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
|
Rick A. Werner, Esq.
Haynes and Boone, LLP 30 Rockefeller Plaza, 26th Floor New York, NY 10112 Tel. (212) 659-7300 Fax (212) 884-8234 |
Large Accelerated Filer ☐
|
Accelerated Filer ☐
|
Non-Accelerated Filer ☐
|
Smaller Reporting Company ☒
|
Emerging Growth Company ☒
|
Title of each Class of Securities
to be Registered |
Proposed Maximum Aggregate Offering Price
(1)(2)
|
Amount of Registration Fee
|
|||||||
Units, each Unit consisting of one share of Common Stock, par value $0.01 per share and one common warrant to purchase one share of Common Stock (3)
|
$
|
11,000,000
|
$
|
1,274.90
|
|||||
(i)
Common Stock included in the Units (4)
|
-
|
-
|
|||||||
(ii)
Common warrants included in the Units (4)
|
-
|
-
|
|||||||
Pre-funded Units, each Pre-funded Unit consisting of one pre-funded warrant to purchase one share of Common Stock and one common warrant to purchase one share of Common Stock (3)
|
$
|
10,800,000
|
$
|
1,251.72
|
|||||
(i) Pre-funded warrants included in the Pre-funded Units (4)
|
-
|
-
|
|||||||
(ii) Common warrants included in the Pre-funded Units (4)
|
-
|
-
|
|||||||
Shares of Common Stock underlying pre-funded warrants included in the Pre-funded Units (3)
|
$
|
200,000
|
$
|
23.18
|
|||||
Shares of Common Stock underlying common warrants included in the Units and the Pre-funded Units (3)
|
$
|
11,000,000
|
$
|
1,274.90
|
|||||
Placement Agent’s warrants (6)
|
$
|
687,500
|
$
|
79.68
|
|||||
Common Stock issuable upon exercise of Placement Agent’s warrants (5)(6)
|
‑
|
‑
|
|||||||
Total
|
$
|
33,687,500
|
$
|
3,904.38
|
(7)
|
(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) |
Pursuant to Rule 416 under the Securities Act of 1933, as amended, the shares of common stock registered hereby also include an indeterminate number of additional shares of common stock as may, from time to time, become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions.
|
(3) |
The proposed maximum aggregate offering price of the Units proposed to be sold in the offering will be reduced on a dollar-for-dollar basis based on the offering price of any Pre-funded Units offered and sold in the offering, and as such the proposed maximum aggregate offering price of the Units and Pre-funded Units (including the common stock issuable upon exercise of the pre-funded warrants included in the Pre-funded Units), if any, is $11,000,000 .
|
(4) |
No additional registration fee is payable pursuant to Rule 457(i) under the Securities Act of 1933, as amended.
|
(5) |
No additional registration fee is payable pursuant to Rule 457(g) under the Securities Act of 1933, as amended.
|
(6) |
Represents warrants to purchase a number of shares of common stock equal to 5% of the number of shares of common stock (i) included within the Units and (ii) issuable upon the exercise of the pre-funded warrants included within the Pre-funded Units placed in this offering at an exercise price equal to 125% of the offering price per unit (excluding any shares of common stock underlying the common warrants included in the units and the pre-funded units placed in this offering).
|
(7) |
The Registrant previously paid $1,810.94 as a registration fee in connection with this registration statement.
|
Per Unit
|
Per Pre-funded Unit |
Total
|
||||||||||
Public offering price
|
$
|
$ |
$
|
|||||||||
Placement agent’s fees
(1)
|
$
|
$ |
$
|
|||||||||
Proceeds, before expenses, to OpGen, Inc.
|
$
|
$ |
$
|
|
Page
|
PROSPECTUS SUMMARY
|
1
|
THE OFFERING
|
8
|
SUMMARY FINANCIAL DATA
|
11
|
RISK FACTORS
|
13
|
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
|
41
|
USE OF PROCEEDS
|
43
|
CAPITALIZATION
|
44
|
DILUTION
|
45
|
PRICE RANGE FOR OUR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
|
46
|
DESCRIPTION OF CAPITAL STOCK
|
47
|
DESCRIPTION OF SECURITIES WE ARE OFFERING
|
50
|
PLAN OF DISTRIBUTION
|
55
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 57 |
BUSINESS
|
66
|
MANAGEMENT
|
87
|
EXECUTIVE COMPENSATION
|
90
|
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
|
98
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
|
100
|
LEGAL MATTERS
|
102
|
EXPERTS
|
102
|
WHERE YOU CAN FIND ADDITIONAL INFORMATION
|
102
|
OpGen, Inc. Index to Audited Consolidated Financial Statements
|
F-1
|
OpGen, Inc. Index to Unaudited Consolidated Interim Condensed Financial Statements
|
F-29
|
|
|
· |
Our Acuitas DNA tests, provide rapid microbial identification and antibiotic resistance gene information. These products include our Acuitas Rapid Test for complicated urinary tract infection in development, the QuickFISH® family of FDA-cleared and CE-marked diagnostics used to rapidly detect pathogens in positive blood cultures, and our Acuitas Resistome Tests for genetic analysis of hospital surveillance isolates.
|
· |
Our Acuitas Lighthouse informatics systems are cloud-based HIPAA compliant informatics offerings that combine clinical lab test results with patient and hospital information to provide analytics and actionable insights to help manage MDROs in the hospital and patient care environment. Components of our informatics systems are the Acuitas Lighthouse Knowledgebase, a proprietary data warehouse of genomic data matched with antibiotic susceptibility information for bacterial pathogens and our Acuitas Lighthouse informatics, which can be specific to a healthcare facility or collaborator, such as a pharmaceutical company.
|
· |
Rapid diagnostics
–We are developing OpGen-branded Acuitas DNA tests for use on the Thermo Fisher Scientific QuantStudio™ 5 Real-Time PCR System. The first of these new tests will be for management of patients with cUTI. We anticipate developing tests for additional clinical indications and for new antibiotic decision-making applications. The second rapid diagnostics growth driver will be through strategic partner relationships where we will work to expand channel access for our proprietary DNA tests through development and subsequent use of these tests, utilizing the Acuitas Lighthouse Knowledgebase on established rapid
in vitro
diagnostic testing platforms.
|
· |
Acuitas Lighthouse informatics and services
- We are pursuing commercial opportunities to provide our Acuitas Lighthouse informatics and companion genomic testing to pharmaceutical companies and CROs, health systems, third party
in vitro
diagnostic companies, and government agencies. Through our Pharmaceutical/CRO services we are working to help accelerate clinical trials and new product launches and to establish early access for diagnostic tests to help guide decision-making for new antibiotics. Our focus in the health system segment is on helping guide antibiotic decision-making and supporting patient safety initiatives. We are actively pursuing government funding for development and deployment of our Acuitas Lighthouse informatics in the United States and internationally.
|
· |
complete development, clinical evaluations, obtain necessary regulatory approvals, and successfully commercialize our Acuitas Rapid Test for cUTI with a goal of achieving three-hour antibiotic resistance analysis from the time of specimen collection;
|
· |
begin clinical evaluations for the Acuitas Rapid Test for cUTI in the second half of 2017 with a goal of initial commercialization in the first half of 2018 as an RUO test;
|
· |
obtain third party funding to expand our Acuitas Rapid Test development and access to additional third party rapid testing platforms;
|
· |
expand our business collaborations with Merck and other pharmaceutical companies;
|
· |
capitalize on opportunities to deploy our Acuitas Lighthouse informatics and genomic testing for Pharmaceutical/CRO services;
|
· |
complete testing and initial development of the Acuitas Lighthouse Knowledgebase in 2017 using 10,000 clinical isolates from the Merck SMART bacterial surveillance network;
|
· |
grow our Acuitas Lighthouse data warehouse offerings for resistance and susceptibility data in hospital, hospital system, or broader community applications through continued development of the Acuitas Lighthouse Knowledgebase;
|
· |
seek government funding to advance programs focused on identification and treatment of MDROs; and
|
· |
continue development of our Acuitas Lighthouse informatics and decision-making software and work to install Acuitas Lighthouse access to customer sites in the United States and globally.
|
· |
the Company may access the bridge financing facility by providing five business days’ notice to jVen Capital
|
· |
secured bridge financing notes will be issued in three $500,000 increments
|
· |
the bridge financing notes carry an interest rate of 10% per annum (increased to 15% in an event of default)
|
· |
the Note Purchase Agreement provides for the issuance of warrants to purchase common stock equal to 20% of the principal of each note being purchased at issuance of such note
|
· |
the maturity date for the up to $1,500,000 principal amount of bridge financing notes is September 30, 2017, when all principal and interest will be due, subject to the following
|
o |
if the Company raises net proceeds of at least $5 million in a qualified financing prior to September 30, 2017, the maturity date of the outstanding bridge financing notes will be accelerated to a date that is five business days after the qualified financing closes
|
o |
if the Company does not complete a qualified financing by September 30, 2017, but is working on a qualified financing transaction, the maturity date of the outstanding bridge financing notes can be extended, but not beyond December 31, 2017
|
· |
the bridge financing notes are secured by all of the Company’s assets, but are subordinate to the existing first priority security interest of Merck Global Health Innovation Fund, or MGHIF, related to the July 2015 $1,000,000 promissory note, or the MGHIF Note; if the Company seeks to liquidate or enters a bankruptcy proceeding, the MGHIF Note and the bridge financing notes will have equal secured status, and the maturity dates of all then-outstanding bridge financing notes and of the MGHIF Note will accelerate
|
· |
assuming that any bridge financing notes are then outstanding, if the Company does not pay any outstanding bridge financing notes on a timely basis, seeks to liquidate the Company, enters into a bankruptcy proceeding, or fails to timely pay any other outstanding indebtedness, the then-outstanding bridge financing notes would acquire a two times liquidation preference for unpaid principal and interest, unless jVen Capital exercises its option to convert the bridge financing notes to Series B convertible preferred stock, or Preferred Stock, at a ratio of one share of Preferred Stock per $1.00 of principal and interest, which Preferred Stock would be convertible into 10 shares of voting common stock, otherwise no further preferences are provided to the Preferred Stock
|
|
|
|
|
|
Risk Factors
Our business is subject to numerous risks and uncertainties, including those highlighted in the section entitled “Risk Factors” immediately following this prospectus summary. These risks include, but are not limited to, the following:
|
|
|
● |
We need to raise money in this offering to fund our operations.
|
||
● |
We needed to obtain bridge financing to allow us to complete this offering and fund our operations.
|
||
● |
We have a history of losses, and we expect to incur losses for the next several years. Substantial doubt exists about our ability to continue as a going concern.
|
||
● |
We expect to make significant additional investments in the future related to our diagnostic products and services, which investments will require additional financing transactions through the issuance of equity or debt. If we are unable to make such investments our business will suffer.
|
||
● |
We are an early stage company with a history of losses, and we expect to incur net losses for the foreseeable future and may never achieve or sustain profitability.
|
||
● |
Our products and services may never achieve significant commercial market acceptance.
|
||
● |
Our future success is dependent upon our ability to expand our customer base.
|
||
● |
We depend on our information technology systems, and any failure of these systems could harm our business.
|
||
● |
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.
|
||
|
|
|
|
· |
1,971,451 shares of common stock issued under our at-the-market offering since March 31, 2017;
|
· |
16,800 shares of common stock issued upon the exercise of outstanding options granted under our equity incentive plans since March 31, 2017;
|
· |
3,514,071 shares of common stock issuable upon the exercise of outstanding options granted as of March 31, 2017, under our equity incentive plans at a weighted average exercise price of $1.48 per share;
|
· |
10,506,524 shares of common stock issuable upon the exercise of outstanding warrants issued as of March 31, 2017, at a weighted average exercise price of $3.23 per share;
|
· |
627,570 shares of common stock issuable upon exercise of warrants issued to jVen Capital and MGHIF since March 31, 2017;
|
· |
18,750 shares of common stock issuable upon vesting of outstanding restricted stock units granted as of March 31, 2017;
|
· |
1,145,402 shares of common stock available for future issuance under our equity incentive plans as of March 31, 2017;
|
· |
20,000,000 shares of common stock issuable upon the exercise of common warrants to be issued to investors in this offering at an exercise price of $ per share; and
|
· |
1,000,000 shares of common stock issuable upon exercise of warrants to be issued to the placement agent as described in “Plan of Distribution.”
|
· |
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.
|
Year Ended
December 31, |
Three Months
Ended March 31, |
|||||||||||||||
2016
|
2015
|
2017
|
2016
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
Cost of services
|
$
|
6,003
|
$ |
-
|
$
|
1,823
|
$
|
4,312
|
||||||||
Research and development
|
236,341
|
240,739
|
57,778
|
62,218
|
||||||||||||
General and administrative
|
599,550
|
619,899
|
152,476
|
172,103
|
||||||||||||
Sales and marketing
|
103,567
|
584,450
|
33,328
|
22,864
|
||||||||||||
Total stock-based compensation
|
$
|
945,461
|
$
|
1,445,088
|
$
|
245,405
|
$
|
261,497
|
As of March 31, 2017
|
||||||||
Actual
|
As Adjusted
|
|||||||
(In thousands)
|
||||||||
(Unaudited)
|
||||||||
Balance Sheet Data:
|
||||||||
Cash and cash equivalents
|
$
|
1,620
|
$
|
11,080
|
||||
Working capital (deficit)
|
(2,160
|
)
|
7,250
|
|||||
Total assets
|
6,157
|
15,567
|
||||||
Accumulated deficit
|
(138,269
|
)
|
(138,269
|
)
|
||||
Total stockholders’ equity
|
554
|
9,964
|
· |
on an actual basis;
|
· |
on an as adjusted basis to give effect to the receipt of the estimated net proceeds from the sale of an aggregate of 20,000,000 units and no pre-funded units in this offering at the assumed offering price of $0.55 per unit and the issuance of 20,000,000 shares of common stock included in the units.
|
· |
our ability to grow our revenue and customer base;
|
· |
the announcement of new products or product enhancements by us or our competitors;
|
· |
developments concerning regulatory oversight and approvals;
|
· |
variations in our and our competitors' results of operations;
|
· |
changes in earnings estimates or recommendations by securities analysts, if our common stock is covered by analysts;
|
· |
successes or challenges in our collaborative arrangements or alternative funding sources;
|
· |
developments in the health care and life science industries;
|
· |
the results of product liability or intellectual property lawsuits;
|
· |
future issuances of common stock or other securities;
|
· |
the addition or departure of key personnel;
|
· |
announcements by us or our competitors of acquisitions, investments or strategic alliances; and
|
· |
general market conditions and other factors, including factors unrelated to our operating performance.
|
· |
commercializing our rapid pathogen identification and Acuitas MDRO and Acuitas Lighthouse informatics services;
|
· |
developing our Acuitas Rapid Test products and services for antibiotic resistance testing, and our automated rapid molecular diagnostic products;
|
· |
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 as we seek regulatory approval for some of our product offerings;
|
· |
expansion of the size and geographic reach of our sales force and our marketing capabilities to commercialize potential future products and services; and
|
· |
continued focus on recruiting and retaining our quality assurance and compliance personnel and activities.
|
· |
our ability to convince the medical community of the clinical utility of our products and services and their potential advantages over existing tests, including our surveillance services offering, despite the lack of reimbursement for such services;
|
· |
our ability to successfully develop automated rapid pathogen identification and antibiotic resistance testing products and services, including informatics, and convince hospitals and other healthcare providers of the patient safety, improved patient outcomes and potential cost savings that could result;
|
· |
our ability to grow our microbial isolate and antibiotic resistance genes knowledgebase;
|
· |
our ability to convince the medical community of the accuracy and speed of our products and services, as contrasted with the current methods available; and
|
· |
the willingness of hospitals and physicians to use our products and services.
|
· |
collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
|
· |
collaborators may not perform their obligations as expected;
|
· |
we may not achieve any milestones, or receive any milestone payments, under our collaborations, including milestones and/or payments that we expect to achieve or receive;
|
· |
the clinical trials, if any, conducted as part of these collaborations may not be successful;
|
· |
a collaborator might elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator's strategic focus or available funding or external factors, such as an acquisition, that diverts resources or creates competing priorities;
|
· |
we may not have access to, or may be restricted from disclosing, certain information regarding product or services candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product or services candidates;
|
· |
collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
|
· |
product or services candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own product or services, which may cause collaborators to cease to devote resources to the commercialization of our product or services candidates;
|
· |
a collaborator with marketing and distribution rights to one or more of our product or services candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate;
|
· |
disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product or services candidates, may cause delays or termination of the research, development or commercialization of such product or services candidates, may lead to additional responsibilities for us with respect to such product or services candidates or may result in litigation or arbitration, any of which would be time-consuming and expensive;
|
· |
collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;
|
· |
disputes may arise with respect to the ownership of intellectual property developed pursuant to a collaboration;
|
· |
collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and
|
· |
collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product or services candidates.
|
· |
coordinating research and development activities to enhance the introduction of new diagnostic tests and technology of the combined business;
|
· |
failure to successfully integrate and harmonize financial reporting and information technology systems of the two companies;
|
· |
retaining each company's relationships with its partners;
|
· |
retaining and integrating key employees from OpGen and AdvanDx;
|
· |
managing effectively the diversion of management's attention from business matters to integration issues;
|
· |
combining research and development capabilities effectively and quickly;
|
· |
integrating partnership efforts so that new partners acquired can easily do business with us; and
|
· |
transitioning all facilities to a common information technology environment.
|
· |
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 in-patient healthcare facilities.
|
· |
required compliance with existing and changing foreign health care 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, or FCPA, 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.
|
· |
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.
|
· |
our ability to finance our operations;
|
· |
the completion of our development efforts for the Acuitas Rapid Test and Acuitas Lighthouse Knowledgebase, and the timing of commercialization;
|
· |
our ability to sustain or grow our customer base for our current products;
|
· |
our liquidity and working capital requirements, including our cash requirements over the next 12 months;
|
· |
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;
|
· |
our opportunity to successfully enter into new collaborative agreements;
|
· |
changes in laws or regulations applicable to our business, including potential regulation by the FDA;
|
· |
compliance with the U.S. and international regulations applicable to our business; and
|
· |
our expectations regarding future revenue and expenses.
|
· |
repayment of outstanding bridge financing notes, if this offering is a qualified offering ;
|
· |
completion of development of Acuitas Rapid Test for cUTI and Acuitas Lighthouse Knowledgebase;
|
· |
support of acquisitions of products and technologies;
|
· |
initial commercialization efforts for the Acuitas Rapid Test for cUTI and Acuitas Lighthouse Knowledgebase; and
|
· |
the balance for general corporate purposes, such as general and administrative expenses, capital expenditures and working capital needs.
|
As of March 31, 2017
|
||||||||
Actual
|
As Adjusted
|
|||||||
(In thousands, except share and per share data)
(Unaudited) |
||||||||
Cash and cash equivalents
|
$
|
1,670
|
$
|
11,080 | ||||
Short-term debt, net of discount
|
$ |
999
|
$ | 999 | ||||
Stockholder's (deficit) equity:
|
||||||||
Common stock, par value $0.01 per share: 200,000,000 shares
|
274
|
474 | ||||||
authorized, 27,377,490 shares issued and outstanding, actual; 200,000,000 shares authorized, 47,377,490 issued and outstanding, as adjusted
|
||||||||
Preferred stock, par value $0.01 per share; 10,000,000 shares
|
||||||||
authorized, no shares outstanding, actual and as adjusted
|
||||||||
Additional paid-in capital
|
138,547
|
147,757 | ||||||
Accumulated other comprehensive income
|
2
|
2 | ||||||
Accumulated deficit
|
(138,269
|
)
|
(138,269 | ) | ||||
Total stockholders' (deficit) equity
|
554
|
9,964 | ||||||
Total capitalization
|
$
|
1,553 |
$
|
10,963 |
|
||||||||
Assumed public offering price per unit
|
$ | 0.55 | ||||||
Net tangible book value per share of as March 31, 2017
|
$ |
(0.06
|
)
|
|||||
Increase in net tangible book value per share attributable to this offering
|
$ | 0.22 | ||||||
As adjusted net tangible book value per share as of March 31, 2017, after giving effect to this offering
|
$
|
0.16 | ||||||
Dilution per share to new investors purchasing our common stock in this offering
|
$
|
0.39 |
· |
1,971,451 shares of common stock issued under our at-the-market offering since March 31, 2017;
|
· |
16,800 shares of common stock issued upon the exercise of outstanding options granted under our equity incentive plans since March 31, 2017;
|
· |
3,514,071 shares of common stock issuable upon the exercise of outstanding options granted as of March 31, 2017, under our equity incentive plans at a weighted average exercise price of $1.48 per share;
|
· |
10,506,524 shares of common stock issuable upon the exercise of outstanding warrants issued as of March 31, 2017, at a weighted average exercise price of $3.23 per share;
|
· |
627,570 shares of common stock issuable upon exercise of warrants issued to jVen Capital and MGHIF since March 31, 2017;
|
· |
18,750 shares of common stock issuable upon vesting of outstanding restricted stock units as of March 31, 2017;
|
· |
1,145,402 shares of common stock available for future issuance under our equity incentive plans as of March 31, 2017;
|
· |
20,000,000 shares of common stock issuable upon the exercise of common warrants to be issued to investors in this offering at an exercise price of $ per share; and
|
· |
1,000,000 shares of common stock issuable upon exercise of warrants to be issued to the placement agent as described in “Plan of Distribution.”
|
High
|
Low
|
|||||||
Common Stock
:
|
||||||||
Year Ended December 31, 2015
|
||||||||
Second Quarter (beginning May 5, 2015)
|
$
|
5.43
|
$
|
3.12
|
||||
Third Quarter
|
$
|
4.43
|
$
|
2.21
|
||||
Fourth Quarter
|
$
|
2.79
|
$
|
1.45
|
||||
IPO Warrants
:
|
||||||||
Year Ended December 31, 2015
|
||||||||
Second Quarter (beginning May 5, 2015)
|
$
|
0.95
|
$
|
0.50
|
||||
Third Quarter
|
$
|
0.84
|
$
|
0.30
|
||||
Fourth Quarter
|
$
|
0.59
|
$
|
0.25
|
||||
High
|
Low
|
|||||||
Common Stock
:
|
||||||||
Year Ended December 31, 2016
|
||||||||
First Quarter
|
$
|
1.96
|
$
|
1.36
|
||||
Second Quarter
|
$
|
1.78
|
$
|
1.03
|
||||
Third Quarter
|
$
|
3.70
|
$
|
1.36
|
||||
Fourth Quarter
|
$
|
1.76
|
$
|
0.89
|
||||
IPO Warrants
:
|
||||||||
Year Ended December 31, 2016
|
||||||||
First Quarter
|
$
|
0.35
|
$
|
0.19
|
||||
Second Quarter
|
$
|
0.46
|
$
|
0.11
|
||||
Third Quarter
|
$
|
0.49
|
$
|
0.13
|
||||
Fourth Quarter
|
$
|
0.26
|
$
|
0.09
|
||||
High
|
Low
|
|||||||
Common Stock
:
|
||||||||
Year Ending December 31, 2017
|
$ | |||||||
First Quarter
|
$
|
1.50
|
$
|
0.99
|
||||
Second Quarter
|
$
|
1.18
|
$
|
0.54
|
||||
Third Quarter (through July 7, 2017)
|
$ | 0.63 | $ | 0.55 | ||||
IPO Warrants
:
|
||||||||
Year Ending December 31, 2017
|
||||||||
First Quarter
|
$
|
0.17
|
$
|
0.07
|
||||
Second Quarter
|
$
|
0.14
|
$
|
0.04
|
||||
Third Quarter (through July 7, 2017)
|
$ | 0.1395 | $ | 0.111 |
· |
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.
|
· |
may not engage in any stabilization activity in connection with our securities; and
|
· |
may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
|
· |
The Acuitas DNA tests provide rapid microbial identification and antibiotic resistance gene information. These products include the Acuitas Rapid Test for complicated urinary tract infections in development, the QuickFISH family of FDA-cleared and CE-marked diagnostics used to rapidly detect pathogens in positive blood cultures, and the Acuitas Resistome Tests for genetic analysis of hospital surveillance isolates.
|
· |
The Acuitas Lighthouse informatics systems are cloud-based HIPAA compliant informatics offerings that combine clinical lab test results with patient and hospital information to provide analytics and actionable insights to help manage MDROs in the hospital and patient care environment. Components of the informatics systems are the Acuitas Lighthouse Knowledgebase, a proprietary data warehouse of genomic data matched with antibiotic susceptibility information for bacterial pathogens and the Acuitas Lighthouse informatics, which can be specific to a healthcare facility or collaborator, such as a pharmaceutical company.
|
|
Year Ended December 31,
|
|||||||
2016
|
2015
|
|||||||
Revenue
|
||||||||
Product sales
|
$
|
3,524,178
|
$
|
2,701,142
|
||||
Laboratory services
|
228,904
|
120,476
|
||||||
Collaboration revenue
|
272,603
|
336,102
|
||||||
Total revenue
|
$
|
4,025,685
|
$
|
3,157,720
|
· |
Product Sales: the increase in revenue of 30% in 2016 as compared to 2015 is attributable to the inclusion of AdvanDx products sales subsequent to the Merger, offset in part by a reduction in the sale of our Argus products, as we transition from our legacy mapping products to the introduction of Acuitas MDRO products;
|
· |
Laboratory Services: the increase in revenue of 90% in 2016 as compared to 2015 is a result of increases in sales of our Acuitas MDRO test services and Acuitas Lighthouse services; and
|
· |
Collaboration Revenue: the decrease in collaboration revenue of 19% in 2016 as compared to 2015 is primarily the result of decreased revenue associated with our technology development agreement with Hitachi, partially offset by $135,000 of revenue recognized related to the Company's agreement with Healthcare Services & Solutions LLC, an affiliate of MGHIF.
|
Year Ended December 31,
|
||||||||
2016
|
2015
|
|||||||
Cost of products sold
|
$
|
1,658,571
|
$
|
1,179,771
|
||||
Cost of services
|
631,333
|
367,802
|
||||||
Research and development
|
8,613,236
|
6,002,941
|
||||||
General and administrative
|
6,602,608
|
5,834,642
|
||||||
Sales and marketing
|
5,529,274
|
4,305,444
|
||||||
Transaction expenses
|
—
|
526,283
|
||||||
Total operating expenses
|
$
|
23,035,022
|
$
|
18,216,883
|
· |
Costs of products sold: cost of products sales for the year ended December 31, 2016 increased approximately 41% when compared to the same period in 2015. The change in costs of products sold is primarily attributable to the inclusion of AdvanDx costs of products sold subsequent to the AdvanDx Merger, offset in part by a reduction in the costs of products sold of our Argus products, as we transition from our legacy mapping products to the introduction of Acuitas MDRO products;
|
· |
Costs of services: cost of services for the year ended December 31, 2016 increased approximately 72% when compared to the same period in 2015. The change in costs of services is primarily attributable to an increase in sales of our Acuitas MDRO test services and Acuitas Lighthouse services;
|
· |
Research and development: research and development expenses for the year ended December 31, 2016 increased approximately 43% when compared to the same period in 2015, primarily due to costs related to the automated pathogen identification project;
|
· |
General and administrative: general and administrative expenses for the year ended December 31, 2016 increased approximately 13% when compared to the same period in 2015, primarily due to a full-year of payroll and facility costs associated with the AdvanDx acquisition in 2015 and public company costs;
|
· |
Sales and marketing: sales and marketing expenses for the year ended December 31, 2016 increased approximately 28% when compared to the same period in 2015, primarily due to costs associated with our expanded sales and marketing team, the Intermountain Healthcare Retrospective study, and industry trade show expenses; and
|
· |
Transaction expenses: transaction expenses for the year ended December 31, 2016 decreased 100% when compared to the same period in 2015 due to the prior year acquisition of AdvanDx.
|
|
Year Ended December 31,
|
|||||||
2016
|
2015
|
|||||||
Interest expense
|
$
|
(143,347
|
)
|
$
|
(1,801,320
|
)
|
||
Foreign currency transaction losses
|
(8,102
|
)
|
—
|
|||||
Change in fair value of derivative financial instruments
|
—
|
(647,342
|
)
|
|||||
Interest and other (expense)/income
|
(5,967
|
)
|
26,657
|
|||||
Total other expense
|
$
|
(157,416
|
)
|
$
|
(2,422,005
|
)
|
|
Three Months Ended March 31,
|
|||||||
2017
|
2016
|
|||||||
Revenue
|
||||||||
Product sales
|
$
|
734,502
|
$
|
947,219
|
||||
Laboratory services
|
16,105
|
129,420
|
||||||
Collaboration revenue
|
21,164
|
-
|
||||||
Total revenue
|
$
|
771,771
|
$
|
1,076,639
|
· |
Product Sales: the decrease in revenue of approximately 22% in the 2017 period compared to the 2016 period is primarily attributable to a
reduction in the sale of our Argus products, as we transition from our legacy mapping products to the introduction of Acuitas MDRO products
sales, and a reduction in the sale of our rapid pathogen ID testing products
;
|
· |
Laboratory Services: the decrease in revenue of approximately 88% in the 2017 period compared to the 2016 period as a result of decreases in sales of our Acuitas MDRO test services and Acuitas Lighthouse services; and
|
· |
Collaboration Revenue: the increase in revenue in the 2017 period compared to the 2016 period is primarily attributable to
$15,000 of revenue recognized related to the Company's agreement with Healthcare Services & Solutions LLC, an affiliate of MGHIF, and
revenue related to Hitachi contracts.
|
Three Months Ended March 31,
|
||||||||
2017
|
2016
|
|||||||
Cost of products sold
|
$
|
424,950
|
$
|
345,967
|
||||
Cost of services
|
100,233
|
315,709
|
||||||
Research and development
|
2,122,515
|
1,953,429
|
||||||
General and administrative
|
1,969,216
|
1,538,046
|
||||||
Sales and marketing
|
1,105,586
|
1,399,435
|
||||||
Total operating expenses
|
$
|
5,722,500
|
$
|
5,552,586
|
· |
Costs of products sold: cost of products sales for the three months ended March 31, 2017 increased approximately 23% when compared to the same period in 2016. The change in costs of products sold is primarily attributable to
increased payroll and facility costs
;
|
· |
Costs of services: cost of services for the three months ended March 31, 2017 decreased approximately 68% when compared to the same period in 2016. The change in costs of services is primarily attributable to a decrease in sales of Acuitas Lighthouse services;
|
· |
Research and development: research and development expenses for the three months ended March 31, 2017 increased approximately 9% when compared to the same period in 2016, primarily due to payroll costs;
|
· |
General and administrative: general and administrative expenses for the three months ended March 31, 2017 increased approximately 28% when compared to the same period in 2016, primarily due to payroll and legal costs; and
|
· |
Sales and marketing: sales and marketing expenses for the three months ended March 31, 2017 decreased approximately 21% when compared to the same period in 2016, primarily due to costs associated with marketing studies conducted in the first quarter of 2016 and payroll costs.
|
Three Months Ended March 31,
|
||||||||
2017
|
2016
|
|||||||
Interest expense
|
$
|
(29,844
|
)
|
$
|
(41,734
|
)
|
||
Foreign currency transaction gains
|
2,620
|
11,328
|
||||||
Interest and other income
|
21
|
173
|
||||||
Total other expense
|
$
|
(27,203
|
)
|
$
|
(30,233
|
)
|
Three Months Ended March 31,
|
||||||||
2017
|
2016
|
|||||||
Net cash used in operating activities
|
$
|
(4,460,492
|
)
|
$
|
(3,795,817
|
)
|
||
Net cash used in investing activities
|
(27,022
|
)
|
(1,644
|
)
|
||||
Net cash provided by/(used in) financing activities
|
2,044,257
|
(54,056
|
)
|
· |
Our Acuitas DNA tests, provide rapid microbial identification and antibiotic resistance gene information. These products include our Acuitas Rapid Test for complicated urinary tract infections in development, the QuickFISH® family of FDA-cleared and CE-marked diagnostics used to rapidly detect pathogens in positive blood cultures, and our Acuitas Resistome Tests for genetic analysis of hospital surveillance isolates.
|
· |
Our Acuitas Lighthouse informatics systems are cloud-based HIPAA compliant informatics offerings that combine clinical lab test results with patient and hospital information to provide analytics and actionable insights to help manage MDROs in the hospital and patient care environment. Components of our informatics systems are the Acuitas Lighthouse Knowledgebase, a proprietary data warehouse of genomic data matched with antibiotic susceptibility information for bacterial pathogens and our Acuitas Lighthouse informatics, which can be specific to a healthcare facility or collaborator, such as a pharmaceutical company.
|
· |
Rapid diagnostics
– We are developing OpGen-branded Acuitas DNA tests for use on the Thermo Fisher Scientific QuantStudio™ 5 Real-Time PCR System. The first of these new tests will be for management of patients with cUTI. We anticipate developing tests for additional clinical indications and for new antibiotic decision-making applications. The second rapid diagnostics growth driver will be through strategic partner relationships where we will work to expand channel access for our proprietary DNA tests through development and subsequent use of these tests, utilizing the Acuitas Lighthouse Knowledgebase on established rapid
in vitro
diagnostic testing platforms.
|
· |
Acuitas Lighthouse informatics and services
– We are pursuing commercial opportunities to provide our Acuitas Lighthouse informatics and companion genomic testing to pharmaceutical companies and CROs, health systems, third party
in vitro
diagnostic companies, and government agencies. Through our Pharmaceutical/CRO services we are working to help accelerate clinical trials and new product launches and to establish early access for diagnostic tests to help guide decision-making for new antibiotics. Our focus in the health system segment is on helping guide antibiotic decision-making and supporting patient safety initiatives. We are actively pursuing government funding for development and deployment of our Acuitas Lighthouse informatics in the United States and internationally.
|
· |
complete development, clinical evaluations, obtain necessary regulatory approvals, and successfully commercialize our Acuitas Rapid Test for cUTI with a goal of achieving three-hour antibiotic resistance analysis from the time of specimen collection;
|
· |
begin clinical evaluations for the Acuitas Rapid Test for cUTI in the second half of 2017 with a goal of initial commercialization in the first half of 2018 as an RUO test;
|
· |
obtain third party funding to expand our Acuitas Rapid Test development and access to additional third party rapid testing platforms;
|
· |
expand our business collaborations with Merck and other pharmaceutical companies;
|
· |
capitalize on opportunities to deploy our Acuitas Lighthouse informatics and genomic testing for Pharmaceutical/CRO services;
|
· |
complete testing and initial development of the Acuitas Lighthouse Knowledgebase in 2017 using 10,000 clinical isolates from the Merck SMART bacterial surveillance network;
|
· |
grow our Acuitas Lighthouse data warehouse offerings for resistance and susceptibility data in hospital, hospital system, or broader community applications through continued development of the Acuitas Lighthouse Knowledgebase;
|
· |
seek government funding to advance programs focused on identification and treatment of MDROs; and
|
· |
continue development of our Acuitas Lighthouse informatics and decision-making software and work to install Acuitas Lighthouse access to customer sites in the United States and globally.
|
· |
Our Acuitas MDRO Gene 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 our Acuitas MDRO Gene Test are associated with CRE, ESBL and VRE organisms, and are gastrointestinal organisms frequently associated with antibiotic-resistant infections. The test results can be used by healthcare providers to identify patients colonized with organisms expressing the drug-resistant genes or who are actively infected.
|
· |
Our Acuitas CR Elite Test adds the ability for the healthcare provider to order a microbiology culture screen to be performed from the same specimen sent for our Acuitas MDRO Gene Test, thereby providing additional information about the organism(s) associated with an active infection, as well as an antibiotic susceptibility profile for such organism(s).
|
· |
Our Acuitas Resistome Test, launched in the second quarter of 2015, is a more comprehensive MDRO molecular test which detects 49 genes covering over 900 subtypes associated with antibiotic resistance. The test includes additional resistance genes for carbapenemases, ESBLs and AmpC genes, in replacement of the Vancomycin resistant genes found in the Acuitas MDRO Gene Test. We use Acuitas Resistome Test results for Acuitas Lighthouse profiling of specimens collected in hospitals and clinical isolates from infected patients. Information from our Acuitas Resistome Test provides additional gene detection information to supplement our Acuitas MDRO Gene Test. Acuitas Resistome Test results can be used in conjunction with the Acuitas CR Elite Test to provide high resolution Acuitas Lighthouse profiles. Our goal is to provide DNA test-based Acuitas Lighthouse profiles, within 24 hours of sample receipt, and, using the Acuitas CR Elite Test to supplement our Acuitas Lighthouse profiles, with biologically derived, phenotypic antibiotic susceptibility data within 48 hours. We anticipate improving the accuracy, over time, of our Acuitas Resistome Test by performing DNA sequence analysis of microbial isolates characterized within our Acuitas Lighthouse Knowledgebase. We believe our menu of genotypic and phenotypic tests along with our Acuitas Lighthouse informatics platform, will enable better surveillance and epidemiology, improved infection control practices, improved antibiotic stewardship and individualized patient care, as well as help to facilitate outbreak detection and response in healthcare settings.
|
· |
assist in accelerating more rapid diagnosis with improved molecular susceptibility data;
|
· |
provide MDRO screening and surveillance capabilities to hospitals to identify pathogen and resistance profiles; and
|
· |
potentially accelerate new antibiotic development as the data are used to reveal genetic resistance patterns to direct drug discovery.
|
· |
development of the Acuitas Rapid Test, capable of providing genetic resistance information for up to 150 drug resistance genes in one to three hours from specimen collection, and a cloud-based Acuitas Lighthouse Knowledgebase for interpretation of test results and clinical decision making support tools to help select appropriate antibiotic therapies;
|
· |
development of more rapid molecular diagnostic products to achieve actionable pathogen identification and differentiation in the first few hours of presentation or symptoms;
|
· |
automating our QuickFISH products through digital imaging and analysis, new formats requiring less hands on time to process samples, multiplex formats that allow for testing of a broader range of microorganisms;
|
· |
continued investments in our Acuitas Lighthouse informatics platform, focused on (i) data warehouse and portal for MDRO data and (ii) antibiotic analysis;
|
· |
further development of our Acuitas MDRO Gene Test, Acuitas Resistome Test and Acuitas Whole Genome Sequence Analysis; and
|
· |
converting our CLIA lab-based products to IVD
kits that can 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 products and services meet leading clinical practice guidelines plays a critical role in payers' 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 payers; and
|
· |
compile a library of peer-reviewed studies that demonstrate that our Acuitas MDRO test products are effective, accurate and faster than current methods.
|
· |
product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;
|
· |
QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the development and 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 cleared 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 $100,000 against parties that enter into a scheme to circumvent the Stark Law's prohibition.
|
Name
|
Age
|
Position
|
||||
Directors
|
||||||
Evan Jones
|
60
|
Chief Executive Officer, Director and Chairman of the Board
|
||||
Harry J. D'Andrea
|
60
|
Director
|
||||
Timothy J.R. Harris, Ph.D., D.Sc
|
66
|
Director
|
||||
Tina S. Nova, Ph.D.
|
63
|
Director
|
||||
David M. Rubin, Ph.D.
|
52
|
Director
|
||||
Misti Ushio, Ph.D.
|
45
|
Director
|
||||
Other Executive Officers
|
||||||
Timothy C. Dec
|
58
|
Chief Financial Officer and Corporate Secretary
|
||||
Vadim Sapiro
|
46
|
Chief Information Officer
|
Named Executive Officer and
Principal Position
|
Year
|
Salary ($)
|
Bonus (2)($)
|
Stock Awards
(1)($)
|
Option
Awards (1)($)
|
Non-Equity Incentive
Plan Compensation
($)
|
All Other
Compensation ($)
|
Total ($)
|
||||||||||||||||||||||
Evan Jones
|
2016
|
$
|
316,538
|
$
|
-
|
$
|
-
|
$
|
499,352
|
$
|
-
|
$
|
-
|
$
|
815,890
|
|||||||||||||||
Chief Executive Officer
|
2015
|
$
|
190,000
|
$
|
-
|
$
|
-
|
$
|
843,260
|
$
|
-
|
$
|
-
|
$
|
1,033,260
|
|||||||||||||||
Timothy Dec
|
2016
|
$
|
273,462
|
$
|
50,000
|
$
|
-
|
$
|
44,996
|
$
|
-
|
$
|
-
|
$
|
368,458
|
|||||||||||||||
Chief Financial Officer
|
2015
|
$
|
182,050
|
$
|
-
|
$
|
42,500
|
$
|
318,226
|
$
|
-
|
$
|
-
|
$
|
542,776
|
|||||||||||||||
Vadim Sapiro
|
2016
|
$
|
280,385
|
$
|
50,500
|
$
|
-
|
$
|
29,997
|
$
|
-
|
$
|
-
|
$
|
360,882
|
|||||||||||||||
Chief Information Officer
|
2015
|
$
|
275,000
|
$
|
-
|
$
|
-
|
$
|
54,375
|
$
|
-
|
$
|
-
|
$
|
329,375
|
|||||||||||||||
Kevin Krenitsky, M.D.
|
2016
|
$
|
233,263
|
$
|
61,000
|
$
|
-
|
$
|
44,996
|
$
|
-
|
$
|
53,364
|
(5)
|
$
|
392,623
|
||||||||||||||
Former President (3)
|
2015
|
$
|
194,950
|
$
|
-
|
$
|
85,000
|
$
|
1,006,087
|
$
|
-
|
$
|
10,891
|
(4)
|
$
|
1,296,928
|
(1) |
The “Stock Awards column reflects the grant date fair value for all restricted stock units awarded under the 2015 Plan during 2016. The “Option Awards” column reflects the grant date fair value for all stock option awards granted under the 2015 Plan or the 2008 Plan during 2016 and 2015, respectively, except for Mr. Jones the 2016 stock option grant was made outside of the 2015 Plan, subject to stockholder approval that was obtained on June 22, 2016. These amounts are determined in accordance with FASB Accounting Standards Codification 718 (ASC 718), without regard to any estimate of forfeiture for service vesting. Assumptions used in the calculation of the amounts in these columns for 2016 and 2015 are included in footnote 8 to the Company's consolidated audited financial statements for the year ended December 31, 2016 included elsewhere in this prospectus.
|
(2) |
Bonus amounts represent 2015 earned amounts that were not finalized until after the 2015 Annual Report and paid in 2016. No bonuses were earned for 2016.
|
(3) |
Dr. Krenitsky resigned from his position on August 31, 2016.
|
(4) |
Represents relocation expenses for which the Company reimbursed Dr. Krenitsky during the year ended December 31, 2015.
|
(5) |
Represents severance related expenses.
|
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
|
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(2)
|
89
|
-
|
-
|
79.05
|
7/23/2018
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
1,847
|
-
|
-
|
110.68
|
9/21/2020
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
108,896
|
65,339
|
-
|
0.05
|
4/24/2024
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
100,000
|
100,000
|
-
|
0.61
|
10/23/2024
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
-
|
766,500
|
-
|
1.55
|
4/28/2026
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Timothy Dec(3)
|
50,015
|
64,305
|
-
|
6.00
|
5/4/2025
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
15,625
|
34,375
|
-
|
1.70
|
11/10/2025
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
-
|
60,000
|
-
|
1.55
|
6/13/2026
|
-
|
-
|
- |
-
|
||||||||||||||||||||||||||||
- | - | - | - | - | 18,750 | 21,563 | - | - | ||||||||||||||||||||||||||||
Vadim Sapiro(4)
|
64
|
-
|
-
|
7.91
|
3/23/2022
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
918
|
-
|
-
|
7.91
|
3/23/2022
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
237
|
16
|
-
|
7.91
|
2/12/2023
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
127
|
-
|
-
|
7.91
|
2/12/2023
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
514
|
119
|
-
|
7.91
|
7/25/2023
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
2,691
|
898
|
-
|
0.05
|
4/24/2024
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
25,000
|
25,000
|
-
|
0.61
|
10/23/2024
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
25,000
|
-
|
-
|
6.00
|
5/4/2025
|
-
|
-
|
- |
-
|
||||||||||||||||||||||||||||
-
|
40,000
|
-
|
1.55
|
6/13/2026
|
-
|
-
|
- |
-
|
||||||||||||||||||||||||||||
Kevin Krenitsky(5)
|
95,266
|
-
|
-
|
6.00
|
2/28/2017
|
-
|
-
|
- |
-
|
|||||||||||||||||||||||||||
20,833 | - | - | 1.70 | 2/28/2017 | - | - | - | - |
(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 fiscal quarter over three years.
|
(2) |
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), October 23, 2014 (200,000 shares) and April 28, 2016 (766,500 shares).
|
(3) |
Mr. Dec was granted stock option awards on May 4, 2015 (114,320 shares), November 10, 2015 (50,000 shares), and June 13, 2016 (60,000 shares). One-forty-eighth of Mr. Dec's stock option awards granted on May 4, 2015 vested on the one month anniversary of the date of grant and thereafter vest over four years with twenty-five percent (25%) vesting on the first yearly anniversary of the date of grant and six and one-quarter percent (6.25%) vesting on the last day of the next fiscal quarter over three years. Mr. Dec's stock option awards granted on November 10, 2015 and June 13, 2016 have the vesting schedule set forth in footnote (1). Mr. Dec was granted restricted stock units on November 10, 2015. Twenty-five present (25%) of the entire Restricted Stock Units Award vest on the first four anniversaries of the date of grant.
|
(4) |
The stock option awards granted to Mr. Sapiro on March 23, 2012 (64 shares and 918 shares), February 12, 2013 (253 shares), July 25, 2013 (633 shares), October 23, 2014 (50,000 shares) and June 13, 2016 (40,000 shares) have the vesting schedule set forth in footnote (1). The stock option award granted to Mr. Sapiro on February 12, 2013 for 127 shares vested in full on the first anniversary of the date of grant, February 12, 2014. The stock option award granted to Mr. Sapiro on April 24, 2014 for 3,589 shares is vesting over four years with twenty-five percent (25%) vesting on December 31, 2014 and six and one-fourth percent (6.25%) vesting quarterly thereafter in equal proportions over the remaining three years. The stock option granted to Mr. Sapiro on May 4, 2015 vested quarterly over the first year following the date of grant.
|
(5) |
Dr. Krenitsky was granted stock option awards on May 4, 2015 (381,067 shares), November 10, 2015 (100,000 shares), and June 13, 2016 (60,000 shares). On August 31, 2016, Dr. Krenitsky resigned from his position as President. The Company entered into a Confidential Separation Agreement and General Release with Dr. Krenitsky on September 1, 2016 (the “Separation Agreement”). Pursuant to the Separation Agreement, the vesting of certain stock options set forth in this table was accelerated and Dr. Krenitsky had until February 28, 2017 to exercise his vested stock options. As of December 31, 2016, 116,099 options vested, including 95,266 options from the May 4, 2015 award, 20,833 options from the November 10, 2015 award and no options from the June 13, 2016 award.
|
Name
|
Fees Earned or
Paid in Cash
($)
|
Option Awards
($)(1)
|
All Other
Compensation
($)
|
Total ($)
|
||||||||||||
Brian G. Atwood (2)
|
$
|
36,000
|
$
|
7,589
|
$
|
-
|
$
|
43,589
|
||||||||
Harry J. D'Andrea
|
$
|
24,167
|
$
|
26,114
|
$
|
-
|
$
|
50,281
|
||||||||
Timothy J.R. Harris
|
$
|
33,500
|
$
|
7,589
|
$
|
-
|
$
|
41,089
|
||||||||
Laurence R. McCarthy (2)
|
$
|
37,500
|
$
|
7,589
|
$
|
-
|
$
|
45,089
|
||||||||
David M. Rubin (3)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Misti Ushio
|
$
|
38,500
|
$
|
7,589
|
$
|
-
|
$
|
46,089
|
(1) |
The “Option Awards” column reflects the grant date fair value for all stock option awards granted under the 2015 Plan during 2016. These amounts are determined in accordance with FASB Accounting Standards Codification 718 (ASC 718), without regard to any estimate of forfeiture for service vesting. Assumptions used in the calculation of the amounts are included in footnote 8 to the Company's consolidated audited financial statements for the year ended December 31, 2016, included elsewhere in this prospectus.
|
(2) |
Mr. Atwood and Dr. McCarthy did not stand for re-election at the 2017 Annual Meeting of the Stockholders.
|
(3) |
As managing director of MGHIF, Dr. Rubin is precluded from receiving compensation for serving as a director of OpGen, Inc.
|
Plan Category
|
Number of securities
to be issued upon
exercise of
outstanding
options, warrants
and rights(1)
|
Weighted average
exercise price of
outstanding
options,
warrants and
rights(2)
|
Number of
securities
remaining available
for future issuance
|
|||||||||
Equity compensation plans approved by security holders
|
2,996,410
|
$
|
1.76
|
669,651
|
||||||||
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
|||||||||
Total
|
2,996,410
|
$
|
1.76
|
669,651
|
(1) |
Includes 18,750
outstanding restricted stock units for which there is no exercise price.
|
(2) |
Includes the weighted-average exercise price of stock options only.
|
· |
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.
|
Name and Address of Beneficial Owner
|
Number of Shares
of Common Stock
|
Percentage of
Outstanding
Common Shares
|
||||||
5% Stockholders
|
||||||||
Merck Global Health Innovation Fund, LLC (1)
|
8,364,270
|
25.9
|
%
|
|||||
One Merck Drive 2W116
|
||||||||
Whitehouse Station, NJ 08889
|
||||||||
jVen Capital, LLC (2)
|
4,988,963
|
16.3
|
%
|
|||||
11009 Cripplegate Road
|
||||||||
Potomac, MD 20854
|
||||||||
Versant Ventures III, LLC (3)
|
3,034,373
|
10.2
|
%
|
|||||
One Sansome Street
|
||||||||
Suite 3630
|
||||||||
San Francisco, CA 94104
|
||||||||
Directors and Executive Officers
|
||||||||
Evan Jones (4)
|
5,638,103
|
18.2
|
%
|
|||||
Harry D'Andrea (5)
|
25,625
|
*
|
||||||
Timothy J.R. Harris, Ph.D., D.Sc. (6)
|
133,211
|
*
|
||||||
Tina S. Nova, Ph.D.(7)
|
3,125
|
-
|
||||||
David M. Rubin, Ph.D. (8)
|
-
|
-
|
||||||
Misti Ushio, Ph.D. (9)
|
15,625
|
*
|
||||||
Timothy C. Dec (10)
|
195,683
|
*
|
||||||
Vadim Sapiro (11)
|
98,837
|
*
|
||||||
All Directors and Executive Officers as a group
|
6,110,209
|
19.5
|
%
|
|||||
(8 individuals) (12)
|
* |
Constitutes less than 1%
|
(1) |
Consists of (i) 5,413,449 shares of common stock and (ii) currently exercisable warrants to acquire an additional 2,950,821 shares of common stock.
|
(2) |
Consists of (i) 3,805,604 shares of common stock, and (ii) currently exercisable warrants to acquire an additional 1,183,359 shares of common stock.
|
(3) |
Consists of (i) 2,539,214 and 14,997 shares of common stock beneficially owned by Versant Venture Capital III, L.P., or Versant Capital III, and Versant Side Fund III, L.P., or Versant SF III, respectively, and (ii) currently exercisable warrants to acquire an additional 477,342 and 2,820 shares of common stock owned by Versant Capital III and Versant SF III, respectively. Versant Ventures III, LLC is the sole general partner of Versant Capital III and Versant SF III.
|
(4) |
Consists of (i) 3,805,604 shares of common stock and currently exercisable warrants to acquire an additional 1,183,359 shares of common stock beneficially owned by jVen Capital, LLC, (ii) 131,156 shares of common stock and currently exercisable warrants to acquire an additional 20,841 shares of common stock owned by Mr. Jones' spouse, and (iii) stock options to purchase 497,143 shares of common stock that are currently vested or that will become vested within 60 days. Mr. Jones is a managing member of jVen Capital, LLC and has voting and investment authority over the shares owned by that entity (see footnote 2 above).
|
(5) |
Consists of stock options to purchase 25,625 shares of common stock that are currently vested or that will become vested within 60 days.
|
(6) |
Consists of (i) 50,116 shares of common stock, (ii) currently exercisable warrants to acquire an additional 39,187 shares of common stock, and (iii) stock options to purchase 43,908 shares of common stock that are currently vested or that will become vested within 60 days.
|
(7) |
Consists of stock options to purchase 3,125 shares of common stock that are currently vested or that will become vested within 60 days.
|
(8) |
Dr. Rubin is the managing director of MGHIF, but does not have nor share voting power over the shares of our common stock owned by MGHIF.
|
(9) |
Consists of stock options to purchase 15,625 shares of common stock that are currently vested or that will become vested within 60 days.
|
(10) |
Consists of (i) 53,966 shares of common stock, (ii) currently exercisable warrants to acquire an additional 36,787 shares of common stock, and (iii) stock options to purchase 104,930 shares of common stock that are currently vested or that will become vested within 60 days.
|
(11) |
Consists of (i) 15,115 shares of common stock, (ii) currently exercisable warrants to acquire an additional 9,837 shares of common stock, and (iii) stock options to purchase 73,885 shares of common stock that are currently vested or that will become vested within 60 days.
|
(12) |
See the beneficial ownership described in footnotes (4) through (11).
|
|
|
2016
|
2015
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
4,117,324
|
$
|
7,814,220
|
||||
Accounts receivable, net
|
542,420
|
678,646
|
||||||
Inventory, net
|
692,368
|
826,012
|
||||||
Prepaid expenses and other current assets
|
329,646
|
566,239
|
||||||
Total current assets
|
5,681,758
|
9,885,117
|
||||||
Property and equipment, net
|
800,723
|
1,074,710
|
||||||
Goodwill
|
600,814
|
637,528
|
||||||
Intangible assets, net
|
1,620,998
|
1,888,814
|
||||||
Other noncurrent assets
|
279,752
|
270,327
|
||||||
Total assets
|
$
|
8,984,045
|
$
|
13,756,496
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
2,232,563
|
$
|
2,285,792
|
||||
Accrued compensation and benefits
|
578,480
|
1,081,270
|
||||||
Accrued liabilities
|
1,215,283
|
920,286
|
||||||
Deferred revenue
|
37,397
|
50,925
|
||||||
Short-term notes payable
|
1,023,815
|
—
|
||||||
Current maturities of long-term capital lease obligation
|
184,399
|
251,800
|
||||||
Total current liabilities
|
5,271,937
|
4,590,073
|
||||||
Deferred rent
|
398,084
|
352,985
|
||||||
Note payable
|
—
|
993,750
|
||||||
Long-term capital lease obligation and other noncurrent liabilities
|
146,543
|
328,642
|
||||||
Total liabilities
|
5,816,564
|
6,265,450
|
||||||
Commitments (Note 10)
|
||||||||
Stockholders' equity
|
||||||||
Common stock, $0.01 par value; 200,000,000 shares authorized; 25,304,270 and
12,547,684 shares issued and outstanding at December 31, 2016 and
December 31, 2015, respectively
|
253,042
|
125,477
|
||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued and
outstanding at December 31, 2016 and December 31, 2015, respectively
|
—
|
—
|
||||||
Additional paid-in capital
|
136,199,382
|
121,490,994
|
||||||
Accumulated other comprehensive income/(loss)
|
6,176
|
(1,059
|
)
|
|||||
Accumulated deficit
|
(133,291,119
|
)
|
(114,124,366
|
)
|
||||
Total stockholders' equity
|
3,167,481
|
7,491,046
|
||||||
Total liabilities and stockholders' equity
|
$
|
8,984,045
|
$
|
13,756,496
|
2016
|
2015
|
|||||||
Revenue
|
||||||||
Product sales
|
$
|
3,524,178
|
$
|
2,701,142
|
||||
Laboratory services
|
228,904
|
120,476
|
||||||
Collaboration revenue
|
272,603
|
336,102
|
||||||
Total revenue
|
4,025,685
|
3,157,720
|
||||||
Operating expenses
|
||||||||
Cost of products sold
|
1,658,571
|
1,179,771
|
||||||
Cost of services
|
631,333
|
367,802
|
||||||
Research and development
|
8,613,236
|
6,002,941
|
||||||
General and administrative
|
6,602,608
|
5,834,642
|
||||||
Sales and marketing
|
5,529,274
|
4,305,444
|
||||||
Transaction expenses
|
—
|
526,283
|
||||||
Total operating expenses
|
23,035,022
|
18,216,883
|
||||||
Operating loss
|
(19,009,337
|
)
|
(15,059,163
|
)
|
||||
Other expense
|
||||||||
Interest and other (expense)/income
|
(5,967
|
)
|
26,657
|
|||||
Interest expense
|
(143,347
|
)
|
(1,801,320
|
)
|
||||
Foreign currency transaction losses
|
(8,102
|
)
|
—
|
|||||
Change in fair value of derivative financial instruments
|
—
|
(647,342
|
)
|
|||||
Total other expense
|
(157,416
|
)
|
(2,422,005
|
)
|
||||
Loss before income taxes
|
(19,166,753
|
)
|
(17,481,168
|
)
|
||||
Provision for income taxes
|
—
|
(129,095
|
)
|
|||||
Net loss
|
(19,166,753
|
)
|
(17,352,073
|
)
|
||||
Preferred stock dividends and beneficial conversion
|
(332,550
|
)
|
(243,762
|
)
|
||||
Net loss available to common stockholders
|
$
|
(19,499,303
|
)
|
$
|
(17,595,835
|
)
|
||
Net loss per common share - basic and diluted
|
$
|
(1.10
|
)
|
$
|
(2.20
|
)
|
||
Weighted average shares outstanding - basic and diluted
|
17,667,557
|
7,980,995
|
||||||
Net loss
|
$
|
(19,166,753
|
)
|
$
|
(17,352,073
|
)
|
||
Other comprehensive income/(loss) - foreign currency translation
|
7,235
|
(1,059
|
)
|
|||||
Comprehensive loss
|
$
|
(19,159,518
|
)
|
$
|
(17,353,132
|
)
|
Common Stock
|
Preferred Stock
|
Additional
|
Accumulated
Other
|
|||||||||||||||||||||||||||||
Number of
Shares
|
Amount
|
Number of
Shares
|
Amount
|
Paid-
in Capital
|
Comprehensive
(Loss) / Income
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||||||||||
Balances at December 31, 2014
|
493,178
|
$
|
4,932
|
—
|
—
|
$
|
88,701,737
|
$
|
—
|
$
|
(96,772,293
|
)
|
$
|
(8,065,624
|
)
|
|||||||||||||||||
Stock option exercises
|
11,472
|
114
|
—
|
—
|
2,189
|
—
|
—
|
2,303
|
||||||||||||||||||||||||
Beneficial conversion feature
|
—
|
—
|
—
|
—
|
1,427,667
|
—
|
—
|
1,427,667
|
||||||||||||||||||||||||
Reclassification of warrant liability to equity
|
—
|
—
|
—
|
—
|
719,675
|
—
|
—
|
719,675
|
||||||||||||||||||||||||
Conversion of preferred stock into common shares
|
7,374,852
|
73,749
|
—
|
—
|
7,730,423
|
—
|
—
|
7,804,172
|
||||||||||||||||||||||||
Demand notes tendered for IPO Units
|
350,000
|
3,500
|
—
|
—
|
2,096,500
|
—
|
—
|
2,100,000
|
||||||||||||||||||||||||
Issuance of IPO units, net of offering costs
|
2,500,000
|
25,000
|
—
|
—
|
12,104,133
|
—
|
—
|
12,129,133
|
||||||||||||||||||||||||
Additional IPO issuance costs
|
—
|
—
|
—
|
—
|
(58,566
|
)
|
—
|
—
|
(58,566
|
)
|
||||||||||||||||||||||
Common shares issued in business combination
|
681,818
|
6,818
|
—
|
—
|
2,577,272
|
—
|
—
|
2,584,090
|
||||||||||||||||||||||||
Common shares issued in financing
|
1,136,364
|
11,364
|
—
|
—
|
4,988,638
|
—
|
—
|
5,000,002
|
||||||||||||||||||||||||
Stock compensation expense
|
—
|
—
|
—
|
—
|
1,445,088
|
—
|
—
|
1,445,088
|
||||||||||||||||||||||||
Accretion of Series A preferred stock
|
—
|
—
|
—
|
—
|
(243,762
|
)
|
—
|
—
|
(243,762
|
)
|
||||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
—
|
—
|
(1,059
|
)
|
—
|
(1,059
|
)
|
||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(17,352,073
|
)
|
(17,352,073
|
)
|
||||||||||||||||||||||
Balances at December 31, 2015
|
12,547,684
|
$
|
125,477
|
—
|
—
|
121,490,994
|
(1,059
|
)
|
(114,124,366
|
)
|
7,491,046
|
|||||||||||||||||||||
Stock option exercises
|
66,502
|
665
|
—
|
—
|
23,106
|
—
|
—
|
23,771
|
||||||||||||||||||||||||
Private offering of common stock, preferred stock and warrants, net of issuance costs
|
6,744,127
|
67,441
|
2,309,428
|
23,094
|
9,370,214
|
—
|
—
|
9,460,749
|
||||||||||||||||||||||||
Preferred stock conversion
|
2,309,428
|
23,094
|
(2,309,428
|
)
|
(23,094
|
)
|
—
|
—
|
—
|
(0
|
)
|
|||||||||||||||||||||
At the market offering, net of offering costs
|
3,619,863
|
36,199
|
—
|
—
|
4,369,774
|
—
|
—
|
4,405,973
|
||||||||||||||||||||||||
Issuance of RSUs
|
16,666
|
166
|
—
|
—
|
(167
|
)
|
—
|
—
|
(1
|
)
|
||||||||||||||||||||||
Stock compensation expense
|
—
|
—
|
—
|
—
|
945,461
|
—
|
—
|
945,461
|
||||||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
—
|
—
|
7,235
|
—
|
7,235
|
||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(19,166,753
|
)
|
(19,166,753
|
)
|
||||||||||||||||||||||
Balances at December 31, 2016
|
25,304,270
|
$
|
253,042
|
—
|
$
|
-
|
$
|
136,199,382
|
$
|
6,176
|
$
|
(133,291,119
|
)
|
$
|
3,167,481
|
2016
|
2015
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(19,166,753
|
)
|
$
|
(17,352,073
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||
Depreciation and amortization
|
656,047
|
624,653
|
||||||
Loss on disposal of property and equipment
|
6,309
|
—
|
||||||
Deferred tax benefit
|
—
|
(129,095
|
)
|
|||||
Noncash interest expense
|
4,527
|
1,598,312
|
||||||
Share-based compensation
|
945,461
|
1,445,088
|
||||||
Inventory obsolescence
|
113,465
|
—
|
||||||
Change in fair value of derivative financial instruments
|
—
|
647,342
|
||||||
Other non-cash items
|
—
|
24,010
|
||||||
Changes in operating assets and liabilities, net of effects of acquisition:
|
||||||||
Accounts receivable
|
136,226
|
359,298
|
||||||
Inventory
|
20,179
|
424,505
|
||||||
Other assets
|
263,882
|
(319,305
|
)
|
|||||
Accounts payable
|
(53,229
|
)
|
196,444
|
|||||
Accrued compensation and other liabilities
|
(163,223
|
)
|
(1,508,937
|
)
|
||||
Deferred revenue
|
(13,528
|
)
|
(288,246
|
)
|
||||
Net cash used in operating activities
|
(17,250,637
|
)
|
(14,278,004
|
)
|
||||
Cash flows from investing activities
|
||||||||
Cash acquired in business combinations
|
—
|
1,367,211
|
||||||
Purchases of property and equipment (net of proceeds on disposals)
|
(123,514
|
)
|
(185,296
|
)
|
||||
Net cash (used in)/provided by investing activities
|
(123,514
|
)
|
1,181,915
|
|||||
Cash flows from financing activities
|
||||||||
Proceeds from issuance of common stock, net of issuance costs
|
4,405,973
|
17,366,620
|
||||||
Proceeds from issuance of convertible notes and warrants, net of issuance costs
|
—
|
1,388,815
|
||||||
Proceeds from issuance of promissory notes, net of issuance costs
|
204,895
|
1,741,667
|
||||||
Proceeds from exercise of stock options and warrants
|
23,771
|
2,293
|
||||||
Proceeds from private offering of common stock, preferred stock and warrants, net of
issuance costs
|
9,460,749
|
—
|
||||||
Payments on debt
|
(178,997
|
)
|
(155,000
|
)
|
||||
Payments on capital lease obligations
|
(251,701
|
)
|
(175,317
|
)
|
||||
Net cash provided by financing activities
|
13,664,690
|
20,169,078
|
||||||
Effects of exchange rates on cash
|
12,565
|
(8,286
|
)
|
|||||
Net (decrease)/increase in cash and cash equivalents
|
(3,696,896
|
)
|
7,064,703
|
|||||
Cash and cash equivalents at beginning of period
|
7,814,220
|
749,517
|
||||||
Cash and cash equivalents at end of period
|
$
|
4,117,324
|
$
|
7,814,220
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for interest
|
$
|
58,564
|
$
|
194,288
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
||||||||
Acquisition of equipment purchased through capital leases
|
$
|
—
|
$
|
580,477
|
||||
Common stock issued in business combination
|
$
|
—
|
$
|
2,584,090
|
||||
Conversion of convertible promissory notes to Series A preferred stock
|
$
|
—
|
$
|
3,000,000
|
||||
Conversion of series A preferred stock into common shares
|
$
|
—
|
$
|
8,183,661
|
||||
Exchange of demand notes for IPO units
|
$
|
—
|
$
|
2,100,000
|
||||
Exchange of demand note for convertible debt
|
$
|
—
|
$
|
300,000
|
· |
Its Acuitas DNA tests, which provide rapid microbial identification, and antibiotic resistance gene information. These products include the QuickFISH family of FDA-cleared and CE-marked diagnostics used to rapidly detect pathogens in positive blood cultures, the Acuitas MDRO Gene Test to detect, type, track, and trend antibiotic resistant organisms in real-time and the Acuitas Rapid Test in development. The Company is working to provide actionable, precise diagnostic information powered by pathogen surveillance data collected through hospital screening programs and a network of hospital and public health laboratories globally.
|
· |
Its Acuitas Lighthouse bioinformatics systems, which are cloud-based HIPAA compliant bioinformatics offerings that combine clinical lab test results with patient and hospital information and provide analytics to help manage MDROs in the hospital and patient care environment. These include its Acuitas Lighthouse informatics, which can be specific to a healthcare facility, public health department or collaborator, such as a pharmaceutical company, and its Acuitas Lighthouse Knowledgebase, a proprietary data warehouse in development to include genomic data matched with antibiotic susceptibility information for microbes and patient information from healthcare providers, in which the Company is beginning to collect and store MDRO information from a variety of sources for use with its Acuitas Rapid Test in development.
|
December 31, 2016
|
December 31, 2015
|
|||||||
Raw materials and supplies
|
$
|
479,479
|
$
|
362,526
|
||||
Work-in process
|
27,422
|
150,369
|
||||||
Finished goods
|
185,467
|
313,117
|
||||||
Total
|
$
|
692,368
|
$
|
826,012
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Laboratory and manufacturing equipment
|
$
|
3,785,133
|
$
|
3,734,044
|
||||
Office furniture and equipment
|
688,952
|
701,557
|
||||||
Computers and network equipment
|
1,472,144
|
1,563,177
|
||||||
Leasehold improvements
|
662,506
|
659,949
|
||||||
6,608,735
|
6,658,727
|
|||||||
Less accumulated depreciation
|
(5,808,012
|
)
|
(5,584,017
|
)
|
||||
Property and equipment, net
|
$
|
800,723
|
$
|
1,074,710
|
December 31, 2016
|
December 31, 2015
|
|||||||||||||||||||
Cost
|
Accumulated
Amortization
|
Net Balance
|
Accumulated
Amortization
|
Net Balance
|
||||||||||||||||
Trademarks and tradenames
|
$
|
461,000
|
$
|
(67,575
|
)
|
$
|
393,425
|
$
|
(21,471
|
)
|
$
|
439,529
|
||||||||
Developed technology
|
458,000
|
(95,898
|
)
|
362,102
|
(30,474
|
)
|
427,526
|
|||||||||||||
Customer relationships
|
1,094,000
|
(228,529
|
)
|
865,471
|
(72,241
|
)
|
1,021,759
|
|||||||||||||
$
|
2,013,000
|
$
|
(392,002
|
)
|
$
|
1,620,998
|
$
|
(124,186
|
)
|
$
|
1,888,814
|
Total purchase price - fair value of common stock issued
|
$
|
2,584,090
|
||
Fair value of tangible assets acquired:
|
||||
Cash
|
$
|
1,367,211
|
||
Receivables
|
536,406
|
|||
Inventory
|
881,273
|
|||
Property and equipment
|
245,479
|
|||
Other assets
|
359,587
|
|||
Fair value of identifiable intangible assets acquired:
|
||||
Customer relationships
|
1,094,000
|
|||
Developed technology
|
458,000
|
|||
Trademarks and tradenames
|
461,000
|
|||
Fair value of goodwill
|
600,814
|
|||
Deferred tax liabilities, net
|
129,095
|
|||
Fair value of liabilities assumed
|
3,290,585
|
|||
$
|
2,584,090
|
December 31,
|
||||
Unaudited pro forma results
|
2015
|
|||
Revenues
|
$
|
5,231,844
|
||
Net loss
|
$
|
(20,751,552
|
)
|
|
Net loss per share
|
$
|
(2.52
|
)
|
Shares
|
Amount
|
|||||||
Balance at December 31, 2014
|
3,999,864
|
$
|
4,564,899
|
|||||
2015 Accretion
|
—
|
243,762
|
||||||
2015 Conversions
|
(3,999,864
|
)
|
(4,808,661
|
)
|
||||
Balance at December 31, 2015
|
—
|
$
|
—
|
Year Ended December 31,
|
||||||||
2016
|
2015
|
|||||||
Cost of services
|
$
|
6,003
|
$
|
—
|
||||
Research and development
|
236,341
|
240,739
|
||||||
General and administrative
|
599,550
|
619,899
|
||||||
Sales and marketing
|
103,567
|
584,450
|
||||||
$
|
945,461
|
$
|
1,445,088
|
Number of
Options
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Life (in years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at January 1, 2015
|
404,272
|
9.3
|
$
|
—
|
||||||||||||
Granted
|
1,961,637
|
$
|
2.68
|
|||||||||||||
Exercised
|
(11,472
|
)
|
$
|
0.20
|
$
|
19,519
|
||||||||||
Forfeited
|
(193,657
|
)
|
$
|
0.55
|
||||||||||||
Outstanding at December 31, 2015
|
2,160,780
|
$
|
2.60
|
9.1
|
$
|
1,575,646
|
||||||||||
Granted
|
1,463,650
|
$
|
1.41
|
|||||||||||||
Exercised
|
(66,502
|
)
|
$
|
0.36
|
$
|
79,406
|
||||||||||
Forfeited
|
(571,687
|
)
|
$
|
3.99
|
||||||||||||
Expired
|
(8,581
|
)
|
$
|
8.49
|
||||||||||||
Outstanding at December 31, 2016
|
2,977,660
|
$
|
1.76
|
8.6
|
$
|
663,298
|
||||||||||
Vested and expected to vest
|
2,977,660
|
$
|
1.76
|
8.6
|
$
|
663,298
|
||||||||||
Exercisable at December 31, 2016
|
1,098,504
|
$
|
0.22
|
8.0
|
$
|
421,621
|
Year Ended December 31,
|
||||||||
2016
|
2015
|
|||||||
Annual dividend
|
—
|
—
|
||||||
Expected life (in years)
|
5.25 - 6.25
|
5.5 - 6.25
|
||||||
Risk free interest rate
|
1.2 - 2.2%
|
1.5 - 1.9%
|
||||||
Expected volatility
|
42.0 - 49.8%
|
47.7 - 65.0%
|
Outstanding at December 31,
|
||||||||||||||
Issuance
|
Exercise
Price
|
Expiration
|
2016
|
2015
|
||||||||||
August 2007
|
$
|
7.91
|
August 2017
|
8,921
|
8,921
|
|||||||||
March 2008
|
$
|
790.54
|
March 2018
|
46
|
46
|
|||||||||
November 2009
|
$
|
7.91
|
November 2019
|
6,674
|
6,674
|
|||||||||
January 2010
|
$
|
7.91
|
January 2020
|
6,674
|
6,674
|
|||||||||
March 2010
|
$
|
7.91
|
March 2020
|
1,277
|
1,277
|
|||||||||
November 2011
|
$
|
7.91
|
November 2021
|
5,213
|
5,213
|
|||||||||
December 2011
|
$
|
7.91
|
December 2021
|
664
|
664
|
|||||||||
March 2012
|
$
|
109.90
|
March 2019
|
4,125
|
4,125
|
|||||||||
February 2015
|
$
|
6.60
|
February 2025
|
225,011
|
225,011
|
|||||||||
May 2015
|
$
|
6.60
|
May 2020
|
3,457,750
|
3,457,750
|
|||||||||
May 2016
|
$
|
1.31
|
May 2021
|
4,739,348
|
—
|
|||||||||
June 2016
|
$
|
1.31
|
May 2021
|
2,050,821
|
—
|
|||||||||
10,506,524
|
3,716,355
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Deferred tax assets:
|
||||||||
NOL carryforward
|
$
|
60,357,220
|
$
|
38,797,762
|
||||
R&E credit carryforward
|
2,559,479
|
1,994,478
|
||||||
Share-based compensation
|
448,534
|
383,153
|
||||||
Inventory reserve
|
269,708
|
226,299
|
||||||
Depreciation
|
117,629
|
313,714
|
||||||
Accruals and other
|
333,126
|
495,640
|
||||||
Total deferred tax assets
|
64,085,696
|
42,211,046
|
||||||
Valuation allowance
|
(63,520,548
|
)
|
(41,554,045
|
)
|
||||
Deferred tax liabilities:
|
||||||||
Intangible assets
|
(565,148
|
)
|
(657,001
|
)
|
||||
Fixed assets
|
—
|
—
|
||||||
Net deferred tax liability
|
$
|
—
|
$
|
—
|
2016
|
2015
|
|||||||
Federal income tax benefit at statutory rates
|
34.0
|
%
|
34.0
|
%
|
||||
State income tax benefit, net of Federal benefit
|
6.5
|
%
|
3.3
|
%
|
||||
Change in valuation allowance
|
(37.3
|
)%
|
(32.1
|
)%
|
||||
Change in state tax rates and other
|
(3.2
|
)%
|
(4.5
|
)%
|
||||
0.0
|
%
|
0.7
|
%
|
Year ending December 31,
|
Capital
Leases
|
Operating
Leases
|
Total
|
|||||||||
2017
|
$
|
204,354
|
$
|
1,072,448
|
$
|
1,276,802
|
||||||
2018
|
113,337
|
1,205,263
|
1,318,600
|
|||||||||
2019
|
21,266
|
427,769
|
449,035
|
|||||||||
2020
|
21,266
|
427,769
|
449,035
|
|||||||||
2021 and thereafter
|
1,773
|
463,416
|
465,189
|
|||||||||
Total
|
$
|
361,996
|
$
|
3,596,665
|
$
|
3,958,661
|
||||||
Less: amount representing interest
|
(31,054
|
)
|
||||||||||
Net present value of future minimum lease payments
|
$
|
330,942
|
||||||||||
Current maturities
|
(184,399
|
)
|
||||||||||
Long-term maturities
|
$
|
146,543
|
2016
|
2015
|
|||||||
Laboratory and manufacturing equipment
|
$
|
560,829
|
$
|
803,500
|
||||
Office furniture and equipment
|
64,790
|
89,140
|
||||||
Computers and network equipment
|
24,350
|
153,693
|
||||||
Less accumulated amortization
|
(270,808
|
)
|
(402,066
|
)
|
||||
Capital lease assets, net
|
$
|
379,161
|
$
|
644,267
|
· |
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
|
Balance at
December 31,
2014
|
Established
in 2015
|
Change in
Fair Value
|
Reclassified
to Equity
|
Balance at
December 31,
2015
|
|||||||||||||||
Derivative warrant liability
|
$
|
—
|
$
|
72,333
|
$
|
647,342
|
$
|
(719,675
|
)
|
$
|
—
|
March 31, 2017
|
December 31, 2016
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
1,670,311
|
$
|
4,117,324
|
||||
Accounts receivable, net
|
379,246
|
542,420
|
||||||
Inventory, net
|
642,961
|
692,368
|
||||||
Prepaid expenses and other current assets
|
267,971
|
329,646
|
||||||
Total current assets
|
2,960,489
|
5,681,758
|
||||||
Property and equipment, net
|
743,521
|
800,723
|
||||||
Goodwill
|
600,814
|
600,814
|
||||||
Intangible assets, net
|
1,554,044
|
1,620,998
|
||||||
Other noncurrent assets
|
298,081
|
279,752
|
||||||
Total assets
|
$
|
6,156,949
|
$
|
8,984,045
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
2,017,202
|
$
|
2,232,563
|
||||
Accrued compensation and benefits
|
1,019,962
|
578,480
|
||||||
Accrued liabilities
|
883,105
|
1,215,283
|
||||||
Deferred revenue
|
31,233
|
37,397
|
||||||
Short-term notes payable
|
998,958
|
1,023,815
|
||||||
Current maturities of long-term capital lease obligation
|
170,297
|
184,399
|
||||||
Total current liabilities
|
5,120,757
|
5,271,937
|
||||||
Deferred rent
|
374,194
|
398,084
|
||||||
Long-term capital lease obligation and other noncurrent liabilities
|
107,940
|
146,543
|
||||||
Total liabilities
|
5,602,891
|
5,816,564
|
||||||
Commitments (Note 8)
|
||||||||
Stockholders' equity
|
||||||||
Common stock, $0.01 par value; 200,000,000 shares authorized; 27,377,490 and
25,304,270 shares issued and outstanding at March 31, 2017 and
December 31, 2016, respectively
|
273,775
|
253,042
|
||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued and outstanding at March 31, 2017 and December 31, 2016, respectively
|
—
|
—
|
||||||
Additional paid-in capital
|
138,546,915
|
136,199,382
|
||||||
Accumulated other comprehensive income
|
2,419
|
6,176
|
||||||
Accumulated deficit
|
(138,269,051
|
)
|
(133,291,119
|
)
|
||||
Total stockholders' equity
|
554,058
|
3,167,481
|
||||||
Total liabilities and stockholders' equity
|
$
|
6,156,949
|
$
|
8,984,045
|
Three Months Ended March 31,
|
||||||||
2017
|
2016
|
|||||||
Revenue
|
||||||||
Product sales
|
$
|
734,502
|
$
|
947,219
|
||||
Laboratory services
|
16,105
|
129,420
|
||||||
Collaboration revenue
|
21,164
|
—
|
||||||
Total revenue
|
771,771
|
1,076,639
|
||||||
Operating expenses
|
||||||||
Cost of products sold
|
424,950
|
345,967
|
||||||
Cost of services
|
100,233
|
315,709
|
||||||
Research and development
|
2,122,515
|
1,953,429
|
||||||
General and administrative
|
1,969,216
|
1,538,046
|
||||||
Sales and marketing
|
1,105,586
|
1,399,435
|
||||||
Total operating expenses
|
5,722,500
|
5,552,586
|
||||||
Operating loss
|
(4,950,729
|
)
|
(4,475,947
|
)
|
||||
Other expense
|
||||||||
Interest and other income
|
21
|
173
|
||||||
Interest expense
|
(29,844
|
)
|
(41,734
|
)
|
||||
Foreign currency transaction gains
|
2,620
|
11,328
|
||||||
Total other expense
|
(27,203
|
)
|
(30,233
|
)
|
||||
Loss before income taxes
|
(4,977,932
|
)
|
(4,506,180
|
)
|
||||
Provision for income taxes
|
—
|
—
|
||||||
Net loss
|
(4,977,932
|
)
|
(4,506,180
|
)
|
||||
Preferred stock dividends and beneficial conversion
|
—
|
—
|
||||||
Net loss available to common stockholders
|
$
|
(4,977,932
|
)
|
$
|
(4,506,180
|
)
|
||
Net loss per common share - basic and diluted
|
$
|
(0.19
|
)
|
$
|
(0.36
|
)
|
||
Weighted average shares outstanding - basic and diluted
|
26,079,461
|
12,568,941
|
||||||
Net loss
|
$
|
(4,977,932
|
)
|
$
|
(4,506,180
|
)
|
||
Other comprehensive loss - foreign currency translation
|
(3,757
|
)
|
(1,112
|
)
|
||||
Comprehensive loss
|
$
|
(4,981,689
|
)
|
$
|
(4,507,292
|
)
|
Three Months Ended March 31,
|
||||||||
2017
|
2016
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(4,977,932
|
)
|
$
|
(4,506,180
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||
Depreciation and amortization
|
159,863
|
168,440
|
||||||
Loss on disposal of property and equipment
|
—
|
6,068
|
||||||
Noncash interest expense
|
2,087
|
1,042
|
||||||
Share-based compensation
|
245,405
|
261,497
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
163,174
|
39,411
|
||||||
Inventory
|
49,407
|
(97,849
|
)
|
|||||
Other assets
|
43,346
|
199,182
|
||||||
Accounts payable
|
(215,361
|
)
|
(80,276
|
)
|
||||
Accrued compensation and other liabilities
|
75,683
|
211,979
|
||||||
Deferred revenue
|
(6,164
|
)
|
869
|
|||||
Net cash used in operating activities
|
(4,460,492
|
)
|
(3,795,817
|
)
|
||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment (net of proceeds on disposals)
|
(27,022
|
)
|
(1,644
|
)
|
||||
Net cash used in investing activities
|
(27,022
|
)
|
(1,644
|
)
|
||||
Cash flows from financing activities
|
||||||||
Proceeds from issuance of common stock, net of issuance costs
|
2,122,861
|
—
|
||||||
Proceeds from exercise of stock options and warrants
|
—
|
9,271
|
||||||
Payments on debt
|
(25,898
|
)
|
—
|
|||||
Payments on capital lease obligations
|
(52,706
|
)
|
(63,327
|
)
|
||||
Net cash provided by/(used in) financing activities
|
2,044,257
|
(54,056
|
)
|
|||||
Effects of exchange rates on cash
|
(3,756
|
)
|
5,254
|
|||||
Net decrease in cash and cash equivalents
|
(2,447,013
|
)
|
(3,846,263
|
)
|
||||
Cash and cash equivalents at beginning of period
|
4,117,324
|
7,814,220
|
||||||
Cash and cash equivalents at end of period
|
$
|
1,670,311
|
$
|
3,967,957
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for interest
|
$
|
10,702
|
$
|
13,021
|
||||
Supplemental disclosures of noncash investing and financing activities:
|
||||||||
Property and equipment purchased on credit
|
$
|
8,685
|
$
|
27,767
|
||||
Deferred and accrued financing costs
|
$
|
—
|
$
|
52,210
|
· |
Its Acuitas DNA tests, which provide rapid microbial identification, and antibiotic resistance gene information. These products include (i) the QuickFISH family of FDA-cleared and CE-marked diagnostics used to rapidly detect pathogens in positive blood cultures, (ii) the Acuitas MDRO Gene Test to detect, type, track, and trend antibiotic resistant organisms in real-time and (iii) the Acuitas Rapid Test in development. The Company is working to provide actionable, precise diagnostic information powered by pathogen surveillance data collected through hospital screening programs and a network of hospital and public health laboratories globally.
|
· |
Its Acuitas Lighthouse bioinformatics systems, which are cloud-based HIPAA compliant bioinformatics offerings that combine clinical lab test results with patient and hospital information and provide analytics to help manage MDROs in the hospital and patient care environment. These include its Acuitas Lighthouse informatics, which can be specific to a healthcare facility, public health department or collaborator, such as a pharmaceutical company, and its Acuitas Lighthouse Knowledgebase, a proprietary data warehouse in development to include genomic data matched with antibiotic susceptibility information for microbes and patient information from healthcare providers, in which the Company is beginning to collect and store MDRO information from a variety of sources for use with its Acuitas Rapid Test in development.
|
March 31, 2017
|
December 31, 2016
|
|||||||
Raw materials and supplies
|
$
|
410,945
|
$
|
479,479
|
||||
Work-in process
|
68,031
|
27,422
|
||||||
Finished goods
|
163,985
|
185,467
|
||||||
Total
|
$
|
642,961
|
$
|
692,368
|
March 31, 2017
|
December 31, 2016
|
|||||||||||||||||||
Cost
|
Accumulated
Amortization
|
Net Balance
|
Accumulated
Amortization
|
Net Balance
|
||||||||||||||||
Trademarks and tradenames
|
$
|
461,000
|
$
|
(79,101
|
)
|
$
|
381,899
|
$
|
(67,575
|
)
|
$
|
393,425
|
||||||||
Developed technology
|
458,000
|
(112,254
|
)
|
345,746
|
(95,898
|
)
|
362,102
|
|||||||||||||
Customer relationships
|
1,094,000
|
(267,601
|
)
|
826,399
|
(228,529
|
)
|
865,471
|
|||||||||||||
$
|
2,013,000
|
$
|
(458,956
|
)
|
$
|
1,554,044
|
$
|
(392,002
|
)
|
$
|
1,620,998
|
· |
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.
|
Three Months Ended March 31,
|
||||||||
2017
|
2016
|
|||||||
Cost of services
|
$
|
1,823
|
$
|
4,312
|
||||
Research and development
|
57,778
|
62,218
|
||||||
General and administrative
|
152,476
|
172,103
|
||||||
Sales and marketing
|
33,328
|
22,864
|
||||||
$
|
245,405
|
$
|
261,497
|
Outstanding at
|
||||||||||||||
Issuance
|
Exercise
Price
|
Expiration
|
March 31, 2017
|
December 31, 2016
|
||||||||||
August 2007
|
$
|
7.91
|
August 2017
|
8,921
|
8,921
|
|||||||||
March 2008
|
$
|
790.54
|
March 2018
|
46
|
46
|
|||||||||
November 2009
|
$
|
7.91
|
November 2019
|
6,674
|
6,674
|
|||||||||
January 2010
|
$
|
7.91
|
January 2020
|
6,674
|
6,674
|
|||||||||
March 2010
|
$
|
7.91
|
March 2020
|
1,277
|
1,277
|
|||||||||
November 2011
|
$
|
7.91
|
November 2021
|
5,213
|
5,213
|
|||||||||
December 2011
|
$
|
7.91
|
December 2021
|
664
|
664
|
|||||||||
March 2012
|
$
|
109.90
|
March 2019
|
4,125
|
4,125
|
|||||||||
February 2015
|
$
|
6.60
|
February 2025
|
225,011
|
225,011
|
|||||||||
May 2015
|
$
|
6.60
|
May 2020
|
3,457,750
|
3,457,750
|
|||||||||
May 2016
|
$
|
1.31
|
May 2021
|
4,739,348
|
4,739,348
|
|||||||||
June 2016
|
$
|
1.31
|
May 2021
|
2,050,821
|
2,050,821
|
|||||||||
10,506,524
|
10,506,524
|
SEC registration fee
|
$
|
3,904,38
|
||
Legal fees and expenses
|
$
|
350,000.00
|
||
Accounting fees and expenses
|
$
|
250,000.00
|
||
FINRA filing fee
|
$
|
3,903.13
|
||
Printer costs and expenses
|
$
|
4,692.49
|
||
Total
|
$
|
612,500.00
|
OPGEN, INC.
|
|
By: |
/s/ Evan Jones
|
Evan Jones
Chief Executive Officer
|
Signature
|
Title
|
Date
|
/s/ Evan Jones
|
Chief Executive Officer and Director
|
July 11, 2017
|
Evan Jones
|
(principal executive officer)
|
|
/s/ Timothy C. Dec
|
Chief Financial Officer
|
July 11, 2017
|
Timothy C. Dec
|
(principal financial officer and principal accounting officer)
|
|
*
|
Director
|
July 11, 2017
|
Harry J. D'Andrea
|
||
*
|
Director
|
July 11 2017
|
Timothy J.R. Harris
|
||
|
Director
|
|
Tina S. Nova
|
||
*
|
Director
|
July 11, 2017
|
David M. Rubin
|
||
*
|
Director
|
July 11, 2017
|
Misti Ushio
|
||
* /s/ Timothy C. Dec
|
||
Timothy C. Dec, as attorney in fact | ||
Exhibit
Number
|
Identification of Exhibit
|
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on May 13, 2015)
|
3.2
|
Certificate of Correction to Amended and Restated Certificate of Incorporation of OpGen, Inc., filed June 6, 2016 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on June 6, 2016)
|
3.3
|
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of Form S-1, filed on March 3, 2015)
|
3.4
|
Form of Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report of Form 8-K/A, filed on June 28, 2017) |
4.1
|
Form of Common Stock Certificate of the Registrant (
incorporated by reference to Exhibit 4.1 to the Registrant’s Form S-1/A, File No. 333-202478, filed on April 28, 2015
)
|
4.2 |
Form of Common Stock Warrant (to be issued to jVen Capital, LLC and Merck Global Health Innovation Fund) (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K/A, filed on July 10, 2017)
|
4.5 * |
|
|
|
10.1
|
Lease Agreement, dated as of June 30, 2008, between the Registrant and ARE-708 Quince Orchard, LLC (the “Landlord”) (incorporated by reference to Exhibit 10.1 to the Registrant’s Form S- 1/A, File No. 333-202478, filed on March 3, 2015)
|
10.1.1
|
First Amendment to Lease, dated as of April 4, 2011, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.1.1 to the Registrant’s Form S-1, File No. 333-202478, filed on March 3, 2015)
|
10.1.2
|
Second Amendment to Lease, dated as of August 15, 2012, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.1.2 to the Registrant’s Form S-1, File No. 333- 202478, filed on March 3, 2015)
|
10.1.3
|
Third Amendment to Lease, dated as of December 30, 2013, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.1.3 to the Registrant’s Form S-1, File No. 333- 202478, filed on March 3, 2015)
|
10.1.4
|
Fourth Amendment to Lease, dated as of March 21, 2014, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.4 to the Registrant’s Form S-1, File No. 333-202478, filed on March 3, 2015)
|
10.1.5
|
Fifth Amendment to Lease Agreement, dated as of March 20, 2015, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.1.5 to the Registrant’s Form S-1/A, File No. 333-202478, filed on March 20, 2015)
|
10.1.6
|
Sixth Amendment to Lease Agreement, dated as of April 30, 2015, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.1.6 to the Registrant’s Form S-1/A, File No. 333-202478, filed on May 1, 2015)
|
10.1.7
|
Seventh Amendment to Lease Agreement, dated as of June 30, 2015, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on July 7, 2015)
|
Exhibit
Number
|
Identification of Exhibit
|
|
10.1.8
|
Eighth Amendment to Lease Agreement, dated September 8, 2015, between the Registrant and the Landlord (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q, filed on November 13, 2015)
|
|
10.2
|
Lease Extension #6, dated October 14, 2016, by and between the Registrant and Cummings Properties, LLC(related to AdvanDx facility) (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, filed on November 14, 2016)
|
|
10.3 |
Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (incorporated by reference to Exhibit 10.2 to the Registrant’s Form S-1, File No. 333-202478, filed on March 3, 2015)
|
|
10.4
|
2015 Equity Incentive Plan, as amended and restated on February 22, 2017 (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K, filed on March 24, 2017)
|
|
10.5 !
|
Employment Agreement, dated April 17, 2015, by and between the Registrant and Timothy C. Dec (incorporated by reference to Exhibit 10.18 to the Registrant’s Form S-1/A, File No. 333- 202478, filed on April 17, 2015)
|
|
10.6 !
|
Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.16 to the Registrant’s Form S-1/A, File No. 333-202478, filed on April 6, 2015)
|
|
10.7
|
Warrant Agreement, dated as of May 8, 2015, between the Registrant and Philadelphia Stock Transfer, Inc., as warrant agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K, filed on May 13, 2015)
|
|
10.8.1 !
|
Form of Stock Option Agreement under the 2015 Equity Incentive Plan for employees and consultants (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K, filed on March 24, 2017)
|
|
10.8.2 !
|
Form of Stock Option Agreement under the 2015 Equity Incentive Plan for non-employee directors (initial grant) (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K, filed on March 24, 2017)
|
|
10.8.3 !
|
Form of Stock Option Agreement under the 2015 Equity Incentive Plan for non-employee directors (annual grant) (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K, filed on March 24, 2017)
|
|
10.9 !
|
Form of RSU Award Agreement under 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K, filed March 24, 2017)
|
|
10.10
|
Common Stock and Note Purchase Agreement, dated as of July 14, 2015, between the Registrant and Merck Global Health Innovation Fund, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on July 16, 2015)
|
|
10.11
|
Common Stock and Note Purchase Agreement, dated as of July 14, 2015, between the Registrant and Merck Global Health Innovation Fund, LLC (incorporated by reference to Exhibit 10.1 of Current Report on Form 8-K, filed on July 16, 2015)
|
|
10.12
|
Third Amended and Restated Investors’ Rights Agreement, dated as of December 18, 2013, among the Registrant and, certain investors (registration rights provisions) (incorporated by reference to Exhibit 4.2 to the Registrant’s Form S-1, File No. 333-202478, filed on March 3, 2015)
|
|
10.13
|
Registration Rights Agreement, dated as of July 14, 2015, among the Registrant, Merck Global Health Innovation Fund, LLC, SLS Invest AB and LD Pensions (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on July 16, 2015)
|
|
10.14
|
Letter Agreement, dated July 12, 2015, between the Registrant and Fluidigm Corporation (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q, filed on August 14, 2015)
|
|
10.15
|
Securities Purchase Agreement, dated May 12, 2016, by and between the Registrant the Purchasers party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on May 17, 2016)
|
|
10.16
|
Amended and Restated Securities Purchase Agreement, dated May 18, 2016, by and between the Registrant and the Purchasers party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on May 20, 2016)
|
Exhibit
Number
|
Identification of Exhibit
|
|
10.17 !
|
Stock Option Award Agreement, dated April 28, 2016, by and between the Registrant and Evan Jones (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q, filed on August 11, 2016)
|
|
10.18 !
|
Confidential Separation Agreement and General Release, dated September 1, 2016, by and between the Registrant and Kevin Krenitsky, M.D. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on September 9, 2016)
|
|
10.19
|
Common Stock Sales Agreement, dated September 13, 2016, by and between the Registrant and Cowen and Company, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on September 14, 2016)
|
|
10.20
|
Amended & Restated Note Purchase Agreement, dated July 10, 2017, by and between the Registrant and jVen Capital, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K/A, filed on July 10, 2017)
|
|
10.21
|
Form of Secured Convertible Promissory Note #1 to be issued to jVen Capital, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A, filed on July 10, 2017)
|
|
10.22
|
Form of Secured Promissory Note #2 and #3 to be issued to jVen Capital, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K/A, filed on July 10, 2017)
|
|
10.23
|
Amended and Restated Registration Rights Agreement, dated June 6, 2017, by and between the Registrant and the Investors party thereto (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed on June 6, 2017)
|
|
10.24
|
Second Amended and Restated Senior Secured Convertible Promissory Note, dated June 28, 2017, by and between the Registrant and Merck Global Health Innovation Fund, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Current Report on Form 8-K/A, filed on June 28, 2017)
|
|
10.24 ±
|
Supply Agreement, dated June 15, 2017, by and between the Registrant and Life Technologies Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on June 19, 2017)
|
|
21.1 **
|
Subsidiaries of the Registrant
|
|
|
||
|
||
24.1 **
|
Power of Attorney (on signature page)
|
|
101* |
Interactive data files pursuant to Rule 405 of Regulation S-T; (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Stockholders’ Equity (Deficit), (iv) Statements of Cash Flows and (v) the Notes to the Financial Statements
|
* |
Filed herewith.
|
** |
Previously filed
|
! |
Denotes management compensation plan or contract
|
± |
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 June 19, 2017. Such provisions have been filed separately with the Commission.
|
OPGEN, INC.
|
Address for Notice:
|
By:__________________________________________
Name:
Title:
With a copy to (which shall not constitute notice):
|
Fax:
E-mail:
|
Ballard Spahr LLP
1735 Market Street, 51 st Floor Philadelphia, PA 19103 Attn: Mary J. Mullany |
1. |
Cash Fee
. The Company shall pay to Wainwright a cash fee, or as to an underwritten Offering an underwriter discount, equal to
6.5
% of the aggregate gross proceeds raised in
the Offering; provided, that, in no event shall any cash fee be paid to Wainwright in connection with sales of Securities to jVen Capital, LLC, Merck & Co., Inc., any Chinese party introduced to the Company by M.S.Q. Ventures Inc., International Finance Corporation, or any of their respective affiliates
.
|
2. |
Warrant Coverage
. The Company shall issue to Wainwright or its designees at each Closing, warrants (the “
Wainwright Warrants
”) to purchase that number of shares of common stock of the Company equal to
5.0
% of the aggregate number of shares of common stock placed in the Offering (and if the Offering includes a “greenshoe” or “additional investment” option component, such number of shares of common stock underlying such additional option component, with the Wainwright Warrants issuable upon the exercise of such option). If the Securities included in the Offering are convertible, the Wainwright Warrants shall be determined by dividing the gross proceeds raised in such Offering divided by the Offering Price (as defined hereunder). The Wainwright Warrants shall have the same terms as the warrants issued to investors in the applicable Offering, except that such Wainwright Warrants shall have an exercise price equal to 125% of the offering price per share (or unit, if applicable) in the applicable Offering and if such offering price is not available, the market price of the common stock on the date the Offering is commenced (such price, the “
Offering Price
”). If no warrants are issued to investors in the Offering, the Wainwright Warrants shall be in a customary form reasonably acceptable to Wainwright, have a term of five (5) years and an exercise price equal to 125% of the Offering Price.
|
3. |
Expense Allowance
. Out of the proceeds of each Closing, the Company also agrees to pay Wainwright (a) a management fee equal to 1.0% of the gross proceeds raised in the Offering
provided, that, in no event shall any management fee be paid to Wainwright in connection with sales of Securities to jVen Capital, LLC, Merck & Co., Inc., any Chinese party introduced to the Company by M.S.Q. Ventures Inc., International Finance Corporation, or any of their respective affiliates
; (b) $50,000 for non-accountable expenses; (c) up to $100,000 for fees and expenses of legal counsel; plus the additional reimbursable amount payable by the Company pursuant to Paragraph D.3 hereunder; provided, however, that such reimbursement amount in no way limits or impairs the indemnification and contribution provisions of this Agreement.
|
4. |
[Reserved.]
|
5. |
Right of First Refusal
. If, from the date hereof until the 12-month anniversary following consummation of the Offering, the Company or any of its subsidiaries (a) decides to finance or refinance any indebtedness using a manager or agent, Wainwright (or any affiliate designated by Wainwright) shall have the right to act as a joint book-runner, a manager, a placement agent or an agent with respect to such financing or refinancing
for the same economics as the other joint book-runner, manager, placement agents or agent; provided, that Wainwright shall be entitled to at least 33% of the economics of such financing (to be increased to 50% of the economics of such financing if neither Cowen nor Leerink participates in such financings)
; or (b) decides to raise funds by means of a public offering or a private placement of equity or debt securities using an underwriter or placement agent
in each case other than through (i) its existing “at the market” program; (ii) any transaction with a Chinese party introduced to the Company by M.S.Q. Ventures Inc.
; or (iii) any transaction with the International Finance Corporation, Wainwright (or any affiliate designated by Wainwright) shall have the right to act as
a joint
book-running manager or a placement agent for such financing
, for the same economics as the other joint bookrunning manager or placement agents; provided, that Wainwright shall be entitled to at least 33% of the economics of such financing (to be increased to 50% of the economics of such financing if neither Cowen nor Leerink participates in such financings). The Company and Wainwright will enter into a new engagement letter with respect to such financing having terms customary for transactions of similar type and size. For the avoidance of doubt, in no event shall Wainwright be entitled to any right of first refusal under the terms of this Agreement in the event that the Offering is not consummated during the Term (as defined below).
If Wainwright or one of its affiliates decides to accept any such engagement, the agreement governing such engagement will contain, among other things, provisions for customary fees for transactions of similar size and nature and the provisions of this Agreement, including indemnification, which are appropriate to such a transaction.
Wainwright hereby acknowledges that (i) the Company has a pre-existing obligation pursuant to (i) a letter agreement, dated February 26, 2016 as amended by letter dated May 10, 2016 (the “Cowen Engagement Letter”), between the Company and Cowen, and (ii) letter agreement, dated as of March 3, 2016, as amended by letter dated May 10, 2016 (the “Leerink Engagement Letter”), by and between Leerink Partners LLC (“Leerink”) and the Company, to provide each of Cowen and Leerink with a right of first refusal to serve as the Company’s joint bookrunning managing underwriter underwriter in connection with any public offering conducted by the Company (other than an “at the market” offering) until February 26, 2018 in the case of Cowen and March 3, 2018 in the case of Leerink and (ii) the Company will seek a waiver of the right of first refusal from each of Cowen and Leerink pursuant to each respective engagement letter, prior to filing of a registration statement on Form S-1 in connection with the Offering. Notwithstanding anything in this Section to the contrary, the Company’s obligation to offer a right of first refusal to Wainwright is in addition to the Company’s obligation to offer each of Cowen and Leerink the right of first refusal provided in the Cowen Engagement Letter and the Leerink Engagement Letter, respectively. Notwithstanding anything herein to the contrary, Wainwright shall not be entitled to receive a tail fee as provided under clause (4) above with respect to any investor that participates in an offering in connection with which Wainwright serves as a joint book-running manager or placement agent pursuant to the right of first refusal provided in this clause (5).
|
1. |
Underwritten Offering
. If an Offering is an underwritten Offering, the Company and Wainwright shall enter into a customary underwriting agreement in form and substance satisfactory to Wainwright and its counsel.
|
2. |
Best Efforts Offering
. If the Offering is on a best efforts basis, the sale of Securities to the investors in the Offering will be evidenced by a purchase agreement (“
Purchase Agreement
”) between the Company and such investors in a form reasonably satisfactory to the Company and Wainwright. Wainwright shall be a third party beneficiary with respect to the representations and warranties included in the Purchase Agreement. Prior to the signing of any Purchase Agreement, officers of the Company with responsibility for financial affairs will be available to answer inquiries from prospective investors.
|
3. |
Escrow and Settlement
. In respect of the Offering, the Company and Wainwright shall enter into an escrow agreement with a third party escrow agent, which may also be Wainwright’s clearing agent, pursuant to which Wainwright’s compensation and expenses shall be paid from the gross proceeds of the Securities sold. If the Offering is settled in whole or in part via delivery versus payment (“
DVP
”), Wainwright shall arrange for its clearing agent to provide the funds to facilitate such settlement. The Company shall bear the cost of the escrow agent and shall reimburse Wainwright for the actual out-of-pocket cost of such clearing agent settlement and financing, if any, which cost shall not exceed $10,000.
|
4. |
FINRA Amendments
. Notwithstanding anything herein to the contrary, in the event that Wainwright determines that any of the terms provided for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to amend this Agreement (or include such revisions in the final underwriting agreement) in writing upon the request of Wainwright to comply with any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company than are reflected in this Agreement.
|
1. |
In connection with the Company’s engagement of Wainwright as Offering agent, the Company hereby agrees to indemnify and hold harmless Wainwright and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees of any of the foregoing (collectively the “
Indemnified Persons
”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively a “
Claim
”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s engagement of Wainwright, or (B) otherwise relate to or arise out of Wainwright’s activities on the Company’s behalf under Wainwright’s engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified Person is a party
; provided, that the Company has received a written undertaking of such Indemnified Person to repay to the Company the amount so advanced if it shall be determined by a court of competent jurisdiction in a final judgment that has become non-appealable that such Indemnified Person was not entitled to indemnification hereunder
. The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted from the fraud, gross negligence or willful misconduct by any person seeking indemnification for such Claim. The Company further agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of Wainwright except for any Claim incurred by the Company as a result of such Indemnified Person’s
fraud,
gross negligence or willful misconduct.
|
2. |
The Company further agrees that it will not, without the prior written consent of Wainwright, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.
|
3. |
Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company so elects or is requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel. In the event, however, that legal counsel to such Indemnified Person reasonably determines that having common counsel would present such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons different from or in addition to those available to the Company, then such Indemnified Person may employ its own separate counsel to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof. In addition, with respect to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her or its own counsel therefor at his, her or its own expense.
|
4. |
The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason then (whether or not Wainwright is the Indemnified Person), the Company and Wainwright shall contribute to the Claim for which such indemnity is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and Wainwright on the other, in connection with Wainwright’s engagement referred to above, subject to the limitation that in no event shall the amount of Wainwright’s contribution to such Claim exceed the amount of fees actually received by Wainwright from the Company pursuant to Wainwright’s engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and Wainwright on the other, with respect to Wainwright’s engagement shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or received by the Company pursuant to the applicable Offering (whether or not consummated) for which Wainwright is engaged to render services bears to (b) the fee paid or proposed to be paid to Wainwright in connection with such engagement
. Notwithstanding the provisions of this paragraph F.4., no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) if the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation
.
|
5. |
The Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not the Company is at fault in any way.
|
Very truly yours,
H.C. WAINWRIGHT & CO., LLC
|
|||
|
By:
|
/s/ Edward D. Silvera | |
Name: Edward D. Silvera | |||
Title: COO | |||
OPGEN, INC. | ||
By:
|
/s/ Timothy C. Dec | |
Name: Timothy C. Dec | ||
Title: Chief Financial Officer | ||
Warrant Shares: _______
|
Issue Date: _________, 2017
|
d) |
Mechanics of Exercise
.
|
i. |
Delivery of Warrant Shares Upon Exercise
. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“
DWAC
”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “
Warrant Share Delivery Date
”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) three Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “
Standard Settlement Period
” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered by 12:00 p.m. (New York City time) on the Initial Exercise Date, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date.
|
OPGEN, INC.
|
By:__________________________________________
Name:
Title:
|
Name:
|
______________________________________ |
(Please Print)
|
|
Address:
|
|
Phone Number:
Email Address:
|
(Please Print)
______________________________________
______________________________________
|
Dated: _______________ __, ______
|
|
Holder’s Signature: ______________________
|
|
Holder’s Address: _______________________
|
Warrant Shares: _______
|
Issue Date: _________, 2017
|
d) |
Mechanics of Exercise
.
|
OPGEN, INC.
|
By:__________________________________________
Name:
Title:
|
Name:
|
______________________________________ |
(Please Print)
|
|
Address:
|
|
Phone Number:
Email Address:
|
(Please Print)
______________________________________
______________________________________
|
Dated: _______________ __, ______
|
|
Holder’s Signature: ______________________
|
|
Holder’s Address: _______________________
|
Warrant Shares: _______
|
Issue Date: _________, 2017
|
d) |
Mechanics of Exercise
.
|
i. |
Delivery of Warrant Shares Upon Exercise
. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“
DWAC
”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner of sale limitations pursuant to Rule 144, or (C) if applicable and permitted under 2(c), this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “
Warrant Share Delivery Date
”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) three Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “
Standard Settlement Period
” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
|
i. |
by operation of law or by reason of reorganization of the Company;
|
ii. |
to any FINRA member firm participating in the offering and the officers and partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;
|
iii. |
if the aggregate amount of securities of the Company held by the underwriter and related persons do not exceed 1% of the securities being offered;
|
iv. |
that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or
|
v. |
the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.
|
OPGEN, INC.
|
By:__________________________________________
Name:
Title:
|
Name:
|
______________________________________ |
(Please Print)
|
|
Address:
|
|
Phone Number:
Email Address:
|
(Please Print)
______________________________________
______________________________________
|
Dated: _______________ __, ______
|
|
Holder’s Signature: ______________________
|
|
Holder’s Address: _______________________
|
OpGen, Inc.
708 Quince Orchard Road
Suite 205
Gaithersburg, Maryland 20878
|