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Great Basin withdraws registration statement, amends convertible note agreement


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Great Basin withdraws registration statement, amends convertible note agreement

Great Basin Scientific Inc. requested to withdraw its S-1 registration statement previously filed with the SEC in connection with its planned $8 million equity financing.

The company announced its intent to raise additional funds when it entered into a convertible note financing in July 2016. It determined that additional capital was needed to fund operations in late 2016 and early 2017 until the 2016 notes began to amortize in January 2017, and cash in the company's restricted accounts incrementally became available under the terms of the 2016 notes.

However, the early release of restrictions on some cash in the restricted accounts, and the company's belief that the rest of the restrictions on cash in its restricted accounts will be released on a timely basis to fund operations, has led management to believe that further financing is currently not required.

In addition, Great Basin amended its agreement with the holders of 2016 convertible notes to revise the conversion terms and eliminate the potential for deferrals. It expects to enter into discussions with the noteholders to revise the schedule for the release of restrictions for funds in the restricted accounts and to amend the equity conditions for the release of such restrictions.

The company has $58 million in restricted cash from the 2016 convertible note financing.

Under the terms of the amendment, any pre-issued conversion shares at the time of the amendment will reduce the principal amount of the note held by noteholders at the fixed conversion price of 44 cents per share without deferral provisions.

Currently, the company does not meet the equity conditions for the release of restrictions on funds under the 2016 notes, but management believes that noteholders are receptive to amending or waiving those conditions and that funds will be available on a timely basis to continue to finance the company's ongoing operations.

In the event that its amendments or waivers are not granted, the company will seek an alternative financing at that time.