As Filed With the Securities and
Exchange Commission on June 12, 2014
Registration No. 333-195648
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
BAXANO SURGICAL, INC.
(Exact name of registrant as specified in
its charter)
Delaware
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33-0909022
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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110 HORIZON DRIVE, SUITE 230
RALEIGH, NORTH CAROLINA 27615
(919) 800-0020
(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive offices)
Timothy M. Shannon
Chief Financial Officer
Baxano Surgical, Inc.
110 Horizon Drive, Suite 230
Raleigh, North Carolina 27615
(919) 800-0020
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Approximate date of commencement of
proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered
on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
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If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
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If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
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If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box.
o
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes
of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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CALCULATION OF REGISTRATION FEE
Title
of Each Class of Securities to be Registered
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Amount
to be
Registered(1)
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Proposed
Maximum
Offering Price
Per Share(2)
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Proposed
Maximum
Aggregate
Offering Price(2)
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Amount
of
Registration Fee(3)
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Common Stock,
$0.0001 par value per share
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13,269,582
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$
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0.60
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$
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7,961,749
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$
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1,025
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(1)
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Consists of 9,428,000
shares issuable upon the conversion of outstanding subordinated convertible debentures and 3,841,582 shares issuable upon
the exercise of outstanding warrants to purchase shares of common stock. Pursuant to Rule 416(a) under the Securities Act
of 1933, as amended, this registration statement also covers such additional shares of common stock as may be issued to prevent
dilution of the shares of common stock covered hereby resulting from stock splits, stock dividends or similar transactions.
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(2)
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Estimated solely for the purpose of calculating
the amount of the registration fee required pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on
the average of the high and low prices of the registrant’s common stock on June 10, 2014, as reported on the NASDAQ
Global Market.
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(3)
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The registrant previously paid the registration
fee with the initial filing of this registration statement on May 2, 2014.
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The registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete
and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission
is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO
COMPLETION, DATED JUNE 12, 2014
PROSPECTUS
13,269,582 Shares
Common Stock
This prospectus relates to the resale, from time
to time, of up to 13,269,582 shares of Baxano Surgical, Inc. common stock, $0.0001 par value per share, being offered by the selling
stockholders named in this prospectus. Such shares consist of 9,428,000 shares issuable upon the conversion of outstanding subordinated
convertible debentures and 3,841,582 shares issuable upon the exercise of outstanding warrants to purchase common stock, which
debentures and warrants were acquired by the selling stockholders in a private placement transaction closed on April 22, 2014.
The selling stockholders may sell their shares from
time to time at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price,
at varying prices determined at the time of sale, or at negotiated prices.
We will not receive any proceeds from the sale of
the shares of common stock by the selling stockholders. We have agreed to bear all of the expenses in connection with the registration
of the shares, except that the selling stockholders will pay all brokerage fees and selling commissions.
Our common stock is listed on the NASDAQ Global
Market under the symbol “BAXS.” The last reported sale price of our common stock on June 5, 2014 was $0.628 per share.
Our principal executive offices are located at 110
Horizon Drive, Suite 230, Raleigh, North Carolina 27615 and our telephone number is (919) 800-0020.
Investing in our common stock involves risk. See
the section entitled “Risk Factors” beginning on page 4 of this prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is ,
2014.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement on Form S-3 that we filed with the Securities and Exchange Commission, or the Commission, under the Securities Act of
1933, as amended, or the Securities Act, using a “shelf” registration or continuous offering process. Under this shelf
process, certain selling stockholders from time to time may sell shares of our common stock described in this prospectus in one
or more offerings. In certain circumstances, we may provide a prospectus supplement that will contain specific information about
the terms of a particular offering by one or more of the selling stockholders. We also may provide a prospectus supplement to add
information to, or update or change information contained in, this prospectus. To the extent there is a conflict between the information
contained in this prospectus and the prospectus supplement, you should rely on the information in the prospectus supplement. Please
read carefully both this prospectus and any prospectus supplement together with additional information described below under the
sections entitled “Where You Can Find Additional Information” and “Incorporation of Certain Information by Reference,”
before investing in our securities.
You should rely only on the information
contained in or incorporated by reference into this prospectus and any prospectus supplement. Neither we nor the selling stockholders
have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. This prospectus is not an offer to sell these securities and it is not soliciting an offer
to buy these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
contained in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front cover of
such prospectus or prospectus supplement, or that the information contained in any document incorporated by reference is accurate
as of any date other than the filing date of the document incorporated by reference, regardless of the time of delivery of this
prospectus and any prospectus supplement or any sale of a security.
As used in this prospectus, references to
“we,” “our,” “us,” “our company” and “Baxano Surgical” refer to Baxano
Surgical, Inc., unless the context requires otherwise. References to “selling stockholders” refer to those stockholders
listed in this prospectus under “Selling Stockholders” and their transferees.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this
prospectus and the documents incorporated by reference in this prospectus contain forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those projected
in the forward-looking statements. These forward-looking statements are intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included
or incorporated by reference in this prospectus, including statements regarding future events, our future financial performance,
our future business strategy and the plans and objectives of management for future operations, are forward-looking statements.
We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,”
“can,” “continue,” “could,” “estimates,” “expects,” “intends,”
“may,” “plans,” “potential,” “predicts,” “should” or “will”
or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe
we have a reasonable basis for doing so, we cannot guarantee their accuracy. Such forward-looking statements are subject to risks,
uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future
results expressed or implied by such forward-looking statements.
Such risks, uncertainties, and other factors
that may cause such differences include, but are not limited to, those disclosed under the caption “Risk Factors” in
this prospectus and in the documents we have incorporated by reference into this prospectus. Our forward-looking statements speak
only as of the date they are made. We expressly disclaim any intent or obligation to update any forward-looking statements to conform
such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules
of The NASDAQ Stock Market.
SUMMARY
This summary is not complete and does
not contain all of the information you should consider before investing in the securities offered by this prospectus. You should
read this summary together with the entire prospectus, including our financial statements, the notes to those financial statements,
and the other documents identified under the headings “Where You Can Find More Information” and “Incorporation
of Certain Information by Reference” in this prospectus, before making an investment decision. See the section entitled “Risk
Factors” beginning on page 4 of this prospectus and in the documents we incorporate by reference in this prospectus for a
discussion of the risks involved in investing in our securities.
Our Business
We are a medical device company focused
on designing, developing and marketing minimally invasive products to treat degenerative conditions of the spine affecting the
lumbar region. We are passionately committed to delivering innovative technologies to our surgeon customers that benefit their
patients. We currently market the AxiaLIF® pre-sacral access and interbody fusion system for single and two level lower lumbar
fusion, the VEO® lateral access and interbody fusion system, the iO-Flex® set of flexible instruments used by surgeons
during spinal decompression procedures, the iO-Tome® instrument, which rapidly and precisely removes bone, specifically the
facet joints, a technique which is commonly performed in spinal fusion procedures, and Avance
TM
, an MIS pedicle screw
system used in lumbar spinal fusion procedures. We currently sell our products through a direct sales force, independent sales
agents and distributors.
Our family of AxiaLIF products, commercially
launched between 2004 and 2010, use the pre-sacral approach. This technique allows a surgeon to access the discs in the lower lumbar
region through an incision adjacent to the tailbone. In this manner, an interbody fusion procedure can be accomplished through
a single tissue plane, which minimizes damage to surrounding tissues. Traditional methods of accessing the lower lumbar spine for
fusion either involve cutting ligament and bone if approaching from the back, or navigating around important organs and blood vessels
if approaching from the front. Our VEO lateral access and interbody fusion system, commercially launched in 2011, provides for
direct visualization of the psoas muscle and unrestricted lateral fluoroscopic views, which we believe has allowed us to increase
our market share in the highly competitive lateral fusion segment. We believe that direct visualization allows a surgeon to identify
and avoid the nerves running through this muscle that, when damaged, can cause numbness and pain in the leg and groin post spinal
surgery. Our iO-Flex instruments, commercially launched in 2009, were developed to allow surgeons to perform a direct decompression
while sparing the facet joints and posterior midline structures. Our iO-Flex minimally invasive set of flexible instruments allow
surgeons to target lumbar stenosis of the spine with minimal disruption to the patient’s healthy anatomy critical for maintaining
spinal stability. With traditional rigid instrumentation, surgeons have to remove bone that helps stabilize the spine in order
to get to the area of the bone that is impinging on the exiting nerve roots. Our iO-Tome disposable instrument, commercially launched
in the fourth quarter of 2013, allows surgeons to perform rapid facetectomies while working above the exiting nerves. The iO-Tome
instrument utilizes the iO-Flex instrument platform to rapidly and precisely remove the facet joint, which is commonly performed
in spinal fusion applications. Our Avance MIS pedicle screw system, which will be in limited market release in the second and third
quarter of 2014 and is planned for full launch in the fourth quarter of 2014, may be used as an adjunct to fusion in numerous degenerative
and complex spinal pathologies. Its innovative design provides a quick and easy-to-use, percutaneous pedicle screw system that
addresses single, complex and multi-level spinal pathologies with minimal tissue disruption and trauma.
We also market other products that complement
these primary offerings, including our Vectre™ facet screw system, Bi-Ostetic™ bone void filler, bowel retractors,
discectomy tools, and a bone graft harvesting system that can be used to extract bone graft from the patient’s hip for use
in fusion procedures. We also have a TLIF system under development, with a limited market launch expected in the fourth quarter
of 2014. The new TLIF system will be used in conjunction with the iO-Tome instrument to provide a less invasive means of performing
a TLIF procedure. Our philosophy of continuous improvement is driven by ongoing research and development investment in our core
technologies. We support this investment by diligently expanding, maintaining, and protecting our significant patent portfolio.
Corporate Information
We were incorporated in Delaware in May 2000
under the name “aXiaMed, Inc.” and changed our name to “TranS1 Inc.” in February 2003. In connection
with our merger with Baxano, Inc. in May 2013, we changed our name to “Baxano Surgical, Inc.” Our principal executive
office is located at 110 Horizon Drive, Suite 230, Raleigh, North Carolina 27615 and our telephone number is (919) 800-0020.
Our website is
www.baxanosurgical.com.
The information on, or that can be accessed through, our website is not incorporated
by reference into this prospectus and should not be considered to be a part of this prospectus.
Private Placement Transaction
On March 11, 2014, we entered into a securities
purchase agreement, or the Securities Purchase Agreement, providing for the issuance, in a private placement, of $9,993,680 in
aggregate principal amount of subordinated convertible debentures, or the Debentures, together with warrants to purchase shares
of our common stock, or the Warrants, to the selling stockholders listed herein. We refer to the private placement of the Debentures
and Warrants, collectively, as the Private Placement Transaction. The closing of the full amount of securities in the Private Placement
Transaction was subject to stockholder approval of the Private Placement Transaction, which was attained at our 2014 annual meeting
of stockholders on April 17, 2014. The Private Placement was closed on April 22, 2014, or the Closing Date.
The three-year Debentures are convertible
into shares of our common stock at an initial conversion price of $1.06 per share, for an aggregate of approximately 9,428,000
shares of our common stock. The Debentures bear interest at a rate of 6% per annum, payable monthly in cash or, at our discretion
provided certain conditions are met each payment period, in shares of our common stock at a price equal to 90% of a calculated
market price per share. In connection with the purchase of the Debentures, the selling stockholders received five-year Warrants
to purchase an aggregate of approximately 9,428,000 shares of our common stock, which were exercisable immediately upon issuance
at an exercise price of $1.19 per share.
For one year after the date of issuance,
the conversion price of the Debentures and the exercise price of the Warrants are subject to adjustment upon the issuance of any
common stock or securities convertible into shares of our common stock below the then-existing conversion or exercise price, as
applicable, subject to certain exceptions. In the event of certain change in control transactions, the holders of the Debentures
and Warrants will be entitled to (i) receive upon conversion or exercise the same kind and amount of securities, cash or property
which the holders would have received had they converted or exercised their Debentures or Warrants, as applicable, immediately
prior to such transaction and (ii) have their securities assumed by the surviving entity. In addition, if such a transaction involves
cash consideration, is a going private transaction, or involves securities not listed on the New York Stock Exchange or NASDAQ,
the holders of the Warrants will be entitled to have their Warrants repurchased at a calculated Black-Scholes value of such Warrants
at any time within 60 days after the transaction. Subject to limited exceptions, we will not permit the conversion of the Debentures
or exercise of the Warrants of any selling stockholder, if after such conversion or exercise such selling stockholder would beneficially
own more than 4.99% of our outstanding shares of common stock.
As part of the Private Placement Transaction,
we entered into a registration rights agreement with the selling stockholders pursuant to which we agreed to file a registration
statement with the Commission to register the resale of all shares of common stock issuable in the Private Placement Transaction
within 10 days of the closing of the Private Placement Transaction. The registration statement, of which this prospectus forms
a part, has been filed to satisfy this obligation.
RISK FACTORS
An investment in our securities involves
a high degree of risk. In addition to the other information included in this prospectus, you should carefully consider the risks
described under the caption “Risk Factors” in any prospectus supplement and documents incorporated by reference into
this prospectus, including our most recent Annual Report on Form 10-K, before making an investment decision. The risks and uncertainties
not presently known to us or that we currently deem immaterial may also materially harm our business, operating results and financial
condition and could result in a complete loss of your investment.
Risks Relating to the Private Placement Transaction
The Debentures contain covenants that could limit our
financing options and liquidity position, which would limit our ability to grow our business.
The Debentures contain certain covenants
and representations limiting our ability to incur additional indebtedness, other than specified permitted indebtedness, or from
entering into or creating any liens on our assets, other than certain permitted liens. These restrictions may limit our ability
to obtain additional financing, withstand downturns in our business or take advantage of business opportunities. Moreover, additional
debt financing we may seek may contain terms that include more restrictive covenants, may require repayment on an accelerated schedule
or may impose other obligations that limit our ability to grow our business, acquire needed assets, or take other actions we might
otherwise consider appropriate or desirable.
Our failure to avoid events of default as defined in the
Debentures could require us to redeem such Debentures at a premium.
The Debentures provide that, upon the occurrence
of an “Event of Default,” the interest rate on the Debentures increases to 15% and we can be required to redeem the
Debentures in whole or in part in cash at 110% of the outstanding balance. Events of Default under the Debentures include, among
other things: (1) suspension or removal from the NASDAQ Global Market or other permissible trading market for specified time periods;
(2) failure to pay principal, interest, late charges and other amounts due under the Debentures; (3) certain events of bankruptcy
or insolvency of our company; and (4) failure to make payment with respect to any indebtedness in excess of $500,000 to any third
party, or the occurrence of a default or event of default under any agreement binding our company having a material adverse effect
on our company.
Our ability to avoid such Events of Default
may be affected by changes in our business condition or results of our operations, or other events beyond our control. If we were
to experience an Event of Default and the holders elected to have us redeem their Debentures, we may not have sufficient resources
to do so, and we may have to seek additional debt or equity financing to cover the costs of redeeming the Debentures. Any additional
debt or equity financing that we may need may not be available on terms favorable to us, or at all.
We may not have the ability to pay cash upon the conversion
of the Debentures or repurchase the Warrants upon the occurrence of a fundamental transaction as required by the Debentures and
Warrants
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In the event of certain corporate transactions
involving a change in control or the reclassification or exchange of our common stock, the holders of the Debentures and Warrants
would be entitled to (i) receive upon conversion or exercise the same kind and amount of securities, cash or property which
the holders would have received had they converted or exercised their Debentures or Warrants, as applicable, immediately prior
to such transaction and (ii) have their securities assumed by the surviving entity. In addition, if such a transaction involves
cash consideration, is a going private transaction, or involves securities not listed on the New York Stock Exchange or the NASDAQ
Global Market, the holders of the Warrants will be entitled to have their Warrants repurchased at a calculated Black-Scholes value
of such Warrants at any time within 60 days after the transaction. Such payments could be significant and limit our ability to
pursue strategic transactions, and we may not have sufficient funds to make them at such time.
There are a large number of shares
underlying the Debentures and Warrants. The sale of these shares may depress the market price of our common stock
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On an aggregated
basis, the Debentures may be converted into 9,428,000 shares of our common stock, and Warrants may be exercised for 9,428,000
shares of our common stock. In addition, subject to certain conditions, we may issue shares of common stock at a price equal to
90% of a calculated market price per share in lieu of cash interest payments on the Debentures. For one year after the date of
issuance, the conversion price of the Debentures and exercise price of the Warrants issued to the selling stockholders is subject
to adjustment upon the issuance of any of our common stock or securities convertible into common stock below the then-existing
conversion or exercise price, as applicable, subject to certain exceptions. If the price of the Debentures is adjusted, this would
lead to the issuance of additional shares of our common stock upon conversion.
Pursuant to the
registration rights agreement we entered into with each of the selling stockholders, we agreed to file a registration statement
with the Commission to register the resale of all shares of common stock issuable in the Private Placement Transaction. The registration
statement, of which this prospectus forms a part, has been filed to satisfy this obligation. This registration statement facilitates
the resale of such shares of common stock into the public market, and any such resale would increase the number of shares of our
common stock available for public trading.
Sales of a substantial
number of shares of our common stock in the public market, or the perception that such sales may occur, could have the effect of
depressing the market price for our common stock and make it more difficult for you to sell shares of our common stock at times
and prices that you feel are appropriate or for us to sell equity securities in the future at a time and price that we might otherwise
wish to effect sales.
The conversion of the Debentures, payment of interest
on the Debentures in shares of common stock, and exercise of Warrants issued to the selling stockholders would have a dilutive
impact on our existing stockholders.
There are 9,428,000 shares of common
stock underlying the Debentures and 9,428,000 shares of common stock underlying Warrants. In addition, subject to certain conditions,
we may issue shares of our common stock in lieu of cash interest payments on the Debentures at a price equal to 90% of a calculated
market price per share. Further, the conversion price of the Debentures and exercise price of the Warrants issued to the selling
stockholders is subject to adjustment upon the issuance of any of our common stock or securities convertible into common stock
below the then-existing conversion or exercise price, as applicable, subject to certain exceptions. If the price of the Debentures
is adjusted, this would lead to the issuance of additional shares of our common stock upon conversion. If and when issued, these
shares of common stock would substantially dilute the ownership percentage and voting power of our current stockholders.
The terms of the Debentures and Warrants
contain provisions that restrict the amount of shares a holder can receive upon conversion or exercise to 4.99% of the then outstanding
number of shares of our common stock, subject to limited exceptions. However, these restrictions do not prevent the holders from
selling some of their holdings and then receiving additional shares. In this way, the holders could sell more than these limits
while never holding more than the limits. As a result, even with the restrictions, the holders of these Debentures and Warrants
could ultimately convert and exercise, and then sell, the full amount issuable upon conversion and exercise of the Debentures and
Warrants, respectively, in which case our current stockholders would suffer the full amount of dilution.
Risks Related to Our Business and Operations
Our indebtedness could negatively impact our financial
health.
On December 3, 2013, we obtained a credit
facility, or the Credit Facility, of up to $15.0 million from Hercules Technology Growth Capital, Inc., or Hercules, to pay off
the existing credit facility we assumed in connection to our merger with Baxano, Inc. and cash collateralize letters of credit
issued thereunder, and for general corporate and working capital purposes. On April 22, 2014, we issued approximately $10 million
of Debentures pursuant to the Private Placement Transaction, which further increased our long-term indebtedness. Our indebtedness
could have important consequences to us, including the following:
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it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development,
debt service requirements, acquisitions or general corporate or other purposes;
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a portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness
and will not be available for other purposes, including our operations, capital expenditures and other business opportunities;
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if we seek to refinance our debt or require additional refinancing in the future, we may be unable to do so on attractive terms
or at all;
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it may limit our flexibility in planning for, or our ability to adjust to, changes in our business or the industry in which
we operate and place us at a competitive disadvantage compared to our competitors that have less debt; and
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we may be vulnerable to a downturn in general economic conditions or in our business, or we may be unable to carry out capital
spending that is important to our growth.
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Both the loan and security agreement governing
the Credit Facility and the terms of the Debentures contain limitations on our ability to engage in certain activities that may
be in our long-term best interests. Our failure to comply with these limitations could result in an event of default which, if
not cured or waived, could result in the acceleration of all of our indebtedness, which would adversely affect our financial health
and could prevent us from fulfilling our obligations.
We will need to raise additional
capital in the future and, if we are unable to raise capital, it could force us to delay, reduce, eliminate or abandon our commercialization
efforts or product development programs.
We believe that our
current cash and cash equivalents, together with cash received from sales of our products and sales of common stock pursuant to
our equity line financing arrangement, will be sufficient to meet our cash needs through the second quarter of 2014, but will not
be sufficient to meet our cash needs through the third quarter of 2014. Our future funding requirements will depend on many factors,
including:
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market acceptance of our products and the revenues we are able to generate as a result;
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the availability of adequate coverage and reimbursement for hospitals and surgeons;
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the scope, rate of progress and cost of our clinical trials;
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the cost of our research and development activities;
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the cost of defending, in litigation or otherwise, any claims that we infringe third-party patent
or other intellectual property rights;
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the cost and timing of additional regulatory clearances or approvals; and
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the cost and timing of establishing additional sales, marketing and distribution capabilities.
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As a result of the recent economic recession,
and the continuing economic uncertainty, it has been difficult for many companies to obtain equity or debt financing. If we raise
additional funds by issuing equity or convertible debt securities, our stockholders may experience dilution and the securities
may contain terms that are preferential to the new investors as compared to the holders of our common stock. If we raise additional
funds by issuing debt securities, the securities may have rights senior to those associated with our common stock and contain covenants
restricting our operations, our ability to pay dividends, the amount of capital expenditures we can make, or our ability to incur
additional debt. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.
In addition, if we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary
to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable to us. If we are
unable to raise adequate funds, we may have to delay, reduce the scope of or eliminate some or all of our planned product development
and marketing efforts. Additionally, if we do not have, or are not able to obtain, sufficient funds, we may have to delay development
or commercialization of our products or license to third parties the rights to commercialize products or technologies that we would
otherwise seek to commercialize. Inadequate funding, which has required us to adjust our resources in the past, may require us
in the future to reduce marketing, customer support or other resources devoted to our products or cease operations.
USE OF PROCEEDS
The selling stockholders will receive all
of the proceeds from the sale of any shares of common stock offered by this prospectus. We will not receive any of the proceeds
from the sale of any shares of common stock by the selling stockholders.
We could receive up to a maximum of
$4,571,482 in proceeds from the cash exercise of the Warrants to purchase 3,841,582 shares of common stock held by the selling
stockholders and covered by this prospectus, if exercised in full, which proceeds would be used primarily for the development
and launch of new products and for other working capital and general corporate purposes. As of the date hereof, none of the Warrants
have been exercised. We cannot precisely estimate the allocation of the net proceeds from any exercise of the Warrants for cash.
Accordingly, in the event the Warrants are exercised for cash, our management will have broad discretion in the application of
the net proceeds of such exercises. There is no assurance that the Warrants will ever be exercised for cash.
SELLING STOCKHOLDERS
This prospectus relates to the resale
of up to 9,428,000 shares of our common stock issuable upon conversion of the Debentures and up to 3,841,582 shares of our common
stock issuable upon exercise of Warrants, in each case, issued to the selling stockholders in the Private Placement Transaction.
The number of shares of common stock being offered by this prospectus does not represent all of the shares issuable upon exercise
of Warrants issued to the selling stockholders in the Private Placement Transaction. The number of common stock that may actually
be issued to the selling stockholders may further increase as a result of, among other things, the antidilution provisions in
the Debentures and our payment of any interest on the Debentures in shares in lieu of cash. The registration statement, of which
this prospectus forms a part, has been filed with the Commission pursuant to registration rights granted to the selling stockholders
with respect to the securities received from us in the Private Placement Transaction.
The information regarding the ownership
of common stock by the selling stockholders does not take into account a blocker provision contained in the terms of the Debentures
and Warrants that prohibits, subject to limited exceptions, conversion or exercise to the extent it would cause the holder and
its affiliates to hold an aggregate of more than 4.99% of our outstanding common stock. For purposes of the table below, we assume
that the selling stockholders will sell all of their shares of common stock covered by this prospectus and will not acquire beneficial
ownership of any additional shares. Because the selling stockholders identified below may sell, transfer or otherwise dispose
of all, some or none of the shares of our common stock covered by this prospectus, the number of such shares that will be sold,
transferred or otherwise disposed of by the selling stockholders and the amount or percentage of shares that will be held by the
selling stockholders after completion of the offering may be more or less than that set forth in the table below.
The table below is based upon information
provided to us by the selling stockholders. The percentages in the following table are based on 48,578,712 shares of our common
stock outstanding as of May 9, 2014 (of which 39,808,746 shares were held by non-affiliate stockholders). None of the selling
stockholders has had any position, office or other material relationship with us or any of our predecessors or affiliates within
the past three years.
|
|
Shares
Beneficially Owned Prior to the Offering (1)
|
|
|
Shares
Registered Hereby
|
|
|
Shares
Beneficially Owned
After the Offering (1)
|
|
Selling Stockholder
|
|
Number
|
|
|
Percentage
|
|
|
Number
|
|
|
Number
|
|
|
Percentage
|
|
DAFNA Lifescience L.P. (2)
|
|
|
3,924,530
|
|
|
|
7.5
|
%
|
|
|
2,761,820
|
|
|
|
1,162,710
|
|
|
|
2.2
|
%
|
DAFNA Lifescience Market Neutral L.P. (3)
|
|
|
679,244
|
|
|
|
1.4
|
%
|
|
|
478,006
|
|
|
|
201,238
|
|
|
|
*
|
|
DAFNA Lifescience Select L.P. (4)
|
|
|
2,943,396
|
|
|
|
5.7
|
%
|
|
|
2,071,363
|
|
|
|
872,033
|
|
|
|
1.6
|
%
|
Sabby Healthcare Volatility Master Fund, Ltd. (5)
|
|
|
8,481,622
|
|
|
|
14.9
|
%
|
|
|
5,968,794
|
|
|
|
2,512,828
|
|
|
|
4.4
|
%
|
Sabby Volatility Warrant Master Fund, Ltd. (6)
|
|
|
2,827,208
|
|
|
|
5.5
|
%
|
|
|
1,989,599
|
|
|
|
837,609
|
|
|
|
1.6
|
%
|
|
(*)
|
Represents less than
1%
|
|
(1)
|
The beneficial ownership of each
selling stockholder includes the shares of common stock issuable upon conversion of the Debentures and exercise of the Warrants
that are held by such selling stockholder and, with respect to percentage ownership, assumes no conversion of Debentures or
exercise of Warrants held by the other selling stockholders. Beneficial ownership does not include any shares that
we may issue in lieu of cash interest payments on the Debentures or pursuant to the anti-dilution provisions of the Debentures
and Warrants, and also does not take into account a blocker provision contained in the terms of the Debentures and Warrants
that prohibits, subject to limited exceptions, conversion or exercise to the extent it would cause the holder and its affiliates
to hold an aggregate of more than 4.99% of our outstanding common stock. For additional information regarding the Debentures
and Warrants, see the section entitled “Summary—Private Placement Transaction” above.
|
|
(2)
|
The number of
shares beneficially owned consists of (i) 1,962,265 shares of common stock issuable upon conversion of this selling stockholder’s
Debenture, all of which are being offered hereby, and (ii) 1,962,265 shares of common stock issuable upon exercise of this
selling stockholder’s Warrant, of which 799,555 shares are being offered hereby. Nathan Fischel and Fariba Ghodsian,
the Chief Executive Officer and Chief Investment Officer, respectively, of DAFNA Capital Management LLC, which serves as the
investment adviser of DAFNA Lifescience, L.P., have voting and dispositive power with respect to the shares.
|
|
(3)
|
The number of
shares beneficially owned consists of (i) 339,622 shares of common stock issuable upon conversion of this selling stockholder’s
Debenture, all of which are being offered hereby, and (ii) 339,622 shares of common stock issuable upon exercise of this selling
stockholder’s Warrant, of which 138,384 shares are being offered hereby. Nathan Fischel and Fariba Ghodsian, the
Chief Executive Officer and Chief Investment Officer, respectively, of DAFNA Capital Management LLC, which serves as the investment
adviser of DAFNA Lifescience Market Neutral, L.P., have voting and dispositive power with respect to the shares.
|
|
(4)
|
The number of
shares beneficially owned consists of (i) 1,471,698 shares of common stock issuable upon conversion of this selling stockholder’s
Debenture, all of which are being offered hereby, and (ii) 1,471,698 shares of common stock issuable upon exercise of this
selling stockholder’s Warrant, of which 599,665 shares are being offered hereby. Nathan Fischel and Fariba Ghodsian,
the Chief Executive Officer and Chief Investment Officer, respectively, of DAFNA Capital Management LLC, which serves as the
investment adviser of DAFNA Lifescience Select, L.P., have voting and dispositive power with respect to the shares.
|
|
(5)
|
The number of
shares beneficially owned consists of (i) 4,240,811 shares of common stock issuable upon conversion of this selling stockholder’s
Debenture, all of which are being offered hereby, and (ii) 4,240,811 shares of common stock issuable upon exercise of this
selling stockholder’s Warrant, of which 1,727,983 shares are being offered hereby. Sabby Management, LLC serves as the
investment manager of Sabby Healthcare Volatility Master Fund, Ltd., and Hal Mintz is the manager of Sabby Management, LLC.
Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over these shares except to the extent of its or
his pecuniary interest therein.
|
|
(6)
|
The number of
shares beneficially owned consists of (i) 1,413,604 shares of common stock issuable upon conversion of this selling stockholder’s
Debenture, all of which are being offered hereby, and (ii) 1,413,604 shares of common stock issuable upon exercise of this
selling stockholder’s Warrant, of which 575,995 shares are being offered hereby. Sabby Management, LLC serves as the
investment manager of Sabby Volatility Warrant Master Fund, Ltd., and Hal Mintz is the manager of Sabby Management, LLC. Each
of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over these shares except to the extent of its or his
pecuniary interest therein.
|
PLAN OF DISTRIBUTION
We are registering the shares of common
stock payable as interest under the Debentures issued to the selling stockholders, issuable upon conversion of the subordinated
convertible debentures issued to the selling stockholders and exercise of the Warrants issued to the selling stockholders to permit
the resale of these shares of common stock by the holders of the Debentures and the Warrants from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock.
We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The selling stockholders may sell all or
a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one
or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of common
stock may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter
market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale, or at negotiated prices. These sales may be effected in transactions that may involve crosses or
block transactions. The selling stockholders may use any one or more of the following methods when selling shares:
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
·
|
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
|
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
·
|
an exchange distribution in accordance with the rules of the applicable exchange;
|
|
·
|
privately negotiated transactions;
|
|
·
|
settlement of short sales entered into after the effective date of the registration statement of which this prospectus forms
a part;
|
|
·
|
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per
share;
|
|
·
|
through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange
or otherwise;
|
|
·
|
a combination of any such methods of sale; and
|
|
·
|
any other method permitted pursuant to applicable law.
|
The selling stockholders also may resell
all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by
that rule, or Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the
criteria and conform to the requirements of those provisions.
Broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate in sales. If the selling stockholders effect such transactions by selling shares
of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions
in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares
of common stock for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be
negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess
of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with FINRA IM-2440-1.
In connection with sales of the shares of
common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short and if such short sale shall take place after the date
that this registration statement is declared effective by the Commission, the selling stockholders may deliver shares of common
stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales.
The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares, to
the extent permitted by applicable law. The selling stockholders may also enter into option or other transactions with broker-dealers
or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing,
the selling stockholders have been advised that they may not use shares registered on this registration statement to cover short
sales of our common stock made prior to the date the registration statement, of which this prospectus forms a part, has been declared
effective by the Commission.
The selling stockholders may, from time
to time, pledge or grant a security interest in some or all of the warrants or shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common
stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate
the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer
or agents participating in the distribution of the shares of common stock may be deemed to be “underwriters” within
the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts
or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. Selling stockholders who are "underwriters"
within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of
the Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities of, including but not limited
to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.
Each selling stockholder has informed us
that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly,
with any person to distribute the common stock. Upon our being notified in writing by a selling stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant
to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s),
(ii) the number of shares involved, (iii) the price at which such shares of common stock were sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material
to the transaction. In no event shall any broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed
eight percent (8.0%).
Under the securities laws of some states,
the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some
states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied with.
There can be no assurance that any selling
stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement of which this
prospectus forms a part.
Each selling stockholder and any other person
participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases
and sales of any of the shares of common stock by the selling stockholder and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares
of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common
stock.
We will pay all expenses of the registration
of the shares of common stock pursuant to the registration rights agreement, including, without limitation, Commission filing fees
and expenses of compliance with state securities or “blue sky” laws;
provided
,
however
, that each selling
stockholder will pay all underwriting discounts and selling commissions, if any and any related legal expenses incurred by it.
We will indemnify the selling stockholders against certain liabilities, including some liabilities under the Securities Act, in
accordance with the registration rights agreement, or the selling stockholders will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any
written information furnished to us by the selling stockholders specifically for use in this prospectus, in accordance with the
related registration rights agreement, or we may be entitled to contribution.
LEGAL MATTERS
The validity of the shares of common
stock offered hereby has been passed upon for us by Goodwin Procter LLP.
EXPERTS
The financial statements incorporated
in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2013 have been so incorporated
in reliance on the report, which contains an explanatory paragraph relating to the Company’s ability to continue as a going
concern as described in Note 2 to the financial statements, of PricewaterhouseCoopers LLP, an independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and other periodic
reports, proxy statements and other information with the Commission. You may read and copy any document we file with the Commission
at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. The Commission maintains an Internet site that contains reports, proxy
and information statements and other information regarding registrants that file electronically, including us. The address of the
site is
http://www.sec.gov
.
Our Internet address is
www.baxanosurgical
.
com
.
There we make available free of charge, on or through the investor relations section of our website, annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with the Commission. The
information on, or that can be accessed through, our website is not incorporated by reference into this prospectus and should not
be considered to be part of this prospectus or any other report we file with the Commission.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The Commission allows us to incorporate
by reference the information we file with it, which means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is an important part of this prospectus. We incorporate by reference
into this registration statement and prospectus the documents listed below and any filings we make with the Commission under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act (i) after the date of the initial registration statement and prior to effectiveness of the
registration statement and (ii) after the date of this prospectus and before the consummation or termination of this offering (other
than, in each case, documents or information deemed to have been “furnished” and not “filed” in accordance
with Commission rules):
|
·
|
Our Annual
Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the Commission
on March 11, 2014 (including the information specifically incorporated by reference into
the Form 10-K from our definitive proxy statement on Schedule 14A for our 2014 Annual
Meeting of Stockholders);
|
|
·
|
Our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission
on May 13, 2014;
|
|
·
|
Our Current
Reports on Form 8-K, as filed with the Commission on January 8, 2014, February 11, 2014,
March 14, 2014, April 17, 2014 and June 6, 2014; and
|
|
·
|
The description
of our Common Stock contained in our Registration Statement on Form 8-A (File No. 001-33744)
filed with the Commission on October 15, 2007 pursuant to Section 12(b) of the Exchange
Act, including any amendment or report filed for the purpose of updating such description.
|
Any statement contained in a document incorporated
or deemed to be incorporated by reference into this prospectus is modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded does not, except
as so modified or superseded, constitute a part of this prospectus.
You may request, and we will provide you
with, a copy of these filings, at no cost, by calling us at (919) 800-0020 or by writing to us at the following address:
Baxano Surgical, Inc.
110 Horizon Drive, Suite 230
Raleigh, NC 27615
Attn: Investor Relations
13,269,582 Shares
Common Stock
BAXANO SURGICAL, INC.
PROSPECTUS
,
2014.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following table sets forth all costs
and expenses payable by us in connection with the sale of the securities being registered hereunder. None of the expenses set forth
herein shall be borne by the selling stockholders. All of the amounts shown are estimates except for the Commission registration
fee.
Commission
registration fee
|
|
$
|
1,025
|
|
Legal
fees and expenses
|
|
|
45,000
|
|
Accounting
fees and expenses
|
|
|
12,000
|
|
Miscellaneous
fees and expenses
|
|
|
1,500
|
|
Total
|
|
$
|
59,525
|
|
ITEM 15. Indemnification of Directors and Officers.
Section 145(a) of the Delaware General
Corporation Law, or the DGCL, provides that a Delaware corporation may indemnify any person who was or is, or is threatened to
be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer,
director, employee or agent of such corporation, or is or was serving at the request of the corporation as an officer, director,
employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding,
provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s
best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct
was unlawful. With respect to derivative actions, Section 145(b) of the DGCL provides in relevant part that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by
or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person was or is a director,
officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise against expenses (including attorneys’ fees) actually and reasonably
incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and
in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall
deem proper. Section 145(c) of the DGCL provides that where an officer or director is successful on the merits or otherwise in
the defense of any action referred to above, the corporation must indemnify him or her against the expenses (including attorneys’
fees) which such officer or director has actually and reasonably incurred.
Our amended and restated certificate of
incorporation provides that to the fullest extent permitted by applicable law, we are authorized to provide indemnification of
(and advancement of expenses to) our directors, officers, employees and agents (and any other persons to whom Delaware law permits
us to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145
of the DGCL, subject only to limits created by applicable Delaware law (statutory or non-statutory), with respect to actions for
breach of duty to a corporation, its stockholders and others. Our amended and restated bylaws provide for the indemnification of
our directors and officers to the fullest extent permitted under the DGCL against all expense, liability and loss (including attorneys’
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such
director or officer. Our amended and restated bylaws also provide for the advancement of expenses incurred in defending any such
proceeding in advance of its final disposition, subject to any requirement of the DGCL regarding the delivery to us of an undertaking,
by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal that such director or officer is not entitled to be indemnified for such
expenses incurred.
We have also entered into an indemnification
agreement with each of our directors and executive officers providing for indemnification to the fullest extent permitted by the
DGCL.
Section 102(b)(7) of the DGCL permits
a corporation to include in its certificate of incorporation a provision to the effect that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director,
except for liability for any (i) breach of a director’s duty of loyalty to the corporation or its stockholders, (ii) act
or omission not in good faith or that involves intentional misconduct or a knowing violation of law, (iii) unlawful payment
of dividends or redemption of shares, or (iv) transaction from which the director derives an improper personal benefit. Our
amended and restated certificate of incorporation includes such a provision.
Our amended and restated bylaws provide
that we may maintain insurance, at our expense, to protect us and any director, officer, employee or agent of Baxano Surgical or
another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not
we would have the power to indemnify such person against such expense, liability or loss under the DGCL. We have an insurance policy
covering our directors and officers with respect to certain liabilities, including liabilities arising under the Securities Act,
which might be incurred by them in such capacities and against which they cannot be indemnified by us.
The indemnification provisions set forth
above and the indemnification agreements entered into between us and our directors and executive officers may be sufficiently broad
to permit indemnification of our directors and officers for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act. The foregoing statements are subject to the detailed provisions of the DGCL and to the applicable provisions
of our amended and restated certificate of incorporation and amended and restated bylaws.
ITEM 16. Exhibits.
Exhibit
|
|
|
No.
|
|
Description
|
4.1
|
|
Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-3 (File No. 333-189617) filed with the Commission on June 26, 2013).
|
4.2
|
|
Form of Securities Purchase Agreement, dated March 11, 2014, by and among Baxano Surgical, Inc. and the purchasers named therein (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on March 14, 2014).
|
4.3
|
|
Form of Subordinated Convertible Debenture (included as an exhibit to Exhibit 4.2).
|
4.4
|
|
Form of Warrant to Purchase Common Stock (included as an exhibit to Exhibit 4.2).
|
4.5
|
|
Form of Registration Rights Agreement, dated March 11, 2014, by and among Baxano Surgical, Inc. and the purchasers named therein (included as an exhibit to Exhibit 4.2).
|
5.1
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Opinion of Goodwin Procter LLP
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23.1
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Consent of Goodwin Procter LLP (included
in Exhibit 5.1).
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23.2
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Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
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24.1*
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Power of Attorney (included on the
signature page to the original filing of this Registration Statement on Form S-3).
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* Previously filed.
ITEM 17. Undertakings.
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(a)
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:
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(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or any decrease in volume of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in the registration statement or any material change to such information in
the registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii)
and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, that are incorporated by reference in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
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(2)
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That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)
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That, for the purpose of determining
liability under the Securities Act of 1933, as amended, to any purchaser, each prospectus filed pursuant to Rule 424(b) as
part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other
than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first
use.
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(b)
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The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(c)
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Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Raleigh, State of North Carolina, on June 12, 2014.
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Baxano Surgical, Inc.
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By:
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/s/ Ken Reali
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Ken Reali
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Chief Executive Officer and President (Principal Executive Officer)
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POWER OF ATTORNEY
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the
dates indicated.
Signature
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Title
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Date
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/s/ Ken Reali
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President, Chief Executive Officer
and
Director (Principal Executive
Officer)
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June 12, 2014
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Ken Reali
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/s/ Timothy M.
Shannon
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Chief Financial Officer (Principal
Financial and Accounting Officer)
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June 12, 2014
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Timothy M. Shannon
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*
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Director
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June 12, 2014
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Jeffrey Fischgrund
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*
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Director
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June 12, 2014
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Russell Hirsch
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*
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Chairman of the Board
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June 12, 2014
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Paul LaViolette
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*
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Director
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June 12, 2014
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James Shapiro
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*
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Director
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June 12, 2014
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Mark Stautberg
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*
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Director
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June 12, 2014
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Roderick Young
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*By:
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/s/Timothy
M. Shannon
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Timothy M. Shannon
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Attorney-in-fact
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EXHIBIT INDEX
Exhibit
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No.
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Description
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4.1
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Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-3 (File No. 333-189617) filed with the Commission on June 26, 2013).
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4.2
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Form of Securities Purchase Agreement, dated March 11, 2014, by and among Baxano Surgical, Inc. and the purchasers named therein (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Commission on March 14, 2014).
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4.3
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Form of Subordinated Convertible Debenture (included as an exhibit to Exhibit 4.2).
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4.4
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Form of Warrant to Purchase Common Stock (included as an exhibit to Exhibit 4.2).
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4.5
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Form of Registration Rights Agreement, dated March 11, 2014, by and among Baxano Surgical, Inc. and the purchasers named therein (included as an exhibit to Exhibit 4.2).
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5.1
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Opinion of
Goodwin Procter LLP
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23.1
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Consent of
Goodwin Procter LLP (included in Exhibit 5.1).
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23.2
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Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
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24.1*
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Power of Attorney
(included on the signature page to the original filing of this Registration Statement on Form S-3).
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* Previously filed.