bsdm424b5201002.htm
Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-162080
Prospectus
Supplement
(To
Prospectus Dated October 1, 2009)
BSD
MEDICAL CORPORATION
1,176,471
SHARES OF COMMON STOCK
WARRANTS
TO PURCHASE 882,354 SHARES OF COMMON STOCK
882,354
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS
We are
offering directly to selected investors up to 1,176,471 shares of our common
stock and warrants to purchase up to 882,354 shares of our common stock
(including 882,354 shares of common stock issuable upon exercise of the
warrants) pursuant to this prospectus supplement and the accompanying
prospectus. Of the 2,058,825 shares of common stock offered hereby,
882,354 shares are issuable upon exercise of the warrants. The
securities will be sold in multiples of a fixed combination consisting of one
share of common stock and a warrant to purchase 0.75 shares of common stock, at
an initial exercise price of $2.04. Each fixed combination will be
sold at a negotiated price of $1.70 per fixed combination. The
warrants will be exercisable on or after the date that is six months and one day
after the date the warrants are issued and will expire on the fifth anniversary
of the date the warrants become exercisable.
For a
more detailed description of the common stock and warrants, see the section
entitled “Description of Securities We Are Offering” beginning on page
S-12.
Our
common stock is traded on The NASDAQ Global Market under the symbol
“BSDM”. On February 10, 2010, the last reported sale price for our
common stock was $1.91 per share. There is no established public
trading market for the warrants, and we do not expect a market to develop. We do
not intend to apply to list the warrants on any securities
exchange.
As of
February 10, 2010, the aggregate market value of our outstanding common equity
held by non-affiliates was approximately $25,831,300 based on 13,524,241 shares
of outstanding common stock held by non-affiliates and a price of $1.91 per
share, which was the last reported sale price of our common stock on The Nasdaq
Global Market on February 10, 2010. As of the date of this prospectus
supplement, we have not sold any securities pursuant to General Instruction
I.B.6. of Form S-3 during the prior 12 calendar month period that ends on, and
includes, the date of this prospectus supplement. The value of the
securities offered hereby is $3,685,297.
We have
retained Roth Capital Partners LLC as our exclusive placement agent in
connection with this offering. The placement agent has no obligation
to buy any of the securities from us or to arrange for the purchase or sale of
any specific number or dollar amount of securities. See “Plan of
Distribution” beginning on page S-13 of this prospectus supplement for more
information regarding these arrangements.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning
on page S-4 of this prospectus supplement and “Risk Factors” beginning on page 5
of the accompanying prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
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Per
Fixed Combination of one share of common stock and one warrant to purchase
0.75 shares of common stock
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Total
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Public
Offering Price
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$ |
1.70 |
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$ |
2,000,001 |
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Placement
agency fees
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$ |
0.11 |
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$ |
130,000 |
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Proceeds,
before expenses, to us
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$ |
1.59 |
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$ |
1,870,001 |
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Roth
Capital Partners, LLC is acting as the exclusive placement agent in this
offering. We estimate the total expenses of this offering, excluding the
placement agency fees, will be approximately $90,000. Because there is no
minimum offering amount, the actual offering amount, the placement agency fees
and net proceeds to us, if any, in this offering may be substantially less than
the total offering amounts set forth above. We are not required to sell any
specific number or dollar amount of the securities offered in this offering, but
the placement agent will use its reasonable efforts to arrange for the sale of
all of the securities offered.
Delivery
of the securities will be made on or before February 17, 2010.
Roth
Capital Partners
The
date of this prospectus supplement is February 11, 2010
Prospectus
Supplement
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Prospectus
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This
prospectus supplement and the accompanying prospectus are part of a “shelf”
registration statement on Form S-3, registration statement number 333-162080,
that we filed with the Securities and Exchange Commission (the SEC) on September
23, 2009 and that was declared effective on October 1, 2009. Under
this shelf registration process, we may offer and sell from time to time in one
or more offerings the securities described in the accompanying
prospectus. This prospectus supplement describes the specific details
regarding this offering, including the price, the amount of our common stock and
warrants being offered, the risks of investing in our common stock, warrants and
other items.
This
document is in two parts. The first part is this prospectus
supplement, which describes the terms of this offering of our common stock and
warrants and also adds, updates, and changes information contained in the
accompanying prospectus and the documents incorporated by
reference. The second part is the accompanying prospectus, which
gives more general information, some of which may not apply to this
offering. Generally, when we refer to this “prospectus,” we are
referring to both documents combined. To the extent the information
contained in this prospectus supplement differs or varies from the information
contained in the accompanying prospectus or any document filed prior to the date
of this prospectus supplement and incorporated by reference, the information in
this prospectus supplement will control.
You
should rely only on the information contained in this prospectus supplement and
the accompanying prospectus, including any information incorporated by
reference. We have not 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. You should not assume that the information appearing
in this prospectus, any prospectus supplement or any document incorporated by
reference is accurate at any date other than as of the date of each such
document. Our business, financial condition, results of operations and prospects
may have changed since the date indicated on the cover page of such
documents.
References
in this prospectus supplement, the accompanying prospectus and the documents
incorporated by reference to “we,” “our,” “us,” “BSD” and “the Company” refer to
BSD Medical Corporation. Both this prospectus supplement and the
accompanying prospectus include important information about us, our common stock
and other information you should know before investing. This
prospectus supplement also adds, updates, and changes certain of the information
contained in the prospectus. You should read both this prospectus
supplement and the accompanying prospectus as well as the additional information
described under the headings “Where You Can Find More Information” and
“Incorporation by Reference” before investing in our common stock and
warrants.
This
prospectus supplement contains summaries of certain provisions contained in some
of the documents described herein, but reference is made to the actual documents
for complete information. All of the summaries are qualified in their
entirety by the actual documents. Copies of some of the documents
referred to herein have been filed, will be filed or will be incorporated by
reference as exhibits to the registration statement of which this prospectus
supplement is a part, and you may obtain copies of those documents as described
below under the heading “Where You Can Find More Information.”
This
summary is not complete and does not contain all of the information that you
should consider before investing in the securities offered by this prospectus.
You should read this summary together with the entire prospectus supplement and
prospectus, including our financial statements, the notes to those financial
statements and the additional information described in this prospectus
supplement under the headings “Where You Can Find More Information” on page S-16
and “Incorporation by Reference” on page S-16, before making an investment
decision. See the “Risk Factors” section of this prospectus supplement beginning
on page S-4 for a discussion of the risks involved in investing in our
securities.
Summary
of Our Business
We
develop, manufacture, market and service medical systems that deliver
precision-focused radio frequency (RF) or microwave energy into diseased sites
of the body, heating them to specified temperatures as required by a variety of
medical therapies. Our business objectives are to commercialize our
products developed for the treatment of cancer and to further expand our systems
to treat other diseases and medical conditions. Our product line for cancer
therapy has been created to offer hospitals and clinics a complete solution for
thermal treatment for cancer provided through microwave/RF systems.
While our
primary developments to date have been cancer treatment systems, we also
pioneered the use of microwave thermal therapy for the treatment of symptoms
associated with enlarged prostate, and we are responsible for technology that
has contributed to a new medical industry addressing the needs of men’s health.
In accordance with our strategic plan, we subsequently sold our interest in
TherMatrx, Inc., the company established to commercialize our technology to
treat enlarged prostate symptoms, to provide substantial funding that we can
utilize for commercializing our systems used in the treatment of cancer and in
achieving other business objectives.
Our
product line includes systems that have been strategically designed to offer a
range of thermal treatment systems for the treatment of cancer, including both
hyperthermia and ablation treatment systems. Studies have shown that both
hyperthermia and ablation treatments kill cancer but they have different
clinical applications.
Our
hyperthermia cancer treatment systems are used to treat cancer with heat
(hyperthermia) while boosting the effectiveness of radiation through a number of
biological mechanisms. Hyperthermia is usually used to increase the
effectiveness of other therapies; e.g., radiation therapy and chemotherapy for
the treatment of locally advanced cancers. Hyperthermia usually
refers to treatments delivered at temperatures of 40-49°C for one
hour.
Our
microwave ablation system is to be used to ablate (remove or vaporize) soft
tissue with heat alone. Thermal ablation usually refers to heat
treatments delivered at temperatures above 55°C for short periods of
time. Thermal ablation is used to destroy local tumors using a short
intense focus of heat on a specific area, which is usually small, similar to
surgical removal of the tumor.
Our
primary mission is to develop the full spectrum of medical uses for our special
competence in precision-focused RF/microwave systems, and to broadly apply the
utilization of our technology to treat cancer and benign diseases and
conditions.
Our
principal executive offices are located at 2188 West 2200 South, Salt Lake City,
Utah 84101, and our telephone number is (801) 972-5555.
On April
22, 2008, we changed the listing of our stock from the American Stock Exchange
(AMEX) to the NASDAQ Stock Market (NASDAQ), and our stock now trades under the
NASDAQ symbol “BSDM.”
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Warrants
to purchase up to 882,354 shares of common stock. Each warrant may be
exercised at any time on or after the date that is six months and one day
after the date the warrants are issued until the fifth anniversary of the
date the warrants become exercisable at an initial exercise price of $2.04
per share of common stock, subject to adjustment. This prospectus also
relates to the offering of the shares of common stock issuable upon
exercise of the warrants.
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We
intend to use the net proceeds from this offering for general corporate
purposes, including working capital, subject to any agreed upon
contractual restrictions. See “Use of Proceeds” on page
S-11.
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The
Offering
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Common
stock offered by us
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1,176,471
shares
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Common
Stock outstanding after this offering (assuming no exercise of the
warrants offered by us)
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23,215,772
shares
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Warrants
offered by us
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Warrants
to purchase up to 882,354 shares of common stock. Each warrant may be
exercised at any time on or after the date that is six months and one day
after the date the warrants are issued until the fifth anniversary of the
date the warrants become exercisable at an initial exercise price of $2.04
per share of common stock, subject to adjustment. This prospectus also
relates to the offering of the shares of common stock issuable upon
exercise of the warrants.
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Use
of proceeds
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We intend to use the net proceeds from this offering for
general corporate purposes, including working capital, subject to any
agreed upon contractual restrictions under the terms of the purchase
agreement. See “Use of Proceeds” on page S-11.
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Market
for the common stock and warrants
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Our
common stock is quoted and traded on the NASDAQ Global Market under the
symbol “BSDM.” However, there is no established public trading market for
the offered warrants, and we do not expect a market to develop. In
addition, we do not intend to apply to list the warrants on any securities
exchange.
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Risk
Factors
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You
should read the “Risk Factors” section of this prospectus supplement and
in the documents incorporated by reference in this prospectus supplement
for a discussion of factors to consider before deciding to purchase our
securities.
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NASDAQ
Global Market Symbol
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BSDM
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The
number of shares of common stock to be outstanding after this offering as
reflected in the table above is based on the actual number of shares outstanding
as of November 30, 2009, which was 22,039,301, and does not include, as of that
date:
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573,825
shares of our common stock issuable upon the exercise of outstanding stock
options under our Fourth Amended and Restated 1998 Director Stock Plan,
having a weighted average exercise price of $5.18
per share;
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236,952 shares
of our common stock reserved for future issuance under our Fourth Amended
and Restated 1998 Director Stock
Plan;
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1,788,462
shares of our common stock issuable upon the exercise of outstanding stock
options under our Third Amended and Restated 1998 Stock Incentive Plan,
having a weighted average exercise price of $3.00
per share; and
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322,329
shares of our common stock reserved for future issuance under our Third
Amended and Restated 1998 Stock Incentive
Plan.
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Unless
otherwise stated, outstanding share information throughout this prospectus
supplement excludes such outstanding options and warrants to purchase shares of
common stock and shares available for issuance.
Before
you make a decision to invest in our securities, you should consider carefully
the risks described below, together with other information in this prospectus
supplement, the accompanying prospectus and the information incorporated by
reference herein and therein. If any of the following events actually occur, our
business, operating results, prospects or financial condition could be
materially and adversely affected. This could cause the trading price of our
common stock to decline and you may lose all or part of your investment. The
risks described below are not the only ones that we face. Additional risks not
presently known to us or that we currently deem immaterial may also
significantly impair our business operations and could result in a complete loss
of your investment.
RISKS
RELATED TO THIS OFFERING
Since
we have broad discretion in how we use the proceeds from this offering, we may
use the proceeds in ways with which you disagree.
We have
not allocated specific amounts of the net proceeds from this offering for any
specific purpose. Accordingly, subject to any agreed upon contractual
restrictions under the terms of the purchase agreement, our management will have
significant flexibility in applying the net proceeds of this offering. You will
be relying on the judgment of our management with regard to the use of these net
proceeds, and subject to any agreed upon contractual restrictions under the
terms of the purchase agreement, you will not have the opportunity, as part of
your investment decision, to assess whether the proceeds are being used
appropriately. It is possible that the net proceeds will be invested in a way
that does not yield a favorable, or any, return for us. The failure of our
management to use such funds effectively could have a material adverse effect on
our business, financial condition, operating results and cash flow.
There
is no minimum offering amount required to consummate this offering.
There is
no minimum offering amount which must be raised in order for us to consummate
this offering. Accordingly, the amount of money raised may not be sufficient for
us to meet our business objectives. Moreover, if only a small amount of money is
raised, all or substantially all of the offering proceeds may be applied to
cover the offering expenses and we will not otherwise benefit from the offering.
In addition, because there is no minimum offering amount required, investors
will not be entitled to a return of their investment if we are unable to raise
sufficient proceeds to meet our business objectives.
You
will experience immediate dilution in the book value per share of the common
stock you purchase.
Because
the price per share of our common stock being offered is substantially higher
than the book value per share of our common stock, you will suffer substantial
dilution in the net tangible book value of the common stock you purchase in this
offering. After giving effect to the sale by us of 1,176,471 shares of common
stock in this offering, and based on a public offering price of $1.70 per fixed
combination in this offering and a pro forma net tangible book value per share
of our common stock of $0.52 as of November 30, 2009, without giving effect to
the potential exercise of the warrants being offered by this prospectus
supplement, if you purchase securities in this offering, you will suffer
immediate and substantial dilution of $1.18 per share in the net tangible book
value of the common stock purchased. See “Dilution” on page S-11 for a more
detailed discussion of the dilution you will incur in connection with this
offering.
There
is no public market for the warrants to purchase common stock in this
offering.
There is
no established public trading market for the warrants being offered in this
offering, and we do not expect a market to develop. In addition, we do not
intend to apply to list the warrants on any securities exchange. Without an
active market, the liquidity of the warrants will be limited.
RISKS
RELATED TO OUR COMPANY
We
have a history of significant operating losses and such losses may continue in
the future.
Since our
inception in 1978, our expenses have substantially exceeded our revenue,
resulting in continuing losses and an accumulated deficit of $16,674,122 at
August 31, 2009. We reported net losses of $11,384,870, $2,439,099
and $3,348,195 in fiscal years 2009, 2008 and 2007, respectively.
We may
continue to incur operating losses in the future as we continue to incur costs
to develop our products, protect our intellectual property and expand our sales
and marketing activities. To become profitable we will need to
increase significantly the revenues we receive from sales of our hyperthermia
therapy products and to successfully commercialize our new ablation product to
improve our profitability on a quarterly or annual basis. We have
been unable to do this in the past and we may be unable to do so in the future,
and therefore may never achieve profitability.
Adverse
worldwide economic conditions have made it difficult for our customers to obtain
approval for the purchase of and funding for our hyperthermia
systems.
Our
hyperthermia cancer treatment systems represent capital equipment purchases for
our customers. Adverse worldwide economic conditions have made it
difficult for our customers to obtain approval for the purchase of and funding
for our hyperthermia systems. This has contributed to a lack of
growth in our worldwide sales of our systems. To the extent that
adverse economic conditions continue, we believe our sales of hyperthermia
systems will continue to be negatively impacted and possibly decrease in fiscal
year 2010 as compared to fiscal year 2009.
Our
revenues can fluctuate significantly from period to period because our sales, to
date have been based upon a relatively small number of systems, the sales price
of each being substantial enough to greatly impact revenue levels in the periods
in which they occur.
Our
revenues can fluctuate significantly from period to period because our sales, to
date, have been based upon a relatively small number of hyperthermia systems,
the sales price of each being substantial enough to greatly impact revenue
levels in the periods in which they occur. Sales of a few systems,
particularly BSD-2000/3D/MR systems, can cause a large change in our revenues
from period to period and the sales cycle for our systems generally extends over
multiple financial reporting periods. In addition, differences in the
configuration of the systems sold, pricing, and other factors can result in
significant differences in the sales price per system and in the total revenues
reported in a given period. As a result, there may be quarterly
financial reporting periods where we may report no or minimal revenues from the
sale of hyperthermia systems.
A
significant portion of our revenues have been from related parties, and we have
had significant concentrations of revenues in foreign countries.
During
the years ended August 31, 2009, 2008, and 2007, we had sales of $603,000,
$2,809,132 and $1,385,332, respectively, to entities controlled by a significant
stockholder and member of the Board of Directors. These related party
transactions represent 17%, 55% and 49% of total sales for each respective
year.
A
significant portion of our revenues are derived from sales to foreign
customers. During the years ended August 31, 2009, 2008 and 2007,
export sales totaled $1,668,547, $2,812,796 and $1,787,363, or 47%, 55% and 63%
of total sales, respectively. During fiscal year 2009, export sales
to China, Switzerland and Poland were approximately 16%, 13% and 14% of total
sales, respectively. During fiscal years 2008 and 2007, export sales
to Switzerland were approximately 53% and 44% of total sales,
respectively.
To the
extent that we are unable to maintain or increase the level of our revenues
derived from related parties or foreign customers, the results of our operations
could be negatively impacted.
Our
hyperthermia therapy products may not achieve market acceptance which could
limit our future revenue and ability to achieve profitability.
To date,
hyperthermia therapy has not gained wide acceptance by cancer-treating
physicians. We believe this is due in part to the lingering
impression created by the inability of early hyperthermia therapy technologies
to focus and control heat directed at specific tissue locations and conclusions
drawn in early scientific studies that hyperthermia was only marginally
effective. Additionally, market acceptance depends upon physicians
and hospitals obtaining adequate reimbursement rates from third-party payors to
make our products commercially viable, and we believe that reimbursement rates
have not been adequate to stimulate strong interest in adopting hyperthermia as
a new cancer therapy. If our sales and marketing efforts to promote
hyperthermia therapy acceptance in the medical community fail, or our efforts to
improve third-party reimbursement rates for hyperthermia therapy are not
successful, then our future revenue from sales of our products may be limited,
and we may never be able to obtain profitable recurring
operations.
We
have delayed market introduction of our MTX-180 ablation product and are unable
to predict when design modification, marketing and sales strategies will be
completed or when regulatory approval will be obtained.
Our
MTX-180 Microwave Ablation System represents a major part of our business plan
moving forward. The FDA granted us a 510(k) clearance to market the
MTX-100, which authorizes the commercial sale of the device in the United
States. Since receipt of FDA clearance to market the MTX-100, we have
devoted significant efforts to optimizing the design of the system to improve
its ease of use and its medical applications. Following clinical
evaluations of Phase I, we decided to postpone market entry until completion of
the optimized Phase II design, the MTX-180. We believe this will
allow us to enter this market with an optimized system that will have a wider
range of clinical applications and increased revenue streams.
Additional
time will be required to complete the market-ready Phase II design, apply for
applicable regulatory approvals, and finalize the manufacturing processes for
the MTX-180 and the applicators. Also, final marketing and sales
strategies must be completed prior to market introduction. We
currently are unable to predict when these efforts will be completed and when
revenues from the sale of the MTX-180 and related applicators will
begin. We do not believe, however, that these revenues will begin
until at least the first or second quarter of calendar year 2010. We
cannot be assured that our efforts to commercialize the MTX-180 will be
successful. If our efforts to commercialize the MTX-180 are not
successful, our business will be adversely affected.
Sales
of our product could be significantly reduced if government, private health
insurers and other third-party payors do not provide sufficient coverage or
reimbursement.
Our
success in selling our products will depend in large part on the extent to which
reimbursement for the costs of our products and related treatments are available
from government health agencies, private health insurers and other third-party
payers. Despite the existence of general reimbursement policies,
local medical review policies may differ for public and private insurance
payers, which may cause payment to be refused for some hyperthermia
treatments. Private payers also may refuse to pay for hyperthermia
treatments.
Medical
reimbursement rates are unpredictable and we cannot predict the extent to which
our business may be affected by future legislative and regulatory
developments. Future health care legislation or regulation may limit
our business or impose additional delays and costs on our business and
third-party reimbursement may not be adequate to cover our costs associated with
producing and selling our products.
Cancer
therapy is subject to rapid technological change and therapies that are more
effective than ours could render our technology obsolete.
The
treatment of cancer is currently subject to extensive research and
development. Many cancer therapies are being researched and our
products may be rendered obsolete by existing therapies and as a result of
therapy innovations by others. If our products are rendered obsolete,
our revenue will decline, we may never achieve profitability, and we may not be
able to continue in business.
Additionally,
other companies, particularly established companies that currently manufacture
and sell other cancer therapy systems, could potentially become competitors (in
that they are also engaged in cancer treatment business), and they have
significantly greater resources than we do.
Some
of the medical institutions to which we have sold in the past have not been able
to pay for their equipment, and some of our sales have therefore become
substantial bad debts, a risk that could continue into the future.
A limited
number of our customers have been developing clinics, and these customers have
been particularly vulnerable to financial difficulties that can cause them to be
unable to pay for equipment that they have purchased. If we choose to accept
higher risk sales opportunities to clinics in the future, we will be subject to
these customer credit risks that could lower future net sales due to bad-debt
write offs, resulting in losses in future periods and potentially lowering the
value of our stock. While we attempt to provide for foreseeable
doubtful accounts, we cannot assure that this provision will always be adequate
to cover our credit risks.
Increasing
sales of our hyperthermia systems depends on our ability to successfully expand
our sales distribution channels; however, we have had failures with the
productivity of new channels of distribution in the past. Expanding
our channels of distribution will also significantly increase our sales
expenses, which could negatively impact our financial performance.
We
believe that the success of our efforts to increase sales of our hyperthermia
systems in the future depends on our ability to successfully expand our sales
distribution channels. Historically, we have sometimes failed in
establishing successful new sales channels.
We
anticipate that the success of our multi-year plan for selling hyperthermia
systems will require expanding our sales and marketing organization through a
combination of direct sales people, distributors and internal and external
marketing expertise. However, as we pursue our marketing plan, there
can be no assurance that we will be successful in securing reliable channels of
distribution to meet our plan through expanded sales. Recruiting and
training new distribution channels can take time and considerable expense. We
project that sales and marketing expenses will increase substantially in the
future as compared to past years. This added expense could have an
adverse effect on our future financial performance that is greater than any
potential increases in sales.
In
addition, there can be no assurance that our channels of distribution that have
been successful in the past will be successful in the future. We have
derived a significant portion of our revenue from sales in Europe and in
China. Sales in Europe were made through our distributor
Medizin-Technik, GmbH, which also purchases equipment components and parts from
us. Medizin-Technik is controlled by Dr. Sennewald, one of our
directors. The loss or ineffectiveness of either Medizin-Technik or
our Chinese distributor as a distributor and significant customer could result
in lower revenue.
We
may face significant uncertainty in the industry due to government healthcare
reform.
Political,
economic and regulatory influences are subjecting the healthcare industry to
fundamental changes. We anticipate that the current administration,
Congress and certain state legislatures will continue to review and assess
alternative healthcare delivery systems and payment methods with an objective of
ultimately reducing healthcare costs and expanding access. Public
debate of these issues will likely continue in the future. The
uncertainties regarding the ultimate features of reform initiatives and their
enactment and implementation may have an adverse effect on our customers’
purchasing decisions regarding our products and services. At this
time, we cannot predict which, if any, healthcare reform proposals will be
adopted, when they may be adopted or what impact they may have on our
business.
We
are subject to government regulations that can delay our ability to sell our
products and cause us to incur substantial expenses.
Our
research and development efforts, pre-clinical tests and clinical trials, and
the manufacturing, marketing, distribution and labeling of our products are
subject to extensive regulation by the FDA and comparable international
agencies. The process of obtaining FDA and other required regulatory
approvals is lengthy and expensive and our financial resources are
limited.
Obtaining
pre-market approval or marketing clearance as a 510(k) submission from the FDA
is necessary for us to commercially market our systems in the United
States. Obtaining approvals is a lengthy and expensive
process. We may not be able to obtain these approvals on a timely
basis, if at all, and such failure could harm our business prospects
substantially. Further, even if we are able to obtain the approvals we seek from
the FDA, the approvals granted might include significant limitations on the
indicated uses for which the products may be marketed, which restrictions could
negatively impact our business. We are unable to predict when the
review process will be completed and its ultimate outcome. If we are
unable to receive HDE marketing approval, or if the FDA requires us to undergo
extensive testing in order to grant HDE marketing approval, our business could
be adversely affected.
After a
product is approved for commercial distribution by the FDA, we have ongoing
responsibilities under the Federal Food, Drug, and Cosmetic Act and FDA
regulations, including regulation of our manufacturing facilities and processes,
labeling and record-keeping, and reporting of adverse experiences and other
information. Failure to comply with these ongoing requirements could
result in the FDA imposing operating restrictions on us, enjoining or
restraining certain violations, or imposing civil or criminal penalties on
us.
All of
these laws are subject to evolving interpretations. If the federal
government were to conclude that we are not in compliance with any of these
health care laws, we could be subject to substantial criminal and civil
penalties, and could be excluded from participation as a supplier to
beneficiaries in federal health care programs.
We
depend on adequate protection of our patent and other intellectual property
rights to stay competitive.
We rely
on patents, trade secrets, trademarks, copyrights, know-how, license agreements
and contractual provisions to establish and protect our intellectual property
rights. Our success will substantially depend on our ability to
protect our intellectual property rights and maintain rights granted to us
through license agreements. Our intellectual property rights may only
afford us limited protection and may not adequately protect our rights or
remedies to gain or keep any advantages we may have over our competitors, which
could reduce our ability to be competitive and generate sales and
profitability.
In the
past, we have participated in substantial litigation regarding our patent and
other intellectual property rights in the medical device industry. We
have previously filed lawsuits for patent infringement against three of our
competitors and subsequently settled all three of those
lawsuits. Additional litigation against other parties may be
necessary in the future to enforce our intellectual property rights, to protect
our patents and trade secrets, and to determine the validity and scope of our
proprietary rights. This litigation may require more financial
resources than are available to us. We cannot guarantee that we will
be able to successfully protect our rights in litigation. Failure to
successfully protect our rights in litigation could reduce our ability to be
competitive and generate sales and profitability.
A
product liability settlement could exceed our ability to pay.
The
manufacturing and marketing of medical devices involves an inherent risk of
product liability. We presently carry product liability insurance
with coverage limits of $3 million. Our product liability insurance
does not cover certain liabilities, including without limitation, intended or
expected injury, injury of our own employee, injury or damage due to war, damage
to property that we own, damage to our work, certain contractual liabilities,
product recalls, patent infringements, pollution claims, or injury or damage
resulting from asbestos inhalation. We are responsible to pay the
first $10,000 resulting from any claim up to a maximum of $50,000 in one
year. We cannot assure that our product liability insurance will
provide adequate coverage against potential claims that might be made against
us. If we were to be subject to a claim in excess of our coverage or
to a claim not covered by our insurance and the claim succeeded, we would be
required to pay the claim from our limited resources, which would reduce our
limited capital resources and liquidity and reduce capital we could otherwise
use to obtain approvals for and market our products. In addition,
liability or alleged liability could harm our business by diverting the
attention and resources of our management and by damaging our
reputation.
We
are dependent upon key personnel, some of whom would be difficult to
replace.
Our
success will be largely dependent upon the efforts of Harold R. Wolcott, our
President, Paul F. Turner, our Senior Vice President and Chief Technology
Officer, and Dixie T. Sells, our Vice President of Regulatory Affairs, and other
key employees. We do not maintain key-person insurance on any of
these employees. Our future success also will depend in large part
upon our ability to identify, attract and retain other highly qualified
managerial, technical and sales and marketing personnel. Competition
for these individuals is intense. The loss of the services of any of
our key personnel, the inability to identify, attract or retain qualified
personnel in the future or delays in hiring qualified personnel could make it
more difficult for us to manage our business and meet key objectives such as the
sale of our products and the introduction of new products.
The
market for our stock is limited and our stock price may be
volatile.
The
market for our common stock has been limited due to low trading volume and the
small number of brokerage firms acting as market makers. Because of
the limitations of our market and volatility of the market price of our stock,
investors may face difficulties in selling shares at attractive prices when they
want to. The average daily trading volume for our stock has varied
significantly from week to week and from month to month, and the trading volume
often varies widely from day to day. The following factors could
impact the market for our stock and cause further volatility in our stock
price:
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·
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announcements
of new technological innovations;
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·
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FDA
and other regulatory developments;
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·
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changes
in third-party reimbursements;
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·
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developments
concerning proprietary rights;
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·
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third
parties receiving FDA approval for competing products;
and
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·
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market
conditions generally for medical and technology
stocks.
|
Our
directors and executive officers own a substantial number of shares of our
capital stock, which could discourage or prevent a takeover, even if an
acquisition would be beneficial to our stockholders.
Our
directors and executive officers own approximately 40% of our outstanding voting
power. Accordingly, these stockholders, individually and as a group,
may be able to influence the outcome of stockholder votes involving the election
of directors, the adoption or amendment of provisions in our certificate of
incorporation and bylaws and the approval of certain mergers or other similar
transactions, such as a sale of substantially all of our assets. Such
control by existing stockholders could have the effect of delaying, deferring or
preventing a change in control of our company.
Future
sales of shares of our securities may negatively affect our stock
price.
We are
unable to predict the effect, if any, that future sales of common stock, or the
availability of our common stock for future sales, will have on the market price
of our common shares from time to time. Sales of substantial amounts
of our common stock (including shares issued upon the exercise of stock options
or warrants), or the possibility of such sales, could adversely affect the
market price of our common stock and also impair our ability to raise capital
through an offering of our equity securities in the future. In the
future, we may issue additional shares or warrants in connection with
investments or for other purposes considered advisable by our Board of
Directors. Any substantial sale of our common shares may have an
adverse effect on the market price of our common shares.
In
addition, as of November 30, 2009, there were 1,057,240 shares of common stock
issuable upon the exercise of outstanding and exercisable stock options,
1,305,047 shares of common stock issuable upon the exercise of outstanding stock
options that are not yet exercisable and 559,281 additional shares available for
grant under our 1998 Stock Incentive Plan and 1998 Director Stock
Plan. The market price of the common shares may be depressed by the
potential exercise of these options. The holders of these options are
likely to exercise them when we would otherwise be able to obtain additional
capital on more favorable terms than those provided by the
options. Further, while the options are outstanding, we may be unable
to obtain additional financing on favorable terms.
We
currently also have the ability to offer and sell up to $50.0 million of common
stock, preferred stock, warrants, senior debt, subordinated debt or units under
a currently effective universal shelf registration statement, of which this
prospectus is a part. Sales of substantial amounts of shares of our
common stock or other securities under our universal shelf registration
statement could lower the market price of our common stock and impair our
ability to raise capital.
Anti-takeover
provisions in our certificate of incorporation may have a possible negative
effect on our stock price.
Certain
provisions of our certificate of incorporation and bylaws may make it more
difficult for a third party to acquire, or discourage a third party from
attempting to acquire, control of us. We have in place several
anti-takeover measures that could discourage or prevent a takeover, even if an
acquisition would be beneficial to our stockholders. The increased
difficulties faced by a third party who wishes to acquire us could adversely
affect our stock price.
We
do not anticipate paying dividends in the foreseeable future.
Since
inception, we have not paid any cash dividend on our common stock and do not
anticipate paying such dividends in the foreseeable future. The
payment of dividends is within the discretion of our Board of Directors and
depends upon our earnings, capital requirements, financial condition and
requirements, future prospects, restrictions in future financing agreements,
business conditions and other factors deemed relevant by the
Board. We intend to retain earnings and cash resources, if any, to
finance our operations and, therefore, it is highly unlikely we will pay cash
dividends.
This
prospectus supplement, the accompanying prospectus, and the documents
incorporated by reference contain forward-looking statements. These
are based on our management’s current beliefs, expectations and assumptions
about future events, conditions and results and on information currently
available to us. Discussions containing these forward-looking
statements may be found, among other places, in the Sections of this prospectus
summary entitled “Prospectus Summary” and “Risk Factors.” See also
“Forward-Looking Statements” in the accompanying prospectus. Within
the meaning of Section 27A of the Securities Act of 1933, as amended, (the
Securities Act), and Section 21E of the Securities Exchange Act of 1934, as
amended (the Exchange Act), these forward-looking statements include, but are
not limited to, statements about our business, technologies, prospects,
partners, customers, suppliers and regulatory strategies.
All
statements, other than statements of historical fact, included or incorporated
herein regarding our strategy, future operations, financial position, future
revenues, projected costs, plans, prospects and objectives are forward-looking
statements. In some cases, you can identify forward-looking
statements by terms such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,”
“will,” “would” and similar expressions. These statements involve
risks, uncertainties and other factors that may cause our actual results,
performance, time frames or achievements to be materially different from any
future results, performance, time frames or achievements expressed or implied by
the forward-looking statements. Risks, uncertainties and other
factors that might cause or contribute to such differences include, but are not
limited to, those discussed in the Section entitled “Risk Factors” in our most
recent Annual Report on Form 10-K and in our Quarterly Reports on
Form 10-Q, as well as any amendments thereto filed with the
SEC. Given these risks, uncertainties and other factors, many of
which are beyond our control, you should not place undue reliance on these
forward-looking statements.
In
addition, past financial and/or operating performance is not necessarily a
reliable indicator of future performance and you should not use our historical
performance to anticipate results or future period trends. We can
give no assurances that any of the events anticipated by the forward-looking
statements will occur or, if any of them do, what impact they will have on our
results of operations and financial condition. Except as required by
law, we assume no obligation to update these forward-looking statements
publicly, or to revise any forward-looking statements to reflect events or
developments occurring after the date of this prospectus, even if new
information becomes available in the future.
We
estimate that the net proceeds from the sale of the securities we are offering
will be approximately $1.8 million, assuming that we sell all of the securities
we are offering, after deducting the placement agent’s fees and estimated
offering expenses payable by us. This amount does not include the
proceeds that we may receive in connection with any exercise of the warrants
issued in this offering.
We
expect to use the proceeds from this offering for general
corporate purposes, including working capital, subject to any agreed upon
contractual restrictions under the terms of the purchase
agreement.
Although
we have identified some potential uses of the net proceeds to be received upon
completion of this offering, we cannot specify these uses with
certainty. Subject to any agreed upon contractual restrictions under
the terms of the purchase agreement, our management will have broad discretion
in the application of the net proceeds from this offering and could use them for
purposes other than those contemplated at the time of this
offering. Our stockholders may not agree with the manner in which our
management chooses to allocated and spend the net proceeds. Moreover,
our management may use the net proceeds for corporate purposes that may not
result in our being profitable or increase our market value.
Until we
use the net proceeds of this offering, we intend to invest the funds in
short-term, investment grade, interest-bearing
securities.
Purchasers
of shares of our common stock in this offering will suffer an immediate and
substantial dilution in net tangible book value per share. Net
tangible book value per share is total tangible assets, reduced by total
liabilities, divided by the total number of outstanding shares of common
stock. Our net tangible book value as of November 30, 2009 was
approximately $10.2 million, or approximately $0.46 per outstanding share of
common stock.
After
giving effect to the sale of the securities and the application of the net
proceeds therefrom at a public offering price of $1.70 per fixed combination of
securities (and excluding shares of common stock issued and any proceeds
received upon exercise of the warrants), our adjusted net tangible book value as
of November 30, 2009 would have been approximately $12.0 million, or
approximately $0.52 per share. This represents an immediate increase
in net tangible book value of $0.06 per share to our existing stockholders and
an immediate dilution of $1.18 per share to new investors. The
following table illustrates this calculation on a per share basis, assuming that
we sell all of the securities we are offering:
|
Public
offering price per fixed combination
|
|
$ |
1.70 |
|
|
Net
tangible book value per share as of November 30,
2009
|
|
$ |
0.46 |
|
|
Increase
in net tangible book value per share attributable to new
investors
|
|
$ |
0.06 |
|
|
Adjusted
net tangible book value per share as of November 30,
2009 after giving effect to this offering
|
|
$ |
0.52 |
|
|
Dilution
per share to new investors
|
|
$ |
1.18 |
|
Investors
that acquire additional shares of common stock through the exercise of the
warrants offered hereby may experience additional dilution depending on our net
tangible book value at the time of exercise.
The
amounts above are based on 22,039,301
shares of common stock outstanding as of November
30, 2009, and assume no exercise of outstanding options or warrants since
that date. The number of shares of common stock anticipated to be
outstanding after this offering excludes:
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|
·
|
573,825
shares of our common stock issuable upon the exercise of outstanding stock
options under our Fourth Amended and Restated 1998 Director Stock Plan,
having a weighted average exercise price of $5.18
per share;
|
|
|
·
|
236,952 shares
of our common stock reserved for future issuance under our Fourth Amended
and Restated 1998 Director Stock
Plan;
|
|
|
·
|
1,788,462
shares of our common stock issuable upon the exercise of outstanding stock
options under our Third Amended and Restated 1998 Stock Incentive Plan,
having a weighted average exercise price of $3.00
per share;
|
|
|
·
|
322,329
shares of our common stock reserved for future issuance under our Third
Amended and Restated 1998 Stock Incentive Plan;
and
|
|
|
·
|
882,354
shares of common stock issuable upon the exercise of warrants to be issued
in this offering, at an exercise price of $2.04 per
share.
|
To the
extent that any of our outstanding options or warrants are exercised, we grant
additional options under our stock option plans or issue additional warrants, or
we issue additional shares of common stock in the future, there may be further
dilution to new investors.
In this
offering, we are offering a maximum of up to 1,176,471 shares of our common
stock and warrants to purchase up to an additional 882,354 shares of our common
stock, as well as 882,354 shares of common stock that are issuable upon exercise
of the warrants. The securities will be sold in multiples of a fixed combination
consisting of one share of common stock and a warrant to purchase 0.75 shares of
common stock, at an initial exercise price of $2.04. We are offering
the fixed combination at a negotiated price of $1.70 per fixed combination.
Common
Stock
The
following description of our common stock is a summary. It is not
complete and is subject to and qualified in its entirety by our Amended and
Restated Certificate of Incorporation and Bylaws, as amended, a copy of each of
which has been incorporated as an exhibit to the registration statement of which
this prospectus supplement forms a part.
As
of the date of this prospectus supplement, our certificate of incorporation
authorizes us to issue 40,000,000 shares of common stock, par value $0.001 per
share, and 10,000,000 shares of preferred stock, par value $0.001 per
share. As of February
11, 2010, 22,039,301
shares of common stock were outstanding and no shares of preferred stock were
outstanding.
The
material terms and provisions of our common stock are described under the
caption "Description of Capital Stock" starting on page 8 of the accompanying
prospectus.
Warrants
The
material terms and provisions of the warrants being offered pursuant to this
prospectus supplement and the accompanying prospectus are summarized
below. The summary is subject to, and qualified in its entirety by,
the form of warrant which will be provided to each purchaser in this offering
and will be filed as an exhibit to a Current Report on Form 8-K with the SEC in
connection with this offering.
Each
purchaser will receive, for each fixed combination purchased, one share of our
common stock and a warrant representing the right to purchase 0.75 shares of
common stock at an initial exercise price of $2.04 per share of common
stock. The warrants will be exercisable on or after the date that is
six months and one day after the date the warrants are issued and will terminate
on the fifth anniversary of the date the warrants become
exercisable. The exercise price and the number of shares for which
each warrant may be exercised is subject to appropriate adjustment in the event
of stock dividends, stock splits, reorganizations or similar events affecting
our common stock and the exercise price of warrants held by a purchaser (or such
purchaser’s direct or indirect transferee) is subject to appropriate adjustment
in the event of cash dividends or other distributions to holders of shares of
our common stock.
There is
no established public trading market for the warrants, and we do not expect a
market to develop. We do not intend to apply to list the warrants on
any securities exchange. Without an active market, the liquidity of
the warrants will be limited. In addition, in the event our common
stock price does not exceed the per share exercise price of the warrants during
the period when the warrants are exercisable, the warrants will not have any
value.
Holders
of the warrants may exercise their warrants to purchase shares of our common
stock by delivering an exercise notice, appropriately completed and duly
signed. Payment of the exercise price for the number of shares for
which the warrant is being exercised is required to be delivered within one
trading day after exercise of the warrant. In the event that the
registration statement relating to the warrant shares is not effective, a holder
of warrants will have the right to exercise its warrants for a net number of
warrant shares pursuant to the cashless exercise procedures specified in the
warrants. Warrants may be exercised in whole or in part, and any
portion of a warrant not exercised prior to the termination date shall be and
become void and of no value. The absence of an effective registration statement
or applicable exemption from registration does not alleviate our obligation to
deliver common stock issuable upon exercise of a warrant.
Upon the
holder’s exercise of a warrant, we will issue the shares of common stock
issuable upon exercise of the warrant within three trading days of our receipt
of notice of exercise.
The
shares of common stock issuable on exercise of the warrants will be, when issued
in accordance with the warrants, duly and validly authorized, issued and fully
paid and non-assessable. We will authorize and reserve at least that number of
shares of common stock equal to the number of shares of common stock issuable
upon exercise of all outstanding warrants.
If, at
any time warrants are outstanding, we consummate any fundamental transaction, as
described in the warrants and generally including any consolidation or merger
into another corporation, the consummation of a transaction whereby another
entity acquires more than 50% of our outstanding voting stock, or the sale of
all or substantially all of our assets, the holder of any warrants will
thereafter receive upon exercise of the warrants, the securities or other
consideration to which a holder of the number of shares of common stock then
deliverable upon the exercise of such warrants would have been entitled upon
such consolidation or merger or other transaction. Furthermore, we
cannot enter into a fundamental transaction unless the successor entity assumes
in writing all of our obligations to the warrant holders.
Additionally,
in the event of a fundamental transaction, each warrant holder will have the
right to require us, or our successor, to repurchase its warrant for an amount
of cash equal to the Black-Scholes value of the remaining unexercised portion of
the warrant on the date of the consummation of such fundamental
transaction.
The
exercisability of the warrants may be limited in certain circumstances if, upon
exercise, the holder or any of its affiliates would beneficially own more than
4.9% of our common stock.
THE HOLDER OF A WARRANT WILL NOT
POSSESS ANY RIGHTS AS A STOCKHOLDER UNDER THAT WARRANT UNTIL THE HOLDER
EXERCISES THE WARRANT. THE WARRANTS MAY BE TRANSFERRED INDEPENDENT OF THE COMMON
STOCK WITH WHICH THEY WERE ISSUED, SUBJECT TO APPLICABLE
LAWS.
Placement
Agency Agreement and Securities Purchase Agreement
Roth
Capital Partners, LLC, which we refer to as the placement agent, has agreed to
act as the exclusive placement agent in connection with this offering subject to
the terms and conditions of a placement agency agreement dated as of February
11, 2010. The placement agent is not purchasing or selling any
securities offered by this prospectus supplement, nor is it required to arrange
the purchase or sale of any specific number or dollar amount of securities, but
it has agreed to use its reasonable efforts to arrange for the sale of all of
the securities offered hereby. Therefore, we will enter into a
securities purchase agreement directly with purchasers in connection with this
offering.
The
placement agent proposes to arrange for the sale to one or more purchasers of
the securities offered pursuant to this prospectus supplement through a
securities purchase agreement between the purchasers and us. We will
enter into a securities purchase agreement with the purchasers pursuant to which
we will sell to the purchasers 1,176,471 shares of our common stock, and
warrants to purchase up to an additional 882,354 shares of our common stock, at
a price of $1.70 per fixed combination. Each fixed combination
consists of one share of our common stock and a warrant to purchase 0.75 shares
of our common stock at an initial exercise price of $2.04 per
share. We negotiated the price for the fixed combination offered in
this offering with the purchasers. The factors considered in
determining the price included the recent market price of our common stock, the
general condition of the securities market at the time of this offering, the
history of, and the prospects, for the industry in which we compete, our past
and present operations, and our prospects for future
revenues.
The
placement agent may be deemed to be an underwriter within the meaning of Section
2(a)(11) of the Securities Act, and any fees or commissions received by it and
any profit realized on the resale of securities sold by it while acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. As an underwriter, the placement agent is required to
comply with the requirements of the Securities Act and the Exchange Act,
including, without limitation, Rule 415(a)(4) under the Securities Act and Rule
10b-5 and Regulation M under the Exchange Act. These rules and
regulations may limit the timing of purchases and sales of shares of common
stock and warrants by the placement agent. Under these rules and
regulations, the placement agent:
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·
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may
not engage in any stabilization activity in connection with our
securities; and
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|
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·
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may not bid for or purchase any of our securities or attempt to induce
any person to purchase any of our securities, other than as permitted
under the Exchange Act, until it has completed its participation in the
distribution. |
From time
to time in the ordinary course of their respective businesses, the placement
agent or its affiliates have in the past or may in the future engage in
investment banking and/or other services with us and our affiliates for which it
has or may in the future receive customary fees and expenses.
Under the
securities purchase agreement, we will also agree with the purchasers that while
the warrants are outstanding, we will not effect or enter into an agreement to
effect a “Variable Rate Transaction,” which means a transaction in which
we:
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|
·
|
issue
or sell any convertible securities either (A) at a conversion, exercise or
exchange rate or other price that is based upon and/or varies with the
trading prices of, or quotations for, the shares of our common stock at
any time after the initial issuance of such convertible securities, or (B)
with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such convertible
securities or upon the occurrence of specified or contingent events
directly or indirectly related to our business or the market for our
common stock, other than pursuant to a customary “weighted average”
anti-dilution provision; or
|
|
|
·
|
enter
into any agreement (including, without limitation, an equity line of
credit) whereby we may sell securities at a future determined price (other
than standard and customary “preemptive” or “participation”
rights).
|
We will
agree with the purchasers that if we issue securities within the 12 months
following the closing of this offering, the purchasers shall have the right to
purchase all of the securities on the same terms, conditions and price provided
for in the proposed issuance of securities.
We will
also agree to indemnify the purchasers against certain losses resulting from our
breach of any of our representations, warranties, or covenants under agreements
with the purchasers as well as under certain other circumstances described in
the securities purchase agreement.
We have
agreed to indemnify the placement agent against liabilities under the Securities
Act of 1933, as amended. We have also agreed to contribute to
payments the placement agent may be required to make in respect of such
liabilities.
Fees
The
placement agent will be entitled to a cash fee of 6.5% of the gross proceeds
paid to us for the securities we sell in this offering. We will also
reimburse the placement agent for all reasonable and documented out-of-pocket
expenses that have been incurred by the placement agent in connection with the
offering, which shall not exceed the lesser of (i) $75,000, less a $25,000 cash
advance for expenses, or (ii) 8% of the gross proceeds received by us from the
sale of the common stock and warrants, less the placement agent’s placement fee
of 6.5% and the $25,000 cash advance for expenses. In addition, all
placement agent expenses over $75,000 require consent from us for
reimbursement.
The
following table shows the per fixed combination and total placement agency fees
we will pay to the placement agent in connection with the sale of the securities
offered pursuant to this prospectus supplement assuming the purchase of all of
the securities offered hereby:
|
Placement
agency fees per fixed combination
|
|
$ |
0.11 |
|
|
Total
|
|
$ |
130,000 |
|
Because
there is no minimum offering amount required, the actual total placement agency
fees, if any, are not presently determinable and may be substantially less than
the maximum amount set forth above. The maximum fees to be received
by any member of the Financial Industry Regulatory Association, or FINRA, or
independent broker-dealer may not be greater than 8% of the initial gross
proceeds from the sale of any securities being offered hereby.
The sale
of up to 1,176,417 shares of common stock and warrants to purchase up to 882,354
shares of common stock will be completed on or about February 17,
2010. We estimate the total offering expenses of this offering that
will be payable by us, excluding the placement agency fees, will be
approximately $90,000, which include legal and printing costs, various other
fees and reimbursement of the placement agent’s expenses. At the
closing, The Depository Trust Company will credit the shares of common stock to
the respective accounts of the investors. We will mail warrants
directly to the investors at the respective addresses set forth in the
securities purchase agreement.
Restrictions
on Future Issuances of Securities
In the
securities purchase agreement, we will agree, subject to certain exceptions,
that we will not within 30 trading days following the close of this offering
(which period may be extended in certain circumstances), directly or indirectly
issue, offer, sell, grant any option or right to purchase, or otherwise dispose
of (or announce any issuance, offer, sale, grant of any option or right to
purchase or other disposition of) any equity security or any equity-linked or
related security, any convertible security, any debt, any preferred stock or any
purchase rights subject to certain exceptions,
including:
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·
|
the
issuance of employee stock options or shares of restricted stock pursuant
to equity compensation plans; and
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|
·
|
issuances
of shares of our common stock upon the exercise of convertible
securities.
|
The
foregoing does not purport to be a complete statement of the terms and
conditions of the placement agency agreement and securities purchase
agreement. Copies of the placement agency agreement and the
securities purchase agreement will be included as exhibits to our current report
on Form 8-K that will be filed with the SEC and incorporated by reference into
the Registration Statement of which this prospectus supplement forms a
part. See “Where You Can Find More Information” on page
S-16.
Certain
legal matters in connection with the offering and the validity of the securities
offered by this prospectus supplement will be passed upon for us by Dorsey &
Whitney LLP. Lowenstein Sandler PC, Roseland, New Jersey, is acting
as counsel for the placement agent in connection with various matters relating
to the securities offered hereby.
Tanner
LC, independent registered public accountants, have audited our financial
statements and the effectiveness of our internal control over financial
reporting incorporated by reference in this prospectus for the year ended August
31, 2009, as set forth in their report which is incorporated by reference in
this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Tanner LC’s
report, given on their authority as experts in accounting and
auditing.
We are a
reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. We have filed with the
SEC a registration statement on Form S-3 under the Securities Act with respect
to the securities we are offering under this prospectus supplement and the
accompanying prospectus. This prospectus supplement and the
accompanying prospectus do not contain all of the information set forth in the
registration statement and the exhibits to the registration
statement. For further information with respect to us and the
securities we are offering under this prospectus supplement and the accompanying
prospectus, we refer you to the registration statement and the exhibits and
schedules filed as a part of the registration statement. You may read
and copy the registration statement, as well as our reports, proxy statements
and other information, at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You can request copies of these documents by
writing to the SEC and paying a fee for the copying cost. Please call
the SEC at 1-800-SEC-0330 for more information about the operation of the Public
Reference Room. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, where our SEC filings are also
available. The address of the SEC’s web site is
“http://www.sec.gov.” We maintain a website at
www.bsdmc.com. Information contained in or accessible through our
website does not constitute a part of this prospectus.
The SEC
allows us to “incorporate by reference” information that we file with it into
this prospectus supplement and the accompanying prospectus, 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 supplement and the accompanying
prospectus. The information incorporated by reference is considered
to be a part of this prospectus supplement and the accompanying prospectus, and
information that we file later with the Commission will automatically update and
supersede information contained in this prospectus supplement and the
accompanying prospectus. We incorporate by reference the documents listed
below that we have previously filed with the Commission:
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Our
Annual Report on Form 10-K for the year ended August 31,
2009;
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the
information specifically incorporated by reference into our Annual Report
on Form 10-K for the year ended August 31, 2009 from our definitive proxy
statement on Schedule 14A filed with the SEC on December 28, 2009;
and
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our
Quarterly Report on Form 10-Q for the quarterly period ended November 30,
2009;
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our
current reports on Form 8-K filed with the SEC on February 9, 2010 and
February 11, 2010; and
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the
description of the Company’s Common Stock, par value $0.001 per share, as
contained in Item 1 of the Registration Statement on Form 8-A filed on
April 22, 2008, including any amendment or report filed for the purpose of
updating such description.
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We also
incorporate by reference into this prospectus additional documents that we may
file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act, excluding, in each case, information deemed furnished and not filed, until
we sell all of the securities we are offering or the termination of the
offering. Any statements contained in a previously filed document
incorporated by reference into this prospectus is deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus, or in a subsequently filed document also
incorporated by reference herein, modifies or supersedes that
statement.
We will
provide to each person, including any beneficial owner, to whom a prospectus is
delivered, without charge upon written or oral request, a copy of any or all of
the information that has been incorporated by reference into this prospectus but
not delivered with the prospectus, including exhibits that are specifically
incorporated by reference into such documents. Requests should be
directed to: BSD Medical Corporation, Attention: Investor
Relations, 2188 West 2200 South, Salt Lake City, UT 84119,
telephone: (801) 972-5555.
1,176,471
Shares of Common Stock
Warrants
to Purchase 882,354 Shares of Common Stock
882,354
Shares of Common Stock Issuable Upon Exercise of the Warrants
BSD
MEDICAL CORPORATION
PROSPECTUS
SUPPLEMENT
Roth
Capital Partners
February 11,
2010
$50,000,000
COMMON
STOCK, PREFERRED STOCK,
DEBT
SECURITIES,
WARRANTS
AND UNITS
BSD
MEDICAL CORPORATION
From time
to time, we may offer up to $50,000,000 of any combination of the securities
described in this prospectus, either individually or in units.
This
prospectus provides a general description of the securities we may
offer. Each time we sell securities, we will provide specific terms
of the securities offered in a supplement to this prospectus. We may
also authorize one or more free writing prospectuses to be provided to you in
connection with these offerings. The prospectus supplement and any
related free writing prospectus may also add, update or change information
contained in this prospectus. You should carefully read this
prospectus, the applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference before you invest
in any securities. This prospectus may not be used to consummate a
sale of securities unless accompanied by the applicable prospectus
supplement.
Our
common stock is listed on The Nasdaq Global Market under the symbol “BSDM.” On
September 22, 2009, the last reported sale price for our common stock was $3.83
per share. The applicable prospectus supplement will contain
information, where applicable, as to any other listing on The Nasdaq Global
Market or any securities market or other exchange of the securities, if any,
covered by the prospectus supplement.
INVESTING
IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD REVIEW CAREFULLY THE
RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING "RISK FACTORS" ON PAGE
5 AND CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT AND ANY RELATED FREE
WRITING PROSPECTUS AND UNDER SIMILAR HEADINGS IN THE OTHER DOCUMENTS THAT ARE
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
We will
sell these securities directly to investors, through agents designated from time
to time or to or through underwriters or dealers. For additional
information on the methods of sale, you should refer to the section entitled
“Plan of Distribution” in this prospectus. If any underwriters are
involved in the sale of any securities with respect to which this prospectus is
being delivered, the names of such underwriters and any applicable commissions
or discounts will be set forth in a prospectus supplement. The price
to the public of such securities and the net proceeds we expect to receive from
such sale will also be set forth in a prospectus supplement.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date
of this prospectus is October 1, 2009
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This
prospectus is a part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, utilizing a “shelf” registration
process. Under this shelf registration process, we may sell any
combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $50,000,000. This prospectus
provides you with a general description of the securities we may
offer. Each time we sell securities under this shelf registration, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. We may also authorize one or more
free writing prospectuses to be provided to you that may contain material
information relating to these offerings. The prospectus supplement
and any related free writing prospectus that we may authorize to be provided to
you may also add, update or change information contained in this prospectus or
in any documents that we have incorporated by reference into this
prospectus. You should read this prospectus, any applicable
prospectus supplement and any related free writing prospectus, together with the
information incorporated herein by reference as described under the heading
“Incorporation by Reference.”
You
should rely only on the information that we have provided or incorporated by
reference in this prospectus, any applicable prospectus supplement and any
related free writing prospectus that we may authorize to be provided to
you. We have not authorized any dealer, salesman or other person to
give any information or to make any representation other than those contained or
incorporated by reference in this prospectus, any applicable prospectus
supplement or any related free writing prospectus that we may authorize to be
provided to you. You must not rely upon any information or
representation not contained or incorporated by reference in this prospectus or
the accompanying prospectus supplement. This prospectus and the
accompanying supplement to this prospectus do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the registered
securities to which they relate, nor do this prospectus and the accompanying
supplement to this prospectus constitute an offer to sell or the solicitation of
an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. You
should not assume that the information contained in this prospectus, any
applicable prospectus supplement or any related free writing prospectus is
accurate on any date subsequent to the date set forth on the front of the
document or that any information we have incorporated by reference is correct on
any date subsequent to the date of the document incorporated by reference, even
though this prospectus, any applicable prospectus supplement or any related free
writing prospectus is delivered or securities sold on a later date.
Prospectus
Summary
This
summary highlights selected information from this prospectus and does not
contain all of the information that you need to consider in making your
investment decision. You should carefully read the entire prospectus,
including the risks of investing discussed under “Risk Factors” beginning on
page 5, the information incorporated by reference, including our financial
statements, and the exhibits to the registration statement of which this
prospectus is a part.
Throughout
this prospectus, references to “BSD,” the “Company,” “we,” “us,” and “our” refer
to BSD Medical Corporation.
Our
Company
We
develop, manufacture, market and service medical systems that deliver
precision-focused radio frequency (RF) or microwave energy into diseased sites
of the body, heating them to specified temperatures as required by a variety of
medical therapies. Our business objectives are to commercialize our
products developed for the treatment of cancer and to further expand our systems
to treat other diseases and medical conditions. Our product line for
cancer therapy has been created to offer hospitals and clinics a complete
solution for thermal treatment for cancer provided through microwave/RF
systems.
While our
primary developments to date have been cancer treatment systems, we also
pioneered the use of microwave thermal therapy for the treatment of symptoms
associated with enlarged prostate, and we are responsible for technology that
has contributed to a new medical industry addressing the needs of men’s health.
In accordance with our strategic plan, we subsequently sold our interest in
TherMatrx, Inc., the company established to commercialize our technology to
treat enlarged prostate symptoms, to provide substantial funding that we can
utilize for commercializing our systems used in the treatment of cancer and in
achieving other business objectives.
Our
product line includes systems that have been strategically designed to offer a
range of thermal treatment systems for the treatment of cancer, including both
hyperthermia and ablation treatment systems. Studies have shown that both
hyperthermia and ablation treatments kill cancer but they have different
clinical applications.
Our
hyperthermia cancer treatment systems are used to treat cancer with heat
(hyperthermia) while boosting the effectiveness of radiation through a number of
biological mechanisms. Hyperthermia is usually used to increase the
effectiveness of other therapies; e.g., radiation therapy and chemotherapy for
the treatment of locally advanced cancers. Hyperthermia usually
refers to treatments delivered at temperatures of 40-49°C for one
hour.
Our
microwave ablation system is to be used to ablate (remove or vaporize) soft tissue with heat
alone. Thermal ablation usually refers to heat treatments delivered
at temperatures above 55°C for short periods of time. Thermal
ablation is used to destroy local tumors using a short intense focus of heat on
a specific area, which is usually small, similar to surgical removal of the
tumor.
Our
primary mission is to develop the full spectrum of medical uses for our special
competence in precision-focused RF/microwave systems, and to broadly apply the
utilization of our technology to treat cancer and benign diseases and
conditions.
Our
principal executive offices are located at 2188 West 2200 South, Salt Lake City,
Utah 84101, and our telephone number is (801) 972-5555.
The
Securities We May Offer
We may
offer shares of our common stock and preferred stock, various series of debt
securities and warrants to purchase any of such securities, either individually
or in units, with a total value of up to $50 million from time to time under
this prospectus, together with any applicable prospectus supplement and related
free writing prospectus, at prices and on terms to be determined by market
conditions at the time of offering. This prospectus provides you with
a general description of the securities we may offer. Each time we
offer a type or series of securities, we will provide a prospectus supplement
that will describe the specific amounts, prices and other important terms of the
securities, including, to the extent applicable:
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designation
or classification;
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aggregate
principal amount or aggregate offering
price;
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maturity,
if applicable;
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original
issue discount, if any;
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rates
and times of payment of interest or dividends, if
any;
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redemption,
conversion, exchange or sinking fund terms, if
any;
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conversion
or exchange prices or rates, if any, and, if applicable, any provisions
for changes to or adjustments in the conversion or exchange prices or
rates and in the securities or other property receivable upon conversion
or exchange;
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restrictive
covenants, if any;
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voting
or other rights, if any; and
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important
United States federal income tax
considerations.
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A
prospectus supplement and any related free writing prospectus that we may
authorize to be provided to you may also add, update or change information
contained in this prospectus or in documents we have incorporated by
reference. However, no prospectus supplement or free writing
prospectus will offer a security that is not registered and described in this
prospectus at the time of the effectiveness of the registration statement of
which this prospectus is a part.
We may
sell the securities directly to or through underwriters, dealers or
agents. We, and our underwriters or agents, reserve the right to
accept or reject all or part of any proposed purchase of
securities. If we do offer securities through underwriters or agents,
we will include in the applicable prospectus supplement:
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the
names of those underwriters or
agents;
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applicable
fees, discounts and commissions to be paid to
them;
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details
regarding over-allotment options, if any;
and
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the
net proceeds to us.
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Common
Stock. We may offer shares of our common stock from time to
time. Holders of our common stock are entitled to one vote per share
on all matters that require stockholder approval. Subject to any
preferential rights of any outstanding preferred stock, holders of our common
stock are entitled to dividends when and if declared by the board of
directors. Our common stock is described in greater detail in this
prospectus under “Description of Capital Stock — Common Stock.”
Preferred
Stock. We currently have authorized 10,000,000 shares of
preferred stock, $0.001 par value per share. We may offer shares of
our preferred stock from time to time, in one or more series. Under
our certificate of incorporation, our board of directors currently has the
authority to designate the shares of preferred stock in one or more series and
to fix the privileges, preferences and rights of each series of preferred stock,
any or all of which may be greater than the rights of the common
stock. Our Preferred Stock is described in greater detail in this
prospectus under “Description of Capital Stock — Preferred
Stock.”
We will
fix the rights, preferences, privileges, qualifications and restrictions of the
preferred stock of each series that we sell under this prospectus and applicable
prospectus supplements in the certificate of designation relating to that
series. We will incorporate by reference into the registration
statement of which this prospectus is a part the form of any certificate of
designation that describes the terms of the series of preferred stock we are
offering before the issuance of the related series of preferred
stock. We urge you to read the prospectus supplements and any free
writing prospectus that we may authorize to be provided to you related to the
series of preferred stock being offered, as well as the complete certificate of
designation that contains the terms of the applicable series of preferred
stock.
Debt
Securities. We may offer debt securities from time to time, in
one or more series, as either senior or subordinated debt or as senior or
subordinated convertible debt. The debt securities will be issued
under one or more documents called indentures, which are contracts between us
and a trustee for the holders of the debt securities. In this
prospectus, we have summarized certain general features of the debt securities
under “Description of Debt Securities.” We urge you, however, to read the
prospectus supplements and any free writing prospectus that we may authorize to
be provided to you related to the series of debt securities being offered, as
well as the complete indentures that contain the terms of the debt
securities. Forms of indentures have been filed as exhibits to the
registration statement of which this prospectus is a part, and supplemental
indentures and forms of debt securities containing the terms of debt securities
being offered will be filed as exhibits to the registration statement of which
this prospectus is a part, or incorporated by reference from a current report on
Form 8-K that we file with the SEC.
Warrants. We
may offer warrants for the purchase of our common stock, preferred stock and/or
debt securities in one or more series, from time to time. We may
issue warrants independently or together with common stock, preferred stock
and/or debt securities, and the warrants may be attached to or separate from
those securities.
The
warrants will be evidenced by warrant certificates issued under one or more
warrant agreements, which are contracts between us and an agent for the holders
of the warrants. In this prospectus, we have summarized certain
general features of the warrants under “Description of Warrants.” We urge you,
however, to read the prospectus supplements and any free writing prospectus that
we may authorize to be provided to you related to the series of warrants being
offered, as well as the complete warrant agreements and warrant certificates
that contain the terms of the warrants. Specific warrant agreements
will contain additional important terms and provisions and will be filed as
exhibits to the registration statement of which this prospectus is a part, or
incorporated by reference from a current report on Form 8-K that we file with
the SEC.
Units. We
may offer units consisting of common stock, preferred stock, debt securities
and/or warrants to purchase any of such securities in one or more
series. In this prospectus, we have summarized certain general
features of the units under “Description of Units.” We urge you, however, to
read the prospectus supplements and any free writing prospectus that we may
authorize to be provided to you related to the series of units being offered, as
well as the unit agreements that contain the terms of the units. We
will file as exhibits to the registration statement of which this prospectus is
a part, or will incorporate by reference from a current report on Form 8-K
that we file with the SEC, the form of unit agreement and any supplemental
agreements that describe the terms of the series of units we are offering before
the issuance of the related series of units.
We will
evidence each series of units by unit certificates that we will issue under a
separate agreement. We will enter into the unit agreements with a
unit agent. Each unit agent will be a bank or trust company that we
select. We will indicate the name and address of the unit agent in
the applicable prospectus supplement relating to a particular series of
units.
THIS
PROSPECTUS MAY NOT BE USED TO OFFER OR SELL ANY SECURITIES UNLESS ACCOMPANIED BY
A PROSPECTUS SUPPLEMENT.
An
investment in our securities involves a high degree of risk. The
prospectus supplement applicable to each offering of our securities will contain
a discussion of the risks applicable to an investment in our securities.
Prior to making a decision about investing in our securities, you should
carefully consider the specific factors discussed under the heading “Risk
Factors” in the applicable prospectus supplement, together with all of the other
information contained or incorporated by reference in the prospectus supplement
or appearing or incorporated by reference in this prospectus. You should
also consider the risks, uncertainties and assumptions discussed under Item 1A,
“Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended
August 31, 2008, and our Quarterly Reports on Form 10-Q for the quarterly
periods ended November 30, 2008, February 28, 2009 and May 31, 2009,
all of which are incorporated herein by reference, and may be amended,
supplemented or superseded from time to time by other reports we file with the
Securities and Exchange Commission in the future. The risks and
uncertainties we have described are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we currently deem
immaterial may also affect our operations.
This
prospectus and the documents incorporated by reference contain forward-looking
statements. These are based on our management’s current beliefs,
expectations and assumptions about future events, conditions and results and on
information currently available to us. Discussions containing these
forward-looking statements may be found, among other places, in the Sections
entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” incorporated by reference from
our most recent Annual Report on Form 10-K and in our Quarterly Reports on
Form 10-Q, as well as any amendments thereto, filed with the
SEC. Within the meaning of Section 27A of the Securities Act of
1933, as amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, these forward-looking
statements include, but are not limited to, statements about our business,
technologies, prospects, partners, customers, suppliers and regulatory
strategies.
All
statements, other than statements of historical fact, included or incorporated
herein regarding our strategy, future operations, financial position, future
revenues, projected costs, plans, prospects and objectives are forward-looking
statements. In some cases, you can identify forward-looking
statements by terms such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,”
“will,” “would” and similar expressions. These statements involve
risks, uncertainties and other factors that may cause our actual results,
performance, time frames or achievements to be materially different from any
future results, performance, time frames or achievements expressed or implied by
the forward-looking statements. Risks, uncertainties and other
factors that might cause or contribute to such differences include, but are not
limited to, those discussed in the Section entitled “Risk Factors” in our most
recent Annual Report on Form 10-K and in our Quarterly Reports on
Form 10-Q, as well as any amendments thereto filed with the
SEC. Given these risks, uncertainties and other factors, many of
which are beyond our control, you should not place undue reliance on these
forward-looking statements.
Except as
required by law, we assume no obligation to update these forward-looking
statements publicly, or to revise any forward-looking statements to reflect
events or developments occurring after the date of this prospectus, even if new
information becomes available in the future.
Except as
described in any applicable prospectus supplement and in any free writing
prospectuses in connection with a specific offering, we currently intend to use
the net proceeds from the sale of the securities offered hereby for operating
costs, capital expenditures and for general corporate purposes, including
working capital. We may also use a portion of the net proceeds to
invest in or acquire businesses or technologies that we believe are
complementary to our own, although we have no current plans, commitments or
agreements with respect to any acquisitions as of the date of this
prospectus. Pending these uses, we intend to invest the net proceeds
in investment-grade, interest-bearing securities.
As of the
date of this prospectus, our certificate of incorporation authorizes us to issue
40,000,000 shares of common stock, par value $0.001 per share, and 10,000,000
shares of preferred stock, par value $0.001 per share. As of August
31, 2009, 22,039,301 shares of common stock were outstanding and no shares of
preferred stock were outstanding.
The
following description of our capital stock is a summary. It is not
complete and is subject to and qualified in its entirety by our Amended and
Restated Certificate of Incorporation and Bylaws, as amended, a copy of each of
which has been incorporated as an exhibit to the registration statement of which
this prospectus forms a part.
Our
Amended and Restated Certificate of Incorporation and Bylaws contain certain
provisions that are intended to enhance the likelihood of continuity and
stability in the composition of the board of directors, which may have the
effect of delaying, deferring or preventing a future takeover or change in
control of BSD unless such takeover or change in control is approved by our
board of directors.
Common
Stock
Holders
of common stock are entitled to one vote per share on all matters to be voted
upon by the stockholders. Holders of common stock do not have
cumulative voting rights, and, therefore, holders of a majority of the shares
voting for the election of directors can elect all of the
directors. In such event, the holders of the remaining shares will
not be able to elect any directors. Subject to preferences that may
be applicable to any then-outstanding preferred stock, holders of common stock
are entitled to receive such dividends as may be declared from time to time by
our board of directors out of funds legally available therefore. We
have never declared or paid cash dividends on our capital stock. We
expect to retain future earnings, if any, for use in the operation and expansion
of our business, and do not anticipate paying any cash dividends in the
foreseeable future.
In the
event of our liquidation, dissolution or winding up, holders of common stock are
entitled to share ratably in all assets legally available for distribution after
payment of all debts and other liabilities and subject to the prior rights of
the holders of any preferred stock then outstanding. Holders of
common stock have no preemptive or other subscription or conversion rights, and
there are no redemption or sinking fund provisions applicable to the common
stock.
All
outstanding shares of common stock are, and all shares of common stock to be
outstanding upon the closing of this offering will be, fully paid and
nonassessable.
Additional
shares of authorized common stock may be issued, as authorized by our board of
directors from time to time, without stockholder approval, except as may be
required by applicable stock exchange requirements.
The
transfer agent and registrar for our common stock is OTC Stock Transfer,
Inc. Our common stock is listed on The Nasdaq Global Market under the
symbol “BSDM”.
Preferred
Stock
As of the
date of this prospectus, there were no shares of preferred stock
outstanding. Our Amended and Restated Certificate of Incorporation
authorizes 10,000,000 shares of undesignated preferred stock. Our
board of directors will have the authority, without any further vote or action
by our stockholders, to issue from time to time the preferred stock in one or
more series and to fix the price, rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting a series or the designation of
such series. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could decrease the amount of earnings and assets available
for distribution to holders of common stock or adversely affect the rights and
powers, including voting rights, of the holders of common stock, and may have
the effect of delaying, deferring or preventing a change in control without
further action by the stockholders. We have no current plans to issue
any shares of preferred stock.
Future Preferred
Stock. Our board of directors will fix the rights,
preferences, privileges, qualifications and restrictions of the preferred stock
of each series that we sell under this prospectus and applicable prospectus
supplements in the certificate of designation relating to that
series. We will file as an exhibit to the registration statement of
which this prospectus is a part, or incorporate by reference into the
registration statement of which this prospectus is a part the form of any
certificate of designation that describes the terms of the series of preferred
stock we are offering before the issuance of the related series of preferred
stock. This description will include:
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the
title and stated value;
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the
number of shares we are offering;
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the
liquidation preference per share;
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the
purchase price per share;
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the
dividend rate per share, dividend period and payment dates and method of
calculation for dividends;
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whether
dividends will be cumulative or non-cumulative and, if cumulative, the
date from which dividends will
accumulate;
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our
right, if any, to defer payment of dividends and the maximum length of any
such deferral period;
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the
procedures for any auction and remarketing, if
any;
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the
provisions for a sinking fund, if
any;
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the
provisions for redemption or repurchase, if applicable, and any
restrictions on our ability to exercise those redemption and repurchase
rights;
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any
listing of the preferred stock on any securities exchange or
market;
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whether
the preferred stock will be convertible into our common stock or other
securities of ours, including warrants, and, if applicable, the conversion
period, the conversion price, or how it will be calculated, and under what
circumstances it may be adjusted;
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whether
the preferred stock will be exchangeable into debt securities, and, if
applicable, the exchange period, the exchange price, or how it will be
calculated, and under what circumstances it may be
adjusted;
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voting
rights, if any, of the preferred
stock;
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preemption
rights, if any;
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restrictions
on transfer, sale or other assignment, if
any;
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a
discussion of any material or special United States federal income tax
considerations applicable to the preferred
stock;
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the
relative ranking and preferences of the preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our
affairs;
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any
limitations on issuances of any class or series of preferred stock ranking
senior to or on a parity with the series of preferred stock being issued
as to dividend rights and rights if we liquidate, dissolve or wind up our
affairs; and
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any
other specific terms, rights, preferences, privileges, qualifications or
restrictions of the preferred
stock.
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When we
issue shares of preferred stock under this prospectus, the shares will be fully
paid and nonassessable and will not have, or be subject to, any preemptive or
similar rights.
The
General Corporation Law of the State of Delaware, the state of our
incorporation, provides that the holders of preferred stock will have the right
to vote separately as a class on any proposal involving fundamental changes in
the rights of holders of that preferred stock. This right is in
addition to any voting rights that may be provided for in the applicable
certificate of designation.
Antitakeover
Effects of Provisions of Charter Documents and Delaware Law
Certain
provisions of our Amended and Restated Certificate of Incorporation and Bylaws
could make the following more difficult:
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acquisition
of us by means of a tender offer;
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acquisition
of us by means of a proxy contest or otherwise;
and
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the
removal of our incumbent officers and
directors.
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These
provisions, summarized below, are expected to discourage coercive takeover
practices and inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of us to first
negotiate with our board of directors. We believe that the benefits
of increased protection resulting from our potential ability to negotiate with
the proponent of an unfriendly or unsolicited proposal to acquire or restructure
us outweigh the disadvantages of discouraging such proposals because we believe
that the negotiation of such proposals could result in an improvement of their
terms.
Stockholder
Meetings. Our Amended and Restated Certificate of
Incorporation provides that only the board of directors, the Chairman of the
Board, the Chief Executive Officer or our President may call special meetings of
stockholders. The provision may not be amended without the
affirmative vote of holders of at least 66 2/3% of our outstanding voting
stock.
Elimination of Stockholder Action By
Written Consent. Our charter documents eliminate the right of
stockholders to act by written consent without a meeting.
Elimination of Cumulative
Voting. Our charter documents do not provide for cumulative
voting in the election of directors.
Undesignated Preferred
Stock. The ability to authorize undesignated preferred stock
makes it possible for the board of directors to issue preferred stock with
voting or other rights or preferences that could impede the success of any
attempt to change control of us. These and other provisions may have
the effect of deferring hostile takeovers or delaying changes in control or
management of us.
Delaware Takeover
Statute. We are subject to Section 203 of the General
Corporation Law of the State of Delaware, or DGCL, which regulates acquisitions
of some Delaware corporations. In general, Section 203
prohibits, with some exceptions, a publicly held Delaware corporation from
engaging in a “business combination” with an “interested stockholder” for a
period of three years following the date of the transaction in which the person
became an interested stockholder, unless:
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the
board of directors of the corporation approved the business combination or
the other transaction in which the person became an interested stockholder
prior to the date of the business combination or other
transaction;
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upon
consummation of the transaction that resulted in the person becoming an
interested stockholder, the person owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced,
excluding shares owned by persons who are directors and also officers of
the corporation and shares issued under employee stock plans under which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer; or
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on
or subsequent to the date the person became an interested stockholder, the
board of directors of the corporation approved the business combination
and the stockholders of the corporation authorized the business
combination at an annual or special meeting of stockholders by the
affirmative vote of at least 66-2/3% of the outstanding stock of the
corporation not owned by the interested
stockholder.
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Section 203
of the DGCL generally defines a “business combination” to include any of the
following:
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any
merger or consolidation involving the corporation and the interested
stockholder;
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any
sale, transfer, pledge or other disposition to the interested stockholder
of assets with a value equal to 10% or more of the corporation’s assets or
outstanding stock;
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in
general, any transaction that results in the issuance or transfer by the
corporation of any of its stock to the interested
stockholder;
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any
transaction involving the corporation that has the effect of increasing
the proportionate share of its stock owned by the interested stockholder;
or
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the
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.
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In
general, Section 203 defines an “interested stockholder” as any person who,
together with the person’s affiliates and associates, owns, or within three
years prior to the determination of interested stockholder status did own, 15%
or more of a corporation’s voting stock.
Section 203
of the DGCL could depress our stock price and delay, discourage or prohibit
transactions not approved in advance by our board of directors, such as takeover
attempts that might otherwise involve the payment to our stockholders of a
premium over the market price of our common stock.
The
provisions of Delaware law and our Amended and Restated Certificate of
Incorporation and Bylaws could have the effect of discouraging others from
attempting unsolicited takeovers and, as a consequence, they may also inhibit
temporary fluctuations in the market price of our common stock that often result
from actual or rumored unsolicited takeover attempts. Such provisions
may also have the effect of preventing changes in our management. It
is possible that these provisions could make it more difficult to accomplish
transactions, which stockholders may otherwise deem to be in their best
interests.
This
section describes the general terms and provisions of the debt securities that
we may offer using this prospectus and the related indentures. This section is
only a summary and does not purport to be complete. You must look to
the relevant form of debt security and the related indenture for a full
understanding of all terms of any series of debt securities. The form of debt
security and the related indenture have been or will be filed or incorporated by
reference as exhibits to the registration statement of which this prospectus is
a part. See “Where You Can Find More Information” for information on
how to obtain copies.
We may
issue senior or subordinated debt securities from time to time in one or more
series under one of two separate indentures, which may be supplemented or
amended from time to time. Senior debt securities will be issued
under a senior indenture and subordinated debt securities will be issued under a
subordinated indenture. The senior debt indenture and the
subordinated debt indenture are referred to individually in this prospectus as
the “indenture” and collectively as the “indentures.” This prospectus
outlines briefly the provisions of the indentures. The particular
terms of a series of debt securities and the extent, if any, to which the
particular terms of the issue modify the terms of the indenture will be
described in the accompanying prospectus supplement relating to such series of
debt securities. In some instances, certain of the precise terms of
debt securities you are offered may be described in a further prospectus
supplement, known as a pricing supplement. The indentures are subject
to and governed by the Trust Indenture Act of 1939, as amended, and may be
supplemented or amended from time to time following their
execution.
The debt
securities may be denominated and payable in U.S. dollars or foreign currencies.
We may also issue debt securities with the principal amount, interest or other
amounts payable to be determined by reference to one or more currency exchange
rates, securities or baskets of securities, commodity prices, indices or any
other financial, economic or other measure or instrument, including the
occurrence or non-occurrence of any event or circumstance. Debt securities may
bear interest at a fixed rate, which may be zero, or a floating
rate.
Some of
the debt securities may be issued as original issue discount debt securities.
Original issue discount securities bear no interest or bear interest at
below-market rates and will be sold at a discount from their stated principal
amount. The prospectus supplement relating to an issue of original issue
discount securities will contain information relating to United States federal
income tax, accounting, and other special considerations applicable to original
issue discount securities.
Holders
may present debt securities for exchange or transfer, in the manner, at the
places and subject to the restrictions stated in the debt securities and
described in the applicable prospectus supplement and other offering material we
will provide. We will provide these services without charge except for any tax
or other governmental charge payable in connection with these services and
subject to any limitations provided in the applicable indenture pursuant to
which such debt securities are issued.
Holders
may transfer debt securities in definitive bearer form and the related coupons,
if any, by delivery to the transferee. If any of the securities are held in
global form, the procedures for transfer of interests in those securities will
depend upon the procedures of the depositary for those global
securities.
We will
generally have no obligation to repurchase, redeem, or change the terms of debt
securities upon any event (including a change in control) that might have an
adverse effect on our credit quality.
The
following description, together with the additional information we may include
in any applicable prospectus supplements and free writing prospectuses,
summarizes the material terms and provisions of the warrants that we may offer
under this prospectus, which may consist of warrants to purchase common stock,
preferred stock or debt securities and may be issued in one or more
series. Warrants may be offered independently or together with common
stock, preferred stock or debt securities offered by any prospectus supplement,
and may be attached to or separate from those securities. While the
terms we have summarized below will apply generally to any warrants that we may
offer under this prospectus, we will describe the particular terms of any series
of warrants that we may offer in more detail in the applicable prospectus
supplement and any applicable free writing prospectus. The terms of
any warrants offered under a prospectus supplement may differ from the terms
described below. However, no prospectus supplement will fundamentally
change the terms that are set forth in this prospectus or offer a security that
is not registered and described in this prospectus at the time of its
effectiveness.
We will
issue the warrants under a warrant agreement that we will enter into with a
warrant agent to be selected by us. The warrant agent will act solely
as an agent of ours in connection with the warrants and will not act as an agent
for the holders or beneficial owners of the warrants. We will file as
exhibits to the registration statement of which this prospectus is a part, or
will incorporate by reference from a current report on Form 8-K that we
file with the SEC, the form of warrant agreement, including a form of warrant
certificate, that describes the terms of the particular series of warrants we
are offering before the issuance of the related series of
warrants. The following summaries of material provisions of the
warrants and the warrant agreements are subject to, and qualified in their
entirety by reference to, all the provisions of the warrant agreement and
warrant certificate applicable to a particular series of warrants. We
urge you to read the applicable prospectus supplement and any applicable free
writing prospectus related to the particular series of warrants that we sell
under this prospectus, as well as the complete warrant agreements and warrant
certificates that contain the terms of the warrants.
General
We will
describe in the applicable prospectus supplement the terms relating to a series
of warrants, including, if applicable:
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the
offering price and aggregate number of warrants
offered;
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the
currency for which the warrants may be
purchased;
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if
applicable, the designation and terms of the securities with which the
warrants are issued and the number of warrants issued with each such
security or each principal amount of such
security;
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If
applicable, the date on and after which the warrants and the related
securities will be separately
transferable;
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in
the case of warrants to purchase debt securities, the principal amount of
debt securities purchasable upon exercise of one warrant and the price at,
and currency in which, this principal amount of debt securities may be
purchased upon such exercise;
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in
the case of warrants to purchase common stock or preferred stock, the
number of shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which these
shares may be purchased upon such
exercise;
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the
effect of any merger, consolidation, sale or other disposition of our
business on the warrant agreements and the
warrants;
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the
terms of any rights to redeem or call the
warrants;
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any
provisions for changes to or adjustments in the exercise price or number
of securities issuable upon exercise of the
warrants;
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the
dates on which the right to exercise the warrants will commence and
expire;
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the
manner in which the warrant agreements and warrants may be
modified;
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material
United States federal income tax consequences of holding or exercising the
warrants;
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the
terms of the securities issuable upon exercise of the warrants;
and
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any
other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
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Before
exercising their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise,
including:
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in
the case of warrants to purchase debt securities, the right to receive
payments of principal of, or premium, if any, or interest on, the debt
securities purchasable upon exercise or to enforce covenants in the
applicable indenture; or
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in
the case of warrants to purchase common stock or preferred stock, the
right to receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if
any.
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Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in
the applicable prospectus supplement at the exercise price that we describe in
the applicable prospectus supplement. Unless we otherwise specify in
the applicable prospectus supplement, holders of the warrants may exercise the
warrants at any time up to the specified time on the expiration date that we set
forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become
void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information,
and paying the required amount to the warrant agent in immediately available
funds, as provided in the applicable prospectus supplement. We will
set forth on the reverse side of the warrant certificate and in the applicable
prospectus supplement the information that the holder of the warrant will be
required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any
other office indicated in the applicable prospectus supplement, we will issue
and deliver the securities purchasable upon such exercise. If fewer
than all of the warrants represented by the warrant certificate are exercised,
then we will issue a new warrant certificate for the remaining amount of
warrants. If we so indicate in the applicable prospectus supplement,
holders of the warrants may surrender securities as all or part of the exercise
price for warrants.
The
following description, together with the additional information we may include
in any applicable prospectus supplements, summarizes the material terms and
provisions of the units that we may offer under this
prospectus. While the terms we have summarized below will apply
generally to any units that we may offer under this prospectus, we will describe
the particular terms of any series of units in more detail in the applicable
prospectus supplement. The terms of any units offered under a
prospectus supplement may differ from the terms described
below. However, no prospectus supplement will fundamentally change
the terms that are set forth in this prospectus or offer a security that is not
registered and described in this prospectus at the time of its
effectiveness.
We will
file as exhibits to the registration statement of which this prospectus is a
part, or will incorporate by reference from a current report on Form 8-K
that we file with the SEC, the form of unit agreement that describes the terms
of the series of units we are offering, and any supplemental agreements, before
the issuance of the related series of units. The following summaries
of material terms and provisions of the units are subject to, and qualified in
their entirety by reference to, all the provisions of the unit agreement and any
supplemental agreements applicable to a particular series of
units. We urge you to read the applicable prospectus supplements
related to the particular series of units that we sell under this prospectus, as
well as the complete unit agreement and any supplemental agreements that contain
the terms of the units.
General
We may
issue units comprised of one or more debt securities, shares of common stock,
shares of preferred stock and warrants in any combination. Each unit
will be issued so that the holder of the unit is also the holder of each
security included in the unit. Thus, the holder of a unit will have
the rights and obligations of a holder of each included security. The
unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time or
at any time before a specified date.
We will
describe in the applicable prospectus supplement the terms of the series of
units, including:
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the
designation and terms of the units and of the securities comprising the
units, including whether and under what circumstances those securities may
be held or transferred separately;
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any
provisions of the governing unit agreement that differ from those
described below; and
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any
provisions for the issuance, payment, settlement, transfer or exchange of
the units or of the securities comprising the
units.
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The
provisions described in this section, as well as those described under
“Description of Capital Stock,” “Description of Debt Securities” and
“Description of Warrants” will apply to each unit and to any common stock,
preferred stock, debt security or warrant included in each unit,
respectively.
Issuance
in Series
We may
issue units in such amounts and in numerous distinct series as we
determine.
Enforceability
of Rights by Holders of Units
Each unit
agent will act solely as our agent under the applicable unit agreement and will
not assume any obligation or relationship of agency or trust with any holder of
any unit. A single bank or trust company may act as unit agent for
more than one series of units. A unit agent will have no duty or
responsibility in case of any default by us under the applicable unit agreement
or unit, including any duty or responsibility to initiate any proceedings at law
or otherwise, or to make any demand upon us. Any holder of a unit
may, without the consent of the related unit agent or the holder of any other
unit, enforce by appropriate legal action its rights as holder under any
security included in the unit.
We, the
unit agents, and any of their agents may treat the registered holder of any unit
certificate as an absolute owner of the units evidenced by that certificate for
any purpose and as the person entitled to exercise the rights attaching to the
units so requested, despite any notice to the contrary.
We may
sell the securities to or through underwriters or dealers, through agents,
directly to one or more purchasers, or through any combination of these
methods. The distribution of the securities may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
the prevailing market prices or at negotiated prices. A prospectus
supplement or supplements (and any related free writing prospectus that we may
authorize to be provided to you) will describe the terms of the offering of the
securities, including, to the extent applicable:
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the
name or names of any underwriters, if
any;
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the
purchase price of the securities and the proceeds we will receive from the
sale;
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any
over-allotment options under which underwriters may purchase additional
securities from us;
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any
agency fees or underwriting discounts and other items constituting agents’
or underwriters’ compensation;
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any
public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers;
and
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any
securities exchange or market on which the securities may be
listed.
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Only
underwriters named in the prospectus supplement are underwriters of the
securities offered by the prospectus supplement.
By
Underwriters
If
underwriters are used in the sale, they will acquire the securities for their
own account and may resell the securities from time to time in one or more
transactions at a fixed public offering price or at varying prices determined at
the time of sale. The obligations of the underwriters to purchase the
securities will be subject to the conditions set forth in the applicable
underwriting agreement. We may offer the securities to the public
through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Subject to certain conditions, the
underwriters will be obligated to purchase all of the securities offered by the
prospectus supplement. Any public offering price and any discounts or
concessions allowed or reallowed may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement, naming the underwriter, the nature of any
such relationship.
By
Dealers
If a
dealer is utilized in the sale of any securities offered by this prospectus, we
will sell those securities to the dealer, as principal. The dealer may then
resell the securities to the public at varying prices to be determined by the
dealer at the time of resale. We will set forth the names of the dealers and the
terms of the transaction in the applicable prospectus supplement.
By
Agents
We may
sell securities directly or through agents we designate from time to
time. We will name any agent involved in the offering and sale of
securities and we will describe any commissions we will pay the agent in the
prospectus supplement. Unless the prospectus supplement states
otherwise, our agent will act on a best-efforts basis for the period of its
appointment.
By
Direct Sales
We may
also directly sell securities offered by this prospectus. In this
case, no underwriters or agents would be involved. We will describe
the terms of those sales in the applicable prospectus supplement.
General
Information
Underwriters,
dealers and agents that participate in the distribution of the securities
offered by this prospectus may be deemed underwriters under the Securities Act
of 1933, as amended (the Securities Act), and any discounts or commissions they
receive from us and any profit on their resale of the securities may be treated
as underwriting discounts and commissions under the Securities Act.
We may
authorize agents or underwriters to solicit offers by certain types of
institutional investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the
future. We will describe the conditions to these contracts and the
commissions we must pay for solicitation of these contracts in the prospectus
supplement.
We may
provide agents and underwriters with indemnification against civil liabilities
related to this offering, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or underwriters may make
with respect to these liabilities. Agents and underwriters may engage
in transactions with, or perform services for, us in the ordinary course of
business.
All
securities we offer, other than common stock, will be new issues of securities
with no established trading market. Any underwriters may make a
market in these securities, but will not be obligated to do so and may
discontinue any market making at any time without notice. We cannot
guarantee the liquidity of the trading markets for any securities.
We may
enter into derivative transactions with third parties, or sell securities not
covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in connection
with those derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third parties may use securities pledged by us or
borrowed from us or others to settle those sales or to close out any related
open borrowings of stock, and may use securities received from us in settlement
of those derivatives to close out any related open borrowings of stock. The
third parties in such sale transactions will be identified in the applicable
prospectus supplement.
One or
more firms, referred to as “remarketing firms,” may also offer or sell the
securities, if the prospectus supplement so indicates, in connection with a
remarketing arrangement upon their purchase. Remarketing firms will act as
principals for their own accounts or as agents for us. These remarketing firms
will offer or sell the securities in accordance with the terms of the
securities. The prospectus supplement will identify any remarketing firm and the
terms of its agreement, if any, with us and will describe the remarketing firm’s
compensation. Remarketing firms may be deemed to be underwriters in connection
with the securities they remarket.
In
connection with an offering of our securities, underwriters, dealers or agents
may purchase and sell them in the open market. These transactions may include
stabilizing transactions and purchases to cover syndicate short positions
created in connection with the offering. Stabilizing transactions consist of
some bids or purchases for the purpose of preventing or slowing a decline in the
market price of the securities, and syndicate short positions involve the sale
by the underwriters or agents, as the case may be, of a greater number of
securities than they are required to purchase from us in the offering.
Underwriters may also impose a penalty bid, which means that the underwriting
syndicate may reclaim selling concessions allowed to syndicate members or other
broker dealers who sell securities in the offering for their account if the
syndicate repurchases the securities in stabilizing or covering transactions.
These activities may stabilize, maintain or otherwise affect the market price of
the securities, which may be higher than the price that might otherwise prevail
in the open market. These activities, if commenced, may be discontinued at any
time without notice. These transactions may be affected on any securities
exchange on which the securities may be listed, in the over-the-counter market
or otherwise.
Dorsey
& Whitney LLP, Salt Lake City, Utah will pass for us upon the validity of
the securities being offered by this prospectus and applicable prospectus
supplement, and counsel named in the applicable prospectus supplement will pass
upon legal matters for any underwriters, dealers or agents.
Tanner
LC, independent registered public accountants, have audited our financial
statements and the effectiveness of the Company’s internal control over
financial reporting incorporated by reference in this prospectus for the year
ended August 31, 2008, as set forth in their report which is incorporated
by reference in this prospectus and elsewhere in the registration
statement. Our financial statements are incorporated by reference in
reliance on Tanner LC’s report, given on their authority as experts in
accounting and auditing.
We are a
reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. We have filed with the
SEC a registration statement on Form S-3 under the Securities Act with respect
to the securities we are offering under this prospectus. This
prospectus does not contain all of the information set forth in the registration
statement and the exhibits to the registration statement. For further
information with respect to us and the securities we are offering under this
prospectus, we refer you to the registration statement and the exhibits and
schedules filed as a part of the registration statement. You may read
and copy the registration statement, as well as our reports, proxy statements
and other information, at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You can request copies of these documents by
writing to the SEC and paying a fee for the copying cost. Please call
the SEC at 1-800-SEC-0330 for more information about the operation of the Public
Reference Room. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, where our SEC filings are also
available. The address of the SEC’s web site is “http://www.sec.gov.”
We maintain a website at www.bsdmc.com. Information contained in or
accessible through our website does not constitute a part of this
prospectus.
The SEC
allows us to “incorporate by reference” information that we file with it into
this prospectus, 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. The information
incorporated by reference is considered to be a part of this prospectus, and
information that we file later with the Commission will automatically update and
supersede information contained in this prospectus and any accompanying
prospectus supplement. We incorporate by reference the documents listed
below that we have previously filed with the Commission:
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Our
Annual Report on Form 10-K for the year ended August 31,
2008;
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Our
Quarterly Reports on Form 10-Q for the quarters ended November 30,
2008, February 28, 2009 and May 31,
2009;
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Our
Current Reports on Form 8-K filed on September 11, 2008, April 8, 2009,
April 14, 2009, May 18, 2009, July 29, 2009 and Form 8-K/A filed on
September 9, 2008, April 14, 2009 and July 29, 2009;
and
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the
description of the Company’s Common Stock, par value $0.001 per
share, as contained in Item 1 of the Registration Statement on Form
8-A filed on April 22, 2008, including any amendment or report
filed for the purpose of updating such
description.
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We also
incorporate by reference into this prospectus additional documents that we may
file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act, excluding, in each case, information deemed furnished and not filed until
we sell all of the securities we are offering or the termination of the
offering. Any statements contained in a previously filed document
incorporated by reference into this prospectus is deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus, or in a subsequently filed document also
incorporated by reference herein, modifies or supersedes that
statement.
We will
provide to each person, including any beneficial owner, to whom a prospectus is
delivered, without charge upon written or oral request, a copy of any or all of
the information that has been incorporated by reference into this prospectus but
not delivered with the prospectus, including exhibits that are specifically
incorporated by reference into such documents. Requests should be
directed to: BSD Medical Corporation, Attention: Investor
Relations, 2188 West 2200 South, Salt Lake City, UT 84119,
telephone: (801) 972-5555.
BSD
MEDICAL CORPORATION
$50,000,000
Common
Stock, Preferred Stock,
Debt
Securities,
Warrants
and Units
PROSPECTUS
October
1, 2009