Delaware
(State or other jurisdiction of incorporation or organization)
|
8071
(Primary Standard Industrial
Classification Code Number)
|
06-1614015
(I.R.S. Employer
Identification Number)
|
Mary J. Mullany, Esq.
Ballard Spahr LLP
1735 Market Street
51
st
Floor
Philadelphia, PA 19103
(215) 665-8500
|
Richard Baumann, Esq.
Barry I. Grossman, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105 (212) 370-1300 |
Large Accelerated Filer ☐
|
Accelerated Filer ☐
|
Non-Accelerated Filer ☐
|
Smaller Reporting Company ☒
|
Title of each Class of Securities to be Registered
|
Proposed Maximum Aggregate Offering Price
(1)(2)
|
Amount of Registration Fee
|
||||||
Common Stock, par value $0.01 per share (3) (4)
|
$
|
34,500,000
|
$
|
4,009.00
|
||||
Underwriters' warrants (3) (4)
|
$
|
1,380,000
|
$
|
160.00
|
||||
Shares of common stock underlying underwriters' warrants (3) (4)
|
$
|
1,518,000
|
$
|
176.00
|
||||
Total
|
$
|
37,398,000
|
$
|
4,345.00
|
(1) | Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
( 2) | Includes the aggregate offering price of additional shares and/or underwriters' warrants which the underwriters have the option to purchase to cover over-allotments, if any. |
(3) | Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions. |
(4) | Assumes the underwriters' over-allotment option is fully exercised. |
Per Share
|
Total
|
|||||||
Public offering price
|
$
|
$
|
||||||
Underwriting discount and commissions
(1)
|
$
|
$
|
||||||
Proceeds, before expenses, to OpGen, Inc.
.(2)
|
$
|
$
|
|
Page
|
PROSPECTUS SUMMARY
|
1
|
THE OFFERING
|
10
|
SUMMARY FINANCIAL DATA
|
11
|
RISK FACTORS
|
13
|
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
|
38
|
USE OF PROCEEDS
|
39
|
DIVIDEND POLICY
|
39
|
CAPITALIZATION
|
40
|
DILUTION
|
41
|
SELECTED FINANCIAL DATA
|
43
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
45
|
BUSINESS
|
52
|
MANAGEMENT
|
79
|
EXECUTIVE COMPENSATION
|
8
|
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
|
91
|
PRINCIPAL STOCKHOLDERS
|
94
|
DESCRIPTION OF CAPITAL STOCK
|
96
|
SHARES ELIGIBLE FOR FUTURE SALE
|
100
|
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
|
101
|
UNDERWRITING
|
106
|
LEGAL MATTERS
|
111
|
EXPERTS
|
112
|
WHERE YOU CAN FIND ADDITIONAL INFORMATION
|
112
|
REFERENCES
|
112
|
OPGEN, INC. INDEX TO AUDITED FINANCIAL STATEMENTS
|
F-1
|
· | Our Acuitas™ MDRO Gene Test, which is currently available for sale. This test is, to our knowledge, the first CLIA lab-based test able to provide information regarding the presence of ten MDRO resistance genes from one patient specimen. The ten drug resistant genes identified by the Acuitas MDRO Gene Test are associated with CRE (Carbapenem-resistant Enterobactercaceae), ESBL (extended spectrum beta lactamase) and VRE (vancomycin resistance enterobacteria) organisms, and are gastrointestinal organisms frequently associated with antibiotic-resistant infections. The test results can be used by healthcare providers to identify patients who are colonized with one of the drug-resistant genes or who are actively infected. To date, eight acute care hospitals and long-term care facilities have partnered with us to evaluate the capabilities and uses of the Acuitas MDRO Gene Test. |
· | Our Acuitas CR Elite Test, which is also commercially available, adds the ability for the provider to order a traditional microbiology culture result to be performed from the same specimen sent for the Acuitas MDRO Gene Test, thereby providing additional information about the organism or organisms associated with an active infection, as well as an antibiotic susceptibility profile for such organism or organisms. |
· | Our Acuitas Lighthouse™ MDRO bioinformatics platform, which is currently in development. Our Acuitas Lighthouse MDRO bioinformatics platform will be able to provide detailed MDRO molecular information about an individual patient's resistance profile, gleaned from our Acuitas MDRO Gene Test results, and integrate this data with other patient and hospital-wide data to help improve overall patient outcomes and to reduce hospital costs. We anticipate that this product will be launched commercially in the third quarter of 2015. |
· | Accelerate the commercialization of our Acuitas MDRO Gene Test and Acuitas CR Elite Test. |
· | Complete development of and commercialize our Acuitas Lighthouse MDRO Management System to healthcare providers, governments and diagnostic companies. |
· | Capitalize on our first-mover advantage through our CLIA lab-based test offerings. We are working to integrate hospital-wide infectious organism molecular diagnostic information with antibiotic susceptibility data with patient specific data for healthcare providers. These infection control, antibiotic stewardship and patient management data product capabilities will be difficult for future market entrants to replicate. |
· | Develop and commercialize additional proprietary molecular diagnostic products with companion data offerings that provide the ability to efficiently analyze data about MDROs present in a patient sample. |
· | Expand our lab service offerings and capabilities through the supply of kits for use on our DNA probe assay platform and commercially available rapid diagnostic testing systems, develop additional MDRO DNA sequencing tests and informatics, and partner these offerings with our Grow on the Go™ technology. |
· | Partner with reference laboratories, government agencies, diagnostic companies and information technology providers to offer our Acuitas Lighthouse MDRO solution on a global basis. |
· | Build on our established Whole Genome Mapping position through our collaboration with Hitachi for human genome assembly and analysis and expanded research programs directed at complete DNA sequence assembly and bioinformatics. |
· | Accelerate growth through strategic partnerships, sponsored research programs with governments and industry and strategic acquisitions. |
· | We are an early stage company with a history of losses, and we expect to incur losses for the foreseeable future and may never achieve or sustain profitability. For the years ended December 31, 2014 and 2013, we had a net loss of $5.7 million and $10.1 million, respectively. From our inception through December 31, 2014, we had an accumulated deficit of $96.8 million. The report of our independent registered public accounting firm on our financial statements for the years ended December 31, 2014 and 2013 contains explanatory language that substantial doubt exists about our ability to continue as a going concern. Our monthly cash burn rate is approximately $500,000, and we have required bridge funding from our current investors to maintain our cash position until consummation of the offering contemplated in this prospectus. |
· | We may not be able to generate sufficient revenue from the Acuitas MDRO gene test products and Acuitas Lighthouse MDRO Management System or our relationships with hospitals to achieve or maintain profitability. |
· | Our success depends on the market acceptance of the Acuitas MDRO gene test products and Acuitas Lighthouse MDRO Management System. If physicians do not believe the Acuitas MDRO Gene Test, Acuitas CR Elite test and our Acuitas Lighthouse MDRO Management System consistently generate actionable information about MDROs present at their facilities, they may be less likely to order our products and services, and our business could suffer. |
· | If we are unable to scale our operations to support increased demand for the Acuitas MDRO gene test products and Acuitas Lighthouse MDRO Management System, our business could suffer. |
· | Our information technology systems are vital to the development and commercialization of our Acuitas Lighthouse MDRO Management System and the Human Chromosome Explorer we are developing with Hitachi, and any failure of these systems could harm our business. |
· | In order to successfully commercialize our Acuitas MDRO Gene Test and Acuitas CR Elite Test and our future products, including our Acuitas Lighthouse MDRO Management System, we need to expand our sales and marketing capabilities and will require substantial additional capital to fund such expansion. |
· | We face competition from large, well-capitalized companies who are developing rapid diagnostic systems for MDROs. If we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue or achieve and sustain profitability. |
· | If our sole laboratory facility becomes damaged or inoperable, our ability to conduct our business may be jeopardized. |
· | We rely on a limited number of suppliers or, in some cases, a sole supplier, for some of our laboratory instruments and materials and we may not be able to find replacements or immediately transition to alternative suppliers. |
· | If the FDA were to begin regulating our tests, we could incur substantial costs and delays associated with trying to obtain premarket clearance or other approvals. |
· | Our patent and intellectual property rights may not adequately protect our technologies, products and services. |
· | being permitted to present only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations in this prospectus; |
· | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended; |
· | reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and |
· | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
Common stock offered by us
|
shares
|
Common stock to be outstanding after this offering
|
shares ( shares if the underwriters exercise their option to purchase additional shares in full)
|
Underwriters' option to purchase additional shares
|
We have granted a 45-day option to the underwriters to purchase up to an aggregate of additional shares of common stock at the public offering price less the underwriting discount and commissions, solely to cover over-allotments.
|
Use of proceeds
|
We estimate that we will receive net proceeds from this offering of approximately $ million, or approximately $ million if the underwriters exercise their option to purchase additional shares in full, at an assumed public offering price of $ per share
,
after deducting the underwriting discount, commissions and estimated offering expenses. See "Underwriting" for additional information. We expect to use the net proceeds from this offering to fund increased sales and marketing activities for our Acuitas MDRO gene test products and Acuitas Lighthouse MDRO Management System, research and development activities to complete the development of our Acuitas Lighthouse MDRO Management System and future product development, for general and administrative expenses and for working capital purposes. See "Use of Proceeds" for additional information.
|
Risk factors
|
You should carefully read "Risk Factors" in this prospectus for a discussion of factors that you should consider before deciding to invest in our common stock.
|
NASDAQ Capital Market trading symbol reserved
|
OPGN
|
· | 1,230,772 shares of common stock issuable upon the exercise of stock options outstanding as of December 31, 2014 at a weighted-average exercise price of $0.78 per share; |
· | 217,019 shares of common stock reserved for future issuance under our 2008 Stock Option and Restricted Stock Plan, as amended, or the 2008 Plan; |
· | up to 1,500,000 shares of common stock reserved for future issuance upon the conversion of our 2015 convertible notes; and |
· | up to 258,607 shares of common stock issuable upon the exercise of outstanding warrants to purchase our common stock. |
· | no issuance or exercise of derivative securities on or after December 31, 2014; and |
· | no exercise by the underwriters of their option to purchase additional shares of common stock in this offering. |
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
(In thousands, except share and per share data)
|
||||||||
Statements of Operations Data:
|
||||||||
Revenue
|
$
|
4,126
|
$
|
2,411
|
||||
Operating expenses:
|
||||||||
Cost of sales
|
952
|
1,823
|
||||||
Research and development
(1)
|
4,368
|
4,152
|
||||||
General and administrative
(1)
|
2,313
|
2,762
|
||||||
Sales and marketing
(1)
|
2,058
|
3,053
|
||||||
Argus Whole Genome obsolescence
|
-
|
951
|
||||||
Total operating expenses
(1)
|
9,691
|
12,741
|
||||||
Loss from operations
|
(5,565
|
)
|
(10,330
|
)
|
||||
Interest income
|
‑
|
1
|
||||||
Interest expense
|
(111
|
)
|
(32
|
)
|
||||
Change in fair value of warrant liability
|
-
|
135
|
||||||
Other income (expense), net
|
5
|
91
|
||||||
Net loss
|
$
|
(5,671
|
)
|
$
|
(10,135
|
)
|
||
Net loss available to common stockholders
(2)
|
$
|
(6,299
|
)
|
$
|
(15,508
|
)
|
||
Net loss per common share, basic and diluted
|
$
|
(16.25
|
)
|
$
|
(896.09
|
)
|
||
Shares used in computing net loss per common share, basic and diluted
|
387,590
|
17,306
|
||||||
Pro forma net loss per common share, basic and diluted (unaudited)
(3)
|
$
|
(1.20
|
)
|
|||||
Pro forma shares used in computing pro forma net loss per common share,
basic and diluted (unaudited)
(3)
|
4,687,713
|
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
(In thousands)
|
||||||||
Research and development
|
$
|
5
|
$
|
8
|
||||
General and administrative
|
56
|
143
|
||||||
Sales and marketing
|
3
|
2
|
||||||
Total stock-based compensation
|
$
|
64
|
$
|
153
|
(2) |
Net loss reduced by preferred stock dividends.
|
(3)
|
Pro forma net loss per
common
share
, basic and diluted,
is calculated assuming the conversion of all shares of Series A Preferred Stock and our 2014 convertible notes into common stock outstanding at the beginning of the period or at the original date of issuance, if later, up to December 31, 2014,
but
does not include 1,500,000 shares of common stock that may be issued upon the conversion of the 2015 convertible notes (assuming the $1.5 million 2015 convertible notes offering is fully subscribed) that were not outstanding at December 31, 2014.
|
As of December 31, 2014
|
|||||||||
Actual
|
Pro Forma
(1)
|
||||||||
(In thousands)
(Unaudited) |
|||||||||
Balance Sheet Data:
|
|||||||||
Cash and cash equivalents
|
$
|
750
|
$
|
750
|
|||||
Working capital deficiency
|
(4,308
|
)
|
(2,808
|
)
|
|||||
Total assets
|
2,655
|
2,655
|
|||||||
Series A Preferred Stock
|
4,565
|
‑
|
|||||||
Accumulated deficit
|
(96,772
|
)
|
(96,772
|
)
|
|||||
Total stockholders' deficit
|
(8,066
|
)
|
(2,001
|
)
|
· | on an actual basis; |
· | on a pro forma basis to give effect to the automatic conversion of all outstanding shares of our Series A Preferred Stock and convertible notes outstanding at December 31, 2014 into an aggregate of 5,499,864 shares of our common stock upon the closing of this offering; and |
· | on a pro forma as adjusted basis to give further effect to the receipt of the estimated net proceeds from the sale of shares of common stock in this offering at the initial public offering price of $ per share, and after deducting the underwriting discount and commissions and estimated expenses payable by us. |
(1)
|
The pro forma presentation does not include 1,500,000 shares of common stock that may be issued upon the conversion of the 2015 convertible notes (assuming the $1.5 million 2015 convertible notes offering is fully subscribed).
|
· | our ability to convince the medical community of the clinical utility of our products and services and their potential advantages over existing tests; |
· | our ability to convince the medical community of the accuracy and speed of our products and services, as contrasted with the current methods available; |
· | the willingness of hospitals and physicians to use our products and services; and |
· | the recognition by inpatient health care facilities of the patient safety, improved outcome and cost-effectiveness benefits of using our products and the willingness to pay for them without reimbursement. |
· | commercializing our Acuitas MDRO gene test products and Acuitas Lighthouse MDRO Management System and potential future diagnostic and screening products and services; |
· | developing, presenting and publishing additional clinical and economic utility data intended to increase clinician adoption of our current and future products and services; |
· | expansion of our operating capabilities; |
· | maintenance, expansion and protection of our intellectual property portfolio and trade secrets; |
· | future clinical trials; |
· | expansion of the size and geographic reach of our sales force and our marketing capabilities to commercialize potential future products and services; |
· | employment of additional clinical, quality control, scientific, customer service, laboratory, billing and reimbursement and management personnel; and |
· | employment of operational, financial, accounting and information systems personnel, consistent with expanding our operations and our status as a newly public company following this offering. |
• | complete the commercialization of our Acuitas MDRO gene test products, complete the development of our Acuitas Lighthouse MDRO Management System products and develop future Acuitas and Lighthouse products and services; |
• | increase our selling and marketing efforts to drive market adoption and address competitive developments; |
• | expand our clinical laboratory operations; |
• | fund our clinical validation study activities; |
• | expand our research and development activities; |
• | sustain or achieve broader commercialization of our products; |
• | acquire or license products or technologies; and |
• | finance our capital expenditures and general and administrative expenses. |
• | the level of research and development investment required to develop our current and future product and service offerings; |
• | costs of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; |
• | our need or decision to acquire or license complementary technologies or acquire complementary businesses; |
• | changes in test development plans needed to address any difficulties in commercialization; |
• | competing technological and market developments; |
• | whether our diagnostic solutions become subject to additional FDA, or other, regulation; and |
• | changes in regulatory policies or laws that affect our operations. |
· | failure of the test at the research or development stage; |
· | lack of clinical validation data to support the effectiveness of the test; |
· | delays resulting from the failure of third-party suppliers or contractors to meet their obligations in a timely and cost-effective manner; |
· | failure to obtain or maintain necessary certifications, licenses, clearances or approvals to market or perform the test; or |
· | lack of commercial acceptance by inpatient health care facilities. |
· | the federal Anti-Kickback Statute, which constrains certain marketing practices, educational programs, pricing policies and relationships with healthcare providers or other entities by prohibiting, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; |
· | federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third party payors that are false or fraudulent; |
· | federal physician self-referral laws, such as the Stark law, which prohibit a physician from making a referral to a provider of certain health services with which the physician or the physician's family member has a financial interest, and prohibit submission of a claim for reimbursement pursuant to a prohibited referral; and |
· | state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third party payor, including commercial insurers, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. |
·
|
required compliance with existing and changing foreign healthcare and other regulatory requirements and laws, such as those relating to patient privacy;
|
·
|
required compliance with anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act and U.K. Bribery Act, data privacy requirements, labor laws and anti-competition regulations;
|
·
|
export or import restrictions;
|
·
|
various reimbursement and insurance regimes;
|
·
|
laws and business practices favoring local companies;
|
·
|
longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
|
·
|
political and economic instability;
|
·
|
potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers;
|
·
|
foreign exchange controls;
|
·
|
difficulties and costs of staffing and managing foreign operations; and
|
·
|
difficulties protecting or procuring intellectual property rights.
|
· | actual or anticipated variations in our and our competitors' results of operations; |
· | announcements by us or our competitors of new products, commercial relationships or capital commitments; |
· | issuance of new securities analysts' reports or changed recommendations for our stock; |
· | periodic fluctuations in our revenue, due in part to the way in which we recognize revenue; |
· | actual or anticipated changes in regulatory oversight of our products; |
· | developments or disputes concerning our intellectual property or other proprietary rights; |
· | commencement of, or our involvement in, litigation; |
· | announced or completed acquisitions of businesses or technologies by us or our competitors; |
· | any major change in our management; and |
· | general economic conditions and slow or negative growth of our markets. |
· | authorize our board of directors to issue, without further action by the stockholders, up to 5,000,000 shares of undesignated preferred stock; |
· | require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; |
· | specify that special meetings of our stockholders can be called only by our board of directors, our chairman of the board or our chief executive officer; |
· | establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; |
· | provide that our directors may be removed only for cause; |
· | provide that vacancies on our board of directors may, except as otherwise required by law, be filled only by a majority of directors then in office, even if less than a quorum; |
· | specify that no stockholder is permitted to cumulate votes at any election of directors; and |
· | require a super-majority of votes to amend certain of the above-mentioned provisions. |
·
|
the commercialization of our current Acuitas MDRO gene test products and completed development and commercialization of our Acuitas Lighthouse MDRO Management System products;
|
·
|
anticipated trends and challenges in our business and the competition that we face;
|
·
|
the execution of our business plan and our growth strategy;
|
·
|
our expectations regarding the size of and growth in potential markets;
|
·
|
changes in laws or regulations applicable to our business, including potential regulation by the FDA;
|
·
|
our ability to develop and commercialize new products and the timing of commercialization;
|
·
|
our liquidity and working capital requirements, including our long-term future cash requirements beyond the next 12 months;
|
·
|
our expectations regarding future revenue and expenses; and
|
·
|
our expectations regarding the use of proceeds from this offering.
|
·
|
approximately $ million for sales and marketing activities, including expansion of our sales force to support the ongoing commercialization of our MDRO gene test products and, when development is completed, our Acuitas Lighthouse MDRO Management System, and for working capital and general and administrative purposes;
|
·
|
approximately $ million for research and development related to the continued support of our completion of the development of our Acuitas Lighthouse MDRO Management System and future products in our pipeline; and
|
·
|
the remainder for general and administrative expenses (including compensation of our officers and directors and other personnel-related costs and costs of operating as a public company), and for working capital and other general corporate purposes.
|
·
|
on an actual basis;
|
·
|
on a pro forma basis to give effect to the automatic conversion of all outstanding shares of our convertible preferred stock and convertible notes into an aggregate of 5,499,864 shares of common stock upon the closing of this offering; and
|
·
|
on a pro forma as adjusted basis to give further effect to the receipt of the estimated net proceeds from the sale of shares of common stock in this offering at the initial public offering price of $ per share, after deducting the underwriting discount and commissions and estimated expenses payable by us.
|
As of December 31, 2014
|
||||||||||||
Actual
|
Pro Forma
|
Pro Forma as
Adjusted |
||||||||||
(In thousands, except share data)
(Unaudited) |
||||||||||||
Cash and cash equivalents
|
$
|
750
|
$
|
750
|
$
|
|||||||
Convertible notes
|
$
|
1,500
|
$ ‑
|
$
|
||||||||
Promissory notes (secured demand notes)
|
1,500
|
1,500
|
||||||||||
Long-term debt
|
235
|
235
|
||||||||||
Redeemable convertible preferred stock, par value $0.01 per share:
|
||||||||||||
6,000,000 shares authorized, 3,999,864 issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted.
|
4,565
|
‑
|
||||||||||
Stockholder's (deficit) equity:
|
||||||||||||
Common stock, par value $0.01 per share: 7,500,000 shares
|
||||||||||||
authorized, 493,178 shares issued and outstanding, actual; 7,500,000 shares authorized, 5,993,042 shares issued and outstanding proforma; and shares authorized and shares issued and outstanding, proforma as adjusted.
|
5
|
60
|
||||||||||
Preferred stock, par value $0.01 per share: no shares
|
||||||||||||
authorized, issued or outstanding, actual and pro forma; 5,000,000 shares authorized, no shares issued or outstanding, pro forma as adjusted
|
‑
|
‑
|
||||||||||
Additional paid-in capital
|
88,701
|
94,711
|
||||||||||
Accumulated deficit
|
(96,772
|
)
|
(96,772
|
)
|
||||||||
Total stockholders' deficit
|
(8,066
|
)
|
(2,001
|
)
|
||||||||
Total capitalization
|
$
|
(266
|
)
|
$
|
(266
|
)
|
$
|
·
|
1,230,772 shares of common stock issuable upon the exercise of options outstanding at December 31, 2014 at a weighted average exercise price of $0.78 per share;
|
·
|
217,019 shares of common stock reserved for future issuance under our 2008 Plan;
|
·
|
up to 1,500,000 shares of common stock reserved for future issuance upon the conversion of our 2015 convertible notes; and
|
·
|
up to 258,607 shares of common stock issuable upon the exercise of warrants to purchase our common stock.
|
Initial public offering price per share
|
$
|
|||||||
Pro forma net tangible book value per share as of December 31, 2014
|
$
|
(0.33
|
)
|
|||||
Increase in pro forma net tangible book value per share attributable to new investors
|
||||||||
Pro forma as adjusted net tangible book value per share after this offering
|
||||||||
Dilution per share to investors participating in this offering
|
$
|
Total Shares
|
Total Consideration
|
Average Price per | ||||||||||||||||||
Number
|
Percent
|
Amount
|
Percent
|
Share
|
||||||||||||||||
Existing stockholders before this offering
|
||||||||||||||||||||
Purchasers of common stock in this offering
|
||||||||||||||||||||
Total
|
100.0
|
%
|
$
|
100.0
|
%
|
·
|
1,230,772 shares of common stock issuable upon the exercise of options outstanding at December 31, 2014, at a weighted average exercise price of $0.78 per share;
|
·
|
217,019 shares of common stock reserved for future issuance under our 2008 Plan;
|
·
|
up to 1,500,000 shares of common stock reserved for future issuance upon the conversion of our 2015 convertible notes (if the offering is fully subscribed); and
|
·
|
up to 258,607 shares of common stock issuable upon the exercise of warrants to purchase our common stock.
|
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
(In thousands, except share and per share data)
|
||||||||
Statements of Operations Data:
|
||||||||
Revenue
|
$
|
4,126
|
$
|
2,411
|
||||
Operating expenses:
|
||||||||
Cost of sales
|
952
|
1,823
|
||||||
Research and development
(1)
|
4,368
|
4,152
|
||||||
General and administrative
(1)
|
2,313
|
2,762
|
||||||
Sales and marketing
(1)
|
2,058
|
3,053
|
||||||
Argus Whole Genome obsolescence
|
-
|
951
|
||||||
Total operating expenses
(1)
|
9,691
|
12,741
|
||||||
Loss from operations
|
(5,565
|
)
|
(10,330
|
)
|
||||
Interest income
|
-
|
1
|
||||||
Interest expense
|
(111
|
)
|
(32
|
)
|
||||
Change in fair value of warrant liability
|
-
|
135
|
||||||
Other income (expense), net
|
5
|
91
|
||||||
Net loss
|
$
|
(5,671
|
)
|
$
|
(10,135
|
)
|
||
Net loss available to common stockholders
(2)
|
$
|
(6,299
|
)
|
$
|
(15,508
|
)
|
||
Net loss per common share, basic and diluted
|
$
|
(16.25
|
)
|
$
|
(896.09
|
)
|
||
Shares used in computing net loss per common share, basic and diluted
|
387,590
|
17,306
|
||||||
Pro forma net loss per common share, basic and diluted (unaudited)
(3)
|
$
|
(1.20
|
)
|
|||||
Pro forma shares used in computing net loss per common share, basic and diluted (unaudited)
(3)
|
4,687,713
|
(1) | Includes stock-based compensation as follows: |
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
(In Thousands)
|
||||||||
Research and development
|
$
|
5
|
$
|
8
|
||||
General and administrative
|
56
|
143
|
||||||
Sales and marketing
|
3
|
2
|
||||||
Total stock-based compensation
|
$
|
64
|
$
|
153
|
(2) |
Net loss reduced by preferred stock dividends.
|
(3)
|
Pro forma net loss per
common
share
, basic and diluted,
is calculated assuming the conversion of all shares of Series A Preferred Stock and our 2014 convertible notes into common stock outstanding at the beginning of the period or at the original date of issuance, if later, up to December 31, 2014,
but
does not include 1,500,000 shares of common stock that may be issued upon the conversion of the 2015 convertible notes (assuming the $1.5 million 2015 convertible notes offering is fully subscribed) that were not outstanding at December 31, 2014.
|
December 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Balance Sheet Data:
|
||||||||
Cash and cash equivalents
|
$
|
750
|
$
|
1,400
|
||||
Working capital deficiency
|
(4,308
|
)
|
(791
|
)
|
||||
Total assets
|
2,655
|
3,159
|
||||||
Series A Preferred Stock
|
4,565
|
2,000
|
||||||
Accumulated deficit
|
(96,772
|
) |
(91,101
|
)
|
||||
Total stockholders' deficit
|
(8,066
|
)
|
(1,831
|
)
|
As of December 31, 2014
|
||||||||
Actual
|
Pro Forma
(1)
|
|||||||
(In thousands)
|
||||||||
(Unaudited)
|
||||||||
Balance Sheet Data:
|
||||||||
Cash and cash equivalents
|
$
|
750
|
$
|
750
|
||||
Working capital deficiency
|
(4,308
|
)
|
(2,808
|
)
|
||||
Total assets
|
2,655
|
2,655
|
||||||
Series A Preferred Stock
|
4,565
|
-
|
||||||
Accumulated deficit
|
(96,772
|
)
|
(96,772
|
)
|
||||
Total stockholders' deficit
|
(8,066
|
)
|
(2,001
|
)
|
(1)
|
The pro forma presentation above does not include 1,500,000 shares of common stock that may be issued upon the conversion of the 2015 convertible notes (assuming the $1.5 million 2015 convertible notes offering is fully subscribed) that were not outstanding at December 31, 2014.
|
Year ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Product sales
|
$
|
1,236,349
|
$
|
1,735,517
|
||||
Laboratory services
|
478,909
|
630,851
|
||||||
Collaboration revenue
|
2,411,120
|
44,239
|
||||||
Total revenue
|
$
|
4,126,378
|
$
|
2,410,607
|
·
|
Collaboration revenue of $2.4 million in 2014 compared with almost no revenue in 2013. Collaboration revenue in 2014 was from the Hitachi technology development collaboration which started in late 2013.
|
·
|
A decrease of 29% in products sales as Whole Genome Mapping system and consumable sales declined $0.6 million, partially offset by an increase of $0.1 million in Argus™ System service revenues.
|
·
|
A decrease of 24% in Laboratory services revenue. Laboratory services revenue in 2014 for non-human Whole Genome Mapping applications decreased 60% compared with 2013. This decline was partially offset by $225,000 of service revenue related to the Hitachi technology development collaboration and $2,000 of CLIA service revenues compared with no revenues in 2013 from these activities.
|
Year ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Cost of product sales
|
$
|
425,541
|
$
|
1,501,648
|
||||
Cost of services
|
526,196
|
320,938
|
||||||
Argus Whole Genome obsolescence
|
-
|
950,881
|
||||||
Research and development
|
4,368,302
|
4,151,936
|
||||||
General and administrative
|
2,312,935
|
2,762,205
|
||||||
Sales and marketing
|
2,058,085
|
3,053,394
|
||||||
Total operating expenses
|
$
|
9,691,059
|
$
|
12,741,002
|
·
|
A decrease of 72% in cost of product sales. This decrease resulted from lower manufacturing costs, lower unit volumes and lower royalty expense;
|
·
|
A write-down of the Company's Whole Genome Mapping inventory of approximately $1.0 million in 2013 that did not reoccur in 2014;
|
·
|
A 5% increase in research and development costs;
|
·
|
A decrease of 16% in general and administrative expenses. Lower payroll, stock-based compensation and legal expenses were the principal reason general and administrative expenses declined;
|
·
|
A decrease of 33% in sales and marketing expenses. Payroll, travel and outside marketing expenses for sales and marketing activities were $0.9 million lower in the 2014 period, reflecting lower costs after the 2013 restructuring; and
|
·
|
An increase of 64% in cost of services revenues which partially offset the decreases described above. The increase in costs of services in 2014 was principally related to costs to run human genome samples in support of the Hitachi technology development collaboration.
|
Year ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Interest income
|
$
|
156
|
$
|
1,222
|
||||
Interest expense
|
(111,345
|
)
|
(31,598
|
)
|
||||
Change in fair value of derivative financial instruments
|
-
|
134,560
|
||||||
Other income (expense)
|
4,400
|
91,390
|
||||||
Total other income (expense)
|
$
|
(106,789
|
)
|
$
|
195,574
|
·
|
our interest expense being higher in 2014 due to our outstanding notes due to stockholders in 2014;
|
·
|
2013 including $0.1 million of gains on the change in the fair value of derivative and derivative liabilities being reduced to zero in 2014 due to our recapitalization; and
|
·
|
other income (expense) in 2013 including loan forgiveness and the reversal of bad debt expense.
|
Year ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Net cash used in operating activities
|
$
|
(5,385,542
|
)
|
$
|
(7,487,822
|
)
|
||
Net cash used in investing activities
|
$
|
(39,537
|
)
|
$
|
(109,871
|
)
|
||
Net cash provided by financing activities
|
$
|
4,774,251
|
$
|
1,880,324
|
·
|
Our Acuitas MDRO Gene Test, which is currently available for sale. This test is, to our knowledge, the first CLIA lab-based test able to provide information regarding the presence of ten MDRO resistance genes from one patient specimen. The ten drug-resistant genes identified by the Acuitas MDRO Gene Test are associated with CRE (Carbapenem-resistant Enterobactercaceae), ESBL (extended spectrum beta lactamase) and VRE (vancomycin resistance enterobacteria) organisms, and are gastrointestinal organisms frequently associated with antibiotic-resistant infections. The test results can be used by healthcare providers to identify patients who are colonized with one of the drug-resistant genes or who are actively infected. To date, eight acute care hospitals and long-term care facilities have partnered with us to evaluate the capabilities and uses of the Acuitas MDRO Gene Test.
|
·
|
Our Acuitas CR Elite Test, which is also commercially available, adds the ability for the provider to order a traditional microbiology culture result to be performed from the same specimen sent for the Acuitas MDRO Gene Test, thereby providing additional information about the organism or organisms associated with an active infection, as well as an antibiotic susceptibility profile for such organism or organisms.
|
·
|
Our Acuitas Lighthouse MDRO bioinformatics platform, which is currently in development. Our Acuitas Lighthouse MDRO bioinformatics platform will be able to provide detailed MDRO molecular information about an individual patient's resistance profile, gleaned from our Acuitas MDRO Gene Test results, and integrate this data with other patient and hospital-wide data to help improve overall patient outcomes and to reduce hospital costs. We anticipate that this product will be launched commercially in the third quarter of 2015.
|
·
|
Accelerate the commercialization of our Acuitas MDRO Gene Test and Acuitas CR Elite Test.
|
·
|
Complete development of and commercialize our Acuitas Lighthouse MDRO Management System to healthcare providers, governments and diagnostic companies.
|
·
|
Capitalize on our first-mover advantage through our CLIA lab-based test offerings. We are working to integrate hospital-wide infectious organism molecular diagnostic information with antibiotic susceptibility data with patient specific data for healthcare providers. These infection control, antibiotic stewardship and patient management data product capabilities will be difficult for future market entrants to replicate.
|
·
|
Develop and commercialize additional proprietary molecular diagnostic products with companion data offerings that provide the ability to efficiently analyze data about MDROs present in a patient sample.
|
·
|
Expand our lab service offerings and capabilities through the supply of kits for use on our DNA probe assay platform and commercially available rapid diagnostic testing systems, develop additional MDRO DNA sequencing tests and informatics, and partner these offerings with our Grow on the Go technology.
|
·
|
Partner with reference laboratories, government agencies, diagnostic companies and information technology providers to offer our Acuitas Lighthouse MDRO solution on a global basis.
|
·
|
Build on our established Whole Genome Mapping position through our collaboration with Hitachi for human genome assembly and analysis and expanded research programs directed at complete DNA sequence assembly and bioinformatics.
|
·
|
Accelerate growth through strategic partnerships, sponsored research programs with governments and industry and strategic acquisitions.
|
·
|
Partner. Through our consulting process and development of a client services agreement, we establish OpGen as a partner to provide the information necessary so that healthcare providers can manage infection control on an institution-wide basis .
|
·
|
Pilot. A plan is prepared within the client institution to conduct point prevalence surveys, culture isolate characterization and comparison to internal methods currently in use. During the pilot phase and at completion, a formal report is prepared and provided. Our reports highlight overall test performance including the detection of colonization or infection missed by conventional methods.
|
·
|
Program. The customized program for each institution includes implementation of MDRO screening, ongoing testing of clinical isolates, and the integration of this data into our Acuitas Lighthouse MDRO Management System.
|
·
|
Platinum status as a proactive MDRO surveillance and "best practices" institution;
|
·
|
Patient safety and enhanced hospital reputational benefits;
|
·
|
Compliance with CDC and public health guidelines and reporting requirements;
|
·
|
Reduced length of stay, improved antibiotic stewardship and overall cost savings;
|
·
|
Insurance against potential reputational harm from undetected MDRO hospital wide outbreaks.
|
·
|
Sell to early adopter institutions;
|
·
|
Demonstrate the value of our solutions in clinical practice;
|
·
|
Educate healthcare providers regarding the clinical validation, clinical utility and improved outcomes that can be obtained with our solutions;
|
·
|
Demonstrate the cost effectiveness of MDRO surveillance to hospital administrators;
|
·
|
Build consumer and public awareness regarding the benefits of MDRO surveillance and best practices in infection control.
|
·
|
Investments in information technology including our Acuitas Lighthouse MDRO portal database interpretation capabilities, and next generation sequencing assembly and bioinformatics;
|
·
|
Further development of additional Acuitas gene tests;
|
·
|
Improved microbiology methods for MDRO culture screening such as our Grow on the Go technology, ESBL culture method and additional culture methods to help improve test workflows;
|
·
|
Combined testing methods from new sample types;
|
·
|
Multiplex tests addressing newly identified clinical needs; and
|
·
|
Converting our CLIA lab-based products to in vitro diagnostic kits that could be sold, upon receipt of FDA clearance and other approvals, directly to our customers and to other clinical reference laboratories.
|
·
|
Meet the evidence standards necessary to be consistent with leading clinical guidelines. We believe demonstrating that our solution meets leading clinical practice guidelines plays a critical role in payors' coverage decisions.
|
·
|
Engage reimbursement specialists to ensure the payor outreach strategy reacts to and anticipates the changing needs of our customer base. A customer service team would be an integral part of our reimbursement strategy, working with hospitals to navigate the claims process.
|
·
|
Cultivate a network of key opinion leaders. Key opinion leaders are able to influence clinical practice by publishing research and determining whether new tests should be integrated into practice guidelines. We would collaborate with key opinion leaders early in the development process to ensure our clinical studies are designed and executed in a way that clearly demonstrates the benefits of our tests to physicians and payors.
|
·
|
Compile a library of peer-reviewed studies that demonstrate that the Acuitas MDRO gene test products are effective, accurate and faster than current methods.
|
·
|
quality and strength of clinical and analytical validation data;
|
·
|
confidence in diagnostic results;
|
·
|
cost-effectiveness; and
|
·
|
ease of use.
|
·
|
product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;
|
·
|
Quality System Regulation, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;
|
·
|
labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;
|
·
|
clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices;
|
·
|
approval of product modifications that affect the safety or effectiveness of one of our approved devices;
|
·
|
medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur;
|
·
|
post-approval restrictions or conditions, including post-approval study commitments;
|
·
|
post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;
|
·
|
the FDA's recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;
|
·
|
regulations pertaining to voluntary recalls; and
|
·
|
notices of corrections or removals.
|
·
|
denial of payment for the services provided in violation of the prohibition;
|
·
|
refunds of amounts collected by an entity in violation of the Stark Law;
|
·
|
a civil penalty of up to $15,000 for each service arising out of the prohibited referral;
|
·
|
possible exclusion from federal healthcare programs, including Medicare and Medicaid; and
|
·
|
a civil penalty of up to $100,000 against parties that enter into a scheme to circumvent the Stark Law's prohibition.
|
Name
|
Age
|
Position
|
Executive officers:
|
||
Evan Jones (1)
|
57
|
President, Chief Executive Officer and Chair of the Board
|
C. Eric Winzer
|
58
|
Senior Vice President, Finance and Chief Financial Officer
|
G. Terrance Walker, Ph.D.
|
55
|
Senior Vice President, Research and Development
|
Vadim Sapiro
|
43
|
Chief Information Officer
|
David Hoekzema
|
52
|
Vice President, Business Development and Operations
|
Consultant:
|
||
Robert McG. Lilley
|
69
|
Chief Commercial Officer
|
Non-management directors:
|
||
Brian G. Atwood (2)
|
61
|
Director
|
Timothy Howe (1)(2)
|
57
|
Director
|
Laurence R. McCarthy Ph.D.(1)(2)
|
70
|
Director
|
Misti Ushio, Ph.D.(1)(2)
|
43
|
Director
|
____________
|
·
|
appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
|
·
|
approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
|
·
|
reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements;
|
·
|
reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;
|
·
|
reviewing the adequacy of our internal control over financial reporting;
|
·
|
establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
|
·
|
reviewing the Company's periodic reports to be filed with the SEC;
|
·
|
recommending, based upon the audit committee's review and discussions with management and the independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10‑K;
|
·
|
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
|
·
|
preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
|
·
|
overseeing our compliance with applicable legal and regulatory requirements;
|
·
|
reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; and
|
·
|
reviewing quarterly earnings releases.
|
·
|
annually reviewing and recommending to our board of directors corporate goals and objectives, and determination of the achievement thereof, relevant to the compensation of our Chief Executive Officer and other executive officers;
|
·
|
evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and recommending to our board of directors the compensation of our Chief Executive Officer;
|
·
|
determining, or reviewing and recommending to our board of directors for approval, the compensation of our other executive officers;
|
·
|
reviewing and establishing our overall management compensation philosophy and policy;
|
·
|
overseeing and administering our compensation and similar plans;
|
·
|
evaluating and assessing potential current compensation advisors in accordance with the independence standards identified in the applicable NASDAQ Stock Market rules;
|
·
|
retaining and approving the compensation of any compensation advisors;
|
·
|
reviewing and approving, or reviewing and recommending to our board of directors for approval, our policies and procedures for the grant of equity-based awards;
|
·
|
determining or reviewing and making recommendations to our board of directors with respect to director compensation;
|
·
|
preparing the compensation committee report required by SEC rules to be included in our annual proxy statement;
|
·
|
reviewing and discussing with management the compensation discussion and analysis to be included in our annual proxy statement or Annual Report on Form 10-K; and
|
·
|
reviewing and discussing with our board of directors corporate succession plans for the Chief Executive Officer and other key officers.
|
Name and Principal Position
|
Year |
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards (1)
|
NonEquity
Incentive Plan Compensation |
All Other
Compensation
|
Total
|
||||||||||||||||
Evan Jones
|
2014 |
$
|
95,000 |
|
—
|
$
|
6,532
|
(2) |
$
|
74,698 |
$
|
—
|
$
|
—
|
$ |
176,230
|
||||||||
President and Chief Executive Officer (2)
|
2013 | $ | 12,500 | — | $ | — | $ | — | $ | — | $ | — | $ | 12,500 | ||||||||||
|
||||||||||||||||||||||||
C. Eric Winzer,
|
2014 | $ | 260,000 | — | $ | — | $ | 36,967 | $ | — | $ | — | $ | 296,967 | ||||||||||
Executive Vice President, Chief Financial Officer (3)
|
2013 | $ | 260,000 | — | $ | 21,667 | (3) | $ | 6,235 | $ | — | $ | 1,600 | (4) | $ | 289,502 | ||||||||
|
||||||||||||||||||||||||
Vadim Sapiro,
|
2014 | $ | 237,260 | — | $ | — | $ | 17,523 | $ | — | $ | — | $ | 254,783 | ||||||||||
Chief Information Officer (3)
|
2013 | $ | 232,740 | — | $ | 19,583 | (3) | $ | 4,530 | $ | — | $ | 1,446 | (4) | $ | 258,299 | ||||||||
|
(1) | Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions made in the calculation of these amounts are described in Note 8 to the Company's audited consolidated financial statements, included in this prospectus. |
(2) | Mr. Jones has served as our President, Chief Executive Officer and Chair of the Board since October 25, 2013. Previously he served as Executive Chair of the board of directors from September 2011 to October 2013. During the first quarter of 2013, he received compensation for serving as our Executive Chair. When he assumed the role of Chief Executive Officer, he agreed to receive base compensation for all of his positions through the issuance of restricted stock units, in lieu of cash salary, for the period from October 25, 2013 to June 30, 2014. The restricted stock units were issued to him in March 2014 and vested on October 24, 2014. In addition, in 2014, Mr. Jones was awarded stock options to acquire 374,235 shares of common stock. |
(3) | Represents restricted preferred stock units awarded to each of Mr. Winzer and Mr. Sapiro as compensation for revising his change in control and severance arrangement in November 2013. Mr. Winzer and Mr. Sapiro each relinquished his award of restricted preferred stock units in December 2014. |
(4) | Represents a 401(k) match for the periods indicated. |
·
|
"cause" means mean: (i) the executive's commission of a felony; (ii) any act or omission of executive constituting dishonesty, fraud, immoral or disreputable conduct that causes material harm to the Company; (iii) executive's violation of Company policy that causes material harm to the Company; (iv) executive's material breach of any written agreement between the executive and the Company which, if curable, remains uncured after notice; or (v) executive's breach of fiduciary duty. The termination of executive's employment as a result of the death or disability is not deemed to be a termination without cause.
|
·
|
"change in control" means (a) a merger or consolidation in which (i) the Company is a constituent party, or (ii) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (taking into account all equity on a fully diluted and converted basis); or (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company; provided that to the extent necessary for compliance with Section 409A of the Internal Revenue Code, no transaction will be a Change in Control for these purposes unless such transaction is also a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the Company's assets as described in Treasury Regulation Section 1.409A-3(i)(5).
|
·
|
"good reason" means any of the following, without the executive's consent: (i) material diminution of executive's responsibilities or duties (provided that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring company will not by itself be deemed to be a diminution of executive's responsibilities or duties); (ii) material reduction in the level of executive's base salary (and any such reduction will be ignored in determining executive's base salary for purposes of calculating the amount of severance pay); (iii) relocation of the office at which executive is principally based to a location that is more than fifty (50) miles from the location at which executive performed his or her duties immediately prior to the effective date of a Change in Control; (iv) failure of a successor in a Change in Control to assume the agreement; or (v) the Company's material breach of any written agreement between executive and the Company. Notwithstanding the foregoing, any actions taken by the Company to accommodate a disability of executive or pursuant to the Family and Medical Leave Act shall not be a good reason for purposes of the agreement. Additionally, before executive may terminate employment for a good reason, executive must notify the Company in writing within thirty (30) days after the initial occurrence of the event, condition or conduct giving rise to good reason, the Company must fail to remedy or cure the alleged good reason within the thirty (30) day period after receipt of such notice if capable of being cured within such thirty-day period, and, if the Company does not cure the good reason (or it is incapable of being cured within such thirty-day period), then executive must terminate employment by no later than thirty (30) days after the expiration of the last day of the cure period (or, if the event condition or conduct is not capable of being cured within such thirty-day period, within thirty (30) days after initial notice to the Company of the violation). Transferring executive's employment to a successor is not itself good reason to terminate employment under the agreement, provided, however, that subparagraphs (i) through (v) above shall continue to apply to executive's employment by the successor. This definition is intended to constitute a "substantial risk of forfeiture" as defined under Treasury Regulation 1.409A-1(d).
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2014
|
|||||||||||||||||||||||||||||||||||
OPTION AWARDS
|
STOCK AWARDS
|
||||||||||||||||||||||||||||||||||
Name
|
(1)
Number of Securities Underlying Unexercised Options Exercisable |
(1)
Number of Securities Underlying Unexercised Options Unexercisable |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options |
(2)
Option
Exercise Price ($) |
Option
Expiration Date |
Number of
Shares of Stock that have not Vested |
Market
Value of Shares of Stock that have not Vested ($) |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights that have not Vested |
||||||||||||||||||||||||||
Evan Jones
|
89
|
—
|
—
|
79.05
|
07/23/2018
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
(3) |
|
|
1,847
|
—
|
—
|
110.68
|
09/21/2020
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
—
|
174,235
|
—
|
0.05
|
04/24/2024
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
—
|
200,000
|
—
|
0.61
|
10/23/2024
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
C. Eric Winzer
|
253
|
—
|
—
|
79.05
|
06/15/2019
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
(4) |
|
|
190
|
—
|
—
|
79.05
|
04/15/2020
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
137
|
—
|
—
|
110.68
|
02/15/2021
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
318
|
30
|
—
|
110.68
|
02/15/2021
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
278
|
134
|
—
|
7.91
|
03/23/2022
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
191
|
252
|
—
|
7.91
|
02/12/2023
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
296
|
653
|
—
|
7.91
|
07/25/2023
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
3,338
|
10,014
|
—
|
0.05
|
04/24/2024
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
—
|
105,000
|
—
|
0.61
|
10/23/2024
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Vadim Sapiro
|
64
|
—
|
—
|
7.91
|
03/23/2022
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
(5) |
|
|
628
|
290
|
—
|
7.91
|
03/23/2022
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
108
|
145
|
—
|
7.91
|
02/12/2023
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
127
|
—
|
—
|
7.91
|
02/12/2023
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
197
|
436
|
—
|
7.91
|
07/25/2023
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
897
|
2,692
|
—
|
0.05
|
04/24/2024
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
—
|
50,000
|
—
|
0.61
|
10/23/2024
|
—
|
—
|
—
|
—
|
(1) | The standard vesting schedule for all stock option grants is vesting over four years with twenty-five percent (25%) vesting on the first anniversary of the date of grant and six and one-quarter percent (6.25%) vesting on the last day of the next whole fiscal quarter over three years. |
(2) | On October 23, 2014, the Board of Directors granted stock options, establishing all terms, including the exercise price (the fair market value determined as of the date of grant). The determination of the exercise price was subject to finalization upon receipt of a third party valuation report. The Board approved the report and the fair market value determination after December 31, 2014. |
(3) | The stock option awards made to Mr. Jones have the vesting schedule set forth in footnote (1) and were awarded on July 23, 2008 (89 shares), February 15, 2011 (1,847 shares), April 24, 2014 (174,235 shares) and October 23, 2014 (200,000 shares). |
(4) | The stock option awards made to Mr. Winzer have the vesting schedule set forth in footnote (1), except as described below, and were awarded on June 15, 2009 (253 shares), April 15, 2010 (190 shares), February 15, 2011 (two awards, 137 and 348 shares, respectively), March 23, 2012 (412 shares), February 12, 2013 (443 shares), July 25, 2013 (949 shares), April 24, 2014 (13,352 shares) and October 23, 2014 (105,000 shares). The stock options award made to Mr. Winzer on April 24, 2014 had its vesting commence on December 31, 2013. |
(5) | The stock option awards made to Mr. Sapiro have the vesting schedule set forth in footnote (1), except as described below, and were awarded on March 23, 2012 (two awards, 64 and 918 shares, respectively), February 12, 2013 (two awards, 253 shares and 127 shares, respectively), July 25, 2013 (633 shares), April 24, 2014 (3,589 shares) and October 23, 2014 (50,000 shares). The stock options award made to Mr. Sapiro on April 24, 2014 had its vesting commence on December 31, 2013. |
Director Compensation
|
||||||||||||||||||||||||||||
Name
|
Fees
Earned or Paid in Cash |
Stock
Awards |
Option
Awards ($) |
Non-Equity
Incentive Plan Compensation |
Nonqualified
Deferred Compensation Earnings |
All Other
Compensation |
Total($)
|
|||||||||||||||||||||
Brian G. Atwood
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Timothy Howe
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Laurence R. McCarthy, Ph.D.
|
$
|
25,000
|
—
|
$
|
5,658
|
—
|
—
|
—
|
$
|
30,658
|
||||||||||||||||||
Misti Ushio, Ph.D.
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(1) | In addition to serving on our board of directors, Dr. McCarthy serves on our Clinical and Scientific Advisory Board. Pursuant to his consulting agreement, he receives compensation of $10,000 per year for service on our Scientific Advisory Board. On April 24, 2014, Dr. McCarthy received a grant of stock options to acquire 15,001 shares of common stock. Under his consulting agreement, we awarded him stock options sufficient to maintain his ownership of our capital stock at 0.33% on a fully diluted basis. The option value was $432, the exercise price was $0.05 per share and the options will vest in December 2017. On October 23, 2014, Dr. McCarthy received a stock option to acquire 15,000 shares of common stock. The option value was $5,226, the exercise price was $0.61 per share and the options will vest in December 2018. In addition, as of the date of this prospectus, Dr. McCarthy holds stock options to acquire an aggregate of 31,610 shares of our common stock. |
·
|
the amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average of the Company's total assets at year end for the past two completed fiscal years; and
|
·
|
any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
|
·
|
each person known by us to be the beneficial owner of more than 5% of our capital stock;
|
·
|
our named executive officers;
|
·
|
each of our directors; and
|
·
|
all executive officers and directors as a group.
|
Number of Shares
|
Percentage of Outstanding
Common Stock |
|||||||||||
Name and Address of Beneficial Owner
(1)
|
Beneficially Owned
|
Before Offering
|
After Offering
|
|||||||||
5% Stockholders
|
||||||||||||
jVen Capital, LLC
(2)
|
2,350,575
|
32.5
|
%
|
|||||||||
Entities affiliated with Versant Ventures
(3)
|
2,046,582
|
28.3
|
%
|
|||||||||
Harris & Harris Group, Inc.
(4)
|
1,056,955
|
14.6
|
%
|
|||||||||
Entities affiliated with CHL Medical Partners
(5)
|
383,155
|
5.3
|
%
|
|||||||||
Entities affiliated with Mason Wells
(6)
|
341,069
|
4.7
|
%
|
|||||||||
Directors and Executive Officers
|
||||||||||||
Evan Jones
(7)
|
2,371,572
|
32.8
|
%
|
|||||||||
Brian G. Atwood
(8)
|
2,046,582
|
28.3
|
%
|
|||||||||
Timothy Howe
(9)
|
383,155
|
5.3
|
%
|
|||||||||
Laurence R. McCarthy, Ph.D.
(10)
|
5,388
|
*
|
*
|
|||||||||
Misti Ushio, Ph.D.
(11)
|
1,056,955
|
14.6
|
%
|
|||||||||
C. Eric Winzer
(12)
|
6,103
|
*
|
||||||||||
Vadim Sapiro
(13)
|
2,356
|
*
|
*
|
|||||||||
Directors and Executive Officers as a group (11 persons)
(14)
|
5,982,928
|
81.1
|
%
|
( 1) | Unless otherwise noted, the business address of each beneficial owner is c/o OpGen, Inc., 708 Quince Orchard Road, Suite 160, Gaithersburg, Maryland 20878. |
(2) | Includes 1,059,213 shares of common stock issuable upon the conversion of 1,059,213 shares of Series A Preferred Stock, 1,289,809 shares of common stock issuable upon the conversion of convertible notes in the aggregate principal amount of $1,289,809 and warrants to purchase 1,553 shares of common stock. As the managing member of jVen Capital, LLC, Evan Jones has voting and investment authority over the shares held by that entity. |
(3) | Includes 72,166 shares of common stock, 1,153,229 shares of common stock issuable upon the conversion of 1,153,229 shares of Series A Preferred Stock, 802,800 shares of common stock issuable upon conversion of convertible notes in the principal amount of $802,800 and warrants to purchase 6,368 shares of common stock owned by Versant Venture Capital III, L.P. Also includes 427 shares of common stock, 6,810 shares of common stock issuable upon the conversion of 6,810 shares of Series A Preferred Stock, 4,743 shares of common stock issuable upon conversion of convertible notes in the principal amount of $4,743 and warrants to purchase 39 shares of common stock owned by Versant Side Fund III, L.P. The address for the Versant Venture funds is One Sansome Street, Suite 3630, San Francisco, CA 94104. As the managing directors of Versant Ventures III, LLC, Brian G. Atwood; Bradley J. Bolzon, Ph.D.; Samuel D. Colella; Ross A. Jaffe, M.D.; William J. Link, Ph.D.; Barbara N. Lubash; Donald B. Milder; Rebecca B. Robertson; and Charles H. Warden share voting and investment authority over the shares held by both Versant Venture Capital III, L.P. and Versant Side Fund III, L.P. |
(4) | Includes 29,883 shares of common stock, 610,017 shares of common stock issuable upon the conversion of 610,017 shares of Series A Preferred Stock, and 417,055 shares of common stock issuable upon conversion of convertible notes in the principal amount of $417,055. The address for Harris & Harris Group, Inc. is 1450 Broadway, 24 th Floor, New York, NY 10018. As the managing directors of Harris & Harris Group, Inc., Douglas W. Jamison; Daniel B. Wolfe, Ph.D.; Alexei A. Andreev, Ph.D.; and Misti Ushio, Ph.D. share voting and investment authority over the shares held by Harris & Harris Group, Inc. |
(5) | Includes 51,163 shares of common stock, 294,506 shares of common stock issuable upon the conversion of 294,506 shares of Series A Preferred Stock and warrants to purchase 6,713 shares of common stock owned by CHL Medical Partners III, L.P. Also includes 4,654 shares of common stock, 25,505 shares of common stock issuable upon the conversion of 25,505 shares of Series A Preferred Stock and warrants to purchase 614 shares of common stock owned by CHL Medical Partners III Side Fund, L.P. The address for the CHL Medical Partners funds is 1055 Washington Boulevard, 6 th Floor, Stamford, CT 06901. Voting and investment authority over the shares held by CHL Medical Partners III, L.P. and CHL Medical Partners III Side Fund, L. P. is exercised by Collinson Howe & Lennox II, LLC in its role as general partner and investment advisor to the limited partnerships. The members of Collinson Howe & Lennox II, LLC are Jeffrey J. Collinson; Myles D. Greenberg, M.D.; Timothy F. Howe; Ronald W. Lennox; and Gregory M. Weinhoff, M.D. |
(6) | Includes 17,805 shares of common stock and warrants to purchase 3,264 shares of common stock owned by Mason Wells Biomedical Fund I, Limited Partnership. Also includes 320,000 shares of common stock issuable upon conversion of 320,000 shares of Series A Preferred Stock owned by Mason Wells OpGen Holdings, Inc. The address of Mason Wells is 411 East Wisconsin Avenue, Suite 1280, Milwaukee, WI 53202. As the managing director of the Mason Wells Biomedical Fund I, Limited Partnership and Mason Wells OpGen Holdings, Inc., John Byrnes has voting and investment authority over the shares held by the Mason Wells Biomedical Fund I, Limited Partnership and Mason Wells OpGen Holdings, Inc. |
(7) | Includes vested stock options to purchase 1,936 shares of common stock. Also includes 19,011 shares of common stock issuable upon the conversion of 19,011 shares of Series A Preferred Stock and warrants to purchase 50 shares of common stock owned by his wife. Also includes an aggregate of 2,350,575 shares of common stock, on an as converted and as exercised basis, beneficially owned by jVen Capital, LLC, of which Mr. Jones is managing member (see footnote 2 above). |
(8) | Consists of 2,046,582 shares of common stock, on an as converted and as exercised basis, beneficially owned by affiliates of Versant Ventures, of which Mr. Atwood is a Managing Director (see footnote 3 above). |
(9) | Consists of 383,155 shares of common stock, on an as converted and as exercised basis, beneficially owned by affiliates of CHL Medical Partners, of which Mr. Howe is a Partner (see footnote 5 above). |
(10) | Consists of vested options to purchase 5,388 shares of common stock. |
(11) | Consists of 1,056,955 shares of common stock, on an as converted and as exercised basis, beneficially owned by Harris & Harris Group, Inc. of which Dr. Ushio is a Managing Director (see footnote 4 above). |
(12) | Includes 127 shares of common stock and vested options to purchase 5,976 shares of common stock. |
(13) | Consists of vested options to purchase 2,356 shares of common stock. |
(14) | In addition to the beneficial ownership described in footnotes (2) through (13), includes vested stock options to purchase 110,817 shares of common stock held by other executive officers. |
·
|
before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
·
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or
|
·
|
at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
·
|
any merger or consolidation involving the corporation and the interested stockholder;
|
·
|
any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
|
·
|
subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
·
|
subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and
|
·
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
·
|
1% of the number of shares then outstanding, which will equal approximately shares immediately after this offering assuming no exercise of the underwriters' option to purchase additional shares, based on the number of shares outstanding as of December 31, 2014; or
|
·
|
the average weekly trading volume of our common stock on The NASDAQ Capital Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
Underwriter
|
Shares of Common Stock
|
|||
Maxim Group LLC
|
||||
Total
|
|
Per
Share
|
Total Without Over-Allotment
|
Total With Over-Allotment in Full
|
|||||||||
Public offering price
|
$
|
$
|
$
|
|||||||||
Underwriting discount and commissions (1)
|
$
|
$
|
$
|
|||||||||
Proceeds, before expenses, to us
|
$
|
$
|
$
|
(1)
|
Does not include the warrants to be issued to the underwriters at closing.
|
·
|
the valuations of publicly traded companies in the United States that the underwriters believe to be comparable to us;
|
·
|
our financial information;
|
·
|
the history of, and the prospects for, our Company and the industry in which we compete;
|
·
|
an assessment of our management, our past and present operations, and the prospects for, and timing of, our future revenues;
|
·
|
the present state of our development; and
|
·
|
various valuation measures of other companies engaged in activities similar to ours.
|
·
|
a passive market maker may not effect transactions or display bids in excess of the highest independent bid price by persons who are not passive market makers;
|
·
|
net purchases by a passive market maker on each day are generally limited to 30% of the passive market maker's average daily trading volume during a specified two-month prior period or ___ shares, whichever is greater, and must be discontinued when that limit is reached; and
|
·
|
passive market making bids must be identified as such.
|
·
|
to any legal entity which is a qualified investor as defined under the EU Prospectus Directive;
|
·
|
to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive); or
|
·
|
in any other circumstances falling within Article 3(2) of the EU Prospectus Directive, provided that no such offer of securities described in this prospectus shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the EU Prospectus Directive.
|
(a) | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to us; and |
(b) | it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom. |
·
|
"
Antibiotic Resistance Threats in the United States, 2013
," report of the U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, Dr. Tom Frieden, M.D., MPH, Director (Apr 23, 2013).
|
·
|
"
Containment of a Country-wide Outbreak of Carbapenem-Resistant Klebsiella pneumonia in Israeli Hospitals via a Nationally Implemented Intervention
" by Mitchell J. Schwaber, Boaz Lev, Avi Israeli, Ester Solter, Gill Smollan, Bina Rubinovitch, Itamar Shalit, Yehuda Carmeli and the Israel Carbapenem-Resistant Enterobacteriaceae Working Group,
Clinical Infectious Diseases
, volume 52, pages 848-55 (Apr 1, 2011).
|
·
|
"
Combating Antibiotic-Resistant Bacteria
," Executive Order of The White House, issued September 18, 2014.
|
·
|
"
Fact Sheets: CMS to Improve Quality of Care during Hospital Inpatient Stays,
"
www.cms.gov/Newsroom (Aug. 4, 2014).
|
·
|
"
Global Spread of Carbapenemase-producing Enterobacteriaceae, by Patrice Nordmann
," Thierry Naas and Laurent Poirel, Emerging Infectious Diseases, volume 17, no. 10,
www.cdc.gov/eid
(Oct 2011).
|
·
|
"
The Last Resort
" by Maryn McKenna,
Nature
, volume 499, pages 394-96 (Jul 25, 2013)
|
·
|
"
10 x '20 Progress‑Development of New Drugs Active Against Gram-Negative Bacilli: An Update from the Infectious Diseases Society of America
," by Helen W. Boucher, George H. Talbot, Daniel K. Benjamin Jr., John Bradley, Robert J. Guidos, Ronald N. Jones, Barbara E. Murray, Robert A. Bonomo and David Gilbert,
Clinical Infectious Diseases
, volume 56, pages 1685-94 (Jun 15, 2013), or Boucher et al.
|
·
|
"
Updated ECDC risk assessment on the spread of new Delhi metallo-
β
-lactamase and its variants within Europe
," Technical Report of the European Centre for Disease Prevention and Control, http://ecdc.europa.eu/en/publications/Publications/Forms/ECDC_DispForm.aspx?ID=740 (Sept 13, 2011).
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Balance Sheets
|
F-3
|
Statements of Operations
|
F-4
|
Statements of Stockholders’ Deficit
|
F-5
|
Statements of Cash Flows
|
F-6
|
Notes to Financial Statements
|
F-7
|
2014
|
2013
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
749,517
|
$
|
1,400,345
|
||||
Accounts receivable, net
|
503,983
|
241,897
|
||||||
Inventory, net
|
369,742
|
175,713
|
||||||
Prepaid expenses and other current assets
|
90,233
|
146,438
|
||||||
Total current assets
|
1,713,475
|
1,964,393
|
||||||
Property and equipment, net
|
587,956
|
1,079,423
|
||||||
Licensed technology and other intangible assets, net
|
-
|
57,594
|
||||||
Deferred IPO issuance costs
|
296,041
|
-
|
||||||
Other noncurrent assets
|
57,459
|
57,459
|
||||||
Total assets
|
$
|
2,654,931
|
$
|
3,158,869
|
||||
Liabilities, Preferred Stock and Stockholders’ Deficit
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
1,160,081
|
$
|
869,172
|
||||
Accrued compensation and benefits
|
423,099
|
517,250
|
||||||
Accrued liabilities
|
993,657
|
743,767
|
||||||
Deferred revenue
|
339,171
|
509,728
|
||||||
Current portion of long-term debt
|
5,000
|
10,000
|
||||||
Current maturities of long-term capital lease obligation
|
100,499
|
105,967
|
||||||
Convertible notes
|
1,500,000
|
-
|
||||||
Secured demand notes
|
1,500,000
|
-
|
||||||
Total current liabilities
|
6,021,507
|
2,755,884
|
||||||
Long-term capital lease obligation, less current maturities
|
134,149
|
234,562
|
||||||
Total liabilities
|
6,155,656
|
2,990,446
|
||||||
Commitments and contingencies (note 10)
|
||||||||
Redeemable convertible preferred stock
|
||||||||
Series A redeemable convertible preferred stock, $.01 par value; 6,000,000 shares authorized; 3,999,864 and 1,999,864 shares issued and outstanding at December 31, 2014 and 2013, respectively; aggregate liquidation preference of $7,999,728 and $3,999,728 at December 31, 2014 and 2013, respectively
|
4,564,899
|
1,999,864
|
||||||
Total redeemable convertible preferred stock
|
4,564,899
|
1,999,864
|
||||||
Stockholders’ deficit
|
||||||||
Common stock, $.01 par value; 7,500,000 shares authorized; 493,178 and 362,537 shares issued and outstanding at December 31, 2014 and 2013, respectively
|
4,932
|
3,625
|
||||||
Additional paid-in capital
|
88,701,737
|
89,265,757
|
||||||
Accumulated deficit
|
(96,772,293
|
)
|
(91,100,823
|
)
|
||||
Total stockholders’ deficit
|
(8,065,624
|
)
|
(1,831,441
|
)
|
||||
Total liabilities, preferred stock and stockholders’ deficit
|
$
|
2,654,931
|
$
|
3,158,869
|
|
|||
2014
|
2013
|
|||||||
Revenue
|
||||||||
Product sales
|
$
|
1,236,349
|
$
|
1,735,517
|
||||
Laboratory services
|
478,909
|
630,851
|
||||||
Collaborations revenue
|
2,411,120
|
44,239
|
||||||
Total revenue
|
4,126,378
|
2,410,607
|
||||||
Operating expenses
|
||||||||
Cost of products sold
|
425,541
|
1,501,648
|
||||||
Cost of services
|
526,196
|
320,938
|
||||||
Argus™ Whole Genome obsolescence
|
-
|
950,881
|
||||||
Research and development
|
4,368,302
|
4,151,936
|
||||||
General and administrative
|
2,312,935
|
2,762,205
|
||||||
Sales and marketing
|
2,058,085
|
3,053,394
|
||||||
Total operating expenses
|
9,691,059
|
12,741,002
|
||||||
Operating loss
|
(5,564,681
|
)
|
(10,330,395
|
)
|
||||
Other income (expense)
|
||||||||
Interest income
|
156
|
1,222
|
||||||
Interest expense
|
(111,345
|
)
|
(31,598
|
)
|
||||
Change in fair value of derivative financial instruments
|
-
|
134,560
|
||||||
Other income (expense)
|
4,400
|
91,390
|
||||||
Total other income (expense)
|
(106,789
|
)
|
195,574
|
|||||
Net loss
|
$
|
(5,671,470
|
)
|
$
|
(10,134,821
|
)
|
||
Preferred stock dividends
|
(627,133
|
)
|
(5,372,978
|
)
|
||||
Net loss available to common stockholders
|
$
|
(6,298,603
|
)
|
$
|
(15,507,799
|
)
|
||
Net loss per common share - basic and diluted
|
$
|
(16.25
|
)
|
$
|
(896.09
|
)
|
||
Weighted average shares outstanding - basic and diluted
|
387,590
|
17,306
|
||||||
Pro forma net loss per common share, basic and diluted (unaudited) (note 16)
|
$
|
(1.20
|
)
|
|||||
Pro forma weighted average shares outstanding – basic and diluted (unaudited) (note 16)
|
4,687,713
|
Common Stock
|
||||||||||||||||||||
Number of Shares
|
Amount
|
Additional Paid-
in Capital |
Accumulated Deficit
|
Total
|
||||||||||||||||
Balances at January 1, 2013
|
3,517
|
$
|
35
|
$
|
-
|
$
|
(75,593,024
|
)
|
$
|
(75,592,989
|
)
|
|||||||||
Stock option exercises
|
46
|
-
|
1,217
|
-
|
1,217
|
|||||||||||||||
Stock compensation expense
|
-
|
-
|
152,753
|
-
|
152,753
|
|||||||||||||||
Accrued dividends, Prior Senior Preferred Stock
|
-
|
-
|
-
|
(5,058,786
|
)
|
(5,058,786
|
)
|
|||||||||||||
Accretion of Prior Senior Preferred Stock
|
-
|
-
|
-
|
(314,192
|
)
|
(314,192
|
)
|
|||||||||||||
Conversion of Prior Preferred Stock to common stock
|
358,974
|
3,590
|
89,111,787
|
-
|
89,115,377
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(10,134,821
|
)
|
(10,134,821
|
)
|
|||||||||||||
Balances at December 31, 2013
|
362,537
|
3,625
|
89,265,757
|
(91,100,823
|
)
|
(1,831,441
|
)
|
|||||||||||||
Stock option exercises
|
1
|
-
|
8
|
8
|
||||||||||||||||
Restricted stock unit vesting
|
130,640
|
1,307
|
(1,307
|
)
|
-
|
|||||||||||||||
Stock compensation expense
|
64,412
|
)
|
64,412
|
|||||||||||||||||
Accretion of Series A Preferred Stock
|
(627,133
|
)
|
(627,133
|
)
|
||||||||||||||||
Net loss
|
(5,671,470
|
)
|
(5,671,470
|
)
|
||||||||||||||||
Balances at December 31, 2014
|
493,178
|
$
|
4,932
|
$
|
88,701,737
|
$
|
(96,772,293
|
)
|
$
|
(8,065,624
|
)
|
2014
|
2013
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(5,671,470
|
)
|
$
|
(10,134,821
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
573,918
|
661,807
|
||||||
Amortization of deferred financing costs
|
19,036
|
5,406
|
||||||
Non-cash interest expense
|
65,132
|
6,334
|
||||||
Bad debt expense
|
4,000
|
7,301
|
||||||
Recovery of bad debt
|
(8,400
|
)
|
(49,050
|
)
|
||||
Loan forgiveness
|
-
|
(36,811
|
)
|
|||||
Stock compensation expense
|
64,412
|
152,753
|
||||||
Inventory obsolescence expense
|
21,877
|
924,285
|
||||||
Change in fair value of derivative financial instruments
|
-
|
(134,560
|
)
|
|||||
Other non-cash items
|
14,681
|
1,639
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(257,686
|
)
|
938,174
|
|||||
Inventory
|
(215,906
|
)
|
(506,088
|
)
|
||||
All other assets
|
76,554
|
163,493
|
||||||
Accounts payable
|
198,177
|
271,460
|
||||||
Accrued compensation and other liabilities
|
(99,310
|
)
|
(112,002
|
)
|
||||
Deferred revenue
|
(170,557
|
)
|
352,858
|
|||||
Net cash used in operating activities
|
(5,385,542
|
)
|
(7,487,822
|
)
|
||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(39,537
|
)
|
(109,871
|
)
|
||||
Net cash used in investing activities
|
(39,537
|
)
|
(109,871
|
)
|
||||
Cash flows from financing activities
|
||||||||
Proceeds from issuance of preferred stock, net of issuance costs
|
1,937,902
|
(2,670
|
)
|
|||||
Proceeds from issuance of convertible notes, net of issuance costs
|
1,472,386
|
969,864
|
||||||
Proceeds from issuance of demand notes, net of issuance costs
|
1,488,229
|
1,030,000
|
||||||
Proceeds from exercise of stock options and warrants
|
8
|
1,217
|
||||||
Payments on debt
|
(5,000
|
)
|
(75,000
|
)
|
||||
Payments on capital lease obligations
|
(105,881
|
)
|
(43,087
|
)
|
||||
Deferred IPO issuance costs
|
(13,393
|
)
|
-
|
|||||
Net cash provided by financing activities
|
4,774,251
|
1,880,324
|
||||||
Net decrease in cash and cash equivalents
|
(650,828
|
)
|
(5,717,369
|
)
|
||||
Cash and cash equivalents at beginning of year
|
1,400,345
|
7,117,714
|
||||||
Cash and cash equivalents at end of year
|
$
|
749,517
|
$
|
1,400,345
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid during the year for interest
|
$
|
32,296
|
$
|
26,088
|
||||
Supplemental disclosure of noncash investing and financing activities:
|
||||||||
Acquisition of equipment purchased through capital leases
|
$
|
-
|
$
|
312,105
|
||||
Conversion of convertible notes to Series A Preferred Stock
|
$
|
-
|
$
|
1,999,864
|
||||
Deferred IPO issuance costs included in accounts payable and accrued compensation and other liabilities
|
$
|
282,648
|
$
|
-
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Raw materials and supplies
|
$
|
40,749
|
$
|
51,005
|
||||
Work-in-process
|
135,625
|
63,917
|
||||||
Finished goods
|
193,368
|
60,791
|
||||||
Total inventories
|
$
|
369,742
|
$
|
175,713
|
||||
December 31,
|
||||||||
2014
|
2013
|
|||||||
Balance at beginning of year
|
$
|
6,500
|
$
|
19,750
|
||||
Warranty expense
|
4,077
|
8,298
|
||||||
Cost of replacement parts and related delivery
|
(7,827
|
)
|
(21,548
|
)
|
||||
Balance at end of year
|
$
|
2,750
|
$
|
6,500
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Laboratory equipment
|
$
|
2,304,615
|
$
|
2,265,717
|
||||
Office furniture and equipment
|
691,032
|
792,129
|
||||||
Computers
|
1,169,910
|
1,167,144
|
||||||
Leasehold improvements
|
245,558
|
250,442
|
||||||
4,411,115
|
4,475,432
|
|||||||
Less accumulated depreciation
|
(3,823,159
|
)
|
(3,396,009
|
)
|
||||
Property and equipment, net
|
$
|
587,956
|
$
|
1,079,423
|
||||
·
|
A mandatory conversion of all outstanding shares of Prior Senior Preferred Stock into common stock in accordance with the terms of the Certificate of Incorporation,
|
·
|
A mandatory conversion of all outstanding shares of the Prior Series A-1 Preferred Stock into common stock on a one-to-one basis,
|
·
|
Elimination of all mandatory, accrued, cumulative and unpaid dividends on the Prior Senior Preferred Stock,
|
·
|
A 1-for-790.5407 reverse stock split of the Company’s common stock as of the financing date, and
|
·
|
Conversion of all outstanding options and warrants on the reverse stock split terms.
|
Shares
|
||||
Prior Series A Preferred Stock
|
25,205,800
|
|||
Prior Series A Preferred Stock Anti-dilution rights
|
35,915,987
|
|||
Prior Series B Preferred Stock
|
64,936,385
|
|||
Prior Series B Preferred Stock Anti-dilution rights
|
26,036,056
|
|||
Prior Series C Preferred Stock
|
126,802,946
|
|||
Prior Series A-1 Preferred Stock
|
4,857,621
|
|||
Common Stock
|
2,817,182
|
|||
Equivalent common shares before recap
|
286,571,977
|
|||
Warrants Outstanding
|
||||
Prior Series A Preferred Stock Warrants
|
1,140,000
|
|||
Prior Series A Preferred Stock Anti-dilution rights
|
1,624,306
|
|||
Prior Series C Preferred Stock Warrants
|
3,260,870
|
|||
Common Stock Warrants
|
23,254,778
|
|||
Equivalent common shares before recap
|
29,279,954
|
|||
Shares
|
Amount
|
|||||||
December 30, 2013 Issuance
|
1,999,864
|
$
|
1,999,864
|
|||||
2013 Accretion
|
-
|
-
|
||||||
Balance at December 31, 2013
|
1,999,864
|
1,999,864
|
||||||
February 2014 Issuance, net of costs
|
1,405,096
|
1,361,469
|
||||||
April 2014 Issuance, net of costs
|
594,904
|
576,433
|
||||||
2014 Accretion
|
-
|
627,133
|
||||||
Balance at December 31, 2014
|
3,999,864
|
$
|
4,564,899
|
|||||
Prior Series A-1 Preferred Stock:
|
||||
Ending balance, December 31, 2012
|
$
|
4,924,230
|
||
Accretion of issuance costs
|
6,011
|
|||
Balance, December 17, 2013
|
4,930,241
|
|||
Recapitalization
|
(4,930,241
|
)
|
||
Ending balance, December 31, 2013
|
$
|
-
|
||
Prior Series A Preferred Stock:
|
||||
Ending balance, December 31, 2012
|
$
|
33,987,502
|
||
Accrual related to cumulative dividends
|
1,939,120
|
|||
Accretion of issuance costs
|
209,512
|
|||
Balance, December 17, 2013
|
36,136,134
|
|||
Recapitalization
|
(36,136,134
|
)
|
||
Ending balance, December 31, 2013
|
$
|
-
|
||
Prior Series B Preferred Stock:
|
||||
Ending balance, December 31, 2012
|
$
|
27,096,513
|
||
Accrual related to cumulative dividends
|
1,773,457
|
|||
Accretion of issuance costs
|
13,121
|
|||
Balance, December 17, 2013
|
28,883,091
|
|||
Recapitalization
|
(28,883,091
|
)
|
||
Ending balance, December 31, 2013
|
$
|
-
|
||
Prior Series C Preferred Stock:
|
||||
Ending balance, December 31, 2012
|
$
|
17,736,824
|
||
Accrual related to cumulative dividends
|
1,346,209
|
|||
Issuance of Prior Series C - additional costs
|
(2,670
|
)
|
||
Accretion of issuance costs
|
85,548
|
|||
Balance, December 17, 2013
|
19,165,911
|
|||
Recapitalization
|
(19,165,911
|
)
|
||
Ending balance, December 31, 2013
|
$
|
-
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Note payable to Montgomery County
|
$
|
5,000
|
$
|
10,000
|
||||
Convertible notes
|
1,500,000
|
-
|
||||||
Secured demand notes
|
1,500,000
|
-
|
||||||
$
|
3,005,000
|
$
|
10,000
|
|||||
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Research and development
|
$
|
5,234
|
$
|
7,876
|
||||
General and administrative
|
55,802
|
142,583
|
||||||
Sales and marketing
|
3,376
|
2,294
|
||||||
$
|
64,412
|
$
|
152,753
|
|||||
Number of Options
|
Weighted-Average Exercise Price
|
Weighted-Average Remaining Contractual Life (in years)
|
Aggregate Intrinsic Value
|
|||||||||||||
Outstanding at January 1, 2013
|
22,128
|
|
$70.97
|
7.9
|
$
|
-
|
||||||||||
Granted
|
7,064
|
|
$7.91
|
|||||||||||||
Forfeited
|
(8,190
|
)
|
|
$57.86
|
$
|
-
|
||||||||||
Exercised
|
(46
|
)
|
|
$27.17
|
||||||||||||
Outstanding at December 31, 2013
|
20,956
|
8.1
|
$
|
-
|
||||||||||||
Granted
|
401,053
|
|
$0.05
|
|||||||||||||
Exercised
|
(1
|
)
|
|
$7.91
|
$
|
-
|
||||||||||
Forfeited
|
(17,736
|
)
|
|
$40.34
|
||||||||||||
Outstanding at December 31, 2014
|
404,272
|
|
$1.13
|
9.3
|
$
|
-
|
||||||||||
Exercisable at December 31, 2014
|
55,670
|
|
$1.47
|
9.0
|
$
|
-
|
||||||||||
Vested and expected to vest
|
371,349
|
|
$1.21
|
9.3
|
$
|
-
|
||||||||||
Year Ended December 31,
|
|||||||
2014
|
2013
|
||||||
Annual dividend
|
-
|
-
|
|||||
Expected life (in years)
|
6.25
|
6.25
|
|||||
Risk free interest rate
|
1.84-2.02%
|
|
.93-1.69%
|
||||
Expected volatility
|
60%
|
|
60%
|
||||
Outstanding at
December 31, |
|||||||||||||||||
Issuance
|
Number
|
Exercise Price
|
Expiration
|
2014
|
2013
|
||||||||||||
August 2007
|
8,921
|
$
|
7.91
|
August 2017
|
8,921
|
8,921
|
|||||||||||
September 2007
|
3,451
|
$
|
790.54
|
September 2014
|
‑
|
3,451
|
|||||||||||
March 2008
|
46
|
$
|
790.54
|
March 2018
|
46
|
46
|
|||||||||||
April 2009
|
33
|
$
|
790.54
|
April 2014
|
‑
|
33
|
|||||||||||
November 2009
|
6,674
|
$
|
7.91
|
November 2019
|
6,674
|
6,674
|
|||||||||||
January 2010
|
6,674
|
$
|
7.91
|
January 2020
|
6,674
|
6,674
|
|||||||||||
March 2010
|
1,277
|
$
|
7.91
|
March 2020
|
1,277
|
1,277
|
|||||||||||
November 2011
|
5,213
|
$
|
7.91
|
November 2021
|
5,213
|
5,213
|
|||||||||||
December 2011
|
664
|
$
|
7.91
|
December 2021
|
664
|
664
|
|||||||||||
March 2012
|
4,125
|
$
|
109.90
|
March 2019
|
4,125
|
4,125
|
|||||||||||
33,594
|
37,078
|
||||||||||||||||
·
|
The estimated fair value of warrants issued in connection with debt agreements were recorded as deferred financing costs and amortized to interest expense over the term of the related debt agreement. For the years ended December 31, 2014 and 2013, the Company recognized $0 and $5,406, respectively, of amortization expense).
|
·
|
The estimated fair values of the warrants issued in connection with the preferred stock agreement were recorded as equity issuance costs and reduced the carrying value of the preferred stock at the issuance dates. For the years ended December 31, 2014 and 2013, the Company recognized $0 and $314,192, respectively, of accretion related to the warrants.
|
·
|
Prior to the December 2013 recapitalization, warrants exercisable into Prior Series A Preferred Stock and Prior Series C Preferred Stock were required to be classified as a liability and marked to their estimated fair value at each reporting date since the preferred stock was redeemable for cash in certain circumstances outside of the Company's control. For the years ended December 31, 2014 and 2013, the Company recorded $0 and $134,560, respectively, as a change in the estimated fair value of the warrant liability
|
·
|
The estimated fair value of the warrants for Prior Senior Preferred Stock issued in connection with a development contract agreement was recorded as warrant liability and expensed to other expense proportional to the revenue earned under the contract. For the years ended December 31, 2014 and 2013, the Company recorded $0 and $1,639, respectively, as other expense.
|
2014
|
2013
|
|||||||
Deferred tax assets:
|
||||||||
NOL carryforward
|
$
|
28,704,237
|
$
|
26,137,776
|
||||
R&E credit carryforward
|
1,894,478
|
1,759,478
|
||||||
Share-based compensation
|
144,742
|
127,429
|
||||||
Inventory reserve
|
334,578
|
377,674
|
||||||
Other
|
431,935
|
306,900
|
||||||
Total deferred tax assets
|
31,509,970
|
28,709,257
|
||||||
Valuation allowance
|
(31,505,287
|
)
|
(28,704,670
|
)
|
||||
Deferred tax liabilities:
|
||||||||
Fixed assets
|
(4,683
|
)
|
(4,587
|
)
|
||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
||||
2014
|
2013
|
|||||||
Federal income taxes (benefit) at statutory rates
|
34.0
|
%
|
34.0
|
%
|
||||
State income taxes (benefit), net of Federal benefit
|
3.6
|
%
|
2.9
|
%
|
||||
Change in valuation allowance
|
(51.1
|
%)
|
(46.7
|
%)
|
||||
Change in state tax rates and other
|
13.5
|
%
|
9.8
|
%
|
||||
0.0
|
%
|
0.0
|
%
|
|||||
Years ending December 31,
|
Capital Leases
|
Operating Leases
|
Total
|
|||||||||
2015
|
$
|
117,591
|
$
|
181,062
|
$
|
298,653
|
||||||
2016
|
89,772
|
-
|
89,772
|
|||||||||
2017
|
29,622
|
-
|
29,622
|
|||||||||
2018
|
27,153
|
-
|
27,153
|
|||||||||
2019 and thereafter
|
-
|
-
|
-
|
|||||||||
Total
|
$
|
264,138
|
$
|
181,062
|
$
|
445,200
|
||||||
Less: amount representing interest
|
(29,490
|
)
|
||||||||||
Net present value of future minimum lease payments
|
$
|
234,648
|
||||||||||
Current maturities
|
(100,499
|
)
|
||||||||||
Long-term maturities
|
$
|
134,149
|
||||||||||
2014
|
2013
|
|||||||
Laboratory equipment
|
$
|
364,471
|
$ |
364,471
|
||||
Computers
|
153,693
|
153,693
|
||||||
Less accumulated amortization
|
(245,030
|
)
|
(122,619
|
)
|
||||
Capital lease assets, net
|
$ |
273,134
|
$ |
395,545
|
||||
·
|
Level 1 - defined as observable inputs such as quoted prices in active markets;
|
·
|
Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
|
·
|
Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions such as expected revenue growth and discount factors applied to cash flow projections.
|
Description
|
Fair Value at
December 31,
2014
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Cash and cash equivalents
|
$
|
749,517
|
$
|
748,048
|
$
|
1,469
|
$
|
-
|
||||||||
Description
|
Fair Value at
December 31,
2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Cash and cash equivalents
|
$
|
1,400,345
|
$
|
1,248,885
|
$
|
151,460
|
$
|
-
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Balance beginning of year
|
$
|
-
|
$
|
(661
|
)
|
|||
Transfers to (from) Level 3
|
-
|
-
|
||||||
Total gains realized/unrealized included in earnings
|
-
|
661
|
||||||
Balance end of year
|
$
|
-
|
$
|
-
|
||||
December 31,
|
||||||||
2014
|
2013
|
|||||||
Balance beginning of year
|
$
|
-
|
$
|
(132,260
|
)
|
|||
Transfers to (from) Level 3
|
-
|
-
|
||||||
Total gains realized/unrealized included in earnings
|
-
|
(1,639
|
)
|
|||||
Balance end of year
|
$
|
-
|
133,899
|
|||||
Year ended
December 31,
2014
|
||||
Net loss available to common stockholders
|
$
|
(6,298,603
|
)
|
|
Interest on convertible notes, including deferred financing costs
|
63,852
|
|||
Preferred stock dividends
|
627,113
|
|||
Pro forma net loss attributable to common stockholders
|
$
|
(5,607,618
|
)
|
|
Weighted average common shares outstanding - basic and diluted
|
387,590
|
|||
Pro forma adjustment to reflect assumed conversion of convertible notes
|
642,686
|
|||
Pro forma adjustment to reflect assumed conversion of redeemable convertible preferred stock
|
3,657,437
|
|||
Pro forma weighted average common shares outstanding - basic and diluted
|
4,687,713
|
|||
Pro forma net loss per common share - basic and diluted
|
$
|
(1.20
|
)
|
SEC registration fee
|
$
|
4,345 | ||
Legal fees and expenses
|
$
|
400,000
|
|
|
Accounting fees and expenses
|
$
|
300,000
|
|
|
FINRA filing fee
|
$
|
* | ||
Printer costs and expenses
|
$
|
50,000
|
||
Total
|
$
|
*
|
·
|
any breach of the director’s duty of loyalty to us or our stockholders;
|
·
|
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
|
·
|
any unlawful payments related to dividends or unlawful stock purchases, redemptions or other distributions; or
|
·
|
any transaction from which the director derived an improper personal benefit.
|
·
|
we will indemnify our directors, officers and, in the discretion of our board of directors, certain employees to the fullest extent permitted by the DGCL, as it now exists or may in the future be amended; and
|
·
|
we will advance reasonable expenses, including attorneys’ fees, to our directors and, in the discretion of our board of directors, to our officers and certain employees, in connection with legal proceedings relating to their service for or on behalf of us, subject to limited exceptions.
|
(a) | The Registrant will provide to the underwriter at the closing as specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. |
(b) | For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from a form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective. |
(c) | For the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
OPGEN, INC.
|
||
By: |
/s/ Evan Jones
|
|
Evan Jones
President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
/s/ Evan Jones
|
President, Chief Executive Officer and Director (principal executive officer)
|
March 3, 2015
|
|
Evan Jones
|
|
|
|
/s/ C. Eric Winzer
|
Senior Vice President and Chief Financial Officer (principal financial officer and principal accounting officer)
|
March 3, 2015
|
|
C. Eric Winzer
|
|
|
|
/s/ Brian G. Atwood
|
Director
|
March 3, 2015
|
|
Brian G. Atwood
|
|
|
|
/s/ Timothy Howe
|
Director
|
March 3, 2015
|
|
Timothy Howe
|
|
|
|
/s/ Laurence R. McCarthy
|
Director
|
March 3, 2015
|
|
Laurence R. McCarthy
|
|
|
|
/s/ Misti Ushio
|
Director
|
March 3, 2015
|
|
Misti Ushio
|
|
|
Exhibit
Number |
Description
|
|
1.1
|
*
|
Form of Underwriting Agreement.
|
3.1
|
Ninth Amended and Restated Certificate of Incorporation of the Registrant, currently in effect.
|
|
3.1.1
|
Certificate of Amendment to Certificate of Incorporation, amending the Ninth Amended and Restated Certificate of Incorporation of the Registrant, currently in effect.
|
|
3.1.2
|
*
|
Form of Tenth Amended and Restated Certificate of Incorporation, to be in effect immediately prior to the consummation of this offering.
|
3.2
|
Amended and Restated Bylaws of the Registrant.
|
|
4.1
|
*
|
Form of Common Stock Certificate of the Registrant.
|
4.2
|
Third Amended and Restated Investors' Rights Agreement, dated as of December 18, 2013, among the Registrant and certain investors.
|
|
4.3
|
Stockholders' Agreements Amendment, dated as of July 11, 2014, among the Registrant and certain investors.
|
|
4.4
|
Second Stockholders' Agreements Amendment, dated as of February 7, 2015, among the Registrant and certain investors.
|
|
4.5
|
Form of Warrant to Purchase Common Stock of the Registrant.
|
|
5.1
|
Opinion of Ballard Spahr LLP.
|
|
10.1
|
Lease Agreement, dated as of June 30, 2008, between the Registrant and ARE-708 Quince Orchard, LLC (the "Landlord").
|
|
10.1.1
|
First Amendment to Lease, dated as of April 4, 2011, between the Registrant and the Landlord.
|
|
10.1.2
|
Second Amendment to Lease, dated as of August 15, 2012, between the Registrant and the Landlord.
|
|
10.1.3
|
Third Amendment to Lease, dated as of December 30, 2013, between the Registrant and the Landlord.
|
|
10.1.4
|
Fourth Amendment to Lease, dated as of March 21, 2014, between the Registrant and the Landlord.
|
|
10.2
|
Form of Indemnification Agreement between the Registrant and each of its directors and executive officers.
|
|
10.3
|
#
|
2008 Stock Option and Restricted Stock Plan of the Registrant, including amendments thereto.
|
10.4
|
#
|
Amended and Restated Chief Executive Officer Letter Agreement, dated March 3, 2014, between the Registrant and Evan Jones.
|
10.5
|
#
|
Executive Change in Control and Severance Benefits Agreement, dated January 19, 2011, between the Registrant and C. Eric Winzer.
|
10.5.1
|
#
|
Amendment to Executive Change in Control and Severance Benefits Agreement, dated as of November 1, 2013, between the Registrant and C. Eric Winzer.
|
10.6
|
#
|
Executive Change in Control and Severance Benefits Agreement, dated January 27, 2012, between the Registrant and Vadim Sapiro.
|
10.6.1
|
#
|
Amendment to Executive Change in Control and Severance Benefits Agreement, dated as of November 1, 2013, between the Registrant and Vadim Sapiro.
|
10.7
|
±
|
Technology Development Agreement, dated September 25, 2013, between the Registrant and Hitachi High-Technologies Corporation.
|
10.7.1
|
±
|
Amendment No. 1 to Technology Development Agreement, dated March 27, 2014, between the Registrant and Hitachi High-Technologies Corporation.
|
10.8
|
±
|
Supply Agreement, dated March 17, 2014, between the Registrant and Fluidigm Corporation.
|
10.9 | Notes Purchase Agreement, dated February 17, 2015, by and among the Registrant and the investors party thereto (including as Exhibit B the form of convertible note). | |
23.1
|
Consent of CohnReznick LLP.
|
|
23.2
|
Consent of Ballard Spahr LLP (included in Exhibit 5.1). | |
24.1
|
Power of Attorney (see page II-4 of this Registration Statement).
|
* | To be filed with an amendment. |
± |
Confidential treatment has been requested for certain portions of this agreement pursuant to an application for confidential treatment filed with the Securities and Exchange Commission on March 3, 2015. Such provisions have been filed separately with the Commission.
|
# | Management contract or compensatory arrangement. |
3338364 8100
|
|
Jeffrey W. Bullock, Secretary of State
|
|
[DELAWARE SEAL]
|
AUTHENTICATION: 1528478
|
140940564
|
|
DATE: 07-11-14
|
A.
|
COMMON STOCK
|
B.
|
PREFERRED STOCK
|
C.
|
SERIES A PREFERRED STOCK
|
(i)
|
the Company is a constituent party, or
|
(ii)
|
a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation,
|
(i)
|
shares of Common Stock, Options or Convertible Securities issued or issuable upon conversion of any Series A Preferred Stock or as a dividend or distribution on Series A Preferred Stock;
|
(ii)
|
shares of Common Stock, Options or Convertible Securities issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by
Subsection 4.5
,
4.6
,
4.7
or
4.8
;
|
(iii)
|
shares of Common Stock or Options issued or issuable to employees or directors of, or consultants or advisors to, the Company or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of the Company, including at least two Preferred Directors;
|
(iv)
|
shares of Common Stock or Preferred Stock issuable upon exercise of Options, Convertible Securities or other rights to purchase any securities of the Company outstanding as of the date of this Amended and Restated Certificate;
|
(v)
|
shares of Common Stock, Options or Convertible Securities issued or issuable to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors of the Company, including at least two Preferred Directors;
|
(vi)
|
shares of Common Stock or Series A Preferred Stock issued pursuant to the bona fide acquisitions, mergers or similar transactions, as approved by the Board of Directors, including the approval of at least two Preferred Directors;
|
(vii)
|
shares of Common Stock issued in connection with any future licensing of technology from third parties, as approved by the Board of Directors, including at least two Preferred Directors; or
|
(viii)
|
shares of Common Stock issued in connection with the Company’s initial public offering of its Common Stock.
|
(i)
|
insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company, excluding amounts paid or payable for accrued interest;
|
(ii)
|
insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors of the Company; and
|
(iii)
|
in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in
clauses (i)
and
(ii)
above, as determined in good faith by the Board of Directors of the Company, including at least two Preferred Directors.
|
(i)
|
the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by
|
(ii)
|
the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.
|
(1)
|
the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
|
(2)
|
the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
|
|
/s/Jeffrey W. Bullock
Jeffrey W. Bullock, Secretary of State
|
3338364 8100
|
AUTHENTICATION: 1528478
|
By: |
CHL Medical Partners III, LLC
its General Partner |
By: |
CHL Medical Partners III, LLC
its General Partner |
By: |
Mason Wells Biomedical Partners I, LLC,
General Partner |
By: | CHL Medical Partners III, LLC, its General Partner |
By: | CHL Medical Partners III, LLC, its General Partner |
No. ____________
|
______________, 201_
|
Y = | the number of Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) |
A = | the fair market value of one Exercise Share (at the date of such calculation) |
B = | Exercise Price (as adjusted to the date of such calculation) |
3.
|
COVENANTS OF THE COMPANY
.
|
4.
|
REPRESENTATIONS OF HOLDER.
|
4.4
|
U.S. Purchasers.
|
4.7
|
Disposition of Warrant and Exercise Shares.
|
________________________________
|
_____________________________________
|
|
(Date)
|
(Signature)
|
|
|
_____________________________________
|
|
(Print Name) |
|
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to
purchase shares.)
|
|
Name:
|
|
|
(Please Print)
|
Address:
|
|
|
(Please Print)
|
OpGen, Inc.
708 Quince Orchard Road Gaithersburg, MD 20878 |
[X] EXHIBIT A
- PREMISES DESCRIPTION
|
[X] EXHIBIT B
- DESCRIPTION OF PROJECT
|
[X] EXHIBIT C
- LANDLORD'S WORK
|
[X] EXHIBIT D
- COMMENCEMENT DATE
|
[X] EXHIBIT E
- RULES AND REGULATIONS
|
[X] EXHIBIT F
– TENANT'S PERSONAL PROPERTY
|
By: | ARE-GP 708 Quince Orchard QRS CORP., a Maryland corporation, managing member |
· | Landlord, at its sole cost and expense, shall fully demise the Premises using materials and workmanship of similar or greater quality to other tenants in the Building. At Tenant's option, any doors to the Premises currently opening into a common corridor may be reoriented to be accessed directly from the interior of the Premises. |
· | Landlord shall provide and install new floor covering and paint throughout Premises. |
· | Landlord, at its sole cost and expense, shall ensure that all maximum travel distances per applicable code are met for the Premises. |
· | Rooms 163 and 164 will be combined by demolishing the separating wall. The new room will be built out as a kitchenette including: VCT floor covering (colors TBD by Tenant), sink (with hot water), a dishwasher, above-and-below cabinets and related counter tops. |
· | Rooms 148 and 149 will be combined by demolishing the separating wall. |
· | Rooms 215 (dark room) and 216 (work room) will be combined by demolishing the separating wall and a second door will be installed to be accessed directly from the lab. |
· | The emergency showers shall be moved to a location inside of the labs. |
· | A 4-foot chemical fume hood will be installed in room 206 (production lab). |
· | Repair countertops and casework to the extent possible and/or practical. |
By: | ARE-GP 708 Quince Orchard QRS CORP., a Maryland corporation, managing member |
By: | ARE-GP 708 Quince Orchard QRS CORP., a Maryland corporation, managing member |
(i) | The definition of " Premises " shall be deleted in its entirety and replaced with the following: " Premises : That portion of the Project, containing a total of approximately 20,713 rentable square feet, as determined by Landlord, as shown on Exhibit A, comprised of (i) approximately 5,818 rentable square feet, located on the 1 st floor and approximately 8,994 rentable square feet located on the 2nd floor (together, the " Original Premises" ) and (ii) approximately 5,901 rentable square feet located on the 2nd floor (the " Expansion Premises ")"; |
(ii) | Exhibit A to the Lease shall be replaced with Exhibit A to this First Amendment; and |
(iii) | The defined term " Tenant's Share " shall be increased to 41.74%. |
LANDLORD:
|
ARE-708 QUINCE ORCHARD, LLC,
a Delaware limited liability company
By:
ARE-GP 708 Quince Orchard QRS CORP., a Maryland corporation, managing member
By:
/s/ Jackie Clem
Jackie Clern VP Real Estate Legal Affairs |
TENANT:
|
OPGEN, INC.
,
a Delaware corporation
By:
/s/ C. Douglas White
Its: CEO |
• | Removal 144LF of wall |
• | Removal of 2 welded frames/viewing panes |
• | Removal of 1 left handed door with welded frame and two side lights/viewing panes |
• | Removal of 1 right handed door with welded frame and two side lights/viewing panes |
• | Removal of 1 left handed door with welded frame and two side lights/viewing panes |
• | Removal and salvage of 3 existing left handed doors for reuse frames will not be re-used. Removal and salvage of 2 existing right handed doors for reuse new frames to be hollow metal knock down |
• | Disconnect all utilities and removal of Fume Hood, leaving connection for owner furnished and installed clean room (OpGen to pay $1750 for fume hood relocation and reconnection- 3/11/11) |
• | Removal of three (3) sinks and plumbing disconnects for return to owner (no disposal) |
• | Removal of 124 LF of cabinetry/millwork disconnecting and reconnecting wiremold electrical with allowance for gas/vac/air demo and put back |
• | Removal of 76 LF of systems furniture |
• | Removal and salvage of 57 LF of existing lab casework work for reuse |
• | Removal 54 LF of wall |
• | Removal and salvage of 1 left handed welded door and frame for reuse |
• | Removal and salvage of 1 right handed welded door and frame for reuse |
• | Removal of 16 LF of existing lab casework |
• | Floor patching associated with sink demo |
• | Not included in scope of work |
• | Reinstall 114 LF of existing work areas from demo'd inventory front lab space |
• | Furnish and Install 4' of laminate cabinetry and laminate top in new conference room for refreshments (plumbing is excluded for this item) |
• | Install only (owner provided) projection screen (GC to give size spec to OpGen) in new conference room (provided as an alternate) |
• | Install 4(four) existing doors and hardware. (3 (three) left handed, l(one) right handed) all relocated |
• | Furnish and install 1 (one) new double door frame and hardware from loading dock to shipping & receiving |
• | Furnish & Install 2 (two) unequal pair of doors, l (one) left handed active, 1 (one) right handed active and hardware |
• | All frames to be new, new frames to be hollow metal knock down |
• | All hardware to be reused |
• | Furnish and Install 2 (two) doors re-used and hardware (1 left banded, 1 right handed) |
• | Furnish and Install 2 (two) new hollow knock down frames |
• | Install 50 LF of floor to ceiling drywall |
• | Install 28 LF of floor to ceiling drywall |
• | Only areas affected by demolition of walls and new construction will be modified using existing materials |
• | Front lab area to have existing sheetrock ceilings demo'd and replaced with like 2x2 office grid and ACT (OpGen to be $350 - 3/11/11) |
• | All new partitions to receive two coats of semi gloss (in lab areas), flat (in offices) latex paint. |
• | All new doors and frames will be painted to match existing. |
• | All Owner Requested ALL walls to be painted (ARE to pay for this item) |
• | All new partitions to receive two coats of semi-gloss (in lab areas), flat (in offices) latex paint. |
• | All new doors and frames will be painted to match existing. |
• | Patch VCT as needed in areas directly affected by partitions |
• | Furnish and Install typical office space carpet (Patcraft, Socrates 11-28 #10069, Searle #00108) |
• | Furnish and Install 96 LF vinyl base (Johnsonite 18-Navy Blue) |
• | (Alternate Owner Requested) Demo and replace ALL VCT in front lab area (ARE to pay for this item) |
• | Patch VCT as needed in areas directly affected by partitions |
• | Furnish and Install typical conference room carpet (Patcraft, Jazz Review-36 #10140, Carnegie Hall #00157) conference area |
• | Furnish and Install 72 LF vinyl base (Johnsonite 18-Navy Blue) |
• | Furnish and Install-20 (+/- 3 degrees ) Freezer (re-furbished) on backup power |
◦ | Includes Watlow microprocessor temperature controller, audible alarm, and control relay |
◦ | Using existing roof curbing assumed to be sufficient to equip new unit |
• | Furnish and Install 1 (one) card reader at the loading dock. Installation only monitoring contract responsibility of tenant for signature prior to inspection of this project to Datawatch directly. |
• | Not included in scope of work |
• | Leave in place duct from existing roof exhaust fan to room preparing for future fume hood |
• | Additional diffuser and plenum return for new conference room tied into existing building system |
• | Air balance as required by City of Gaithersburg |
• | Demo only of 3 (three) sinks |
• | Water line to be brought to new counter top area for coffee maker (OpGen to pay $95) for plumbing permitting, and installation of line not including connection to be made by coffee vendor-3/11/11) |
• | As required by modifications made to partitions |
• | No new lighting is included |
• | Same 3-3way switch (offices, shipping & receiving) |
• | Re-switch lab and front area |
• | No new lighting is included |
• | Re-switching and conference room required (4 (four) locations) |
• | Modifications to existing as required by demo, add one (1) to conference room in back lab area |
• | Provide Architectural and Engineering plans in accordance with landlord approval and for submission to the city of Gaithersburg Planning & Code |
• | A/E and construction management meetings will include three (3) meetings with the tenant. |
• | Obtain building and trade permits. |
LANDLORD:
|
ARE-708 QUINCE ORCHARD, LLC,
|
|
a Delaware limited liability company
|
|
|
|
By:
ARE-GP 708 Quince Orchard QRS CORP.,
|
|
a Maryland corporation,
|
|
managing member
|
|
|
|
|
|
By:
/s/ Jennifer Banks
|
|
Jennifer Banks
|
|
EVP, General Counsel
|
|
|
|
|
TENANT:
|
OPGEN, INC.,
|
|
a Delaware corporation
|
|
|
|
|
|
By:
/
s/ C. E. Winzer
|
|
Its: CFO
|
|
|
By: | ARE-GP 708 Quince Orchard QRS CORP., a Maryland corporation, managing member |
1.
|
jVen Capital, LLC: Managing Member
|
2.
|
Fluidigm, Inc.: Board of Directors, member Compensation and Audit Committees
|
3.
|
Foundation Medicine, Inc.: Board of Directors, Chair Audit Committee
|
4.
|
Veracyte, Inc.: Board of Directors; Chair Compensation Committee
|
1.
|
Children’s National Medical Center: Board of Directors, member compensation committee
|
2.
|
Research!America: Board of Directors
|
3.
|
Campaign for Public Health Foundation: Chair Board of Directors
|
4.
|
American College of Medical Genetics Foundation: Board of Directors
|
|
OPGEN, INC. By: /s/ C. Douglas White Name: C. Douglas White Title: CEO |
|
|
|
/s/ C. Eric Winzer
C. Eric Winzer |
|
OPGEN, INC.
|
|
|
|
By:
/s/ C. Douglas White
Name:
C. Douglas White
Title:
CEO
/s/ Vadim Sapiro
Vadim Sapiro
|
|
OPGEN, INC.
|
|
|
|
By:
/s/ Evan
Name:
Evan Jones
Title:
Chief Executive Officer
/s/ Vadim Sapiro
Vadim Sapiro
|
|
|
|
Page
|
ARTICLE 1 DEFINITIONS
|
1
|
||
|
Section 1.1
|
Certain Definitions
|
1
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|
Section 1.2
|
Interpretations
|
4
|
|
|
|
|
ARTICLE 2
COLLABORATION
|
4
|
||
|
Section 2.1
|
Collaboration Overview
|
4
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|
Section 2.2
|
Steering Committee
|
4
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Section 2.3
|
Development Committee
|
6
|
|
|
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ARTICLE 3
PRODUCT DEVELOPMENT
|
7
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||
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Section 3.1
|
Overview
|
7
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Section 3.2
|
Project Milestones
|
7
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|
Section 3.3
|
Performance Standards
|
7
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|
Section 3.4
|
Development Records and Reports
|
8
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|
Section 3.5
|
Escrow for Software Deliverables
|
8
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|
Section 3.6
|
Commercialization and Right of First Offer
|
8
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ARTICLE 4
INTELLECTUAL PROPERTY PROVISIONS
|
9
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||
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Section 4.1
|
License of OpGen Intellectual Property
|
9
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|
Section 4.2
|
License of HHT Intellectual Property
|
10
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|
Section 4.3
|
Ownership
|
10
|
|
Section 4.4
|
Developed Technology License Grants
|
11
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|
Section 4.5
|
Patent Disclosure
|
12
|
|
Section 4.6
|
Patent Prosecution
|
13
|
|
Section 4.7
|
Cooperation
|
14
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|
Section 4.8
|
No License
|
14
|
|
Section 4.9
|
Infringement by Third Parties
|
14
|
|
Section 4.10
|
Infringement of Third Party Intellectual Property
|
15
|
|
Section 4.11
|
Trademarks
|
16
|
|
|
|
|
ARTICLE 5
FINANCIAL PROVISIONS
|
16
|
||
|
Section 5.1
|
Initial Development Payment
|
16
|
Section 5.2 | Milestone Payments | 16 | |
Section 5.3 | Financial Terms | 17 | |
|
Section 5.4
|
Payments
|
17
|
|
Section 5.5
|
Records Retention; Audit
|
17
|
|
|
|
Page
|
ARTICLE 6
CONFIDENTIALITY
|
17
|
||
|
Section 6.1
|
Protection of Confidential Information
|
17
|
|
Section 6.2
|
Required Disclosure
|
18
|
|
Section 6.3
|
Return of Confidential Information
|
18
|
|
Section 6.4
|
Publicity; Press Releases
|
19
|
|
|
|
|
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS
|
19
|
||
|
Section 7.1
|
Representations and Warranties of OpGen
|
19
|
|
Section 7.2
|
Representations and Warranties of HHT
|
20
|
|
Section 7.3
|
Disclaimer
|
21
|
|
Section 7.4
|
Non-Solicitation of Employees
|
21
|
|
Section 7.5
|
Publications
|
21
|
|
Section 7.6
|
Insurance
|
22
|
|
|
|
|
ARTICLE 8
TERM AND TERMINATION
|
22
|
||
|
Section 8.1
|
Term
|
22
|
|
Section 8.2
|
Material Breach
|
22
|
|
Section 8.3
|
Termination Upon Completion of a Project Milestone
|
22
|
|
Section 8.4
|
Insolvency or Bankruptcy
|
22
|
|
Section 8.5
|
Termination by HHT Upon Change in Control of OpGen
|
22
|
|
Section 8.6
|
Effect of Termination
|
23
|
|
Section 8.7
|
Rights to HHT Upon Certain Termination Events
|
23
|
|
Section 8.8
|
Survival
|
23
|
|
|
|
23
|
ARTICLE 9
INDEMNIFICATION
|
|
||
|
Section 9.1
|
Limitation of Liability
|
23
|
|
Section 9.2
|
Indemnification by OpGen
|
23
|
|
Section 9.3
|
Indemnification by HHT
|
24
|
|
Section 9.4
|
Indemnification Procedures
|
24
|
|
|
|
24
|
ARTICLE 10
MISCELLANEOUS
|
|
||
|
Section 10.1
|
Dispute Resolution
|
25
|
|
Section 10.2
|
Governing Law; Binding Effect
|
25
|
|
Section 10.3
|
Entire Agreement
|
25
|
Section 10.4 | Amendment | 25 | |
Section 10.5 | Force Majeure | 25 |
Page | |||
|
Section 10.6
|
Notice
|
25
|
|
Section 10.7
|
Assignment
|
26
|
|
Section 10.8
|
Construction; Headings
|
27
|
|
Section 10.9
|
Severability
|
27
|
|
Section 10.10
|
No Waiver
|
27
|
|
Section 10.11
|
Independent Contractors
|
27
|
|
Section 10.12
|
Further Actions
|
28
|
|
Section 10.13
|
Counterparts; Electronic Signature
|
28
|
|
Section 10.14
|
28
|
|
|
|
|
|
EXHIBIT A PROJECT MILESTONES
|
A-1
|
||
|
|
|
|
EXHIBIT B DEVELOPMENT PLAN
|
B-1
|
||
|
|
|
|
EXHIBIT C TERMS APPLICABLE TO COMMERCIALIZATION
|
C-1
|
Technology Development Milestones
|
Milestone Payment
|
Phase I: Analytical Pipeline Development
|
|
Milestone I. A:
[* * *]
|
$[* * *]
|
Milestone I. B:
[* * *]
|
$[* * *]
|
Milestone I. C:
[* * *]
|
$[* * *]
|
Milestone I. D:
[* * *]
|
$[* * *]
|
Milestone I. E:
[* * *]
|
$[* * *]
|
Milestone I. F:
[* * *]
|
$[* * *]
|
Milestone I. G:
[* * *]
|
$[* * *]
|
Milestone I. H:
[* * *]
|
$[* * *]
|
Phase II: Graphing/Computational Frameworks*
|
|
Milestone II. A:
[* * *]
|
$[* * *]
|
Milestone II. B:
[* * *]
|
$[* * *]
|
Phase III: Human Chromosome Mapping Applications Development
|
|
Milestone III. A:
[* * *]
|
$[* * *]
|
Milestone III. B:
[* * *]
|
$[* * *]
|
Milestone III. C:
[* * *]
|
$[* * *]
|
Milestone III. D:
[* * *]
|
$[* * *]
|
Milestone III. E:
[* * *]
|
$[* * *]
|
(a)
|
Scope of Work
. Following the Addendum Effective Date, OpGen shall perform the “scope of work” activities related to HCM-MapSolver as set forth on Appendix 1 to this Addendum.
|
(b)
|
Milestones
. Milestone 1 of the HCM-MapSolver project is set forth on Appendix 1. OpGen estimates that Milestone 1 will be completed within
[* * *]
following the Addendum Effective Date. The Development Committee will promptly establish any future milestones required for the development work, and the timeline and financial requirements for such additional milestone deliverables. Such additional milestones, including timetable and payments shall be added to Appendix 1 upon completion. OpGen shall be under no obligation to provide the license to HCM-MapSolver until all development activities, milestones, timeline and financial provisions are completed as set forth in Appendix 1.
|
(c)
|
Development Scope of Work Exclusions and Limitations
. The estimated development budget to complete the HCM-MapSolver Milestone 1 development is US
[* * *]
. Such scope of work and cost budget excludes customized features which may be defined or specified by HHT as development proceeds, or following initial deployment of HCM-MapSolver. Additional HHT features beyond the scope of work can be defined by the Parties for potential development by OpGen at additional cost to HHT.
|
(a)
|
The payment terms set forth in Section 5.2 and 5.4 of the Development Agreement shall apply to the following payments under this Addendum:
|
(1)
|
the payment of
[* * *]
sum as partial payment, of the HCM-MapSolver development fee and for the initial HCM-MapSolver Development Plan, upon execution of this Addendum.
|
(2)
|
the payment of
[* * *]
sum as the Milestone 1 payment including the licensing fee upon delivery and HHT’s acceptance of the Milestone 1 deliverables as set forth on Appendix 1.
|
(b)
|
The Parties shall negotiate payment terms for a separate licensing fee of
[* * *]
for the further use or license of HCM-MapSolver as part of the commercialization agreements contemplated by Section 3.6(a) of Development Agreement. The separate licensing fee may be structured as an up-front royalty payment and/or running royalties.
|
HITACHI HIGH-TECHNOLOGIES CORPORATION
|
|||||
By:
|
/s/ Takashi Matsuzaka
|
Date:
|
March 31, 2014
|
||
Name:
|
Takashi Matsuzaka
|
||||
Title:
|
Senior Vice President and Executive Officer, CTO
|
OPGEN, INC.
|
|||||
By:
|
/s/ C. Eric Winzer
|
Date:
|
March 27, 2014
|
||
Name:
|
C. Eric Winzer
|
||||
Title:
|
CFO
|
A. | Fluidigm manufactures, markets and sells certain chip, reagent, and other consumable products listed in Exhibit A; and |
B. | Buyer wishes to purchase from Fluidigm, and Fluidigm wishes to sell to Buyer, such products for Buyer’s internal use, all pursuant to the terms and conditions of this Agreement. |
BUYER
|
FLUIDIGM CORPORATION
|
|||
By:
|
/s/ C. E. Winzer
|
By:
|
/s/ Gajus V. Worthington
|
|
Name:
|
C. Eric Winzer
|
Name:
|
Gajus V. Worthington
|
|
Title:
|
Chief Financial Officer
|
Title:
|
CEO
|
|
Date:
|
March 31, 2014
|
Date:
|
31
st
Mar. 2014
|
Sales Quotation
|
Tax ID #
|
||
SHIP TO: |
Materials Manager
OpGen 708 Quince Orchard Rd
Gaithersburg, MD 20878
|
||
PLEASE REFERENCE
QUOTE NUMBER ON PURCHASE ORDER |
|||
PHONE:
FAX:
EMAIL:
|
|
Q-04985
3/20/2014 3/31/2015 N30 FOB Origin, PPD&ADD USD |
Item #
|
Product Name
|
Product Description
|
QTY
|
Unit List
Price |
Offer Price
|
Extended Price
|
||
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
||
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
||
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
||
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
[* * *]
|
||
Items TOTAL:
|
[* * *]
|
· | Prices do not include any applicable sales tax, consumption tax, import duties or VAT. |
· | Pricing only valid upon receipt of total order. |
· | Purchase order may not differ materially from the items listed in this quotation. |
· | Optional Items are available at an additional cost. |
· | This quotation subject to acceptance of attached Sales Terms and Conditions. |
· | Fluidigm, the “F” logo, BioMark, TOPAZ, Dynamic Array, and Digital Array are trademarks or registered trademarks of Fluidigm Corporation in the U.S. and/or other countries. |
· | Installation service performed by a Fluidigm representative is recommended. |
Exhibit A
-
|
Schedule of Investors
|
Exhibit B
-
|
Form of Note
|
Exhibit C
-
|
Form of Certificate of Amendment of Certificate of Incorporation
|
Exhibit D
-
|
Form of Warrant
|
Exhibit E
-
|
Form of Security Agreement
|
Exhibit
F
-
|
Form of Second Stockholders' Agreements Amendment
|
Exhibit G
-
|
Disclosure Schedule
|
Exhibit H-1
-
|
Capitalization as of February 11, 2015
|
Exhibit H-2
-
|
Capitalization Immediately Following the Initial Closing
|
Exhibit I
-
|
Form of Amended and Restated Intercreditor Agreement
|
Investor
|
Principal Amount of Note
|
Versant Venture Capital III, L.P.
Versant Side Fund III, L.P.
|
$400,452
$2,366 |
jVen Capital, LLC
|
$540,443
|
Harris & Harris Group, Inc.
|
$208,035
|
Cross Creek Capital, L.P.
Cross Creek Capital Employees Fund, L.P.
|
$59,578
$5,855 |
Virginia Collett
|
$13,101
|
John C. Lee IV
|
$11,115
|
Thunder River LLC
|
$3,054
|
TOTAL
|
$1,243,999
|
Amount: $___________
|
Issue Date: February __, 2015
|