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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. __ )

Filed by the Registrant                                 ☒

Filed by a Party other than the Registrant    ☐

Check the appropriate box:

AIRXPANDERS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box)

AIRXPANDERS, INC.

1047 ELWELL COURT3047 ORCHARD PARKWAY

PALO ALTO,SAN JOSE, CA, 9404395134

NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS

To Be Held On May 22,October 25, 2018, Australian Eastern Standard DaylightTime

(May 21,October 24, 2018, Pacific Daylight Time)

Dear Stockholder:

You are cordially invited to attend the 2018 Annuala Special Meeting of Stockholders of AIRXPANDERS, INC., a Delaware corporation. The meeting will be held on Tuesday, May 22,Thursday, October 25, 2018, at 9:00 a.m. Australian Eastern StandardDaylight Time (which is 4:3:00 p.m. on Monday, May 21,Wednesday, October 24, 2018 Pacific Daylight Time), at the Melbourne offices of Johnson Winter and Slattery at Level 34, 55 Collins Street, Melbourne, Victoria, Australia, for the following purposes:

These items of business are more fully described in the Proxy Statement accompanying this Notice.

All stockholders and holders of our CHESS Depositary Interests (“CDIs”) are invited to attend the annual meetingSpecial Meeting in person and we hope you will be able to attend the annual meeting.Special Meeting. Whether or not you expect to attend the annual meeting,Special Meeting, you are urged to submit your proxy card or CDI Voting Instruction Form as soon as possible so that your shares (or shares underlying your CDIs) can be voted at the annual meetingSpecial Meeting in accordance with your instructions. When you have finished reading the proxy statement, we encourage you to vote promptly. You may vote your shares (or direct CHESS Depositary Nominees Pty Ltd (“CDN”) to vote if you hold your shares in the form of CDIs) by following the instructions on the enclosed proxy card or the CDI Voting Instruction Form. Internet voting is available as described in the enclosed materials.

The record date for the AnnualSpecial Meeting is Monday, April 9,Wednesday, October 3, 2018 at 7:00 p.m. Australian Eastern Standard Time, (2:00 a.m. Pacific Daylight Time). Only stockholders of record at the close of business on that datetime may vote at the meeting or any adjournment thereof.

AIRXPANDERS, INC.

2018 ANNUALSPECIAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS

AIRXPANDERS, INC.

1047 ELWELL COURT3047 ORCHARD PARKWAY

PALO ALTO,SAN JOSE, CA 9404395134

PROXY STATEMENT FOR THE 2018 ANNUALSPECIAL MEETING OF STOCKHOLDERS

TUESDAY, MAY 22,9 A.M. THURSDAY, OCTOBER 25, 2018

(AUSTRALIAN EASTERN STANDARDDAYLIGHT TIME)

This Proxy Statement, along with the accompanying notice of 2018 Annuala Special Meeting of Stockholders, contains information about the 2018 AnnualSpecial Meeting of Stockholders (the “AnnualSpecial Meeting” or “meeting”) of AirXpanders, Inc., including any adjournments or postponements of the AnnualSpecial Meeting. We are holding the AnnualSpecial Meeting on Tuesday, May 22,Thursday, October 25, 2018, at 9:00 a.m. Australian Eastern StandardDaylight Time (which is 4:3:00 p.m. on Monday, May 21,Wednesday, October 24, 2018 Pacific Daylight Time), at the Melbourne offices of Johnson Winter and Slattery at Level 34, 55 Collins Street, Melbourne, Victoria, Australia. Directions to the AnnualSpecial Meeting may be found on the website of Johnson Winter and Slattery at www.jws.com.au/en/ by clicking on “Contact” then “Directions” for the Melbourne office.

In this Proxy Statement, we refer to AirXpanders, Inc. as “AirXpanders,” “the Company,” “we” and “us.” 

This Proxy Statement relates to the solicitation of proxies by our board of directors for use at the AnnualSpecial Meeting.

On or about May 1,October 8, 2018, we began sending this proxy statement, the attached Notice of the 2018 AnnualSpecial Meeting of Stockholders ("Notice of Meeting" or “Notice”), proxy card, and CDI Voting Instruction Form and Annual Report, which includes our financial statements for the fiscal year ended December 31, 2017 (“Annual Report”) to all stockholders entitled to vote at the AnnualSpecial Meeting.

IMPORTANT:  To ensure that your shares are represented at the AnnualSpecial Meeting, please vote (or, for CDI holders, direct CDN to vote) your shares via the Internet or by marking, signing, dating, and returning the enclosed proxy card or CDI Voting Instruction Form to the address specified. If you attend the AnnualSpecial Meeting, you may choose to vote in person even if you have previously voted your shares, except that CDI holders may only instruct CDN to vote on their behalf by completing and signing the CDI Voting Instruction Form or voting online at www.investorvote.com.au and may not vote in person unless they have nominated themselves as CDN’s proxy.proxy.

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

Why am I receiving these materials?

We have sent you these proxy materials because the Boardboard of Directorsdirectors of AirXpanders is soliciting your proxy to vote at the AnnualSpecial Meeting, including at any adjournments or postponements of the meeting. Stockholders are invited to attend the AnnualSpecial Meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the meeting to vote your shares of Class A Common Stock (“Shares”). Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy through the internet.

What is the purpose of the meeting?

At the AnnualSpecial Meeting, stockholders are invited to act upon the matters outlined in the Notice of Meeting. At the meeting, management will also report on matters of current interest to our stockholders and respond to any questions from our stockholders. The matters outlined in the Notice of Meeting include:

-  Approval of Private Placement of Shares to Mr. Barry Cheskin, the electionChairman of one Class III directorthe Company (Item 1);

-  approvalApproval of grant of Options to Mr. Frank Grillo, President & CEO and a 10% placement facilityDirector of the Company (Item 2);

-  grantRatification and approval of options to the Non-Executive Directorsprior issue of the Company (Items 3(a), (b), (c), (d) and (e))Shares under Private Placement (Item 3);

-  approvalRatification and Approval of issuePrior Issue of securities under our 2015 Equity Incentive PlanWarrants to Oxford Finance LLC (Item 4);

-  Approval of Stock Option Exchange program (Item 5); and

-  ratificationApproval of independent registered public accounting firmincrease in authorized capital of Class A Common Stock to 600,000,000 shares from 200,000,000 shares (Item 5)6).

Who is entitled to vote at the meeting?

Only those stockholders of record on Monday, April 9,Wednesday, October 3, 2018 at 7:00 p.m. Australian Eastern Standard Time, (2:00 a.m. Pacific Daylight Time) (“Record Date”), will be entitled to receive notice of and to vote at the meeting and any adjournment or postponement thereof. CHESS Depositary Interest (“CDI”) holders as of the Record Date are entitled to receive notice of and attend the meeting and may instruct CHESS Depositary Nominees Pty Ltd (“CDN”) to vote at the meeting by following the instructions on the CDI Voting Instruction Form or by voting online at www.investorvote.com.au.

As of the Record Date, there were 95,943,408185,850,890 shares of Class A common stock in the Company (“Shares”) outstanding (equivalent to 287,830,224557,552,670 CDIs), all of which were entitled to vote with respect to the proposals to be acted upon at the meeting, subject to the voting exclusions noted in the Notice of Meeting. Each CDI represents one third of a Share. As of the Record Date, there were 287,830,224557,552,670 CDIs quoted on the Australian Securities Exchange (“ASX”) (assuming all issued Shares are held as CDIs). On each matter to be voted upon, you have one vote for each share of common stock you own as of the Record Date. Stockholders are not permitted to cumulate votes with respect to the election of directors.

Votes for and against and abstentions each will be counted as present and entitled to vote for purposes of determining whether a quorum is present.

Will any investors be excluded from voting on any of the proposals at the meeting?

In accordance with ASX Listing Rule 14.11.1, the Company will disregard any votes cast in favor of certain resolutions by certain stockholders and associates of those stockholders. Please refer to the Notice of Meeting for further detail in relation to the exclusions that apply.

What are my voting rights?

Holders of Shares are entitled to one vote for each Share held as at the Record Date. Holders of our CDIs are entitled to direct CDN to vote one vote for every three (3) CDIs held by such holder as at the Record Date. Therefore, as of the Record Date, a total of 95,943,408185,850,890 votes are entitled to be cast at the meeting.

How many shares must be present or represented to hold the meeting?

In accordance with section 8 of the Company’s amended and restated bylaws, the presence in person, by remote communication or by proxy, of the holders of a majority of the outstanding Shares entitled to vote at the meeting, as of the Record Date, must be present at the AnnualSpecial Meeting in order to hold the meeting and conduct business. This is called a quorum. Shares represented by proxies that reflect abstentions or “broker non-votes” will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

What is a proxy?

It is your designation of another person to vote stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. When you designate a proxy, you also may direct the proxy how to vote your shares. We refer to this as your ‘‘proxy vote.’’

What is the difference between a stockholder of record and a ‘‘street name’’ holder?

If you own Shares registered directly in your name with our U.S. transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those Shares. As a stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the AnnualSpecial Meeting.

If your Shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the stockholder of record with respect to those Shares, while you are considered the beneficial owner of those Shares. In that case, your Shares are said to be held in ‘‘street name’’ and these proxy materials were forwarded to you by that organization. Street name holders generally cannot vote their Shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their Shares using the method described below under ‘‘How do I vote my shares of AirXpanders common stock?’’ Since a street name holder is not the stockholder of record, you may not vote your shares in person at the AnnualSpecial Meeting unless you obtain a ‘‘legal proxy’’ from the broker, bank, trustee, or nominee that holds your Shares giving you the right to vote the Shares at the AnnualSpecial Meeting.

If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares,  the question of whether your broker or nominee will still be able to vote your shares depends on whether the particular proposal is deemed to be a “routine” matter under the rules and related interpretations of the New York Stock Exchange (“NYSE”NYSE”).   Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters.  Under the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or privileges of shareholders, such as mergers, shareholder proposals, elections of directors (even if not contested), executive compensation (including any advisory shareholder votes on executive compensation and on the frequency of shareholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. 

CDN is the stockholder of record for all Shares beneficially owned by holders of CDIs. Holders of CDIs are entitled to receive notice of and to attend the AnnualSpecial Meeting and may direct CDN to vote at the AnnualSpecial Meeting by using one of the methods described below under ‘‘How do I vote if I hold CDIs?’’

How do I vote my shares of AirXpanders common stock?

If you are a stockholder of record, you can submit a proxy to be voted at the AnnualSpecial Meeting in any of the following ways:

-  over the Internet by following instructions below; or

-  signing, dating and mailing the enclosed proxy card; or

-  in person at the AnnualSpecial Meeting.

Valid proxies must be received by Computershare no later than 9:00 a.m. on Sunday, May 20,Tuesday, October 23, 2018, Australian Eastern StandardDaylight Time, (Saturday, May 19,(Monday, October 22, 2018 at 4:3:00 p.m. Pacific Daylight Time).

To vote by the Internet, you will need to use a control number that was provided to you in the materials with the enclosed proxy card and follow the additional steps when prompted. The steps have been designed to authenticate your identity, allow you to give voting instructions, and confirm that those instructions have been recorded properly.

If you hold your Shares in street name, you must vote your Shares in the manner prescribed by your broker, bank, trust or other nominee, which is similar to the voting procedures for stockholders of record. You will receive a voting instruction form (not a proxy card) to use in directing the broker, bank, trust or other nominee how to vote your Shares.

Please refer to ‘‘Will any investors be excluded from voting on any of the proposals at the meeting?’’ for a summary of voting exclusions applicable to each proposal to be voted on at the AnnualSpecial Meeting.

How do I vote if I hold CDIs?

Each CDI holder as at the Record Date is entitled to direct CDN to one vote for every three (3) CDIs held by such holder. Such CDI holders are entitled to receive notice of and to attend the AnnualSpecial Meeting and any adjournment or postponement of the AnnualSpecial Meeting and may instruct the Company’s CDI depositary, CDN, to vote the Shares underlying their CDIs in a particular manner by returning the enclosed CDI Voting Instruction Form to Computershare, or by voting online at www.investorvote.com.au. Valid voting instructions must be received by Computershare no later than 9:00 a.m. on Sunday, May 20,October 21, 2018, Australian Eastern StandardDaylight Time, (Saturday, May 19,October 20, 2018 at 4:3:00 p.m. Pacific Daylight Time). Doing so permits CDI holders to instruct CDN to vote on behalf of the CDI holders at the meeting in accordance with their written instructions.

Alternatively, CDI holders may vote at the AnnualSpecial Meeting by informing the Company that they wish to nominate themselves or another person to be appointed as CDN’s proxy for the purpose of attending and voting at the meeting by completing Step 1 in the enclosed CDI Voting Instruction Form.

What are broker non-votes?

As discussed above, when a beneficial owner of shares held in street name does not give voting instructions to his or her broker, bank or other securities intermediary holding his or her shares as to how to vote on matters deemed to be “non-routine” under NYSE rules, the broker, bank or other such agent cannot vote the shares. These un-voted shares are counted as “broker non-votes.” Items 1, 2, 3 and 4 are considered to be “non-routine” under NYSE rules and we therefore expect broker non-votes to exist in connection with those proposals.

What does it mean if I receive more than one printed set of proxy materials?

If you receive more than one printed set of proxy materials, it means that you hold Shares or CDIs registered in more than one account. To ensure that all of your Shares and CDIs are voted, please submit proxies or voting instructions for all of your Shares and CDIs.

How can I attend the meeting?

All of our stockholders and CDI holders are invited to attend the AnnualSpecial Meeting. You may be asked to present valid photo identification, such as a driver’s license or passport, before being admitted to the meeting. If you hold your Shares in street name or are a CDI holder, you also may be asked to present proof of ownership to be admitted to the meeting. A brokerage or holding statement or letter from your broker, bank, trust or other nominee are examples of proof of ownership. For directions to attend the AnnualSpecial Meeting, please contact our Investor Relations department at 650-390-9000 or by email at ir@airxpanders.com.

Can I vote my SharesShares in person at the meeting?

If you are a stockholder of record, you may vote your Shares in person at the meeting by completing a ballot at the meeting. Even if you currently plan to attend the AnnualSpecial Meeting, we recommend that you submit your proxy as described above so your vote will be counted if you later decide not to attend the AnnualSpecial Meeting. If you submit your vote by proxy and later decide to vote in person at the AnnualSpecial Meeting, the vote you submit at the AnnualSpecial Meeting will override your proxy vote.

If you are a street name holder, you may vote your Shares in person at the AnnualSpecial Meeting only if you obtain a valid proxy from your broker, bank, trust or other nominee giving you the right to vote the Shares at the AnnualSpecial Meeting.

Please refer to ‘‘How do I vote if I hold CDIs?’’ if you are a CDI holder.

How can I raise questions relevant to the Company’s audit to the external auditor?

The Company’s auditor, SingerLewak LLP, is based in California, United States of America and will attend the Annual Meeting via teleconference.

Stockholders may submit questions relevant to the Company’s audit to the Company’s Australian registered office at Level 13, 41 Exhibition Street, Melbourne, Victoria. The Company’s Australian Secretary, Mr. Brendan Case, will ensure that the questions are provided to the Company’s auditor and will co-ordinate responses.

What is the voting requirement to approve each of the proposals included in the notice of meeting?

Item 1 — ElectionApproval of Director

You may vote ‘‘FOR’’ or ‘‘ABSTAIN’’ onPrivate Placement of Shares to Mr. Barry Cheskin, the electionChairman of the director nominated for election. Directors are elected by a plurality of the votes of the Shares present in person, by remote communication or represented by proxy and entitled to vote at the Annual Meeting. Accordingly, the director nominee receiving the highest number of “FOR” votes will be elected. “ABSTAIN” votes and broker non-votes will not have any effect on the outcome of the election. 

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted for the purpose of establishing a quorum and will have no effect on the outcome of this proposal.

Under ASX Listing Rule 14.2.1, a proxy form must allow stockholders to vote for a resolution, against a resolution or to abstain from voting on a resolution. The laws of Delaware, where the Company is domiciled, do not provide for the casting of stockholders’ votes against certain types of resolutions, including the election of directors. As a result, ASX granted the Company a waiver from ASX Listing Rule 14.2.1 to the extent necessary to permit the Company not to provide in its proxy form an option for holders of CDIs to vote against a resolution to elect a director. The terms of the waiver are that: (i) the Company complies with the relevant US laws as to the content of proxy forms applicable to resolutions for the election of directors; (ii) any notice given by the Company to CDI holders under ASX Settlement Operating Rule 13.8.9 makes it clear that holders are only able to vote for such resolutions or abstain from voting, and the reasons why this is the case; (iii) the terms of the waiver are set out in the management proxy circular provided to all holders of CDIs; and (iv) the waiver from ASX Listing Rule 14.2.1 only applies for so long as the relevant US laws prevent the Company from permitting stockholders to vote against a resolution to elect a director.

Item 2 — Approval of 10% Placement Facility

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on the proposal to approve pursuant to and in accordance with ASX Listing Rule 7.1A and for all other purposes, the issue of up to 10% of the issued capital of the Company (at the time of the issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 (“10% Placement Facility”).Item 1.

The proposal to approve the 10% Placement Facility is a "special resolution" and requires the affirmative vote of 75% of the votes cast by stockholders present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal. Abstentions are considered Shares present and entitled to vote and thus will have the effect of a vote ‘‘AGAINST’’ this proposal. Broker non-votes will have no effect.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted for the purpose of establishing a quorum and will have no effect on the outcome of this proposal. 

Items 3(a) to 3(e) — Approval of Grant of Options to Non-Executive Directors

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on each of the proposals to approve the grants of options to the Non-Executive Directors of the Company, as follows:

-  to Mr. Barry Cheskin, Chairman and Non-Executive Director (assuming Item 1(a) is passed) – options to purchase 83,837 Shares (equivalent to 251,511 CDIs) (Item 3(a));

-  to Mr. Dennis Condon, Non-Executive Director – options to purchase 83,837 Shares (equivalent to 251,511 CDIs) (Item 3(b));

-  to Ms. Elizabeth Hammack, Non-Executive Director– options to purchase 83,837 Shares (equivalent to 251,511 CDIs) (Item 3(c)).

-  to Mr. Gregory Lichtwardt, Non-Executive Director – options to purchase 83,837 Shares (equivalent to 251,511 CDIs) (Item 3(d); and

-  to Ms. Zita Peach, Non-Executive Director – options to purchase 83,837 Shares (equivalent to 251,511 CDIs) (Item 3(e)).

The proposals to approve such grants each1 requires the affirmative vote of the holders of a majority of the Shares present in person or represented by proxy at the AnnualSpecial Meeting and entitled to vote on such proposal at the AnnualSpecial Meeting. Abstentions are considered Shares present and entitled to vote and thus will have the effect of a vote ‘‘AGAINST’’ these proposal. Broker non-votes will have no effect.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted for the purpose of establishing a quorum and will have no effect on the outcome of this proposal. 

Item 42 — Approval of IssueGrant of Securities under our 2015 Equity Incentive PlanOptions to Mr. Frank Grillo, President & CEO and a Director of the Company

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on the proposal to for the purposes of Exception 9 of ASX Listing Rule 7.2 and for all other purposes, to approve the issue of securities under the AirXpanders, Inc. 2015 Equity Incentive Plan (including the Australian Sub-Plan) (“2015Plan”) as an exception to ASX Listing Rule 7.1.Item 2.

The proposal to approve the issue under our 2015 PlanItem 2 requires the affirmative vote of the holders of a majority of the Shares present in person or represented by proxy at the AnnualSpecial Meeting and entitled to vote on such proposal at the AnnualSpecial Meeting. Abstentions are considered Shares present and entitled to vote and thus will have the effect of a vote ‘‘AGAINST’’ thisthese proposal. Broker non-votes will have no effect.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted for the purpose of establishing a quorum and will have no effect on the outcome of this proposal.  

In addition, the approval of this Item 5 —2 is conditioned upon approval of Item 6 (Approval of Increase in Authorized Capital) described below.

Items 3 - Ratification and Approval of RatificationPrior Issue of Independent Registered Public Accounting FirmShares under Private Placement

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on the proposal to approve the ratification of SingerLewak LLP as our Independent Register Public Accounting Firm for the year ended December 31, 2018.Item 3.

The proposal to ratify the appointment of SingerLewak LLPItem 3 requires the affirmative vote of the holders of a majority of the Shares present in person or represented by proxy at the AnnualSpecial Meeting and entitled to vote on such proposal at the AnnualSpecial Meeting. Abstentions are considered sharesShares present and entitled to vote and thus will have the effect of a vote ‘‘AGAINST’’ thisthese proposal. Broker non-votes will have no effect.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted forand will have no effect on the purposeoutcome of establishingthis proposal.  

Item 4 - Ratification and Approval of Prior Issue of Warrants to Oxford Finance LLC

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on the proposal to approve Item 4.

Item 4 requires the affirmative vote of the holders of a quorummajority of the Shares present in person or represented by proxy at the Special Meeting and entitled to vote on such proposal at the Special Meeting. Abstentions are considered Shares present and entitled to vote and thus will have the effect of a vote ‘‘AGAINST’’ these proposal. Broker non-votes will have no effect.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted and will have no effect on the outcome of this proposal.

Item 5 — Approval of Stock Option Exchange Program

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on the proposal to approve Item 6.

Item 5 requires the affirmative vote of the holders of a majority of the Shares present in person or represented by proxy at the Special Meeting and entitled to vote on such proposal at the Special Meeting. Abstentions are considered Shares present and entitled to vote and thus will have the effect of a vote ‘‘AGAINST’’ these proposal. Broker non-votes will have no effect.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted and will have no effect on the outcome of this proposal.  

Item 6 — Approval of Increase in Authorized Capital

You may vote ‘‘FOR,’’ ‘‘AGAINST’’ or ‘‘ABSTAIN’’ on the proposal to approve Item 6.

Item 6 requires the affirmative vote of the holders of a majority of the outstanding Shares. Abstentions and broker-non-votes, if any, will have the same effect as “AGAINST” votes.

For CDI holders, if you do not instruct CDN how to vote your Shares, your Shares will not be counted and will have no effect on the outcome of this proposal.  

Can I change my vote after submitting my proxy?

Yes.

If you are a stockholder of record, you may change your vote or revoke your proxy at any time before your proxy is voted at the AnnualSpecial Meeting, in any of the following ways:

-  by voting again (including by the Internet) or submitting a later-dated proxy or the Internet before 9:00 a.m. on Tuesday, October 23, 2018, Australian Eastern StandardDaylight Time, on Sunday, May 20, 2018 (Saturday, May 19,(Monday, October 22, 2018 at 4:3:00 p.m. Pacific Daylight Time);

-  by submitting a later-dated proxy to the Company’s Australian Secretary, which must be received by the Company before the time of the AnnualSpecial Meeting;

-  by sending a written notice of revocation of proxy to the Company’s Australian Secretary, which must be received by the Company before the time of the AnnualSpecial Meeting; or

-  by voting in person at the AnnualSpecial Meeting.

If you are a holder of CDIs and you direct CDN to vote by completing the CDI Voting Instruction Form, you may revoke those instructions by delivering to Computershare, no later than 9:00 a.m. Australian Eastern Standard Time on Sunday, May 20,October 21, 2018, Australian Eastern StandardDaylight Time, (Saturday, May 19,October 20, 2018 at 4:3:00 p.m. Pacific Daylight Time), a written notice of revocation bearing a later date than the CDI Voting Instruction Form previously sent.

Who pays for the cost of proxy preparation and solicitation?

We pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokerage firms, banks, trusts or other nominees for forwarding proxy materials to street name holders and CDI holders. We are soliciting proxies by mail. In addition, our directors, officers and regular employees may solicit proxies personally, telephonically, electronically or by other means of communication. The Company’s directors, officers and regular employees will receive no additional compensation for their services other than their regular compensation.

When are the stockholder proposals and director nominations due for next year’s annual meeting?

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 11, 2018, to the Company Secretary; 1047 Elwell Court, Palo Alto, California 94043, United States

 How can I find out the results of the voting at the annual meeting?Special Meeting?

Preliminary voting results will be announced at the AnnualSpecial Meeting. In addition, final voting results will be published (i) in an ASX announcement immediately after the AnnualSpecial Meeting has been held; and (ii) in a current report on Form 8-K that we expect to file within four business days after the AnnualSpecial Meeting.

What proxy materials are available on the internet?

The proxy statement Form 10-K and annual report tostockholders areis available at www.proxyvote.com and on the company announcements platform on the ASX website.

ITEM 1

ELECTIONPRIVATE PLACEMENT OF DIRECTORS

The Company's Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the Board of Directors of the Company (the "Board" or "Board of Directors") shall be divided into three classes, each class being as equal in number as reasonably possible; designated: Class I, Class II and Class III. Each class has a three-year term. Mr. Gregory Lichtwardt and Ms. Zita Peach were elected as Class I directors at the 2016 Annual Meeting. Mr. Dennis Condon and Ms. Elizabeth Hammack were elected as Class II directors at the 2017 Annual Meeting.

The following table sets forth the names, ages and positions of our directors and nominees as of the Record Date:

The term of office of the Class III directors will expire at the 2018 Annual Meeting. After the resignation of Scott Dodson, our President and Chief Executive Officer in April 2018, the nominee listed below is currently the only Class III director of the Company. If elected at the Annual Meeting, the nominee would serve until the 2021 annual meeting and until his successor has been elected and qualified, or, if sooner, until the director’s death, resignation or removal. Directors are elected by a plurality of the votes of the holders of Shares present in person or represented by proxy and entitled to vote on the election of directors. The nominee receiving the highest number of affirmative votes will be elected.Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominee named below. The person nominated for election has agreed to serve if elected. The Company’s management has no reason to believe that the nominee will be unable to serve.  The Board of Directors proposes that Mr. Barry Cheskin, a current Class III director whose term expires at the Annual Meeting, be re-elected by stockholders at the Annual Meeting as a Class III director.

Nominee For Election For A Three-Year Term Expiring At The 2021 Annual Meeting: Mr. Barry Cheskin

Barry Cheskin is a co-founder of AirXpanders and the Chairman of the Board. He was appointed to the Board in December 2006. He is also a member of the Nomination and Remuneration Committee. Mr. Cheskin has 30 years of experience, primarily in the general management of medical device enterprises in the U.S. Mr. Cheskin is President and CEO and a co-founder of PowerVision, Inc., a medical device company, where he has served since 2004. Mr. Cheskin holds a B.S. degree in Mechanical Engineering from MIT in Cambridge, Massachusetts, a M.S. degree in Mechanical Engineering from Stanford University, Stanford, California as well as an MBA degree from Columbia University in New York. Mr. Cheskin is qualified to serve on our board because he is intimately familiar with AirXpanders’ business and industry, capable of effectively identifying strategic priorities and defining AirXpanders’ strategic objectives.

THE DIRECTORS (EXCLUDINGSHARES TO MR. CHESKIN) UNANIMOUSLY RECOMMEND THAT STOCKHOLDERS VOTE “FOR” ITEM 1. 

BARRY CHESKIN, THE CHAIRMAN OF THE MEETING INTENDS TO VOTE UNDIRECTED PROXIES IN FAVOR OF ITEM 1. COMPANY

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE

Introduction

Set forth below is biographical information for our directors as well asItem 1 relates to the key experience, qualifications, attributes and skills that we believe such director brings to our Board.proposed participation of the Company’s Chairman, Mr. Barry Cheskin, in the Private Placement.

On August 2, 2018 (U.S. time), the Company entered into a Class II Directors (Term ExpiringA Common Stock Purchase Agreement (the “Purchase Agreement”) with certain funds affiliated with Vivo Ventures and Mr. Barry Cheskin, pursuant to which we agreed to issue and sell an aggregate of 20,441,183 Shares (equivalent to 61,323,549 CDIs) at a purchase price of US$0.167 per Share (equivalent of A$0.075 per CDI, assuming an exchange rate of 1 AUD to 0.74307 USD and a conversion rate of three (3) CDIs to one (1) Share) (the “Private Placement”), which was equal to the 2020 Annual Meeting)price per Share in the Company’s rights offering (the “Rights Offering”), described in the Company’s Registration Statement on Form S-1 and the related prospectus filed with the Securities and Exchange Commission (the “SEC”) on August 2, 2018 (U.S. time) and declared effective by the SEC on August 6, 2018 (U.S. time).

Dennis Condon — Non-executive Director

Dennis Condon was appointed non-executive director of AirXpanders in August 2012. He is a memberAs part of the AuditPrivate Placement, Mr. Barry Cheskin, the Company’s non-executive Chairman and Risk Committee, and the Nomination and Remuneration Committee. Mr. Condon has over 30 years of experience in key executive roles in the plastic surgery market, including as the former president of Mentor Aesthetics from 1991 to 1998, one of the two largest global implant manufacturers. From 2013 to 2016, Mr. Condon has served as the CEO and President of Nuvesse Skin Therapies, a venture-backed cosmeceutical skincare company. From 2011 to 2013, he served as CEO and president of Merz Aesthetics, Inc. Since 2016, Mr. Condon has been providing consulting services to other healthcare-focused entities and serves as a board member for various private companies. Mr. Condon has a B.S. degree in Biological Sciences from the University of California, Davis. Mr. Condon’s qualifications to serve as a director include his 30 years of experience in key executive roles in the plastic surgery market and his extensive senior executive management experience.

Elizabeth (Liz) Hammack — Non-executive Director

Liz Hammack was appointed non-executive director of AirXpanders in May 2017 and is a member of the Audit and Risk Committee. Ms. Hammack has 30 years of experience in senior executive roles in medical device industry manufacturing, global supply chain management, product development and technology development. Ms. Hammack held several roles at Medtronic plc, a medical technology, services and solutions company, between 2000 and 2015. Most recently, Ms. Hammack was Vice President of Operations and Manufacturing for the Atrial Fibrillation Solutions business, where she led the global end-to-end supply chain functions. Ms. Hammack also served as VP of Implantable Manufacturing for Cardiac Rhythm Disease Management and VP of the Medtronic Energy and Component Center (MECC). Ms. Hammack also led the Vascular Manufacturing Organization. Before joining Medtronic, Ms. Hammack held roles in the medical device industry at Advanced Cardiovascular Systems, ACS/Guidant, Conceptus and Heartport. She is currently volunteering as Chair of the Industry Advisory Board for Oregon State University School of Mechanical, Industrial and Manufacturing Engineering. Ms. Hammack holds a Bachelor of Science degree in Industrial Engineering from Oregon State University. Ms. Hammack's qualifications to serve as a director include her 30 years of experience in key executive roles in medical device industry manufacturing, global supply chain management, product development and technology development.

Class I Directors (Term Expiring at the 2019 Annual Meeting)

Gregory Lichtwardt — Non-executive Director

Gregory Lichtwardt was appointed non-executive director of AirXpanders in May 2016 and is the chair of the Audit and Risk Committee. Mr. Lichtwardt has more than 30 years in corporate financial management with over 20 years in executive financial leadership. From 2013 to 2015, Mr. Lichtwardt served as Executive Vice President, Operations and Chief Financial Officer at Accuray, a manufacturer of tumor treatment solutions. From 2003 to 2013, Mr. Lichtwardt was Executive Vice President, Operations and Chief Financial Officer at Conceptus, Inc., a manufacturer of minimally invasive devices for reproductive medical applications. He also served as a member of the board of directors, agreed to purchase 299,060 Shares, and chairon August 2, 2018 (U.S. time), he wired the purchase price for the Shares to an escrow account pending completion of the audit committee at Biolase Inc., a manufacturer of laser systems for dentistry and medicine, from 2010purchase. Pursuant to 2013. Mr. Lichtwardt holds a B.S. degree in business administration fromASX Listing Rule 10.11, the University of Michigan, an MBA degree from Michigan State University and is also a certified management accountant. Mr. Lichtwardt's qualifications to serve as a director include his more than 30 years of experience in corporate financial management with over 20 years in executive financial leadership.

Zita Peach — Non-executive Director

Zita Peach was appointed non-executive director of AirXpanders in May 2016 and is the chairissuance of the Nomination and Remuneration Committee. Ms. Peach has over 25 years of executive experience with multi-disciplinary skills across international markets, including commercialization of products and technologies, sales, marketing, licensing and mergers and acquisitions. Ms. Peach’s previous executive roles include Managing Director for Australia and New Zealand, and Executive Vice President for South Asia Pacific, at Fresenius Kabi, a leading provider of pharmaceutical products and medical devicesshares to hospitals, as well as Vice President of Business Development, R&D at CSL Limited (ASX: CSL). She is also currently non-executive director at four other ASX listed companies, including Starpharma Holdings Limited since 2011, Monash IVF Group Limited since 2016, Visioneering Technologies Inc. since 2017 and Pacific Smiles Group Limited since 2017. Ms. Peach also serves on the not for profit board, Hudson Institute for medical research. Ms. Peach holds a B.S. degree in immunology from the University of Melbourne, Australia and is a graduate of the Australian Institute of Company Directors. Ms. Peach's qualifications to serve as a director include her 25 years of executive experience with multi-disciplinary skills across international markets, including commercialization of products and technologies, sales, marketing, licensing and mergers and acquisitions, and her experience with Australian public companies.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Director Independence

Our Board of Directors determined that none of the following directors had any relationship that would interfere with the exercise of independent judgment in carrying out his or her responsibilities as a director and, thus, that all of the following directors are independent under the Nasdaq listing rules: Mr. Barry Cheskin, Mr. Dennis Condon, Ms. Elizabeth Hammack, Mr. Gregory Lichtwardt, and Ms. Zita Peach, representing all of our current directors. Although Mr. Cheskin is considered to be independent undercontingent on the Nasdaq listing rules, he is not considered to be independent forCompany obtaining the purposesstockholder approval of the ASX Corporate Governance Principles and Recommendations.issuance, which is the reason why the Company is soliciting your approval of this Item 1.

Mr. Scott Dodson, who resigned on April 6, 2018 (California time), was not considered an independent director because of his former position as our chief executive officer.

In making these determinations, our Board consideredThe Directors consider that the current and prior relationships that each non-employee director hastransaction with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions that may involve them described in the section titled Related Person Transaction below.

There are no family relationships among any of our directors, director nominees, or executive officers.

Board Structure

During 2017, Mr. Barry Cheskin served as the Chairman of the Board and Mr. Scott Dodson served as the President, Chief Executive Officer and a director of AirXpanders. We believe that having a separate Chairman and Chief Executive Officer is appropriate and is consistent with corporate governance best practices. Because of his involvement since the founding of AirXpanders, Mr. Cheskin is intimately familiar with AirXpanders’ businessfair and industry, and very capable of effectively identifying strategic priorities, leading discussionsis in the best interests of the BoardCompany for a variety of Directors and defining AirXpanders’ strategic objectives.reasons.  The Board determined that Mr. Cheskin is antransaction was deemed to be fair, in part, because, first, the Private Placement was approved by the independent, memberdisinterested members of the Board underboard of directors on an informed basis, following full disclosure of and taking into account all information related to Mr. Cheskin’s participation in the Nasdaq Listing Rules, but is not an independent member of the Board for the purposes of the ASX Corporate Governance Principles and Recommendations.

The Chief Executive Officer is the individual selected by the Board to manage AirXpanders on a day-to-day basis, and his or her prior experience and direct involvement in AirXpanders’ operations allow him or her to provide valuable insights with respect tostrategic planning and the operational requirements to meet AirXpanders’ short- and long-term objectives. AirXpanders’ independent directors bring experience, oversight and expertise from outside the company and industry.

The Board’s Role in Risk Oversight

One of the Board’s primary responsibilities is reviewing AirXpanders’ strategic plans and objectives, including oversight of the principal risk exposures of the company. The Board’s role in risk oversight includes receiving reports from senior management and thePrivate Placement; second, our Audit and Risk Committee, onof which Mr. Cheskin is not a regular basis regarding material risks faced bymember, separately approved the Company and applicable mitigation strategies and activities. The reports detail the effectivenesssale of the risk management program and identify and address material business risks such as technological, strategic, business, operational, financial, human resources and legal/regulatory risks. The Board and its committees (described below) consider these reports, discuss matters with management and identify and evaluate any potential strategic or operational risks, and appropriate activityShares to address those risks.

Board of Directors Meetings and Committees

The full Board of Directors met ten times during the year ended December 31, 2017. During the year ended December 31, 2017, all directors attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings of committees on which they served. The standing committees of the Board of Directors include an Audit and Risk Committee and a Nomination and Remuneration Committee.

Directors are encouraged to attend the annual meeting of stockholders. All members of the Board of Directors, thenMr. Cheskin in office, attended the 2017 Annual Meeting, either in person or by telephone.

The Board of Directors has determined that all of its directors meet the independence requirements of the Nasdaq Stock Market,accordance with the exception of Mr. Scott Dodson, due to his position as our President and Chief Executive Officer until he resigned in April 2018.

The Board has a standing Audit and Risk Committee, and Nomination and Remuneration Committee. The following table provides membership and meeting attendance information for fiscal 2017 for each of the Board standing committees:

*Chair of the committee

(1) Ms. Hammack served as a membersection 5.3.8 of the Audit and Risk Committee commencingCharter; and third, the price and the terms of the Rights Offering and the Private Placement were established based on arm’s-length negotiations with our Australian underwriter, who had agreed to underwrite any unsold amount of the Rights Offering.  The sale to Mr. Cheskin, if approved by stockholders, was determined to be in May 2017 when she was electedthe best interests of the Company because it both demonstrated confidence among our Directors and Management to potential participants in the Rights Offering, and provided additional capital for our future operations. 

A more detailed description of ASX Listing Rule 10.11 and its application to the Board at the May 2017 annual meeting.issuance of shares to Mr. Cheskin is set out below.

(2) Mr. Shalon served as

ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires an entity to obtain stockholder approval where an entity issues, or agrees to issue, securities to a memberrelated party of the Auditentity. Mr. Cheskin is a related party of the Company as he is the Chairman and Risk Committee through May 2017.a Director. Accordingly, Item 1 seeks stockholder approval pursuant to ASX Listing Rule 10.11 to enable Mr. Shalon did not stand for re-election atCheskin to participate in the May 2017 annual meeting.Private Placement.

Audit and Risk CommitteeIf stockholder approval is given under Listing Rule 10.11 pursuant to Item 1, separate approval under ASX Listing Rule 7.1 is not required in relation to the issue of the Shares to Mr. Cheskin.

Information required under ASX Listing Rule 10.13

The Auditfollowing information is provided in accordance with ASX Listing Rule 10.13:

Consequences if Item 1 is not approved

If Item 1 is not approved by stockholders, the Company will not issue any Shares to Mr. Cheskin and Risk Committee of the purchase price for the Shares will not be released to the Company.

Board of Directors oversees our financial reporting, our internal auditRecommendation and control functions, the results and scope of the annual audit and quarterly reviews conducted by our independent registered public accounting firm, and our compliance with legal matters that may have a significant impact on our financial reports. In addition, the Audit and Risk Committee has the responsibility to consider and recommend the engagement of, and to review and approve fee arrangements with, our independent registered public accounting firm. The Audit and Risk Committee also monitors transactions between AirXpanders and our officers and directorsChairman’s voting intentions for any potential conflicts of interest and assists the Board of Directors in its risk oversight role. Item 1

The Directors (excluding Mr. Cheskin) consider that Item 1 is in the best interests of the Company and recommend that stockholders vote in favor of Item 1.

The Chairman of the Special Meeting intends to vote undirected proxies in favor of Item 1.

ITEM 2

Grant of optionS to PRESIDENT & CEO AND EXECUTIVE DIRECTOR

Introduction

Item 2 relates to the proposed issue of options to purchase Shares (“Options”) to Mr. Frank Grillo, the President and Chief Executive Officer and an executive Director of the Company. The approval of this Item 2 is conditioned upon approval of Item 6 (Approval of Increase in Authorized Capital) described below.

On June 8, 2018 (U.S. time), the Company entered into an offer letter with Mr. Grillo appointing him as the Company’s new President and Chief Executive Officer and an executive Director. The remuneration package under Mr. Grillo’s offer letter provides for the issue of Options equal to 5% of the “fully diluted capitalization” of the Company to be granted, subject to stockholder approval, once the Company has completed a financing raising US$10.0 million or more. As the Company has raised more than US$10.0 million through the Rights Offering and Private Placement, the Company is now seeking stockholder approval of the issue of the Options to Mr. Grillo.

Number of Options

The number of Options to be issued to Mr. Grillo will be equal to 5% of the “fully diluted capitalization” of the Company (rounded down to the nearest whole number) on the date of grant, which is expected to be the date of the Special Meeting.

“Fully diluted capitalization” is defined in Mr. Grillo’s offer letter as the number of issued and outstanding Shares of the Company's capital stock, assuming the conversion or exercise of all of the Company's outstanding convertible or exercisable securities, including all outstanding vested or unvested options or warrants to purchase the Company's capital stock, as well as any convertible promissory notes issued by the Company and any equity securities that are issuable upon conversion of any outstanding convertible promissory notes.

“Fully diluted capitalization” will not include any Shares issued to Mr. Cheskin if Item 1 is approved by stockholders but will include any other Shares, options or warrants (if any) issued prior to stockholder approval. The Company does not expect the capitalization to change in any material respect before the date of the Special Meeting.

As of September 21, 2018, there were 185,850,890 Shares outstanding (equivalent to 557,552,670 CDIs), 5,257,889 options to purchase Shares outstanding, and 1,710,556 warrants to purchase Shares outstanding, for a “fully diluted capitalization” of 192,819,335 Shares (equivalent to 578,458,005 CDIs). Accordingly, the maximum number of Options that may be acquired by Mr. Grillo if stockholder approval is given for Item 2 based on the “fully diluted capitalization” of the Company as of September 21, 2018 is 9,640,966 (equivalent to options to purchase 28,922,901 CDIs), assuming no further issuance of Shares, options or warrants prior to stockholder approval.

Date of issue

Subject to stockholder approval, the Options will be granted to Mr. Grillo on (or shortly following) the date of the Special Meeting (and in any event, no later than one month after the date of the Special Meeting).

Rationale for proposed grant of Options to Mr.Grillo

The board of directors considers that the proposed grant of Options to Mr. Grillo is aligned to the Company’s long-term performance objectives.  The remuneration package for Mr. Grillo, including the proposed grant of Options, was based on the Company’s performance and remuneration framework. This framework seeks to provide appropriate rewards and recognition to employees (balancing fixed and ‘at risk’ remuneration), with a view to attracting, retaining and motivating high calibre and motivated people.

The Non-Executive Directors concluded that the remuneration package for Mr. Grillo, including the proposed grant of Options, was reasonable and appropriate having regard to the circumstances of the Company and the duties and responsibilities of Mr. Grillo.

Principal terms of the Options

Contingent on approval of Item 6, if Item 2 is approved by stockholders, the Options to be issued to Mr. Grillo will be issued on the terms and conditions set out below, outside of the Company’s 2015 Equity Incentive Plan.

Exercise Price

The exercise price of the Options will be equal to the closing price of the Company’s CDIs on ASX (multiplied by three for the per Share exercise price) on the date of the grant of the Options, as converted to U.S. dollars. Upon exercise, each Option will entitle the optionee to one Share.

Vesting conditions

25% of the Options will vest on the 12-month anniversary of the start of Mr. Grillo’s employment (June 12, 2019), and an additional 1/48^th of the Options will vest each month over the subsequent three-year period, assuming continued employment. In the event of a change in control of the Company, 50% of unvested Options shall immediately vest and the remaining Options shall vest equally each month over the following 12 months, provided that Mr. Grillo makes himself reasonably available, if requested by the Company (or its successor), to provide services to the Company (or its successor).

Lapsing of Options

The Options will lapse in circumstances where:

Source of shares

At the discretion of the board of directors, the Shares required in connection with the Options may be provided either by issuing new Shares or by acquiring existing Shares.

Other terms

ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires an entity to obtain stockholder approval where an entity issues, or agrees to issue, securities to a related party of the entity. Mr. Grillo is a related party of the Company as he is the President and Chief Executive Officer and an executive Director of the Company. Accordingly, Item 2 seeks stockholder approval pursuant to ASX Listing Rule 10.11 for the issue of the Options to Mr. Grillo.

If stockholder approval is given under ASX Listing Rule 10.11 pursuant to Item 2, separate approval under ASX Listing Rule 7.1 is not required in relation to the issue of the Options to Mr. Grillo.

Other information required under ASX Listing Rule 10.13

The following additional information is provided in accordance with ASX Listing Rule 10.13:

Consequences if Item 2 is not approved

If Item 2 is not approved by stockholders, the Company will not issue any Options to Mr. Grillo. In this circumstance, the Company may consider offering Mr. Grillo alternative compensation.

Note also that Item 2 is conditioned on the approval of Item 6. Accordingly, if Item 6 is not approved by stockholders, the Company will not issue any Options to Mr. Grillo even if Item 2 is approved.

Board Recommendation and Chairman’s voting intentions for Item 2

The Directors (excluding Mr. Grillo) unanimously recommend stockholders vote in favor of Item 2.

The Chairman of the Special Meeting intends to vote undirected proxies in favor of Item 2.

ITEM 3

Ratification and approval of prior issueof Shares UNDER PRIVATE PLACEMENT

Introduction

Item 3 seeks stockholder ratification and approval under ASX Listing Rule 7.4 for the issue by the Company of 20,142,123 Shares under the Private Placement.

As outlined in an announcement released to the market on August 2, 2018 (U.S. time) and subsequent related announcements, the Company raised approximately US$3.4 million in August 2018 by the issue 20,142,123 Shares (represented by 60,426,369 CDIs) to Vivo Ventures at US$0.167 per Share under the Private Placement.

The Shares issued to Vivo Ventures under the Private Placement were issued within the Company’s 15% placement capacity under ASX Listing Rule 7.1. Accordingly, stockholder approval of the Private Placement to Vivo Ventures was not required. Stockholder approval of Mr. Cheskin’s participation in the Private Placement is being separately sought under Item 1.

The Private Placement was undertaken in conjunction with the Rights Offering to raise an aggregate of approximately A$20.3 million before costs and expenses.

ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that an entity must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities if the number of those securities exceeds 15% of the number of securities on issue at the commencement of the 12 month period. Unless ASX Listing Rule 7.1A applies, issues of securities exceeding this 15% limit require stockholder approval.

ASX Listing Rule 7.4

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a Company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with stockholder approval for the purpose of ASX Listing Rule 7.1.

Ratification by stockholders of the Company for the Private Placement to Vivo Ventures is now sought pursuant to ASX Listing Rule 7.4 in order to reinstate the Company’s capacity under ASX Listing Rule 7.1 currently utilized by those Shares.

Information required under ASX Listing Rule 7.5

The following information is provided in accordance with ASX Listing Rule 7.5:

Consequences if Item 3 is not approved

If Item 3 is not approved by stockholders, the Shares issued to Vivo Ventures under the Private Placement will continue to count towards the Company’s 15% capacity under ASX Listing Rule 7.1 until the 12 month anniversary of their issue, thereby limiting the Company’s ability to issue new equity securities.

Board Recommendation and Chairman’s voting intentions for Item 3

The Directors unanimously recommend stockholders vote in favor of Item 3.

The Chairman of the Special Meeting intends to vote undirected proxies in favor of Item 3.

ITEM 4

Ratification and approval of prior issueof WARRANTS

Introduction

Item 4 seeks stockholder ratification and approval under ASX Listing Rule 7.4 for the issue by the Company of Warrants to purchase a total of 1,215,278 Shares to Oxford Finance LLC (“Oxford”), the Company’s lender.

The Company has determinedissued the following Warrants to Oxford in the last 12 months:

In each case, the above Warrants were issued to Oxford in connection with waivers and amendments to the Company’s loan and security agreement with Oxford. The Warrants were issued within the Company’s 15% placement capacity under ASX Listing Rule 7.1. Accordingly, stockholder approval was not required.

     ASX Listing Rules 7.1 and 7.4

A summary of ASX Listing Rules 7.1 and 7.4 is set out above under Item 3. By ratifying this issue, the Company will retain flexibility to issue equity securities in the future under its 15% capacity set out in ASX Listing Rule 7.1.

Other information required under ASX Listing Rule 7.5

The following additional information is provided in accordance with ASX Listing Rule 7.5:

Consequences if Item 4 is not approved

If Item 4 is not approved by stockholders, the Warrants will continue to count towards the Company’s 15% capacity under ASX Listing Rule 7.1 until the 12 month anniversary of their respective issue dates.

Board Recommendation and Chairman’s voting intentions for Item 4

The Directors unanimously recommend stockholders vote in favor of Item 4.

The Chairman of the Special Meeting intends to vote undirected proxies in favor of Item 4.

ITEM 5

APPROVAL OF THE STOCK OPTION EXCHANGE PROGRAM

Introduction

On September 17, 2018, the board of directors authorized the terms of a stock option exchange program (the "Option Exchange"), pursuant to which our employees, including our executive officers other than the Chief Executive Officer and any Director, would be given the opportunity to exchange eligible stock options for new stock options. An eligible stock option generally includes any stock option granted under the Company’s 2015 Equity Incentive Award Plan (the "2015 Plan"), also referred to as our Equity Plan, that each memberhas an exercise price greater than the closing price per Share (based on the closing price of the CDIs on ASX) (referred to as an “underwater option”) on the date the Option Exchange commences (the "Commencement Date").

The board of directors believes that the Option Exchange is in the best interests of stockholders and the Company, as new stock options granted under the program will provide added incentive to motivate and retain our talented employees.

Rationale for Option Exchange

The price of the Company’s CDIs on ASX has significantly decreased this year. While the Company has taken a number of actions to improve the Company’s performance and remain optimistic regarding the Company’s potential, our CDI price remains at a relatively low level. On September 17, 2018, the closing price of the CDIs on the ASX was A$0.11 which is equivalent to US$0.24 per Share (based on an exchange rate of 1 AUD to 0.727 USD and a conversion rate of three (3) CDIs to one (1) Share), resulting in nearly all of our Auditoutstanding stock options issued under the 2015 Plan being underwater. The stock options issued under the 2015 Plan cannot be sold; they may either be voluntarily exercised or they expire unexercised. Underwater stock options are no longer effective as performance and Risk Committee is “independent” within the meaningretention incentives because they provide little or no perceived value to optionholders. In addition, since many of the rules ofCompany’s options are significantly underwater, the Securities and Exchange Commissionlikelihood that there will be a positive spread between their exercise prices and the Nasdaq listing rules,current or future price of our Shares is too low to provide any meaningful incentive to the optionholders.

Performance and hasRetention Incentives; Morale

We have designed the qualifications or previous experienceOption Exchange to restore equity value, increase retention and motivation in a competitive labor market, provide non-cash compensation incentives and align our employee and stockholder interests for long-term growth. At current stock prices, a vast majority of outstanding stock option awards are of limited benefit in motivating and retaining our employees, including our executive officers. Through the Option Exchange, we believe that we will be able to readenhance long-term stockholder value by increasing our ability to retain experienced and understand financial statements. Further,talented employees and by aligning the Boardinterests of Directors has determinedthese individuals more fully with the interests of our stockholders. Because most of our outstanding stock options are underwater (and in some cases, significantly so), we face a considerable challenge in maintaining motivation among and retaining our employees, including our executive officers, and there is a possibility that our competitors may be able to offer equity incentives that are more attractive to our employees and executive officers, which in some cases, make the terms of Mr. Lichtwardt, Chairemployment at a new employer more attractive than those currently offered at the Company. The Option Exchange is designed to address these concerns as well as improve morale among our employees generally and reinvigorate a culture where equity compensation is a key component of our overall compensation package.

None of the Audit and Risk Committee, qualifies as an “audit committee financial expert,” as such term is usednew stock options issued under the Option Exchange program will be vested on the date of grant. Stock options issued in the SecuritiesOption Exchange in exchange for the eligible options, whether already vested, partially vested or not vested as of the date on which the eligible options are exchanged for new options, will be subject to the following new vesting schedule: 25% of the new stock options will vest on the one-year anniversary of the grant date of such new stock options, and Exchange Commission rules.1/48^th of the new stock options will vest monthly over the following 36 months, in each case subject to the optionholder’s continuous service with us on the applicable vesting date. The stock options eligible to be exchanged generally are subject to a similar four-year vesting schedule, subject to the optionholder’s continuous service with us on each applicable vesting date. The Nomination and Remuneration Committee believes that implementing a new vesting schedule is appropriate because it encourages retention of employees during the next four years, during a pivotal period for the Company.

Impact on Compensation Expense

The reportvalue of the Auditstock options eligible for exchange was based on the then fair market value of our common stock. Under applicable accounting rules, we will recognize a total of approximately US$2.0 million in non-cash compensation expense related to these underwater stock options, US$0.6 million of which has already been expensed as of September 17, 2018 and Risk Committee is included at the endUS$1.4 million of the “Corporate Governance” sectionwhich we will continue to be obligated to expense, even if these stock options are never exercised because they remain underwater. By replacing stock options that have little or no retention or incentive value with new stock options that will provide both retention and incentive value while not creating significant additional compensation expense, we will be making efficient use of this Proxy Statement. The Board of Directors has adopted a written Audit and Risk Committee Charter, which is available on our website at http://www.airxpanders.com/corporate_governance.php.resources.

Nomination and Remuneration CommitteeAlternatives Considered

The Nomination and Remuneration Committee has overall responsibility for establishing processes for the identification of suitable candidates for appointmentconsidered alternatives to the Board, establishing processesOption Exchange to provide meaningful performance and retention incentive to our employees, including providing additional new options to employees, exchanging underwater options for reviewingfull value shares, or exchanging underwater options for a cash payment, and determined that the Option Exchange provides better performance of individual directors,and retention incentives with less cost to the Board as a whole, and Board committees; determining the executive remuneration policy; determining the non-executive director and remuneration policy; and reviewing and approving all equity based incentive plans.Company or dilution to our stockholders.

Each current member of our Nomination and Remuneration Committee is a “non-employee” director within the meaning of Rule 16b-3Structure of the Option Exchange Act. The Board of Directors has determined that each of the directors serving on our Nomination and Remuneration Committee is “independent” within the meaning of the Nasdaq listing rules as currently in effect, although Mr. Cheskin is not independent for the purposes of the ASX Corporate Governance Principles and Recommendations.

The Boardboard of Directors has adopteddirectors authorized the Option Exchange on September 17, 2018, subject to stockholder approval. It is currently anticipated that the Option Exchange will commence as soon as practicable following approval of Item 5. At the start of the Option Exchange, eligible optionholders holding eligible stock options will receive a written Nominationexchange offer that will set forth the precise terms of the Option Exchange. The written offer will be governed by the tender offer rules of the SEC. At or before the commencement of the Option Exchange, we will file the offer to exchange and Remuneration Committee Charter,other related documents with the SEC as part of a tender offer statement on Schedule TO. Eligible optionholders will be given at least 20 business days to elect to participate in the Option Exchange. Eligible optionholders may choose which eligible option grants they wish to exchange, though they may not choose to exchange portions of eligible option grants. Set forth below is available on our website at http://www.airxpanders.com/corporate_governance.php. a description of the key features of the Option Exchange.

Nomination and Remuneration CommitteeEligible Participants Interlock and Insider Participation

No interlocking relationship exists between our Board or our Nomination and Remuneration Committee and the Board or Nomination and Remuneration Committee of any other company, nor has any interlocking relationship existed in the past.

Remuneration Policy

The Company has a Remuneration Policy approved byOption Exchange will be available to employees located in the Board which sets out the short term and long term strategy for the remuneration of the non-executive directors, theUnited States, including our chief executiveoperating officer and the executive team.  The Company’s remuneration strategy aims to:

●     attract and retain exceptional people to lead and manage the Company and to support the internal development of executive talent within the Company, recognizing that the Company is operating in a global industry environment;

●     drive sustainable growth and returns to stockholders; 

●     motivate and reward superior performance by the executive team whilst aligning the interests of stockholders; and

●     comply with the law and high standards of governance.

The Remuneration Policy includes detail in relation to the Company’s approach to remuneration benchmarking, director and executive performance review processes and the framework upon which key performance indicators for short and long term awards are set. The Company’s strategy is to remunerate its executives with a total remuneration package that includes base salary, and clearly delineated short and long-term variable incentives.  All cash and equity awards are subject to the achievement of either key performance indicators or stock price growth targets.  The Board is committed to setting incentive targets that are aligned to the Company’s short and long-term performance objectives and that are appropriate to the Company’s circumstances, goals and risk appetite.  

Remuneration processes and procedures

Typically, the Nomination and Remuneration Committee meets at least two times annually to discuss compensation for directors and officers. The agenda for each meeting is usually developed by the Chair of the Nomination and Remuneration Committee. The Nomination and Remuneration Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Nomination and Remuneration Committee to make presentations, to providechief financial or other background information or advice or to otherwise participate in Nomination and Remuneration Committee meetings to determine or recommend the amount or form of executive and director compensation. The Chief Executive Officer mayofficer, but not participate in, or be present during, any deliberations or determinations of the Nomination and Remuneration Committee regarding his compensation or individual performance objectives. The Nomination and Remuneration Committee has full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Nomination and Remuneration Committee may, with the prior approval of the Chairman of the Board, instruct the Chief Executive Officer or Directors, who, at the start of the Option Exchange, are employed by the Company and hold outstanding eligible stock options at that time. As of September 17, 2018, we had a total of 69 eligible participants, comprising of 68 employees who are not executive officers plus one executive officer who is not a director. Eligible stock options are held by 100% of employees who are not executive officers and by the Company’s chief operating officer and chief financial officer.

Participants in the Option Exchange must continue to engage suchbe employed by the Company on the date the surrendered options are cancelled and new stock options are granted. Any employee holding eligible stock options who elects to participate in the Option Exchange but whose employment with us terminates for any reason before the date the new stock options are granted, including a termination due to voluntary resignation, retirement, involuntary termination, layoff, death or disability, would retain his or her eligible options subject to their existing terms and would not receive new stock options in the Option Exchange.

Eligible Stock Options

As of September 17, 2018, there were stock options outstanding to purchase approximately 5,257,889 Shares under our Equity Plan and the former 2005 Equity Incentive Plan at a weighted average exercise price of US$1.49 per Share and with a weighted average remaining life of 8.8 years. Of these outstanding stock options, employees, including our executive officers, other independent advisersthan our Chief Executive Officer and Directors, held stock options to purchase 2,777,374 Shares under the Equity Plan, which will be eligible to participate in relationthe Option Exchange. These represent approximately 1.44% of the number of Shares as of September 17, 2018, on a fully diluted basis. These eligible stock options have a weighted average exercise price of US$1.67 per Share.

Exchange Ratio

For each stock option surrendered in the Option Exchange, we will be issuing one new stock option exercisable for the same number of Shares.

Vesting Schedules for New Options

New stock option awards will be unvested on the date of grant and will be subject to any matter pertaininga new vesting schedule. New stock options will vest with respect to the responsibilities25% of the Committee, asnew option on the Committee may require. The Nomination and Remuneration Committee has direct responsibility for the oversightone-year anniversary of the workgrant date of any consultants or advisers engaged forsuch new stock options, and with respect to 1/48^th of the purpose of advisingnew stock options monthly over the Committee. In particular, the Nomination and Remuneration Committee will have the authority to retain compensation consultants to assistfollowing 36 months, in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. The Nomination and Remuneration Committee may select, or receive advice from, a compensation consultant, legal counsel or other advisereach case subject to the Committee.optionholder’s continuous service with us on the applicable vesting date. The new vesting schedule supports the nature of stock options as an incentive vehicle and provides for additional years of retention.

Considerations in Evaluating Director NomineesTerm for New Options

The Nomination and Remuneration Committee believes that candidates for director should have certain minimum qualifications, includingnew stock options will expire ten years following the ability to read and understand basic financial statements, being over 21 years of age and havingdate the highest personal integrity and ethics. The Nomination and Remuneration Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairsnew options are granted.

Intended Implementation of the Company, demonstrated excellence in his or her field, havingOption Exchange As Soon As Practicable Following Stockholder Approval

We expect that the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interestsOption Exchange will begin as soon as practicable, but no later than four (4) months following stockholder approval, if received. Our board of the Company’s stockholders. However, the Nomination and Remuneration Committee retainsdirectors reserves the right to modify these qualificationsamend, postpone or, under certain circumstances, cancel the Option Exchange once it has commenced, but the Option Exchange will not be materially amended in a manner more beneficial to eligible participants without first seeking additional stockholder approval.

Option Exchange Process

Additional information about how we expect to conduct the Option Exchange, if approved by stockholders, is set forth below. While the terms of the Option Exchange are expected to conform to the material terms described above, we may find it necessary or appropriate (subject to the terms of the ASX waiver described below) to change the terms of the Option Exchange from timethose described in this Item 5 to time. Candidates for director nominees are reviewedtake into account our administrative needs, accounting rules, company policy decisions or to comply with any comments we receive from the SEC. We may decide not to implement the Option Exchange even if stockholder approval of the Option Exchange is obtained, or we may delay, amend or terminate the Option Exchange once it is in progress. The final terms of the Option Exchange will be described in the contextexchange offer documents that will be filed with the SEC and available at www.sec.gov. Copies of these documents will also be available on the Company’s announcement section of the current compositionASX website.

Overview of the Board, the operating requirementsOption Exchange Process

Upon initiation of the Company andOption Exchange, eligible participants holding eligible stock options will receive a written offer setting forth the long-term interests of stockholders. In conducting this assessment, the Nomination and Remuneration Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given the current needsprecise terms of the Board of DirectorsOption Exchange and may voluntarily elect to participate. All employees, excluding the Company,Chief Executive Officer, who are employed by us on the Commencement Date, are still employed on the grant date, and hold eligible stock option awards may participate in the Option Exchange. Eligible participants will be given at least 20 business days to maintain a balance of knowledge, experience and capability.

Inelect to surrender eligible stock options in exchange for the case of incumbent directors whose terms of office are set to expire, the Nomination and Remuneration Committee reviews these directors’ overall service to the Company during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. The Committee also takes into account the resultsnew stock options. Upon completion of the Board’s self-evaluation, conducted annually on a groupOption Exchange, surrendered stock options will be cancelled and individual basis. In the case of new director candidates, the Nomination and Remuneration Committee also determines whether the nominee is independent for ASX and Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations, the ASX Corporate Governance Principles and Recommendations and the advice of counsel, if necessary. The Nomination and Remuneration Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nomination and Remuneration Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board of Directors. The Nomination and Remuneration Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote.

Stockholder Recommendations for Nominations to Our Boardstock options will be granted.

The Nomination and Remuneration Committee2015 Plan will consider director candidates recommended by stockholders. The Nomination and Remuneration Committee doesgovern any terms or conditions of new stock options not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for considerationspecifically addressed by the Nomination and Remuneration Committee to become nominees for election to the Board may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: AirXpanders, Inc., 1047 Elwell Court, Palo Alto, California 94043, at least 120 days prior to the anniversary date of the mailing of the Company’s proxy statement for the last Annual Meeting of Stockholders. Submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of the Company’s stock and has been a holder for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.

Stockholder Communication Policy

We have established a formal process for stockholders to send communications to the Board of Directors or to individual directors. The names of all directors are available to stockholdersOption Exchange described in this Proxy Statement. Stockholder communications mayAdditionally, all of the new options will be submitted in writing to AirXpanders, Inc., 1047 Elwell Court, Palo Alto, California 94043 Attention: Company Secretary. Australian stockholder communications may be submitted in writing to AirXpanders’ Australian registered office at level 13, 41 Exhibition Street, Melbourne, Victoria 3000 Attention: Australian Secretary. If we receive any stockholder communication intendedincentive stock options (that is, they will qualify for the full Boardtax-favored treatment under Section 422 of Directors or any individual director, we will forward the communicationInternal Revenue Code) to the full Board of Directors or the individual director, unless the communication is clearly of a marketing nature or is unduly hostile, threatening, illegal or similarly inappropriate.extent allowable.

CodeElection to Participate

Eligible participants will receive a tender offer document and will be able to voluntarily elect to participate in the Option Exchange. The written exchange offer documents described above will be provided if and when the Option Exchange is initiated; an eligible participant can elect to participate after that time only.

Impact of Conduct Option Exchange on Number of Options Issued

As recommendeddescribed above under the section “Exchange Ratios”, the total number of shares of common stock issuable upon exercise of new stock options will be equal to the number of surrendered eligible options. Therefore, there will be no impact on the number of the outstanding stock options as a result of the Option Exchange.

Effect on Stockholders

Under the terms of the Option Exchange, the new stock options will have a fair value that will be equal to the then fair market value of the Shares on the date of issuance. Based on the closing price of Shares on the ASX on September 17, 2018 of US$0.24 per Share (based on a CDI closing price of A$0.11, an exchange rate of 1 AUD to 0.727 USD and a conversion rate of three (3) CDIs to one (1) Share), if all options were exchanged, the fair value of the newly issued options, in the aggregate, would be approximately US$0.4 million. This would be an incremental operating expense over the expected vesting period.

Interests of Our Directors and Executive Officers in the Option Exchange

Our directors (even if they are also executive officers) will not be permitted to participate in the Option Exchange. Our executive officers (other than the Chief Executive Officer) will be permitted to participate in the Option Exchange to the extent they are employed by the ASX Corporate Governance Principles, we have established a codeCompany at the start of conductthe Option Exchange and hold outstanding eligible stock options at that time. The following table shows the number of shares subject to eligible stock options held by our named executive officers as of September 17, 2018 and the number of shares subject to new stock options that they may receive assuming, for purposes of illustration only, that each named executive officer remains eligible to and decides to, exchange all of our directors, officers and employees. We have adopted a Code of Conduct that applies to all of our employees, including our chief executive officer and chief financial and accounting officers. The text of the Code of Conduct is posted on our website at http://www.airxpanders.com/corporate_governance.php.his eligible stock options.

Other Corporate Governance Policies