HeartWare International shareholders voted Oct. 26 to allow the company to issue nearly 1.4 million new shares of stock, opening the spigot to $60 million in new funding.
The Framingham, Mass.-based manufacturer of implantable cardiac pumps struck a deal August 11 with a wide group of institutional and individual investors to purchase more than 2.7 million shares of HeartWare stock. But the deal — priced at $22 a share — first required existing HeartWare shareholders to agree to a 26.4 percent increase in the number of new and issued shares before the company could actually tap proceeds from the private placement.
The proposals were approved overwhelmingly during a special meeting of shareholders in Miami Oct. 26, with about 98.9 percent of the vote, according to a company tally. Proceeds from the August stock sale had been held in an escrow account prior to the vote.
Overall, existing shareholders saw their stakes diluted about 26 percent by the private placement, although any loss in relative value has been erased by a 36 percent jump in HeartWare’s share price since the deal was announced.
Prior to securing the new funding, HeartWare was down to its last $6 million in cash, along with access to a $20 million convertible loan facility. The company was allowed to expand its “bridge to transplant” trial earlier this month to 12 additional U.S. sites, raising the total number of locations to 40 studying whether HeartWare’s ventricular assist system is suitable for patients waiting for heart transplants.