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BSD MEDICAL CORP FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Other Events, Financial Statements and Exhibits

June 26, 2014

Item 1.01 Entry into a Material Definitive Agreement.

On June 20, 2014, BSD Medical Corporation (the "Company") entered into an engagement agreement (the "Engagement Agreement") with Maxim Group LLC (the "Placement Agent"), pursuant to which the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of shares of the Company's common stock and warrants to purchase shares of the Company's common stock in a registered direct offering (the "Offering"). The Placement Agent will be entitled to a cash fee of 6.5% of the gross proceeds paid to the Company for the securities the Company sells in this Offering. The Company will also reimburse the Placement Agent for all travel and other out-of-pocket expenses that have been incurred by the Placement Agent in connection with the Offering, which shall be limited to the lesser of (i) $70,000 or (ii) 1% of the gross proceeds of the Offering, subject to compliance with FINRA Rule 5110(f)(2)(D). In the event the engagement of the placement agent terminates prior to the consummation of this offering, the Placement Agent shall be entitled to reimbursement for actual expenses in an amount not to exceed $40,000.

The Engagement Agreement contains customary representations, warranties and covenants by the Company. It also provides for customary indemnification by the Company and the Placement Agent for losses or damages arising out of or in connection with the sale of the securities being offered. The Company has also agreed to contribute to payments the Placement Agent may be required to make in respect of such liabilities.

Also on June 26, 2014, the Company and certain institutional investors entered into a securities purchase agreement (the "Purchase Agreement") in connection with the Offering, pursuant to which the Company agreed to sell an aggregate of 5,500,000 shares of its common stock and warrants to purchase a total of 4,400,000 shares of its common stock to such investors for aggregate gross proceeds, before deducting fees to the Placement Agent and other estimated offering expenses payable by the Company, of approximately $5.2 million. The common stock and warrants were sold in fixed combinations, with each combination consisting of one share of common stock and a warrant to purchase 0.8 shares of common stock. The purchase price is $0.95 per fixed combination. The warrants will become exercisable six months and one day following the closing date of the Offering and will remain exercisable for five years thereafter at an exercise price of $1.10 per share. The exercise price of the warrants is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

The exercisability of the warrants may be limited if, upon exercise, the holder or any of its affiliates would beneficially own more than 4.99% of the Company's common stock.

Under the Purchase Agreement, the Company has agreed with each of the purchasers that, subject to certain exceptions, it will not, within the 75 days following the closing of the Offering enter into any agreement to issue or announce the issuance or proposed issuance of any securities.

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The Company also agreed with each of the purchasers that for a period of four years from the date of the Purchase Agreement, the Company will not effect or enter into an agreement to effect a "Variable Rate Transaction," which means a transaction in which it:

? issues or sells any convertible securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of, or quotations for, the shares of common stock of the Company at any time after the initial issuance of such convertible securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such convertible securities or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Company's common stock, other than pursuant to a customary "weighted average" anti-dilution provision; or ? enter into any agreement (including, without limitation, an equity line of credit) whereby the Company may sell securities at a future determined price.



The Company has also agreed to indemnify each of the purchasers against certain losses resulting from its breach of any of its representations, warranties, or covenants under agreements with each of the purchasers, as well as under certain other circumstances described in the Purchase Agreement.

The net proceeds to the Company from the Offering, after deducting placement agent fees and the estimated offering expenses borne by the Company, and excluding the proceeds, if any, from the exercise of the warrants issued in the Offering, are expected to be approximately $4.71 million. The Offering will close on or about July 1, 2014, subject to customary closing conditions. After giving effect to the Offering, but without giving effect to the exercise of the warrants being offered, the Company will have 39,689,209 shares of common stock outstanding.

The Offering was effected as a takedown off the Company's shelf registration statement on Form S-3 (File No. 333-184164), which became effective on October 11, 2012, pursuant to a prospectus supplement to be filed with the Securities and Exchange Commission.

The foregoing summaries of the terms of the Engagement Agreement, the form of warrant to be issued to each of the purchasers and the Purchase Agreement are subject to, and qualified in their entirety by, such documents attached hereto as Exhibits 1.1, 4.1, and 10.1 respectively, which are incorporated herein by reference.

Item 8.01 Other Events.



The information set forth in Item 1.01 with respect to the Offering is hereby incorporated herein by reference. The Company will file the opinion of its counsel, Dorsey & Whitney LLP, relating to the legality of the issuance and sale of the shares of common stock, warrants and shares of common stock issuable upon exercise of the warrants in the Offering, by amendment to this report.

On June 26, 2014, the Company issued a press release announcing the execution of the Purchase Agreement. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated by reference herein.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No. Description

1.1 Engagement Agreement, dated as of June 20, 2014, by and among the Company and Maxim Group LLC 4.1 Form of Common Stock Purchase Warrant 10.1 Securities Purchase Agreement, dated as of June 25, 2014, by and between the Company and each of the purchasers identified on the signature pages thereto 99.1 Press Release, dated June 26, 2014



Forward-Looking Statements

Certain statements in this Report are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include statements that are not historical facts and statements about the proposed offering of common stock described herein. For such statements, the Company claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from the Company's expectations. Factors that could cause actual results to differ materially from those stated or implied by the Company's forward-looking statements are disclosed in its filings with the Commission. These forward-looking statements represent the Company's judgment as of the time of this report. The Company disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.


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Source: Edgar Glimpses


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