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SEC Filings

HEARTWARE INTERNATIONAL, INC. filed this Form SC TO-I on 08/26/2016
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as defined in the Code. As used in this section, a “non-U.S. Holder” means a beneficial owner of a Note that is not a U.S. Holder.


This section applies to you if you are a U.S. Holder.

Sale, Exchange, Redemption or Other Taxable Disposition of the Notes

Subject to the discussions under “—Accrued Interest” and “—Market Discount”, on the sale, exchange, redemption or other taxable disposition of a Note (including a disposition of a Note by a U.S. Holder pursuant to the exercise of the Fundamental Change Repurchase Right):


    You will have taxable gain or loss equal to the difference between the amount of cash received on the disposition, other than amounts attributable to accrued but unpaid interest (which will be taxable as described under “—Accrued Interest” below), and your adjusted tax basis in the Note.


    Your gain or loss will generally be a capital gain or loss and will be a long-term capital gain or loss if you have a holding period for the Note that is more than one year. The deductibility of capital losses is subject to limitation.


    Your adjusted tax basis in a Note generally will equal the cost of the Note to you, less any principal payments received and increased by the amount of original issue discount (“OID”) (taking into account any acquisition premium that offset such original issue discount) previously accrued on the Notes. If you have elected to include “market discount” (as described below) in income as it accrues, then your tax basis in a Note will be increased by any market discount previously included in gross income. If you purchased a Note for an amount greater than its principal amount, then your tax basis in the Note will be decreased by the amount of any such excess that you have elected to offset against interest income as amortizable bond premium.

Accrued Interest

Amounts received by you upon the disposition of a Note pursuant to the exercise of either the Fundamental Change Repurchase Right or conversion rights that are attributable to accrued and unpaid interest, including OID, will be taxable to you as ordinary interest income, to the extent that such interest or OID has not been previously included in income.

Market Discount

Gain recognized by you upon the disposition of a Note pursuant to the exercise of either the Fundamental Change Repurchase Right or conversion rights will be treated as ordinary income to the extent of any market discount on the Note that has accrued during the period that the you held such Note, unless you have made an election to include market discount in income as it accrues. A Note generally will be treated as having market discount if the stated redemption price at maturity of the Note exceeded your tax basis in that Note immediately after acquisition by more than a statutorily defined de minimis amount. Market discount accrues on a ratable basis, unless you have elected to accrue market discount using a constant-yield method for U.S. federal income tax purposes.

Information Reporting and Backup Withholding

Information reporting requirements generally will apply with respect to payments attributable to accrued but unpaid interest on, and payment of the proceeds from the disposition of, the Notes. Backup withholding may apply to those payments if you fail to provide to the Paying Agent your taxpayer identification number, or certification of exempt status, or if you have failed to report in full interest and dividend income.