OpGen (OTC:OPGN) Inc., a medical laboratory services provider, has amended its existing securities purchase agreement with AEI Capital Ltd., expanding its financing capacity by an additional $6 million and extending the period during which it can issue shares to AEI Capital until December 31, 2025. This amendment, detailed in an 8-K filing with the Securities and Exchange Commission on Wednesday, modifies the initial agreement that allowed OpGen to issue up to $3 million in common stock to the purchaser.
The amendment, effective as of October 3, 2024, grants OpGen the option to sell two more tranches of common stock worth $3 million each, thereby potentially raising the total financing under the agreement to $9 million. The securities will be issued without registration under the Securities Act of 1933, relying on exemptions for sales to accredited investors.
OpGen, based in Rockville, Maryland, specializes in services related to medical laboratories, operating under the SIC code 8071. The company, incorporated in Delaware, trades on The Nasdaq Capital Market under the ticker symbol OPGN.
The financial maneuver comes as part of OpGen's strategic efforts to secure additional funding for its operations. The unregistered sales of equity securities to AEI Capital Ltd. are based on exemptions provided by Section 4(a)(2) of the Securities Act and Regulations D and S, as well as similar exemptions under state laws.
The 8-K filing also includes the full text of the amendment to the securities purchase agreement as Exhibit 10.1, which provides further details of the terms agreed upon between OpGen and AEI Capital Ltd.
This development may be of interest to investors and market watchers who follow OpGen's financial strategies and growth plans. The information in this article is based on a press release statement.
In other recent news, OpGen Inc . disclosed a restatement of its Q1 2024 financials due to an accounting error related to an indemnification asset from a former office lease. The decision to restate was made in consultation with OpGen's board of directors and its independent registered public accounting firm. The restated financials will be provided in an amended Quarterly Report.
Additionally, OpGen has undergone a significant reshuffle in its leadership and ownership structure. David Lazar, former CEO and Chairman, sold his shares to AEI Capital Ltd., resulting in his departure from his executive roles. This transaction led to AEI Capital Ltd. increasing its stake in OpGen to approximately 49%, with a potential rise to about 80% upon acquisition of the remaining shares of Series E Stock.
John Tan, a designee of AEI Capital Ltd., was appointed as the new CEO, Chairman, and Director of OpGen. Furthermore, the company announced the appointment of five new directors to its board, including Christian-Laurent Bonte, Victor Chua Kok Hoe, Ken Lim Zhao Qi, Ethan Low Yu Jie, and Constance Wong Poh Yin. These are the recent developments in OpGen Inc.
InvestingPro Insights
OpGen's recent amendment to its securities purchase agreement comes at a critical time for the company, as revealed by InvestingPro data. With a market capitalization of just $15.29 million and a revenue of $1.96 million in the last twelve months as of Q2 2024, OpGen is operating on a relatively small scale. The company's financial health appears precarious, with InvestingPro Tips highlighting that OpGen is "quickly burning through cash" and "operates with a significant debt burden."
The additional $6 million financing capacity secured through the amendment could provide much-needed liquidity, especially considering that InvestingPro Tips indicate that OpGen's "short term obligations exceed liquid assets." However, investors should note that the company's revenue growth has been negative, with a -30.32% decline in the last twelve months as of Q2 2024.
These insights underscore the importance of OpGen's efforts to secure additional funding. For a more comprehensive analysis, InvestingPro offers 12 additional tips for OPGN, providing investors with a deeper understanding of the company's financial position and market performance.
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