SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person* Prospect Management Co. III, L.L.C. (Last) (First) (Middle) C/O PROSPECT VENTURE PARTNERS 435 TASSO STREET, SUITE 200 (Street) PALO ALTO CA 94301 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 05/31/2013	3. Issuer Name and Ticker or Trading Symbol BAXANO SURGICAL, INC. [ BAXS ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	5,340,616	I	By Prospect Venture Partners III, L.P.(1)

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

1. Name and Address of Reporting Person* Prospect Management Co. III, L.L.C. (Last) (First) (Middle) C/O PROSPECT VENTURE PARTNERS 435 TASSO STREET, SUITE 200 (Street) PALO ALTO CA 94301 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Prospect Venture Partners III L P (Last) (First) (Middle) C/O PROSPECT VENTURE PARTNERS 435 TASSO STREET, SUITE 200 (Street) PALO ALTO CA 94301 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* SCHNELL DAVID (Last) (First) (Middle) C/O PROSPECT VENTURE PARTNERS 435 TASSO STREET, SUITE 200 (Street) PALO ALTO CA 94301 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. The reported securities are owned by Prospect Venture Partners III, L.P. ("PVP III"). Prospect Management Co. III, L.L.C. ("PMC III") is the sole general partner of PVP III. David Schnell and Russell C. Hirsch are the managing directors of PMC III and share voting and dispositive power over the shares held by PVP III. Mr. Hirsch is a director of the issuer and files separate Section 16 reports. Each of the reporting persons disclaims beneficial ownership of the reported securities except to the extent of his or its respective pecuniary interest therein.

Remarks:

	/s/ Russell C. Hirsch, Managing Director	06/10/2013
	/s/ Russell C. Hirsch, Managing Director of Prospect Management Co. III, L.L.C., General Partner of Prospect Venture Partners III, L.P.	06/10/2013
	/s/ David Schnell	06/10/2013
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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