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<P style="font-size: 14pt" align="center"><B>UNITED STATES<BR>
SECURITIES AND
EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P style="font-size: 18pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 12pt" align="center"><B>CURRENT REPORT<BR>
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest
event reported): October 31, 2008</B>

<P style="font-size: 24pt" align="center"><B>NovaRay Medical,
Inc.<BR>
</B><FONT style="font-size: 10pt">(Exact name of registrant as
specified in its charter) </FONT>
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  <TD width="32%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="33%">&nbsp;</TD>
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  <TD width="32%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>Delaware</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>000-52731</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>16-1778998</B></TD>
 </TR>
 <TR valign="top">
  <TD>(State or other Jurisdiction of Incorporation)</TD>
  <TD>&nbsp;</TD>
  <TD>(Commission File Number)</TD>
  <TD>&nbsp;</TD>
  <TD>(IRS Employer Identification No.)</TD>
 </TR>

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cellpadding="0" width="100%" border="0">

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  <TD width="49%">&nbsp;</TD>
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  <TD width="49%">&nbsp;</TD>
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 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>39655 Eureka Drive, Suite A,
Newark, California<BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>94560</B></TD>
 </TR>
 <TR valign="top">
  <TD>(Address of Principal Executive Offices)</TD>
  <TD>&nbsp;</TD>
  <TD>(Zip Code)</TD>
 </TR>

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<P style="font-size: 10pt" align="center">Registrant&#8217;s telephone number,
including area code: <B>(510) 619-9200</B>
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 </TR>
 <TR>
  <TD nowrap>(Former name or former address if changed since last report.)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="left">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:

<P style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


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<P style="font-size: 10pt" align="left"><B>Item&nbsp;3.02 Unregistered Sales of Equity Securities.</B>


<P style="font-size: 10pt; text-indent: 4%" align="left">On October&nbsp;31, 2008, Vision Opportunity
Master Fund, Ltd. exercised a warrant as to 1,445,450 shares of Series&nbsp;A
Convertible Preferred Stock of NovaRay Medical, Inc. (the
&#8220;Company&#8221;) at an exercise price of $2.67 per share, and Vision
Capital Advantage Fund, L.P. exercised a warrant as to 427,210 shares of
Series&nbsp;A Preferred Stock of the Company at an exercise price of $2.67 per
share. The Company received the aggregate exercise price of $5,000,002.20. Such
issuance and sale of Series&nbsp;A Convertible Preferred Stock of the Company
were made pursuant to Rule&nbsp;506 of Regulation&nbsp;D promulgated under the
Securities Act of 1933, as amended, as Vision Opportunity Master Fund, Ltd. and
Vision Capital Advantage Fund, L.P. each represented to the Company that it was
an &#8220;accredited investor&#8221; as defined in Regulation&nbsp;D
promulgated under the Securities Act of 1933, as amended.



<P style="font-size: 10pt" align="center"><B>SIGNATURES</B>

<P style="font-size: 10pt; text-indent: 4%" align="left">Pursuant to the requirements of the
Securities and Exchange Act of 1934, as amended, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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  <TD valign="top">&nbsp;</TD>
  <TD valign="top" align="left" colspan="2"><B>NovaRay Medical, Inc.</B></TD>
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 <TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
  <TD valign="top">Dated: November&nbsp;4, 2008</TD>
  <TD valign="top" align="left">By: </TD>
  <TD valign="top" align="left" style="border-bottom: 1px solid #000000">/s/ Jack Price</TD>
</TR>


<TR valign="bottom">
  <TD valign="top">&nbsp;</TD>
  <TD valign="top" align="left">Name:</TD>
  <TD valign="top" align="left">Jack Price</TD>
</TR>

<TR valign="bottom">
  <TD valign="top">&nbsp;</TD>
  <TD valign="top" align="left">Title:</TD>
  <TD valign="top" align="left">President and Chief Executive Officer</TD>
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<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">3
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{"company-data": {"conformed-name": "NovaRay Medical, Inc.", "cik": "0001383529", "assigned-sic": "3844", "irs-number": "161778998", "state-of-incorporation": "DE", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-52731", "film-number": "081162864"}, "business-address": {"street1": "1850 EMBARCADERO ROAD", "city": "PALO ALTO", "state": "CA", "zip": "94303", "phone": "4089665738"}, "mail-address": {"street1": "1850 EMBARCADERO ROAD", "city": "PALO ALTO", "state": "CA", "zip": "94303"}, "former-company": {"former-conformed-name": "Vision Acquisition I, Inc", "date-changed": "20061213"}}
Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): October 31, 2008
NovaRay Medical,
Inc.
(Exact name of registrant as
specified in its charter)
Delaware
000-52731
16-1778998
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
39655 Eureka Drive, Suite A,
Newark, California
94560
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number,
including area code:
(510) 619-9200
(Former name or former address if changed since last report.)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 3.02 Unregistered Sales of Equity Securities.
On October 31, 2008, Vision Opportunity
Master Fund, Ltd. exercised a warrant as to 1,445,450 shares of Series A
Convertible Preferred Stock of NovaRay Medical, Inc. (the
"Company") at an exercise price of $2.67 per share, and Vision
Capital Advantage Fund, L.P. exercised a warrant as to 427,210 shares of
Series A Preferred Stock of the Company at an exercise price of $2.67 per
share. The Company received the aggregate exercise price of $5,000,002.20. Such
issuance and sale of Series A Convertible Preferred Stock of the Company
were made pursuant to Rule 506 of Regulation D promulgated under the
Securities Act of 1933, as amended, as Vision Opportunity Master Fund, Ltd. and
Vision Capital Advantage Fund, L.P. each represented to the Company that it was
an "accredited investor" as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.
SIGNATURES
Pursuant to the requirements of the
Securities and Exchange Act of 1934, as amended, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
NovaRay Medical, Inc.
Dated: November 4, 2008
By:
/s/ Jack Price
Name:
Jack Price
Title:
President and Chief Executive Officer