OpGen, Inc. (NASDAQ:OPGN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On May 31, 2017, OpGen, Inc. (the “Company”) entered into a
Note Purchase Agreement with jVen Capital, LLC, a Delaware
limited liability company (“jVen Capital”), under which jVen
Capital agreed to lend bridge financing in an aggregate principal
amount of up to $1,500,000 to the Company in the form of three
$500,000 secured convertible promissory notes (the “Note
Purchase Agreement”). The disclosure set forth below in Item
3.02 of this Current Report on Form 8-K relating to the Note
Purchase Agreement and the transactions contemplated thereby is
hereby incorporated into this item by reference.
Note Purchase Agreement with jVen Capital, LLC, a Delaware
limited liability company (“jVen Capital”), under which jVen
Capital agreed to lend bridge financing in an aggregate principal
amount of up to $1,500,000 to the Company in the form of three
$500,000 secured convertible promissory notes (the “Note
Purchase Agreement”). The disclosure set forth below in Item
3.02 of this Current Report on Form 8-K relating to the Note
Purchase Agreement and the transactions contemplated thereby is
hereby incorporated into this item by reference.
jVen Capital is an affiliate of Evan Jones, the Company’s
Chairman of the Board and Chief Executive Officer. The
transactions contemplated by the Note Purchase Agreement, and the
entry into the Note Purchase Agreement and the related documents
were approved by the independent members of the Company’s Board
of Directors, without Mr. Jones’ present. In addition, David
Rubin, Ph.D., a member of the Board of Directors of the Company
and affiliated with Merck Global Health Innovation Fund, LLC, a
Delaware limited liability company and a shareholder of the
Company (“MGHIF”) disclosed his affiliation with MGHIF to the
independent members of the Board and recused himself from
approval of any transactions with MGHIF contemplated under the
Note Purchase Agreement.
Chairman of the Board and Chief Executive Officer. The
transactions contemplated by the Note Purchase Agreement, and the
entry into the Note Purchase Agreement and the related documents
were approved by the independent members of the Company’s Board
of Directors, without Mr. Jones’ present. In addition, David
Rubin, Ph.D., a member of the Board of Directors of the Company
and affiliated with Merck Global Health Innovation Fund, LLC, a
Delaware limited liability company and a shareholder of the
Company (“MGHIF”) disclosed his affiliation with MGHIF to the
independent members of the Board and recused himself from
approval of any transactions with MGHIF contemplated under the
Note Purchase Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The descriptions of the Bridge Financing Notes and the AR MGHIF
Note in Section 3.02 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Note in Section 3.02 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
Note Purchase Agreement
On May 31, 2017, the Company entered into a Note Purchase
Agreement with jVen Capital, under which jVen Capital agreed to
lend bridge financing in an aggregate principal amount of up to
$1,500,000 to the Company in the form of three $500,000 secured
convertible promissory notes. The principal terms of the Bridge
Financing Notes to be provided under the Note Purchase Agreement
are:
Agreement with jVen Capital, under which jVen Capital agreed to
lend bridge financing in an aggregate principal amount of up to
$1,500,000 to the Company in the form of three $500,000 secured
convertible promissory notes. The principal terms of the Bridge
Financing Notes to be provided under the Note Purchase Agreement
are:
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the Company may access the bridge financing facility by
providing five business days’ notice to jVen Capital to receive financing in up to three $500,000 increments through the issuance of secured convertible promissory notes (each, a “Bridge Financing Note” and collectively, the “Bridge Financing Notes”); |
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each Bridge Financing Note, when issued, will carry an
interest rate of 10% per annum (increased to 15% in an event of default), provide for the issuance of warrants to purchase common stock equal to 10% of the principal balance of such Bridge Financing Note, and entitle the holder to convert the principal and interest of such Bridge Financing Note into shares of common stock and warrants to be sold in a “qualified financing” (offering of debt or equity securities with net proceeds of $5 million or more to the Company) at a discount of 10% of the offering price in the qualified financing; |
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a maturity date of September 30, 2017, when all principal
and interest will be due on any outstanding Bridge Financing Notes; provided, that if a qualified financing occurs prior to September 30, 2017, the maturity date will be accelerated to a date that is five business days after the qualified financing closes, and if the Company does not complete a qualified financing by September 30, 2017, but is working on a transaction, the maturity date can be extended at the option of jVen Capital, but not beyond December 31, 2017; |
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the Bridge Financing Notes are secured, to security
agreements, by all of the Company’s assets, but such liens are subordinate to the existing first priority security interest of MGHIF related to the July 2015 $1,000,000 promissory note by the Company and payable to MGHIF (the “MGHIF Note”); and |
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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 or enters into a bankruptcy proceeding, the then-outstanding Bridge Financing Notes would acquire a two times liquidation preference for unpaid principal and interest. jVen Capital would then have the option to convert the Bridge Financing Notes to 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. |
A condition to the issuance of any Bridge Financing Notes and the
Company receiving the financing evidenced thereby, is an
extension of the maturity date of the MGHIF Note from July 14,
2017 to July 14, 2018. To receive MGHIF’s consent to such
extension, on June 6, 2017, the Company amended and restated the
terms of the MGHIF Note to: (i) increase the interest rate to
10%; (ii) issue warrants to purchase shares of common stock to
MGHIF equal to ten percent of the principal and accrued interest
of the MGHIF Note at the time the amended and restated senior
secured convertible promissory note (the “AR MGHIF Note”) was
issued; and (iii) provide for conversion of the AR MGHIF Note
upon maturity, at MGHIF’s option, to common shares, at a
discount of 10% of the then current market price of the
Company’s shares.
Company receiving the financing evidenced thereby, is an
extension of the maturity date of the MGHIF Note from July 14,
2017 to July 14, 2018. To receive MGHIF’s consent to such
extension, on June 6, 2017, the Company amended and restated the
terms of the MGHIF Note to: (i) increase the interest rate to
10%; (ii) issue warrants to purchase shares of common stock to
MGHIF equal to ten percent of the principal and accrued interest
of the MGHIF Note at the time the amended and restated senior
secured convertible promissory note (the “AR MGHIF Note”) was
issued; and (iii) provide for conversion of the AR MGHIF Note
upon maturity, at MGHIF’s option, to common shares, at a
discount of 10% of the then current market price of the
Company’s shares.
The Bridge Financing Notes are secured, to security agreements,
by all of the Company’s assets, but such liens are subordinate
to the liens securing the AR MGHIF Note unless the Company
liquidates or enters a bankruptcy proceeding; in such events
MGHIF and jVen Capital would have equal secured status and the
maturity date on all then-outstanding Bridge Financing Notes and
the AR MGHIF Note will accelerate. The Company, its subsidiary
AdvanDx, Inc., jVen Capital and MGHIF entered into an
Intercreditor Agreement, dated June 6, 2017, to set forth these
provisions.
by all of the Company’s assets, but such liens are subordinate
to the liens securing the AR MGHIF Note unless the Company
liquidates or enters a bankruptcy proceeding; in such events
MGHIF and jVen Capital would have equal secured status and the
maturity date on all then-outstanding Bridge Financing Notes and
the AR MGHIF Note will accelerate. The Company, its subsidiary
AdvanDx, Inc., jVen Capital and MGHIF entered into an
Intercreditor Agreement, dated June 6, 2017, to set forth these
provisions.
Warrants
As part of the transactions contemplated by the Note Purchase
Agreement and the AR MGHIF Note, the Company will issue warrants
to purchase shares of its common stock (the “Warrants”) to jVen
Capital and to MGHIF in private placement transactions. Each
Warrant is immediately exercisable, has an exercise price equal
to 1.10% of the closing stock price of the Company’s common
stock on the trading day immediately preceding this issuance date
and has a five-year term.
Agreement and the AR MGHIF Note, the Company will issue warrants
to purchase shares of its common stock (the “Warrants”) to jVen
Capital and to MGHIF in private placement transactions. Each
Warrant is immediately exercisable, has an exercise price equal
to 1.10% of the closing stock price of the Company’s common
stock on the trading day immediately preceding this issuance date
and has a five-year term.
Registration Rights Agreements
In connection with the entry into the Note Purchase Agreement and
the issuance of the AR MGHIF Note, the Company also entered into
an Amended and Restated Registration Rights Agreement, dated as
of June 6, 2017 (the “Registration Rights Agreement”), with
jVen Capital and MGHIF, to which jVen Capital and MGHIF were
granted certain demand and piggyback registration rights to
participate in subsequent registered offerings of the Company’s
common stock.
the issuance of the AR MGHIF Note, the Company also entered into
an Amended and Restated Registration Rights Agreement, dated as
of June 6, 2017 (the “Registration Rights Agreement”), with
jVen Capital and MGHIF, to which jVen Capital and MGHIF were
granted certain demand and piggyback registration rights to
participate in subsequent registered offerings of the Company’s
common stock.
The foregoing descriptions of the Note Purchase Agreement, the AR
MGHIF Note, the Warrants and the Registration Rights Agreement
(collectively, the “Transaction Documents”) are only a summary
and are qualified in their entirety by reference to the complete
text of each such Transaction Document, which are filed as
exhibits to this Current Report on Form 8-K and incorporated by
reference herein.
MGHIF Note, the Warrants and the Registration Rights Agreement
(collectively, the “Transaction Documents”) are only a summary
and are qualified in their entirety by reference to the complete
text of each such Transaction Document, which are filed as
exhibits to this Current Report on Form 8-K and incorporated by
reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed herewith:
| Exhibit |
Description
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| 4.1 |
Form of Warrant to Purchase Common Stock.
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| 10.1 |
Note Purchase Agreement, dated as of May 31, 2017, by and
between OpGen, Inc. and jVen Capital, LLC (incorporated by reference to Exhibit 10.21 of Form S-1, File No. 333-218392, filed May 31, 2017). |
| 10.2 |
Form of Secured Convertible Promissory Note to be issued
by OpGen, Inc. to jVen Capital, LLC under the Note Purchase Agreement (incorporated by reference to Exhibit 10.21 of Form S-1, File No. 333-218392, filed May 31, 2017). |
| 10.3 |
Amended and Restated Senior Secured Convertible
Promissory Note issued by OpGen, Inc. to Merck Global Health Innovation Fund, LLC on June 6, 2017 |
| 10.4 |
Amended and Restated Registration Rights Agreement, dated
as of June 6, 2017, by and among OpGen, Inc., jVen Capital, LLC and Merck Global Health Innovation Fund, LLC. |
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About OpGen, Inc. (NASDAQ:OPGN)
OpGen, Inc. (OpGen) is a precision medicine company using molecular diagnostics and informatics to combat infectious disease. The Company is engaged in developing molecular information solutions to combat infectious disease in global healthcare settings, helping to guide clinicians with information about life threatening infections, managing patient outcomes, and the spread of infections caused by multidrug-resistant microorganisms. Its deoxyribonucleic acid (DNA) tests and bioinformatics address the threat of anti-biotic resistance by helping physicians and healthcare providers manage patient care decisions and protect the hospital biome through customized screening and surveillance solutions. It is working to deliver its molecular information solution to a global network of customers and partners. It is also working to provide precise diagnostic information powered by pathogen surveillance data. The Company’s high-resolution DNA tests are marketed under the Acuitas trade name.