Sunshine Heart to sell 115 million shares of common stock in private placement

Sunshine Heart, Inc. (ASX:SHC), today announced it has entered into definitive agreements with new and existing institutional investors in the United States and Canada to sell approximately 115 million shares of common stock in a private placement.

“We were especially pleased by the fact that the first tranche was oversubscribed.”

These investors have agreed to purchase the shares at a price of A$0.04 per share resulting in gross proceeds of approximately A$4.6 million. For each share purchased, investors will receive one warrant to purchase 0.3 shares of common stock at an exercise price of A$0.056 per share (4-year term). The placement was made at a fifteen percent discount to the volume weighted average price (VWAP) of the Company's shares over the 10 consecutive trading days to 22 July 2011. The funds will be used to support the Company's continuing activities to obtain approvals to market its C-Pulse Heart Assist System. Summer Street Research Partners was the exclusive placement agent for the transaction.

"The continued confidence demonstrated by the investment community exemplifies the growing excitement around the C-Pulse Heart Assist System for treatment of Class III and ambulatory Class IV heart failure," said Dave Rosa, Sunshine Heart's Chief Executive Officer. "We were especially pleased by the fact that the first tranche was oversubscribed."

The Company intends to raise a second tranche of approximately A$9.1 million under the same terms in August subject to approval at an Extraordinary General Meeting to be held on August 18, 2011. This capital is expected to be placed with institutional investors in Australia, U.S. and Canada. All the capital raised will enable Sunshine Heart to advance its clinical programs in the U.S., Europe and other select countries as well as support further development of the C-Pulse Heart Assist System, including a fully implantable wireless version.