As filed with the Securities and Exchange Commission on January 10,June 15, 2017

Registration Statement No. 333-213144333-216045

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

Amendment No. 2AMENDMENT NO. 3
toTO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

GREAT BASIN SCIENTIFIC, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		3841		83-0361454
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

420 E. South Temple, Suite 520
Salt Lake City, UT 84111
(801) 990-1055

(Address and telephone number of registrant’s principal executive offices)

 

Ryan Ashton
Chief Executive Officer
Great Basin Scientific, Inc.
420 E. South Temple, Suite 520
Salt Lake City, UT 84111
(801) 990-1055

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

Jason BrenkertKevin Friedmann, Esq. DorseyMitchell Silberberg & WhitneyKnupp LLP 1400 Wewatta Street, Suite 40011377 W. Olympic Blvd. Denver, Colorado 80202Los Angeles, CA 90064 (303) 629-3450(310) 312-3106		Robert Charron, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 Direct: (212) 931-8704

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filero		Accelerated filero
Non-accelerated filero (Do not check if a smaller reporting company)		Smaller reporting companyx
Emerging growth companyx

The registrant is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended. This registration statement complies with the requirements that apply to an issuer that isIf an emerging growth company.company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

 

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CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered		Proposed Maximum Aggregate Offering Price(1)				Amount of Registration Fee(7)
Units, each consisting of (a) one share of Series G Mandatorily Convertible Preferred Stock, par value $0.001, stated value $1,000 per share, and (b) a Series I Warrant to purchase Common Stock, par value $0.0001 per share		$	8,000,000			$	927.2
Series G Mandatorily Convertible Preferred Stock, par value $0.001, stated value $1,000 per share(2)
Series I Warrants to Purchase Common Stock, par value $0.0001 per share, underlying Units(3)
Common stock par value $0.0001 per share, issuable upon conversion of the Series G 12.5% Mandatorily Convertible Preferred Stock(4)(5)
Common Stock par value $0.0001 per share, issuable upon exercise of the Series I Warrants(4)(6)		$	8,000,000				927.2
Total		$	16,000,000			$	1354.4

Title of Each Class of Securities to be Registered		Proposed Maximum Aggregate Offering Price(1)				Amount of Registration Fee
Class A Units, each consisting of:		$	3,034,000			$	351.64
(i) common stock, par value $0.0001 per share(2)
(ii) Series J Warrants to purchase common stock
Class B Units, each consisting of:			2,952,000				342.14
(i) one pre-funded Series K Warrant to purchase common stock
(ii) Series J Warrants to purchase common stock
Common stock underlying the pre-funded Series K Warrants(2)			82,000				9.50
Common stock underlying the Series J Warrants(2)			15,170,000				1,758.20
Total		$	21,238,000			$	2,461.48	(3)

(1)

This amount represents the proposed maximum offering price of the securities reregistered hereunder that may be sold by the registrant. Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”).

(2)

Included in the registration fee paid for the Units pursuant to Rule 457(o) and Rule 457(i).

(3)

No separate registration fee is payable pursuant to Rule 457(g) under the Securities Act as the underlying shares of common stock are being registered pursuant hereto.

(4)

Pursuant to Rule 416 under the Securities Act, the shares of common stock registered hereby also include an indeterminate number of additional shares of common stock as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions.

(5)(3)

No separate registration fee is payable pursuant to Rule 457(i) as no additional consideration will be paid for the conversion of the preferred stock into shares of common stock.

(6)

Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act based on the proposed maximum offering price upon exercise of the Series I Warrants.

(7)

The registrant previously paid $2,014 in connection with its filing of the registration statement on Form S-1 (333-213144).Previously paid.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS		SUBJECT TO COMPLETION		DATED JANUARY 10,JUNE 15, 2017

8,000Great Basin Scientific, Inc.

Up to 8,200,000 Units Series G 12.5% Mandatorily Convertible Preferred Stock and Series I
Warrants to Purchase Common Stock
(     sharesthat can be comprised of Common Stock underlying the Series G 12.5% Mandatorily Convertible Preferred Stock and Series I Warrants)either Class A Units or Class B Units

 

We are offering an aggregate of up to 8,0008,200,000 units that can be comprised of either Class A Units representing $8,000,000(“Class A Units”) or Class B Units (“Class B Units”), together with 8,200,000 shares of units, or “Units,” each consisting of: (i) onecommon stock included in the Class A Units, 41,000,000 shares of common stock underlying the Series J Warrants and 8,200,000 shares of common stock underlying the Pre-funded Series K warrants discussed below.

Each Class A Unit consists of 1 share of our Series G 12.5% Mandatorily Convertible Preferred Stock, par value $0.001 per share, with a stated value of  $1,000 per share, or “Series G Preferred Stock,” which is initially convertible into      shares of our common stock, par value $0.0001 (“common stock”), and 1 Series J Warrant (the “Series J Warrants”) to purchase 2.5 shares of our common stock. The Class A Units are being offered at an assumed public offering price of $0.37 per Class A Unit, the closing price of our common stock on June 13, 2017. The Series J Warrants will be immediately exercisable at an initial exercise price per share or “Common Stock;”equal to 100% of the public offering price of the Class A Units and (ii) awill expire 60 days from the date of issuance.

Each Class B Unit consists of 1 pre-funded Series IK Warrant to purchase 1 share of our common stock (the “Pre-funded Series K Warrants” together with the Series J Warrants, the “Offering Warrants”) and 1 Series J Warrant to purchase 2.5 shares of our Common Stock.common stock. Each Pre-funded Series K Warrant will be sold together with 1 Series J Warrant at the same assumed combined public offering price of $0.37 per unit less the $0.01 per share exercise price of the Pre-funded Series K Warrant included in the Class B Unit. Each Pre-funded Series K warrant will entitle the holder to acquire 1 share of our common stock at an exercise price of $0.01 per share. We are offering the Class B Units to any purchaser including those purchasers, if any, whose purchase of Class A Units in this offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser 9.99%) of our issued and outstanding shares of common stock following the consummation of this offering.

The Class A Units together with the Class B Units are collectively referred to in this prospectus as the “Units.” The Units will not be issued to purchasers or certificated. Purchasers will receive only shares of common stock and the Offering Warrants. The Series G Preferred Stockcommon stock and Series Ithe Offering Warrants are immediately separable, and will be issued separately but willand may be purchased together as a unit in this offering. This prospectus also covers up to 400,000,000 shares of Common Stock issuabletransferred separately immediately upon conversion of theissuance.

Each Pre-funded Series G Preferred Stock based on the floor conversion price of $0.02 per share and      shares of Common Stock issuable upon exercise of the Series I Warrants.

The Series G Preferred Stock is convertible into shares of Common Stock by dividing the stated value of the Preferred Stock by the conversion price. The conversion price is equal to the lesser of: (i) $     per share of Common Stock, referred to as the “Set Price,” and (ii) 87.5% of the lowest volume weighted average trading price of the Common Stock during the five trading days ending on, and including the date of delivery of a notice of conversion, subject to adjustment as provided for in the Series G Certificate of Designation. Each Series IK Warrant will be immediately exercisable for a number of shares of Common Stock determined as 100% of the total shares of Common Stock into which one share of Series G Preferred Stock sold in this offering is convertible based on the Set Price.

The Set Price will be determined as the closing bid price for the Common Stock as reported on the date of effectiveness of the registration statement of which this prospectus forms a part. The initial conversion price, subject to adjustment as provided for in the Series G Certificate of Designation, for the Series G Preferred Stock will be the Set Price and the Set Price will be the Series I Warrant initial exercise price, subject to adjustment as described in the form of Series I Warrant. Based on the closing bid price of the Common Stock as of January 5, 2017, the Set Price would be $1.10. As a result, at that date and assuming such Set Price: (i) one share of Series G Preferred Stock would be convertible into 909.0909 shares of the Common Stock and, assuming 8,000 Units are sold, all shares of the Series G Preferred Stock would be convertible into 7,272,728 shares of Common Stock; and (ii) one Series I Warrant would permit the holder to acquire 909.0909 shares of the Common Stock at an initial exercise price of $1.10 and allow all$0.01 per share. The Pre-funded Series IK Warrants to be exercised for a total of 7,272,728 shares of Common Stock.will expire upon exercise.

We have made arrangements to place funds raised in this offering in an escrow account. Any investor who purchases securities in this offering will have no assurance that other purchasers will invest in this offering. We anticipate that the offering will end no later than 15 business days after the effective date of the registration statement of which this prospectus is a part, and it will not be extended. Closing of the offering is subject to customary closing conditions including but not limited to delivery of officer certificates and legal opinions and the continued accuracy of representations and warranties. See “Plan of Distribution” for a description of the conditions for closing. We may determine in our sole discretion to terminate the offering at any time prior to closing. If the offering is terminated prior to closing your funds will be promptly returned from the escrowour account without any reduction and without interest.

This offering is being made in the United States only to investors which qualify as “institutional investors” under the state securities lawson a best efforts basis and regulationsthere is no minimum amount of their stateproceeds that is a condition of domicile.closing.

Our common stock is quoted on the OTCQB marketplace under the symbol “GBSN.” On January 5,June 13, 2017, the last reported bidclosing price of our common stock on the OTCQB was $1.10$0.37 per share. There is no established trading market for the Series G Preferred Stock or Series IOffering Warrants and we do not expect an active trading market to develop. In addition, we do not intend to list the Series G Preferred Stock or Series IOffering Warrants on any securities exchange or other trading market. Without an active trading market, the liquidity of the Series G Preferred Stock and Series IOffering Warrants will be limited. On April 10, 2017, we effected a 1-for-2,000 reverse stock split of our issued and outstanding shares of common stock. All information included in this prospectus has been retroactively adjusted to account for such reverse stock split.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”

Investing in our securities involves risks. You should carefully read and consider the “Risk Factors” beginning on page 2010 of this prospectus before investing.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

If we were to sell 8,200,000 Class A Units at the presumed offering price (and no Class B units), we would pay placement agent fees as follows:

		Per Unit				Total
Public offering price		$	1,000			$	8,000,000
Placement agent fees(1)		$	70			$	560,000
Proceeds to us, before expenses		$	930			$	7,440,000

		Per Class A Unit				Total
Assumed public offering price		$	0.37			$	3,034,000
Placement agent fees		$	0.0259			$	212,380
Proceeds to us before expenses		$	0.3441			$	2,821,620

If we were to sell 8,200,000 Class B Units at the presumed offering price (and no Class A units), less the $0.01 per share exercise price of the Pre-funded Series K Warrants included in the Class B Units, we would pay placement agent fees as follows:

(1)

In addition, we will reimburse certain expenses of the placement agent in connection with this offering. See “Plan of Distribution” beginning on page 137 of this prospectus for more information regarding the compensation arrangements with the placement agent.

		Per Class B Unit				Total
Assumed public offering price		$	0.36			$	2,952,000
Placement agent fees		$	0.0252			$	206,640
Proceeds to us before expenses		$	0.3348			$	2,745,360

In addition, we will reimburse certain expenses of the placement agent in connection with this offering. See “Plan of Distribution” beginning on page 114 of this prospectus for more information regarding the compensation arrangements with the placement agent.

We have engaged Roth Capital Partners, LLC to act as our exclusive placement agent in connection with this offering (the “placement agent”). The placement agent ismay be deemed to be an “underwriter”underwriter within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended.amended (the “Securities Act”). The placement agent may engage one or more sub-placement agents or selected dealers to assist with this offering. The placement agent is not purchasing the securities offered by us and is not required to sell any specific number or dollar amount of securities but will assist us in this offering on a commercially reasonable “best efforts” basis. We have agreed to pay the placement agent a cash fee equal to 7% of the gross proceeds from the sale of the Class A Units and Class B Units. We have also agreed to reimburse the placement agent for its reasonable out-of-pocket legal expenses up to $75,000 and other reasonable out-of-pocket expenses up to $25,000. We estimate that the total expenses of this offering, excluding the placement agent fees, will be approximately $350,000. Because there is no minimum offering amount required as a condition to closing in this offering, the actual public offering amount, placement agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts set forth above. See “Plan of Distribution” beginning on page 137114 of this prospectus for more information on this offering and the placement agent arrangements. All costs associated with the registration will be borne by us.

Delivery of the securities offered hereby is expected to be made on or about           , 2017, subject to the satisfaction of certain conditions.

 

Roth Capital Partners

The date of this prospectus is           , 2017

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PROSPECTUS SUMMARY			1
RISK FACTORS			2010
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS			5137
DILUTION			5238
USE OF PROCEEDS			5440
MARKET PRICE HISTORY			5541
DIVIDEND POLICY			5541
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			5642
BUSINESS			7057
MANAGEMENT			8976
EXECUTIVE AND DIRECTOR COMPENSATION			9481
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			10289
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			10492
DESCRIPTION OF CERTAIN INDEBTEDNESS			11097
DESCRIPTION OF CAPITAL STOCK			116100
DESCRIPTION OF OFFERED SECURITIES			132111
PLAN OF DISTRIBUTION			137114
LEGAL MATTERS			141118
EXPERTS			141118
WHERE YOU CAN FIND MORE INFORMATION			142119

You should rely only on the information contained in this prospectus and any free writing prospectus prepared by us or on our behalf. We have not, and the placement agent has not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the placement agent is not, making an offer to sell the securities offered hereby in any jurisdiction where the offer is not permitted. The information contained in this prospectus and any free writing prospectus that we have authorized for use in connection with this offering is accurate only as of the date of those respective documents, regardless of the time of delivery of this prospectus or any authorized free writing prospectus or the time of issuance or sale of any securities. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus and any free writing prospectus that we have authorized for use in connection with this offering in their entirety before making an investment decision. You should also read and consider the information in the documents to which we have referred you in the section of this prospectus entitled “Where You Can Find More Information.”

We are offering to sell, and seeking offers to buy, the securities only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering of the securities in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to

i

i

ii

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PROSPECTUS SUMMARY

The following information is a summary of the prospectus and it does not contain all of the information you should consider before investing in our securities. You should read the entire prospectus carefully, including the “Risk Factors” section and our financial statements and the notes relating to the financial statements contained in this prospectus, before making an investment decision.

Our Company

We are a molecular diagnostic testing company focused on the development and commercialization of our patented, molecular diagnostic platform designed to test for infectious disease,diseases, especially hospital-acquired infections. We believe that small to medium sized hospital laboratories, those under 400 beds, are in need of simpler and more affordable molecular diagnostic testing methods. We market a system that combines both affordability and ease-of-use, when compared to other commercially available molecular testing methods, which we believe will accelerate the adoption of molecular testing in small to medium sized hospitals. Our system includes an analyzer, whichthat we provide for our customers’ use without charge in the United States, and a diagnostic cartridge, whichthat we sell to our customers. For purposes of this prospectus, we use the term “assay(s)” to describe our existing diagnostic test product as well as our diagnostic test products under development. Our testing platform has the capability to identify up to 64 individual targets at one time. If the assay identifies one to three targets, we refer to them as low-plex tests, or tests, and if they identify four or more targets we refer to them as multi-plex panels, or panels.

We currently have fourfive commercially available tests, our first for clostridium difficile, orC. diff, which received clearance fromas illustrated in the Food and Drug Administration, or FDA, in April 2012, our second for Group B Strep, which received clearance from the FDA in April 2015 and launched commercially in June 2015, our third for Shiga Toxin Direct, or STEC, which received clearance from the FDA in March of 2016 and launched commercially in August 2016 and the fourth Staphylococcus Identification and Resistance Blood Culture Panel, or Staph ID/R panel, which received FDA clearance in March of 2016 and launched commercially in September 2016. chart below:

FDA Cleared Test		510(k) Filed		FDA Clearance		Commercialization
C.diff		November 2011		April 2012		July 2012
Group B Strep		November 2014		April 2015		June 2015
Shiga Toxin Direct		October 2015		March 2016		August 2016
Staph ID/R Panel		August 2015		March 2016		September 2016
Bordetella pertussis (whooping cough)		January 2017		March 2017		May 2017

Our customers consist of hospitals, clinics, laboratories and other healthcare providers in the United States, the European Union and New Zealand.

Molecular diagnostic testing generally reduces test time from days to hours compared to culture methods, and typically provides much more accurate results than non-molecular rapid assays. Culture testing utilizes a sample taken from a patient, which is incubated in a culture medium; the operator waits for the microorganisms, if there are any, to grow until they are in large enough quantities to be detected. This method can take days and, in some cases, requires highly trained laboratory technicians to perform the tests and interpret the results. The accuracy of culture-based methods has been shown to be lower than that of molecular-based approaches. For example, in a multi-arm, multicenter clinical study using ourC. difftest, we increased detection sensitivity nearly 20% as compared to the culture-based arm. Molecular testing methods, like our system, utilize technologies to multiply the DNA from a small sample until it can be detected by an automated, visual system. A key difference between our system and other molecular systems is our use of a low-cost, but highly sensitive, semiconductor chip based detection system. This allows us to utilize existing components, for example digital camera components, to provide visual evidence of the result. This provides more accurate answers, generally in hours, and can be operated by technicians with less extensive training than is required for culture testing. We believe these advantages can lead to shortened hospital stays and improved patient outcomes, resulting in reduced costs for hospitals that implement molecular testing in their labs. We believe this improvement in the time to resultresults and the quality of those results has led to a fast-growing market for molecular diagnostic systems at hospitals. We believe our system is well positionedwell-positioned to meet this need and attract new customers. As of September 30, 2016,March 31, 2017, we had 276256 customers worldwide (255(235 in the United States and 21 in the rest of the world), who use an aggregate of 510470 of our analyzers.

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customer and evaluation history is as follows:follows (excluding Staph ID/R and STEC diagnostic assays as they were in the beginning stages of the evaluation period):

		Total U.S. Customers				C. diff Customers				C. diff Penetration				Group B Strep Customers				Group B Strep Penetration				Total U.S. Customers				C. Diff Customers				C. Diff Penetration				Group B Strep Customers				Group B Strep Penetration
Third Quarter 2014			80				80				100	%			0				NA				80				80				100	%			0				NA
Fourth Quarter 2014			84				84				100	%			0				NA				84				84				100	%			0				NA
First Quarter 2015			101				101				100	%			0				NA				101				101				100	%			0				NA
Second Quarter 2015			115				115				100	%			0				NA				115				115				100	%			0				NA
Third Quarter 2015			143				142				99	%			25				17	%			143				142				99	%			25				17	%
Fourth Quarter 2015			186				185				99	%			47				25	%			186				185				99	%			47				25	%
First Quarter 2016			222				219				99	%			61				27	%			222				219				99	%			61				27	%
Second Quarter 2016			260				253				97	%			78				30	%			260				253				99	%			78				30	%
Third Quarter 2016			255				248				97	%			78				30	%			255				248				99	%			78				30	%
Fourth Quarter 2016																							244				234				96	%			74				30	%
First Quarter 2017																							235				222				94	%			72				31	%

As our STEC and Staph ID/R assays commercially launched in August 2016 and September 2016, respectively, we don’t have meaningful penetration and win rates for those assays as of the date of thethis prospectus.

We refer to the percentage of customers that elect to switch to our platform and purchase our diagnostic tests after receiving and evaluating our platform as our “win rate.” This is a metric that we use to determine our sales efficiency and our market acceptance. Our win rate calculation is determined without any minimum or recurring purchase threshold. Our win rates over various periods since we launched ourC. diff product commercially are as follows:

		Number of Evaluations				Win Rate
Full Year 2013			86				69	%
Full Year 2014			49				76	%
Full Year 2015			125				85	%
1st Quarter 2016			40				85	%
2nd Quarter 2016			49				88	%
3rd Quarter 2016			24				79	%
Since Commercial Launch (as of September 30, 2016)			373				80	%

		Number of Evaluations				Win Rate
1st Quarter 2016			46				80	%
2nd Quarter 2016			47				87	%
3rd Quarter 2016			25				76	%
4th Quarter 2016			7				86	%
1st Quarter 2017			9				78	%
Since 1st Quarter of 2016			134				82	%

We believe our platform has the ability to provide small to medium sized hospitals with an easy-to-use, affordable solution when compared to other commercially available sample-to-result molecular testing methods — one that provides accurate results in 45 to 115 minutes depending on the assay — to meet the rapidly evolving needs of providers and their patients.

We formally launched the sale of our first product,C. difftest, in the United States in the third quarter of 2012. Since this launch, we have generated limited revenues of $6.7$8.4 million as of September 30, 2016,March 31, 2017, including $2.2$3.0 million infor the 9 monthsyear ended September 30,December 31, 2016 from the sale of our tests. We have generated substantial losses since inception and have an accumulated deficit of $204.9$189.5 million at September 30, 2016.March 31, 2017. Our auditor included a paragraph in their 2015its 2016 audit opinion expressing substantial doubt as to our ability to continue as a going concern due to our cash position and other concerns as disclosed in the footnotes to the audited financial statements.statements included elsewhere in this prospectus.

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Our Products and Our Product Candidates

Our FDA Cleared Tests

We currently market the following tests, which have been cleared by the FDA:

Our Assay Under FDA Review

We have submitted the following assay to the FDA for review. As of the date of this prospectus, the following assay has not received clearance from the FDA and is not, therefore, available for commercial sale in the U.S. There is no assurance that the FDA will clear this assay for sale.

Our Assay in Clinical Development

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Our Assays in Development

Product Markets

Based on published researchIn a survey of 100 hospitals released in January 2014, less than half used molecular testing for infectious disease testing and we believe that fewerless than half of all hospitals are currently usinguse molecular testing for their infectious disease testing. More importantly, we believe that a far smaller fraction of all testing done in hospital labs is molecular. We believe that as molecular testing becomes more cost effective, its advantages of faster time to result and higher sensitivity relative to legacy testing methods will lead more and more hospitals to convert to molecular testing.testing.

Our diagnostic assays are currently sold in the United States, Europe and New Zealand. Our primary focus is in the U.S. where we utilize a direct sales and support team. We utilize distributors in certain key European countries and New Zealand. If we decide to increaseescalate our efforts to expand internationally, we expect theythese distributors will be augmented by marketing partners and distributors in other strategic areas as we expand internationally.areas.

Implications of Being an Emerging Growth Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we intend to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

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We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more;

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applicable holder) (each, a “Mandatory Conversion”, and such price, the “Mandatory Conversion Price”). Upon any Mandatory Conversion of Series B Notes, the applicable holder is required to release such aggregate amount of restricted cash equal to the numberaggregate principal of the Series B Notes converted, 100% of which may be used by the Company for general working capital and operating expenses. Pursuant to the terms of the New Series B Notes, the Company exercised the Mandatory Conversion right to convert $334,860 of principal amount into 246,600 shares of common stock above 4.99%at a conversion price between $1.08 and $1.44 per share. In conjunction with the Mandatory Conversions, $334,860 was released from the restricted cash accounts which became available for use by the Company to be deliveredfund its ongoing operations.

On April 17, 2017 as part of the amended 2017 Exchange Agreements, all of the Existing Warrants were cancelled for no additional consideration.

On April 18 and April 21, 2017, cash in the amount of $3.0 million and approximately $1.5 million, respectively, was released from the restricted cash accounts and returned to holders of the New Series B Notes. Pursuant to the terms of the New Series B Notes, the principal amount of the New Series B Notes was reduced on a dollar for dollar basis for each dollar of restricted cash released to the holder. Accordingly, the principal amount of the remaining New Series B Notes was reduced to $1.4 million.

On May 12, 2017, holders of the New Series B Notes released all restrictions on the remaining $1.4 million in cash collateral securing the Series B Notes, which became available to the Company to fund its operations and for general corporate purposes. In connection with the release, the Company temporarily reduced the conversion price of the New Series B Notes to $1.10 per share until July 14, 2017, after which the conversion price of the New Series B Notes will return to $3.00 per share. The Company also permanently waived any right to effect any Mandatory Conversion of the Series B Notes. From May 15 through June 13, 2017, pursuant to the temporary reduced conversion price of the New Series B Notes, the Company issued 559,892 shares of common stock upon conversion of $615,880 of New Series B Note principal at a conversion price of $1.10 per share.

On May 12 through June 13, 2017, pursuant to the terms of the 2017 Exchange Agreements, the Company issued 350,311 shares of common stock for the conversion of 373 shares of Existing Preferred Stock at a conversion rate of $1.06 per share.

In October 2013, the Company entered into a sale-leaseback transaction with Onset Financial, Inc. (“Onset”) pursuant to a Master Lease Agreement and Schedule 001 thereto (collectively, the “Lease Agreement”). The Lease Agreement provided for the sale of 125 molecular diagnostic analyzers by the Company to Onset for a price of $2,500,000, and a lease-back of the analyzers from Onset to the Company for monthly payments of $74,875. On March 14, 2014, the Company entered into Lease Schedule 002 pursuant to which it sold to Onset 75 molecular diagnostic analyzers for a price of $1,500,000, and leased-back the analyzers from Onset for monthly payments of $64,665. Pursuant to the terms of the Lease Agreement, upon repurchase, the ownership of the analyzers was transferred back to the Company and all letters of credit and security interests pursuant to the Master Lease Agreement were cancelled. On April 13, 2017, the Company repurchased the analyzers from Onset for an aggregate purchase price of $1.0 million in cash plus payment of current invoices in the amount of approximately $0.2 million. The Company obtained the funds to make the payments to Onset by entering into a $1.2 million promissory note agreement with Utah Autism Foundation (the “Foundation”). David Spafford, one of our directors, and his wife, Susan Spafford, have been designated by the Foundation as “Founding Trustees” under its bylaws and have authority to control certain activities of the Foundation. The promissory note provides for 24 monthly payments of $45,000 per month with interest of 10% per annum with a balloon payment of $300,402 at the end of the business day on January 21, 2016. On January 21, 2016, we announced24-month period in April 2019. The Company granted a security interest in the expirationanalyzers to the Foundation until the loan is fully paid. The loan from the Foundation replaces $1.2 million in obligations to Onset that would have been payable in monthly payments of $139,540 through September 2017 and conversion of all outstanding Series C Warrants into shares of common stock.$74,875 from October 2017 through April 2018.

Reverse Stock Split

On December 8, 2015, we heldApril 7, 2017, the Company filed a special meeting (the “December 2015 Special Meeting”)Certificate of our stockholders. At the December 2015 Special Meeting, the stockholders approved an amendmentAmendment to the Company’s Seventh Amended and Restated Certificate of Incorporation as amended, (the “Certificate of Incorporation”“Amendment”) to effecteffectuate a 1-for-2,000 reverse stock split of the Company’s common stock at a ratio between 1 to 50issued and 1 to 60, such ratio to be determined by the board of directors of the Company (the “Board”), and to reduce the par value of the Company’s common stock from $0.001 to $0.0001 (the “December 2015 Reverse Stock Split”). Immediately after the December 2015 Special Meeting, the Board held a meeting and approved the December 2015 Reverse Stock Split at a ratio of 1 to 60, such December 2015 Reverse Stock Split went effective at 12:01 am EST on December 11, 2015. Unless we indicate otherwise, the information in this prospectus reflects the impact of the December 2015 Reverse Stock Split.

On December 30, 2015, we closed a $22.1 million senior secured convertible note financing (the “2015 Convertible Note Financing”) pursuant to a Securities Purchase Agreement dated December 28, 2015 (the “2015 SPA”) between the Company and certain buyers as set forth in the schedule of buyers of our convertible notes attached to the 2015 SPA. In connection with the 2015 Convertible Note Financing we issued $22.1 million aggregate principal amount of senior secured convertible notes (the “2015 Notes”) and Series D common stock purchase warrants exercisable to acquire 8outstanding shares of common stock (the “Series D warrants”), which amount acquirable upon exercise of the Series D warrant represents 16.6% of the fully-diluted issued and outstanding common stock as calculated pursuant to the 2015 SPA. Under the terms of the 2015 Notes, we received an initial release from restricted accounts of $4.6 million at the close of the 2015 Convertible Note Financing. Pursuant to the terms of the 2015 Notes, prior to the release from our restricted accounts of the remaining cash purchase price of $13.8 million in subsequent tranches, we were required to meet certain equity conditions as described therein.

Subsequently, on November 2, 2016, the outstanding 2015 Notes were exchanged for Series F Preferred Stock, as discussed below, and all cash in restricted accounts was made available to the Company.

On January 28, 2016, we filed a preliminary proxy statement with the SEC regarding a special meeting of our stockholders to be held on March 24, 2016 (the “March 2016 Special Meeting”). At the March 2016 Special Meeting, our stockholders were asked to approve (1) an amendment to the Certificate of Incorporation to effect an additional reverse stock split (the “March 2016 Reverse“Reverse Stock Split”) at a ratio between 1-to-20 and 1-to-35 and effective upon a date to be determined by the Board and (2) for purposes of complying with. On April 10, 2017,

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NASDAQ Listing Rule 5635(d), the issuance ofCompany effected the Reverse Stock Split. Upon effectiveness, every 2,000 shares of ourissued and outstanding common stock underlying the 2015 Notes and related Series D warrants issued by us in the 2015 Convertible Note Financing without giving effect to the exchange cap in the convertible notes in an amount that may be equal to or exceed 20% of our common stock outstanding before the issuance of the 2015 Notes and related Series D warrants and certain subordination warrants and without giving effect to the exercise price floor of such Series D warrants and subordination warrants (the “NASDAQ 20% Issuance Proposal”). Under the terms of the Series E Warrants we were obligated to increase our authorized shares of common stock either by effecting a reserve stock split or by increasing our authorized shares of common stock so as to permit the exercise in full of the Series E Warrants. The March 2016 Reverse Stock Split was intended, in part, to satisfy that obligation. On March 24, 2016, we held the March 2016 Special Meeting. At the March 2016 Special Meeting, the stockholders approved an amendment to the Certificate of Incorporation to effect the March 2016 Reverse Stock Split at a ratio between 1-to-20 and 1-to-35 with such ratio to be determined by the Board. Immediately after the March 2016 Special Meeting, the Board approved the Additional Reverse Stock Split at a ratio of 1-to-35, such March 2016 Reverse Stock Split wentconverted into effect at 5:00 pm EDT on March 30, 2016. At the March 2016 Special Meeting, the stockholders also approved the NASDAQ 20% Issuance Proposal. Unless we indicate otherwise, the information in this prospectus reflects the impact of the March 2016 Reverse Stock Split.

On February 8, 2016, we entered into a settlement agreement with Dawson James Securities, Inc. (“Dawson James”) in relation to a disagreement between us and Dawson James regarding performance under an underwriting agreement between us and Dawson James dated October 8, 2014 (the “Underwriting Agreement”). In settlement of the claims of both us and Dawson related to the Underwriting Agreement and without either party admitting liability, we entered into a consulting agreement with Dawson James pursuant to which Dawson James has agreed to provide us with financial advisory services for the 12-month term of the agreement in consideration of us paying them an aggregate consulting fee of $800,000 (payable $200,000 upon execution of the consulting agreement and $50,000 at the beginning of each month for twelve months beginning on March 2, 2016). Additionally, Dawson James agreed to terminate its right of first refusal under the Underwriting Agreement in consideration of the Company making a one-time payment to Dawson James of $80,000. The parties provided mutual releases of all claims against the other party as of the date of the settlement agreement. Dawson James is not participating in this public offering of securities.

On February 8, 2016, we and certain of the buyers of our 2015 Notes holding enough of the 2015 Notes and Series D warrants to constitute the Required Holders (as defined under Section 9 (e) of the 2015 SPA) entered into an amendment agreement, whereby we and the buyers of our 2015 Notes agreed to: (i) amend the 2015 SPA to reduce the number of shares of our common stock we are initially required to reserve for issue upon conversion of the 2015 Notes and exercise of the Series D warrants from 120,000,000 to 85,000,000 from February 8, 2016 until 11:59:59 pm New York Time on March 31, 2016; (ii) amend the 2015 SPA such that from and after 12:00:00 am New York time on April 1 2016, the required number of shares of common stock we are required to reserve shall revert back to 120,000,000; (iii) amend the 2015 SPA, the 2015 Notes and the Series D warrants, to reflect the reduction in the required reserve amount of shares of common stock; (iv) provide that if our public offering of securities pursuant to Registration Statement on Form S-1 (File No. 333-207761) triggers the anti-dilution provisions in the convertible notes and results in the required reserve amount under those agreements being higher than the initial required reserve amount of 85,000,000, then the definition of required reserve amount in such agreement is amended to equal the initial required reserve amount from the effective date of the amendment agreement until 11:59:59 pm New York Time on March 31, 2016 (which was effected); (v) provide that from and after 12:00:00 am New York time on April 1, 2016, the holders waive any right to contest or otherwise attempt to prevent the issuance of shares of common stock upon the exercise of Pre-Funded Series F Warrants if there is an authorized share failure under the terms of the 2015 Notes and Warrants and (vi) amend the 2015 SPA to extend the time period we have to call a special meeting of our stockholders to vote on certain matters concerning the 2015 Notes and Series D warrants from 65 days after the closing of the 2015 Convertible Note Financing (March 4, 2016) to 11:59:59 pm New York time on March 31, 2016 (which deadline was met).

On February 16, 2016, we and certain of the buyers of our 2015 Notes holding enough of the 2015 Notes and Series D warrants to constitute the Required Holders under Section 9 (e) of the 2015 SPA related to the 2015

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THE OFFERING

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Unless otherwise indicated, all information in this prospectus:

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RISK FACTORS

An investment in the securities being offered in this prospectus involves a high degree of risk. Before you invest in the securities, you should give careful consideration to the following risk factors, in addition to the other information included in this prospectus, including our financial statements and related notes incorporated by reference herein. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Financial Position and Need for Additional Capital

We expect that we will need substantial additional funding to expand our commercialization efforts for our C. diff and Group B Strep assay and other new assays.

Molecular diagnostic development, which includes research and development, pre-clinical and human clinical trials, is a time-consuming and expensive process that takes years to complete. We expect that our expenses will increase substantially as we move new assays through human clinical trials, seek regulatory approvals, and pursue development of additional innovations. IfFor those diagnostic tests for which we obtain marketing approval for the diagnostic tests that we develop, license, or acquire,from regulatory authorities, we expect to incur significant commercialization expenses related to regulatory compliance requirements, sales and marketing, manufacturing, and distribution. Net lossincome (loss) for the nine-monththree-month periods ended September 30,March 31, 2017 and 2016 and 2015 was approximately $83.0$21.5 million and $39.0$(33.7) million, respectively. Net loss for the years ended December 31, 20152016 and 2014,2015 was approximately $57.9$(89.1) million and $21.7$(57.9) million, respectively. As of September 30, 2016,March 31, 2017, December 31, 2015,2016, and December 31, 2014,2015, we had an accumulated deficit of $204.9$189.6 million, $121.9$211.1 million and $64.0$121.9 million, respectively. As discussed in Note 3 to the interim unaudited financial statements for the quarter ended March 31, 2017 and the audited financial statements for the year ended December 31, 2016, our recurring operating losses from operations and our need for additional sources of capital to fund our ongoing operations raise substantial doubt about our ability to continue as a going concern. We expect to continue to incur operating losses for the foreseeable future, and we anticipate these losses will increase as we continue ourthe development and commercialization of our platform and seek regulatory approval for additional assays. Accordingly, our ability to continue as a going concern depends on our ability to obtain additional financing to fund our operations, and there can be no assurance that additional financing will be available to us or that such financing, if available, will be available on favorable terms. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

We expect that we will need additional funding to manufacturermanufacture analyzers to be used by potential customers during the sales evaluation phase.

Our potential customers evaluate the performance of our products through the use of analyzers that we manufacture and provide at no cost. Our ability to grow our customer base depends upon our ability to obtain additional financing to fund the manufacturing of analyzers to deliver to such potential customers. Since May 5, 2017, our manufacturing capacity has been limited due to our lack of operating capital and we have manufacturing employees on furlough. We have not been able to manufacture our tests at levels to meet our ongoing orders. We expect that with the proceeds of this offering, we will be able to bring back sufficient employees from furlough to increase capacity such that we will be up-to-date with orders in the 3rd quarter of 2017; however, we cannot make any assurance that we will be able to bring back some employees or increase our manufacturing capacity during the 3rd quarter of 2017.

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Our inability to raise capital on acceptable terms in the future may cause us to delay, diminish, or curtail certain operational activities as we have done during the 2^nd quarter of 2017, including research and development activities, clinical trials, sales and marketing, and other operations, in order to reduce costs and sustain the business, and such inability would have a material adverse effect on our business and financial condition.

We expect capital outlays and operating expenditures to increase over the next several years as we work to expand our commercial activities, expand our development activities, conduct clinical trials, expand manufacturing operations and expand our infrastructure. We may need to raise additional capital to, among other things:

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We have a history of highly dilutive financings and reverse stock splits which amplifies the dilutive effect of these financings on our stockholders. Any investment in our common stock will likely be highly diluted through the future conversion of our outstanding derivative securities and our likely future capital raising efforts.

In the past 13 months, we have conducted four (4)the Company has effected 4 stock splits to address the Company’s need to issue shares of common stock to raise capital to fund ongoing operations. These stock splits were as follows:

Date		Reverse Split Ratio
12/11/2015		60 to 1
3/30/March 31, 2016		35 to 1
9/16/September 16, 2016		80 to 1
12/28/December 28, 2016		300 to 1
April 10, 2017		2,000 to 1
Cumulative Ratio		50,400,0001,680,000,000 to 1

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steps to obtain short term financing from the holders of the 2016 Notes, increase our stock price through the Reverse Stock Split, is likely to have a similar effect onrefile the dilutionregistration statement and retain the services of stockholders, especially since the authorized share increase was approved by stockholders. Following the 300 to 1 reverse split and the authorized share increase, we have approximately 1.5 billion shares of common stock to issue under our authorized capital. It is anticipated that the Company will issue a majority of those shares of common stock primarily as follows (i) to settle conversion of the Company’s outstanding Series F Preferred Stock, (ii) to settle conversion of the Company’s outstanding, $75 million of 2016 Notes and (iii) to raise additional capital through a public or private offering of securities including this offering of Units.

Both the Series F Preferred Stock (beginning July 2017) and the 2016 Notes have conversion prices that are tied to a discount to the Company’s recent average trading volume. As a result, if our stock price again declines following our recent December 2016 Reverse Stock Split, the number of post-split shares that must be issued to settle these securities will increase and the pre-split equivalent number of shares will increase rapidly due to the large ratio of 1-to-300. The dilution to current stockholders will be substantial; similar to the effect of past stock splits.placement agent.

Raising additional capital will cause dilution to our existing stockholders, and restrict our operations or require us to relinquish certain intellectual property rights.

We will seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, licensing arrangements and grants. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders may be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt and receivables financings may be coupled with an equity component, such as warrants to purchase shares, which could also result in dilution of our existing stockholders’ ownership. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our

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performance, and share price and could require us to delay or abandon development or commercialization plans. In addition, there is a risk that one or more of our current and future service providers, manufacturers, suppliers, hospitals and other medical facilities, our third party payors, and other partners could be negatively affected by these difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives.

Our ability to use our net operating loss carryforwards is limited.

As of December 31, 2015,2016, we had federal income tax net operating loss, or NOL, carryforwards of approximately $11.5$46.7 million and state income tax NOL carryforwards of approximately $8.2$41.6 million. These NOL carryforwards, if not previously used, will begin to expire in 2025.2023. During 2015 we experienced a shift in our stock ownership within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, orand under applicable state tax laws that currently subject our NOL carryforwards to an annual limitation. Accordingly, we were required to write off $23.2 million of net operating loss carryforwards. AsIf we experience a result, if weshift in our stock ownership and earn net taxable income in the future, the limitations on our ability to use our NOL carryforwards to reduce U.S. federal and state tax liabilities will result in increased future tax liability to us.

We have identified a material weakness in our internal control over financial reporting that, if not properly remediated, could result in material misstatements in our financial statements in future periods.

Management identified the following material weakness as of December 31, 2016:

Because of the material weakness described above, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2016, based on criteria in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

With respect to the remediation of the material weakness, we have hired additional accounting and IT personnel to help improve our segregation of duties. We continue to engage third-party consultants to assist us with our evaluation of complex technical accounting matters, including the valuation and accounting for our complex derivative agreements. We also continue to engage consultants to advise us on making further improvements to our internal control over financial reporting. We believe that these additional resources will enable us to broaden the scope and quality of our controls relating to the oversight and review of financial statements and our application of relevant accounting policies. These remediation efforts are still in process and have not yet been completed. We cannot assure you that the steps taken will remediate such weakness, nor can we be certain of whether additional actions will be required or the costs of any such actions.

We may need to take additional measures to fully mitigate these issues, and the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weaknesses or significant deficiencies or other material weaknesses or deficiencies will not result in a material misstatement of our annual or interim financial statements. In addition, other material weaknesses or deficiencies may be identified in the future. If we are unable to correct material weaknesses or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected, and could result in material misstatements in our financial statements in future periods. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported

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The design of

financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our internal control overbusiness and financial reporting is ineffective.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. The Company has performed an assessment of our internal control of financial reporting as required by section 404(a) of the Sarbanes Oxley Act. Since the Company is considered to be an “emerging growth company”, we are not required to obtain an attestation of our assessment from the auditors under section 404(b) of the Sarbanes Oxley Act.

In 2014, we identified a material weakness in our system of internal control over financial reporting relating to processes and controls over properly identifying and accounting for transactions of a complex or non-routine nature. We made progress in this area in 2015. For example, we recognized the need to engage independent consultants to assist with accounting for certain complex transactions. However, due to the nature of our complex transactions, we could not complete the fair valuations in a timely manner. Accordingly, we believe the material weakness has not been fully remediated. In addition, while performing our assessment of internal control of financial reporting, management identified certain design deficiencies relating to segregation of duties, review and approval, and verification procedures, primarily resulting from the limited number of our accounting staff available to perform such procedures. Additionally, management identified certain design deficiencies to access over information systems. Based on the evaluation of our disclosure controls and procedures as of December 31, 2015, our chief executive officer and chief financial officer concluded that, as a result of material weaknesses in our internal control over financial reporting, our disclosure controls and procedures were not effective as of December 31, 2015.condition.

Risks Related to the Convertible Note Financings (assumes extinguishment of approximately $0.6 million of New Series B Notes from proceeds of this offering)

Our obligations to the holders of our 2016New Series A and New Series B Notes are secured by a security interest in substantially all of our assets, so if we default on those obligations, the convertible note holders could foreclose on our assets.

Our obligations under the 2016New Series A and New Series B Notes and the transaction documents relating to those convertible notes are secured by a security interest in substantially all of our assets. As a result, if we default underin our obligations under the convertible notes, or the transaction documents, the holders of the convertible notes, acting through theirthroughtheir appointed agent, could foreclose on their security interests and liquidate some or all of these assets, which would harm our business, financial condition and results of operations and could require us to reducecurtail or cease operations.

If the holders of our New Series A and New Series B Notes elect to convert the principal and interest due under the notes, our stockholders will experience substantial dilution in their investment.

The total remaining principal amount we owe to the holders of our New Series A Notes is approximately $20.3 million. If the holders of these notes were to elect to convert all of the principal amount (and assuming no interest has accrued on the principal amount) into shares of our common stock at the Conversion Price of $3.00, we would be required to issue approximately 6.8 million shares. The remaining principal amount we will owe to holders of our New Series B Notes after this offering will be approximately $0.1 million. On May 12, 2017, in connection with the release of $1.4 million of restricted funds, we temporarily reduced the conversion price of the New Series B Notes to $1.10 per share until July 14, 2017, after which the conversion price of the New Series B Notes will return to $3.00 per share. If the holders of the New Series B Notes were to elect to convert all of the remaining principal amount (and assuming no interest has accrued on the principal amount) into shares of our common stock at the conversion price of $3.00, we would be required to issue approximately 33,334 shares. If the holders of the New Series B Notes were to elect to convert all of the remaining principal amount (and assuming no interest has accrued on the principal amount) into shares of our common stock prior to July 14, 2017 at the conversion price of $1.10, we would be required to issue approximately 90,910 shares. These conversions would result in significant dilution to the investments of our existing stockholders.

The sale of a substantial amount of our common stock in the public market by the holders of our NewSeries A and New Series B Notes may adversely affect the market price of our common stock.

As of June 13, 2017 we had 2,747,140 shares of common stock issued and outstanding. Assuming theconversion of all of the remaining principal outstanding under the New Series A and New Series B Notes at the conversion price of $3.00 (and assuming no interest has accrued on the principal amount), we would be required to issue an additional approximately 6.8 million shares of common stock to the holders of the notes. Assuming theconversion of all of the remaining principal outstanding under the New Series A Notes at the conversion price of $3.00 and the New Series B Notes at a conversion price of $1.10, we would be required to issue an additional approximately 6.9 million shares of common stock to the holders of the notes. The sale of substantial amounts of shares of our common stock in the public market by the holders of the New Series A and New Series B Notes, or the perception that such sales might occur, could adversely affect the market price of our common stock.

The holders of the 2016our New Series A and New Series B Notes have certain additional rights upon an event of default under such convertiblethe notes which could harm our business, financial condition and results of operations and could require us to reducecurtail or cease or operations.

Under the 2016our New Series A and New Series B Notes, the holders have certain rights upon an event of default. Such rights include (i) the remaining principal amount of the convertible notes bearing interest at a rate of 10% per annum, (ii) during the event of default the conversion price being adjusted to the lowest of (a) the conversion price then in effect, (b) 75% of the lowest weighted average price of the common stock during the 30 consecutive trading day period ending on the trading day immediately preceding the date of the event of default conversion and (c) 75% of the weighted average price of the common stock on the date of the applicable event of default conversion, and (iii) the holder having the right to demand redemption of all or a portion of the convertible notes, as described below. At any time after certain notice requirements for an event of default are triggered, a holder of convertible notes may require us to redeem all or any portion of the convertible note by delivering written notice. Each portion of the convertible note subject to redemption would be redeemed by usnotes (including all accrued and unpaid interest thereon), in cash, by wire transfer of immediately available funds at a price equal to the greater of (x)(i) up to 125% of the conversion amount being redeemed, and (y)depending on the product of (A) the conversion amount being redeemed and (B) the quotient determined by dividing (I) the greatest closing pricenature of the sharesdefault, and (ii) the intrinsic value of theshares of common stock duringthen issuable upon conversion of the period beginningnotes. It is unlikely that we would have the cash to redeem the notes as required. Furthermore, if we default on the date immediately preceding such eventpayment of default and ending on the date the holder delivers the redemption notice, by (II) the lowest conversion price in effect during such period. We may not have sufficient funds to settle the redemption price and, as described above, this could trigger rights under the security interest granted to the holders and result in the foreclosure of their security interests and liquidation of some or all of our assets.notes,

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The exerciseinterest on the notes will accrue at the rate of any of these rights upon10% per annum. If we were unable to come to an event of default could substantially harm our financial condition and force us to reduce or cease operations.

The Company is currenlty relying upon a waiver from the dollar value of daily trading and stock price requirement in the equity conditions under the 2016 Notes which is effective until February 28, 2017. If the Company does not obtain an extension of the waiver or an amendment to equity conditions to lower the stock price requirement, then the Company will not be able to convert amortization payments under the 2016 Notes and the restrictions on cash held in the Company’s restricted accounts will not be released, either of which will harm our financial condition, could force us to delcare bankruptcy and could result in the loss of your entire investment.

The release of restrictions on cash held in the Company’s restricted accounts on certain dates under the terms of the 2016 Notes depends upon the Company’s satisfaction of certain equity conditions as set forth in the 2016 Notes. If the Company does not meet these equity conditions, then the cash will not become available to the Company. Two of those equity conditions is that the Company’s shares of common stock have a dollar value of daily trading volume of at least $800,000 and a 5-day weighted average price of $31,200 (adjusted for the Company’s reverse stock splits) during certain equity condition measurement periods. As of January 5, 2017, the Company’s common stock closed at $1.10 per share and the dollar value of daily trading volume was $126,610. The Company currenlty has a waiver, obtained on January 9, 2017, to these equity conditions which extends through February 28, 2017. If, by February 28, 2017, the Company does not receive an extension of this waiver or an amendment to the 2016 notes which amends these equity conditions, then the Company will not be able to convert amortization payments under the 2016 Notes, which would require settlement of the payments in cash. Further, the Company would not meet the requirements to receive the release of the restrictions on cash in the restricted accounts. If the Company does not have sufficient cash to pay the amortization payments when due and payable under the 2016, then an Event of Default (as defined in the 2016 Notes) would occur andagreement with the holders of the 2016 Notes would be able to exercisenotes regarding payment, the holders could foreclose on their rights under the 2016 Notes, inlcuding but not limited to demanding immediate payment of the entire aggregate principal amount of the 2016 Notes and exercising rights under the security agreement over the Company’s assets. Further, if the Company doesn’t receive the release of restrictions on cash in the restricted accounts, then the Company likely would need to raise more capital to continue as a going concern. Any of the above events would substantially harm our financial position and could result in the Company declaring bankruptcy, which could result in the loss of your entire investment.

Risk Related to Our Series F Preferred Stock

Holders of our Series F Preferred Stock have certain additional rights upon the occurrence of certain triggering eventsinterest, which could harm our business, financial condition and results of operations and could require ususe to reducecurtail or cease orour operations.

Under the Certificate of Designations for the Series F Preferred Stock, the holders will have certain rights upon a “Triggering Event” (as defined in the Certificate of Designations for the Series F Preferred Stock). Such rights include (i) the remaining principal amount of the Preferred Shares bearing interest at a rate of 10% per annum, (ii) during the Triggering Event the conversion price being adjusted to the lowest of (a) the conversion price then in effect, (b) 75% of the lowest weighted average price of the our common stock during the 30 consecutive trading day period ending on the trading day immediately preceding the date of the Triggering Event conversion and (c) 75% of the weighted average price of the our common stock on the date of the applicable Triggering Event conversion, and (iii) the holder having the right to demand redemption of all or any number of the preferred shares.

At any time after the earlier of the holder’s receipt of a notice of an Triggering Event and the holder becoming aware of an Triggering Event and ending on the 15th trading day after the later of (x) the date such Triggering Event is cured and (y) the holder’s receipt of an Triggering Event notice, the holder may require the Company to redeem all or any number of the preferred shares at a price equal to the greater of (x) 125% of the conversion amount being redeemed and (y) the product of (A) the conversion amount being redeemed and (B) the quotient determined by dividing (I) the greatest closing price of the shares of our common stock during the period beginning on the date immediately preceding such Triggering Event and ending on the date the holder delivers the redemption notice, by (II) the lowest conversion price in effect during such period.

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spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the shares of common stock. Consequently, these penny stock rules may affect the ability of broker-dealers to trade in the shares of common stock.

Future sales and issuances of our common stock or rights to purchase common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations, including expanding research and development, funding clinical trials, purchasing of capital equipment, hiring new personnel, commercializing our diagnostic tests, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the increase, if any, of our share price.

We are an “emerging growth company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are

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We have elected to use the extended transition periods for complying with new or revised accounting standards.

We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transaction period provided in Section 7(a)(2)(B). As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

Our management is required to devote substantial time to compliance initiatives.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a newly formedprivate entity. The Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission, and NASDAQ, have imposed various new requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time consuming and costly. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage.

Provisions of our Seventh Amended and Restated Certificate of Incorporation, as amended, our Amended and Restated Bylaws and Delaware law could make an acquisition of our Company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the current members of our board of directors and management.

Certain provisions of our Seventh Amended and Restated Certificate of Incorporation, as amended, or our Certificate, and our Amended and Restated Bylaws (our “Bylaws”), could discourage, delay or prevent a merger, acquisition or other change of control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. Furthermore, these provisions could prevent or frustrate attempts by our stockholders to replace or remove members of our board of directors. These provisions also could limit the price that investors might be willing to pay in the future for our common stock, thereby depressing the market price of our common stock. Stockholders who wish to participate in these transactions may not have the opportunity to do so. These provisions:

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Due to financial constraints, we have been unable to pay our employees on regularly scheduled payment dates. As a result, the Utah Labor Commission could impose a penalty on us in accordance with the Utah Payment of Wages Act.

We are subject to the Utah Payment of Wages Act (the “Utah Act”), which governs how and when wages are paid to our employees. Section 34-28-9 of the Utah Act gives the Labor Commission’s Division of Antidiscrimination and Labor the right to assess against an employer who fails to pay an employee in accordance with the Utah Act a penalty of 5% of the unpaid wages owing to the employee, which will be assessed daily until paid for a period not to exceed 20 days.

Due to financial constraints, we offered our employees the choice of continuing to work or taking an unpaid temporary furlough. Thirty-five of our employees chose to take the temporary furlough. As of June 13, 2017, we had 109 full-time and 7 part-time employees employed. Since the payroll that was due to be paid on March 20, 2017, we have been behind two to three payments on our payroll and we may not, therefore, be in compliance with the Utah Act. If the Division of Antidiscrimination and Labor concludes that we are not in compliance with the Utah Act and were to assess a penalty against us for our failure to pay the wages we owe on a timely basis, our liability could be in excess of $25,000 through May 31, 2017. We also might be subject to claims from employees due to late payment of their wages.

Risks Related to Our Business and Industry

We have a limited commercial history upon which to base our prospects, have not generated profits and do not expect to generate profits for the foreseeable future. We may never achieve or sustain profitability.

We began operations in January 2005, and we have a limited operating history.2005. We have not earned significant revenue to-date, and do not expect to earn significant revenue in the near future. We had a net lossNet gain (loss) for the nine-monththree-month periods ended September 30,March 31, 2017 and 2016 and 2015 ofwas approximately $83.0$21.5 million and $39.0$(33.7) million, respectively. Net loss(loss) for the years ended December 31, 20152016 and 2014,2015 was approximately $57.9$(89.1) million and $21.7$(57.9) million, respectively. As of September 30, 2016,March 31, 2017, December 31, 2015,2016, and December 31, 2014,2015, we had an accumulated deficit of $204.9$189.6 million, $121.9$211.1 million and $64.0 million, respectively.$121.9 million. Potential investors should be aware of the difficulties, normally encountered by a new enterprise,including delays, substantial risks, and expenses, many of which are beyond our control, including substantial risks and expensesthat we may experience in the course of developing new diagnostic tests, obtaining regulatory approvals, establishing or entering new markets and organizing operations and marketing procedures. The likelihood of our success must be considered in light of these risks, expenses, complications and delays, and the competitive environment in which we operate. There is, therefore, nothing at this time upon which to base an assumption that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of the start-up nature of our business, we can be expected to continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures. As discussed in Note 3 to the auditedours financial statements, our recurring operating losses from operations and our need for additional sources of capital to fund our ongoing operations raise substantial doubt about our ability to continue as a going concern. Any investment in our Company is therefore highly speculative and could result in the loss of your entire investment.

Our near-term success is dependent upon our ability to expand our customer base.

Our current customer base is composed of hospitals and testing laboratories that use ourC. diff, Group B Strep and other assays. Our success will depend, in part, upon our ability to expand our customer base and increase revenue by adding new products. Attracting new customers requires substantial time and expense. Any failure to expand our existing customer base would adversely affect our operating results. Many factors could affect the market acceptance and commercial success of our assays, including:

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If we cannot successfully develop, maintain, commercialize, or obtain regulatory approvals for new and existing diagnostic assays, our financial results will be harmed and our ability to compete will be harmed.

Our financial performance depends in part upon our ability to successfully develop and market new assays in a rapidly changing technological and economic environment, and to maintain and successfully commercialize previously cleared assays. If we fail to successfully introduce new assays or do not maintain approval for previously FDA-cleared assays, we could lose customers and market share. We could also lose market share if our competitors introduce new assays or technologies that render our assays less competitive or obsolete. In addition, delays in the introduction of new assays due to regulatory, developmental or other obstacles could negatively impact our revenue and market share, as well as our earnings. Factors that can influence our ability to introduce new assays, the timing associated with new product approvals and commercial success of these assays include:

We are subject to many laws and governmental regulations and any adverse regulatory action may materially adversely affect our financial condition and business operations.

Our assays forC. diff, Group B Strep, Staph ID/R and STEC and anyThe assays that we develop and commercialize in the future are subject to regulation by numerous government agencies, including the FDA and comparable foreign agencies. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of our assays. In particular, FDA regulations govern activities such as product development, product testing, product labeling, product storage, premarket clearance or approval, manufacturing, advertising, promotion, product sales, reporting of certain product failures and distribution. Our assays will require 510(k) clearance from the FDA prior to marketing. Clinical trials are required to support a 510(k) submission.

We may be unable to obtain marketing clearance for our assays in development. If such approval is obtained, it may:

Our facilities are subject to periodic inspection by the FDA and foreign regulatory agencies and conformance to the FDA’s Quality System Regulation (the “QSR”) and current Good Manufacturing Practice requirements, as well as applicable foreign or international standards. The results of these inspections can include

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inspectional observations regarding potential violations of the Food, Drug and Cosmetic Act (the “FDCA”) and related laws, warning letters, restrictions on medical device sales and other forms of enforcement.

Since 2009, the FDA has significantly increased its oversight of companies subject to its regulations, including medical device companies, by hiring new investigators and stepping up inspections of manufacturing facilities. The FDA has recently also significantly increased the number of warning letters issued to companies. If the FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk, the FDA could ban such medical devices, detain or seize adulterated or misbranded medical devices, order a recall, repair, replacement, or refund of such devices, refuse to grant pending pre-market approval applications or require certificates of foreign governments for exports, and/or require us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health. The FDA may also impose operating restrictions on a company-wide basis, enjoin and restrain certain violations of applicable law pertaining to medical devices and assess civil or criminal penalties against our officers, employees or us. The FDA may also recommend prosecution to the U.S. Department of Justice. Any adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our diagnostic tests.

Foreign governmental regulations have become increasingly stringent and more common, and we may become subject to more rigorous regulation by foreign governmental authorities in the future. Penalties for a company’s non-compliance with foreign governmental regulation could be severe, including revocation or suspension of a company’s business license and criminal sanctions. Any domestic or foreign governmental law or regulation imposed in the future may have a material adverse effect on us.

Our current and potential customers in the United States and elsewhere may also be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

The life sciences industry is highly competitive and subject to rapid technological change. If our competitors and potential competitors develop superior assays and technologies, our competitive position and results of operations would suffer.

We face intense competition from a number of companies that offer assays in our target markets, many of which have substantially greater financial resources and larger, more established marketing, sales and service operations than we do. The life sciences industry is characterized by rapid and continuous technological innovation. We may need to develop new technologies for our existing product and our assays to be competitive. One or more of our current or future competitors could render our existing products or assays under development obsolete or uneconomical by technological advances. We may also encounter other problems in the process of delivering new assays to the marketplace, such as problems related to FDA clearance or regulations, design, development or manufacturing of such assays, and as a result we may be unsuccessful in selling such assays. Our future success depends on our ability to compete effectively against current technologies, as well as to respond effectively to technological advances by developing and marketing assays that are competitive in the continually changing technological landscape.

If our assays do not perform as expected or the reliability of the technology on which our assays are based is questioned, we could experience delayed or reduced market acceptance of our assays, increased costs and damage to our reputation.

Our success depends on the market’s confidence that we can provide reliable, high-quality analyzers and diagnostic cartridges. We believe that customers in our target markets are likely to be particularly sensitive to product defects and errors. Our reputation and the public image of our assays or technologies may be impaired if our assays fail to perform as expected or our assays are perceived as difficult to use. Despite quality control testing, defects or errors could occur in our assays or technologies.

In the future, if our assays experience a material defect or error, this could result in loss or delay of revenues, delayed market acceptance, product recalls, damaged reputation, diversion of development resources, legal claims, increased insurance costs or increased service and warranty costs, any of which could harm our

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business. Such defects or errors could also prompt us to amend certain warning labels or narrow the scope of the use of our assays, either of which could hinder our success in the market. Even after any underlying concerns or problems are resolved, any widespread concerns regarding our technology or any manufacturing defects or performance errors in our assays could result in lost revenue, delayed market acceptance, damaged reputation, increased service and warranty costs and claims against us.

If our international distributor relationships are not successful, our ability to market and sell our assays will be harmed and our financial performance will be adversely affected.

Outside of the United States, we depend on relationships with distributors for the marketing and sales of our assays in various geographic regions, and we have a limited ability to influence their efforts. Relying on distributors for our sales and marketing could harm our business for various reasons, including:

If any of our products, or the malfunctioning of our products, causes or contributes to a death or a serious injury, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.

Under the FDA medical device reporting regulations, medical device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to death or serious injury if the malfunction of the device were to recur. If we fail to report these events to the FDA within the required timeframes, or at all, FDA could take enforcement action against us. Any such adverse event involving our assays could also result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.

Our assays may in the future be subject to product recalls. A recall of our products, either voluntarily or at the direction of the FDA or another governmental authority, including a third-country authority, or the discovery of serious safety issues with our products, could have a significant adverse impact on us.

The FDA and similar foreign governmental authorities have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture. In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is reasonable probability that the device would cause serious injury or death. In addition, foreign governmental bodies have the authority to require the recall of our products in the event of material deficiencies or defects in design or manufacture. Manufacturers may, under their own initiative, recall a product if any material deficiency in a device is found. The FDA requires that certain classifications of recalls be reported to the FDA within ten working days after the recall is initiated. A government-mandated or voluntary recall by us or one of our international distributors could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of our assays would divert managerial and financial resources and have an adverse effect on our reputation, results of operations and financial condition, which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands. We may also be subject to liability claims, be required to bear other costs, or take other actions that may have a negative impact on our future sales and our ability to generate profits. Companies are required to maintain certain records of recalls, even if they are not reportable to the FDA or another third-country competent authority. We may initiate voluntary recalls involving our products in the future that we determine do not require notification of the FDA or another third-country competent authority. If the FDA disagrees with our determinations, it could require us to

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report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for failing to report the recalls when they occur.

We are also required to follow detailed recordkeeping requirements for all Company-initiated medical device corrections and removals. In addition, in December 2012, the FDA issued a draft guidance intended to assist the FDA and industry in distinguishing medical device recalls from product enhancements. Per the guidance, if any change or group of changes to a device that addresses a violation of the FDCA, that change would generally constitute a medical device recall and require submission of a recall report to the FDA.

If we become subject to claims relating to improper handling, storage or disposal of hazardous materials, we could incur significant cost and time to comply.

Our research and development processes involve the controlled storage, use and disposal of hazardous materials, including biological hazardous materials. We are subject to foreign, federal, state and local regulations governing the use, manufacture, storage, handling and disposal of materials and waste products. We may incur significant costs complying with both existing and future environmental laws and regulations. In particular, we are subject to regulation by the Occupational Safety and Health Administration, or OSHA, and the Environmental Protection Agency, or EPA, and to regulation under the Toxic Substances Control Act and the Resource Conservation and Recovery Act in the United States. OSHA or the EPA may adopt additional regulations in the future that may affect our research and development programs. The risk of accidental contamination or injury from hazardous materials cannot be eliminated completely. In the event of an accident, we could be held liable for any damages that result, and any liability could exceed the limits or fall outside the coverage of our workers’ compensation insurance. We may not be able to maintain insurance on acceptable terms, if at all.

Our diagnostic cartridges have not been manufactured on a high volume scale and are subject to unforeseen scale-up risks.

Although we have developed a process to manufacture diagnostic cartridges for our current volume of sales, there can be no assurance that we can manufacture our diagnostic cartridges at a scale that is adequate for our future commercial needs. We may face significant or unforeseen difficulties in manufacturing our diagnostic cartridges, including but not limited to:

In addition, since May 5, 2017, our manufacturing capacity has been limited due to our lack of operating capital and we have manufacturing employees on furlough. These and other difficulties may only become apparent when scaling up to the manufacturing process of our diagnostic cartridges to a more substantive commercial scale. If our diagnostic cartridges cannot be manufactured in sufficient commercial quantities or manufacturing is delayed, our future prospects could be significantly impacted and our financial prospects would be materially harmed.

We or our suppliers may experience development or manufacturing problems or delays that could limit the growth of our revenue or increase our losses.

We may encounter unforeseen situations in the manufacturing of our diagnostic cartridges that could result in delays or shortfalls in our production. Our suppliers may also face similar delays or shortfalls. In addition, our

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Our clinical trial costs will increase if we have material delays in those trials or if we need to perform more or larger trials than planned. Adverse events during a clinical trial could cause us to repeat a trial, terminate a trial or cancel an entire program. Should our clinical development plan be delayed, this could have a material adverse effect on our operations and financial condition.

Product liability claims could adversely impact our financial condition and our earnings and impair our reputation.

Our business exposes us to potential product liability risks that are inherent in the design, manufacture and marketing of medical devices. Device failures, manufacturing defects, design flaws, or inadequate disclosure of product-related risks or product-related information with respect to our assays could result in an unsafe condition regarding, injury to, or death of, a patient. The occurrence of such a problem could result in product liability claims or a recall of, or safety alert relating to, one or more of our assays. Product liability claims or product recalls in the future, regardless of their ultimate outcome, could have a material adverse effect on our business and reputation and on our ability to attract and retain customers for our assays.

Healthcare policy changes, including U.S. healthcare reform legislation signed in 2010, may have a material adverse effect on us.

In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010, or PPACA, were signed into law. The legislation imposes a 2.3% excise tax on medical device manufacturers. This significant tax burden on our industry could have a material, negative impact on our results of operations and our cash flows. Other elements of this legislation, such as comparative effectiveness research, an independent payment advisory board, payment system reforms, including shared savings pilots, and other provisions, could meaningfully change the way healthcare is developed and delivered, and may materially impact numerous aspects of our business.

In addition, we expect that the new presidential administration and U.S. Congress will seek to modify, repeal, or otherwise invalidate all, or certain provisions of, the Affordable Care Act. Since taking office, President Trump has continued to support the repeal of all or portions of the Affordable Care Act. In January 2017, the House and Senate passed a budget resolution that authorizes congressional committees to draft legislation to repeal all or portions of the Affordable Care Act and permits such legislation to pass with a majority vote in the Senate. President Trump has also recently issued an executive order in which he stated that it is his administration’s policy to seek the prompt repeal of the Affordable Care Act and directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of the Affordable Care Act to the maximum extent permitted by law. There is still uncertainty with respect to the impact President Trump’s administration and the U.S. Congress may have, if any, and any changes will likely take time to unfold, and could have an impact on coverage and reimbursement for healthcare items and services covered by plans that were authorized by the Affordable Care Act. However, we cannot predict the ultimate content, timing or effect of any healthcare reform legislation or the impact of potential legislation on us.

Adverse changes in reimbursement policies and procedures by payors may impact our ability to market and sell our assays that are subject to reimbursement.

Healthcare costs have risen significantly over the past decade, and there have been and continue to be proposals by legislators, regulators and third-party payors to decrease costs. Third-party payors are increasingly challenging the prices charged for medical products and services and instituting cost containment measures to control or significantly influence the purchase of medical products and services. For example, the PPACA, among other things, reduced and/or limited Medicare reimbursement to certain providers. The Budget

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Control Act of 2011, as amended by subsequent legislation, further reduces Medicare’s payments to providers by 2 percent through fiscal year 2024. These reductions may reduce providers’ revenues or profits, which could affect their ability to purchase new technologies. Furthermore, the healthcare industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control healthcare costs by imposing lower payment rates and negotiating reduced contract rates with service providers. Legislation could be adopted in the future that limits payments for our products from governmental payors. In addition, commercial payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers’ products. Therefore, we cannot be certain that those of our assays that will be subject to reimbursement will be reimbursed at a cost-effective level. We face similar risks relating to adverse changes in reimbursement procedures and policies in other countries where we market or intend to market our assays. Reimbursement and healthcare payment systems vary significantly among international markets. Our inability to obtain international reimbursement approval, or any adverse changes in the reimbursement policies of foreign payors, could negatively affect our ability to sell our assays and have a material adverse effect on our business and financial condition.

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Our ability to compete depends on our ability to attract and retain talented employees.

Our future success depends on our ability to identify, attract, train, integrate and retain highly qualified technical, development, sales and marketing, managerial and administrative personnel. Competition for highly skilled individuals is extremely intense and we face difficulty identifying and hiring qualified personnel in many areas of our business. We may not be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we compete for hiring experienced employees have greater resources than we have. If we fail to identify, attract, train, integrate and retain highly qualified and motivated personnel, our reputation could suffer and our business, financial condition and results of operations could be adversely affected.

Our future success also depends on the continued service and performance of our senior management team. The replacement of members of our senior management team likely would involve significant time and costs, and the loss of any these individuals may delay or prevent the achievement of our business objectives.

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Our operating results may fluctuate due to reductions and delays in expenditures by our customers. Any decrease in our customers’ budgets or expenditures, or in the size, scope or frequency of operating expenditures, could materially and adversely affect our business, operating results and financial condition.

New technologies, techniques or assays could emerge that might offer better combinations of price and performance than our current C. diff, Group B Strep, Staph ID/R and e. coli assays or future assays and analyzers.

It is critical to our success that we anticipate changes in technology and customer requirements and to successfully introduce, on a timely and cost-effective basis, new, enhanced and competitive technologies that meet the needs of current and prospective customers. If we do not successfully innovate and introduce new technology into our product lines or manage the transitions to new product offerings, our revenues, results of operations and business will be adversely impacted. Competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements.

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not be successful in defending challenges made against our patents and other intellectual property rights. Any third-party challenge to any of our patents could result in the unenforceability or invalidity of some or all of the claims of such patents and could be time consuming and expensive.

The extent to which the patent rights of life sciences companies effectively protect their diagnostic tests and technologies is often highly uncertain and involves complex legal and factual questions for which important legal principles remain unresolved.

No consistent policy regarding the proper scope of allowable claims of patents held by life sciences companies has emerged to date in the United States. Various courts, including the U.S. Supreme Court, have rendered decisions that impact the scope of patentability of certain inventions or discoveries relating to diagnostic tests or genomic diagnostic testing. These decisions generally stand for the proposition that inventions that recite laws of nature are not themselves patentable unless they have sufficient additional

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enforcement or defense of issued patents that we own or license, all of which could have a material adverse effect on our business and financial condition.

Patent applications in the United States and many foreign jurisdictions are not published until at least eighteen months after filing and it is possible for a patent application filed in the United States to be maintained in secrecy until a patent issues on the application. In addition, publications in the scientific literature often lag behind actual discoveries. We therefore cannot be certain that others have not filed patent applications that cover inventions that are the subject of pending applications that we own or exclusively license or that we were the first to invent the technology (if filed prior to the Leahy-Smith Act) or first to file (if filed after the Leahy-Smith Act). Our competitors may have filed, and may in the future file, patent applications covering technology that is similar to or the same as our technology. Any such patent application may have priority over patent applications that we own and, if a patent issues on such patent application, we could be required to obtain a license to such patent in order to carry on our business. If another party has filed a U.S. patent application covering an invention that is similar to, or the same as, an invention that we own,

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competitive technologies and products. In particular, during prosecution of any patent application, the issuance of any patents based on the application may depend upon our ability to generate additional nonclinical or clinical data that support the patentability of our proposed claims. We may not be able to generate sufficient additional data on a timely basis, or at all. Moreover, changes in either the patent laws or interpretation of the patent laws in the United States or other countries may diminish the value of our patents or narrow the scope of our patent protection.

Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, reexamination,inter partes review, post-grant review or interference proceedings or other patent office proceedings or litigation, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such submission or proceeding could reduce the scope of, or invalidate, our patent rights; allow third parties to commercialize our technology or products and compete directly with us, without payment to us; or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the breadth or strength of

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and administrative proceedings (e.g., a re-examination) in the United States and internationally involve complex legal and factual questions. As a result, such proceedings are costly and time consuming to pursue, and their outcome is uncertain.

Even if we prevail in such a proceeding in which we assert our intellectual property rights against third parties, the remedy we obtain may not be commercially meaningful or adequately compensate us for any damages we may have suffered. If we do not prevail in such a proceeding, our patents could potentially be declared to be invalid, unenforceable or narrowed in scope, or we could otherwise lose valuable intellectual property rights. Similar proceedings involving the intellectual property we exclusively license could also have an impact on our business. Further, if any of our other owned or exclusively licensed patents are declared invalid, unenforceable or narrowed in scope, our competitive position could be adversely affected.

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misappropriation, but we do not know to what extent, if any, these agreements, and any remedies for their breach, will be enforced by a foreign court. If our intellectual property is misappropriated or infringed upon and an adequate remedy is not available, our future prospects will likely diminish. The sale of diagnostic tests that infringe our intellectual property rights, particularly if such diagnostic tests are offered at a lower cost, could negatively impact our ability to achieve commercial success and may materially and adversely harm our business.

Our failure to secure trademark registrations could adversely affect our business and our ability to market our assays and product candidates.

Our trademark applications in the United States and any other jurisdictions where we may file may not be allowed for registration, and our registered trademarks may not be maintained or enforced. During trademark registration proceedings, we may receive rejections. Although we are given an opportunity to respond to those

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Additional Risks Related to this Offering

You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

Investors purchasing securities in this offering will incur immediate and substantial dilution in net tangible book value per share. Assuming a public offering price of $0.37 per Class A Unit and $0.37 (including and assuming the exercise of the Pre-funded Series K Warrants underlying the Class B Units) per Class B Unit, purchasers of Class A Units and Class B Units will effectively incur dilution of $3.43 per share in the net tangible book value of their purchased shares. To the extent that any of the Offering Warrants are ultimately exercised, you will sustain further dilution. In addition, in the past, we issued options, warrants and other convertible securities to acquire shares of common stock and may need to do so in the future to support our operations. To the extent options and/or warrants are ultimately exercised, you will sustain future dilution. See “Dilution” on page 38 of this prospectus for a discussion of the dilution you may incur in connection with this offering.

There is no public market for the Offering Warrants.

There is no established trading market for the Offering Warrants and we do not expect active trading market to develop. In addition, we do not intend to list the Offering Warrants on any securities exchange or other trading market. Without an active trading market, the liquidity of the Offering Warrants will be limited.

Purchasers of our Offering Warrants will not have rights of common stock stockholders until such Offering Warrants are exercised.

The Offering Warrants being offered do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price for a limited period of time.

We will have broad discretion over the use of the net proceeds of this offering.

We currently intend to allocate the net proceeds received from this offering as described under “Use of Proceeds” on page 5440 of this prospectus. However, management will have broad discretion in the actual application of the net proceeds, and may elect to allocate net proceeds differently from that described under “Use of Proceeds” if management believes it would be in our best interests to do so. Furthermore, as at the date hereof, we have no definitive plans for the expenditure of certain net proceeds of this offering and there can be no assurance as to how such funds may be expended. Certain of the net proceeds of this offering, including corporate general and administrative expenses and exploration/development, are currently unallocated and as such may be expended at the discretion of our management. Accordingly, although such allocations are based on the current expectation of our management, there may be circumstances where, for business reasons, a reallocation of funds may be necessary, as may be determined at our discretion. Our shareholdersstockholders may not agree with the manner in which management chooses to allocate and spend the net proceeds. The failure by our management to apply these funds effectively could have a material adverse effect on our business.

Investors in this offering will experience immediate and substantial dilution.

The public offering price of the Units offered pursuant to this prospectus is substantially higher than the net tangible book value per share of our Common Stock. Therefore, if you purchase Units in this offering, you will incur immediate and substantial dilution in the net tangible book value per share of Common Stock underlying the Series G Preferred Stock and the Series I Warrants from the price per Unit that you pay for the securities. Based on the sale of 8,000 Units at a public offering price of $1,000 per Unit in this offering (and an assumed Set Price of $1.10 per share), you will suffer immediate dilution of approximately $6.19 per share in the net tangible book value of the Common Stock. Moreover, as described under “Prospectus Summary — The Offering,” we have a substantial number of stock options, warrants to purchase Common Stock and convertible notes convertible into Common Stock outstanding. If the holders of outstanding options, warrants and convertible notes exercise or converts those options, warrants or convertible notes at prices below the public offering price, you will incur further dilution.

The offering price determined for this offering is not an indication of our value.

The per-Unit offering price and the initial conversion price of the Series G Preferred Stock and the initial exercise price of the Series I Warrants may not necessarily bear any relationship to the book value of our assets, past operations, cash flows, losses, financial condition or any other established criteria for value. You should not consider the offering price for the Units as an indication of the value of the Common Stock underlying the Series G Preferred Stock and the Series I Warrants. After the date of this prospectus, the Common Stock may trade at prices above or below the price per share of Common Stock imputed by the offering price.

There is a limited public trading market for the Common Stock.

The Common Stock is currently quoted on OTCQB under the trading symbol “GBSN.” There is a limited public trading market for the Common Stock. Without an active trading market, there can be no assurance of any liquidity or resale value of the Common Stock, and shareholders may be required to hold shares of the Common Stock for an indefinite period of time.

There is no public market for the Units, the Series G Preferred Stock and the Series I Warrants.

There is no established public trading market for the Units, the Series G Preferred Stock and the Series I Warrants offered by this prospectus and we do not expect a market to develop. In addition, we do not intend to apply to list the Units, the Series G Preferred Stock or the Series I Warrants on any national securities exchange or other nationally recognized trading system. Without an active market, the liquidity of the Units, the Series G Preferred Stock and the Series I Warrants will be limited.

As a holder of the Series G Preferred Stock or Series I Warrants you have no voting rights.

You will have no voting rights as a holder of the Series G Preferred Stock or Series I Warrants. Our Common Stock and Series F Preferred Stock are currently the only classes of our securities that carry full voting rights.

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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in our “Prospectus Summary,” “Use of Proceeds,” “Risk Factors,” “Management“Management’s Discussion and Analysis of Financial Condition and Result of Operations,” and “Business” sections. In some cases, you can identify these forward — lookingforward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,” “estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms or other similar expressions, although not all forward-looking statements contain those words.

We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this prospectus, regarding, among other things:

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These risks are not exhaustive. Other sections of this prospectus may include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward looking statements. You should read this prospectus with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. Except as required by law, we undertake no obligation to update publicly any forward looking statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations.

We qualify all of our forward looking statements by these cautionary statements.

DILUTION

Dilution is the amount by which the purchase price paid by the purchasers for the securities offered in this offering will exceed the as-adjusted net tangible book value (deficit) per share of our Common Stockcommon stock after the offering.

The net tangible book deficit of our common stock as of September 30, 2016March 31, 2017 was approximately $61.5$29.9 million, or approximately $7,276.87$(39.14) per share (based on 8,456763,612 shares outstanding on September 30, 2016)March 31, 2017). Net tangible book deficit per share is equal to the amount of our total tangible assets, less total liabilities, divided by the aggregate number of shares of common stock outstanding.

OurAfter giving effect to the assumed sale by us of 8,200,000 Class A Units in this offering at an assumed public offering price of $0.37 per Class A Unit, and after deducting the estimated placement agent fees and estimated offering expenses payable by us, and attributing no value to the Series J Warrants, our pro forma as-adjusted net tangible book deficit as of September 30, 2016March 31, 2017 would have been approximately $50.7$27.4 million, or approximately $38.91$(3.06) per share (based on 1,302,904 shares of our common stock outstanding on January 5, 2017) after giving effect to the following transactions subsequent to September 30, 2016: (i) reduction of liabilities in the amount of $5.7 million for conversion of 2015 Notes into shares of common stock, (ii) reductionstock. This represents a decrease in our pro forma as adjusted net tangible book deficit to existing stockholders of liabilities in the amountapproximately $37.00 per share and an immediate dilution of $8.4 million related$3.43 per share to the cancellation of the 2015 Notes in exchange for Series F Preferred Stock, (iii) net increase in liabilities in the amount of $5.9 million due to the issuance of Series F Preferred Stock and subsequent partial conversion into shares of common stock, and (iv) the increase in cash in the amount of $2.6 million for the early release of funds from the restricted accounts related to the 2016 Notes.

Purchasers ofnew investors purchasing Class A Units in this offering will experience substantial and immediate dilution in net tangible book value per share of our Common Stock for financial accounting purposes immediately following the closing. The calculations below are based on there being 8,456 shares outstanding on September 30, 2016 and 1,302,904 shares of our common stock outstanding after giving effect to shares issued after September 30, 2016 pursuant to the conversion of 2015 Notes, Series F Preferred Stock and 2016 Notes.offering.

The Units offered in this offering contain shares of Series G Preferred Stock that are convertible into shares of Common Stock. The following table illustrates this dilution based on (i) the offering of an aggregate of 8,000 Units at a public offering price of $1,000 per Unit, and (ii) the issuance of 7,272,728 shares of Common Stock upon conversion of the Series G Preferred Stock at an assumed Set Price of $1.10 based on the closing bid price of the Common Stock on January 5, 2017.share dilution:

Assumed public offering price per share (assumed conversion of Preferred Stock as described above)		$	1.10
Net tangible book value (deficit) per share as of September 30, 2016		$	(7,276.87	)
Pro forma net tangible book value (deficit) per share as of September 30, 2016		$	(38.91	)
Increase in pro forma net tangible book value (deficit) per share attributable to new investors		$	33.82
Pro forma, as-adjusted, net tangible book value (deficit) per share after this offering and after giving effect to the issuance of shares after September 30, 2016		$	(5.09	)
Dilution per share to investors in this offering		$	6.19

Assumed public offering price per share		$	0.37
Net tangible book value (deficit) per share as of March 31, 2017		$	(39.14	)
Pro forma net tangible book value (deficit) per share as of March 31, 2017		$	(3.06	)
Increase in pro forma net tangible book value (deficit) per share attributable to new investors		$	36.08
Dilution per share to investors in this offering		$	(3.43	)

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If we were only to sell Class B Units in this offering, the table below illustrates this dilution based on (i) the offering of an aggregate of 8,200,000 Class B Units at a public offering price of $0.37 per unit less the $0.01 per share exercise price of the Pre-funded Series K Warrant included in the Class B Unit, (ii) the issuance of 20,500,000 shares of common stock upon exercise of all Series J Warrants at an assumed exercise price of $0.37 per share based on 100% of the closing bid price of the common stock on June 13, 2017, (iii) the issuance of 8,200,000 shares of common stock upon the exercise of all Pre-funded Series K Warrants at an assumed exercise price of $0.01, and (iv) deducting the estimated placement agent fees and estimated offering expenses payable by us.

Assumed public offering price per share		$	0.37
Net tangible book value (deficit) per share as of March 31, 2017		$	(39.14	)
Pro forma net tangible book value (deficit) per share as of March 31, 2017		$	(0.67	)
Increase in pro forma net tangible book value (deficit) per share attributable to new investors		$	38.47
Dilution per share to investors in this offering		$	(1.04	)

The number of shares of our outstanding common stock reflected in the discussion and table above is based on 8,456763,612 shares of common stock outstanding as of September 30, 2016March 31, 2017 and excludes, as of that date:

This discussion does not take into account further dilution to new investors that could occur upon the exercise of outstanding options and warrants, including the Series IOffering Warrants, offered in this offering, having a per share exercise price less than the public offering price per unit in this offering. To the extent that the above issued options and warrants were exercised, the pro forma net tangible book value (deficit) per share of our common stock after giving effect to this offering would be $(0.39) per share, and the dilution in net tangible book deficit per share to investors in this offering would be $(0.76) per share.

If we raise additional capital in the future, we may in the future sell substantial additional amounts of Common Stockcommon stock or securities convertible into or exercisable for Common Stock.common stock. We may also choose to raise additional capital due to market conditions or other strategic considerations even if we believe we have sufficient funds for our current or future operating plans. The issuance of these securities could result in further dilution to our shareholders.stockholders.

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USE OF PROCEEDS

We estimate that the net proceeds of this offering will be approximately $7.09 million,$2,471,620, assuming the sale of 8,000up to 8,200,000 Units at an assumed public offering price of $1,000$0.37 per Unit (less, in the case of Class B Units, the $0.01 per share exercise price of the Pre-funded Series K Warrants) after deducting estimated placement agent fees and estimated offering expenses payable by us and excluding the proceeds, if any, from the exercise of the Series IOffering Warrants. We will receive additional proceeds from any cash exercise of the Series I Warrants offered by this prospectus.Offering Warrants. We cannot provide any assurance as to the amount or timing of receipt of any additional proceeds from exercise of the Series IOffering Warrants.

A $100 increase (decrease) in the assumed public offering price of $1,000 per Unit, would increase (decrease) the expected net cash proceeds of the offering to us by approximately $800,000, assuming the aggregate number of Units sold remains the same. An increase (decrease) of 100 in the assumed aggregate number of Units sold in this offering would increase (decrease) the expected net cash proceeds of the offering to us by approximately $100,000, assuming that the assumed public offering price for each such security remains the same.

We expect the net proceeds from this offering will allow us to fund our operations for up to 2 months following the closing of thethis offering, including the completioncontinued expansion of sales of our on-going clinical trialfive currently approved tests and filing withcontinuation of the FDA ofregulatory process seeking approval for one of our diagnostic test.tests currently under review by the FDA. We intend to use the net proceeds from this offering as reflected in the following use of proceeds tables. The use of proceeds table assumes that we raise 10%, 50% or 100% of the securities offered in this offering (all amounts in millions of dollars):offering:

			10	%			50	%			100	%		50%				100%
Extinguishment of New Series B Notes														$	0.6			$	0.6
Research and Development		$	0.1			$	1.5			$	3.2				0.1				0.5
Sales and Marketing		$	0.1			$	0.5			$	1.4				0.1				0.7
Manufacturing Analyzers for Customers		$	—			$	—			$	0.7
General Corporate Purposes		$	0.2			$	1.4			$	1.7				0.3				0.7
Total		$	0.4			$	3.4			$	7.1			$	1.1			$	2.5

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MARKET PRICE HISTORY

Market Information

Our common stock is currently quoted on the OTCQB under the symbol “GBSN.”

The following table contains for the periods indicated, the intraday high and low sale prices per share of our common stock.stock from October 9, 2014, the time of our initial public offering, to October 11, 2016, when our common stock was suspended from trading on the NASDAQ Capital Market and began to be quoted on the OTCQB. Prior to the date of our initial public offering, there was no public market for our common stock. As a result, we have not set forth other quarterly information with respect to the high and low prices for our common stock for the two most recent fiscal years. The below prices retroactively apply our December 11, 2015 60-to-1 reverse stock split, our March 30, 2016 35-to-1 reverse stock split, our September 16, 2016 80-to-1 reverse stock split and our December 28, 2016 300-to-1 reverse stock split.

On October 11, 2016 our common stock was suspended from trading on the NASDAQ Capital Market and transferred to being quoted on the OTCQB. The below quotations from on or after October 11, 2016, are the high and low bid prices for such periods indicated as reported by the OTC Markets Group Inc., which reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

		High				Low				2015 (in billions)
2014
Fourth Quarter		$	457,632,000.00			$	106,848,000.00
2015
										High				Low
First Quarter		$	212,688,000.00			$	74,592,000.00			$	425.4			$	149.2
Second Quarter		$	307,440,000.00			$	127,808,000.00			$	614.9			$	254.0
Third Quarter		$	161,280,000.00			$	2,520,000.00			$	322.6			$	4.5
Fourth Quarter		$	11,088,000.00			$	789,600.00			$	27.0			$	1.6
2016
First Quarter		$	798,000.00			$	88,320.00
Second Quarter		$	188,400.00			$	40,320.00
Third Quarter		$	42,240.00			$	660.00
Fourth Quarter		$	695.10			$	1.09
2017
First Quarter (through January 5, 2017)		$	1.80			$	0.79

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this prospectus. Except for historical information contained herein, the following discussion and analysis contains forward-looking statements which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We discuss such risks, uncertainties and other factors throughout this prospectus and specifically under the section titled “Risk Factors”.

Overview of Our Business

We are a molecular diagnostic testing company. We are focused on improving patient care through the development and commercialization of our patented, low-cost, molecular diagnostic platform for testing for infectious disease,diseases, especially hospital- acquiredhospital-acquired infections. We believe our platform has the ability to transform molecular testing for infectious diseases at small to medium sizedmedium-sized hospitals by providing an affordable solution that meets the rapidly evolving needs of patients and providers.

We believe there is a fast-growing market for molecular diagnostic systems being purchased by hospital microbiology labs to replace culture and other legacy testing formats. We believe our platform is well positioned to meet this need. Our platform providescapable of providing results in 45 to 115 minutes, depending on the test. Molecular testing generally reduces test time from days to hours, and provides more accurate results, which we believe leads to shortened hospital stays and improved patient outcomes, all of which leads to reduced cost for hospitals that implement molecular testing in their labs.

Our platform is an automated molecular diagnostic system, consisting of an analyzer and associated assay cartridge. Our platform utilizes a sample-to-result format, which means that once a patient specimen is received, it undergoes limited processing before it is placed in the analyzer where the assay is run without further technician intervention. This reduces assay complexity, and eliminates the need for highly trained and expensive molecular technicians to run the tests. Our platform is designed to enable simple, rapid, and cost-effective analysis of multiple pathogens from a single clinical sample which will allow small to medium sizedmedium-sized community hospitals that traditionally could not afford more expensive or complex molecular diagnostic testing platforms to modernize their laboratory testing and provide better patient care at an affordable cost.

In November 2012, we launched our first FDA-cleared test forC. diff, a bacteria that causes life-threatening gastrointestinal distress in hospital patients. In addition to our C. diff assay, we have four additional FDA-cleared tests: our Group B Strep assay which we launched in 2015, our Shiga toxin producing E. coli (“STEC”) and Staph ID/R (“SIDR”) assays which we launched in 2016, and a test for Bordetella pertussis (whooping cough) which we launched in May 2017. Additionally, we have completed clinical trials and submitted a 510(k) application to the FDA for another assay — Stool Bacterial Pathogens Panel (“SBPP”) in December of 2016, for which we expect a decision in 2017. Even though the SBPP product has not yet been cleared by the FDA, beginning in February 2017 we began selling this assay to customers who agreed to pay us discounted evaluation pricing to help us validate this assay ahead of FDA clearance. We also have three other assays in various stages of product development: (i) a test for Chlamydia-Gonorrhea, (ii) a pre-surgical nasal screen for Staphylococcus aureus, and (iii) a panel for Candida blood infections.

We currently sell our diagnostic test cartridgecartridges in the United States through a direct sales force, and we use distributors in the European Union and New Zealand. As of September 30, 2016,March 31, 2017, we had 276256 customers worldwide (255(235 in the United States and 21 in the rest of the world), who use an aggregate of 510470 of our analyzers. Our easy to use platform allows small to medium sizedmedium-sized hospitals that we believe could not previously afford more expensive or complex molecular diagnostic systems to modernize their laboratory testing and provide better patient care at an affordable cost.

In addition to our C. diff assay, we have developed two additional tests, Group B Strep assay for which we received FDA clearance in April 2015 and launched commercially in June 2015 and Shiga toxin producing E. coli, or STEC, for which we received FDA clearance in March 2016 and launched commercially in August 2016. We also received FDA clearance in March of 2016 for Staph ID/R and launched commercially in September 2016. Additionally, we have five other assays in various stages of product development: (i) a pre-surgical nasal screen for Staphylococcus aureus, or SA, (ii) a food borne pathogen panel, (iii) a panel for candida blood infections (iv) a test for pertussis and, (v) a test for CT/NG.

Since inception, we have incurred net losses from operations each year, and we expect to continue to incur losses for the foreseeable future. Our lossesnet loss attributable to operations for the fiscal year ending December 31, 20152016 was approximately $34.1 million and for the ninethree months ended September 30,March 31, 2017 our net loss from operations was $6.4 million. For the fiscal year ending December 31, 2016 wereour net loss was approximately $57.9$89.1 million and $83.0 million, respectively. As of September 30, 2016, we had an accumulated deficit of $204.9 million.

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while for the three months ended March 31, 2017 we had net income, due to the change in value of our fair value liabilities, in the amount of $21.5 million. As of March 31, 2017, we had an accumulated deficit of $189.5 million.

Financial Operations Overview

Revenue

We derive our revenue from the sale of single use assays sold through our dedicated sales force in the United States, and in the European Union and New Zealand through a network of distributors. Revenue is recognized when all four of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery of the products has occurred; (3) the selling price of the product is fixed or determinable; and (4) collectability of that price is reasonably assured. Change in title to the product and recognition of revenue from sales of the assays occurs at the time of shipment.

We believe our revenue from the sale of our assays will increase as we expand our sales and marketing efforts, and as we introduce new assays into the market. We expect that our revenue will continue to be primarily attributable to sales of our assays in the United States.

Our material increases in revenues since the inception of our business have been attributable to increases in the volume of goods being sold as a result of increases in the number of customers. As of September 30, 2016,March 31, 2017, we have fourfive commercial products, ourC. diff assay, our Group B Strep assay, our Staph ID/R panel, and our Shiga Toxin Direct Test.Test, and Bordetella pertussis diagnostic assay. The average price of each assay has not materially changed since theirthe assay’s commercial releases.release.

Cost of Sales

The components of our cost of sales include cost of materials, supplies, labor for manufacturing and support personnel, equipment, and facility expenses associated with manufacturing. We also depreciate the cost of each analyzer that is at a customer site over a period of 5 years on a straight line basis, and include that cost in cost of sales. Effective January 1, 2017, we changed our estimate of the analyzers’ useful lives from five to seven years. We perform all of our manufacturing activities at our facility located in Salt Lake City, Utah. Facility expenses include allocated overhead comprised of rent, other equipment depreciation, and utilities. We expect our cost of sales in absolute dollars to increase, as the number of diagnostic cartridges we manufacture increases. However, we also expect that as assay volumes increase we will realize manufacturing efficiencies, which would result in a decrease in our cost of sales as a percentage of revenue. We also license certain technologies for our C. diff assay, which are described elsewhere in this prospectus. Pursuant to the terms of these license agreements, we pay royalty fees in the aggregate equal to 14% of our worldwide “Net Sales” of those products that use these technologies (as defined and adjusted pursuant to the terms of the applicable license agreements).

Research and Development

All research and development costs, including those funded by third parties, are expensed as incurred. Research and development costs consist of engineering, product development, clinical trials, test-part manufacturing, testing, developing and validating the manufacturing process, manufacturing, facility, and regulatory-related costs. Research and development costs also include employee cash compensation, employee and non-employee stock-based compensation, supplies and materials, consultant services, and travel related to research activities.

In 2015 and 2016 we incurred additional research and development costs as we continued to develop new assays, and as we advanced the development of our product candidates, including our Group B Strep, Staph ID/R, and shigaShiga toxin producing e. coli assays. In particular, we conducted clinical trials for theour Staph ID/R, and shigaShiga toxin producing e. coli, food borne pathogen, and Bordetella pertussis (whopping cough) product candidates, which increased our research and development expenses. Additionally, we have fivethree other assays in various stages of product development: (i) a panel for Candida blood infections, (ii) a test for Chlamydia-Gonorrhea, and (iii) a pre-surgical nasal screen forStaphylococcus aureus, or SA, (ii) a food borne pathogen panel, (iii) a panel for candida blood infections, (iv) a test for pertussis, and (v) a test for CT/NG.. We plan to continue the development of these products and conduct clinical trials in 2016, which will increase our research2017 and development expenses.2018.

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Sales and Marketing

Sales and marketing expenses primarily consist of salaries, benefits, and other related costs, including stock-based compensation, for personnel employed in sales, marketing, and training. In addition, our sales and marketing expenses include commissions and bonuses paid to our sales representatives, generally based on the number of new customers obtained and other objectives attained.

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associated with them was extinguished. A gain on the extinguishment of debt was recorded to account for these transactions. The gain amount was equal to the fair market values of the common shares issued and the principal amounts of the 2016 Notes either paid down or extinguished, partially offset by the related remaining debt discount associated with the extinguished principal amounts, the related derivative liability amounts also reduced, and the accrued underwriting fees eliminated.

Change in Fair Value of Derivative LiabilityLiabilities

We have issued certain common stock warrants that contain a price adjustment clause which states that in the event the Company issues common stock for a price less than the exercise price of warrants, the exercise price will be reduced to the issuance price of the common stock. We have also issued convertible notes payable that contain a conversion feature that could result in modification of the conversion price to issue a variable amount of additional common shares. The Company hasWe have determined that the warrants are accounted for as a derivative liability, and the conversion feature of the convertible notes is an embedded derivative. These derivatives are recorded at fair value measured at the transaction date and again at each reporting period. In addition, we issued shares of Series F Preferred Stock that are required to be recorded as a liability on the balance sheet as the Series F Preferred Stock predominantly represents an unconditional obligation to issue a variable number of common shares for a fixed amount. The shares of Series F Preferred Stock are recorded at fair value at the transaction date and again at each reporting period. Any difference in fair value of these instruments between the transaction date and future reporting periods must be recognized in earnings for the period.

Results of Operations

Comparison of the Three Months Ended March 31, 2017 and 2016

Revenue

		Three Months Ended March 31,								Increase
		2017				2016				$				%
C. diff		$	638,767			$	671,742			$	(32,975	)			-5	%
Group B Strep			108,680				59,680				49,000				82	%
STEC			23,180				—				23,180				—
SIDR			52,900				—				52,900				—
SBPP			7,250				—				7,250				—
		$	830,777			$	731,422			$	99,355				14	%

Revenue increased 14% for the three months ended March 31, 2017, as compared to the three months ended March 31, 2016. We had revenue derived from the sale of STEC and SIDR assays inasmuch as the products were commercially launched in August and September of 2016. In anticipation of it being cleared by the FDA, in February 2017 we also began shipping discounted “investigational use only” versions of our new SBPP assay. The 82% increase in Group B Strep tests was the result of the addition of new customers, particularly two large reference labs, as well as continued purchases by our existing customers. The 5% decline inC. diff sales was primarily attributable to reducedC. diff rates experienced by patients at our customer sites, along with our decision to terminate certain small accounts we determined were unlikely to become profitable even with our expanded test menu. The number of U.S. customers increased to 235 by March 31, 2017, as compared to 222 at the end of March 31, 2016. The number of analyzers placed with customers decreased to 470 at March 31, 2017, as compared to 493 at the end of March of the prior year. Through mid-2016, the Company was intensely focused on building its customer base and placing additional analyzers in the field. Currently, however, the Company anticipates that in the future, it will sell higher quantities of existing assays, as well as new assays to a more profitable, select customer group now that additional products have come to market.

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Results

Cost of Operations

		Three Months ended March 31,
		2017								2016								Increase
		Expense				% of revenue				Expense				% of revenue				$				%
Materials and direct labor		$	611,814				74	%		$	589,155				81	%		$	22,659				4	%
Indirect labor, overhead, and royalties			1,134,927				137	%			956,779				131	%			178,148				19	%
Analyzer depreciation			233,335				28	%			315,811				43	%			(82,476	)			-26	%
		$	1,980,076				238	%		$	1,861,745				255	%		$	118,331				6	%

Beginning in mid-2016, the overall cost of direct and indirect labor increased as a percentage of revenue due to the hiring of production workers for additional daily shifts, in anticipation of eventually doubling the number of assays produced. Similarly, overhead increased as a percentage of revenue, also due to anticipated demand for the new assays. Compared to the first quarter of 2016, the cumulative effect of these activities later in 2016 and into 2017 resulted in an overall increase in labor and overhead costs as a percentage of revenue during the three months ended March 31, 2017. This comparative increase was offset by cost savings in materials attributable to bringing in-house the production of key components beginning in 2017.

Also during the first quarter of 2017, we determined that the actual life of analyzers used at customer sites was longer than the estimated life used for depreciation purposes. As a result, effective January 1, 2017, we changed our estimate of the useful life of our analyzers to better reflect the estimated period during which these assets will remain in service. The estimated useful life of the analyzers previously was five years, which we increased to seven years. The effect of this change with respect to analyzer depreciation included in cost of sales was that depreciation expense for the quarter ended March 31, 2017 was reduced by $155,200.

We brought to market both the STEC and Staph ID/R assays in a relatively short period of time during the second half of 2016. Sales of these new products only began in August and September of 2016, respectively, and to-date their more favorable impact on total revenue and gross margin remains minimal. Accordingly, we don’t expect to see additional revenue and gross margin potential from these new assays until later in 2017.

Operating Expenses

		Three Months Ended March 31,								Increase
		2017				2016				$				%
Research and development		$	2,048,100			$	2,297,983			$	(249,883	)			-11	%
Selling and marketing			1,391,978				1,478,778				(86,800	)			-6	%
General and administrative			1,857,729				2,208,657				(350,928	)			-16	%
		$	5,297,807			$	5,985,418			$	(687,611	)			-11	%

Research and Development

Research and development expenses decreased 11% during the quarter ended March 31, 2017 as compared to the prior year, primarily because last year we were applying significant resources into the internal development of new products. Accordingly, during 2017 as compared to 2016, we spent $473,003 less for testing cartridges, $141,262 less in outside consultants, and $81,266 less in recruiting fees associated with the hiring of additional software developers and scientists. These decreases were partially offset by increases of $195,351 in compensation expense related to the additional personnel, $249,485 in clinical trial expenses related to new products which will be introduced later in 2017, and $812 in all other research and development expense.

Selling and Marketing

Selling and marketing expenses decreased by 6% in the quarter ended March 31, 2017 as compared to the quarter ended March 31, 2016, due primarily to $39,517 in lower travel costs, $28,766 in lower promotional assay costs, and $8,875 in lower trade show expenses. All other selling and marketing expenses decreased by $9,642.

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General and Administrative

The 16% decline in general and administrative expenses for the quarter ended March 31, 2017 compared to the quarter ended March 31, 2016 resulted primarily from $218,936 in lower filing and professional fees, $168,150 in lower franchise and property taxes, $102,217 in reduced write offs of uncollectible customer accounts, and $90,385 in lower employee and H/R-related expenses. These decreases were partially offset by $102,340 in higher legal fees, $89,116 in higher rents associated with additional space in the Salt Lake City offices, and $46,103 in higher accounting, regulatory, human resource and IT personnel costs than we had during the quarter ended March 31, 2016. All other general and administrative expenses decreased by $8,799.

Interest Expense

Interest expense for the quarter ended March 31, 2017 increased by a total of $5.3 million, from $6.3 million to $11.6 million, as compared to the quarter ended March 31, 2016. The change was due mainly to the differences in the amount of debt discount amortization for the 2015 convertible notes during 2016 ($6.1 million), as compared to the higher amount of debt discount amortization for the 2016 convertible notes during 2017 ($11.4 million). Other interest expense for 2017 decreased by $12,092 as compared to 2016.

Gain on Extinguishment of Debt

The Company’s 2016 Notes contained a conversion feature whereby installment payments could be made by the Company issuing shares of common stock to the noteholders. Because this feature was separate from the note itself, when such conversions occurred they were deemed extinguishments of debt for accounting purposes. During the first three months of 2017, we made approximately $3.9 million of installment payments by issuing 762,672 shares of common stock to the noteholders. Also during the first quarter of 2017, the Company and the noteholders agreed to $38.9 million in redemptions of the 2016 Note and a corresponding amount of restricted cash was returned to the noteholders. Accordingly, a significant portion of the 2016 Notes’ principal amount and derivative liability was extinguished. A total gain on the extinguishment of debt in the amount of $602,555 was recorded to account for these transactions. The gain amount was equal to the fair market values of the common shares issued and the principal amounts of the 2016 Notes either paid down or extinguished, partially offset by the related remaining debt discount associated with the extinguished principal amounts, the related derivative liability amounts also reduced, and the accrued underwriting fees eliminated.

Change in Fair Value Liabilities

The change in fair value of the derivative liability resulted in a net gain in earnings of $38.9 million for the three months ended March 31, 2017, as compared to a net loss in earnings of $20.2 million for the three months ended March 31, 2016. During the first quarter of 2017, we had a $4.1 million decrease in the fair value of our common stock purchase warrants, due to the decrease in the value of our common stock during the period. We also had a $40.3 million decrease in the fair value of the embedded conversion feature of our 2016 Notes attributable to the decrease in the value of our common stock during the period. These decreases in fair values were partially offset by a $5.5 million increase in the fair value of Series F Preferred Stock accounted for as a liability. The increase in the fair value of our Series F Preferred stock was the result of a reset in the fixed conversion price during the quarter as a result of certain conversions of the 2016 Notes and such fixed conversion rate was significantly lower than the value of the stock at the measurement date of period end.

During the three months ended March 31, 2016 we had an increase in the fair value of our Series E Warrants and embedded conversion feature on convertible notes in the amount of $25.4 million which was partially offset by the reduction in the fair value of our Series D Warrants and other derivative securities in the amount of $5.2 million.

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Comparison of the Years Ended December 31, 20152016 and 20142015

The following table sets forth our results of operations for the years ended December 31, 20152016 and December 31, 2014:2015:

		Years Ended December 31,								Years Ended December 31,
		2015				2014				2016				2015
Revenue		$	2,142,040			$	1,606,254			$	3,048,126			$	2,142,040
Cost of sales			4,813,415				3,968,185				8,061,382				4,813,415
Gross loss			(2,671,375	)			(2,361,931	)			(5,013,256	)			(2,671,375	)
Operating expenses:
Operating Expenses
Research and development			8,485,668				4,609,913				13,406,370				8,485,668
Selling and marketing			5,007,320				2,301,610				6,859,323				5,007,320
General and administrative			6,241,433				2,928,186				8,801,997				6,241,433
(Gain) loss on sale of assets			—				(8,166	)
Total operating expenses			19,734,421				9,831,543				29,067,690				19,734,421
Loss from operations			(22,405,796	)			(12,193,474	)			(34,080,946	)			(22,405,796	)
Interest expense			(11,757,445	)			(1,136,054	)			(167,466,170	)			(11,757,445	)
Interest income			18,193				3,176				7,399				18,193
Loss on extinguishment of warrants			(4,038,063	)			—
Change in fair value of derivative liability			(19,714,808	)			(8,396,169	)
Gain (loss) on extinguishment of warrants											3,374,752				(4,038,063	)
Loss on extinguishment of debt											(24,172,736	)			—
Change in fair value liabilities											133,191,183				(19,714,808	)
Provision for income taxes			(1,250	)			(5,297	)			(1,750	)			(1,250	)
Net loss		$	(57,899,169	)		$	(21,727,818	)		$	(89,148,268	)		$	(57,899,169	)

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half of 2016. Sales of these new products began in August and September of 2016. Similarly,2016, respectively, and their impact on total revenue and gross margins for the year ended December 31, 2016 was minimal. Similar to direct labor costs, indirect labor and overhead increased as a percentage of revenue due to anticipated demand for the new assays, along with underutilization of capacity in our analyzer manufacturing group. During periods when analyzers are being manufactured, the group’s labor and overhead costs are allocated to the cost of the analyzers produced and expensed eventually through depreciation. Otherwise, the group’s costs are expensed directly to cost of sales during the period incurred. Depreciation of analyzers also increased since the number of analyzers placed in the field grew from 336428 at September 30,December 31, 2015, to 510498 at September 30,December 31, 2016.

Operating Expenses

		Three months ended September 30,								Increase
		2016				2015				$				%
Research and development		$	3,737,415			$	2,878,316			$	859,099				30	%
Selling and marketing			1,644,075				1,481,140				162,935				11	%
General and administrative			2,464,159				1,795,766				668,393				37	%
		$	7,845,649			$	6,155,222			$	1,690,427				27	%

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Interest Expense

Interest expense for the nine monthsyear ended September 30,December 31, 2016 increased by $149.8$155.7 million, from $868,587$11.8 million to $150.7$167.5 million, as compared to the nine monthsyear ended September 30,December 31, 2015.

The increasedifference was due mainly to the $119.2$107.8 million increase in the loss on the issuance of the 2016 convertible note $30.4as compared to the loss on the 2015 convertible note issued at the end of the previous year, and $47.3 million in debt discount amortizationsamortization on ourboth convertible notes during 2016 which we didn’t have during the prior year and $212,415 increase in all other interest.2015. Other interest expense increased $651,107.