By Susanna Moon
Chicago, April 17 – Great Basin Scientific, Inc. said it exchanged $20,320,613 of its 2016 senior secured convertible notes and $4,974,000 of its series F preferred stock under improved terms with holders.
In exchange, the company issued an equal amount of 8% series A senior secured convertible notes due April 17, 2020, according to an 8-K filing with the Securities and Exchange Commission.
On Friday, the company also exchanged $6.2 principal amount of 8% series B notes for an equal principal amount of new 2017 series B senior secured convertible notes, and $10 million principal amount of series B notes was canceled in exchange for the return of $10 million of restricted cash to the holder.
The exchanged notes have a fixed conversion price of $3.00 per share, which is a 245% premium to the company’s closing price of $0.87 per share April 13.
The conversion price of the notes is permanently fixed with no pricing resets, and noteholders are restricted from converting their notes into common stock for six months from the exchange date, according to a company notice.
The new series A notes are only being issued in one form in lieu of the series A-1A notes, series A-1B notes, series A-2A notes and series A-2B notes as originally described.
The principal changes to the new series B notes also include the following:
• $6.2 million principal of new series B notes remains outstanding.
• The new series B notes may be mandatorily converted into shares of the company’s common stock at any time at the company’s option; and
• Proceeds of any mandatory conversion will be kept by the company.
The company also canceled all of the existing warrants for no additional amount.
As long as any series A notes or series B notes remain outstanding, the company agreed not to complete any variable-rate transaction.
Along with the exchange, the noteholders also agreed to reduce the size of the series B notes and the associated restricted cash to $6.2 million from $16.2 million, further trimming the company’s outstanding liabilities by $10 million.
As of the exchange, the company has 1,570,892 shares of common stock outstanding.
“Eliminating the potential price resets and permanently setting the conversion price on the A notes at a price three times the existing floor price significantly reduces the number of shares issuable upon conversion of the notes,” Jeff Rona, chief financial officer of Great Basin Scientific, said in the press release.
“It also eliminates our derivative liability which caused us to have negative stockholder equity and was a key contributor to our delisting from Nasdaq last year. We believe these changes will provide a more easily understandable capital structure where investors may better evaluate the value of our common stock and should enable the company to attract more conventional debt and more effectively pursue other strategic initiatives to fund its growth.”
Added Ryan Ashton, co-founder and chief executive officer of Great Basin, “With our capital structure substantially improved, we look forward to executing on our growth plan for 2017. With five assays in our menu and a sixth test awaiting clearance from the FDA, we are seeing strong demand for the Great Basin system from our target market of small to medium hospitals who need a powerful, cost-effective and easy to use molecular system to provide better care for their patients.”
The company announced the restructuring on April 10.
Great Basin is a molecular diagnostics company based in Salt Lake City.
New Issue
| Issuer: | Great Basin Scientific, Inc.
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| Issue: | Series A, B senior secured convertible notes
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| Amount: | $31,494,613, or $25,294,613 of series A convertibles and $6.2 million series B convertibles
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| Maturity: | April 17, 2020
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| Coupon: | 8%
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| Conversion price: | $3.00 beginning Oct. 17, 2017
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| Conversion premium: | 245%
|
| Redemption premium: | 100%, reduced from 110%
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| Stock ticker: | Nasdaq: GBSN
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| Stock price: | $0.87 per share at closing on April 13
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