GREAT BASIN SCIENT COM USD0.0001(POST REV SPLT (OTCMKTS:GBSN), began trading under the symbol (GBSN) and rallied in recent trading upon the switch back to the legacy symbol. This is common for companies to move back to the previous symbol. This means they exit a bankruptcy proceeding and drop a letter at the end. GBSN shareholders applauded the move which was telegraphed last quarter through press that explained what the company was doing internally to emerge from chapter 11 with a restructuring.
This event normally lights a fire under volume and investor interest. Great Basin followed this playbook recently with a small rally.
GREAT BASIN SCIENT COM USD0.0001(POST REV SPLT (OTCMKTS:GBSN) a molecular diagnostics company, announced recently that it has improved the terms and completed the exchange of securities with the holders of its 2016 Senior Secured Convertible notes and Series F Preferred stock into Series A Senior Secured Convertible Notes. The Company also improved the terms and exchanged its Series B Senior Secured Convertible Notes into new Series B Senior Secured Convertible Notes.
The Series A Notes and Series B Notes have a fixed conversion price of $3.00 per share, which represents a conversion price premium of 245% above the closing price of $0.87 per share of the Company’s common stock on Thursday, April 13, 2017, and a maturity date of April 17, 2020. The conversion price of the notes is permanently fixed, with no future price resets, and noteholders are restricted from converting their notes into common stock for six months from the date of the note exchange.
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In conjunction with the foregoing exchange, the noteholders also agreed to reduce the size of the Series B Notes, and the associated restricted cash, from $16.2 million to $6.2 million, further reducing the Company’s outstanding liabilities by $10.0 million.
“We are pleased that our noteholders have agreed to substantially simplify our convertible securities,” said Jeff Rona, chief financial officer of Great Basin Scientific. “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. 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.”
The Series A Notes are effective immediately and replace all 2016 senior convertible notes and Series F Preferred Shares, which are now extinguished. As of the date of the note exchange, the Company has 1,570,892, shares of common stock issued and outstanding.
“Finalizing this exchange on such favorable terms is a significant step forward for Great Basin and its shareholders,” said 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.”
On April 17, 2017, Great Basin Scientific filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission describing the transaction documents for this financial restructuring transaction and has attached those transaction documents as exhibits to the Current Report. Investors and shareholders are encouraged to review the Current Report in its entirety, including its exhibits. The information in this press release is qualified in its entirety by the contents of the Current Report, including its exhibits.
In trading today Great Basin Scientific, Inc. (OTCMKTS:GBSN) we identify the rally as based on moving back to the elevated exchange which will allow larger investors to participate and also gives smaller players confidence the company is back in good stead. The company’s vision is to make molecular diagnostic testing so simple and cost-effective that every patient will be tested for every serious infection, reducing misdiagnoses, and significantly limiting the spread of infectious disease, which is a noble investment no matter what symbol they trade under. For more news on GBSN and other fast-moving penny stocks, please subscribe to OracleDispatch.com below.