NuVasive, Inc.
As filed with the Securities and Exchange Commission on February 2, 2007
Commission File No. 333-_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NUVASIVE, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction
of incorporation or organization)
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3841
(Primary Standard Industrial
Classification Code Number)
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33-0768598
(I.R.S. Employer
Identification Number) |
4545 Towne Centre Court
San Diego, California 92121
(858) 909-1800
(Address, including zip code, and telephone number, including area code,
of registrants principal executive offices)
Alexis V. Lukianov
Chairman and Chief Executive Officer
NuVasive, Inc.
4545 Towne Centre Court
San Diego, California 92121
(858) 909-1800
(Name, address, including zip code, and telephone number, including area code
of agent for service)
Copy to:
Michael S. Kagnoff, Esq.
Heller Ehrman LLP
4350 La Jolla Village Drive
Seventh Floor
San Diego, California 92122
(858) 450-8400
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective as determined by the selling stockholder.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the Securities
Act), other than securities offered only in connection with dividend or interest reinvestment
plans, check the following box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If this Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. o
If this Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Title of Each Class of |
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Amount to be |
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Offering Price Per |
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Aggregate Offering |
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Amount of |
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Securities to be Registered |
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Registered |
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Unit (2) |
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Price(2) |
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Registration Fee |
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Common Stock, par value $.001 per share |
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451,677 |
(1) |
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$ |
24.475 |
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$ |
11,054,794 |
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$ |
1,183 |
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(1) |
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All such shares are currently owned by the selling stockholder. |
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(2) |
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Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c)
under the Securities Act, based upon the average of the high and low sales prices of the
registrants common stock, as reported on the NASDAQ Global Market, on February 1, 2007. |
The registrant hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
The information in this prospectus is not complete and may be changed. These securities may
not be sold until the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is not soliciting
offers to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 2, 2007.
PROSPECTUS
451,677 Shares
Common Stock
The selling stockholder identified in this prospectus may sell up to 451,677 shares of
our common stock. Those shares of common stock were originally issued by us in connection with our
acquisition of assets from Radius Medical, LLC. The selling stockholder may offer and sell its
shares in public or private transactions, or both. These sales may occur at fixed prices, at
market prices prevailing at the time of sale, at prices related to prevailing market prices, or at
negotiated prices.
The selling stockholder may sell shares to or through underwriters, broker-dealers or agents,
who may receive compensation in the form of discounts, concessions or commissions from the selling
stockholder, the purchasers of the shares, or both. See Plan of Distribution for a more complete
description of the ways in which the shares may be sold. We will not receive any of the proceeds
from the sale of the shares by the selling stockholder.
Our common stock is quoted on the NASDAQ Global Market under the symbol NUVA. On February
1, 2007, the last reported sale price of our common stock on the
NASDAQ Global Market was $24.57.
Investing in our common stock involves a high degree of risk. See Risk Factors beginning on
page 2 of this 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.
The date of this prospectus is , 2007.
ABOUT THIS PROSPECTUS
This prospectus relates to the resale of up to 451,677 shares of our common stock by the
selling stockholder. The shares were issued to the selling stockholder in January 2007 in
connection with our acquisition of assets from Radius Medical, LLC. We will not receive any
proceeds from the potential sale of the shares offered by the selling stockholder.
This prospectus constitutes part of the registration statement on Form S-3 filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the Securities
Act), utilizing a shelf registration or continuous offering process. It omits some of the
information contained in the registration statement and reference is made to the registration
statement for further information with respect to us and the securities being offered by the
selling stockholder. Any statement contained in the prospectus concerning the provisions of any
document filed as an exhibit to the registration statement or otherwise filed with the Securities
and Exchange Commission is not necessarily complete, and in each instance, reference is made to the
copy of the document filed.
You should rely only on information contained in or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information that is different. If
anyone provides you with different or inconsistent information, you should not rely on it. These
securities will not be sold in any jurisdiction where such sale is not permitted. The information
contained in this prospectus is accurate only as of the date of this prospectus or earlier dates as
specified herein. Our business, financial condition, results of operations and prospects may have
changed since those dates.
This prospectus provides you with a general description of the common stock that will be sold
pursuant to this prospectus. The registration statement filed with the Securities and Exchange
Commission includes exhibits that provide more details about the matters discussed in this
prospectus. You should read this prospectus and the related exhibits filed with the Securities and
Exchange Commission, together with the additional information described under Where You Can Find
More Information.
Our business was incorporated in Delaware in July 1997. Our principal executive offices are
located at 4545 Towne Centre Court, San Diego, California, 92121, and our telephone number is (858)
909-1800. Our website is located at www.nuvasive.com. The information contained in, or that can
be accessed through, our website is not part of this prospectus. Unless the context requires
otherwise, as used in this prospectus the terms NuVasive, we, us, and our refer to
NuVasive, Inc., a Delaware corporation.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should consider
carefully the risks and uncertainties described below together with all other information contained
or incorporated by reference in this prospectus before you decide to invest in our common stock. If
any of the following risks actually occurs, our business, financial condition, results of
operations and our future growth prospects could be materially and adversely affected. Under these
circumstances, the trading price of our common stock could decline, and you may lose all or part of
your investment.
Risks Related to Our Business and Industry
Pricing pressure from our competitors and sources of medical reimbursement may impact our ability
to sell our products at prices necessary to expand our operations and reach profitability.
The market for spine surgery products is large and growing at a significant rate. This has
attracted numerous new companies and technologies, and encouraged more established companies to
intensify competitive pressure. New entrants to our markets include companies owned partially by
spine surgeons, who have significant market knowledge and access to the surgeons who use our
products. As a result of this increased competition, we believe there will be growing pricing
pressure in the near future. If competitive forces drive down the price we are able to charge for
our products, our profit margins will shrink, which will hamper our ability to invest in and grow
our business.
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Further, sales of our products will depend on the availability of adequate reimbursement from
third-party payors. Healthcare providers, such as hospitals that purchase medical devices for
treatment of their patients, generally rely on third-party payors to reimburse all or part of the
costs and fees associated with the procedures performed with these devices. Spine surgeons are
unlikely to use our products if they do not receive reimbursement adequate to cover the cost of
their involvement in the surgical procedures. We also believe that future reimbursement may be
subject to increased restrictions both in the United States and in international markets. Future
legislation, regulation or reimbursement policies of third-party payors may adversely affect the
demand for our existing products or our products currently under development and limit our ability
to sell our products on a profitable basis.
To the extent we sell our products internationally, market acceptance may depend, in part,
upon the availability of reimbursement within prevailing healthcare payment systems. Reimbursement
and healthcare payment systems in international markets vary significantly by country, and include
both government sponsored healthcare and private insurance.
We are in a highly competitive market segment and face competition from large, well-established
medical device manufacturers as well as new market entrants.
The market for spine surgery products and procedures is intensely competitive, subject to
rapid change and significantly affected by new product introductions and other market activities of
industry participants. With respect to NeuroVision, our nerve avoidance system, we compete with
Medtronic Sofamor Danek, Inc., a wholly owned subsidiary of Medtronic, Inc., and Nicolet
Biomedical, a VIASYS Healthcare company, both of which have significantly greater resources than we
do. With respect to MaXcess, our minimally disruptive surgical system, our largest competitors are
Medtronic Sofamor Danek, Inc., DePuy Spine, Inc., a Johnson & Johnson company, and Synthes-Stratec,
Inc. We compete with many of the same companies with respect to our other products. At any time,
these companies may develop alternative treatments, products or procedures for the treatment of
spine disorders that compete directly or indirectly with our products. Many of our larger
competitors are either publicly traded or divisions or subsidiaries of publicly traded companies,
and enjoy several competitive advantages over us, including:
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significantly greater name recognition; |
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established relations with spine surgeons, hospitals, other healthcare providers and third-party payors; |
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large and established distribution networks with significant international presence; |
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products supported by long-term clinical data; |
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greater experience in obtaining and maintaining United States Food and Drug Administration, or FDA, and
other regulatory approvals or clearances for products and product enhancements; |
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more expansive portfolios of intellectual property rights; and |
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greater financial and other resources for product research and development, sales and marketing and
litigation. |
In addition, the spine industry is becoming increasingly crowded with new market entrants,
including companies owned at least partially by spine surgeons. Many of these new competitors focus
on a specific product or market segment, making it more difficult for us to expand our overall
market position. If these companies become successful, we expect that competition will become even
more intense, leading to greater pricing pressure and making it more difficult for us to expand.
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To be commercially successful, we must convince spine surgeons that our products are an attractive
alternative to existing surgical treatments of spine disorders.
We believe spine surgeons may not widely adopt our products unless they determine, based on
experience, clinical data and published peer reviewed journal articles, that our products provide
benefits or an attractive alternative to conventional modalities of treating spine disorders.
Surgeons may be slow to change their medical treatment practices for the following reasons, among
others:
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lack of experience with our products; |
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lack of evidence supporting additional patient benefits; |
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perceived liability risks generally associated with the use of new products and procedures; |
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limited availability of reimbursement within healthcare payment systems; |
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costs associated with the purchase of new products and equipment; and |
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the time that must be dedicated for training. |
In addition, we believe recommendations and support of our products by influential surgeons
are essential for market acceptance and adoption. If we do not receive support from such surgeons
or have favorable long-term data, surgeons and hospitals may not use our products. In such
circumstances, we may not achieve expected revenues and may never become profitable.
Our failure to continue building an effective and exclusive distribution network for our products
could significantly impair our ability to increase sales of our products.
We utilize a hybrid model of independent sales agencies and directly-employed sales
professionals for product sales. The majority of the sales professionals selling our products are
paid on a commission basis. We have recently completed a significant effort to convert our sales
force to exclusivity, meaning their spine sales efforts are focused exclusively on our products.
This transition process has been lengthy and expensive. In order to realize benefits from this
large investment of time, money and resources, our sales force must continue to grow and expand
sales of our products, which all of our sales projections and budgeting processes have assumed.
Since this sales force is extremely new, there is risk that unanticipated problems will be
encountered with generating sales and introducing customers to our products. Any failure to
generate expected sales would adversely affect our operational results.
Our future success depends on our ability to timely develop and introduce new products or product
enhancements that will be accepted by the market.
It is important to our business that we continue to build a more complete product offering to
surgeons and hospitals. As such, our success will depend in part on our ability to develop and
introduce new products and enhancements to our existing products to keep pace with the rapidly
changing spine market. We cannot assure you that we will be able to successfully develop, obtain
regulatory approval for or market new products or that any of our future products will be accepted
by the surgeons who use our products or the payors who financially support many of the procedures
performed with our products. We also cannot provide assurance that we will be able to successfully
integrate acquired products, such as our Formagraft product recently acquired from Radius Medical,
LLC, into our product lines. Specifically, we have little experience selling biologic products as
a company, and we may have unanticipated difficulty.
The success of any new product offering or enhancement to an existing product will depend on
several factors, including our ability to:
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properly identify and anticipate surgeon and patient needs;
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develop and introduce new products or product enhancements in a timely manner; |
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develop products based on technology that we acquire, such as the technology recently acquired
from Pearsalls Limited, RSB Spine LLC, and Radius Medical, LLC; |
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avoid infringing upon the intellectual property rights of third parties; |
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demonstrate, if required, the safety and efficacy of new products with data from preclinical
studies and clinical trials; |
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obtain the necessary regulatory clearances or approvals for new products or product enhancements; |
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provide adequate training to potential users of our products; |
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receive adequate reimbursement; and |
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develop an effective and dedicated marketing and distribution network. |
If we do not develop new products or product enhancements in time to meet market demand or if
there is insufficient demand for these products or enhancements, our results of operations will
suffer.
We may encounter difficulties in integrating acquired products, technologies or businesses, which
could adversely affect our business.
We recently acquired products and/or assets from each of Radius Medical, LLC, Pearsalls
Limited, RSB Spine LLC, and RiverBend Design LLC, and may in the future acquire technology,
products or businesses related to our current or future business. We have limited experience in
acquisition activities and may have to devote substantial time and resources in order to complete
any future acquisitions. Further, these past and potential acquisitions entail risks, uncertainties
and potential disruptions to our business. For example, we may not be able to successfully
integrate an acquired companys operations, technologies, products and services, information
systems and personnel into our business. Further, products we acquire, such as the biologic product
we acquired from Radius Medical, LLC or the cervical plate we acquired from RSB Spine LLC, may not
provide the intended complementary fit with our existing products. In addition, certain acquired
technology, such as that acquired from Pearsalls Limited, requires significant additional
development work and efforts to obtain regulatory clearance or approval. An acquisition may further
strain our existing financial and managerial controls, and divert managements attention away from
our other business concerns. In connection with in-process research and development activities, we
would likely experience an increase in development expenses and capital expenditures. There may
also be unanticipated costs and liabilities associated with an acquisition that could adversely
affect our operating results.
We are dependent on single source suppliers and manufacturers for certain of our products and
components, and the loss of any of these suppliers or manufacturers, or their inability to supply
us with an adequate supply of materials could harm our business.
We rely on third-party suppliers and manufacturers to manufacture and supply our products. To
be successful, our contract manufacturers must be able to provide us with products and components
in substantial quantities, in compliance with regulatory requirements, in accordance with agreed
upon specifications, at acceptable cost and on a timely basis. Our anticipated growth could strain
the ability of suppliers to deliver an increasingly large supply of
products, materials and components. Manufacturers often experience difficulties in scaling up
production, including problems with production yields and quality control and assurance, especially
with products such as allograft which is processed human tissue. If we are unable to obtain
sufficient quantities of high quality components to meet customer demand on a timely basis, we
could lose customers, our reputation may be harmed and our business could suffer.
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We currently use one or two manufacturers for each of our devices or components. Our
dependence on one or two manufacturers involves several risks, including limited control over
pricing, availability, quality and delivery schedules. If any one or more of our manufacturers
cease to provide us with sufficient quantities of our components in a timely manner or on terms
acceptable to us, or cease to manufacture components of acceptable quality, we would have to seek
alternative sources of manufacturing. We could incur delays while we locate and engage alternative
qualified suppliers and we might be unable to engage alternative suppliers on favorable terms. Any
such disruption or increased expenses could harm our commercialization efforts and adversely affect
our ability to generate revenue.
Further, Tissue Banks International, Inc. and U.S. Tissue and Cell (formerly Intermountain
Tissue Center) collectively supply us with all of our allograft implants, and will continue to be
our only sources for the foreseeable future. The processing of human tissue into allograft implants
is very labor intensive and it is therefore difficult to maintain a steady supply stream. In
addition, due to seasonal changes in mortality rates, some scarce tissues used for our allograft
implants are at times in particularly short supply. We cannot be certain that our supply of
allograft implants from Tissue Banks International and U.S. Tissue and Cell will be available at
current levels or will be sufficient to meet our needs. If we are no longer able to obtain
allograft implants from these sources in amounts sufficient to meet our needs, we may not be able
to locate and engage replacement sources of allograft implants on commercially reasonable terms, if
at all. Any interruption of our business caused by the need to locate additional sources of
allograft implants could significantly harm our revenues, which could cause the market price of our
common stock to decline.
Additionally, Invibio, Inc. is our exclusive supplier of polyetheretherketone, which comprises
our PEEK partial vertebral body product called CoRoent. We have a supply agreement with Invibio,
pursuant to which we have agreed to purchase our entire supply of polyetheretherketone from
Invibio. In addition, we have an exclusive supply arrangement with Peak Industries, Inc., pursuant
to which Peak Industries is our exclusive supplier of NeuroVision systems. In the event Peak
Industries ceases to supply us, which it may do at any time, we would be forced to locate a
suitable alternative supplier. We believe the start-up time to establish a new supply of
NeuroVision would be approximately 16 to 20 weeks. We have established an inventory of NeuroVision
systems to help us bridge any downtime in the event Peak Industries ceases to supply us; however,
this inventory may be depleted before we are able to engage an alternate supplier. Any inability to
meet our customers demands for NeuroVision systems could lead to decreased sales and harm our
reputation, which could cause the market price of our common stock to decline.
Maxigen Biotech, Inc., or MBI, is our exclusive supplier of our recently-acquired Formagraft
product. We are party to a supply agreement with MBI, pursuant to which we have agreed to purchase
our entire supply of Formagraft from MBI. As this is a new relationship, we have no prior
experience dealing with MBI and there can be no assurance that this supply arrangement will
function as successfully as we hope. Specifically, we will require that MBI significantly expand
its manufacturing capacity to meet our forecasted needs, and no assurance can be given that MBI
will be able to meet our requirements. If we experience difficulties in dealing with MBI, our
ability to integrate our Formagraft product into our product line will be substantially harmed,
which could adversely affect our operational results.
Any failure in our efforts to train spine surgeons could significantly reduce the market acceptance
of our products.
There is a learning process involved for spine surgeons to become proficient in the use of our
products. It is critical to the success of our commercialization efforts to train a sufficient
number of spine surgeons and to provide them with adequate instruction in the use of our products.
This training process may take longer than expected and may therefore affect our ability to
increase sales. Convincing surgeons to dedicate the time and energy necessary for adequate training
is challenging, and we cannot assure you we will be successful in these efforts. If surgeons are
not properly trained, they may misuse or ineffectively use our products. This may also result in
unsatisfactory patient
outcomes, patient injury, negative publicity or lawsuits against us, any of which could have
an adverse effect on our business.
Although we believe our training methods regarding surgeons are conducted in compliance with
FDA and other applicable regulations, if the FDA determines that our training constitutes promotion
of an unapproved use, they could request that we modify our training or subject us to regulatory
enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine
and criminal penalty.
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We are dependent on the services of Alexis V. Lukianov and Keith Valentine, and the loss of either
of them could harm our business.
Our continued success depends in part upon the continued service of Alexis V. Lukianov, our
Chairman and Chief Executive Officer, and Keith Valentine, our President, who are critical to the
overall management of NuVasive as well as to the development of our technology, our culture and our
strategic direction. We have entered into employment agreements with Messrs. Lukianov and
Valentine, but neither of these agreements guarantees the service of the individual for a specified
period of time. The loss of either Messr. Lukianov or Valentine could have a material adverse
effect on our business, results of operations and financial condition. We have not obtained and do
not expect to obtain any key-person life insurance policies.
If we fail to properly manage our anticipated growth, our business could suffer.
The rapid growth of our business has placed a significant strain on our managerial,
operational and financial resources and systems. To execute our anticipated growth successfully, we
must attract and retain qualified personnel and manage and train them effectively. We will be
dependent on our personnel and third parties to effectively market our products to an increasing
number of surgeons. We will also depend on our personnel to develop next generation technologies.
Further, our anticipated growth will place additional strain on our suppliers and
manufacturers, resulting in increased need for us to carefully monitor quality assurance. Any
failure by us to manage our growth effectively could have an adverse effect on our ability to
achieve our development and commercialization goals.
If clinical trials of our current or future product candidates do not produce results necessary to
support regulatory approval in the United States or elsewhere, we will be unable to commercialize
these products.
Several investigational devices in our development pipeline, including our NeoDisc cervical
disc replacement device, Cerpass cervical total disc replacement (TDR) and lateral lumbar TDR, will
require premarket approval, or PMA, from the FDA. A PMA application must be submitted if the device
cannot be cleared through the less rigorous 510(k) process. A PMA application must be supported by
extensive data including, but not limited to, technical, preclinical, clinical trials,
manufacturing and labeling to demonstrate to the FDAs satisfaction the safety and effectiveness of
the device for its intended use.
As a result, to receive regulatory approval for NeoDisc, Cerpass or other devices requiring
PMA approval, we must conduct, at our own expense, adequate and well controlled clinical trials to
demonstrate efficacy and safety in humans. Clinical testing is expensive, takes many years and has
an uncertain outcome. Clinical failure can occur at any stage of the testing. Our clinical trials
may produce negative or inconclusive results, and we may decide, or regulators may require us, to
conduct additional clinical and/or non-clinical testing. Our failure to adequately demonstrate the
efficacy and safety of any of our devices would prevent receipt of regulatory approval and,
ultimately, the commercialization of that device.
We depend on clinical investigators and clinical sites to enroll patients in our clinical trials
and other third parties to manage the trials and to perform related data collection and analysis,
and, as a result, we may face costs and delays that are outside of our control.
As a company, we have limited experience in conducting clinical trials, demonstrated by the
fact that all of our commercialized products to date have been cleared via 510(k). We recently
received conditional approval of an
Investigational Device Exemption (IDE) from the FDA to begin clinical trial enrollment of our
NeoDisc cervical disc replacement device. In connection with this and other planned studies, we
will rely on clinical investigators and clinical sites to enroll patients in our clinical trials
and other third parties to manage the trial and to perform related data collection and analysis.
However, we may not be able to control the amount and timing of resources that clinical sites may
devote to our clinical trials. If these clinical investigators and clinical sites fail to enroll a
sufficient number of patients in our clinical trials or fail to ensure compliance by patients with
clinical protocols or fail to comply with regulatory requirements, we will be unable to complete
these trials, which could prevent us from
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obtaining regulatory approvals for our products. Our agreements with clinical
investigators and clinical sites for clinical testing place substantial responsibilities on these
parties and, if these parties fail to perform as expected, our trials could be delayed or
terminated. If these clinical investigators, clinical sites or other third parties do not carry out
their contractual duties or obligations or fail to meet expected deadlines, or if the quality or
accuracy of the clinical data they obtain is compromised due to their failure to adhere to our
clinical protocols, regulatory requirements or for other reasons, our clinical trials may be
extended, delayed or terminated, or the clinical data may be rejected by the FDA, and we may be
unable to obtain regulatory approval for, or successfully commercialize, our devices.
Delays in the commencement or completion of clinical testing could significantly affect our
product development costs. Delays in the clinical trial process may require us to engage additional
clinical sites and extend our agreements with the third parties who monitor the clinical trials and
collect and analyze data. Additionally, delays in the completion of, or the potential termination
of, our clinical trials, will cause the commercial prospects for our investigational devices to be
harmed, and our ability to generate product revenues will be delayed. In addition, many of the
factors that cause, or lead to, a delay in the commencement or completion of clinical trials may
also ultimately lead to the denial of regulatory approval of a device.
If we fail to obtain, or experience significant delays in obtaining, FDA clearances or approvals
for our future products or product enhancements, our ability to commercially distribute and market
our products could suffer.
Our medical devices are subject to rigorous regulation by the FDA and numerous other federal,
state and foreign governmental authorities. The process of obtaining regulatory clearances or
approvals to market a medical device, particularly from the FDA, can be costly and time consuming,
and there can be no assurance that such clearances or approvals will be granted on a timely basis,
if at all. In particular, the FDA permits commercial distribution of a new medical device only
after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic
Act, or is the subject of an approved premarket approval application, or PMA. The FDA will clear
marketing of a medical device through the 510(k) process if it is demonstrated that the new product
is substantially equivalent to other 510(k)-cleared products. The PMA process is more costly,
lengthy and uncertain than the 510(k) clearance process. A PMA application must be supported by
extensive data, including, but not limited to, technical, preclinical, clinical trial,
manufacturing and labeling data, to demonstrate to the FDAs satisfaction the safety and efficacy
of the device for its intended use.
Our failure to comply with such regulations could lead to the imposition of injunctions,
suspensions or loss of regulatory approvals, product recalls, termination of distribution, or
product seizures. In the most egregious cases, criminal sanctions or closure of our manufacturing
facilities are possible.
To date, all of our products, unless exempt, have been cleared through the 510(k) process. We
have no experience in obtaining premarket approval. We expect that our total disc replacement
devices currently under development, including CerPass, our investigational cervical total disc
replacement device, and NeoDisc, our investigational nucleus-like cervical disc replacement device,
will have to go through the PMA process. We cannot assure you whether successful clinical trials
will be conducted or completed or regulatory approval will ultimately be obtained for these
devices. Moreover, clinical trials typically have durations of several years and competing products
may be introduced while our devices are undergoing clinical trials. This could reduce the potential
demand for our products and negatively impact our business prospects. Our competitors new products
and technologies may be more effective or less expensive than our products or render our products
obsolete.
Further, pursuant to FDA regulations, we can only market our products for cleared or approved
uses. Certain of our products may be used by physicians for indications other than those cleared or
approved by the FDA, but we cannot promote the products for such off-label uses. If the FDA
determines that our promotional materials or training constitutes promotion of an unapproved use,
it could request that we modify our training or promotional materials or subject us to regulatory
enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine
and criminal penalties. It is also possible that other federal, state or foreign enforcement
authorities might take action if they consider promotional or training materials to constitute
promotion of an unapproved use, which could result in significant fines or penalties under other
statutory authorities.
8
Foreign governmental authorities that regulate the manufacture and sale of medical devices
have become increasingly stringent and, to the extent we market and sell our products in foreign
countries, we may be subject to rigorous regulation in the future. In such circumstances, we would
rely significantly on our foreign independent sales agencies to comply with the varying
regulations, and any failures on their part could result in restrictions on the sale of our
products in foreign countries.
The safety of our products is not yet supported by long-term clinical data and may therefore prove
to be less safe and effective than initially thought.
We obtained clearance to offer almost all of our products that require FDA clearance or
approval through the FDAs 510(k) clearance process. The FDAs 510(k) clearance process is less
rigorous than the PMA process and requires less supporting clinical data. As a result, we currently
lack the breadth of published long-term clinical data supporting the safety of our products and the
benefits they offer that might have been generated in connection with the PMA process. For these
reasons, spine surgeons may be slow to adopt our products, we may not have comparative data that
our competitors have or are generating and we may be subject to greater regulatory and product
liability risks. Further, future patient studies or clinical experience may indicate that treatment
with our products does not improve patient outcomes. Such results would reduce demand for our
products, significantly reduce our ability to achieve expected revenues and could prevent us from
becoming profitable. Moreover, if future results and experience indicate that our products cause
unexpected or serious complications or other unforeseen negative effects, we could be subject to
significant legal liability and harm to our business reputation. The spine medical device market
has been particularly prone to costly product liability litigation.
If we or our suppliers fail to comply with the FDAs quality system regulations, the manufacture of
our products could be delayed.
We and our suppliers are required to comply with the FDAs quality system regulations, which
cover the methods and documentation of the design, testing, production, control, quality assurance,
labeling, packaging, storage and shipping of our products. The FDA enforces the quality system
regulation through inspections. If we or one of our suppliers fail a quality system regulations
inspection or if any corrective action plan is not sufficient, the manufacture of our products
could be delayed. We underwent an FDA inspection in August 2003 regarding our allograft implant
business, and another FDA inspection in April 2004 regarding our medical device activities. In
connection with these inspections, the FDA requested minor corrective actions, which we believe we
have taken, but there can be no assurance the FDA will not subject us to further enforcement
action. The FDA may impose additional inspections or audits at any time.
Modifications to our marketed products may require new 510(k) clearances or premarket approvals, or
may require us to cease marketing or recall the modified products
until clearances are obtained.
Any modification to a 510(k)-cleared device that could significantly affect its safety or
efficacy, or that would constitute a major change in its intended use, requires a new 510(k)
clearance or, possibly, premarket approval. The FDA requires every manufacturer to make this
determination in the first instance, but the FDA may review any manufacturers decision. The FDA
may not agree with any of our decisions regarding whether new clearances or approvals are
necessary. If the FDA requires us to seek 510(k) clearance or premarket approval for any
modification to a previously cleared product, we may be required to cease marketing or to recall
the modified product until we obtain clearance or approval, and we may be subject to significant
regulatory fines or penalties. Further, our products could be subject to recall if the FDA
determines, for any reason, that our products are not safe or effective. Any recall or FDA
requirement that we seek additional approvals or clearances could result in delays, fines, costs
associated with modification of a product, loss of revenue and potential operating restrictions
imposed by the FDA.
9
Risks Related to Our Financial Results and Need for Financing
We have a limited operating history, have incurred significant operating losses since inception and
expect to continue to incur losses, and we cannot assure you that we
will achieve profitability.
We were incorporated in Delaware in 1997, began commercial sales in 2001 and have several
product offerings in both MAS and classic fusion. We have yet to demonstrate that we can generate
sufficient sales of our products to become profitable. The extent of our future operating losses
and the timing of profitability are difficult to predict. At September 30, 2006, we had an
accumulated deficit of approximately $154 million, and cash, cash equivalents and short term
investments totaling approximately $121 million, compared to approximately $144 million as of June
30, 2006. Our net loss for the three months ended September 30, 2006 was approximately $19 million.
Even if we do achieve profitability as planned, we may not be able to sustain or increase
profitability on an ongoing basis. In addition, our independent distributors are entitled to
certain payments in the event their services are terminated in connection with (or shortly
following) a change of control of our company. These payments are the responsibility of our
successor, but may represent an additional significant expense or reduce the price paid in
connection with any such event.
Our quarterly financial results are likely to fluctuate significantly because our sales prospects
are uncertain.
Our quarterly operating results are difficult to predict and may fluctuate significantly from
period to period, particularly because our sales prospects are uncertain. These fluctuations will
also affect our annual operating results and may cause those results to fluctuate unexpectedly from
year to year. The level of our revenues and results of operations at any given time will be based
primarily on the following factors:
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our ability to drive increased sales of our products to hospitals and surgeons; |
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our ability to establish and maintain an effective and dedicated sales force; |
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pricing pressure applicable to our products, including adverse third-party reimbursement outcomes; |
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results of clinical research and trials on our existing products and products in development and our ability
to obtain FDA approval or clearance; |
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the mix of our products sold (i.e., profit margins differ between our products); |
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timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors; |
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the ability of our suppliers to timely provide us with an adequate supply of materials and components; |
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the evolving product offerings of our competitors and the potential introduction of new and competing
technologies; |
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regulatory approvals and legislative changes affecting the products we may offer or those of our
competitors; and |
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interruption in the manufacturing or distribution of our products. |
Many of the products we may seek to develop and introduce in the future will require FDA
approval or clearance, without which we cannot begin to commercialize them in the United States,
and commercialization of them outside of the United States would likely require other regulatory
approvals and import licenses. As a result, it will be difficult for us to forecast demand for
these products with any degree of certainty. In addition, we will be increasing our operating
expenses as we build our commercial capabilities. Accordingly, we may experience significant,
unanticipated quarterly losses. Because of these factors, our operating results in one or more
future quarters may fail to meet the expectations of securities analysts or investors.
10
Risks Related to Our Intellectual Property and Potential Litigation
Our ability to protect our intellectual property and proprietary technology through patents
and other means is uncertain.
Our success depends significantly on our ability to protect our proprietary rights to the
technologies used in our products. We rely on patent protection, as well as a combination of
copyright, trade secret and trademark laws, and nondisclosure, confidentiality and other
contractual restrictions to protect our proprietary technology. However, these legal means afford
only limited protection and may not adequately protect our rights or permit us to gain or keep any
competitive advantage. For example, our pending U.S. and foreign patent applications may not issue
as patents in a form that will be advantageous to us or may issue and be subsequently successfully
challenged by others and invalidated. In addition, our pending patent applications include claims
to material aspects of our products and procedures that are not currently protected by issued
patents. Both the patent application process and the process of managing patent disputes can be
time consuming and expensive. Competitors may be able to design around our patents or develop
products which provide outcomes which are comparable to ours. Although we have taken steps to
protect our intellectual property and proprietary technology, including entering into
confidentiality agreements and intellectual property assignment agreements with our officers,
employees, consultants and advisors, such agreements may not be enforceable or may not provide
meaningful protection for our trade secrets or other proprietary information in the event of
unauthorized use or disclosure or other breaches of the agreements. Furthermore, the laws of some
foreign countries may not protect our intellectual property rights to the same extent as do the
laws of the United States.
In the event a competitor infringes upon our patent or other intellectual property rights,
enforcing those rights may be costly, difficult and time consuming. Even if successful, litigation
to enforce our intellectual property rights or to defend our patents against challenge could be
expensive and time consuming and could divert our managements attention. We may not have
sufficient resources to enforce our intellectual property rights or to defend our patents against a
challenge.
In addition, certain product categories, including pedicle screws, have been the subject of
significant patent litigation in recent years. Since we sell pedicle screws and recently introduced
our SpheRx pedicle screw system, any related litigation could harm our business.
The medical device industry is characterized by the existence of a large number of patents and
frequent litigation based on allegations of patent infringement. Patent litigation can involve
complex factual and legal questions and its outcome is uncertain. Any claim relating to
infringement of patents that is successfully asserted against us may require us to pay substantial
damages. Even if we were to prevail, any litigation could be costly and time-consuming and would
divert the attention of our management and key personnel from our business operations. Our success
will also depend in part on our not infringing patents issued to others, including our competitors
and potential competitors. If our products are found to infringe the patents of others, our
development, manufacture and sale of such potential products could be severely restricted or
prohibited. In addition, our competitors may independently develop similar technologies. Because of
the importance of our patent portfolio to our business, we may lose market share to our competitors
if we fail to protect our intellectual property rights.
As the number of entrants into our market increases, the possibility of a patent infringement
claim against us grows. While we make an effort to ensure that our products do not infringe other
parties patents and proprietary rights, our products and methods may be covered by patents held by
our competitors. In addition, our competitors may assert that future products we may market
infringe their patents.
A patent infringement suit brought against us or any strategic partners or licensees may force
us or any strategic partners or licensees to stop or delay developing, manufacturing or selling
potential products that are claimed to infringe a third partys intellectual property, unless that
party grants us or any strategic partners or licensees rights to use its intellectual property. In
such cases, we may be required to obtain licenses to patents or proprietary rights of others in
order to continue to commercialize our products. However, we may not be able to obtain any licenses
required under any patents or proprietary rights of third parties on acceptable terms, or at all.
Even if any strategic partners, licensees or we were able to obtain rights to the third partys intellectual
property, these rights may be non-exclusive, thereby giving our competitors access to the same
intellectual property. Ultimately, we may be unable to commercialize some of our potential products
or may have to cease some of our business operations as a result of patent infringement claims,
which could severely harm our business.
11
If we become subject to product liability claims, we may be required to pay damages that exceed our
insurance coverage.
Our business exposes us to potential product liability claims that are inherent in the
testing, manufacture and sale of medical devices for spine surgery procedures. Spine surgery
involves significant risk of serious complications, including bleeding, nerve injury, paralysis and
even death. In addition, we sell allograft implants, derived from cadaver bones, which pose the
potential risk of biological contamination. If any such contamination is found to exist, sales of
allograft products could decline.
Currently, we maintain product liability insurance in the amount of $10 million. Any product
liability claim brought against us, with or without merit, could result in the increase of our
product liability insurance rates or the inability to secure coverage in the future. In addition,
if our product liability insurance proves to be inadequate to pay a damage award, we may have to
pay the excess out of our cash reserves, if such reserves are not sufficient, which may harm our
financial condition. If longer-term patient results and experience indicate that our products or
any component cause tissue damage, motor impairment or other adverse effects, we could be subject
to significant liability. Finally, even a meritless or unsuccessful product liability claim could
harm our reputation in the industry, lead to significant legal fees and could result in the
diversion of managements attention from managing our business.
Any claims relating to our making improper payments to physicians for consulting services, or other
potential violations of regulations governing interactions between us and healthcare providers,
could be time consuming and costly.
We frequently engage spine surgeons as consultants to assist us with scientific research and
development and to help us evaluate technologies. We are subject to federal and state laws and
regulations governing our relationships with physicians and other health care providers. In April
2005, the United States Department of Justice expanded its investigation into the relationships
between medical device companies and health care providers. The investigation originally appeared
to focus on Medtronic Sofamor Danek, Inc., but the Department of Justice has apparently since
issued subpoenas to DePuy Spine, Inc., a Johnson & Johnson company, Biomet, Smith & Nephew, Stryker
and Zimmer Holdings, all orthopedic device manufacturers, relating to the consulting process and
procedures tied to fees that such companies have paid to physicians as consultants. Although we
have not been contacted by the Department of Justice in respect of this investigation, we could
become a subject of the investigation and be forced to incur significant costs as a result.
The regulations governing the interactions between medical device companies and health care
providers continue to evolve. Compliance with these regulations is costly, especially as accepted
methods of compliance are developed. We expect to continue to incur costs related to compliance
with these new measures, such as the requirement to comply with the new California Prescription
Drug Marketing Act.
We or our suppliers may be the subject of claims for non-compliance with FDA regulations in
connection with the processing or distribution of allograft implants.
It is possible that allegations may be made against us or against donor recovery groups or
tissue banks, including those with which we have a contractual relationship, claiming that the
acquisition or processing of tissue for allograft implants does not comply with applicable FDA
regulations or other relevant statutes and regulations. Allegations like these could cause
regulators or other authorities to take investigative or other action against us, or could cause
negative publicity for us or our industry generally. These actions or any negative publicity could
cause us to incur substantial costs, divert the attention of our management from our business, harm
our reputation and cause the market price of our shares to decline.
12
Risks Related to the Securities Markets and Ownership of Our Common Stock
We expect that the price of our common stock will fluctuate substantially, potentially adversely
affecting the ability of investors to sell their shares.
The market price of our common stock is likely to be volatile and may fluctuate substantially
due to many factors, including:
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volume and timing of orders for our products; |
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the introduction of new products or product enhancements by us or our competitors; |
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disputes or other developments with respect to intellectual property rights or other potential legal actions; |
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our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on
a timely basis; |
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quarterly variations in our or our competitors results of operations; |
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sales of large blocks of our common stock, including sales by our executive officers and directors; |
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announcements of technological or medical innovations for the treatment of spine pathology; |
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changes in governmental regulations or in the status of our regulatory approvals, clearances or applications; |
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changes in the availability of third-party reimbursement in the United States or other countries; |
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the acquisition or divestiture of products, assets or technology; |
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changes in earnings estimates or recommendations by securities analysts; and |
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general market conditions and other factors, including factors unrelated to our operating performance or the
operating performance of our competitors. |
Market price fluctuations may negatively affect the ability of investors to sell our shares at
consistent prices.
Recent
changes in the required accounting treatment for stock options have
had a material negative
impact on our financial statements and may affect our stock price.
In December 2004, the Financial Accounting Standards Board, or FASB, issued SFAS No. 123R,
which focuses primarily on accounting for transactions in which an
entity obtains employee services through share-based payment
transactions. SFAS 123R requires us to measure the cost of
employee services received in exchange for the award of equity
instruments based on the fair value of the award at the date of
grant. The cost will be recognized over the period during which an
employee is required to provide services in exchange for the award.
We adopted SFAS 123R in the first quarter of 2006, as required.
As a result, our reported earnings have been reduced, which may
affect our stock price.
Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent
a change of control, even if an acquisition would be beneficial to our stockholders, which could
affect our stock price adversely and prevent attempts by our stockholders to replace or remove our
current management.
Our certificate of incorporation and bylaws contain provisions that could delay or prevent a
change of control of our company or changes in our board of directors that our stockholders might
consider favorable. Some of these provisions:
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authorize the issuance of preferred stock which can be created and issued by the board of directors
without prior stockholder approval, with rights senior to those of the common stock; |
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provide for a classified board of directors, with each director serving a staggered three-year term; |
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prohibit our stockholders from filling board vacancies, calling special stockholder meetings, or
taking action by written consent; |
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prohibit our stockholders from making certain changes to our certificate of incorporation or bylaws
except with 66 2/3 % stockholder approval; and |
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require advance written notice of stockholder proposals and director nominations. |
In addition, we are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which may prohibit certain business combinations with stockholders owning 15% or
more of our outstanding voting stock. These and other provisions in our certificate of
incorporation, our bylaws and Delaware law could make it more difficult for stockholders or
potential acquirers to obtain control of our board of directors or initiate actions that are
opposed by our then-current board of directors, including delay or impede a merger, tender offer,
or proxy contest involving our company. Any delay or prevention of a change of control transaction
or changes in our board of directors could cause the market price of our common stock to decline.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical fact, are statements that could be deemed forward-looking
statements, including, but not limited to, statements regarding our future financial position,
business strategy and plans and objectives of management for future operations. When used in this
prospectus, the words believe, may, could, will, estimate, continue, anticipate,
intend, expect and similar expressions are intended to identify forward-looking statements.
We have based these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect our financial
condition, results of operations, business strategy, short-term and long-term business operations
and objectives, and financial needs. These forward-looking statements are subject to certain risks
and uncertainties that could cause our actual results to differ materially from those reflected in
the forward-looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in this prospectus, and in particular, the risks
discussed under the heading Risk Factors and those discussed in other documents we file with the
Securities and Exchange Commission. Except as required by law, we do not intend to update these
forward-looking statements publicly or to update the reasons actual results could differ materially
from those anticipated in these forward-looking statements, even if new information becomes
available in the future.
In light of these risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this prospectus and in the documents incorporated in this prospectus may
not occur and actual results could differ materially and adversely from those anticipated or
implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue
reliance on such forward-looking statements.
USE OF PROCEEDS
All shares of our common stock offered by this prospectus are being registered for the account
of the selling stockholder. We will not receive any of the proceeds from the sale of these shares.
SELLING STOCKHOLDER
All of the shares of common stock registered for sale pursuant to this prospectus are owned by
the selling stockholder. All of the shares offered hereby were acquired by the selling stockholder
in connection with our acquisition of assets of Radius Medical, LLC pursuant to an Asset Purchase
Agreement, dated as of January 23, 2007, among us, Radius Medical, LLC and certain members and
managers of Radius Medical, LLC. The selling stockholder does not have a material relationship
with us.
14
The following table sets forth the name of the selling stockholder, the number of shares of
common stock beneficially owned by the selling stockholder immediately prior to the date of this
prospectus, and the total number of shares that may be offered pursuant to this prospectus. The
table also provides information regarding the beneficial ownership of our common stock by the
selling stockholder as adjusted to reflect the assumed sale of all of the shares offered under this
prospectus. Percentage of beneficial ownership before this offering is based on 34,406,170 shares
of our common stock outstanding as of January 31, 2007. The selling stockholder may offer the
shares for sale from time to time in whole or in part. Except where otherwise noted, the selling
stockholder named in the following table has, to our knowledge, sole voting and investment power
with respect to the shares beneficially owned by it.
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Beneficial |
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Ownership Before Offering |
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Number of Shares |
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Number of Shares |
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Beneficial Ownership After Offering |
Selling Stockholder |
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Owned |
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Percent |
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Being Registered |
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Shares |
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Percent |
Radius Medical, LLC(1) |
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451,677 |
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1.3 |
% |
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451,677 |
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* |
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Less than 1%. |
(1) |
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Power to vote or dispose of the shares is held jointly by
Russell Cook and Duraid Antone as managers of Radius
Medical, LLC. The address of Radius Medical, LLC is 3700 Campus Drive, Newport Beach, CA 92660. |
The selling stockholder provided us with information with respect to its share ownership.
Because the selling stockholder may sell all, part or none of its shares, we are unable to estimate
the number of shares that will be held by the selling stockholder upon resale of shares of common
stock being registered hereby. We have, therefore, assumed for the purposes of the registration
statement related to this prospectus that the selling stockholder will sell all of its shares. See
Plan of Distribution.
PLAN OF DISTRIBUTION
The selling stockholder and any of its pledgees, assignees and successors-in-interest may,
from time to time, sell any or all of the shares of common stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholder may use any one or more of the following
methods when selling shares:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers; |
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block trades in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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settlement of short sales; |
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broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share; |
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a combination of any such methods of sale; |
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through the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise; or |
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any other method permitted pursuant to applicable law. |
15
The selling stockholder may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholder may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholder (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling stockholder does not expect these commissions
and discounts relating to its sales of shares to exceed what is customary in the types of
transactions involved.
In connection with the sale of our common stock or interests therein, the selling stockholder
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The selling stockholder may also sell shares of our common stock short and deliver these
securities to close out its short positions, or loan or pledge the common stock to broker-dealers
that in turn may sell these securities. The selling stockholder may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
The selling stockholder and any broker-dealers or agents that are involved in selling the
shares may be deemed to be underwriters within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. The selling stockholder has informed us that it does not
have any agreement or understanding, directly or indirectly, with any person to distribute the
common stock.
Because the selling stockholder may be deemed to be an underwriter within the meaning of the
Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144
under the Securities Act may be sold under Rule 144 rather than under this prospectus. The selling
stockholder has advised us that it has not entered into any agreements, understandings or
arrangements with any underwriter or broker-dealer regarding the sale of the resale shares. There
is no underwriter or coordinating broker acting in connection with the proposed sale of the resale
shares by the selling stockholder.
The shares will be sold only through registered or licensed brokers or dealers if required
under applicable state securities laws. In addition, in certain states, the shares may not be sold
unless they have been registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of 1934, as amended
(the Exchange Act), any person engaged in the distribution of the resale shares may not
simultaneously engage in market making activities with respect to our common stock for a period of
two business days prior to the commencement of the distribution. In addition, the selling
stockholder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of our common stock by the selling stockholder or any other person.
We will make copies of this prospectus available to the selling stockholder and have informed the
selling stockholder of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale.
We will not receive any proceeds from the sale of the shares by the selling stockholder.
16
EXPERTS
Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for the year ended
December 31, 2005 and managements assessment of the effectiveness of internal control over
financial reporting as of December 31, 2005, as set forth in their reports, which are incorporated
by reference in this prospectus and elsewhere in the registration statement. Our financial
statements and schedule and managements assessment are incorporated by reference in reliance on
Ernst & Young LLPs reports, given on their authority as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby and certain other
legal matters in connection therewith have been passed upon for us by Heller Ehrman LLP, San Diego,
California.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information reporting requirements of the Securities Exchange Act of
1934, as amended, and we file periodic reports, proxy statements and other information with the
Securities and Exchange Commission relating to our business, financial results and other matters.
The reports, proxy statements and other information we file may be inspected and copied at
prescribed rates at the Securities and Exchange Commissions Public Reference Room and via the
Securities and Exchange Commissions website (see below for more information).
In connection with the common stock offered by this prospectus, we have filed a registration
statement on Form S-3 under the Securities Act with the Securities and Exchange Commission. This
prospectus, filed as part of that registration statement, does not contain all of the information
included in that registration statement and its accompanying exhibits and schedules. For further
information with respect to our common stock and us you should refer to that registration statement
and its accompanying exhibits and schedules.
You may inspect a copy of the registration statement of which this prospectus is a part and
its accompanying exhibits and schedules, as well as the reports, proxy statements and other
information we file with the Securities and Exchange Commission, without charge at the Securities
and Exchange Commissions Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549, and
you may obtain copies of all or any part of the registration statement from those offices for a
fee. You may obtain information on the operation of the Public Reference Room by calling the
Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission
maintains a web site that contains reports, proxy and information statements and other information
regarding registrants that file electronically, including us. The address of the site is
http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by reference information in
this prospectus and other information that we file with the Securities and Exchange Commission,
which means that we can disclose important information to you by referring to those documents. The
information incorporated by reference is an important part of this prospectus. The following
documents filed by us with the Securities and Exchange Commission are incorporated herein by
reference:
(1) Annual Report on Form 10-K for the fiscal year ended December 31, 2005, as filed on March
15, 2006;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, as filed May 10, 2006;
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, as filed August 8,
2006;
(4) Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, as filed November
8, 2006;
(5) Current Reports on Form 8-K, as filed on January 9, 2006, February 7, 2006, March 13,
2006, May 30, 2006, September 29, 2006, November 16, 2006, January 9, 2007, January 22, 2007 and
January 25, 2007; and
17
(6) the description of our common stock contained in our registration statement on Form S-1,
filed March 5, 2004, under the caption Description of Capital StockCommon Stock, together with
Amendments Nos. 1, 2, 3 and 4 on Form S-1/A filed with the Securities and Exchange Commission on
April 8, 2004, April 26, 2004, May 5, 2004 and May 11, 2004, respectively, and in any report filed
for the purpose of amending such description.
All documents subsequently filed by us with the Securities and Exchange Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the termination of this
offering, shall be deemed to be incorporated by reference in this prospectus. Any statement
contained in a document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained herein, or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
We will provide, without charge, to each person, including any beneficial owner, to whom a
copy of this prospectus is delivered, upon the written or oral request of such person, a copy of
any or all of the documents that have been incorporated herein by reference, but are not delivered
with this prospectus, other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such copies should be directed to:
NuVasive, Inc.
4545 Towne Centre Court
San Diego, California 92121
Attn: Chief Financial Officer
You should rely only on the information contained in this prospectus. We have not authorized
any person to provide you with information different from that contained in this prospectus. This
prospectus may be used only where it is legal to sell the common stock of NuVasive, Inc. The
information contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the date of delivery of this prospectus or of any sale of the common stock of
NuVasive, Inc.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by us in connection with the
issuance and distribution of the securities being registered, other than underwriting discounts
(all amounts except the Securities and Exchange Commission filing fee are estimated):
|
|
|
|
|
|
|
Amount to be paid |
|
SEC registration fee |
|
$ |
1,183 |
|
Legal fees and disbursements |
|
|
10,000 |
|
Accounting fees and disbursements |
|
|
10,000 |
|
Miscellaneous |
|
|
3,817 |
|
|
|
|
|
|
Total expenses |
|
$ |
25,000 |
|
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to award, or a
corporations board of directors to grant, indemnity to directors and officers in terms
sufficiently broad to permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities Act of 1933, as
amended (the Securities Act).
As permitted by the Delaware General Corporation Law, our restated certificate of
incorporation includes a provision that eliminates the personal liability of our directors for
monetary damages for breach of fiduciary duty as a director, except for liability (1) for any
breach of the directors duty of loyalty to us or our stockholders, (2) for acts or omissions not
in good faith or that involve intentional misconduct or a knowing violation of law, (3) under
Section 174 of the Delaware General Corporation Law (regarding unlawful dividends and stock
purchases) or (4) for any transaction from which the director derived an improper personal benefit.
As permitted by the Delaware General Corporation Law, our bylaws provide that (1) we are
required to indemnify our directors and officers to the fullest extent permitted by the Delaware
General Corporation Law, subject to certain very limited exceptions, (2) we may indemnify our other
employees and agents as set forth in the Delaware General Corporation Law, (3) we are required to
advance expenses, as incurred, to our directors and executive officers in connection with a legal
proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to
certain very limited exceptions and (4) the rights conferred in the bylaws are not exclusive.
We have entered into indemnification agreements with each of our directors and executive
officers to give such directors and officers additional contractual assurances regarding the scope
of the indemnification set forth in our certificate of incorporation and to provide additional
procedural protections. We also intend to enter into indemnification agreements with any new
directors and executive officers in the future. At present, there is no pending litigation or
proceeding involving any of our directors, officers, employees, or agents where indemnification by
us will be required or permitted, and we are not aware of any threatened litigation or proceeding
that may result in a claim for such indemnification.
The indemnification provisions in our certificate of incorporation, bylaws and the
indemnification agreements entered into between us and each of our directors and executive officers
may be sufficiently broad to permit indemnification of our directors and executive officers for
liabilities arising under the Securities Act.
We have obtained liability insurance for our officers and directors.
19
Item 16. Exhibits
(a) Exhibits
|
|
|
Exhibit No. |
|
Description |
|
|
|
2.1(1) |
|
Asset Purchase Agreement, dated as of June 3, 2005, by and between NuVasive, Inc. and RSB Spine LLC |
|
|
|
2.2(2) |
|
Asset Purchase Agreement, dated as of August 4, 2005, by and
among NuVasive, Inc., Pearsalls Limited and American Medical Instruments Holdings, Inc. |
|
|
|
2.3(3) |
|
Intellectual Property Purchase Agreement, dated as of August
12, 2005, by and between NuVasive, Inc. and RiverBend Design LLC |
|
|
|
2.4(4) |
|
Amendment No. 1 to Asset Purchase Agreement, dated as of
September 26, 2006, by and among NuVasive, Inc., Pearsalls Limited and American Medical Instruments Holdings, Inc. |
|
|
|
2.5(5) |
|
Agreement, dated as of January 3, 2007, by and between NuVasive, Inc. and RSB Spine LLC |
|
|
|
2.5(6) |
|
Asset Purchase Agreement, dated as of January 23, 2007, by and
among NuVasive, Inc., Radius Medical, LLC, Biologic, LLC, Antone Family Partners, Russell Cook and Duraid Antone |
|
|
|
4.1(7) |
|
Second Amended and Restated Investors Rights Agreement, dated
July 11, 2002, by and among NuVasive, Inc. and the other parties named therein |
|
|
|
4.2(7) |
|
Amendment No. 1 to Second Amended and Restated Investors
Rights Agreement, dated June 19, 2003, by and among NuVasive, Inc. and the other parties named therein |
|
|
|
4.3(7) |
|
Amendment No. 2 to Second Amended and Restated Investors
Rights Agreement, dated February 5, 2004, by and among NuVasive, Inc. and the other parties named therein |
|
|
|
4.4(2) |
|
Registration Rights Agreement, dated August 4, 2005, by and between NuVasive, Inc. and Pearsalls Limited |
|
|
|
4.5(4) |
|
Registration Rights Agreement Termination Agreement, dated
September 26, 2006, by and between NuVasive, Inc. and Pearsalls Limited |
|
4.6(8) |
|
Specimen Common Stock Certificate |
|
5.1* |
|
Opinion of Heller Ehrman LLP |
|
23.1* |
|
Consent of Independent Registered Public Accounting Firm |
|
23.2* |
|
Consent of Heller Ehrman LLP (included in Exhibit 5.1) |
|
24.1* |
|
Power of Attorney (included in signature page) |
|
|
|
* |
|
Filed herewith |
|
(1) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on June 9, 2005, and is incorporated herein by
reference. |
|
(2) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on August 10, 2005, and is incorporated herein by
reference. |
|
(3) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on August 17, 2005, and is incorporated herein by
reference. |
|
(4) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on September 29, 2006, and is incorporated herein by
reference. |
|
(5) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 9, 2007, and is incorporated herein by
reference. |
|
(6) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 25, 2007, and is incorporated herein by
reference. |
|
(7) |
|
This exhibit was previously filed as an exhibit to our Registration Statement on Form S-1
(File No. 333-113344) originally filed with the Securities and Exchange Commission on March 5,
2004, as amended thereafter, and is incorporated herein by reference. |
|
(8) |
|
This exhibit was previously filed as an exhibit to our Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 15, 2006, and is incorporated herein by
reference. |
20
Item 17. Undertakings
(a) |
|
The undersigned registrant hereby undertakes: |
|
(1) |
|
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: |
|
(i) |
|
to include any prospectus required by Section 10(a)(3) of the Securities Act; |
|
|
(ii) |
|
to reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
this registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set forth
in the Calculation of Registration Fee table in the effective registration
statement; and |
|
|
(iii) |
|
to include any additional or changed material information on
the plan of distribution; |
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of
this section do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant under the Exchange Act that are incorporated
by reference in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
|
(2) |
|
That, for the purpose of determining any liability under the Securities Act,
each post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. |
|
|
(3) |
|
To file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering. |
|
|
(4) |
|
That, for the purpose of determining liability under the Securities Act to any purchaser: |
|
(i) |
|
If the registrant is relying on Rule 430B: |
|
(A) |
|
Each prospectus filed by the registrant
pursuant to Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and |
|
|
(B) |
|
Each prospectus required to be filed pursuant
to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities
Act shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed
to be a new effective date of the registration statement relating to
the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof. |
21
Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that
was made in the registration statement or prospectus that was part of
the registration statement or made in any such document immediately
prior to such effective date; or
|
(ii) |
|
If the registrant is subject to Rule 430C, each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating to
an offering, other than registration statements relying on Rule 430B or other
than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use. |
(b) |
|
That, for purposes of determining any liability under the Securities Act, each filing of the
registrants annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act,
(and, where applicable, each filing of an employee benefit plans annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. |
(c) |
|
Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person of such registrant in the
successful defense of any action suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue. |
22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements of filing on Form S-3 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Diego, State of California on February 2, 2007.
|
|
|
|
|
|
NUVASIVE, INC.
|
|
|
By: |
/s/
Alexis V. Lukianov |
|
|
|
Alexis V. Lukianov |
|
|
|
Chairman and Chief Executive Officer |
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Alexis V. Lukianov and Kevin C. OBoyle, and each of them individually, as his or her
true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, with
full powers to each of them, for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments) to this
Registration Statement, and any registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, in connection with the registration under the Securities Act of
1933, as amended, of securities of the registrant, and to file or cause to be filed the same, with
exhibits thereto and other documents in connection therewith, with the SEC, granting unto said
attorney-in-fact and agent, and each of them individually, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and about the foregoing,
as fully to all intents and purposes as he or she might or could do in person, lawfully do or cause
to be done by virtue thereof, and hereby ratifying and confirming all that said attorneys, and each
of them, or their substitute or substitutes, shall do or cause to be done by virtue of this Power
of Attorney. This Power of Attorney may be executed in counterparts.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities indicated on February 2, 2007.
|
|
|
Signature |
|
Title |
|
|
|
/s/
Alexis V. Lukianov
|
|
Alexis V. Lukianov |
|
|
Chairman and Chief Executive Officer |
|
|
(principal executive officer) |
|
|
|
/s/ Kevin C. OBoyle
|
|
Kevin C. OBoyle |
|
|
Executive
Vice President and Chief Financial Officer |
|
|
(principal financial and accounting officer) |
|
|
|
/s/ Jack R. Blair
|
|
Jack R. Blair |
|
|
Director |
|
|
|
|
|
James C. Blair, Ph.D. |
|
|
Director |
|
|
|
/s/ Peter C. Farrell. Ph.D., AM
|
|
Peter C. Farrell. Ph.D., AM |
|
|
Director |
|
|
|
/s/ Lesley H. Howe
|
|
Lesley H. Howe |
|
|
Director |
|
|
|
/s/ Robert J. Hunt
|
|
Robert J. Hunt |
|
|
Director |
|
|
|
/s/ Hansen A. Yuan, M.D.
|
|
Hansen A. Yuan, M.D. |
|
|
Director |
23
EXHIBIT INDEX
|
|
|
Exhibit No. |
|
Description |
|
|
|
2.1(1)
|
|
Asset Purchase Agreement, dated as of June 3, 2005, by and
between NuVasive, Inc. and RSB Spine LLC |
|
|
|
2.2(2)
|
|
Asset Purchase Agreement, dated as of August 4, 2005, by and
among NuVasive, Inc., Pearsalls Limited and American Medical
Instruments Holdings, Inc. |
|
|
|
2.3(3)
|
|
Intellectual Property Purchase Agreement, dated as of August
12, 2005, by and between NuVasive, Inc. and RiverBend Design
LLC |
|
|
|
2.4(4)
|
|
Amendment No. 1 to Asset Purchase Agreement, dated as of
September 26, 2006, by and among NuVasive, Inc., Pearsalls
Limited and American Medical Instruments Holdings, Inc. |
|
|
|
2.5(5)
|
|
Agreement, dated as of January 3, 2007, by and between
NuVasive, Inc. and RSB Spine LLC |
|
|
|
2.5(6)
|
|
Asset Purchase Agreement, dated as of January 23, 2007, by and
among NuVasive, Inc., Radius Medical, LLC, Biologic, LLC,
Antone Family Partners, Russell Cook and Duraid Antone |
|
|
|
4.1(7)
|
|
Second Amended and Restated Investors Rights Agreement, dated
July 11, 2002, by and among NuVasive, Inc. and the other
parties named therein |
|
|
|
4.2(7)
|
|
Amendment No. 1 to Second Amended and Restated Investors
Rights Agreement, dated June 19, 2003, by and among NuVasive,
Inc. and the other parties named therein |
|
|
|
4.3(7)
|
|
Amendment No. 2 to Second Amended and Restated Investors
Rights Agreement, dated February 5, 2004, by and among
NuVasive, Inc. and the other parties named therein |
|
|
|
4.4(2)
|
|
Registration Rights Agreement, dated August 4, 2005, by and
between NuVasive, Inc. and Pearsalls Limited |
|
|
|
4.5(4)
|
|
Registration Rights Agreement Termination Agreement, dated
September 26, 2006, by and between NuVasive, Inc. and
Pearsalls Limited |
|
|
|
4.6(8)
|
|
Specimen Common Stock Certificate |
|
|
|
5.1*
|
|
Opinion of Heller Ehrman LLP |
|
|
|
23.1*
|
|
Consent of Independent Registered Public Accounting Firm |
|
|
|
23.2*
|
|
Consent of Heller Ehrman LLP (included in Exhibit 5.1) |
|
|
|
24.1*
|
|
Power of Attorney (included in signature page) |
|
|
|
* |
|
Filed herewith |
|
(1) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on June 9, 2005, and is incorporated herein by
reference. |
|
(2) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on August 10, 2005, and is incorporated herein by
reference. |
|
(3) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on August 17, 2005, and is incorporated herein by
reference. |
|
(4) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on September 29, 2006, and is incorporated herein by
reference. |
|
(5) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 9, 2007, and is incorporated herein by
reference. |
|
(6) |
|
This exhibit was previously filed as an exhibit to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 25, 2007, and is incorporated herein by
reference. |
|
(7) |
|
This exhibit was previously filed as an exhibit to our Registration Statement on Form S-1
(File No. 333-113344) originally filed with the Securities and Exchange Commission on March 5,
2004, as amended thereafter, and is incorporated herein by reference. |
|
(8) |
|
This exhibit was previously filed as an exhibit to our Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 15, 2006, and is incorporated herein by
reference. |