee and aStrategic Planning Committee.

*Audit Committee.**  *The Audit Committee of the Board ofDirectors of the Company assists the Board of Directors in its oversight of thequality and integrity of the accounting, auditing and reporting practices ofWorldHeart. The Audit Committee’s role includes overseeing WorldHeart’sinternal accounting and auditing processes and discussing with WorldHeart’smanagement the processes to manage the business, financial risk and compliancewith applicable legal, ethical and regulatory requirements. The Audit Committeeis responsible for reviewing all financial continuous disclosure filings ofWorldHeart, including press releases with respect to earnings and relatedmatters. The Audit Committee is responsible for the appointment, compensation,retention, and oversight of the independent auditors engaged to prepare andissue audit reports on the financial statements of WorldHeart. The Committeealso approves all non-audit expenditures. The Audit Committee relies on theexpertise and knowledge of management and the independent auditor in carryingout its oversight responsibilities. During 2005, the Audit Committee wascomposed of three directors: John F. Carlson (Chair), C. Ian Ross andWilliam C. Garriock****and metseven times during the year. All members of the Company’s Audit Committee areindependent (as independence is defined in Nasdaq Marketplace Rule 4200(a)(15)).The Board of Directors has determined that each member of the Audit Committeehas sufficient knowledge in financial and auditing matters to serve on theAudit Committee and that John F. Carlson is an “audit committee financialexpert” as currently defined in Rule 10A-3 of the Exchange Act. Thespecific responsibilities and functions of the Audit Committee are delineatedin the Amended and Restated Audit Committee Charter.

*CompensationCommittee*

The principalresponsibilities of the Compensation Committee are: (i) to review, approveand recommend to the Board of Directors the annual goals, objectives andcompensation of the President and Chief Executive Officer of the Company and toevaluate performance against those goals and objectives; (ii) to overseethe performance evaluation of the Company’s other executive officers andapprove and recommend their compensation; (iii) to oversee theadministration of the Company’s equity-based compensation and approve grants ofequity compensation under the Company’s employee stock option plan. TheCompensation Committee’s role includes producing the report on executivecompensation required to be included in the Company’s proxy statement. During2005, the Compensation Committee was composed of three directors: Robert J.Majteles (Chair), C. Ian Ross and William C. Garriock, and met twiceduring****the****year. All members of the Company’sCompensation Committee are independent (as independence is defined in NasdaqMarketplace Rule 4200(a)(15)). The Board of Directors has adopted awritten Compensation Committee Charter.

*CorporateGovernance and Nominating Committee*

The principal responsibilities of the CorporateGovernance and Nominating Committee are: (i) to determine the slate ofdirector nominees for election to the Company’s Board of Directors andrecommend candidates to fill vacancies that may occur; (ii) to review thecomposition of the committees of the Board of Directors; and (iii) tomonitor compliance with, review and recommend changes to the Company’scompliance with corporate governance regulatory requirements, including issuesof significance to the Company and its shareholders. During 2005, the CorporateGovernance and Nominating Committee was composed of three****directors: C. Ian Ross (Chair), John F.Carlson and William C. Garriock and met once during the year. All members ofthe Company’s Corporate Governance and 

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Nominating Committee areindependent (as independence is defined in Nasdaq Marketplace Rule 4200(a)(15)).The Board of Directors has adopted a written Corporate Governance and NominatingCommittee Charter.

Although no establishedspecific minimum qualifications for director nominees have been adopted, theCorporate Governance and Nominating Committee reviews the backgrounds andqualifications of directors and potential nominees. The Committee annuallyreviews the Board of Director nominees in the context of current compositionand the Company’s current circumstances, and considers director candidatesrecommended by shareholders. The name of any recommended candidate for directormay be sent to the attention of the Corporate Governance and NominatingCommittee. These requirements are separate from and in addition to the SECrequirements that must be met by a shareholder in order to have a shareholderproposal included in the Company’s proxy statement. See “Information ConcerningSolicitation and Voting—Shareholder Proposals.” To date, the CorporateGovernance and Nominating Committee has not received any recommendations fromshareholders requesting that the Corporate Governance or Nominating Committeeconsider a candidate for inclusion among the Corporate Governance andNominating Committee’s slate of nominees in the Company’s proxy statement.

*Strategic PlanningCommittee*

The Strategic PlanningCommittee’s overall responsibility is to assist the Board of Directors in itslong range financial and strategic planning efforts. The primaryresponsibilities of the Strategic Planning Committee are (i) to makechoices on strategic direction of the Company; (ii) to focus the financialresources of the Company on program initiatives which have the greatestopportunity for technical, commercial and financial success based on themarkets and the factors required to succeed in those markets; and (iii) toidentify the resources required to ensure a successful implementation of theCompany’s strategic plan. All members of the Board of Directors are members ofthe Strategic Planning Committee and the Committee met once during 2005. Thespecific responsibilities and functions of the Strategic Planning Committee aredelineated in the Strategic Planning Committee Charter.

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

Section 16(a) of the Exchange Act requiresthe Company’s directors and executive officers, and persons who own more thanten percent of a registered class of the Company’s equity securities, to filewith the SEC initial reports of ownership and reports of changes in ownershipof common shares and other equity securities of the Company. Officers,directors and greater than ten percent shareholders are required by SECregulation to furnish the Company with copies of all Section 16(a) formsthey file.

To the Company’sknowledge, based solely on a review of the copies of such reports furnished tothe Company and written representations that no other reports were required,during the fiscal year ended December 31, 2005, all Section 16(a) filingrequirements applicable to its officers, directors and greater than ten percentbeneficial owners were complied with.

**CODEOF CONDUCT AND ETHICS**

We have adopted a written code of business conduct andethics that applies to our principal executive officer and principal financialand accounting officer, or persons performing similar functions, as well as all employees of WorldHeart.We intend to disclose any amendments to, or waivers from, our code of businessconduct and ethics that are required to be publicly disclosed pursuant to rules ofthe SEC and Nasdaq by filing such amendment or waiver with the SEC.

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**Item 10.**                 ExecutiveCompensation.

The following table showsfor the fiscal years ended December 31, 2003, December 31, 2004 andDecember 31, 2005, compensation awarded or paid to, or earned by, theCompany’s Chief Executive Officer, the Company’s Chief Financial Officer andits other three most highlycompensated executive officers at the end of fiscal year 2005 (the “NamedExecutive Officers”).

**SUMMARYCOMPENSATION TABLE**

|                                                                      | ** ** | ** ** | ** ** | **Annual Compensation** | ** ** | **Long Term  Compensation** | ** ** | ** **         | ** ** |
|----------------------------------------------------------------------|------------|------------|------------|------------------------------|------------|----------------------------------|------------|--------------------|------------|
| Named Executive Officers  and Principal Position | ** ** | ** ** | ** ** | **Year**                     | ** ** | **Salary ($)**              | ** ** | **Bonus ($)** | ** ** | **Other annual  compensation  ($)** | ** ** | **Securities  underlying  options (#)** | ** ** | **All other  Compensation  ($)** | ** ** |
| Jal S. Jassawalla                                                    |       |       | 2005       |                         |       | $                                | 267,000    | ** **         | —     |   |   |   |   |   |   | 1,000,000 | (3) |   | $ | 4,107 | (4) |
| President and Chief                                                  |       |       | 2004       |                         |       | $                                | 267,000    | ** **         | —     |   | ** ** | — |   |   |   | 787,225 | (3) | ** ** | — |   |
| Executive Officer                                                    |       |       | 2003       |                         |       | $                                | 227,000    | ** **         | $          | 64,381 |   |   | $ | 24,000 | (5) |   |   | 104,558 |   | ** ** | — |   |
| A. Richard Juelis(1)                                                 |       |       | 2005       |                         |       | $                                | 112,308    | ** **         | —     |   | ** ** | — |   |   |   | 275,000 | (6) | ** ** | — |   |
| Vice  President Finance,                                             |       |       | 2004       |                         | ** ** | —                           | ** ** | —             |       | ** ** | — |   | ** ** | ** ** | **—** |   | ** ** | — |   |
| Chief  Financial Officer                                             |       |       | 2003       |                         | ** ** | —                           | ** ** | —             |       | ** ** | — |   | ** ** | ** ** | **—** |   | ** ** | — |   |
| D. Mark Goudie(2)                                                    |       |       | 2005       |                         |       | CAD  71,689                      | ** ** | —             |       | ** ** | — |   |   |   | 40,000 | (7) |   |   |   |
| Vice President Finance,                                              |       |       | 2004       |                         |       | CAD  202,209                     | ** ** | —             |       | ** ** | — |   |   |   | 40,000 | (7) |   | CAD 209,667 | (8) |
| Chief Financial Officer                                              |       |       | 2003       |                         |       | CAD  144,900                     | ** ** | CAD 95,300         |       | ** ** | — |   |   |   | 37,395 | (7) | ** ** | — |   |
| Piet Jansen                                                          |       |       | 2005       |                         |       | €                           | 170,000    | ** **         | —     |   |   | € | 30,057 | (10) |   |   | 85,000 | (9) | ** ** | — |   |
| Managing  Director                                                   |       |       | 2004       |                         |       | €                           | 153,750    | ** **         | —     |   | ** ** | — |   |   |   | 261,500 | (9) | ** ** | — |   |
| Europe  and Chief  Medical Officer                                   |       |       | 2003       |                         | ** ** | —                           | ** ** | —             |       | ** ** | — |   | ** ** | ** ** | **—** |   | ** ** | — |   |
| John Marinchak                                                       |       |       | 2005       |                         |       | $                                | 160,000    | ** **         | $          | 110,000 | (12) |   | $ | 6,600 | (13) |   |   | 100,000 | (11) |   | $ | 5,839 | (4) |
| Vice President                                                       |       |       | 2004       |                         |       | $                                | 142,096    | ** **         | $          | 157,291 | (12) |   | $ | 6,600 | (13) |   |   | 160,000 | (11) | ** ** | — |   |
| Marketing  and Sales                                                 |       |       | 2003       |                         |       | $                                | 21,635     | ** **         | $          | 22,500 | (12) |   | $ | 1,142 | (13) |   |   | 18,256 | (11) | ** ** | — |   |
| Phillip J. Miller                                                    |       |       | 2005       |                         |       | $                                | 160,000    | ** **         | —     |   | ** ** | — |   |   |   | 145,000 | (14) |   | $ | 13,767 | (4)(15) |
| Vice  President Research                                             |       |       | 2004       |                         |       | $                                | 141,414    | ** **         | —     |   | ** ** | — |   |   |   | 180,000 | (14) |   | $ | 7,280 | (15) |
| and Development                                                      |       |       | 2003       |                         |       | $                                | 130,305    | ** **         | $          | 23,455 |   |   | — |   |   |   | 5,036 | (14) |   | $ | 4,689 | (15) |
|                                                                      |            |            |            |                              |            |                                  |            |                    |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)             Mr. Juelis became Vice President, Finance andChief Financial Officer in June 2005. 

(2)             Mr. Goudie resigned as Vice President, Finance andChief Financial Officer of WorldHeart in May 2005.

(3)             Options for 787,225 common shares were granted toMr. Jassawalla on September 23, 2004, and Mr. Jassawallaforfeited previously granted options for 105,397 common shares. TheSeptember 23, 2004 options initially had an exercise price of $1.12, andrequired approval by the shareholders, which was given on July 18, 2005.After the shareholder approval, the exercise price of these options wasadjusted to $1.30 reflecting the fair market value on the date shareholdersapproved the grant. On January 31, 2005, options for 1,000,000 commonshares were granted to Mr. Jassawalla. 

(4)             Represents 401(k) company matching contribution. 

(5)             Travel allowance paid to Mr. Jassawalla of$24,000. No travel allowances were paid to Mr. Jassawalla in 2004 and2005.

(6)             Options for 275,000 common shares were granted toMr. Juelis on May 27, 2005. 

(7)             Options for 40,000 common shares were granted toMr. Goudie, subject to meeting certain milestones, on September 23,2004, and Mr. Goudie forfeited previously granted options for 39,820common shares. The September 23, 2004 options initially had an exerciseprice of $1.12, and required approval by the shareholders, which was given onJuly 18, 2005. After the shareholder approval, the exercise price of theseoptions was adjusted to $1.30 reflecting the fair market value on the dateshareholders approved the grant. On January 31, 2005, options for 40,000commons shares were granted to Mr. Goudie.

(8)             Amount represents a payment for notice, severance andvacation lump sum accrued in 2004 and paid in 2005 as part of Mr. Goudie’stermination arrangements pursuant to Mr. Goudie’s employment agreementwith WorldHeart.

(9)             Options for 240,000 common shares were granted toDr. Jansen on September 23, 2004, and Dr. Jansen forfeitedpreviously granted options for 21,500 common shares. The September 23,2004 options initially had an exercise price of $1.12, and required approval bythe shareholders, which was given on July 18, 2005. After the shareholderapproval, the exercise price of these options was adjusted to $1.30 reflectingthe fair market value on the date shareholders approved the grant. OnJanuary 31, 2005, options for 85,000 common shares were granted toMr. Jansen. 

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(10)       Represent the car allowance and health care benefitspaid to Dr. Jansen.

(11)       Options for 160,000 common shares were granted toMr. Marinchak on September 23, 2004, and Mr. Marinchak forfeitedpreviously granted options for 18,256 common shares. The September 23,2004 options initially had an exercise price of $1.12, and required approval bythe shareholders, which was given on July 18, 2005. After the shareholderapproval, the exercise price of these options was adjusted to $1.30 reflectingthe fair market value on the date shareholders approved the grant. OnJanuary 31, 2005, options for 100,000 common shares were granted toMr. Marinchak. 

(12)       Represent sales commissions paid to Mr. Marinchak.

(13)       Represents car allowance paid to Mr. Marinchak.

(14)       Options for 180,000 common shares were granted toMr. Miller on September 23, 2004, and Mr. Miller forfeitedpreviously granted options for 5,716 common shares. The September 23, 2004options initially had an exercise price of $1.12, and required approval by theshareholders, which was given on July 18, 2005. After the shareholderapproval, the exercise price of these options was adjusted to $1.30 reflectingthe fair market value on the date shareholders approved the grant. OnJanuary 31, 2005, options for 145,000 common shares were granted toMr. Miller

(15)       $7,162, $7,280, $4,689 in 2005, 2004 and2003, respectively, represent royalties on the sales of the Novacor LVASpursuant to a royalty agreement between Mr. Miller and WorldHeart datedApril 22, 1998. 

**STOCKOPTION GRANTS AND EXERCISES**

The Company grants options to its employees, executiveofficers and directors under the World Heart Corporation Employee Stock OptionPlan, as amended (the “Plan”). As of April 13, 2006 options to purchase atotal of 6,753,284 shares wereoutstanding under the Plan and options to purchase 3,019,221 shares remainedavailable for grant thereunder.

The following tables showfor the fiscal year ended December 31, 2005, certain information regardingoptions granted to, exercised by, and held at year-end by, the Named ExecutiveOfficers.

**OPTION GRANTS IN FISCAL YEAR 2005**

| ** **               | ** ** | **Common**  | ** ** | **As a Percentage**  | ** ** | ** **    | ** ** | ** **     | ** ** | **Potential Realizable**          | ** ** |
|--------------------------|------------|-------------|------------|--------------------------------|------------|---------------|------------|----------------|------------|----------------------------------------|------------|
| ** **               | ** ** | **Shares**  | ** ** | **of Total Options** | ** ** | ** **    | ** ** | ** **     | ** ** | **Value at Assumed**         | ** ** |
| ** **               | ** ** | **Under**   | ** ** | **Granted to**            | ** ** | **Exercise**  | ** ** | ** **     | ** ** | **Annual Rates of**          | ** ** |
| ** **               | ** ** | **Options** | ** ** | **Employees in**          | ** ** | **Price**     | ** ** | ** **     | ** ** | **Stock Price Appreciation** | ** ** |
| **Named Executive** | ** ** | **Granted** | ** ** | **Financial Year**        | ** ** | **($/Common** | ** ** | **Expiration** | ** ** | **for Option Term**          | ** ** |
| **Officers**             | ** ** | ** **  | ** ** | **(#)**                        | ** ** | **(%)**       | ** ** | **Share)**     | ** ** | **Date**                               | ** ** | **5%** | ** ** | **10%** | ** ** |
| Jal S.  Jassawalla(1)    |       | 1,000,000   |       |                           | 29.85%     |          |       |           | $          | 1.48                                   |       |   | January, 2014 |   | $ | 930,777 |   | $ | 2,358,756 |   |
| A. Richard  Juelis(2)    |       | 275,000     |       |                           | 8.21%      |          |       |           | $          | 1.15                                   |       |   | May, 2014 |   | $ | 198,901 |   | $ | 504,039 |   |
| D. Mark Goudie(3)        |       | 40,000      |       |                           | 1.19%      |          |       |           | $          | 1.48                                   |       |   | May, 2008 |   | $ | 37,244 |   | $ | 94,367 |   |
| Piet Jansen              |       | 85,000      |       |                           | 2.54%      |          |       |           | $          | 1.48                                   |       |   | January, 2014 |   | $ | 79,128 |   | $ | 200,510 |   |
| John Marinchak           |       | 100,000     |       |                           | 2.99%      |          |       |           | $          | 1.48                                   |       |   | January, 2014 |   | $ | 93,090 |   | $ | 235,891 |   |
| Phillip J. Miller        |       | 145,000     |       |                           | 4.33%      |          |       |           | $          | 1.48                                   |       |   | January, 2014 |   | $ | 134,974 |   | $ | 342,035 |   |
|                          |            |             |            |                                |            |               |            |                |            |                                        |            |  |  |  |  |  |  |  |  |  |  |  |

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(1)          Mr.Jassawalla becamePresident and Chief Executive Officer of the Corporation on July 28, 2004.

(2)          Mr. Juelis becameVice President, Finance and Chief Financial Officer on June 2, 2005.

(3)          Mr. Goudieresigned as Vice President, Finance and Chief Financial Officer of WorldHearton May 17, 2005.

The aggregate number ofoptions granted to all employees during the year ended December 31, 2005was 3,349,750.

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**AGGREGATED OPTION EXERCISES INLAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES**

| ** **                             | ** ** | **Shares** | ** ** | ** **                     | ** ** | **Number of Securities  Underlying Unexercised** | ** ** | **Value of Unexercised  In-the-Money** | ** ** |
|----------------------------------------|------------|------------|------------|--------------------------------|------------|-----------------------------------------------------------------|------------|--------------------------------------------------|------------|
| **Named Executive Officers** | ** ** | ** ** | ** ** | **Acquired on  Exercise** | ** ** | **Value  Realized**                                             | ** ** | **Options at  December 31, 2005** | ** ** | **Options At  December 31, 2005** | ** ** |
| ** **                             | ** ** | **(#)**    | ** ** | **($)**                        | ** ** | **Exercisable(#)**                                              | ** ** | **Unexercisable(#)**                             | ** ** | **Exercisable($)** | ** ** | **Unexercisable($)** | ** ** |
| Jal S. Jassawalla                      |       |       | —     |                           |       |                                                            | —     |                                             |       |   | 1,000,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| A. Richard Juelis                      |       |       | —     |                           |       |                                                            | —     |                                             |       |   | 275,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| D. Mark Goudie                         |       |       | —     |                           |       |                                                            | —     |                                             |       |   | 40,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Piet Jansen                            |       |       | —     |                           |       |                                                            | —     |                                             |       |   | 85,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| John Marinchak                         |       |       | —     |                           |       |                                                            | —     |                                             |       |   | 100,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Phillip J. Miller                      |       |       | —     |                           |       |                                                            | —     |                                             |       |   | 145,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
|                                        |            |            |            |                                |            |                                                                 |            |                                                  |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

On December 21, 2005,the Board of Directors of WorldHeart approved the accelerated vesting of alloutstanding stock options held by current employees or consultants, except forthe options held by the non-employee members of the Board of Directors. Nooptions were exercised by Named Executive Officers during 2005. As of December 31,2005, none of the options held by the Named Executive Officers werein-the-money.

**OPTION REPRICINGS**

The following table provides certain information withrespect to certain options forfeited by the Named Executive Officers during thepast fiscal year (1) and the number of new options granted to each Named ExecutiveOfficer. There is no direct correlation between the number of options forfeitedand the number of options granted but the nature of these actions is consideredto be a repricing of options received by the Named Executive Officers.****

| **Named Executive Officer** | ** ** | ** ** | **Forfeited  Options** | ** ** | **Exercise Price** | ** **      | **Expiry Date** | ** **                          | **New Options  Granted** | ** ** | **Exercise  Price** | ** ** | **Expiry Date** | ** ** |
|---------------------------------------|------------|------------|------------------------|------------|-------------------------|-----------------|----------------------|-------------------------------------|-------------------------------|------------|---------------------|------------|----------------------|------------|
| Jal S. Jassawalla                     |       |       | 105,397                |       |                    | $               | 7.77-$29.05          |                                | Jan 4, 2007 to 12/31/2010     |       |                | 787,225    |                 |       |   | $ | 1.30 |   |   | September, 2013 |   |
| A. Richard Juelis                     |       |       | —                 |       |                    | —          |                 | —                              |                          |       | —              |       |                 |       | — |   |   | — |   |
| D. Mark Goudie                        |       |       | 39,820                 |       |                    | Cdn$8.54-$37.45 |                 | April 1, 2007 to Dec  31, 2010 |                          |       | 40,000              |       |                 |       | $ | 1.30 |   |   | May, 2008 |   |
| John Marinchak                        |       |       | 18,256                 |       |                    | $               | 7.21-$7.83           |                                | Oct 26, 2008 to Dec 31,  2010 |       |                | 160,000    |                 |       |   | $ | 1.30 |   |   | September, 2013 |   |
| Piet Jansen                           |       |       | 21,500                 |       |                    | $               | 7.03                 |                                | Dec 31, 2008 to Dec 31,  2010 |       |                | 240,000    |                 |       |   | $ | 1.30 |   |   | September, 2013 |   |
| Phillip J. Miller                     |       |       | 5,716                  |       |                    | $               | 7.77-$29.05          |                                | Jan 4, 2007 to Dec 31, 2010   |       |                | 180,000    |                 |       |   | $ | 1.30 |   |   | September, 2013 |   |

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(1)             In September 2004, the Board ofDirectors of WorldHeart determined to make certain grants of options toemployees, executive officers and directors of WorldHeart in order to improvemorale and ensure retention of their services. The Named Executive Officers,among others, agreed to forfeit certain previously granted options with higherexercises prices, and each individual was granted new options on a common basiswith more equitable terms, including lower exercise price. Although theseoption grants were made in September 2004, they were subject toshareholder approval, which was received in July 2005. The September 2004options initially had an exercise price of $1.12, and after the shareholderapproval was received, the exercise price of these options was adjusted to$1.30 reflecting the fair market value on the date shareholders approved thegrant.

**COMPENSATIONOF DIRECTORS**

Each non-employee director of the Company receives anannual cash fee of Cdn$15,000. The Chairman of the Board of Directors receivesan additional cash fee of Cdn$48,000, the Chair of the Audit Committee receivesan additional cash fee of Cdn$30,000, and the Chairs of each of the othercommittees receive an additional cash fee of Cdn $25,000. Beginning in 2006,the Chair of the Corporate Governance and Nominating Committee will not receivea fee. An additional Cdn$1,000 per diem fee is paid for meetings attended inperson and a Cdn $500 per diem fee is paid for meetings attended by telephone,with a daily maximum of Cdn $1,000. In the fiscal year ended December 31,2005, the total compensation paid to non-employee directors was Cdn$346,500 ofwhich****Cdn$ 94,000 was for 2004compensation paid in 

8

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2005**.**Non-employee directors are also entitledto be reimbursed for travel and other expenses incurred in attending meetingsof the Board of Directors or of a committee.

Each of the Company’s non-employee directors alsoreceives stock option grants under the Plan. Options granted under the Plan arenonstatutory stock options under the Internal Revenue Code.

During 2005, the Company granted options to purchase50,000 shares to each non-employee director at an exercise price of $1.48 pershare, the fair market value of such common shares on the date of grant.  As of April 13, 2006, no options had beenexercised by the directors under the Plan.

Upon consummation of WorldHeart’s 2003 common stock and warrant financing, the Special Situations Fundsexercised its right to designate a director nominee and designated Robert J.Majteles to serve as a member of our Board of Directors. Mr. Majtelesjoined the Board of Directors in 2003, and was subsequently reelected to serveon the Board at the 2005 annual shareholders meeting. Mr. Majteles serveson the Board of Directors of Adept Technology, Inc. Mr. RichardJuelis, our Chief Financial Officer, also serves on the Board of Directors ofAdept, including the compensation committee thereof. Special Situations Funds,the second largest shareholder of WorldHeart, is also a significant shareholderof Adept. Mr. Majteles is the founder of Treehouse Capital, LLC, aninvestment firm. Special Situations Fund III, L.P., Special Situations CaymanFund, L.P., Special Situations Private Equity Fund, L.P. and Special SituationsFund, L.P. have entered into an agreement with Mr. Majteles and TreehouseCapital pursuant to which Treehouse Capital, through Mr. Majteles,provides certain management and financial advisory services for the funds onrequest. If Mr. Majteles’ services are requested by the funds with respectto a particular portfolio investment, Treehouse Capital is entitled to ten percentof the funds’ net gain (as defined) or net loss (as defined) on the investmentduring the term of the agreement, offset by certain fees that may be paid bythe portfolio company to Treehouse Capital or Mr. Majteles directly. Underthe agreement, Mr. Majteles is required to act independently of the fundsin discharging 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 for a particular portfolio company. Mr. Majtelesdoes not have or share voting or dispositive power over any securities held bythe funds. Mr. Majteles has agreed to serve as a member of WorldHeart’sBoard of Directors pursuant to this agreement.

**EMPLOYMENT,SEVERANCE AND CHANGE OF CONTROL AGREEMENTS**

WorldHeart entered into an employment arrangement withMr. Jal S. Jassawalla dated June 23, 2000, which arrangement wasupdated as of July 28, 2004 and further amended as of October 25,2004. As of July 28, 2004, Mr. Jassawalla is entitled to receive abase salary of $267,000 per annum. Mr. Jassawalla was granted 787,255options on September 23, 2004, in connection with which he forfeited previouslygranted options for 105,397 common shares, and was granted 1,000,000 options onJanuary 31, 2005. Mr. Jassawalla is eligible to receive grants ofoptions pursuant to the Plan. Mr. Jassawalla is entitled to a severancepayment of 104 weeks upon termination by WorldHeart pursuant to the termsand conditions of World Heart Inc. severance pay plan.

WorldHeart entered into an employment agreement with Mr. RichardJuelis on May 27, 2005. Mr. Juelis is entitled to receive an annualsalary of $200,000. He received an initial stock option grant for 275,000common shares and is eligible to receive future option grants pursuant to thePlan.

Mr. Mark Goudie entered into an employmentagreement with WorldHeart effective October 1, 2003. This agreementprovided for certain termination payments in the event that the position ofChief Financial Officer was re-located from Ottawa, Ontario. As part of thedecision to consolidate in August 2004 operations of WorldHeart toOakland, California, WorldHeart entered into a letter agreement with Mr. Goudiewherein Mr. Goudie received a termination payment of Cdn$180,000 lessstatutory deductions, including payment for accrued vacation. Mr. Goudiewas granted 40,000 options on 

9

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September 23, 2004,in connection with which he forfeited previously granted options for 39,820common shares, and was granted another 40,000 options on January 31,2005, all of which vested as to 100% on the termination date of employment withWorldHeart.

WorldHeart entered into an employment arrangement withMr. Phillip Miller dated June 23, 2000, which arrangement was updatedas of October 12, 2004. As of October 2004, Mr. Miller isentitled to receive a base salary of $160,000 per annum. Mr. Miller wasgranted 180,000 options on September 23, 2004, in connection withwhich he forfeited previously granted options for 5,716 common shares, and wasgranted 145,000 options on January 31, 2005. Mr. Miller is alsoeligible to receive future option grants pursuant to the Plan. Under the October 12,2004 arrangement, Mr. Miller retained royalty rights pursuant to a royaltyagreement between Mr. Miller and WorldHeart dated April 22, 1988entitling him to certain payments on the sale of Novacor LVAS kits.

WorldHeart entered into an employment arrangement withDr. Piet Jansen on December 9, 2003, which arrangement was updated asof October 12, 2004. As of October 2004**,** Dr. Jansen is entitled to receive a base salary of €170,000per annum. Dr. Jansen was granted 240,000 options on September 23,2004, in connection with which he forfeited previously granted options for21,500 common shares, and was granted 85,000 options on January 31, 2005. Mr. Jansenis also eligible to receive future option grants pursuant to the Plan.

WorldHeart entered into an employment arrangement withMr. John Marinchak dated October 6, 2003, which arrangement wasupdated as of October 12, 2004. As of October 2004**,** Mr. Marinchak is entitled to receivea base salary of $160,000 per annum. Mr. Marinchak is also entitled toreceive commissions based on sales of Novacor LVAS kits based on a formula forwhich commissions are adjusted from time to time. Mr. Marinchak wasgranted 160,000 options on September 23, 2004, in connection withwhich he forfeited previously granted options for 18,256 common shares, and wasgranted 100,000 options on January 31, 2005. Mr. Marinchak is alsoeligible to receive future option grants pursuant to the Plan.

WorldHeart entered into an employment arrangement withMr. Pratap Khanwilkar dated January 31, 2005, which was effective on July 29,2005 upon the closing of the acquisition by WorldHeart of MedQuest Products, Inc.As of July 29, 2005, Mr. Khanwilkar is entitled to receive a basesalary of $165,000 per annum. Mr. Khanwilkar was granted options for425,000 common shares on July 29, 2005 and is also eligible to receivefuture option grants pursuant to the Plan.

WorldHeart entered into anemployment arrangement with Mr. John Vajda on June 9, 2005. Mr. Vajdais entitled to receive a base salary of $150,000 per annum. Mr. Vajda wasalso granted options for 250,000 common shares and is also eligible to receivefuture option grants pursuant to the Plan.

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**EQUITYCOMPENSATION PLAN INFORMATION**

Thefollowing table provides certain information with respect to the Plan, whichwas the only equity compensation plan in effect as of December 31, 2005. ThePlan was initially adopted in December 1996 and was amended and restatedseveral times. At last year’s annual meeting on July 18, 2005, theshareholders approved the last amendments to the Plan.

| ** **                                                   | ** ** | **Number of Securities to be  Issued Upon Exercise of  Outstanding Options,  Warrants and Rights** | ** ** | **Weighted-Average  Exercise Price of  Outstanding Options,  Warrants and Rights** | ** ** | **Number of Securities  Remaining Available for  Future Issuance Under  Equity Compensation  Plans (Excluding  Securities Reflected  in Column (a))** | ** ** |
|--------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Plan Category**                                       | ** ** | ** **                                                                                                                                           | ** ** | **(a)**                                                                                                     | ** ** | **(b)**                                                                                                                                                                                                      | ** ** | **(c)** | ** ** |
| Equity  compensation plans approved by security holders |       |                                                                                                                                                 | 6,803,804  |                                                                                                        |       |                                                                                                                                                                                                         | $          | 1.73 |   |   |   | 2,968,701 |   |   |
| Equity  compensation plans not approved by security holders  |       |                                                                                                                                                 | —     |                                                                                                        |       |                                                                                                                                                                                                         | —     |   |   |   | — |   |   |
| Total                                                        |       |                                                                                                                                                 | 6,803,804  |                                                                                                        |       |                                                                                                                                                                                                         | $          | 1.73 |   |   |   | 2,968,701 |   |   |
|                                                              |            |                                                                                                                                                      |            |                                                                                                             |            |                                                                                                                                                                                                              |            |  |  |  |  |  |  |  |  |  |

 

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**Item 11.**                 SecurityOwnership of Certain Beneficial Owners and Management

Thetable below sets forth information regarding the beneficial ownership of commonshares as of March 31, 2006 by: (i) each person or entity known byWorldHeart to own beneficially more than 5% of its outstanding common shares; (ii) eachexecutive officer named in the Summary Compensation Table;  (iii) each director and nominee fordirector; and  (iv) all executiveofficers and directors of the Company as a group. Beneficial ownership isdetermined in accordance with the rules of the SEC. The number of commonshares used to calculate the percentage ownership of each listed personincludes the common shares underlying options, warrants or other convertiblesecurities held by such person that are exercisable within 60 days of March 31,2006.

|                                                                        | ** ** | **Beneficial Ownership** | ** ** |
|------------------------------------------------------------------------|------------|-------------------------------|------------|
| **Name and Address of Beneficial Owner**      | ** ** | ** **                    | ** ** | **Number of  Shares** | ** ** | **Percent of Class** | ** ** |
| Maverick Venture Management,  LLC                                      |       | 17,202,343                    |       |   | 31.01 | % |   |
| 737 Bryant Street                                                      |       |                          |       |   |   |   |   |
| Palo Alto, CA 94301                                                    |       |                          |       |   |   |   |   |
| Austin W. Marxe  and David M. Greenhouse(2)                            |       | 12,926,694                    |       |   | 22.64 | % |   |
| 153 East 53rd  Street                                                  |       |                          |       |   |   |   |   |
| New York, NY  10022                                                    |       |                          |       |   |   |   |   |
| MQP Dissolution, Inc.                                             |       | 4,175,000                     |       |   | 7.53 | % |   |
| 4750 Wiley Post Way,  Suite 120                                   |       |                          |       |   |   |   |   |
| Salt Lake City, UT 84116                                               |       |                          |       |   |   |   |   |
| Michael A. Roth  and Brian J. Stark(3)                                 |       | 3,929,610                     |       |   | 7.00 | % |   |
| c/o Bryan Cave  LLP                                                    |       |                          |       |   |   |   |   |
| 1290 Avenue of  the Americas                                           |       |                          |       |   |   |   |   |
| New York, NY  10104                                                    |       |                          |       |   |   |   |   |
| Jal S. Jassawalla(4)                                                   |       | 1,818,929                     |       |   | 3.17 | % |   |
| A. Richard  Juelis(5)                                                  |       | 275,000                       |       |   | * |   |   |
| Piet Jansen(6)                                                         |       | 325,000                       |       |   | * |   |   |
| John Marinchak(7)                                                      |       | 260,000                       |       |   | * |   |   |
| Phillip J. Miller(8)                                                   |       | 340,270                       |       |   | * |   |   |
| D. Mark Goudie(9)                                                      |       | 80,000                        |       |   | * |   |   |
| William C. Garriock(10)                                                |       | 43,334                        |       |   | * |   |   |
| C. Ian Ross(11)                                                        |       | 44,199                        |       |   | * |   |   |
| John F. Carlson(12)                                                    |       | 43,334                        |       |   | * |   |   |
| Robert J.  Majteles(13)                                                |       | 43,334                        |       |   | * |   |   |
| All Executive Officers and  Directors as a Group (12 persons)(14) |       | 4,126,397                     |       |   | 6.94 | % |   |
|                                                                        |            |                               |            |  |  |  |  |  |  |

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*                    less than onepercent

(1)          This table is based uponinformation supplied by officers, directors and principal shareholders andSchedules 13D and 13G filed with the SEC. Unless otherwise indicated in thefootnotes to this table and subject to community property laws whereapplicable, WorldHeart believes that each of the shareholders named in thistable has sole voting and investment power with respect to the shares indicatedas beneficially owned. Unless otherwise indicated, the principal address ofeach of the shareholders named in this table is:  c/o World Heart Corporation, 7799 PardeeLane, Oakland, California 94621. Applicable percentages are based on 55,479,549 shares outstanding on March 31,2006, adjusted as required by rules promulgated by the SEC.

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(2)          Includes warrants topurchase 316,915 common shares and 2,050,604 common shares held by Special SituationsCayman Fund, L.P., warrants to purchase 76,622 common shares and 551,240 commonshares held by Special Situations Fund III, L.P., warrants to purchase 874,124common shares and 6,288,734 common shares held by Special Situations Fund IIIQP, L.P., and warrants to purchase 345,726 common shares and 2,422,729 commonshares held by Special Situations Private Equity Fund, L.P. Messrs. Marxand Greenhouse share sole voting and investment power over the shares held bySpecial Situations Cayman Fund, L.P., Special Situations Fund III, L.P.,Special Situations Fund III QP, L.P. and Special Situations PrivateEquity Fund, L.P.

(3)          Includes warrants topurchase 691,244 common shares. The shares and the warrants are held directlyby SF Capital Partners Ltd. Messrs. Roth and Stark are the ManagingMembers of Stark Offshore Management, LLC, which acts as an investment managerand has sole power to direct the management of SF Capital. Through StarkOffshore, Messrs. Roth and Stark possess voting and dispositive power overthe shares but disclaim beneficial ownership, except to the extent of theirpecuniary interests therein.

(4)          Mr. Jassawallaholds options for 1,788,929 common shares. All of those options are exercisablewithin 60 days of March 31, 2006.

(5)          Mr. Juelis holdsoptions for 275,000 common shares. All of those options are exercisable within60 days of March 31, 2006.

(6)          Dr. Jansen holdsoptions for 325,000 common shares. All of those options are exercisable within60 days of March 31, 2006.

(7)          Mr. Marinchak holdsoptions for 260,000 common shares. All of those options are exercisable within60 days of March 31, 2006.

(8)          Mr. Miller holdsoptions for 325,270 common shares. All of those options are exercisable within60 days of March 31, 2006.

(9)          Mr. Goudie holdsoptions for 80,000 common shares. Of those options, all are exercisable within60 days of March 31, 2006.

(10)   Mr. Garriock holds optionsfor 130,000 common shares. Of those options, 43,334 are exercisable within 60days of March 31, 2006.

(11)   Mr. Ross holds options for130,365 common shares. Of those options, 43,699 are exercisable within 60 daysof March 31, 2006.

(12)   Mr. Carlson holds optionsfor 130,000 common shares. Of those options, 43,334 are exercisable within 60days of March 31, 2006

(13)   Mr. Majteles holds optionsfor 130,000 common shares. Of  thoseoptions, 43,334 are exercisable within 60 days of March 31, 2006.

(14)   Includesall of the shares referenced in notes (4) through (13).

**Item 12.**              CertainRelationships and Related Transactions.

The Company has entered into certain employmentagreements with Messrs. Jassawalla, Juelis, Miller, Marinchak, Khanwilkarand Vajda and with Dr. Jansen. The details of these employment agreementsare described above under the heading “Item 10. Executive Compensation—Employment,Severance and Change of Control Agreements.”

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Mr. Robert J. Majteles serves on our Board ofDirectors as a designee of the Special Situations Funds, our second largestshareholder. The details of Mr. Majteles relationship and agreements withthe Special Situations Funds are described above under the heading “Item 10.Executive Compensation—Compensation of Directors.”

Maverick VentureManagement, LLC, our largest shareholder, is entitled to two nominees on theBoard of Directors if Maverick’s shareholdings are at least 25% of the issuedand outstanding common shares of the Company and is entitled to one nominee onthe Board if Maverick’s shareholdings are between 15% and less than 25%. Thenumber of directors shall not exceed seven.

**Item13.**                 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 3.2  |   | By-laws of the  Corporation (incorporated by reference to the Corporation’s Registration  Statement on Form F-1, dated October 8, 1996).                                                                                                                                 |
| Exhibit 3.3  |   | Amendment to the  By-Laws of the Corporation (incorporated by reference to Amendment No. 2  to the Corporation’s Registration Statement on Form F-1,  dated December 6, 1996).                                                                            |
| 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.*                                                                                                                                                                                                                                                |
| 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)). |
| 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                                                                                                             |

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|                    |   | 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 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  |   | Letter Agreement, dated  December 9, 2003, as amended on October 12, 2004, between the  Corporation and Piet Jansen. (incorporated by reference to Exhibit 10.5  to the Corporation’s Form 10-KSB/A for the year ended  December 31, 2004 (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)).                                             |
| 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.*                                                                                                                                                          |
| Exhibit 10.12 |   | License Agreement dated  March 31, 1999 between the Corporation and the University of Virginia  Patent Foundation.*                                                                                                                                                                                          |
| Exhibit 10.13 |   | License Agreement dated  February 13, 2002 between the Corporation and University of Pittsburgh.*                                                                                                                                                                                                            |
| 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.*                                                                                                                                 |

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| Exhibit 10.15 |   | World Heart Corporation Employee Stock Option Plan  (incorporated by reference to the Corporation’s Registration Statement on  Amendment No. 1 to form F-1, dated November 18, 1996).                                                                          |
|--------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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 27, 2006).*                                                                                                         |
| 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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*                    Previouslyfiled

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

Forthe years ended December 31, 2005 and 2004, the fees billed to WorldHeartfor audit work and other services performed by PricewaterhouseCoopers LLPexcluding taxes and out of pocket expenses were as follows:

| ** **              | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------|------------|--------------------------------------------|------------|
| ** **              | ** ** | **2005**                                   | ** ** | **2004** | ** ** |
| Audit Services          |       | CAD 273,000                                |       | CAD 230,000 |   |
| Audit-Related  Services |       | CAD 167,000                                |       | — |   |
| Tax Services            |       | CAD 88,000                                 |       | CAD 90,000 |   |
| Other Services          |       | CAD 154,000                                |       | — |   |
| Total                   |       | CAD 682,000                                |       | CAD 320,000 |   |

 

**AUDITFEES**

Duringthe last two fiscal years ended December 31, 2005 and December 31,2004, the aggregate fees billed by PricewaterhouseCoopers LLP for theprofessional services rendered for the audit of the Company’s annual financialstatements and for the reviews of the financial statements included in theCompany’s Forms 10-QSB or services that are normally provided byPricewaterhouseCoopers LLP in connection with statutory and regulatory filingsor engagements for such fiscal years were approximately Cdn$273,000 and Cdn**$**230,000, respectively.

**AUDIT-RELATEDFEES**

During the last two fiscalyears ended December 31, 2005 and December 31, 2004, the aggregatefees billed by PricewaterhouseCoopers LLP for assurance and related servicesthat are reasonably related to the performance of the audit or review of theCompany’s financial statements and not otherwise reported above under “AuditFees” were approximately Cdn $167,000 and nil, respectively. These servicesprimarily related to the Management Information Circular (Proxy) filing.

**TAXFEES**

During the last two fiscalyears ended December 31, 2005 and December 31, 2004, the aggregatefees billed by PricewaterhouseCoopers LLP for tax compliance, tax advice andtax planning were approximately Cdn$95,000 and Cdn$88,000, respectively. Theseservices included assistance with tax return preparation and review, federal,state and international tax compliance, strategic tax planning services andservices with the Company’s international subsidiaries.

**ALLOTHER FEES**

During the last two fiscalyears ended December 31, 2005 and December 31, 2004, the aggregatefees billed by PricewaterhouseCoopers LLP for products and professionalservices other than those described above were approximately Cdn $154,000 andnil, respectively. These services included tax planning related to the MedQuestacquisition, reorganization planning “monetization” and support for theresolution of the ongoing Provincial Sales Tax audit.

**PRE-APPROVALPOLICIES AND PROCEDURES**

Under its charter adoptedby the Board of Directors on December 16, 2003, the Audit Committee hasthe authority and responsibility to review and approve in advance all auditingservices of the independent auditors, including related fees and terms, and allnon-audit service mandates, including related fees and terms, to the extentpermitted by applicable laws, regulations and policies. The Audit Committee may

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delegateto 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 describedabove were pre-approved by the Audit Committee.

**AUDITORS’INDEPENDENCE**

The Audit Committee has determined that the renderingof all the aforementioned services by PricewaterhouseCoopers LLP werecompatible with maintaining the auditors’ independence. During the fiscal yearended December 31, 2005, none of the total hours expended on the Company’sfinancial audit by PricewaterhouseCoopers LLP were provided by persons otherthan PricewaterhouseCoopers LLP’s full-time permanent employees.

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**SIGNATURES**

Inaccordance with Section 13 or 15(d) of the Exchange Act, theregistrant caused this report to be signed 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 26, 2006               |

 

Inaccordance with the Exchange Act, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and datesindicated.

|                        | **Name** | ** **                                           | ** ** |                      | **Title** | ** ** | ** ** |  | **Date** | ** ** |
|------------------------|----------|------------------------------------------------------|------------|----------------------|-----------|------------|------------|--|----------|------------|
| /s/ JAL  S. JASSAWALLA |     | President, Chief  Executive Officer and Director     |       | April 26,  2006 |
| Jal  S. Jassawalla     |     | (principal executive  officer)                       |       |                 |
| /s/ A. RICHARD  JUELIS |     | Vice President,  Finance and Chief Financial Officer |       | April 26,  2006 |
| A.  Richard Juelis     |     | (principal financial and  accounting officer)        |       |                 |
| *                      |     | Director                                             |       | April 26,  2006 |
| John  F. Carlson       |     |                                                 |       |                 |
| *                      |     | Director                                             |       | April 26,  2006 |
| William  C. Garriock   |     |                                                 |       |                 |
| *                      |     | Director                                             |       | April 26,  2006 |
| Robert  J. Majteles    |     |                                                 |       |                 |
| *                      |     | Chairman of the  Board and Director                  |       | April 26,  2006 |
| C. Ian Ross            |     |                                                 |       |                 |

 

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

 

 

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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 27, 2006) |
| 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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