SALT LAKE CITY, Jan. 20, 2017 (GLOBE NEWSWIRE) -- Great Basin Scientific, Inc. (OTCQB:GBSND), a molecular diagnostics company, announced today that it has submitted a request to the Securities and Exchange Commission to withdraw its S-1 Registration Statement on file with the SEC for a planned $8 million equity financing. The Company also announced an amendment agreement with holders of its 2016 Convertible Note. The Company currently has $58 million in restricted cash from the 2016 Convertible Note financing.
“We are pleased that our operating cash needs to date have been below forecast. As a result, we determined the additional funds were unnecessary at this time and have decided not to proceed with the planned financing,” said Jeff Rona, chief financial officer of Great Basin Scientific. “We are especially encouraged by the higher-than-expected efficiency of the instruments we placed at our customer sites, making it possible to potentially meet our revenue targets manufacturing fewer instruments.”
The Company previously announced its intent to raise additional funds when it entered into the Convertible Note financing in July of 2016. At that time, the Company expected that additional capital was needed to fund operations in late 2016 and early 2017 until the 2016 Notes began to amortize in January 2017, and cash in the Company’s restricted accounts incrementally became available pursuant to the terms of the 2016 Notes. However, the early release of restrictions on some cash in the restricted accounts, and the Company’s belief that the rest of the restrictions on cash in the Company’s restricted accounts will be released on a timely basis to fund operations going forward, has led the Company’s management to believe that further financing is not required at this time.
“We are gratified by the support of our Noteholders and look forward to working with them to make 2017 a very successful year as we anticipate expanding our menu of FDA-cleared assays from four to six,” said Ryan Ashton, co-founder and chief executive officer of Great Basin Scientific. “In addition to our four FDA-cleared and commercialized diagnostic assays, last month we submitted our Stool Bacterial Pathogens Panel to the FDA for 510(k) clearance, and we expect to submit our Bordetella Direct Test to the FDA very soon.”
The Company expects to enter into discussions with the Noteholders to revise the schedule for the release of restrictions for funds in the restricted accounts and to amend the equity conditions for the release of such restrictions, as outlined in the 2016 Notes, and expects to amend the notes in relation to these terms in the coming weeks. Currently, the Company does not meet the equity conditions for the release of restrictions on funds under the 2016 Notes, but management believes that Noteholders are receptive to amending or waiving those conditions and that funds will be available on a timely basis to continue to finance the Company’s ongoing operations. If the Company is unsuccessful in obtaining such amendments or waivers, then management will have to consider alternative financing at that time.
Amendment Agreement to 2016 Convertible Note
The Company also announced today that it signed an agreement with holders of the 2016 Notes that amends the conversion terms and eliminates the potential for deferrals. Under the terms of the amendment, any pre-issued conversion shares at the time of the amendment will reduce the principal amount of the Note held by Noteholders at the fixed conversion price of $0.044 per share without deferral provisions. The amendment eliminates the provisions of the 2016 Notes dealing with the Company’s ability to elect to convert installment payments, delivery of pre-installment conversion shares in relation to converted installment payments and the ability of Noteholders to accelerate or defer installment amounts. Future conversions may only be made at the election of the Noteholder at a variable price of the lower of (i) $2.00 per share, (ii) 85% of the lowest trading price of the stock during five consecutive trading days ending and including the trading day on which the Noteholder delivers a conversion notice to the Company or (iii) 85% of the weighted average price of the common stock during a single trading day on the date with which the Noteholder delivers a conversion notice to the Company.
About Great Basin Scientific
Great Basin Scientific is a molecular diagnostics company that commercializes breakthrough chip-based technologies. The Company is dedicated to the development of simple, yet powerful, sample-to-result technology and products that provide fast, multiple-pathogen diagnoses of infectious diseases. The Company’s vision is to make molecular diagnostic testing so simple and cost-effective that every patient will be tested for every serious infection, reducing misdiagnoses, and significantly limiting the spread of infectious disease. More information can be found on the company’s website at www.gbscience.com.
Forward-Looking Statements
This press release includes forward-looking statements regarding the Company’s continuing business efforts related to its products, including but not limited to, statements regarding the Company’s anticipated capital needs through mid-2018, the Company’s expectation that restrictions on cash in the Company’s restricted accounts will be release pursuant to the terms of the 2016 Notes, that the release of cash from restricted accounts, if and when it occurs, will be sufficient and timely to fund the Company’s operations, the Company’s expectation that holders of the 2016 Notes will agree to a restructuring of the release schedule and equity conditions to permit the release of funds, and the Company’s development plans and other similar statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: our limited operating history and history of losses; our ability to develop and commercialize new products and the timing of commercialization; our ability to obtain capital when needed; our ability to restructure the release schedule for cash in our restricted accounts under the 2016 Notes, our ability to amend the equity conditions of the 2016 Notes to permit release of restrictions on cash in restricted accounts, our ability to meet any equity conditions in the future, amended or otherwise, to permit the timely release of restrictions on cash in restricted accounts to meet our ongoing operating costs, our anticipated capital needs not varying significantly from those currently projected through mid-2018, our anticipated business and customer growth occurring as anticipated and other risks set forth in the Company’s filings with the Securities and Exchange Commission, including the risks set forth in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2016. These forward-looking statements speak only as of the date hereof and Great Basin Scientific specifically disclaims any obligation to update these forward-looking statements, except as required by law.