##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2009
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 COMMISSION FILE NUMBER: 001-34256
 HEARTWARE INTERNATIONAL, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    26-3636023(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 205 Newbury Street, Suite 101
Framingham, Massachusetts 01701
+1 508 739 0950
 
 
 : þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 Yes o No o
 o þ
  Class
    
    Shares Outstanding as of July 31, 2009Common Stock, $0.001 Par Value Per Share
    
    8,949,448




---



##### 



PART I. FINANCIAL INFORMATION
    
    
    4ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
    
    4ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
    
    
    23ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    31ITEM 4. CONTROLS AND PROCEDURES
    
    
    31PART II. OTHER INFORMATION
    
    
    32ITEM 1A. RISK FACTORS
    
    
    32ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    32ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    32ITEM 6. EXHIBITS
    
    
    33Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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References
  
    
    HeartWare, the Company, HeartWare Group, we, us and our refer to HeartWare
International, Inc. and its consolidated subsidiaries, HeartWare Pty. Limited and
HeartWare, Inc.
    
    HeartWare International, Inc. refers to HeartWare International, Inc., a Delaware
corporation incorporated on July 29, 2008.
    
    HeartWare Pty. Limited refers to HeartWare Pty. Limited, an Australian proprietary
corporation.
    
    HeartWare, Inc. refers to HeartWare, Inc., a Delaware corporation incorporated on
April 3, 2003. HeartWare, Inc. was acquired by HeartWare Limited on January 24, 2005.
 Dollars
  Trademarks
 ® TM TM
  3




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
 June 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,925,450
    
    
    $
    20,803,656Accounts receivable
    
    
    2,574,257
    
    
    
    244,198Inventories, net
    
    
    8,353,463
    
    
    
    3,508,065Prepaid expenses and other current assets
    
    
    1,254,615
    
    
    
    1,061,737Total current assets
    
    
    18,107,785
    
    
    
    25,617,656Property, plant and equipment, net
    
    
    3,521,214
    
    
    
    3,608,626Other intangible assets, net
    
    
    1,075,437
    
    
    
    823,495Restricted cash
    
    
    288,429
    
    
    
    288,429Total Assets
    
    $
    22,992,865
    
    
    $
    30,338,206LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,034,582
    
    
    $
    699,064Accrued expenses and other current liabilities
    
    
    4,639,664
    
    
    
    2,883,587Total current liabilities
    
    
    7,674,246
    
    
    
    3,582,651Commitments and contingenciesShareholders equity:Preferred stock  $.001 par value; 5,000,000
shares authorized; no shares issued and
outstanding at June 30, 2009 and December 31,
2008
    
    
    
    
    
    
    Common stock  $.001 par value; 25,000,000
shares authorized; 8,929,809 and 8,866,702
shares issued and outstanding at June 30, 2009
and December 31, 2008, respectively
    
    
    8,930
    
    
    
    8,867Additional paid-in capital
    
    
    113,332,723
    
    
    
    112,400,642Accumulated deficit
    
    
    (90,086,226
    )
    
    
    (76,962,787
    )Accumulated other comprehensive (loss):Cumulative translation adjustments
    
    
    (7,936,808
    )
    
    
    (8,691,167
    )Total Shareholders Equity
    
    
    15,318,619
    
    
    
    26,755,555Total Liabilities and Shareholders Equity
    
    $
    22,992,865
    
    
    $
    30,338,206
   4




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##### Table of Contents



HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues, net
    
    $
    2,968,447
    
    
    $
    
    
    
    $
    4,446,243
    
    
    $
    Cost of revenues
    
    
    1,579,421
    
    
    
    
    
    
    
    2,297,729
    
    
    
    Gross profit
    
    
    1,389,026
    
    
    
    
    
    
    
    2,148,514
    
    
    
    Operating expenses:Selling, general and administrative
    
    
    4,372,200
    
    
    
    2,625,098
    
    
    
    8,571,863
    
    
    
    4,812,723Research and development
    
    
    2,858,514
    
    
    
    5,070,212
    
    
    
    6,348,294
    
    
    
    9,322,927Total operating expenses
    
    
    7,230,714
    
    
    
    7,695,310
    
    
    
    14,920,157
    
    
    
    14,135,650Loss from operations
    
    
    (5,841,688
    )
    
    
    (7,695,310
    )
    
    
    (12,771,643
    )
    
    
    (14,135,650
    )Foreign exchange (loss)
    
    
    (1,060,206
    )
    
    
    (547,321
    )
    
    
    (367,658
    )
    
    
    (1,270,623
    )Interest income, net
    
    
    11,793
    
    
    
    237,003
    
    
    
    18,549
    
    
    
    562,774Other, net
    
    
    (655
    )
    
    
    (89,872
    )
    
    
    (2,687
    )
    
    
    (92,112
    )Loss before income taxes
    
    
    (6,890,756
    )
    
    
    (8,095,500
    )
    
    
    (13,123,439
    )
    
    
    (14,935,611
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (6,890,756
    )
    
    $
    (8,095,500
    )
    
    $
    (13,123,439
    )
    
    $
    (14,935,611
    )Loss per common share  basic and
diluted
    
    $
    (0.78
    )
    
    $
    (1.14
    )
    
    $
    (1.48
    )
    
    $
    (2.11
    )Weighted average shares
outstanding  basic and diluted
    
    
    8,876,398
    
    
    
    7,088,579
    
    
    
    8,871,685
    
    
    
    7,088,579
   5




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HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
 For the Three Months Ended June 30,
    
    
    For the Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net loss
    
    $
    (6,890,756
    )
    
    $
    (8,095,500
    )
    
    $
    (13,123,439
    )
    
    $
    (14,935,611
    )Foreign currency translations
    
    
    1,340,919
    
    
    
    848,215
    
    
    
    754,359
    
    
    
    1,838,715Comprehensive loss
    
    $
    (5,549,837
    )
    
    $
    (7,247,285
    )
    
    $
    (12,369,080
    )
    
    $
    (13,096,896
    )
   6




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##### Table of Contents



HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(unaudited)
 AccumulatedCommon Shares
    
    
    Additional
    
    
    
    
    
    
    OtherShares
    
    
    
    
    
    
    Paid-In
    
    
    Accumulated
    
    
    ComprehensiveIssued
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    (Loss)
    
    
    TotalBalance December 31, 2008
    
    
    8,866,702
    
    
    $
    8,867
    
    
    $
    112,400,642
    
    
    $
    (76,962,787
    )
    
    $
    (8,691,167
    )
    
    $
    26,755,555Issuance of common shares
pursuant to stock option
exercise
    
    
    63,107
    
    
    
    63
    
    
    
    431,481
    
    
    
    
    
    
    
    
    
    
    
    431,544Share-based compensation
    
    
    
    
    
    
    
    
    
    
    500,600
    
    
    
    
    
    
    
    
    
    
    
    500,600Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,123,439
    )
    
    
    
    
    
    
    (13,123,439
    )Accumulated other
comprehensive (loss):Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    754,359
    
    
    
    754,359Balance June 30, 2009
    
    
    8,929,809
    
    
    $
    8,930
    
    
    $
    113,332,723
    
    
    $
    (90,086,226
    )
    
    $
    (7,936,808
    )
    
    $
    15,318,619
   7




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HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Six Months Ended June 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (13,123,439
    )
    
    $
    (14,935,611
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation
    
    
    421,816
    
    
    
    293,768Amortization
    
    
    34,785
    
    
    
    13,983Share-based compensation expense
    
    
    500,600
    
    
    
    369,954Loss on disposal of assets
    
    
    2,687
    
    
    
    92,112Accrued interest on convertible note
    
    
    
    
    
    
    5,047Change in operating assets and liabilities:Accounts receivable
    
    
    (2,330,059
    )
    
    
    Inventories, net
    
    
    (4,845,398
    )
    
    
    Prepaid expenses and other current assets
    
    
    47,602
    
    
    
    (52,280
    )Accounts payable
    
    
    2,451,256
    
    
    
    159,009Accrued expenses and other current liabilities
    
    
    1,745,068
    
    
    
    719,771Net cash used in operating activities
    
    
    (15,095,082
    )
    
    
    (13,334,247
    )CASH FLOWS FROM INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (335,531
    )
    
    
    (992,939
    )Additions to patents
    
    
    (286,727
    )
    
    
    (125,273
    )Cash paid for security deposits
    
    
    
    
    
    
    (288,429
    )Net cash used in investing activities
    
    
    (622,258
    )
    
    
    (1,406,641
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from exercise of stock options
    
    
    112,062
    
    
    
    Net cash provided by financing activities
    
    
    112,062
    
    
    
    Effect of exchange rate changes on cash
    
    
    727,072
    
    
    
    1,933,461INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (14,878,206
    )
    
    
    (12,807,427
    )CASH AND CASH EQUIVALENTS  BEGINNING OF PERIOD
    
    
    20,803,656
    
    
    
    28,276,388CASH AND CASH EQUIVALENTS  END OF PERIOD
    
    $
    5,925,450
    
    
    $
    15,468,961
   8




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HEARTWARE INTERNATIONAL, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 1. Basis of Presentation
 Interim Financial Statements
   Development Stage
  Accounting
and Reporting by Development Stage Enterprise,
 Subsequent Events
    9




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2. Liquidity
   10




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3. Significant Accounting Policies
 Principles of Consolidation
  Accounting Estimates
  Cash and Cash Equivalents
  Inventories
    11




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##### Table of Contents



Property, Plant and Equipment
  Share-Based Payments
 Share-Based Payment
    Impairment of Long-Lived Assets
   12




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Income Taxes
 Accounting for Income Taxes Accounting for Uncertainty in Income Taxes
  Translation of Foreign Currency
    Research and Development
  Vendor Concentration
  Marketing and Advertising Costs
   13




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Net Loss Per Common Share
  New Accounting Standards
 The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No.
162
 Subsequent Events
 
    
    the period after the balance sheet date during which management should evaluate
events or transactions that may occur for potential recognition or disclosure in the
financial statements;
    
    the circumstances under which we should recognize events or transactions occurring
after the balance sheet date in our financial statements; and
    
    the disclosures that we should make about events or transactions that occur after the
balance sheet date, but before the financial statements are issued or are available to
be issued.
  Business Combinations, Non-controlling Interests in Consolidated Financial Statements
 Accounting
for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies
  14




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Application of FASB Statement No. 157 to
FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements
for Purposes of Lease Classification or Measurement Accounting for Leases Effective Date of FASB Statement No. 157
 Disclosures about Derivative Instruments and
Hedging Activities
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets Business Combinations
 4. Inventories, Net
  June 30,
    
    
    December 31,2009
    
    
    2008Raw material
    
    $
    1,831,500
    
    
    $
    813,276Work-in-process
    
    
    2,531,415
    
    
    
    1,690,852Finished goods
    
    
    3,990,548
    
    
    
    1,003,937$
    8,353,463
    
    
    $
    3,508,065
  15




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##### Table of Contents



5. Property, Plant and Equipment, Net
  June 30,
    
    
    December 31,Property, Plant and Equipment
    
    Useful Lives
    
    
    2009
    
    
    2008Machinery and equipment
    
    
    5 to 7 years
    
    
    $
    4,643,979
    
    
    $
    4,428,452Leasehold improvements
    
    
    3 to 7 years
    
    
    
    219,301
    
    
    
    212,891Office equipment, furniture and fixtures
    
    
    5 to 7 years
    
    
    
    305,558
    
    
    
    271,275Software
    
    
    5 to 7 years
    
    
    
    491,435
    
    
    
    406,9835,660,273
    
    
    
    5,319,601Less: accumulated depreciation
    
    
    
    
    
    
    (2,139,059
    )
    
    
    (1,710,975
    )$
    3,521,214
    
    
    $
    3,608,626
 6. Other Intangible Assets
  June 30, 2009
    
    
    December 31, 2008Life
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmortizable Intangible Assets
    
    (Years)
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationPatents
    
    
    15
    
    
    $
    1,199,078
    
    
    $
    (123,641
    )
    
    $
    912,351
    
    
    $
    (88,856
    )
  Remainder of 2009
    
    $
    39,9702010
    
    
    79,9392011
    
    
    79,9392012
    
    
    79,9392013
    
    
    79,9392014
    
    
    79,939
 7. Accrued Expenses and Other Current Liabilities
  June 30,
    
    
    December 31,Accrued expenses and other current liabilities
    
    2009
    
    
    2008Accrued payroll and other employee costs
    
    $
    1,039,092
    
    
    $
    1,721,506Accrued material purchases
    
    
    30,851
    
    
    
    417,344Accrued research and development expenses
    
    
    1,183,357
    
    
    
    494,997Accrued professional fees
    
    
    2,243,835
    
    
    
    149,146Other accrued expenses
    
    
    142,529
    
    
    
    100,594$
    4,639,664
    
    
    $
    2,883,587
  16




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8.
    Equity Incentive Plans     HeartWare International, Inc. Employee Stock Option Plan (ESOP) (formerly HeartWare Limited
Employee Share Option Plan)
       17




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Accounting for Contingencies
  WeightedWeighted
    
    
    AverageAverage
    
    
    RemainingExercise
    
    
    Contractual Life
    
    
    AggregateShares
    
    
    Price
    
    
    (Years)
    
    
    Intrinsic ValueOutstanding at December 31, 2008
    
    
    629,936
    
    
    $
    18.62
    
    
    
    6.39
    
    
    $
    Granted
    
    
    
    
    
    
    Exercised
    
    
    (46,119
    )
    
    
    7.03Forfeited
    
    
    (12,141
    )
    
    
    16.19Expired
    
    
    
    
    
    
    Outstanding at June 30, 2009
    
    
    571,676
    
    
    $
    23.12
    
    
    
    6.26
    
    
    $
    1,070,252Exercisable at June 30, 2009
    
    
    276,394
    
    
    $
    22.31
    
    
    
    4.29
    
    
    $
    740,078
 th
    HeartWare International, Inc. Restricted Stock Unit Plan (formerly HeartWare Limited Performance
Rights Plan)
   18




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WeightedAverageRemainingContractualLife
    
    
    AggregateShares
    
    
    (Years)
    
    
    Intrinsic ValueOutstanding at December 31, 2008
    
    
    142,846
    
    
    
    9.32
    
    
    $
    2,078,238Granted
    
    
    Exercised
    
    
    Forfeited
    
    
    Expired
    
    
    Outstanding at June 30, 2009
    
    
    142,846
    
    
    
    8.83
    
    
    $
    3,569,882Exercisable at June 30, 2009
    
    
    
    
    
    
    
    
    
    $
    
 th
    19




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Non-Plan Options
    WeightedAverageWeighted
    
    
    RemainingAverage
    
    
    ContractualExercise
    
    
    Life
    
    
    AggregateShares
    
    
    Price
    
    
    (Years)
    
    
    Intrinsic ValueOutstanding at December 31, 2008
    
    
    68,438
    
    
    $
    18.03
    
    
    
    2.17
    
    
    $
    Granted
    
    
    Exercised
    
    
    (16,988
    )
    
    
    6.61Forfeited
    
    
    Expired
    
    
    Outstanding at June 30, 2009
    
    
    51,450
    
    
    $
    25.91
    
    
    
    2.04
    
    
    $
    Exercisable at June 30, 2009
    
    
    45,450
    
    
    $
    26.52
    
    
    
    1.20
    
    
    $
    
 th
    HeartWare International, Inc. 2008 Stock Incentive Plan
   20




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Summary
  Awards Outstanding
    
    
    Awards ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    AverageWeighted
    
    
    Remaining
    
    
    
    
    
    
    Weighted
    
    
    RemainingRange of
    
    
    
    
    
    Average
    
    
    Contractual
    
    
    
    
    
    
    Average
    
    
    ContractualExercise Prices
    
    Shares
    
    
    Exercise Price
    
    
    Life (years)
    
    
    Shares
    
    
    Exercise Price
    
    
    Life (years)$0.00  $0.00
    
    
    142,846
    
    
    $
    
    
    
    
    8.83
    
    
    
    
    
    
    $
    
    
    
    
    $5.68  $17.04
    
    
    204,276
    
    
    
    12.65
    
    
    
    5.05
    
    
    
    114,007
    
    
    
    9.81
    
    
    
    1.82$21.30  $31.24
    
    
    399,365
    
    
    
    27.88
    
    
    
    6.61
    
    
    
    188,352
    
    
    
    28.80
    
    
    
    5.42$40.04  $42.60
    
    
    19,485
    
    
    
    42.60
    
    
    
    0.62
    
    
    
    19,485
    
    
    
    42.60
    
    
    
    0.62765,972
    
    
    $
    18.99
    
    
    
    6.45
    
    
    
    321,844
    
    
    $
    22.91
    
    
    
    3.85
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of revenues
    
    $
    64
    
    
    $
    
    
    
    $
    80
    
    
    $
    Selling, general and administrative
    
    
    81
    
    
    
    392
    
    
    
    221
    
    
    
    665Research and development
    
    
    61
    
    
    
    (380
    )
    
    
    200
    
    
    
    (295
    )$
    206
    
    
    $
    12
    
    
    $
    501
    
    
    $
    370
  21




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9.
    Net Loss Per Common Share  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Common shares issuable upon:Exercise of share-based payment awards
    
    
    765,972
    
    
    
    677,899
    
    
    
    765,972
    
    
    
    677,899Conversion of convertible note
    
    
    
    
    
    
    43,155
    
    
    
    
    
    
    
    43,155
 10.
    Business Segment, Geographic Areas and Major Customers   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Domestic
    
    $
    1,804
    
    
    $
    
    
    
    $
    2,929
    
    
    $
    International
    
    
    1,164
    
    
    
    
    
    
    
    1,517
    
    
    
    $
    2,968
    
    
    $
    
    
    
    $
    4,446
    
    
    $
    
  11. Commitments and Contingencies
  
 
    22




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ITEM 2:
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Forward-Looking Statements
 This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These statements can be identified by the words expects, projects,
hopes, believes, intends, should, estimate, will, would, may, anticipates,
plans, could and other similar words. All statements that address operating performance,
events or developments that we expect or anticipate will occur in the future are forward-looking
statements, including without limitation our expectations with respect to the progress of
clinical trials or the commercial success of our products. We may not actually achieve the plans,
projections or expectations disclosed in forward-looking statements, and actual results,
developments or events could differ materially from those disclosed in the forward-looking
statements. Management believes that these forward-looking statements are reasonable as and when
made. However, you should not place undue reliance on forward-looking statements because they
speak only as of the date when made. We do not assume any obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or
otherwise. Forward-looking statements are subject to a number of risks and uncertainties,
including without limitation those described in Item 1A. Risk Factors in our Annual Report on
Form 10-K filed with the Securities Exchange Commission (the SEC) on February 26, 2009 and as
amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 29, 2009, and those
described in other reports filed from time to time with the SEC.
 The following discussion and analysis of our financial condition and results of operations
should be read together with our unaudited interim condensed consolidated financial statements
and related notes appearing elsewhere in this Quarterly Report on Form 10-Q .
 Overview
       23




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Critical Accounting Policies and Estimates
  Revenue Recognition
 Revenue Recognition
  24




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Inventory Capitalization
    Research and Development
  Share-Based Payments
 Share-Based Payment
     25




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Income Taxes
 Accounting for Income Taxes Accounting for Uncertainty in Income Taxes
  Translation of Foreign Currency
    Results of Operations
 Three and six months ended June 30, 2009 and 2008
 Revenues
   26




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Gross Profit
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Gross profit
    
    $
    1,389
    
    
    $
    
    
    
    $
    2,149
    
    
    $
    Gross margin %
    
    
    47
    %
    
    
    
    
    
    
    48
    %
    
    
    
  Selling, General and Administrative
     27




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Research and Development
     Other Income (Loss)
     28




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Income Taxes
   Liquidity and Capital Resources
        29




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30




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ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Rate Fluctuations
    
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   31




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PART II. OTHER INFORMATION
 
 ITEM 1A.
    
    RISK FACTORS
   If we fail to obtain an adequate level of reimbursement for our products by third party
payers, there may be no commercially viable markets for our product candidates or the markets may
be much smaller than expected.
     
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   32




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##### Table of Contents



ITEM 6.
    
    EXHIBITS
 31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13A-14(a) or Rule 15d-14(a) of
the Securities Exchange Act31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13A-14(a) or Rule 15d-14(a) of
the Securities Exchange Act31.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 Signatures
  HEARTWARE INTERNATIONAL, INC.Date:      August 14, 2009
    /s/  Douglas GodshallDouglas GodshallChief Executive OfficerDate:      August 14, 2009
    /s/  David McIntyreDavid McIntyreChief Financial Officer and Chief Operating Officer  33




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EXHIBIT INDEX
 31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13A-14(a) or Rule 15d-14(a) of the
Securities Exchange Act31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13A-14(a) or Rule 15d-14(a) of the
Securities Exchange Act31.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  34