Trading under new ticker symbol "BAXS" to begin
June 3, 2013
Completes financing of $17.2M at $2.28/share
Two directors and Vice President of Operations
appointed from former Baxano, Inc.
Combined company assumes Baxano, Inc.'s credit
facility
TranS1 Inc. (Nasdaq:TSON), a medical device company focused on
designing, developing, and marketing products to treat degenerative
conditions of the spine affecting the lumbar region, today
announced that it has completed its acquisition of Baxano, Inc.
("Baxano"), a privately-held medical device company that
manufactures and markets the iO-Flex® system utilized in standard
spinal decompression surgery and is developing the iO-TomeTM
system, a precision facetectomy instrument.
"The creation of the new Baxano Surgical completes our
transition to a high growth medical device company focused on
minimally invasive spinal procedures, the fastest area of growth in
the spine market. The increased scale of the combined company
allows us to offer our surgeon customers a suite of proprietary and
differentiated products," said Ken Reali, President and Chief
Executive Officer of the new Baxano Surgical, Inc. "Through the
continued market penetration of iO-Flex and VEO and the re-launch
of AxiaLIF we expect to drive the company into its next phase of
growth. We are excited to begin executing on our vision and
strategy of becoming a leader in the minimally invasive spine
market."
Closing of Merger and Financing Transaction
Under the terms of the merger agreement (the "Merger
Agreement"), RacerX Acquisition Corp., a wholly-owned subsidiary of
TranS1 Inc. ("TranS1" or "the Company"), merged with and into
Baxano, with Baxano remaining as the surviving corporation and as a
wholly-owned subsidiary of the Company (the "Merger"). Upon
the closing of the Merger, and in accordance with the terms of the
Merger Agreement, the Company issued an aggregate of approximately
10.3 million shares of the Company's common stock as merger
consideration (valued at approximately $20.1 million based on the
May 30, 2013 closing price).
At the closing of the Merger, each outstanding share of capital
stock of Baxano was cancelled and extinguished and converted into
the right to receive a portion of the merger consideration in
accordance with the Merger Agreement. Each promissory note of
Baxano that was convertible into capital stock of Baxano (each a
"Baxano Note") was terminated at closing of the Merger, and the
holders of such Baxano Notes are entitled to receive merger
consideration in accordance with the Merger Agreement. All
stock option plans or other stock or equity-related plans of
Baxano, all employee stock purchase plans, each outstanding option
to purchase common stock of Baxano, whether vested or unvested, and
each warrant to acquire capital stock of Baxano were terminated
prior to the closing of the Merger.
Effective May 31, 2013, following the closing of the Merger,
TranS1 merged the wholly-owned subsidiary created by the Merger
with and into the Company and changed the name of the Company to
Baxano Surgical, Inc. The Company's common stock is expected
to begin trading under the new trading symbol "BAXS" on June 3,
2013. In addition, the Company's common stock now trades
under a new CUSIP number, 071773 105.
Contemporaneously with the closing of the Merger, and in
accordance with the terms of a Securities Purchase Agreement, the
Company issued and sold to certain investors approximately 7.5
million shares of the Company's common stock, at a purchase price
of $2.28 per share, resulting in gross proceeds to the Company of
$17.2 million.
Also in connection with the Merger, the Company assumed and
became the borrower under Baxano's existing secured credit facility
provided by Oxford Finance LLC and Silicon Valley Bank. The
credit facility consists of a $3 million term loan accruing
interest at a fixed rate of 6.72% and is secured by a first
priority security interest in substantially all of the Company's
personal property other than intellectual property. The credit
facility has a maturity date of May 2016.
Changes to the Board of Directors and
Management
In order to facilitate the composition of the Board of Directors
of the Company (the "Board") required by the Merger Agreement,
Jeffrey Fischgrund, M.D. resigned as a Class III member of the
Board and was reappointed as a Class II member of the Board
effective as of May 31, 2013; Michael Carusi and Jonathan Osgood
tendered their resignations as members of the Board effective as of
May 31, 2013; and the Board appointed former Baxano directors
Russell C. Hirsch, M.D., Ph.D. and Roderick A. Young to serve as
Class III members of the Board effective as of May 31, 2013.
Dr. Hirsch, 50, has been a Managing Director of Prospect Venture
Partners, a venture capital firm, since February 2001. From June
1992 to December 2000, he was a member of the Healthcare Technology
Group at Mayfield Fund, a venture capital firm. Dr. Hirsch
previously served as a member of the boards of directors of Hansen
Medical, Inc. from 2002 to 2012, Portola Pharmaceuticals, Inc. from
2003 to 2013, AVEO Pharmaceuticals, Inc. from 2002 to 2011, and
Visiogen from 2003 to 2009. Dr. Hirsch holds a B.A. in Chemistry
from the University of Chicago and a Ph.D. in Biochemistry and an
M.D. from the University of California, San Francisco.
Mr. Young, 69, has been a venture partner of Three Arch
Partners, a venture capital firm, since May 2006. He has served as
a director of LipoScience, Inc., a medical diagnostics company,
since 2008 and serves on the audit committee and compensation
committee of the board. He served as a director of North American
Scientific, Inc., a medical device company, from 2006 to 2009. He
also represents Three Arch Partners as a director on two private
company boards. From 2003 to 2005, Mr. Young was president and
chief executive officer of Vivant Medical, Inc., a venture-backed
medical device company that was acquired by Tyco International,
Ltd. Prior to his tenure at Vivant, Mr. Young was president and
chief executive officer of Targesome, Inc., a biotechnology
company, from 1998 to 2002. Prior to Targesome, Mr. Young also
served as chairman and chief executive officer of General Surgical
Innovations, a medical device company; president and chief
executive officer of Focus Surgery; president of Toshiba America
MRI; and president and chief operating officer of Diasonics. Mr.
Young received a B.S. degree in industrial engineering from
Stanford University and an M.B.A. degree from Harvard Business
School.
In connection with the Merger, Greg Welsh, the former Vice
President of Operations of Baxano, was appointed as Vice President
of Operations of the Company effective as of May 31, 2013. Mr.
Welsh, 50, was Vice President of Operations of Baxano from January
2013 through May 31, 2013. At Baxano, Mr. Welsh previously served
as Vice President of Manufacturing from January 2012 to January
2013, Senior Director of Operations from August 2009 to January
2012, and Director of Operations from March 2008 to August 2009.
Prior to joining Baxano, Mr. Welsh served as Director of Production
at Avantis Medical Systems from 2007 to 2008 and held various
senior management positions at Cierra from 2006 to 2007 and Boston
Scientific/Target Therapeutics from 1996 to 2006. From 1988
to 1996, Mr. Welsh served in various engineering, supervisory, and
project leadership roles at Edwards, a division of Baxter
Healthcare. Mr. Welsh holds a B.S. degree in Mechanical
Engineering from Cal Poly San Luis Obispo and holds a Management
Development Program Certificate from the School of Business at
University of Southern California.
2013 Annual Meeting Date
In light of the timing of the special meeting of stockholders on
May 31, 2013, the Board has approved August 20, 2013 as the date of
the 2013 annual meeting of stockholders (the "2013 Annual
Meeting"). The Board has also approved July 3, 2013 as the record
date for determining stockholders of record entitled to vote at the
2013 Annual Meeting. Because the date of the 2013 Annual
Meeting is more than 30 days after the anniversary date of the
Company's annual meeting of stockholders in 2012, the Company is
informing stockholders of changes to the deadlines for submitting
stockholder proposals and candidates for nomination to the
Board.
For a stockholder proposal to be considered for inclusion in the
Company's proxy statement and form of proxy for the 2013 Annual
Meeting, the proposal must be received at the Company's corporate
offices on or before June 10, 2013. Any such proposal also must
comply with Rule 14a-8 under the Securities Exchange Act of 1934,
as amended, and any other applicable rules established by the
Securities and Exchange Commission.
For a stockholder proposal or director nomination that is not
intended to be included in the Company's proxy statement and form
of proxy for the 2013 Annual Meeting, written notice must be
received by the Company's Corporate Secretary at the Company's
corporate office at Baxano Surgical, Inc., 110 Horizon Drive, Suite
230, Raleigh, NC 27615, no later than the close of business on June
10, 2013. Any such proposal must also comply with the advance
notice procedures and other requirements set forth in Article II of
the Amended and Restated Bylaws of the Company.
About Baxano Surgical, Inc.
Baxano Surgical, Inc. is a medical device company focused on
designing, developing, and marketing products to treat degenerative
conditions of the spine affecting the lumbar region. Baxano
Surgical currently markets the AxiaLIF® family of products for
single and two level lumbar fusion, the VEOTM lateral access and
interbody fusion system, and the iO-Flex® system, a proprietary
minimally invasive set of flexible instruments allowing surgeons to
target lumbar spinal stenosis during spinal decompression
procedures in all three regions of the spine: central canal,
lateral recess, and neural foramen. Baxano Surgical was
founded in May 2000 and is headquartered in Raleigh, North
Carolina. For more information, visit
www.baxanosurgical.com.
Forward Looking Statements
This press release contains "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, that are intended
to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. Such statements
are subject to risks and uncertainties that are often difficult to
predict, are beyond the Company's control, and which may cause
results to differ materially from expectations. Factors that could
cause actual results to differ materially from those described
include, but are not limited to, the ability to successfully
integrate the combined company after the Merger, the effect on the
Company's business of existing and new regulatory requirements,
uncertainty surrounding the outcome of the matters relating to the
subpoena issued to the Company by the Department of Health and
Human Services, Office of Inspector General, stockholder class
action lawsuits, and other economic and competitive factors, and
the other factors described in the Company's filings with the
Securities and Exchange Commission (the "SEC"), including its
Annual Report on Form 10-K for the year ended December 31, 2012 and
subsequent reports. You are cautioned not to place undue reliance
on these forward looking statements, which are based on the
Company's expectations as of the date of this press release and
speak only as of the date of this press release. The Company
undertakes no obligation to publicly update or revise any forward
looking statement, whether as a result of new information, future
events, or otherwise.
CONTACT: Investors:
Baxano Surgical, Inc.
Joseph P. Slattery, 919-825-0868
Executive Vice President and Chief Financial Officer
or
Westwicke Partners
Mark Klausner, 443-213-0501
baxano@westwicke.com
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