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Our Products and Our Product Candidates

Our FDA Cleared Tests

Our Assays Under Review by the FDA

Our Assay Under FDA Review

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(ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering (our “IPO”); (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you have beneficial ownership. In addition, we have elected to opt-in to the extended transition period for new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

Recent Corporate Developments

On December 7, 2015, the Company entered into an Amendment Agreement Number Two (the “Second Amendment Agreement”) with the holders of our Series C Warrants to effect amendments to the Series C Warrants. Pursuant to Section 9 of the Series C Warrants, the amendments are binding on all of the issued and outstanding Series C Warrants effective as of December 7, 2015.

In addition to some administrative changes, the Series C Warrants were amended to provide that if they are not exercised by the end of the business day on January 21, 2016, they will automatically be exchanged for shares of our common stock pursuant to their existing cashless exercise provision and, in the case of holders that would hold more than 4.99% of our issued and outstanding on such date, pre-funded rights convertible, subject to a 4.99% blocker, without additional payment for shares of our common stock equal to the number of shares of common stock above 4.99% to be delivered pursuant to conversion at the end of the business day on January 21, 2016. On January 21, 2016, we announced the expiration and conversion of all outstanding Series C Warrants into shares of common stock.

On December 8, 2015, we held a special meeting (the “Special“December 2015 Special Meeting”) of our stockholders. At the December 2015 Special Meeting, the stockholders approved an amendment to the Company’s Seventh Amended and Restated Certificate of Incorporation, as amended, (the “Certificate of Incorporation”) to effect a reverse stock split of the Company’s common stock at a ratio between 1 to 50 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 “Reverse“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 “convertible note financing”“2015 Convertible Note Financing”) pursuant to a Securities Purchase Agreement dated December 28, 2015 (the “SPA”“2015 SPA”) between the Company and certain buyers as set forth in the Scheduleschedule of buyers of our convertible notes attached to the 2015 SPA. In connection with the convertible note financing2015 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 3,503,1168 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 convertible notes,2015 Notes, we received an initial release from restricted accounts of $4.6 million at the close of the convertible note financing.2015 Convertible Note Financing. Pursuant to the terms of the convertible notes,2015 Notes, prior to the release from our restricted accounts of the remaining cash purchase price of $13.8 million in subsequent tranches, we mustwere required to meet certain equity conditions as described therein. Until we meet certain equity conditions outlined in

Subsequently, on November 2, 2016, the convertible notes to receive the remainingoutstanding 2015 Notes were exchanged for Series F Preferred Stock, as discussed below, and all cash purchase price of $13.8 million, the remaining amounts will be held in restricted accounts. We consider the cash in the restricted accounts to be assets of the Company which constitutes valid and sufficient consideration for the issuance of the convertible notes in the aggregate principal amount of $22.1 million. In the event we are unable to meet the equity conditions outlined in the convertible notes, the cash contained in the restricted accounts will be returnedwas made available to the holders and the aggregate principal amount of the convertible notes will be reduced accordingly. See “Description of Certain Indebtedness—convertible note financing—Note Equity Conditions” for a summary of the equity conditions set forth in the convertible notes.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 4,24, 2016 (the “Additional“March 2016 Special Meeting”). At the AdditionalMarch 2016 Special Meeting, our stockholders are beingwere asked to approve (1) an amendment to the Certificate of Incorporation to effect the Additionalan additional reverse stock split (the “March 2016 Reverse Stock SplitSplit”) 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

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NASDAQ Listing Rule 5635(d), the issuance of shares of our common stock underlying the convertible notes2015 Notes and related Series D warrants issued by us in the convertible note financing2015 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 convertible notes2015 Notes and related Series D warrants and certain

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Convertible Note Financing and the Section 10 of the registration rights agreements related thereto, entered into an amendment agreement to the registration rights agreement, whereby we and the buyers of our convertible notes2015 Notes agreed to amend the registration rights agreements to: (i) extend the deadline for filing the initial registration statement required thereunder registering our shares of common stock issuable upon conversion of the convertible notes2015 Notes and exercise of the Series D warrants to February 29, 2016, (ii) extend the deadline for bringing such registration statement effective to March 30, 2016 if the SEC does not review such registration statement and April 14, 2016 if the SEC does review such registration statement, (iii) decrease the number of shares of our common stock we are required to register pursuant to the registration rights agreement in the case where such number exceeds our authorized and unreserved shares of common stock and (iv) covenant that outside of shares of our common stock reserved for issuance on February 13, 2016 and shares of common stock to be issued or issuable pursuant to our public offering of securities pursuant to a Registration Statement on Form S-1 (File No. 333-207761), we will not reserve shares of common stock for issuance unless (i) a number of shares of common stock equal to least 120,000,000 or such additional number of shares of common stock as shall then be necessary to effect the conversion of all of the convertible notes2015 Notes and the exercise of all of the Series D warrants then outstanding (in each case, without regard to any limitations on conversions or exercises) have been reserved for the issuance and (ii) all shares of common stock required to be registered on that date pursuant to the terms of the registration rights agreement, as amended, without giving effect to any cutbacks provided for in Section 1(cc) or Section 1(g) of the registration rights agreement, as amended, related to a reduction due to insufficient authorized and unreserved shares of common stock have been either registered under an effective registration statement or filed with the SEC under a registration statement within the timeframe required for such filing under the registration rights agreement and we have no reason to believe such registration statement will not be made effective by the applicable deadline set forth in the registration rights agreement. The amendment agreement also contains a waiver by the holders of any prior breach by the Company under the registration rights agreement for failing to file the initial registration statement by the original filing deadline.

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delisting unless we requested a hearing with the NASDAQ Listing Qualifications Panel. On April 20, 2016, we requested a hearing with the NASDAQ Listing Qualifications Panel. On June 23, 2016, the NASDAQ Listing Qualifications Panel issued a determination granting our request for the continued listing of our common stock on The NASDAQ Capital Market. The Company’s continued listing on NASDAQ was subject to, among other things, the Company evidencing compliance with its plan to meet the minimum $35 million market value of listed securities requirement by October 10, 2016. In order to satisfy the market value of listed securities requirement, the Company was required to provide evidence a market capitalization of at least $35 million for a minimum of 10 consecutive business days on or before October 10, 2016. Our shares of common stock were subsequently delisted from the NASDAQ Capital Market due to our failure to meet the requirement, as described below.

On April 28, 2016, we received notices of deferral pursuant to section 8(d) of the 2015 Notes from each of the holders of such 2015 Notes notifying us of each such holder’s election to defer the entire installment amount due such holder on both April 29, 2016 (for which a pre-installment payment was due on March 31, 2016) and May 31, 2016 (for which pre-installment was due on April 29, 2016) until the next installment date of June 30, 2016 (for which pre-installment will be due on June 1, 2016).

On May 3, 2016, the holders of the 2015 Notes voluntarily removed restrictions on the Company’s use of an aggregate of $1.0 million previously funded to the Company and authorized the release of those funds from the restricted accounts of the Company.

On May 11, 2016, we and certain of the buyers holding enough of the 2015 Notes and Series D Warrants to constitute the required holders under Section 10 of the registration rights agreement entered into Amendment Agreement No. 3 to the Registration Rights Agreement (the “Third Amendment Agreement”). In the Third Amendment Agreement we and the buyers agreed to extend the deadline for bringing the initial registration statement effective registering our shares of common stock issuable upon conversion of the 2015 Notes and exercise of the Series D Warrants to the date which is the earlier of May 31, 2016 and the fifth (5^th) business day after the date we are notified (orally or in writing, whichever is earlier) by the SEC that such initial registration statement will not be subject to further review. As noted below, the requirements of the Registration Rights Agreement were subsequently suspended until March 1, 2017.

Under the Third Amendment Agreement, the buyers also waived (i) any breach of the registration rights agreement prior to May 11, 2016 under Section 2(a) of the registration rights agreement for our failure to have the initial registration statement brought effective by the initial effectiveness deadline, prior to the date of Third Amendment Agreement and (ii) the buyer’s rights to Registration Delay Payments (as defined under the registration rights agreement) prior to the date of the Third Amendment Agreement for our failure to have the initial registration statement brought effective by the initial effectiveness deadline.

On May 18, 2016, the holders of the 2015 Notes voluntarily removed restrictions on the Company’s use of an aggregate of $1.0 million previously funded to the Company and authorized the release of those funds from the restricted accounts of the Company.

On May 24, 2016, we and certain buyers holding enough of the 2015 Notes and Series D Warrants to constitute the required holders under Section 9(e) of the 2015 SPA and Section 19 of the 2015 Notes entered into waiver agreements to waive (i) the breach by us of Section 4(n)(ii) of the 2015 SPA solely with respect to (x) us filing of the Registration Statement on Form S-1 (No. 333-211334) related to an offering of units, (y) our filing of an amendment to the Registration Statement on Form S-1 (No. 333-211334) in the calendar week starting on May 23, 2016 and (z) our consummation of the offering of units pursuant to the Registration Statement on Form S-1 (No. 333-211334), as amended by the amendment described in the immediately preceding clause (y), and (ii) the event of default arising under Section 4(a)(x) of the 2015 Notes due to our failure to comply with Section 4(n)(ii) of the 2015 SPA as described in the immediately preceding clause (i) above.

On June 1, 2016, we closed the referenced public offering of 3.16 million units at a public offering price of $1.90 per unit. The gross proceeds from the offering of the units was approximately $6 million. Each unit consisted of one share of common stock and one Series G warrants. Currently, each 24,000 Series G warrants entitles the holder to acquire one share of common stock, subject to adjustment, at an exercise price of $0.25

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$2.53 per share for a period of five years following the date they first become exercisable. The Series E warrants will not be exercisable until at least one year from the date of issuance and exercise of the Series E warrants is subject to certain stockholder approval requirements. See “Description of Share Capital –— Warrants –— Series G Warrants.”

On June 1, 2016, we received notices of deferral pursuant to section 8(d) of the 2015 Notes from each of the holders of such convertible notes notifying us of each such holder’s election to defer the entire installment amount due such holder on June 30, 2016 (for which a pre-installment payment was due on June 1, 2016) and all prior deferred installment amounts until the next installment date of July 31, 2016 (for which pre-installment was due on July 2, 2016).

On June 29, 2016, the Company and certain buyers holding enough of the 2015 Notes and Series D Warrants to constitute the required holders under Section 9(e) of the 2015 SPA and Section 19 of the 2015 Notes entered into waiver agreements to waive: (i) the Company’s restriction to incur Indebtedness (as defined in the 2015 Notes) in accordance with Section 17(a) of the 2015 Notes, (ii) the Company’s restriction to incur Liens (as defined in the 2015 Notes) in accordance with Section 17(b) of the 2015 Notes, (iii) the Company’s restriction to incur Indebtedness that ranks pari passu with the 2015 Notes pursuant to Section 16 of the 2015 Notes and (iv) the Company’s restriction in incur Liens (as defined in the 2015 Notes) on certain types of intellectual property in accordance with Section 17(g) of the 2015 Notes, in each case of clauses (i) through (iii), solely with respect to entering into the Notes and related documents thereto and consummating the transactions contemplated thereby (collectively, the “2015 Note Waiver”). Further the Company and certain buyers holding enough of the 2015 Notes and Series D Warrants to constitute the required holders under Section 10 of the registration rights agreement entered into between the Company and the holders of the 2015 Notes and Series D Warrants entered into waiver agreements to waive: (i) any breach prior to and including June 29, 2016 under Section 2(a) of the registration rights agreement for the Company’s failure to have the initial registration statement brought effective by the initial effectiveness deadline, (ii) any right to Registration Delay Payments (as defined under the registration rights agreement) prior to and including June 29, 2016 for failure to meet its obligations under Section 2(a), and (iii) compliance with the registration requirements of Section 2(a) from and including June 29, 2016, through August 31, 2016.

On June 29, 2016, the Company and certain investors who executed subscription agreements in the June 2016 unit offering representing on the closing date of such unit offering at least sixty-seven percent (67%) of the aggregate number of shares of common stock purchased in the unit offering pursuant to the subscription agreements entered into waiver agreements to waive the lock-up on issuance of securities contained in Section 18 of the subscription agreements solely with respect to the Company’s offering and consummation of the 2016 Notes and Series H Warrants, the offer and issuance of the placement agent warrants and the offer and issuance of the subordination warrants to be issued in connection with the 2016 Notes and Series H Warrants.

On July 1, 2016, the Company closed on the Securities Purchase Agreement dated June 29, 2016 (the “2016 SPA”) with certain investors pursuant to which the Company has agreed to issue $75 million in principal face amount of senior secured convertible notes of the Company (the “2016 Notes”) and related Series H common stock purchase warrants (the “Series H Warrants”) (the “2016 Convertible Note Financing”). The buyers purchased 2016 Notes and related Series H Warrants through payment of cash at a discount for the 2016 Notes and related Series H Warrants. The 2016 Notes were issued and sold to the buyers by each buyer paying at the closing (1) 8.8235% (approximately $6 million) of its applicable aggregate cash purchase price to the Company by wire transfer of immediately available funds and (2) 91.1765% (approximately $62 million) of its applicable aggregate cash purchase price to an account of the Company established for such Buyer by wire transfer of immediately available funds, such purchase price to be held and in accordance with and pursuant to the terms and conditions of an account control agreement between the buyer and the bank. Until we meet certain equity conditions outlined in the 2016 Notes to receive the remaining cash purchase price of $62 million, the remaining amounts will be held in restricted accounts. We consider the cash in the restricted accounts to be assets of the Company which constitutes valid and sufficient consideration for the issuance of the 2016 Notes in the aggregate principal amount of $75 million. In the event we are unable to meet the equity conditions outlined in the 2016 Notes and are unable to redeem in cash any installment payments that become due under the 2016 Notes, the 2016 Notes may go into default and be subject to the default and redemption provisions contained in the 2016 Notes. The cash contained in the restricted accounts will be returned to the holders and the aggregate principal amount of the 2016 Notes will be reduced

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accordingly. See “Description of Certain Indebtedness — 2016 Convertible Note Financing — Note Equity Conditions” for a summary of the equity conditions set forth in the 2016 Notes.

In consideration of the Utah Autism Foundation and Springforth Investments LLC entering into subordination agreements with the collateral agent for the 2016 Notes, the Company issued to the entities warrants exercisable for 71 shares of common stock (the “2016 Subordination Warrants”). The 2016 Subordination Warrants have the same material terms and conditions as the Series H Warrants.

In connection with the 2016 Convertible Note Offering on July 1, 2016, the exercise prices or conversion prices of certain of our issued and outstanding securities were automatically adjusted to take into account the 2016 Convertible Note Financing and the conversions of our 2015 Notes. The exercise prices or conversion prices of the following securities were adjusted as follows: The Class A and Class B Warrant exercise prices were adjusted from $45,600.00 per share of common stock to $32,160.00 per share of common stock. The Series B Warrants exercise price was adjusted from $401.2 million per share of common stock to $97.7 million per share of common stock. Certain common stock warrant exercise prices were adjusted from $45,600.00 per share of common stock to $32,160.00 per share of common stock. The Series D Warrants and Subordination Warrants exercise price was adjusted from $45,600.00 per share of common stock to $37,920.00 per share of common stock. The Series G Warrants exercise price was adjusted from $45,600.00 per share of common stock to $32,160.00 per share of common stock. In addition, the consummation of the 2016 Convertible Note Financing is an issuance that triggers an adjustment to the conversion price of the 2015 Notes applicable to optional conversions by the holders of the 2015 Notes (conversion pursuant to amortization payments under the 2015 Notes are not adjusted pursuant to subsequent equity offerings as they are based on a discount to current market prices for the common stock). Therefore, the conversion price of the 2015 Notes was adjusted from $45,600.00 per share of common to $37,920.00 per share of common stock. All prices above representing post-September 2016 and December 2016 Reverse Stock Split adjusted prices.

On July 1, 2016, Mantyla McReynolds, LLC (“Mantyla”), the Company’s former independent registered public accountants, merged with BDO USA, LLP (“BDO”). As a result of this transaction, on July 14, 2016, we received notice that instead of Mantyla, BDO would now stand for appointment as the Company’s independent registered public accountants for the fiscal year ending December 31, 2016. Effective July 18, 2016, the Company, after review and approval of the Company’s Audit Committee, appointed BDO as the Company’s new independent registered public accounting firm for and with respect to the fiscal year ending December 31, 2016.

From July 1, 2016, through the termination of the 2015 Notes upon exchange for Series F Preferred Stock on November 3, 2016 (as described below), we issued to certain holders of the 2015 Notes 316,590 shares of our common stock upon conversion of installment payments under the 2015 Notes at conversion prices ranging from $11,172.00 per share to $6.00 per share (such number of shares and conversion prices being adjusted to post-September 2016 and December 2016 shares and prices).

In connection with the conversions of the installment payments under the 2015 Notes, from July 1 through November 3, 2016, the exercise prices or conversion prices of certain of our issued and outstanding securities were periodically and automatically adjusted based on the changing conversion price of the 2015 Notes. As of the date hereof, the exercise price for the Class A and Class B Warrants is $2.53 per share of common stock, the exercise price for the Common Warrants is $2.53 per share of common stock, the exercise price of the Series B Warrants is $27.5 million per share of common stock, exercise price of the Series D and 2015 Subordination Warrants is $2.53 per share of common stock, the exercise price for the Series G Warrants is $2.53 per share of common stock, and the exercise price of the Series H and 2016 Subordination Warrants is $6.00 per share. The conversion price of our Series F Preferred Stock is $6.00 per share.

On August 4, 2016, we entered into an Amendment to the Spring Forth Promissory Note with Spring Forth Investments, LLC to extend the maturity date of a $500,000 promissory note issued by the Company to Spring Forth in connection with a loan provided by Spring Forth to the Company from July 18, 2016 to July 18, 2017. The effective date of the Amendment was July 18, 2016.

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On August 10, 2016, we filed a preliminary proxy statement with the SEC regarding our annual meeting of our stockholders to be held on September 12, 2016 (the “Annual Meeting”). At the Annual Meeting, our stockholders were being asked to approve along with director appointments and approval of the auditors (1) for purposes of complying with NASDAQ Listing Rule 5635(d), the exchange of our Series E Warrants.”Warrants for shares of our common stock, (2) for purposes of complying with NASDAQ Listing Rule 5635(d), the issuance of shares of our common stock underlying the 2016 Notes and related Series H warrants issued by us in the 2016 Convertible Note Financing without giving effect to the exchange cap in the 2016 Notes in an amount that may be equal to or exceed 20% of our common stock outstanding before the issuance of the 2016 Notes and related Series H warrants and certain subordination warrants and without giving effect to the exercise price floor of such Series H warrants and subordination warrants (the “NASDAQ 20% Issuance Proposal”), (3) an amendment to the Certificate of Incorporation to effect an additional reverse stock split (the “September 2016 Reverse Stock Split”) at a ratio between 1-to-40 and 1-to-80 and effective upon a date to be determined by the Board and (4) approving an amendment to the Certificate of Incorporation to increase the numbers of shares of common stock authorized from 200,000,000 to 350,000,000. On September 12, 2016, we held the Annual Meeting. At the Annual Meeting, the stockholders approved an amendment to the Certificate of Incorporation to effect the September 2016 Reverse Stock Split at a ratio between 1-to-40 and 1-to-80 with such ratio to be determined by the Board. Immediately after the Annual Meeting, the Board approved the September 2016 Reverse Stock Split at a ratio of 1-to-80, such September 2016 Reverse Stock Split went into effect at 12:01 am EDT on September 16, 2016. At the Annual Meeting, the stockholders also approved the NASDAQ 20% Issuance Proposal for the 2016 Notes and the Series E Warrant exchange. The stockholders did not approve the increase in authorized shares of common stock. Unless we indicate otherwise, the information in this prospectus reflects the impact of the September 2016 Reverse Stock Split.

On August 17, 2016, we and certain 2015 Note Buyers holding enough of the 2015 Notes and Series D Warrants to constitute the required holders under Section 9(e) of the 2015 SPA and Section 19 of the 2015 Notes entered into waiver agreements to waive (i) the breach by the Company of Section 4(n)(ii) of the 2015 SPA solely with respect to (x) the Company’s filing of the Registration Statement on Form S-1 (No. 333-213144) related to an offering of Units, (y) the Company’s filing of amendments to the Registration Statement on Form S-1 (No. 333-213144) to complete the offering of Units and (z) the Company’s consummation of the offering of Units pursuant to the Registration Statement on Form S-1 (No. 333-213144) no later than September 30, 2016 and (ii) the event of default arising under Section 4(a)(x) of the 2015 Notes due to the Company’s failure to comply with Section 4(n)(ii) of the 2015 SPA as described in the immediately preceding clause (i) above.

On August 17, 2016, the Company and certain 2016 Note Buyers holding enough of the 2016 Notes and Series H Warrants to constitute the required holders under Section 9(e) of the 2016 SPA and Section 19 of the 2016 Notes entered into waiver agreements to waive (i) the breach by the Company of Section 4(n)(ii) of the SPA solely with respect to (x) the Company’s filing of the Registration Statement on Form S-1 (No. 333-213144) related to an offering of Units, (y) the Company’s filing of amendments to the Registration Statement on Form S-1 (No. 333-213144) to complete the offering of Units and (z) the Company’s consummation of the offering of Units pursuant to the Registration Statement on Form S-1 (No. 333-213144) no later than September 30, 2016 and (ii) the event of default arising under Section 4(a)(x) of the 2016 Notes due to the Company’s failure to comply with Section 4(n)(ii) of the 2016 SPA as described in the immediately preceding clause (i) above.

On September 19, 2016, we entered into separate agreements (each, a “Leak-Out Agreement”) with each of the 2015 Note Buyers. In each Leak-Out Agreement, the Company and a 2015 Note Buyer agreed that during the period commencing on September 20, 2016 through November 1, 2016, neither such 2015 Note Buyer nor any of its affiliates will sell, directly or indirectly, on any trading day more than a fixed percentage (as designated in such Leak-Out Agreement, which, in the aggregate for all 2015 Note Buyers, equals approximately 35%) of the trading volume of our common stock on the Nasdaq Capital Market, unless our common stock is then trading above the lower of (x) $5.50 or (y) 120% of the closing bid price of our common stock as of the trading day immediately preceding such date of determination.

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On October 2, 2016, we entered into separate exchange agreements (each, an “Exchange Agreement”) with each of the 2015 Note Buyers, pursuant to which, among other things each of the parties thereto agreed to the following:

The Exchange was subject to customary closing conditions, including without limitation that no unwaived event of default under the 2015 Notes exists and is continuing and that the arithmetic average of the daily dollar trading volume of our common stock during the twenty trading days prior to the Exchange is at least $300,000.

On October 17, 2016, we entered into separate agreements (each, an “Amended Leak-Out Agreement”) with each of the 2015 Note Buyers. In each Amended Leak-Out Agreement, the Company and a 2015 Note Buyer agreed that during the period commencing on October 17, 2016 through and including October 21, 2016, neither such Buyer nor any of its affiliates would sell, directly or indirectly, on any trading day more than a fixed percentage (as designated in such Leak-Out Agreement, which, in the aggregate for all 2015 Note Buyers, equals approximately 40%) of the trading volume of our common stock on the Nasdaq Capital Market, unless our common stock is then trading above the lower of (x) $5.50 or (y) 120% of the closing bid price of our common stock as of the trading day immediately preceding such date of determination.

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On November 2, 2016, the Company separately amended and restated the Exchange Agreements (each, an “Amended Exchange Agreement”) with each of the 2015 Note Buyers, pursuant to which, among other things, the following occurred:

On November 2, 2016, we filed a Certificate of Designation for Series E Preferred Stock to the Certificate of Incorporation. The Certificate of Designation reduced, pursuant to Section 151(g) of the Delaware General Corporation Law, the number of authorized Series E Preferred Shares from 2,860,200 Series E Preferred Shares to 74,380 Series E Preferred Shares, the number of Series E Preferred Shares issued and outstanding as of November 2, 2016. Pursuant to the provisions of Section 151(g) of the Delaware General Corporation Law, the 2,785,820 authorized Series E Preferred Shares eliminated pursuant to the reduction return to the available undesignated preferred stock of the Company and may be re-designated into another series of preferred stock.

On November 2, 2016, the Company and certain of the 2015 Note Buyers holding enough of the 2015 Notes and Warrants to constitute the Required Holders under Section 10 of the Registration Rights Agreement entered into Amendment Agreement No.4 to the Registration Rights Agreement (the “Fourth Amendment Agreement”). In the Fourth Amendment Agreement, the Company and the 2015 Note Buyers agreed to extend the deadline for bringing the initial registration statement effective registering our shares of common stock issuable upon conversion of the Notes and exercise of the Warrants to the date which is the earlier of March 1, 2017 and the fifth (5th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such initial registration statement will not be subject to further review. Under the Fourth Amendment Agreement, the 2015 Note Buyers also waived (i) any breach of the Registration Rights Agreement prior to November 2, 2016 under Section 2(a) of the Registration Rights Agreement for the Company’s failure to have the initial registration statement brought effective by the initial effectiveness deadline, prior to the date of Fourth Amendment Agreement and (ii) the holder’s right to Registration Delay Payments (as defined under the Registration Rights Agreement) prior to the date of the Fourth Amendment Agreement for the Company’s failure to have the initial registration statement brought effective by the initial effectiveness deadline.

On November 3, 2016, in connection with the issuance of the Series F Preferred Stock, the exercise and conversion prices of certain outstanding securities were automatically adjusted to take into account the conversion price of the Series F Preferred Stock. Accordingly, the exercise price for our Series D Warrants, 2015 Subordination Warrants, Series H Warrants and 2016 Subordination Warrants were adjusted to $6.00 per share of common stock. The exercise price of our Series B Warrants was adjusted to $27.5 million per share

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of common stock. The conversion price voluntary for conversions at the election of the holders of our 2016 Notes was adjusted to $6.00 per share of common stock.

From November 3, 2016 through January 5, 2017, we have issued 429,334 shares of common stock upon the mandatory or voluntary conversion of 2,576 shares of Series F Preferred Stock at a conversion price of $6.00 per share.

On December 2, 2016, the Company and certain 2016 Note Buyers holding enough of the 2016 Notes and Series H Warrants to constitute the required holders under Section 9(e) of the 2016 SPA and Section 19 of the 2016 Notes entered into waiver agreements to waive (i) the breach by the Company of Section 4(n)(ii) of the SPA solely with respect to (x) the Company’s filing of an amendment to the Registration Statement on Form S-1 (No. 333-213144 ) related to an offering of Units, (y) the Company’s filing of subsequent amendments to the Registration Statement on Form S-1 (No. 333-213144) to complete the offering of Units and (z) the Company’s consummation of the offering of Units pursuant to the Registration Statement on Form S-1 (No. 333-213144) no later than February 28, 2017 and (ii) the event of default arising under Section 4(a)(x) of the 2016 Notes due to the Company’s failure to comply with Section 4(n)(ii) of the 2016 SPA as described in the immediately preceding clause (i) above.

On December 14, 2016, the holders of the 2016 Notes voluntarily removed restrictions on the Company’s use of an aggregate of approximately $2.7 million previously funded to the Company and authorized the release of those funds from the restricted accounts of the Company.

On December 22, 2016, the Company held a special meeting (the “December 2016 Special Meeting”) of its stockholders. At the December 2016 Special Meeting, the stockholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of the Company’s common stock at a ratio between 1 to 200 and 1 to 300, such ratio and to be the effective on a date to be determined by the Board (the “December 2016 Reverse Stock Split”) and to increase the number of authorized shares of the Company’s common stock from 200,000,000 shares, par value $0.0001, to 1,500,000,000 shares, par value $0.0001 to be effective on a date to be determined by the Company’s board of directors (the “Authorized Share Increase”). On December 22, 2016, the Board held a meeting and approved (i) the December 2016 Reverse Stock Split at a ratio of 1 to 300, such December 2016 Reverse Stock Split to be effective at 12:01 am EST on December 28, 2016 and (ii) the Authorized Share Increase to be effective at 12:01 am EST on December 28, 2016.

On December 22, 2016, the Company filed an amendment to its Certificate of Incorporation to effect the December 2016 Reverse Stock Split and the Authorized Share Increase at 12:01 am EST on December 28, 2016. This prospectus reflects the proforma impact of the December 2016 Reverse Stock Split unless otherwise noted.

On December 28, 2016, the Company received notices of deferral pursuant to section 8(d) of the 2016 Notes from each of the holders of such 2016 Notes notifying the Company of each such holder’s election to defer the entire installment amount in the aggregate of $5 million due such holders on January 30, 2017 (for which a pre-installment payment was due on December 28, 2016) until an acceleration of deferral is made pursuant to the terms of the 2016 Notes or until the next installment date of February 28, 2017 (for which a pre-installment payment will be due on January 27, 2017).

On December 31, 2016 the Company adjusted the Series D Warrants pursuant to the terms of the Series D Warrants such that they are exercisable into 2,361,468 shares of common stock representing 16.6% of the sum of the number of shares of common stock actually outstanding on December 31, 2016, plus the number of shares of common stock deemed to be outstanding pursuant to all outstanding options or convertible securities of the Company. In addition, the Company adjusted the 2015 Subordination Warrants pursuant to the terms of the 2015 Subordination Warrants such that they are exercisable into 71,129 shares of common stock representing 0.5% of the sum of the number of shares of common stock actually outstanding on December 31, 2016, plus the number of shares of common stock deemed to be outstanding pursuant to all outstanding options or convertible securities of the Company. The exercise price for the Series D Warrants is currently $2.53 per share.

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On January 2, 2017, the Company entered into separate agreements (each, an “Amendment Agreement”) with holders of more than 51% in aggregate principal amount of the 2016 Notes. Pursuant to the terms of the Amendment Agreements, all of the 2016 Notes were amended such that no holder of 2016 Notes nor any of its affiliates will sell, directly or indirectly, on any trading day more than its pro rata percentage of 40% of the trading volume of our common stock, unless our common stock is then trading above $2.50 (as adjusted for stock splits, stock dividends, recapitalizations and similar events). Additionally, the 2016 Notes were amended to provide that the portion of an installment amount due on an applicable installment date equal to the product obtained by multiplying (x) the number of pre-installment conversion shares delivered by the Company to the holder with respect to such installment date and (y) the Company Conversion Price (as defined in the 2016 Notes) as in effect on such installment date, shall not be allowed to be deferred by the holder to a later installment date.

On January 3 and 5, 2017, certain holders of the 2016 Notes submitted notices to accelerate previously deferred preinstallment amortization payments for the amortization date of January 30, 2017 under the 2016 Notes and convert the accelerated payments on the 2016 notes into shares of the Company’s common stock pursuant to Section 3(a)(9) of the United States Securities Act of 1933, (as amended). In connection with the conversions, the Company issued 556,627 shares of common stock upon the conversion of $1,410,267 principal amount of 2016 Notes at a conversion price of $2.53.

As a result of the conversions, we adjusted the exercise prices of our Class A and Class B warrants, our Common Stock warrants, our Series D and 2015 Subordination Warrants and our Series G warrants. As of the date hereof, the exercise price for the Class A and Class B Warrants is $2.53 per share of common stock, the exercise price for the Common Warrants is $2.53 per share of common stock, the exercise price of the Series B Warrants is $27.5 million per share of common stock, exercise price of the Series D and 2015 Subordination Warrants is $2.53 per share of common stock, the exercise price for the Series G Warrants is $2.53 per share of common stock, and the exercise price of the Series H and 2016 Subordination Warrants is $6.00 per share. The conversion price of our Series F Preferred Stock is $6.00 per share.

On January 9, 2017, the Company and certain 2016 Note holders holding enough of the 2016 Notes and Series H Warrants to constitute the required holders under Section 9(e) of the 2016 SPA and Section 19 of the 2016 Notes entered into waiver agreements to waive (i) the Company’s failure to comply with the provisions of Sections 33(gg)(xi) and 33(gg)(xii) of the Notes regarding the equity conditions that the Company have a dollar value of daily trading volume of at least $800,000 and a 5-day volume weighted average price of at least $31,200 during the equity condition measuring periods, (ii) the Event of Default (as defined in the 2016 Notes) arising under Section 4(a)(xvii) of the 2016 Notes due to the Company’s failure to comply with the provisions of Sections 33(gg)(xi) and 33(gg)(xii) of the 2016 Notes prior to the date hereof through to February 28, 2017, and (iii) the negative convenants contained in sections 17(a), 17(c), 17(d) and 17(e) of the 2016 Notes in connection with the issuance of the Series G Preferred Stock, the payment of any Series G Dividends which may accrue and become payable pursuant to the terms of the Series G Preferred Stock and the accretion of such dividends to the Series G Preferred Stock.

On January 9, 2017, the Company and certain holders of the Series F Preferred Stock holding enough of the Series F Preferred Stock to constitute the required holders under Section 29(b) of the Series F Preferred Stock Certificate of Designations entered into waiver agreements to waive the negative covenants set forth in sections 15(a), 15(c), 15(d) and 15(e) of the Series F Preferred Stock Certificate of Designations in connection with the issuance of the Series G Preferred Stock, the payment of any Series G dividends which may accrue and become payable pursuant to the terms of the Series G Preferred Stock and the accretion of such dividends to the Series G Preferred Stock.

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Our Corporate Information

We are a Delaware corporation headquartered in Salt Lake City, Utah that does business as Great Basin Corporation. We were originally incorporated as Diagnostic Micro Arrays, Inc., a Nevada corporation, on June 27, 2003, and we commenced operations in January of 2005. On April 19, 2006, we changed our name to Great Basin Scientific, Inc. On August 12, 2008, we took steps to change our corporate domicile from Nevada to Delaware by forming a Delaware corporation with the same name, Great Basin Scientific, Inc., and merging the Nevada corporation with and into the Delaware corporation. As a result of this merger, the Delaware corporation was the sole surviving entity, continuing operations as Great Basin Scientific, Inc. and doing business as Great Basin Corporation.

Our fiscal year ends December 31 of each year. Our principal executive offices are located at 2441420 E. South 3850 West,Temple, Suite 520, Salt Lake City, UT 84120.84111. Our telephone number is (801) 990-1055. Our website address is www.gbscience.com.www.gbscience.com. The information contained on, or that can be accessed through, our website is not incorporated by reference in this prospectus and should not be considered a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

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THE OFFERING

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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. If we obtain marketing approval for the diagnostic tests that we develop, license, or acquire, we expect to incur significant commercialization expenses related to regulatory compliance requirements, sales and marketing, manufacturing, and distribution. Net loss for the 12 monthsnine-month periods ended September 30, 2016 and 2015 was approximately $83.0 million and $39.0 million, respectively. Net loss for the years ended December 31, 2015 and 2014, was approximately $57.9 million and $21.7 million, respectively. As of September 30, 2016, December 31, 2015, and December 31, 2014, we had an accumulated deficit of $204.9 million, $121.9 million, and $64.0 million, respectively. As discussed in Note 3 to the audited 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. We expect to continue to incur operating losses for the foreseeable future, and we anticipate these losses will increase as we continue our 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 manufacturer 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.

Our inability to raise capital on acceptable terms in the future may cause us to delay, diminish, or curtail certain operational activities, 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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Our present and future funding requirements will depend on many factors, including but not limited to:

We may not be able to continue to operate as a going concern.

Our former independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements. Our ability to continue as a going concern is contingent upon, among other factors, the release of restricted cash related to our convertible notes upon satisfaction of the conditions set forth in the terms of the convertible notes or obtaining alternate financing. We cannot provide any assurance that we will be able to raise additional capital. If we are unable to secure additional capital or gain access to the cash in the restricted accounts, we may be required to curtail our business plans and initiatives and take additional measures to reduce costs in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.

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) 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
3/30/2016		35 to 1
9/16/2016		80 to 1
12/28/2016		300 to 1
Cumulative Ratio		50,400,000 to 1

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The multiple stock splits permitted us and will permit us moving forward to issue a large number of shares of common stock pursuant to issued and outstanding convertible securities as well as conduct several public offerings to raise additional capital for operations. The conversion of these derivative securities resulted in the substantial dilution of stockholders over the course of the last 13 months. The following table sets forth the number of post-split shares that were issued upon conversion of these derivative securities, the post-split average conversion price, the number of pre-split shares (being the number of share equivalents prior to the four reverse stock splits, calculated by multiplying post-split shares by the cumulative ratio of 50,400,000 to 1) and the pre-split equivalent conversion prices.

Security		Post-Split Shares Issued				Post-Split Average Conversion Price				Pre-Split Equivalent Shares Issued				Pre-Split Equivalent Conversion Price
Series C Warrants			91			$	112.4 million				1,363,521,600,000			$	0.01
2015 Senior Convertible Notes			316,590			$	42.00				4,786,833,492,000,000			$	0.00
Series F Preferred Stock			349,334			$	6.00				5,281,920,000,000,000			$	0.00
Total			666,015				—				10,070,117,013,600,000				—

The large number of pre-split equivalent shares of common stock issued is due primarily to three factors: (1) the conversion price of the 2015 Notes being tied to a discount to the market price on the date of the installment payments, (2) the continued decline in the price of the Company’s shares of common stock following each of the reverse splits and (3) the conversion of a large number of Series F Preferred Stock at the current conversion price of $6.00 per $1,000 principal amount of each share of Series F Preferred Stock which was $0.02 per share prior to the December 2016 Reverse Stock Split. Following each reverse split, the issuance of common stock pursuant to these derivative securities and other market factors resulted in a rapid decline in the market price of our common stock. This decline in market price resulted in a greater number of shares of common stock being issued to settle conversion of these derivative securities which was amplified over time by the cumulative effective of the reverse split ratios.

The December 2016 Reverse Stock Split is likely to have a similar effect on the dilution 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.

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

We maywill 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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product candidates, or grant licenses on terms that are not favorable to us. A failure to obtain adequate funds may cause us to curtail certain operational activities, including research and development, regulatory trials, sales and marketing, and manufacturing operations, in order to reduce costs and sustain the business, and would have a material adverse effect on our business and financial condition.

The issuance of shares of our common stock pursuant to the Series D warrants, 2016 Notes and related Series H warrants and the Series F Preferred Stock will result in significant dilution to our stockholders.

Our stockholders will experience significant dilution as a result of shares of our common stock issued pursuant to outstanding Series D warrants, 2016 Notes and related Series H warrants and our Series F Preferred Stock. Under the Series D warrants, 2016 Notes and related Series H warrants and Series F Preferred Stock, we are required to have reserved or have designated for future issuance a number of shares of common stock necessary to effect the conversion of such convertible notes and preferred stock and the exercise of the Series D warrants and Series H warrants, subject to potential future anti-dilution adjustments.

The price at which the Company will convert the 2016 Notes installment amounts is equal to the lowest of (i) the then prevailing conversion price, (ii) 80% of the arithmetic average of the lower of (i) the three lowest daily weighted average prices of the common stock during the twenty (20) consecutive trading day period ending on the trading day immediately preceding the installment date and (iii) the weighted average price of the common stock on the trading day immediately preceding the installment date, subject in all cases to a floor price of $1.00 (however, the Company may determine in the future to amend the 2016 Notes to adjust or eliminate the floor with the consent of the 2016 Note holders).

For conversions at the election of the holder that are not subject to a floor price pursuant to the terms of the 2016 Notes as originally issued, and at the current conversion price of $2.53 per share for such conversions, the $75 million in principal amount of 2016 Notes would be convertible into 29,644,269 shares of our common stock. For conversions in relation to the 2016 Notes amortization payments on the convertible notes, if all amortization payments are made at an 80% discount to the market price per share on January 5, 2017, approximately $0.88 per share, then we could potentially issue up to approximately 85 million shares of our common stock. If our stock price continues to decline, we could be required to issue shares at a conversion price of $0.01 per share and we could potentially issue up to 7 billion shares of common stock. If we don’t have sufficient authorized capital to issue these shares we would need to seek another reverse stock split which would result in further substantial dilution to shareholders, an increase in our authorized share capital or settle the 2016 Notes in cash, if available.

Further, we issued Series D warrants issuable to acquire 16.6% of our issued and outstanding shares of common stock on a fully-diluted basis, which were subject to a one time reset on December 31, 2016 to 16.6% of our fully diluted shares of common stock on that date. As of January 5, 2017, following such adjustment, the Series D warrants were exercisable to acquire 2,361,468 shares of common stock at an exercise price of $2.53 per share, subject to adjustment for subsequent issuances.

Further in connection with the 2016 Note, we issued Series H warrants exercisable as of January 5, 2017, to acquire 2,346 shares of common stock at an exercise price of $6.00 per share, subject to adjustment for certain subsequent issuances.

The Series F Preferred Stock is initially convertible at the election of the holder into shares of our common stock at a conversion price equal to $6.00, subject to adjustments. From and after July 3, 2017, the Series F Preferred Stock shall be convertible at a conversion price equal to 85% of the arithmetic average, in each case of the lower of (i) the three lowest daily weighted average prices of the our common stock during the twenty (20) consecutive trading day period ending on the trading day immediately preceding the date of determination and (iii) the weighted average price of the our common stock on the trading day immediately preceding the date of determination. On November 3, 2016, 2,098 Series F Preferred shares were mandatorily converted into 349,667 shares of our common stock at a conversion price of $6.00 per share. On November 3, 2018, so long as no Triggering Event then exists, any remaining Preferred Shares then outstanding shall be converted into shares of our common stock at a conversion price of $6.00 per share. In each case, shares of our common stock will be held in abeyance to the extent necessary to satisfy limitations on beneficial ownership as described in the Certificate of Designations for the Series F Preferred Stock. As of January 5, 2017 we had converted 2,576 Series F Preferred Shares into 429,334 shares of common stock. As of

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January 5, 2017, based on 5,860 shares of Series F Preferred Stock issued and outstanding, at a conversion price of $6.00 per share, we could potentially issue up to 976,667 shares of our common stock on conversion of Series F Preferred Stock. After July 3, 2017, if our stock price continues to decline, we could be required to issue shares at a conversion price of $0.01 per share and we could potentially issue up to 586 million shares of common stock under the Series F Preferred Stock.

Due to the variable nature of the adjustments of the 2016 Notes and Series F Preferred Stock conversion prices and the formula which sets certain conversion prices of these securities based on a discount to the then current market price, the Company could issue more shares of common stock upon conversion of these securities than anticipated above. This is especially the case if the Company conducts a reverse stock split which increases the per share price in the market but such price subsequently drops below the immediate post-split price. Although we have the option to settle the principal payments on the convertible notes in cash and certain conversion and exercise restrictions are placed upon the holders of the convertible notes and Series D warrants and Series H Warrants, the issuance of material amounts of common stock by us pursuant to these securities will cause our stockholders to experience significant dilution in their investment in our Company.

We may be at risk of securities class action litigation.

We may be at risk of securities class action litigation. This risk is especially relevant for us due to our dependence on positive clinical trial outcomes and regulatory approvals of our diagnostic tests. In the past, life science companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals. Additionally, due to our price volatility and our high demand for cash to fund operations, we have had to conduct a number of reverse stock splits and highly dilutive financings to continue as a going concern which exposes us to additional risk of securities class action litigation. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a decline in the market price of our common stock. If such lawsuits were successful we may not be able to pay awarded damages and we may be forced into bankruptcy which would likely result in the complete loss of your investment.

Market and economic conditions may negatively impact our business, financial condition and share price.

Concerns over inflation, energy costs, geopolitical issues, the U.S. mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial 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, we had federal income tax net operating loss, or NOL, carryforwards of approximately $11.5 million and state income tax NOL carryforwards of approximately $8.2 million. These NOL carryforwards, if not previously used, will begin to expire in 2025. 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, or under applicable state tax laws that currently subject our NOL carryforwards to an annual limitation. Accordingly, we were required to write off $23,200,232$23.2 million of net operating loss carryforwards. As a result, if we 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.

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The design of our internal control over 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 the prior year,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.

Risks Related to the Convertible Note Financings

Our obligations to the holders of our 2016 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 2016 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 under our obligations under the convertible notes or the transaction documents, the holders of the convertible notes, acting through their 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 reduce or cease operations.

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

Under the 2016 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 us in cash by wire transfer of immediately available funds 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 common stock during the period beginning on the date immediately preceding such event 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.

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The exercise of any of these rights upon 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 and the holders of the 2016 Notes would be able to exercise 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 events which could harm our business, financial condition and results of operations and could require us to reduce or cease or 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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“Triggering Event” includes, but is not limited to (and subject to the ability to cure in certain instances): (i) (A) the suspension from trading for more than an aggregate of ten (10) trading days in any 365-day period or (B) the failure of the our common stock to be listed on an eligible market; (ii) the Company’s (i) failure to convert the Series F Preferred Shares or related warrants by delivery of the required number of shares of our common stock within five (5) trading days after the applicable conversion or exercise date, (ii) notice of its intention not to comply with a request for conversion or exercise of the Series F Preferred Shares or related warrants or (iii) the Company fails to have sufficient authorized shares to convert the Series F Preferred Shares and related warrants in full for 75 consecutive days. (iii) any payment failure; (iv) any default under, redemption of or acceleration prior to maturity of more than $100,000, individually or in the aggregate, of Indebtedness of the Company or any of its Subsidiaries; (v) certain bankruptcy events; (vii) a final judgment or judgments for the payment of money aggregating in excess of $250,000, individually or in the aggregate, are rendered against the Company or any of its Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within seventy-five (75) days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $250,000 amount set forth above so long as the Company provides each holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to such holder) to the effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within forty-five (45) days of the issuance of such judgment; (viii) breaches of representations, warranties and covenants in the Certificate of Designations for the Series F Preferred Stock and related transaction documents; or (ix) the Company’s failure for any reason after the date that is six (6) months immediately following the Issuance Date to satisfy the current public information requirement under Rule 144(c) of the 1933 Act.

The triggering and exercise of any of these rights could substantially harm our financial condition and force us to reduce or cease operations.

Holders of our Series F Preferred Stock have voting rights on an as converted basis. These rights permit the holders of the Series F Preferred Stock to vote up to certain percentage of our outstanding voting securities.

The holders of the preferred shares may have interests in matters brought before the shareholders that are different than holders of common stock. The holders of Series F Preferred Stock have the right to vote with holders of shares of our common stock, voting together as one class on all matters, with each Series F Preferred share entitling the holder thereof to cast that number of votes per share as is equal to the aggregate number of shares of our common stock into which it is then convertible (without regard to any limitations on conversion set forth in the Certificate of Designations for the Series F Preferred Stock including without limitation, the maximum percentage and/or the failure to have a sufficient number of shares of common stock reserved or available for issuance pursuant to the Certificate of Designations for the Series F Preferred Stock) using the record date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the conversion price is calculated; provided, that no holder (together with such holder’s attribution parties) shall be permitted to have a number of votes in excess of such aggregate number of votes granted to the holders of 9.99% of the shares our common stock then outstanding (including any votes with respect to any shares of our common stock and preferred stock beneficially owned by the holder or such holder’s attribution parties).

The holders of the Series F Preferred Stock may have interests in matters brought before the shareholders that are different than the interests of holders of our common stock. Specifically, the holders of our Series F Preferred Stock are also holders of our 2016 Notes and their interests in relation to shareholder matters that affect the 2016 Notes will be different that the interests of holders of our common stock. While the Series F Preferred Stock holders do not act as a group, in the instances where their interests are aligned, their ability to cast votes on an as converted basis may affect the outcome of any shareholder votes on such matters.

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Risks Related to Owning our Common Stock and Other Securities

The price of our common stock may fluctuate substantially.

The market price of our common stock has been and may continue to be subject to wide fluctuation in response to various factors, some of which are beyond our control. Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this prospectus, are:

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In addition, if any of the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

Certain of our outstanding warrants and convertible securities have anti-dilution provisions triggered by the issuance of shares of common stock and securities exercisable for shares of our common stock at prices below the then current exercise prices for such warrants, including this offering of Units, pursuant to which the exercise price of such warrants or conversion price of such convertible securities will be adjusted downward and could make it more likely that such warrants are exercised or such convertible securities are converted and dilute our current stockholders.

The exercise price for each of the Class A Warrants, Class B Warrants, Series D Warrants, Series G Warrants, Series H Warrants, certain other warrants, 2015 Subordination Warrants and 2016 Subordination Warrants and the conversion price of the Series F Preferred Stock and 2016 Notes is subject to adjustment in the event we issue common stock or securities convertible into common stock at a price lower than the then-current exercise price or conversion price, as the case may be. The exercise price of the Series B Warrants is subject to adjustment in the event we issue common stock or securities convertible into common stock at a price lower than the current market price. See “Description of Capital Stock — Warrants”.

Specifically, based on the assumed offering price of per Unit in this offering of $1.10, the following securities will be adjusted as follows:

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If we issue shares of common stock or securities exercisable or convertible for shares of common stock that trigger these provisions, then the exercise price for these warrants and conversion price for the 2016 Notes and the Series F Preferred Stock will be reduced according to their provisions, in most cases, to the per share price of the triggering transaction. This includes the issuance of Units under this offering. A reduction in the exercise price of these warrants and other securities will make it more likely that they are exercised or converted resulting in further dilution to our then current stockholders.

Broker-dealers may be discouraged from effecting transactions in our shares of common stock because they are considered a penny stock and are subject to the penny stock rules.

Our shares of common stock are currently considered a “penny stock.” The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The shares of common stock are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their 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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applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

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 formed 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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In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on our common stock, from merging or combining with us for a prescribed period of time.

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. We have not earned significant revenue to dateto-date, and do not expect to earn significant revenue in the near future. We had a net loss for the nine-month periods ended September 30, 2016 and 2015 of approximately $83.0 million and $39.0 million, respectively. Net loss for the years ended December 31, 2015 and 2014, was approximately $57.9 million and $21.7 million, in the twelve month period ending December 31, 2015 and the twelve month period ending December 31, 2014, respectively. Our accumulated deficit was $121.9 million and $64.0 million asAs of September 30, 2016, December 31, 2015, and December 31, 2014, we had an accumulated deficit of $204.9 million, $121.9 million, and $64.0 million, respectively. Potential investors should be aware of the difficulties normally encountered by a new enterprise, many of which are beyond our control, including substantial risks and expenses in the course of developing new diagnostic tests, establishing or entering new markets, 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 audited 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 and, Group B Strep and other assays. Our success will depend, in part, upon our ability to expand our customer base.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 any 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:

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 or our suppliers’ production processes may have to change to accommodate any significant future expansion

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of our manufacturing capacity, which may increase our or our suppliers’ manufacturing costs, delay production of our diagnostic cartridges, reduce our product gross margin and adversely impact our business. If we are unable to satisfy demand for our diagnostic cartridges by successfully manufacturing and shipping our diagnostic cartridges in a timely manner, our revenue could be impaired, market acceptance for our assays could be adversely affected and our customers might instead purchase our competitors’ assays. In addition, developing manufacturing procedures for assays under development may require developing specific production processes for those assays. Developing such processes could be time consuming and any unexpected difficulty in doing so can delay the introduction of a product.

We are dependent on single source suppliers for some of the components and materials used in our assays, and supply chain interruptions could negatively impact our operations and financial performance.

Our assays are manufactured by us and we obtain supplies from a limited number of suppliers. In some cases, critical components required to manufacture our assays may only be available from a sole supplier or limited number of suppliers, any of whom would be difficult to replace. The supply of any of our manufacturing materials may be interrupted because of poor vendor performance or other events outside our control, which may require us, among other things, to identify alternate vendors and result in lost sales and increased expenses. Even if the manufacturing materials that we source are available from other parties, the time and effort involved in validating the new supplies and obtaining any necessary regulatory approvals for substitutes could impede our ability to replace such components in a timely manner or at all.

We expect to rely on third parties to conduct studies of our assays under development that will be required by the FDA or other regulatory authorities and those third parties may not perform satisfactorily.

We do not have the ability to independently conduct the field trial studies or other studies that may be required to obtain FDA and other regulatory clearances or approvals for our assays. Accordingly, we expect to rely on third parties, such as independent testing laboratories and hospitals, to conduct such studies. Our reliance on these third parties will reduce our control over these activities. These third-party contractors may not complete activities on schedule or conduct studies in accordance with regulatory requirements or our study design. We cannot control whether they devote sufficient time, skill and resources to our studies. Our reliance on third parties that we do not control will not relieve us of any applicable requirement to prepare, and ensure compliance with, various procedures required under good clinical practices. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our studies may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for additional assays.

Any clinical trials that we may conduct may not begin on time, or at all, may not be completed on schedule, or at all, or may be more expensive than we expect, which could prevent or delay regulatory approval of our assays or impair our financial position.

The commencement or completion of any clinical trials that we may conduct may be delayed or halted for numerous reasons, including, but not limited to, the following:

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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.

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 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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Consolidation in the healthcare industry could have an adverse effect on our revenues and results of operations.

Many healthcare industry companies, including healthcare systems, are consolidating to create new companies with greater market power. As the healthcare industry consolidates, competition to provide goods and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price concessions or reductions for diagnostic tests. If we are forced to reduce our prices because of consolidation in the healthcare industry, our projected revenues would decrease and our earnings, financial condition, and/or cash flows would suffer.

If we or our distributors do not comply with the U.S. federal and state fraud and abuse laws, including anti-kickback laws for any products approved in the U.S., or with similar foreign laws where we market our products, we could face significant liability.

There are numerous United States federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws, false claims, and physician transparency laws. Our relationships with physicians and surgeons, hospitals and our independent distributors are subject to scrutiny under these laws. Violations of these laws are punishable by criminal and civil sanctions, including significant fines, damages and monetary penalties and in some instances, imprisonment and exclusion from participation in federal and state healthcare programs, including the Medicare, Medicaid and Veterans Administration health programs.

Healthcare fraud and abuse regulations are complex, and even minor irregularities can potentially give rise to claims that a statute or prohibition has been violated. The laws that may affect our ability to operate include:

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Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our

operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from federal healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. To enforce compliance with the federal laws, the U.S. Department of Justice, or DOJ, has recently increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time and resource consuming and can divert management’s attention from the business. In addition, settlements with the DOJ or other law enforcement agencies have forced healthcare providers to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Any violations of these laws, or any action against us for violation of these laws, even if we successfully defend against it, could have a material adverse effect on our reputation, business and financial condition.

Many foreign countries have enacted similar laws addressing fraud and abuse in the healthcare sector. The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance requirements in multiple jurisdictions increases the possibility that we may run afoul of one or more of the requirements.

The implementation of the reporting and disclosure obligations of the Physician Payments Sunshine Act/Open Payments provisions of the Health Care Reform Law could adversely affect our business upon commercialization of our product in the U.S.

The federal Physician Payments Sunshine Act, being implemented as the Open Payments Program, requires device manufacturers to engage in extensive tracking of payments and other transfers of value made to physicians and teaching hospitals, as well as physician ownership and investment interests, and public reporting of such data to the Centers for Medicare and Medicaid Services annually. Although we have and expect to continue to have substantially compliant programs and controls in place to comply with the Physician Payments Sunshine Act requirements and similar state and foreign laws, our compliance with the Physician Payments Sunshine Act and similar state and foreign transparency laws imposes additional costs on us. Additionally, failure to comply with the Physician Payment Sunshine Act or similar state or foreign laws may subject us to monetary penalties.

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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Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition and results of operations.

We are subject to income taxes as well as non-income based taxes in both the United States and various foreign jurisdictions. Changes in existing tax laws, treaties, regulations or policies or the interpretation or enforcement thereof, or the enactment or adoption of new tax laws, treaties, regulations or policies could materially impact our effective tax rate.

If we do not achieve, sustain or successfully manage our anticipated growth, our business and prospects will be harmed.

If we are unable to obtain or sustain adequate revenue growth, our financial results could suffer. Furthermore, significant growth will place strains on our management and our operational and financial systems and processes and our operating costs may escalate even faster than planned. If we cannot effectively manage our expanding operations and our costs, we may not be able to grow effectively or we may grow at a slower pace. Additionally, if we do not successfully forecast the timing of regulatory authorization for our additional tests, marketing and subsequent demand for our diagnostic tests or manage our anticipated expenses accordingly, our operating results will be harmed.

Our revenue, results of operations and cash flows may suffer upon the loss of a significant customer.

We have one large customer that generates a significant amount of our revenue. Our largest customer accounted for 7.4% of our revenue for the twelve months ended December 31, 2015. The loss of any significant customer or a significant reduction in the amount of product ordered by any such customer would adversely affect our revenue, results of operations, and cash flows.

Other companies or institutions have commercial assays or may develop and market novel or improved methods for infectious disease diagnostics, which may make our diagnostic platform less competitive or obsolete.

The market for diagnostics is large and established, and our competitors may possess significantly greater financial resources and have larger development and commercialization capabilities than we do. We may be unable to compete effectively against these competitors either because their diagnostic platforms are superior or because they may have more expertise, experience, financial resources or stronger business relationships.

Demand for our assays depends in part on the operating budgets and hospital-acquired infection rates of our customers, a reduction in which could limit demand for our assays and adversely affect our business.

In the near term, we expect that our revenue will be derived primarily from sales of ourC. diff and Group B Strep assays to hospitals. The demand for our assays will depend in part upon the prevalence ofC. diff and Group B Strep at the hospitals of these customers and impacted by other factors beyond our control, such as:

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, and 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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We anticipate that we will face increased competition in the future as existing companies and competitors develop new or improved diagnostic tests and as new companies enter the market with new technologies.

Due to our fixed overhead costs and the depreciation of our analyzers at customer sites included in cost of sales and the costs associated with our current hand-build cartridge manufacturing process we have in the past experienced substantial negative gross margins. We will need to increase our sales volumes significantly and automate our cartridge manufacturing process in order to achieve profitability.

We had negative gross margins of 124.7%169% and 147.0%120% during the twelvenine months ended December 31,September 30, 2016 and 2015, and 2014, respectively. The components of our cost of sales include cost of materials, supplies, labor for manufacturing, equipment and facility expenses associated with manufacturing. Facility expenses include allocated overhead comprised of rent, equipment depreciation and utilities. Due to our fixed overhead costs we will continue to experience negative gross margins unless and until we are able to significantly increase our sales volume. In addition, we currently hand-build our diagnostic cartridges. We are working to automate portions of our manufacturing and assembly process, which we believe will reduce our cartridge manufacturing costs. However, there is no assurance that we will be successful in automating our manufacturing process, and our failure to do so will materially limit our ability to reduce our cost of sales in the future.

If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, our business could be adversely affected.

We depend on information systems to manufacture products, process orders, manage inventory, process shipments to customers and respond to customer inquiries. If we were to experience a prolonged disruption in the information technology systems that involve our interactions with customers and suppliers, it could result in the loss of sales and customers, which could adversely affect our business.

Risks Related to Intellectual Property

The extent to which we can protect our business and technologies through intellectual property rights that we own, acquire or license is uncertain.

We employ a variety of proprietary and patented technologies and methods in connection with the assays that we sell or are developing. We license some of these technologies from third parties. We cannot provide any assurance that the intellectual property rights that we own or license provide effective protection from competitive threats or that we would prevail in any litigation in which our intellectual property rights are challenged. In addition, we may not be successful in obtaining new proprietary or patented technologies or methods in the future, whether through acquiring ownership or through licenses from third parties.

Our currently pending or future patent applications may not result in issued patents, and we cannot predict how long it may take for a patent to issue on any of our pending patent applications, assuming a patent does issue.

Other parties may challenge patents issued or exclusively licensed to us, or courts or administrative agencies may hold our patents or the patents we license on an exclusive basis to be invalid or unenforceable. We may 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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features that provide practical assurance that the processes are genuine inventive applications of those laws rather than patent drafting efforts designed to monopolize a law of nature itself. What constitutes a “sufficient” additional feature for this purpose is uncertain. Although we do not generally rely on gene sequence patents, this evolving case law in the United States may adversely impact our ability to obtain new patents and may facilitate third-party challenges to our existing owned and exclusively licensed patents.

We cannot predict the breadth of claims that may be allowed or enforced in patents we own or in those to which we have exclusive license rights. For example:

Changes in either the patent laws or in interpretations of patent laws in the United States or other countries may diminish the value of our intellectual property rights.

On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art, may affect patent litigation and switch the U.S. patent system from a “first-to-invent” system to a“first-to-file”

“first-to-file” system. Under a first-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had made the invention earlier. The U.S. Patent and Trademark Office, or USPTO, recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, including the first-to-file provisions in particular, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned and licensed patent applications and the 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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we may have to participate in an interference or other proceeding in the USPTO or a court to determine priority of invention in the United States, for applications and patents made prior to the enactment of the Leahy-Smith Act. For applications and patents made following the enactment of the Leahy-Smith Act, we may have to participate in a derivation proceeding to resolve disputes relating to inventorship. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful, resulting in our inability to obtain or retain any U.S. patent rights with respect to such invention.

In addition, the laws of foreign jurisdictions may not protect our rights to the same extent as the laws of the United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does. Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions. Moreover, the USPTO might require that the term of a patent issuing from a pending patent application be disclaimed and limited to the term of another patent that is commonly owned or names a common inventor. As a result, the issuance, scope, validity, term, enforceability and commercial value of our patent rights are highly uncertain.

The patent prosecution process is expensive and time-consuming, is highly uncertain and involves complex legal and factual questions. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary technology and product candidates. We seek to protect our proprietary position by filing in the United States and in certain foreign jurisdictions patent applications related to our novel technologies and product candidates that are important to our business.

The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. In addition, we may not pursue or obtain patent protection in all major markets. Moreover, in some circumstances, we may not have the right to control the preparation, filing or prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties. In some circumstances, our licensors may have the right to enforce the licensed patents without our involvement or consent, or to decide not to enforce or to allow us to enforce the licensed patents. Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. If any of our licensors fail to maintain such patents, or lose rights to those patents, the rights that we have licensed may be reduced or eliminated and our right to develop and commercialize any of our product candidates that are the subject of such licensed rights could be adversely affected.

Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing 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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protection provided by our owned and licensed patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Obtaining and maintaining our patent protection depends upon compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent prosecution process and following the issuance of a patent. There are situations in which noncompliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case if our patent were in force.

Our intellectual property rights may not be sufficient to protect our competitive position and to prevent others from manufacturing, using or selling competing assays.

The scope of our owned and exclusively licensed intellectual property rights may not be sufficient to prevent others from manufacturing, using or selling competing assays. Competitors could purchase our product and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitive technologies and thereby avoid infringing our intellectual property rights. If our intellectual property is not sufficient to effectively prevent our competitors from developing and selling similar diagnostic tests, our competitive position and our business could be adversely affected.

Our platform depends on certain technologies that are licensed to us. We do not control these technologies and any loss of our rights to them could prevent us from manufacturing our assays.

We rely on licenses to various proprietary technologies that are material to our business, including the development of certain future assays. We have entered into non-exclusive licenses with Biohelix Corp., or Biohelix, a subsidiary of Quidel Corporation and a license with Integrated DNA Technologies, Inc. that has certain exclusive and non-exclusive fields. Our rights to use these technologies will be subject to the continuation of and our compliance with the terms of those licenses.

We may become involved in disputes relating to our intellectual property rights, and may need to resort to litigation in order to defend and enforce our intellectual property rights.

Extensive litigation regarding patents and other intellectual property rights has been common in the medical diagnostic testing industry. Litigation may be necessary to assert infringement claims, protect trade secrets or know-how and determine the enforceability, scope and validity of certain proprietary rights. Litigation may even be necessary to resolve disputes of inventorship or ownership of proprietary rights. The defense and prosecution of intellectual property lawsuits, USPTO interference or derivation proceedings and related legal and administrative proceedings (e.g.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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We could face claims that our activities or the manufacture, use or sale of our assays infringe the intellectual property rights of others, which could cause us to pay damages or licensing fees and limit our ability to sell some or all of our assays and services.

Our research, development and commercialization activities may infringe or be claimed to infringe patents or other intellectual property rights owned by other parties of which we may be unaware because the relevant patent applications may have been filed but

not yet published. Certain of our competitors and other companies have substantial patent portfolios, and may attempt to use patent litigation as a means to obtain a competitive advantage or to extract licensing revenue. In addition to patent infringement claims, we may also be subject to other claims relating to the violation of intellectual property rights, such as claims that we have misappropriated trade secrets or infringed third party trademarks. The risks of being involved in such litigation may also increase as we gain greater visibility as a public company and as we gain commercial acceptance of our diagnostic tests and move into new markets and applications for our assays.

Regardless of merit or outcome, our involvement in any litigation, interference or other administrative proceedings could cause us to incur substantial expense and could significantly divert the efforts of our technical and management personnel. Any public announcements related to litigation or interference proceedings initiated or threatened against us could cause our share price to decline. An adverse determination, or any actions we take or agreements we enter into in order to resolve or avoid disputes, may subject us to the loss of our proprietary position or to significant liabilities, or require us to seek licenses that may include substantial cost and ongoing royalties. Licenses may not be available from third parties, or may not be obtainable on satisfactory terms. An adverse determination or a failure to obtain necessary licenses may restrict or prevent us from manufacturing and selling our diagnostic tests and offering our services. These outcomes could materially harm our business, financial condition and results of operations.

We may not be able to adequately protect our intellectual property outside of the United States.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States, and many companies have encountered significant problems in protecting and defending such rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to medical devices, diagnostic testing and biotechnology, which could make it difficult for us to stop the infringement of our patents and for licensors, if they were to seek to do so, to stop infringement of patents that are licensed to us. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. Additionally, prosecuting and maintaining intellectual property (particularly patent) rights are very costly endeavors, and for these and other reasons we may not pursue or obtain patent protection in all major markets. We do not know whether legal and government fees will increase substantially and therefore are unable to predict whether cost may factor into our global intellectual property strategy.

In addition to the risks associated with patent rights, the laws in some foreign jurisdictions may not provide protection for our trade secrets and other intellectual property. If our trade secrets or other intellectual property are misappropriated in foreign jurisdictions, we may be without adequate remedies to address these issues. Additionally, we also rely on confidentiality and assignment of invention agreements to protect our intellectual property in foreign jurisdictions. These agreements may provide for contractual remedies in the event of 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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rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in corresponding foreign agencies, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our applications and/or registrations, and our applications and/or registrations may not survive such proceedings. Failure to secure such trademark registrations in the United States and in foreign jurisdictions could adversely affect our business and our ability to market our diagnostic tests and product candidates.

We may be unable to adequately prevent disclosure of trade secrets and other proprietary information, or the misappropriation of the intellectual property we regard as our own.

We rely on trade secrets to protect our proprietary know how and technological advances, particularly where we do not believe patent protection is appropriate or obtainable. Nevertheless, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, third party contractors, third party collaborators and other advisors to protect our trade secrets and other proprietary information. These agreements generally require that the other party to the agreement keep confidential and not disclose to third parties all confidential information developed by us or made known to the other party by us during the course of the other party’s relationship with us. These agreements may not effectively prevent disclosure of confidential information and may

not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Monitoring unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate. If we were to seek to pursue a claim that a third party had illegally obtained and was using our trade secrets, it would be expensive and time consuming, and the outcome would be unpredictable. Further, courts outside the United States may be less willing to protect trade secrets. In addition, others may independently discover our trade secrets and proprietary information and therefore be free to use such trade secrets and proprietary information. Costly and time consuming litigation could be necessary to enforce and determine the scope of our proprietary rights. In addition, our trade secrets and proprietary information may be misappropriated as a result of breaches of our electronic or physical security systems in which case we may have no legal recourse. Failure to obtain, or maintain, trade secret protection could enable competitors to use our proprietary information to develop assays that compete with our assays or cause additional, material adverse effects upon our competitive business position.

We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

As is common in our industry, we employ individuals who were previously employed at other companies in our industry or in related industries, including our competitors or potential competitors. We may be subject to claims that we or these employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

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Additional Risks Related to Owningthis Offering

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 54 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 shareholders 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 Other Securities

The priceconvertible notes convertible into Common Stock outstanding. If the holders of our common stock may fluctuate substantially.

The market price of our common stock has beenoutstanding options, warrants and may continue to be subject to wide fluctuation in response to various factors, some of which are beyond our control. Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this prospectus, are:

In addition, if any of the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

Certain of our outstanding warrants have anti-dilution provisions triggered by the issuance of shares of common stock and securities exercisable for shares of our common stockconvertible notes at prices below the then current exercise prices for such warrants, including the recent issuance of securities under our public offering price, you will incur further dilution.

The offering price determined for this offering is not an indication of units pursuant to a Registration Statement on Form S-1 (File No. 333-207761), pursuant to whichour value.

The per-Unit offering price and the exerciseinitial conversion price of such warrants will be adjusted downward and could make it more likely that such warrants are exercised and dilute our current stockholders.

The exercise price for each of the Class A Warrants, Class B Warrants, Series D warrants, the Series E warrantsG Preferred Stock and Subordination Warrants is subject to adjustment in the event we issue common stock or securities convertible into common stock at a price lower than the then-current exercise price. Theinitial exercise price of the Series BI 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 subjecta 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 adjustment in the event we issue common stock or securities convertible into common stock at a price lower than the current market price. See “Description of Capital Stock – Warrants”.

If we issuehold shares of common stock or securities exercisable or convertiblethe Common Stock for sharesan indefinite period of common stock that trigger these provisions, then the exercise price for these warrants will be reduced according to their provisions, in most cases, to the per share price of the triggering transaction. This includes the issuance of units under ourtime.

There is no public offering of securities pursuant to a Registration Statement on Form S-1 (File No. 333-207761) which reset the exercise price of the Class A Warrants, Class B Warrants, Series D Warrants and Subordination Warrants to $0.16 per share. A reduction in the exercise price of these warrants will make it more likely that they are exercised resulting in further dilution to our then current stockholders.

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.

“Penny stock” rules may make buying or selling our securities difficult, which may make our stock less liquid and make it harder for investors to buy and sell our securities.

If at any time in the future our shares of common stock are not listed for trading by NASDAQ and begin to trade on an over-the-counter market such as the Over-the-Counter Bulletin Board or any quotation system maintained by OTC Markets, Inc., trading in our

securities will be subject to the SEC’s “penny stock” rules and it is anticipated that trading in our securities will continue to be subject to the penny stock rules for the foreseeable future. The SecuritiesUnits, the Series G Preferred Stock and Exchange Commission has adopted regulations that generally define a penny stock to be any equity security that has athe Series I Warrants.

There is no established public trading market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receiveUnits, the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock marketSeries G Preferred Stock and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealerSeries I Warrants offered by this prospectus and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.

We have received a delisting notice from The NASDAQ Stock Market. Our common stock may be involuntarily delisted from trading on The NASDAQ Capital Market if we fail to regain compliance with the minimum closing bid price requirement of $1.00 per share and the minimum value of listed securities of $35 million. A delisting of our common stock is likely to reduce the liquidity of our common stock and may inhibit or preclude our ability to raise additional financing and may also materially and adversely impact our credit terms with our vendors.

The quantitative listing standards of The NASDAQ Stock Market, or NASDAQ, require, among other things, that listed companies maintain a minimum closing bid price of $1.00 per share and maintain a minimum value of listed securities of $35 million. We failed to satisfy these thresholds for 30 consecutive trading days and on October 14, 2015, we received a letter from NASDAQ indicating our deficiencies and that we have been provided an initial period of 180 calendar days, or until April 11, 2016, in which to regain compliance.

If we do not regain compliance with the minimum bid price requirement within the 180-day grace period,expect a market to develop. In addition, we may be eligible to receive an additional 180-day grace period; provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, including the minimum market value of listed securities of $35 million and we provide written notice of our intention to cure the bid price deficiency during the second 180-day grace period, by effecting a reverse stock split, if necessary. This additional 180-day grace period does not apply to our deficiency regarding the minimum value of listed securities.

If we do not regain compliance, the NASDAQ staff will provide written notice that our common stock is subject to delisting. Given the increased market volatility, the challenging environment in our industry and our lack of liquidity, we may be unable to regain compliance with the closing bid price requirement and minimum value of listed securities within the 180-day grace period. A delisting of our common stock is likely to reduce the liquidity of our common stock and may inhibit or preclude our ability to raise additional financing and may make it difficult for our stockholders to sell any securities if they desire or need to sell them.

We do not intend to pay cash dividendsapply to list the Units, the Series G Preferred Stock or the Series I Warrants on our sharesany national securities exchange or other nationally recognized trading system. Without an active market, the liquidity of common stock so any returnsthe Units, the Series G Preferred Stock and the Series I Warrants will be limited tolimited.

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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We expect that the market value of our shares.

We currently anticipate that we will retain future earnings for the development, operationSeries G Preferred Stock 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” andSeries I Warrants 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 applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

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.

We may be at risk of securities class action litigation.

We may be at risk of securities class action litigation. This risk is especially relevant for us due to our dependence on positive clinical trial outcomes and regulatory approvals of our diagnostic tests. In the past, life science companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a declinesignificantly affected by changes in the market price of our common stock.

Common Stock, which could change substantially at any time.

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 formed 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 rulesthat the market value of the Series G Preferred Stock 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.

ProvisionsSeries I Warrants will depend on a variety 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,factors, 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 depressingwithout limitation, the market price of our common stock. Stockholders who wish to participate inCommon Stock. Each of these transactions may not have the opportunity to do so. These provisions:

In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on our common stock, from merging or combining with us for a prescribed period of time.

Risks Associated with our Proposed Additional Reverse Stock Split

Our stockholders are being asked to approve a proposal to authorize our board of directors to effect an additional reverse stock split of our common stock. There are risks associated with a reverse stock split, if it is approved by the shareholders and then effected.

Our stockholders are being asked to approve a proposal to effect a reverse stock split of our issued and outstanding common stock, if our board of directors, in its discretion, determines to effect a reverse stock split, by a ratio of not less than 1-for-20 and not more than 1-for-35 at any time as determined by the board of directors, with the exact ratio to be set at a whole number within this range as determined by the board of directors in its sole discretion, referred to as the “Additional Reverse Stock Split.” If our stockholders approve such proposal, we expect to effect a 1-for-20 to 1-for-35 reverse stock split of our issued and outstanding common stock. However, the board of directors reserves the right to elect to abandon and not effect the Additional Reverse Stock Split if it determines, in its sole discretion, that effecting the Additional Reverse Stock Split is not in the best interests of our Company and our stockholders. If we implement the Additional Reverse Stock Split we will be subject to certain risks associated with it, including the following:

We intend to effect a 1-for-20 to 1-for-35 Additional Reverse Stock Split of our outstanding common stock prior to the date of this prospectus. However, the Additional Reverse Stock Split may not increase our stock price sufficiently and we may not be able to listwithin our common stock oncontrol. For example, we expect the NASDAQ Capital Market.

We expect that a 1-for-20 to 1-for-35 Additional Reversemarket value of the Series G Preferred Stock Split of our outstanding common stockand Series I Warrants will increase the market price of our common stock so that we will be able to meet the minimum bid price requirement of the Listing Rules of the NASDAQ Capital Market. However, the effect of a reverse stock split upon the market price of our common stock cannot be predicted with certainty, and the results of reverse stock splits by companies in similar circumstances have been varied. It is possible that the market price of our common stock following the Additional Reverse Stock Split will not permit us to be in compliance with the applicable minimum bid or price requirements. For example, although we effected the Reverse Stock Split on December 11, 2015, it was not sufficient to permit us to maintain compliance with NASDAQ’s $1.00 minimum bid requirement. If we are unable meet the minimum bid or price requirements, we may be unable to list our shares on the NASDAQ Capital Market,

Even if the Additional Reverse Stock Split achieves the requisite increaseincreases in the market price of our common stock, we cannot assure you that we will be able to continue to comply with the minimum bid price requirement of the NASDAQ Capital Market.

Even if the Additional Reverse Stock Split achieves the requisite increaseCommon Stock. As described in another risk factor, the market price of our common stock to be in compliance with the minimum bid price of the NASDAQ Capital Market, or whichever exchange on which we list our common stock, there can be no assurance that the market price of our common stock following the Additional ReverseCommon Stock Split will remain at the level required for continuing compliance with that requirement. It is not uncommon for the market price of a company’s common stock to declinehas been volatile in the period following a reverse stock split. If the market price of our common stock declines following the effectuation of the Additional Reverse Stock Split, the percentage declinepast and could fluctuate widely in response to various factors.

We may be greater than would occur in the absence of the Additional Reverse Stock Split. In any event, other factors unrelated to the number ofissue additional shares of our common stock outstanding, such as negative financialCommon Stock or operational results, couldinstruments convertible or exercisable into our Common Stock, including in connection with exercise of the Series G Preferred Stock and Series I Warrants, and thereby materially and adversely affect the market price of our common stockCommon Stock, and, jeopardize our abilityin turn, the market value of the Series G Preferred Stock and Series I Warrants.

Subject to meet or maintain the minimum bid price requirement of whichever exchange on which our common stock is listed. For example, althoughcertain contractual limitations we effected the Reverse Stock Split on December 11, 2015, it was not sufficient to permit us to maintain compliance with NASDAQ’s $1.00 minimum bid requirement. In addition to specific listingare under, we may offer and maintenance standards, the NASDAQ Capital Market has broad discretionary authority over the initial and continued listing of securities, which it could exercise with respect to the listingsell additional shares of our common stock.

EvenCommon Stock or other securities convertible into or exercisable for our Common Stock during the life of the Series G Preferred Stock and Series I Warrants. We cannot predict the size of future issuances or the effect, if the Additional Reverse Stock Split increasesany, that they may have on the market price for our Common Stock. If we issue additional shares of our common stock, there can be no assurance that we will be able to comply with other continued listing standards ofCommon Stock or instruments convertible or exercisable into our Common Stock, it may materially and adversely affect the NASDAQ Capital Market.

Even if the market price of our common stock increases sufficiently so that we comply withCommon Stock and, in turn, the minimum bid price requirement, we cannot assure you that we will be able to comply with the other standards that we are required to meet in order to maintain a listing of our common stock on the NASDAQ Capital Market. Even if we effect the Additional Reverse Stock Split, we may still be subject to delisting if we fail to meet the minimummarket value of listed securities requirement by April 11, 2016. Our failure to meet these requirements may resultthe Series G Preferred Stock and Series I Warrants. Furthermore, as described in our common stock being delisted from such exchange, irrespective of our compliance with the applicable minimum bid price requirement.

Risks Related to the convertible note financing

Our obligations to the holders of our convertible 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 convertible notes and the transaction documents relating to the convertible notes are secured by a security interest in substantially all of our assets. As a result, if we default under our obligations under the convertible notes or the transaction documents, the holders of the convertible notes, acting through their 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 reduce or cease operations.

The holders of the convertible notes have certain additional rights upon an event of default under the convertible notes which could harm our business, financial condition and results of operations and could require us to reduce or cease or operations.

Under the convertible 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 defaultdifferent risk factor above, 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 Note by delivering written notice. Each portion of the Note subject to redemption would be redeemed by us in cash by wire transfer of immediately available funds 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 common stock during the period beginning on the date immediately preceding such event 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 liquidationexercise of some or all of our assets.

The exercise of any of these rights upon an event of default could substantially harm our financial condition and force us to reduce or cease operations.

As part of the convertible note financing, we are required to repay the principal on the convertible notes in twelve (12) equal installments in cash or shares of common stock and we are required to issue shares upon the exercise ofoutstanding derivative securities, including the Series D warrants. The issuanceG Preferred Stock and Series I Warrants, will dilute the ownership interests of existing shareholders, and any sales in the public market of shares of our common stock pursuant to the convertible notes and related Series D warrantswill result in significant dilution to our stockholders.

Our stockholders may experience significant dilution as a result of sharesCommon Stock issuable upon any such conversion or exercise could adversely affect prevailing market prices of our common stock issued pursuant toCommon Stock or the convertible notes and related Series D warrants. Under the convertible notes and related Series D warrants, we are required to have reserved or have designated for future issuance a number of shares of common stock necessary to effect the conversion of the convertible notes and the exercisemarket value of the Series D warrants,G Preferred Stock and Series I Warrants.

Holders of the Series G Preferred Stock and Series I Warrants will be entitled to only limited rights with respect to our Common Stock, and will be subject to potential future anti-dilution adjustments. Currently, that reservation amount is 85,000,000 shares of common stock and increasesall changes made with respect to 120,000,000 on April 1, 2016. The price at which the Company will convert the installment amounts into common stock is equalour Common Stock to the lowest of (i) the then prevailing conversion price, (ii) initially 80% of the arithmetic average and (ii) after nine months from closing, 85% of the arithmetic average, in each case of the lower of (i) the three lowest daily weighted average prices of the common stock during the twenty (20) consecutive trading day period ending on the trading day immediately preceding the installment date and (iii) the weighted average price of the common stock on the trading day immediately preceding the installment date, subject in all cases to a floor price of $0.20.

For conversions at the election of the holder are not subject to a floor price, and at the current conversion rate of $0.16 for such conversions, the $22.1 million in principal amount of convertible notes would be convertible into 138,125,000 shares of our common stock, representing 120.9% dilution to current stockholders based on 114,231,984 shares of common stock issued and outstanding on February 25, 2016. For conversions in relation to the amortization payments on the convertible notes, if all amortization payments are made at the conversion floor price of $0.20 per share, then we could potentially issue up to a maximum of approximately 110,500,000 shares of our common stock representing 96.7% dilution to current stockholders based on 114,231,984extent holders receive shares of Common Stock issued and outstanding on February 25, 2016.

Further, we issued Series D warrants issuable to acquire 16.6% of our issued and outstanding shares of common stock on a fully-diluted basis, which are subject to a one time reset on December 31, 2016 to 16.6% of our fully diluted shares of common stock on that date. Although we have the option to settle the principal payments on the convertible notes in cash and certain conversion and exercise restrictions are placed upon the holders of the convertible notes and Series D warrants, the issuance of material amounts of common stock by us would cause our stockholders to experience significant dilution in their investment in our Company.

The convertible notes have anti-dilution provisions triggered by the issuance of shares of common stock and securities exercisable for shares of our common stock at prices below the then current conversion price for the convertible notes, including the recent issuance of units under our public offering of securities pursuant to a Registration Statement on Form S-1 (File No. 333-207761), pursuant to which the conversion price of the convertible notes will be adjusted downward and could make it more likely that such convertible notes are converted by the holders diluting our current stockholders and requiring that we reserve more shares for issuance under the convertible notes, which could create an authorized share failure under the terms of the convertible notes.

The conversion price of the convertible notes, currently $0.16, is subject to reduction upon us issuing shares of our common stock or securities exercisable or convertible for shares of our common stock at a per share price below the then current conversion price. In such case, the conversion price is reduced to be equal to the lowest per share price in the triggering issuance. This includes the units issued in our public offering of securities pursuant to a Registration Statement on Form S-1 (File No. 333-207761) which reset the conversion price to $0.16 per share. A reduction in the conversion price of the convertible notes will make it more likely that they are converted resulting in further dilution to our then current stockholders.

Further, we are required pursuant to the terms of the securities purchase agreementSeries G Preferred Stock and Series I Warrants.

Holders of the Series G Preferred Stock and Series I Warrants will be entitled to only limited rights with respect to our Common Stock until the time at which they become holders of our Common Stock pursuant to which we issued the convertible notes and under the terms of the convertible notesSeries G Preferred Stock and Series I Warrants, but will be subject to maintain 120,000,000all changes affecting our Common Stock before that time. For example, if an amendment is proposed to our articles of incorporation requiring shareholder approval and the record date for determining the shareholders of record entitled to vote on the amendment occurs before the date you are deemed to be a record holder of our Common Stock, you generally will not be entitled to vote on the amendment, although you will nevertheless be subject to any changes affecting our Common Stock.

The Series G Preferred Stock ranks junior to the Company’s Series F Preferred Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company. Therefore, holders of the Series G Preferred Stock may not receive cash or assets of the Company pursuant to the terms of the Series G Preferred Stock upon such dividends, distributions and payments if there are insufficient funds following distribution or payment of the preferential Series F Preferred Stock.

The Series G Preferred Stock ranks junior to the Company’s outstanding Series F Preferred Stock. Pursuant to the terms of the Series F Preferred Stock, the Series F Preferred Stock is given preference on all dividends, distributions and payments upon liquidation, dissolution and winding up of the Company. If the Company should liquidate, dissolve or otherwise wind up its business, following payment of outstanding debts of the Company, including but not limited to the Company’s outstanding 2016 Notes, and settlement of any other outstanding obligations, any remaining cash and assets available for distribution to the holders of the Company’s capital stock would first be distributed to the holders of the Company’s Series F Preferred Stock pursuant to the terms of the Series F Preferred Stock Certificate of Designation. Upon occurrence of a liquidation event, the Series F Preferred Stock in entitled to an amount per share of Series F Preferred Stock

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equal to the greater of (A) the conversion amount thereof on the date of such payment and (B) the amount per share such holder would receive if such holder converted such shares of commonSeries F Preferred Stock into Common Stock immediately prior to the date of such payment (without regard to any limitations on the conversion). If there are no funds remaining following the payment of the Series F Preferred Stock in the occurrence of a liquidation event, then the Series G Preferred Stock holders will not receive any dividend, distribution or payment upon the occurrence of such event.

The exercise price of the Series I Warrants will not be adjusted for certain dilutive events.

While the exercise price of the Series I Warrants does adjust for stock assplits and share dividends and is subject to a one-time adjustment pursuant to its terms based on the market price on the relevant reset date, the exercise prices of the Series I Warrants is not subject to adjustment upon a future issuances of securities, including, without limitation, capital stock, options and convertible securities. Such issuances, transactions or occurrences that may adversely affect the market price of our Common Stock or the market value of the Series I Warrants without resulting in an initial reserve amountadjustment of the exercise prices of the Series I Warrants.

You may receive less valuable consideration than expected because the value of our Common Stock may decline after you convert the Series G Preferred Stock or exercise the Series I Warrants issued in this offering, but before we settle our obligation thereunder.

A converting or exercising holder will be exposed to fluctuations in the value of our Common Stock during the period from the date such holder converts the Series G Preferred Stock or surrenders Series I Warrants for issuance of shares uponexercise until the date we settle our exercise obligation. Upon conversion of the convertible notesSeries G Preferred Stock and exercise of the related Series D warrants. Further, we are required to reserve any additional amount of shares of common stock above the initial reserve requirement as may be necessary to settle the conversion of all the outstanding convertible notes and exercise of all the outstanding Series D warrants.

Pursuant to an amendment agreement to the securities purchase agreement, the convertible notes and the Series D warrants, the amount of required initial reserve has been temporarily reduced to 85,000,000 shares of common stock until 11:59:59 pm New York time on March 31, 2016 and the amount of required reserve has been fixed to be no higher than the reduced initial reserve requirement also until 11:59:59 pm New York time on March 31, 2016. Thereafter, beginning at 12:00:00 am New York time on April 1, 2016, the provisions of the securities purchase agreement, convertible notes and Series D warrants will revert to their initial provisions and the minimum number of sharesI Warrants, we will be required to reserve pursuant todeliver the convertible notes will revert to 120,000,000 shares of common stock.

Due toour Common Stock, on the expiration on April 1, 2016third business day following the relevant conversion or exercise date. Accordingly, if the price of our Common Stock decreases during this period, the value of the above reductions in the required number of shares of common stock to be reserved by the Company, if the Company has not increased its authorized shares of common stock by April 1, 2016, including through the approval and implementation of the Additional Reverse Stock Split, then there will likely be an authorized share failure under the terms of the convertible notes and Series D warrants. Upon occurrence of such authorized share failure the Company will have seventy-five (75) days to call a special meeting of stockholders to cure the authorized share failure. If the Company cannot cure the authorized share failure or is otherwise unable to issue shares of common stock upon conversion of the convertible notes or exercise of the Series D warrants, the Companythat you receive will be required to settle such obligations in cash amounts as calculated pursuant toadversely affected and would be less than the terms of those securities andvalue on the holder of the convertible notes will be entitled to require the Company to redeem all or any portion of the convertible notes.exercise date.

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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 Discussion and Analysis of Financial Condition and Result of Operations,” and “Business” sections. In some cases, you can identify these forward -— 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 statementsstatements.

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 Stock after the offering.

USE OF PROCEEDS

We are registering theseThe net tangible book deficit of our common stock as of September 30, 2016 was approximately $61.5 million, or approximately $7,276.87 per share (based on 8,456 shares pursuantoutstanding on September 30, 2016). Net tangible book deficit per share is equal to the registration rights granted to the selling stockholders in the note financing. We will not receive any proceeds from the sale or other dispositionamount of our total tangible assets, less total liabilities, divided by the selling stockholdersaggregate number of theshares of common stock outstanding.

Our pro forma net book deficit as of September 30, 2016 would have been approximately $50.7 million, or approximately $38.91 per share (based on 1,302,904 shares of our common stock coveredoutstanding 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) reduction of liabilities in the amount of $8.4 million related 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 of 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.

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.

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

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The Units offered in this offering also include Series I Warrants, each of which is assumed to be exercisable into 909.0909 shares of Common Stock before adjustment based on an assumed Set Price of $1.10. In the tables below, we illustrate 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 exercise of all Series I Warrants at an assumed exercise price of $1.10 per share based on the closing bid price of the Common Stock on January 5, 2017.

Assumed public offering price per share (assumed exercise of Series I Warrants 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		$	36.66
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		$	(2.25	)
Dilution per share to investors in this offering		$	3.35

The number of shares of our outstanding common stock reflected in the discussion and table above is based on 8,456 shares of common stock outstanding as of September 30, 2016 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 I Warrants offered in this offering, having a per share exercise price less than the public offering price per unit in this offering.

If we raise additional capital in the future, we may in the future sell substantial additional amounts of Common Stock or securities convertible into or exercisable for 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.

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USE OF PROCEEDS

We estimate that the net proceeds of this offering will be approximately $7.09 million, assuming the sale of 8,000 Units at an assumed public offering price of $1,000 per Unit, 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 I Warrants. We will receive additional proceeds from any cash exercise of the Series I Warrants offered by this prospectus.

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 the offering, including the completion of our on-going clinical trial and filing with the FDA of one of our diagnostic test. 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):

			10	%			50	%			100	%
Research and Development		$	0.1			$	1.5			$	3.2
Sales and Marketing		$	0.1			$	0.5			$	1.4
Manufacturing Analyzers for Customers		$	—			$	—			$	0.7
General Corporate Purposes		$	0.2			$	1.4			$	1.7
Total		$	0.4			$	3.4			$	7.1

This expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the status of and results from clinical trials of additional trials and the continued market acceptance of ourC. diff test, Group B Strep test and our other commercially available tests. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We may find it necessary or advisable to use the net proceeds from this offering for other purposes, and we will have broad discretion in the application of net proceeds from this offering. Furthermore, we anticipate that we will need to secure additional funding before we reach profitability. Although certain proceeds of this offering will be used for clinical and regulatory development of our diagnostic tests, we may need to raise additional proceeds to complete the clinical and regulatory development of these diagnostic tests. We anticipate any additional funds necessary to complete clinical and regulatory development of these diagnostic tests, if any, would be sought through a later public offering of debt or equity or from existing investors.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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MARKET PRICE HISTORY

Market Information

Our common stock is currently listedquoted on the NASDAQ Capital MarketOTCQB 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. 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, reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

		High				Low
2014
Fourth Quarter		$	457,632,000.00			$	106,848,000.00
2015
First Quarter		$	212,688,000.00			$	74,592,000.00
Second Quarter		$	307,440,000.00			$	127,808,000.00
Third Quarter		$	161,280,000.00			$	2,520,000.00
Fourth Quarter		$	11,088,000.00			$	789,600.00
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

As of February 25, 2016,January 5, 2017, there were approximately 509474 shareholders of record for our common stock. A substantially greater number of stockholders may be “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.

As of February 25, 2016,January 5, 2017, the last reported salebid price of our common stock on The NASDAQ Capital MarketOTCQB was $0.19.$1.10.

DIVIDEND POLICY

We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on any of our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends in the foreseeable future. Future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our operating results, financial conditions, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

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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 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, especially hospital- acquired infections. We believe our platform has the ability to transform molecular testing for infectious diseases at small to medium 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 provides 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 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. We currently sell our diagnostic test cartridge in the United States through a direct sales force and we use distributors in the European Union and New Zealand. As of December 31, 2015,September 30, 2016, we had 207276 customers worldwide (186(255 in the United States and 21 in the rest of the world), who use an aggregate of 428510 of our analyzers. Our easy to use platform allows small to medium 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 ourC. diff assay, we have developed atwo additional tests, Group B Strep assay for which we received FDA clearance in April 2015 and launched commercially in June 2015.2015 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 filed two 510(k) applicationsreceived FDA clearance in the second halfMarch of 2015, one2016 for Staph ID/R and one for Shiga toxin producingE. coli.launched commercially in September 2016. Additionally, we have five other assays in various stages of product development: (i) 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.

Since inception, we have incurred net losses from operations each year and we expect to continue to incur losses for the foreseeable future. Our losses attributable to operations for the fiscal year ending December 31, 2015 and 2014the nine months ended September 30, 2016 were approximately $57.9 million and $21.7$83.0 million, respectively. As of December 31, 2015,September 30, 2016, we had an accumulated deficit of $121.9$204.9 million.

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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 December 31, 2015,September 30, 2016, we have twofour commercial products, ourC. diff assay, and our Group B Strep assay.assay, our Staph ID/R panel and our Shiga Toxin Direct Test. The average price has not materially changed since their commercial releases.

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 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. We perform all of our manufacturing activities at our facility located in Salt Lake City, Utah. Facility expenses include allocated overhead comprised of rent, 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 shiga toxin producing e. coli assays. In particular, we conducted clinical trials for the Staph ID/R and shiga toxin producing e.colie. coli product candidates, which increased our research and development expenses. Additionally, we have five other assays in various stages of product development: (i) 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 research and development expenses.

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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We expect our sales and marketing expenses to continue to increase as we introduce new assays, such as our Staph ID/R assays and shiga toxin producing e.colie. coli assays, if approved, and seek to enhance our commercial infrastructure, including increasing our sales force and marketing efforts. Additionally, we expect our commissions to continue to increase in absolute terms over time, but to decline as a percentage of revenue.

General and Administrative Expenses

General and administrative expenses primarily consist of salaries, benefits, and other related costs, including stock-based compensation, for certain members of our executive team and other personnel employed in finance, legal, compliance, administrative, information technology, customer service, executive, and human resource departments. General and administrative expenses include allocated facility expenses, related travel expenses, and professional fees for accounting and legal services.

We expect our general and administrative expenses will increase due to costs associated with our public and private funding efforts as we continue to raise capital for our business needs. Our expenses related to compliance with the rules and regulations of the Securities and Exchange Commission and the NASDAQ Capital Market, as well as investor relations activities and other administrative and professional services, will continue to increase as we grow our business.

Gain or Loss on Sale of Assets

Analyzers used outside the United States are sold to the customer and the sale is accounted for as a sale of fixed assets. For these limited situations, management has elected to sell the fixed asset analyzers as opposed to placing them with international customers (thereby not retaining title over the analyzers), as it would be impractical to retain ownership due to, among other reasons, the Company lacking the necessary personnel needed to service international customers, the need to comply with the additional laws and regulations of countries outside the United States to which the Company is not currently subject, and the added costs to recover, reconfigure, ship, and redeploy fixed asset analyzers that have been used internationally. A corresponding loss on the sale of assets is recorded for the difference in the sales price from the cost of the analyzers. Other fixed assets of the Company are sold from time to time after the usefulness has ended. A corresponding gain or loss on the sale of other assets is recorded for the difference in the sales price from the cost of the asset.

Interest Income and Other Income

Interest income and other income primarily consist of interest earned on our cash.

Interest Expense

Interest expense consists of interest on capital leases, notes payable, letters of credit, as well as the amortization of debt discounts. In certain debt transactions that have components required to be measured at fair value, the excess of the fair value over the proceeds received is recorded as an interest expense.

Loss on Extinguishment of Warrants

We entered into an agreement where certain common stock warrants were exchanged for a convertible note payable and warrants. This is considered an extinguishment of a liability as there is both the addition and elimination of a substantive conversion option at the date of exchange. The accounting of an extinguishment of a liability requires the difference between the fair value of the warrants extinguished and the fair value of the consideration provided be recorded as a loss in the statement of operations.

Change in Fair Value of Derivative Liability

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 has 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. Any difference in fair value between the transaction date and future reporting periods must be recognized in earnings for the period.

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Results of Operations

Comparison of the Years Ended December 31, 2015 and 2014

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

		Years Ended December 31,
		2015				2014
Revenue		$	2,142,040			$	1,606,254
Cost of sales			4,813,415				3,968,185
Gross loss			(2,671,375	)			(2,361,931	)
Operating expenses:
Research and development			8,485,668				4,609,913
Selling and marketing			5,007,320				2,301,610
General and administrative			6,241,433				2,928,186
(Gain) loss on sale of assets			—				(8,166	)
Total operating expenses			19,734,421				9,831,543
Loss from operations			(22,405,796	)			(12,193,474	)
Interest expense			(11,757,445	)			(1,136,054	)
Interest income			18,193				3,176
Loss on extinguishment of warrants			(4,038,063	)			—
Change in fair value of derivative liability			(19,714,808	)			(8,396,169	)
Provision for income taxes			(1,250	)			(5,297	)
Net loss		$	(57,899,169	)		$	(21,727,818	)

Revenue

Revenue increased by $535,786, or 33.4% in the twelve months ended December 31, 2015 to $2,142,040, as compared to $1,606,254 in same period of 2014. This increase was attributable to the number of customers in the U.S. increasing to 186 at December 31, 2015 as compared to 84 at December 31, 2014.

Cost of Sales

Cost of sales increased $845,230, or 21.3%, in the twelve months ended December 31, 2015 to $4,813,415, as compared to $3,968,185 for the same period of 2014. The increase is due mainly to a $453,806 increase in costs associated with manufacturing additionalC. diff assays to meet the increased demand for our product, $314,745 in depreciation on additional analyzers and manufacturing equipment needed to support the increase in customers, and a $76,679 increase in royalties. The negative gross margin decreased from 147.0% in the year ended December 31, 2014 to 124.7% in the year ended December 31, 2015, primarily due to the decrease in the cost of ourC. diffassays due to increased production that allowed for economies of scale and the allocation of fixed costs over a greater number of units, as well as increased utilization of capacity in our analyzer manufacturing.

Research and Development

Research and development expenses increased $3,875,755, or 84.1%, in the twelve months ended December 31, 2015 to $8,485,668, as compared to $4,609,913 for the same period of 2014. The increase was due to an increase in salaries of $1,425,033 as the result of hiring new developers and scientists, the increased cost of $1,352,191 for the supply of internal assays and research and development materials associated with the development of our new products, an increase of $500,053 in costs associated with our clinical trials for Staph ID/R and shiga toxin producing e.colie. coli product candidates, an increase of $257,332 in outside development consultants, and all other expenses of $341,146.

Selling and Marketing

Selling and marketing expenses increased $2,705,710, or 117.6%, in the twelve months ended December 31, 2015 to $5,007,320, as compared to $2,301,610 for the same period of 2014. The increase was due primarily to an increase of $2,063,978 in salaries for new sales and marketing personnel as well as increased sales

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commissions as a result of new customers, an increase of $269,740 in travel costs, an increase of $237,988 in marketing and public relations costs as we have expanded our marketing efforts, and an increase in all other expenses of $134,004.

General and Administrative

General and administrative expenses increased $3,313,247, or 113.2%, in the twelve months ended December 31, 2015 to $6,241,433, as compared to $2,928,186 for the same period of 2014. The increase was due to an increase in salaries in the amount of $1,106,664 due to increased accounting and human resource personnel as well as executive bonuses awarded during the year, an increase in legal, accounting, and investor relations fees of $707,122 associated with our public and debt offerings, an increase in non-cash compensation of $499,822 due to the fair value of the issuance of the subordination warrants, an increase in board of directors fees, directors and officers and other general insurance in the amount of $623,451, and an increase in all other expenses of $376,188.

Interest Expense

Interest expense increased by $10,621,391, or 934.9% in the twelve months ended December 31, 2015 to $11,757,445, as compared to $1,136,054 for the same period of 2014. The increase was due to a non-cash charge in the amount of $10,657,904 as the result of the excess of the fair value of the components of our convertible note payable over the proceeds we received in the transaction. This was partially offset by a $36,513 decrease in all other debt payments amortized to interest.

Interest Income

Interest income increased by $15,017, or 472.8% in the twelve months ended December 31, 2015, as compared to the same period of 2014, due to an increase in our average cash balance during 2015.

Loss on Extinguishment of Warrants

The loss on extinguishment of warrants in the amount of $4,038,063 in the twelve months ended December 31, 2015 was due to the extinguishment of 1,050,000 Series C Warrants for $2.1 million in convertible notes payable and associated Series D Warrants. This is considered an extinguishment of a liability, as there is both the addition and elimination of a substantive conversion option at the date of exchange. The accounting of an extinguishment of a liability requires the difference between the fair value of the warrants extinguished and the fair value of the consideration provided be recorded as a loss in the statement of operations. The fair value of the $2.1 million convertible note and warrants issued as consideration for the exchange was $6,378,303 and the fair value of the Series C Warrants was $2,340,240.

Change in fair value of derivative liability

The loss in earnings resulting from the change in fair value of derivative liability increased by $11,318,639, or 134.8%, in the twelve months ended December 31, 2015 to $19,714,808, as compared to $8,396,169 for the same period of 2014. The increase was due mainly to the follow-on offering of the sale of Units in February 2015. The

excess of the fair value on the transaction date of the components of the offering over the net proceeds resulted in an increase of $32,738,211 to the loss in earnings. This increase was partially offset by a decrease in the derivative liability of $21,419,572, which represents the change in the estimated fair value of warrants accounted for as derivative liabilities during the twelve months ended December 31, 2015. This decrease was caused mainly by the decrease in the common stock price.

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Comparison of the three months ended September 30, 2016 compared to the three months ended September 30, 2015

Revenue

		Three months ended September 30,								Increase
		2016				2015				$				%
C. diff		$	625,827			$	521,164			$	104,663				20	%
Group B Strep			108,730				24,770				83,960				339	%
STEC			1,260				—				1,260				—
		$	735,817			$	545,934			$	189,883				35	%

Revenue increased 35% for three months ended September 30, 2016, as compared to the three months ended September 30, 2015. Revenue derived from the sale of STEC assays began since the product was commercially launched in August 2016. There was no revenue from the sale of SIDR assays during the third quarter, as the product did not launch until the last day of September 2016, but SIDR revenue is expected during the fourth quarter of 2016. The 35% increase in total sales was attributable to the number of customers increasing to 255 by September 30, 2016, as compared to 143 at the end of September 30, 2015. In addition, the number of analyzers placed with customers rose to 510 at September 30, 2016, as compared to 336 at the end of September of the prior year. During 2016, the Company was intensely focused on building its customer base and placing additional analyzers in the field. While the increase in customers and analyzers was not always directly proportional to the increase in the Company’s traditional C. diff sales, the Company anticipates selling higher quantities of existing assays, as well as new assays to this larger customer group once new products come to market.

Cost of sales

		Three months ended September 30,
		2016								2015								Increase
		Expense				% of revenue				Expense				% of revenue				$				%
Materials and direct labor		$	703,070				96	%		$	449,000				82	%		$	254,070				57	%
Indirect labor, overhead, and royalties			1,077,966				146	%			429,618				79	%			648,348				151	%
Analyzer depreciation			380,943				52	%			224,109				41	%			156,834				70	%
		$	2,161,979				294	%		$	1,102,727				202	%		$	1,059,252				96	%

The overall cost of direct labor for the third quarter of 2016 increased as a percentage of revenue as compared to the third quarter of 2015 due to the hiring of production workers for additional daily shifts due to both an increase in production of existing assays, and in anticipation of production of our new STEC and Staph ID/R assays. These two assays were launched in August and September of 2016. Similarly, indirect labor and overhead increased as a percentage of revenue due to anticipated demand for 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 336 at September 30, 2015, to 510 at September 30, 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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Research and Development

Research and development expenses increased 30% during the three months ended September 30, 2016, due to an increase of $187,126 for hiring new developers and scientists, an increase of $589,768 for additional costs for clinical trials, experimental assays, and outside consultants, all related to the development of new products, and a net increase of all other research and development expenses aggregating $82,205.

Selling and Marketing

The third-quarter 2016 increase in sales and marketing expenses was due to $160,091 in higher salaries and travel costs resulting from an increase in sales and marketing personnel, stemming from the increase in efforts to add customers and sell additional existing and newly-developed assays. These higher costs included increased commissions related to the increase in new customers, and were also the result of efforts to place additional analyzers in the field. Also included in the increase was $36,028 in other expenses, offset by a $33,184 decrease in promotional assay costs as two new products were finally launched to customers.

General and Administrative

The increase in general and administrative expenses during the third quarter of 2016 resulted from increased rent expense of $111,696, as well as $676,582 in increased legal and consulting fees incurred during 2016 because of increased financing activities. In addition, there were $50,411 in other general and administrative expenses, which were offset by a $170,296 decrease in compensation and travel expenses over the prior year related to certain one-time expenses incurred during 2015.

Interest Expense

Interest expense for the three months ended September 30, 2016 increased by $138.0 million, from $253,220 to $138.2 million, as compared to the three months ended September 30, 2015. The increase was due mainly to the $119.2 million loss on the issuance of the 2016 convertible note, $18.5 million in debt discount amortizations on our convertible notes, which we didn’t have during the third quarter of 2015 and $244,900 increase in all other interest.

Change in Fair Value of Derivative Liability

The change in the fair value of the derivative liability resulted in a gain in earnings for the three months ended September 30, 2016 of $135.7 million, as compared to a gain in earnings of $20.0 million for the three months September 30, 2015. This resulted in an increase in the gain recorded in earnings by $115.7 million for the three months ended September 30, 2016. During 2016’s third quarter we had a decrease in the fair value of our conversion feature and warrants associated with the 2016 Notes in the amount of $102.1 million, a decrease in the fair value of our conversion feature and warrants associated with the 2015 Notes in the amount of $28.3 million, and a decrease in the fair value of all other derivative securities in the amount of $5.3 million. These decreases were all a result of the decrease in the value of our common stock during the third quarter.

During the three months ended September 30, 2015, the fair value of all the derivative securities decreased by $20.0 million, also due to the decrease in the value of our common stock during the period.

Comparison of the Nine months ended September 30, 2016 compared to the nine months ended September 30, 2015

Revenue

		Nine months ended September 30,								Increase
		2016				2015				$				%
C. diff		$	1,934,736			$	1,503,600			$	431,136				29	%
Group B Strep			260,200				26,570				233,630				879	%
STEC			1,260				—				1,260				—
		$	2,196,196			$	1,530,170			$	666,026				44	%

Revenue increased 44% for nine months ended September 30, 2016, as compared to the nine months ended September 30, 2015. Revenue derived from the sale of STEC assays began since the product was

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commercially launched in August 2016. There was no revenue from the sale of SIDR assays during the third quarter, as the product did not launch until the last day of September 2016, but SIDR revenue is expected during the fourth quarter of 2016. The 44% increase in total sales was attributable to the number of customers increasing to 255 by September 30, 2016, as compared to 143 at the end of September 30, 2015. In addition, the number of analyzers placed with customers rose to 510 at September 30, 2016, as compared to 336 at the end of September of the prior year. During 2016, the Company was intensely focused on building its customer base and placing additional analyzers in the field. While the increase in customers and analyzers was not always directly proportional to the increase in the Company’s traditional C. diff sales, the Company anticipates selling higher quantities of existing assays, as well as new assays to this larger customer group once new products come to market.

Cost of Sales

		Nine months ended September 30,
		2016								2015								Increase
		Expense				% of revenue				Expense				% of revenue				$				%
Materials and direct labor		$	1,958,445				89	%		$	1,233,768				81	%		$	724,677				59	%
Indirect labor, overhead, and royalties			2,917,074				133	%			1,483,408				97	%			1,433,666				97	%
Analyzer depreciation			1,036,576				47	%			652,092				43	%			384,484				59	%
		$	5,912,095				269	%		$	3,369,268				220	%		$	2,542,827				75	%

The overall cost of direct labor increased as a percentage of revenue due to the hiring of production workers during the third quarter of 2016 for additional daily shifts in anticipation of increased production of STEC and Staph ID/R assays. These two assays were launched in August and September of 2016. Similarly, indirect labor and overhead increased as a percentage of revenue due to anticipated demand for 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 336 at September 30, 2015, to 510 at September 30, 2016.

Operating Expenses

		Nine months ended September 30,								Increase
		2016				2015				$				%
Research and development		$	9,492,887			$	6,284,170			$	3,208,717				51	%
Selling and marketing			4,892,903				3,206,957				1,685,946				53	%
General and administrative			7,163,214				4,132,973				3,030,241				73	%
		$	21,549,004			$	13,624,100			$	7,924,904				58	%

Research and Development

Research and development expenses increased 51% during the nine months ended September 30, 2016, as compared to the same period during the prior year, due to an increase of $899,860 for hiring new developers, scientists, and recruiting costs, an increase of $1.9 million for additional costs for clinical trials, experimental assays, and outside consultants, all related to the development of new products, and a net increase of all other research and development expenses aggregating $382,539.

Selling and Marketing

The 2016 increase in sales and marketing expenses as compared to 2015 was due to primarily to $1.4 million in higher salaries, travel, and promotional assay costs resulting from an increase in sales and marketing personnel and their increased efforts to add customers and sell additional existing and newly-developed assays. These higher expenses included increased commissions related to the increase in new customers, and were also the result of efforts to place additional analyzers in the field. All other expenses increased $311,764.

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General and Administrative

The increase in general and administrative expenses for the first three quarters of 2016 compared to 2015 resulted from an increase of $502,632 related to the hiring of additional accounting and human resource personnel, as well as $232,351 in increased rent expense, all to accommodate growth experienced during 2016 and growth anticipated in the future. In addition, there was $1.7 million in increased legal and consulting fees incurred during 2016 because of increased financing activities. There was also a $201,883 in additional corporate registration and property tax expenses, and $441,022 in all other general and administrative expenses.

Interest Expense

Interest expense for the nine months ended September 30, 2016 increased by $149.8 million, from $868,587 to $150.7 million, as compared to the nine months ended September 30, 2015. The increase was due mainly to the $119.2 million loss on the issuance of the 2016 convertible note, $30.4 million in debt discount amortizations on our convertible notes, which we didn’t have during the prior year and $212,415 increase in all other interest.

Net Gain on Exchange and Issuance of Warrants

The exchange and issuance of warrants during the nine months ended September 30, 2016 resulted in a net gain of $3.4 million. During the nine months ended September 30, 2016, we recognized a gain on the exchange of Series E Warrants in the amount of $4.1 million. This gain was partially offset by a loss on the issuance of our Series G Warrants in the amount of $0.7 million. We did not have a warrant exchange and issuance during the nine months ended September 30, 2015.

Change in Fair Value of Derivative Liability

The change in fair value of the derivative liability resulted in a gain in earnings of $106.9 million for the nine months ended September 30, 2016 as compared to loss in earnings of $22.6 million for the nine months ended September 30, 2015. During the nine months ended September 30, 2016, we had a decrease in the fair value of our conversion feature and warrants associated with the 2016 Notes in the amount of $102.1 million and a decrease in the fair value of all other derivative securities in the amount of $4.8 million. These decreases were the result of the decrease in the value of our common stock during the period.

During the nine months ended September 30, 2015 we were required to record a charge in the amount of $55.6 million to record the derivative liability on the issuance date of our Series C warrants offered as part of the follow-on offering. This charge was partially offset by an amount of $33.0 million due to the decrease in the fair value of all derivative securities as a result of the decrease in the value of our common stock during the period.

Liquidity and Capital Resources

We have funded our operations to date primarily with net proceeds from our initial and otherIPO, our follow-on public offerings, cash exercises of warrants, sales of our preferred stock, convertible notes, and revenues from operations. Since January 2014, we issued the following securities to help fund our operations. All share numbers and prices set forth below have been adjusted to reflect a reverse stock split effective as of December 11, 2015 whereby each sixty shares of common stock were replaced with one share of stock (with no fractional shares issued). In addition, we have adjusted the number of shares of preferred stock to reflect the number of shares of common stock into which such preferred stock would convert.

(“Notes”) that are convertible into shares of Common Stock at a price equal to $1.85 per share subsequently adjusted to $0.16 per share. $20 million of the Notes were issued for cash at an original issue discount in the amount of $1.6 million which is equal to sixteen (16) months of simple interest at a rate of six percent (6.0%) per annum on the aggregate principal of the Notes (assuming, that the entire aggregate original principal amount remains outstanding through the maturity date). $2.1 million of the Notes were issued upon exchange of outstanding Series C Warrants at an exchange value of $2 per Series C Warrant with no original issue discount. Each Note was sold with a related number of Series D warrants to purchase Common Stock.In relation to the Note Financing, certain warrants were issued to prior debt holders as consideration for their agreement to subordinate the debt owed them by the Company to the Notes (the “Subordination Warrants”). Under the terms of the Notes, at closing the Company received an initial tranche of $4.6 million at the close of the Note Financing. Pursuant to the Notes, the remaining cash purchase price of $13.8 million will be released to the Company in subsequent tranches subject to the terms of the agreement.

As of December 31, 2015 and 2014, we had approximately $4.8 million and $2.0 million, respectively, in cash. Following the closing of the Company’s public offering of units on February 24, 2016, we had approximately $6.3 millionunrestricted cash of $809,763, and restricted cash of $69.1 million. The restricted cash is related to convertible notes we entered into in unrestricted cash. In orderDecember 2015 and July 2016, and the restrictions on the use of the cash will be released during the rest of 2016 and 2017 as certain equity conditions are met. The cash will be used to finance the continued growth in product sales, to invest in further product development, and to otherwise satisfy obligations as they mature,meet ongoing corporate needs.

In February 2016, we will needcompleted a follow-on public offering, whereby 39,200,000 units were sold at a price of $0.16 per unit for net proceeds of $5.0 million after deducting underwriting commissions and offering costs. Each group of 840,000 units converted into one share of our common stock, along with 1,260,000 Series E Warrants to seek additional financing throughpurchase 1.5 shares of common stock.

In June 2016, we completed another follow-on public offering, whereby 3,160,000 units were sold at a price of $1.90 per unit for net proceeds of $5.3 million after deducting underwriting commissions and offering costs. Each group of 24,000 units converted into one share of our common stock, along with 24,000 Series G Warrants to purchase one share of common stock.

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In July 2016, we entered into a securities purchase agreement to issue $75 million of original issue discount convertible notes and related Series H Warrants and Subordination Warrants to purchase common stock. We received $68 million in total proceeds, of which $62 million was placed in restricted accounts. Currently, the issuancenotes are convertible into 12,500,000 shares of common stock, preferredthe Series H Warrants are convertible into 2,346 shares of common stock, and the Subordination Warrants are convertible or non-convertible debt financing. Any additional equity financing, if availableinto 71 shares of common stock.

We have limited liquidity and have not yet established a stabilized source of revenue sufficient to us, may not be availablecover operating costs, based on favorable terms, will most likely be dilutive to our current stockholders, and debt financing, if available, may involve restrictive covenants. If we are unable to access additional funds when needed, we will not be able to continue the development ofestimated burn rate. Accordingly, as discussed herein, our molecular diagnostic platform, our diagnostic tests or we could be required to delay, scale back or eliminate some or all of our development programs and other operations. Any of these events could have an adverse impact on our business, financial condition and prospects.

Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continuecontinuation as a going concern in its report onis dependent upon our audited financial statements. We may be unableability to continuegenerate greater revenue through increased sales and/or our ability to operate without the threat of liquidation for the foreseeable future unless we raise additional capital. Following our February 24, 2016 public offering of units for $6.3 million in gross proceeds and assuming the cash balance in our restricted accounts are released to us in accordance with the terms of the convertible notes, we anticipate we will have sufficient cash to fund our planned operationsfunds through the end of calendar year 2016. However, we anticipate we will need to seek additional financing prior to the calendar year end in order to continue to fund the growth of our operations into 2017.capital markets.

Summary Statement of Cash Flows for the Years Ended December 31,Nine Months ended September 30, 2016 and 2015 and 2014

The following table summarizes our cash flows for the periods indicated:

		Nine months ended September 30,
		2016				2015
Cash used in operating activities		$	(24,138,118	)		$	(14,847,494	)
Cash used in investing activities			(2,908,404	)			(4,066,052	)
Cash provided by financing activities			23,068,526				24,199,434
Net increase (decrease) in cash		$	(3,977,996	)		$	5,285,888

Cash Flows from Operating Activities

Cash used in operating activities for the nine months ended September 30, 2016 was $24.1 million. The net loss of $82.5 million was offset by non-cash items of $30.4 million for the convertible note debt discount amortization, $119.2 million for the loss on the issuance of convertible note, $17.2 million for the loss on the extinguishment of debt, $1.9 million for the increase in depreciation and amortization, and $196,315 in all other non-cash items. These non-cash increases were partially offset by $106.9 million change in the fair value of the derivative liability, and $3.4 million for a non-cash net gain on the exchange and issuance of warrants. The change in operating assets and liabilities resulted in a further use of cash of $288,648, primarily due to a rise in inventory and accounts receivable amounts attributable to the launch of new products and sales increases, offset partially by a related net rise in accounts payable, accrued liabilities and vendor prepayments.

Cash used in operating activities for the nine months ended September 30, 2015 was $20,669,754.$14.8 million. The net loss of $57,899,169$39.0 million was partially offset by other non-cash items of $19,714,808$22.6 million for changethe increase in fair value of derivative liability, $10,594,182$1.1 million for the increase in interest from issuance of convertible note, $4,038,063 in a loss on extinguishment of warrants, $1,612,086 for depreciation and amortization, $612,006 of warrant issuance costs $232,174 in other non-cash items. The change in operating assets and liabilities offset the cash used in operating activities by $426,096, primarily due to an increase of $602,056 in accounts payable and an increase of $700,790 in accrued liabilities partially offset by a $676,048$179,213 net increase in inventory and a $200,702 increase in accounts receivables and prepaid and other assets. As of December 31, 2015, 71.6% of accounts receivable was less than 60 days old.

Cash used in operating activities for 2014 was $12,397,418. The net loss of $21,727,818 was partially offset by non-cash items of $8,396,169 for change in fair value of derivative liability, $1,157,976 for depreciation and amortization, $297,244 of stock-based compensation and $82,817 inall other non-cash items. The change in operating assets and liabilities further reduced cash used in operationsoffset the net loss by $603,806, primarilyanother $157,424 due to a decrease of $217,597 in prepaid and other assets, a decrease of $203,455$552,275 increase in accrued liabilities due mainly to payroll, and a $219,925$457,250 increase in inventoryaccounts payable related to the growth in our operations and accounts receivablesthe timing of payments. These were partially offset by an increase of $31,171$576,872 in inventory, a $197,270 increase in prepaid and other assets, and a $77,959 increase in accounts payable. As of December 31, 2014, 64.6% of accounts receivable was less than 60 days old.

Cash Flows from Investing Activities

Cash used in investing activities was $2.9 million for the nine months ended September 30, 2016, and was related to the costs associated with the construction of analyzers and other equipment in the amount of $2.0 million, and the purchase of equipment in the amount of $912,862.

Cash used in investing activities was $4,792,987$4.1 million for the nine months ended September 30, 2015, and is duewas related to $3,226,943 for the costpurchase of equipment in the amount of $842,225, and the costs associated with the construction of our analyzeranalyzers and other equipment and $1,566,044in the amount of capital expenditures for acquisition of property and equipment.$3.2 million.

Cash Flows from Financing Activities

Cash provided by investingfinancing activities for the nine months ended September 30, 2016 was $315,745 for 2014 and is due to $1,500,000 that was provided from the sale-leaseback$23.1 million, comprised of analyzers and $35,000 providednet proceeds of $10.7 million from the sale of assetsunits in our follow-on offerings, the release of $6.7 million in funds from our restricted cash accounts, net proceeds of $5.5 million from the issuance of

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convertible notes payable, and $1.4 million in proceeds from the exercise of underwriter purchase warrants and Series G Warrrants. These were partially offset by $971,122$314,879 for the costcash settlement of the constructionexercise of our analyzer equipmentSeries C Warrants, and $248,133 of$955,455 in payments made on capital expenditures for acquisition of propertyleases and equipment.

Cash Flows from Financing Activitiesnotes payable.

Cash provided by financing activities for the nine months ended September 30, 2015 was $24.2 million, comprised of $28,232,677 wasnet proceeds of $21.7 million from the proceeds of $21,933,874 from the issuancesale of units in our follow-on offering, proceeds of $4,135,000$250,000 from related-party notes payable, and $3.2 million in proceeds from the exercise of warrants, partially offset by $954,585 in payments made on capital leases, notes payable, and related-party notes payable.

Satisfaction of our cash obligations for the next 12 months and our ability to continue as a going concern

Our condensed unaudited financial statements have been prepared on a going concern basis which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. At September 30, 2016, we had unrestricted and restricted cash amounts of $809,763 and $69.1 million, respectively. We have incurred substantial losses from operations and negative operating cash flows which raise substantial doubt about our ability to continue as a going concern. We sustained a net loss for the nine months ended September 30, 2016 of $83.0 million and a net loss for the year ended December 31, 2015 of $57.9 million. We have an accumulated deficit of $204.9 million as of September 30, 2016. During the nine months ended September 30, 2016, cash used for operations was $24.1 million. Whether and when we can attain profitability and positive cash flows from operations is uncertain.

We intend to continue to develop our products and expand our customer base, but we do not have sufficient realized revenues or operating cash flows in order to finance these activities internally. As a result, we have obtained and intend to continue to obtain financing in order to fund our working capital and development needs. In February 2016, we obtained financing by completing a follow-on offering for net proceeds of $5.0 million, and in June 2016, we completed another follow-on offering for net proceeds of $5.3 million. In July 2016, we signed and issued convertible notes for net proceeds of $68 million, of which a net $5.4 million was immediately available while the rest of the proceeds were placed in the Company’s restricted accounts. Through January 5, 2017, we have drawn from restricted accounts all of the $13.8 million related to our December 2015 convertible notes and we have drawn $2.6 million in an early release of funds from the restricted accounts related to our July 2016 Notes. However, in order to continue operations we will need to obtain additional financing. We anticipate that we will require an additional $5 million in financing by mid-January 2017 to bridge the gap between the funds already released from the restricted accounts and funds that can be released from restricted cash accounts under the terms of the 2016 Notes. If we don’t receive at least $5 million in financing by mid-January 2017, the Company will not be able to continue operations as currently planned, and will be required to either curtail or cease operations. Under the terms of the 2016 Notes, if we are in compliance with all of the conditions we would receive $3.4 million on February 6, 2017 from the restricted accounts. However, the Company is not currently in compliance and will need to seek a waiver or amendment of such conditions to receive a release of funds from restricted accounts. If we are in compliance with all the conditions or receive a waiver or amendment to such conditions and receive the scheduled releases from the restricted accounts, we expect to have adequate funds to run the business until mid-2018. If we fail to receive the release of funds, then we will need further financing to continue operations. We anticipate funds from this offering, assuming $5 – 8 million in gross aggregate proceeds are raised, to last 2 months of operations.

We have been able to meet our short-term needs through private placements of convertible preferred securities, an initial public offering (“IPO”), follow-on public offerings, convertible debt and the sale and leaseback of analyzers used to report test results. We will continue to seek funding through the issuance of convertible notes payable,additional equity securities, debt financing, the sale and leaseback of analyzers, or a combination of these items. Any proceeds of $3,161,220received from exercise of warrantsthese items could provide the needed funds for continued operations and $250,000 in otherdevelopment programs. We can provide no assurance that we will be able to obtain sufficient additional financing activities offsetthat we need to alleviate doubt about our ability to continue as a going concern. If we are able to obtain sufficient additional financing proceeds, we cannot be certain that this additional financing will be available on acceptable terms, if at all. To the extent we raise additional funds by $947,423 in payments of capital leases and $299,994 for the payments of notes payables.issuing equity securities, our stockholders will likely experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. The financial statements do not include any

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Cash provided by financing activities for 2014 of $12,888,073 wasadjustments that might result from the proceedsoutcome of $6,569,886 fromthis uncertainty. If we are unable to obtain additional financings, the issuance of preferred stock, proceeds of $6,375,837 from the issuance of units inimpact on our initial public offeringoperations will be material and proceeds of $1,321,600 in other financing activities offset by $944,606 in payments of capital leases and $434,644 for the payments of notes payables.adverse.

Critical Accounting Policies and Estimates

The preparation of the financial statements requires us to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Certain of our

more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. On an ongoing basis, we evaluate our judgments, including those related to inventories, receivables, recoverability of long-lived assets and derivativethe fair value of our preferred and common stock and related instruments. We use historical experience and other assumptions as the basis for our judgments and making these estimates. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in those estimates will be reflected in our financial statements as they occur. While our significant accounting policies are more fully described in the footnotes to our financial statements included elsewhere in this prospectus,Form 10-Q, we believe that the following accounting policies and estimates are most critical to a full understanding and evaluation of our reported financial results. The critical accounting policies addressed below reflect our most significant judgments and estimates used in the preparation of our financial statements.

As an emerging growth company, we have elected to opt-in to the extended transition period for new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

Revenue Recognition

We derive our product revenue from the sale of single use diagnostic test cartridgesassays sold through our dedicated sales force exceptin the United States, and through a network of distributors in the European Union where we sell through a network of distributors. Product revenueand New Zealand. 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 diagnostic test cartridgesassays occurs at the time of shipment. Shipping and handling fees and related freight costs and supplies for test kits are billed to customers. Additional costs associated with shipping products to customers are included as a component of cost of sales.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are generated from the sale of assays to end users in the United States and to a network of distributors outside the United States. These accounts receivable are recorded at the invoiced amount, net of allowances for doubtful amounts. We routinely review outstanding accounts receivable balances for estimated uncollectible accounts and establish or adjust the allowances for doubtful accounts receivable using the specific identification method and recordsrecord a reserve for amounts not expected to be fully recovered. Actual balances are not applied against the reserve until substantially all collection efforts have been exhausted. We do not have customer acceptance provisions, but we provide our customers a limited right of return for defective diagnostic test cartridges.assays.

Inventories

Inventories are stated at the lower of cost or market with cost determined according to the average cost method. Manufactured inventory consists of raw material, direct labor and manufacturing overhead cost components. We review the components of our inventory on a regular basis for excess and obsolete inventory and make appropriate adjustments when necessary. We have made adjustments to, and it is reasonably possible that we may be required to make further adjustments to, the carrying value of inventory in future periods.

Long-Lived Assets

Long-lived tangible assets, including property and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We regularly evaluate whether events or circumstances have occurred that indicate possible impairment and rely on a number of factors, including expected future operating results, business plans, economic projections, and anticipated future cash flows. We use an estimate of the future undiscounted

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net cash flows and comparisons to like-kind assets, as appropriate, of the related asset over the remaining life in measuring whether the assets are recoverable. Measurement of the amount of impairment, if any, is based upon the difference between the asset’s carrying value and estimated fair value. Fair value is determined through various valuation techniques, including cost-based, market and income approaches as considered necessary. We amortize intangible assets on a straight-line basis over their estimated useful lives.

Our long-lived assets include our analyzers used by hospitals in the United States to run the assays they buy from us. There are no contractual terms with respect to the usage of our analyzers by our customers. Hospitals are under no contractual commitment to use our analyzers. We maintain ownership of these analyzers and, when requested, we can remove the analyzers from the customer’s site. We do not currently charge for the use of our analyzers and there are no minimum purchase commitments of our assays. As our analyzer is used numerous times over several years, often by many different customers, analyzers are capitalized as property and equipment once they have been placed in service. Once placed in service, analyzers are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method based on average estimated useful lives. The estimated useful life of our analyzers is determined based on a variety of factors including in reference to associated product life cycles, and average 5 years. As analyzers are integral to the performance of our diagnostic test,tests, depreciation of analyzers is recognized as a cost of sales.

Analyzers used outside the United States are sold to the customer and the sale is accounted for as a sale of fixed assets. Since inception, the Company has not focused nor placed significant emphasis on developing international markets for the Company��sCompany’s product. The Company has never had an international sales force and has never manufactured analyzers specifically for international markets. Over the past two years on occasion, small, international sales opportunities have come along through international distributors. The analyzers that were sold to them were part of the fixed asset pool of analyzers the Company has, and many of these specific analyzers had been previously placed at customer locations within the United States. In 2014, these opportunities represented 4% of the total analyzers built. For the year ended December 31, 2015 there were no analyzers sold to international distributors. Sale of the fixed asset analyzers in these limited international opportunities have not been based on established product price listings as no such listing exists or has been publicly marketed to customers; instead, the final sales price has been a negotiated amount based on the sale of a functioning fixed asset analyzer, whether or not that analyzer was previously used at another customer site. Similar to other fixed asset sales, there were no stated or implied warranties or other continuing service requirements made with the sale of these assets. For these limited situations, management has elected to sell the fixed asset analyzers as opposed to placing them with international customers (thereby not retaining title over the analyzers) as it would be impractical for us to retain ownership due to, among other reasons, the Company lacking the necessary personnel needed to service international customers, the need to comply with the additional laws and regulations of countries outside the United States to which the Company is not currently subject, and the added costs to recover, reconfigure, ship and redeploy fixed asset analyzers that have been used internationally. During the nine months ended September 30, 2016 there were no analyzers sold to international distributors.

Derivative Instruments

The Company accounts for derivative instruments under the provisions of ASC 815Derivatives and Hedging. ASC 815 requires the Company to record derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings. As a result of certain terms, conditions and features included in our convertible notes and certain common stock purchase warrants granted by the Company, those securities are required to be accounted for as derivatives at estimated fair value, with changes in fair value recognized in earnings.

Income Taxes

We are required to determine the aggregate amount of income tax expense or loss based upon tax statutes in jurisdictions in which we conduct business. In making these estimates, we adjust our results determined in accordance with generally accepted accounting principles for items that are treated differently by the applicable taxing authorities. Deferred tax assets and liabilities resulting from these differences are reflected on our balance sheet for temporary differences in loss and credit carryforwards that will reverse in subsequent years. We also establish a valuation allowance against deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. Valuation allowances are based, in part, on predictions that management must make as to our results in future periods. The outcome of events could differ over time which would require that we make changes in our valuation allowance.

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The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not of being sustained if the position were to be challenged by a taxing authority. We examined the tax positions taken in tax returns and determined that there are no uncertain tax positions. As a result, we recorded no uncertain tax liabilities in our balance sheet.

Stock Based Compensation

We measure and recognize compensation expense for stock options granted to our employees and directors, based on the estimated fair value of the award on the grant date. Historically, for all periods prior to our initial public

offering,IPO, the fair values of the shares of common stock underlying our stock-based awards were estimated on each grant date by our board of directors. In order to determine the fair value of our common stock underlying option grants, our board of directors considered, among other things, contemporaneous valuations of our common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the Statements of Standards for Valuation Services No. 1 of the American Institute of Certified Public Accountants.

Subsequent to the completion of Since our initial public offering,IPO, our board of directors determines the fair value of each share of underlying common stock based on the closing price of our common stock as reported by the NASDAQ Capital Market on the date of grant.

We use the Black-Scholes valuation model to estimate the fair value of stock option awards. The fair value is recognized as expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award on a straight-line basis.

Derivative Instruments

Off-Balance Sheet Arrangements

We account for derivative instruments under the provisions of ASC 815Derivatives and Hedging. ASC 815 requires the Companycurrently do not have any off-balance sheet arrangements that have or are reasonably likely to record derivative instruments at their fair value at the initial transaction date and again at each reporting period. Changes in the fair value of derivatives are recognized in earnings. Ashave a result of certain terms, conditions and features included in certain common stock warrants granted by the Company as well as the conversion features in the convertible notes, those provisions are required to be accounted for as derivatives at estimated fair value, withcurrent or future effect on our financial condition, changes in fair value recognized in earnings.

Jumpstart Our Business Startups Actfinancial condition, revenues or expenses, results of 2012

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012,operations, liquidity, capital expenditures or JOBS Act, was enacted. Section 107 of the JOBS Act, providescapital resources that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise applyare material to private companies. Presently, we are an emerging growth company as defined in Section 2(a) of the Securities Act. We are electing to delay such adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result of this election, our financial statements may not be comparable to the financial statements of other public companies. We may take advantage of these reporting exemptions until we are no longer an emerging growth company.investors.

We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company, we intend to rely on certain of these exemptions, including without limitation, (1) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We may be able to remain an “emerging growth company” until the earliest of (a) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more, (b) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering, (c) the date on which we have issued more than $1 billion in non-convertible debt during the previous three years or (d) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Controls and Procedures

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. Our independent public registered accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until the first year we are no longer an “emerging growth company”.company.”

InWe have evaluated our disclosure controls and procedures and concluded that, as a result of material weaknesses in our internal control over financial reporting as disclosed in our annual report on Form 10-K for the prior year weended December 31, 2015, and in our quarterly report on Form 10-Q for the three and nine months ended September 30, 2016, our disclosure controls and procedures were not effective.

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.

While performing our assessment of internal control over financial reporting, managementManagement also 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

We continue to take steps to remediate the evaluationunderlying causes of the material weakness. As of September 30, 2016, we are in the process of implementing and improving our disclosure controls and procedures asprocesses. We are in the process of December 31, 2015,hiring additional accounting and IT personnel to help improve our chief executive officer and chief financial officer concluded that, assegregation of duties. In January 2016, we engaged a result of material weaknessesthird-party consultant to assist us in making further improvements to our existing internal controlcontrols over financial reporting, our disclosure controlsand we are in the process of formalizing, documenting, and implementing written policies and procedures werefor the review of our various financial reporting processes. We also continue to engage third-party consultants to provide support and to assist us with our evaluation of complex technical accounting matters. We believe 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. Furthermore, we continue to implement and improve systems to automate certain financial reporting processes and to improve information accuracy. However, these remediation efforts are still in process and have not effective asyet been completed. Because of December  31, 2015.this material weakness, there is heightened risk that a material misstatement of our annual or quarterly financial statements will not be prevented or detected.

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BUSINESS

References herein to “we,” “us” or “our” refer to Great Basin Scientific, Inc., doing business as “Great Basin Corporation Inc.,” unless the context specifically requires otherwise.

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, especially hospital-acquired infections. We believe our platform has the ability to transform molecular testing for infectious diseases at small to medium 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 provides 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 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. We currently sell our diagnostic test cartridge in the United States through a direct sales force and we use distributors in the European Union and New Zealand. As of January 31,September 30, 2016, we had 222276 customers worldwide (201(255 in the United States and 21 in the rest of the world), who use an aggregate of 453510 of our analyzers. Our easy to use platform allows small to medium 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 ourC. diff assay, we have developed acommercialized three additional tests, Group B Strep assay for which we received FDA clearance in April 2015 and launched commercially in June 2015. We also filed two 510(k) applications2015, Shiga toxin producing E. coli, or STEC, for which we received FDA clearance in the second half of 2015, one forMarch 2016 and launched commercially in August 2016 and Staph ID/R for which we received FDA clearance in March of 2016 and one for Shiga toxin producingE. coli.launched commercially in September 2016. Additionally, we have five other assays in various stages of product development: (i) a test for pertussis, (ii) a food borne pathogen panel, (iii) a pre-surgical nasal screen forStaphylococcus aureus,, or SA, (ii) a stool bacterial pathogenic panel, (iii)(iv) 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 losses attributable to operations for the fiscal year ending December 31, 20142015 and the nine months ended September 30, 20152016 were approximately $21.7$57.9 million and $39.0$83.0 million, respectively. As of September 30, 2015,2016, we had an accumulated deficit of $103.0$204.9 million.

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Our Strategy

Our goal is to become the leading provider of sample-to-result, multiplex and low-plex molecular diagnostic testing in infectious disease by leveraging the strengths of our affordable diagnostic testing platform. We intend to expand the use of our platform by targeting small to medium sized hospitals in the United States with fewer than 400 beds. We believe that our low-cost platform will be attractive to these hospitals in particular, which may not otherwise have sufficient resources to justify the purchase of a molecular diagnostic sample-to-result solution. To achieve this objective, we intend to do the following:

•

Accelerate the Growth of our U.S. Customer Base.  We intend to expand our sales force to target small to medium hospitals in the United States. We anticipate that increasing our number of customers will drive sales of our diagnostic cartridges. We expect these sales will generate the majority of our revenue for the foreseeable future.

The Great Basin Platform

Our platform, which employs a combination of proprietary and patented technology, consists of a bench top analyzer with a touch screen (or, in early models, a laptop computer) into which our self-contained, single-use diagnostic cartridges are inserted. We believe that our platform is user friendly and intuitive and provides the hospital with the ability to perform molecular diagnostic assays in an efficient and cost-effective manner.

The Analyzer
The Analyzer		The Diagnostic Cartridge		The User Placing the Diagnostic Cartridge into the Analyzer

Once a patient specimen is received in the lab, a technician will typically perform no more than three to five steps of sample preparation before placing the sample in our disposable diagnostic cartridge and inserting it in the analyzer where the assay is run without further technician intervention. Our twofour FDA-cleared assaysC. diff test and Group B Strep, were rated by Clinical Laboratory Improvement Amendments of 1988, or CLIA, as moderately complex, which