10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36662

GREAT BASIN SCIENTIFIC, INC.

(Exact name of registrant as specified in its charter)

Delaware	83-0361454
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
420 E. South Temple, Suite 520, Salt Lake City, UT	84111
(Address of principal executive offices)	(Zip Code)

(801) 990-1055

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨     No  x

The issuer had 3,942,843 shares of common stock outstanding as of May 11, 2016.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Balance Sheets (Unaudited) March 31, 2016 and December 31, 2015	3
	Condensed Statements of Operations (Unaudited) For the Three Months Ended March 31, 2016 and 2015	4
	Condensed Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2016 and 2015	5
	Notes to Condensed Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25
PART II. OTHER INFORMATION		25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
SIGNATURES		31

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

GREAT BASIN SCIENTIFIC, INC.

CONDENSED BALANCE SHEETS

March 31, 2016 and December 31, 2015

(Unaudited)

	March 31			December 31,
	2016			2015
Assets
Current assets:
Cash	$	2,307,191		$	4,787,759
Restricted Cash		13,800,478			13,800,000
Accounts receivable, net		348,534			411,390
Inventory		1,156,012			1,133,142
Prepaid and other current assets		1,571,608			564,910
Total current assets		19,183,823			20,697,201
Intangible assets, net		93,465			119,171
Property and equipment, net		8,315,185			7,741,991
Total assets	$	27,592,473		$	28,558,363
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	2,503,422		$	2,432,459
Accrued expenses		1,754,966			1,313,149
Current portion of notes payable		—			5,693
Current portion of convertible notes payable, net of discount		8,271,184			1,638,717
Notes payable - related party, net of discount		500,000			500,000
Current portion of capital lease obligations		1,376,049			1,305,426
Current portion of derivative liability		35,096,383			—
Total current liabilities		49,502,004			7,195,444
Notes payable, net of current portion		—			—
Convertible notes payable, net of current portion and debt discount		—			525,000
Capital lease obligations, net of current portion		483,681			851,410
Derivative liability, net of current portion		21,011,177			43,181,472
Total liabilities		70,996,862			51,753,326
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $.001 par value, 5,000,000 shares authorized;
74,380 and 88,347 shares issued and outstanding, respectively		74			88
Common stock, $.0001 par value: 200,000,000 shares authorized;
3,292,683 and 296,869 shares issued and outstanding, respectively		329			30
Additional paid-in capital		112,151,579			98,708,784
Accumulated deficit		(155,556,371	)		(121,903,865	)
Total stockholders' deficit		(43,404,389	)		(23,194,963	)
Total liabilities and stockholders' deficit	$	27,592,473		$	28,558,363

See the accompanying notes to condensed financial statements

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GREAT BASIN SCIENTIFIC, INC.

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Revenues	$	731,422		$	458,730
Cost of sales		1,861,745			966,593
Gross loss		(1,130,323	)		(507,863	)
Operating expenses:
Research and development		2,297,983			1,503,558
Selling and marketing		1,478,778			806,118
General and administrative		2,208,657			1,060,652
Total operating expenses		5,985,418			3,370,328
Loss from operations		(7,115,741	)		(3,878,191	)
Other income (expense):
Interest expense		(6,316,330	)		(305,582	)
Interest income		578			4,297
Change in fair value of derivative liability		(20,219,263	)		(66,994,149	)
Total other income (expense)		(26,535,015	)		(67,295,434	)
Loss before provision for income taxes		(33,650,756	)		(71,173,625	)
Provision for income taxes		(1,750	)		—
Net loss	$	(33,652,506	)	$	(71,173,625	)
Net loss per common share - basic and diluted	$	(15.26	)	$	(29,374.17	)
Weighted average common shares - basic and diluted		2,205,230			2,423

See the accompanying notes to condensed financial statements

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GREAT BASIN SCIENTIFIC, INC.

CONDENSED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Cash flows from operating activities:
Net loss	$	(33,652,506	)	$	(71,173,625	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		563,322			339,593
Bad debt expense		86,273			—
Change in fair value of derivative liability		20,219,263			66,994,149
Employee stock compensation		37,045			18,720
Debt discount amortization		6,107,467			25,000
Changes in operating assets and liabilities:
Increase in accounts receivable		(23,417	)		(23,024	)
Increase in inventory		(22,870	)		(47,602	)
Increase in prepaid and other assets		(1,006,698	)		(181,741	)
Decrease in accounts payable		(899,776	)		(37,237	)
Increase in accrued liabilities		441,817			495,060
Net cash used in operating activities		(8,150,080	)		(3,590,707	)
Cash flows from investing activities:
Acquisition of property and equipment		(216,230	)		(83,566	)
Construction of equipment		(408,271	)		(77,769	)
Net cash used in investing activities		(624,501	)		(161,335	)
Cash flows from financing activities:
Proceeds from exercise of warrants		1,335,950			88,000
Proceeds from follow-on offering		5,575,741			22,154,639
Proceeds from issuance of notes payable - related party		—			250,000
Payment of cash settlement for warrant exercises		(314,879	)		—
Principal payments of capital leases		(297,106	)		(158,090	)
Principal payments of notes payable		(5,693	)		(11,969	)
Net cash provided by financing activities		6,294,013			22,322,580
Net increase (decrease) in cash		(2,480,568	)		18,570,538
Cash, beginning of the period		4,787,759			2,017,823
Cash, end of the period	$	2,307,191		$	20,588,361
Supplemental disclosures of cash flow information:
Interest paid	$	215,199		$	241,228
Income taxes paid	$	1,750		$	—
Supplemental schedule of non-cash investing and financing activities:
Initial public offering and follow-on offering costs incurred but unpaid	$	483,952		$	453,015
Property and equipment included in accounts payable	$	486,309		$	419,693
Cashless exercise of warrants	$	187		$	—
Change in derivative liability from exercised and issued warrants	$	12,384,852		$	—

See the accompanying notes to condensed financial statements

5

GREAT BASIN SCIENTIFIC, INC.

Notes to Condensed Financial Statements (Unaudited)

NOTE 1 DESCRIPTION OF BUSINESS

Great Basin Scientific, Inc. (the “Company”) (d.b.a., Great Basin Corporation) is a Delaware corporation headquartered in Salt Lake City, Utah. The Company was originally incorporated as Diagnostic Micro Arrays, Inc., a Nevada corporation, on June 27, 2003. The Company changed its name to Great Basin Scientific, Inc. on April 19, 2006. On August 12, 2008, the Company took steps to change its corporate domicile from Nevada to Delaware by forming Great Basin Scientific, Inc., a Delaware corporation, and on August 29, 2008, Great Basin Scientific, Inc., a Nevada corporation, was merged with and into Great Basin Scientific, Inc., a Delaware corporation, wherein the Delaware corporation was the sole surviving entity.

The Company is a molecular diagnostic testing company focused on the development and commercialization of its patented, molecular diagnostic platform designed to test for infectious disease, especially hospital-acquired infections. The Company believes that small to medium sized hospital laboratories, those under 400 beds, are in need of simpler and more affordable molecular diagnostic testing methods. The Company markets a system that combines both affordability and ease-of-use, when compared to other commercially available molecular testing methods, which it believes will accelerate the adoption of molecular testing in small to medium sized hospitals. The system includes an analyzer, which is provided for our customers’ use without charge in the United States, and a diagnostic cartridge, which is sold to our customers. The testing platform has the capability to identify up to 64 individual targets at one time. If the test identifies one to three targets, they are referred to as low-plex tests, or tests, and if they identify four or more targets they are referred to as multi-plex panels, or panels. The Company currently has two commercially available tests, the first for clostridium difficile, or C. diff, which received clearance from the Food and Drug Administration, or FDA, in April 2012 and the second for Group B Strep, which received clearance from the FDA in April 2015 and launched commercially in June 2015. The Company received FDA clearance on two more tests in March 2016, Staphylococcus Identification and Resistance Panel, or Staph ID/R panel and Shiga toxin producing E. coli, or STEC, each of which is not yet available for commercial sale. Our customers consist of hospitals, clinics, laboratories and other healthcare providers in the United States, the European Union and New Zealand.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These condensed unaudited financial statements have been prepared to reflect the financial position, results of operations and cash flows of the Company as of March 31, 2016 and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. The accompanying condensed financial statements and notes are unaudited. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements for the year ended December 31, 2015 and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2016 and its results of operations and cash flows for the three months ended March 31, 2016 and 2015. The results for the three months ended March 31, 2016 are not necessarily indicative of the results expected for the full fiscal year or any other interim period.

Net Income (Loss) per Common Share

Basic loss per share (“EPS”) is computed by dividing net loss (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net loss by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include convertible preferred stock, convertible notes, stock options and warrants. The number of potential common shares outstanding is computed using the treasury stock method.

As the Company has incurred losses for the three months ended March 31, 2016 and 2015, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of March 31, 2016 and 2015, there were 5,732,109 and 18,495 potentially dilutive shares, respectively.

Reverse Stock Split

On March 30, 2016, the Company effected a reverse stock split of the Company’s common stock whereby each thirty-five shares of common stock was replaced with one share of common stock (with no fractional shares issued). The par value and the number of authorized shares of the common stock were not adjusted. All common share and per share amounts for all periods presented in these financial statements have been adjusted retroactively to reflect the reverse stock split. The quantity of Series E Preferred Stock,

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Common Warrants, Class A, Class B, Series A, Series B and Series C Warrants as well as employee and other options were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion and exchange ratios were adjusted for the effect of the reverse stock splits such that upon conversion each 2,100 shares of Series E Preferred Stock will now be converted into four shares of common stock and upon exercise each 2,100 warrants or options will now be converted into one share of common stock. The quantity of Series D and Subordination Warrants were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion ratio has been adjusted such that upon exercise each 35 of the Series D and Subordination Warrants will now be converted into one share of common stock (see NOTE 10 WARRANTS).

Fair Value of Financial Instruments

FASB ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under FASB ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under FASB ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, with the first two inputs considered observable and the last input considered unobservable, that may be used to measure fair value as follows:

· Level one — Quoted market prices in active markets for identical assets or liabilities;

· Level two — Inputs other than level one inputs that are either directly or indirectly observable; and

· Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company issued certain common stock warrants, employee stock options and convertible notes that are required to be recorded at fair value measured at the transaction date. In addition certain other warrants to purchase common stock and convertible notes qualify as derivative liabilities and are therefore required to be recorded at fair value measured at the transaction date and again at each reporting period end. The fair value of these warrants and conversion was determined using estimates and assumptions that are not readily available in public markets and the Company has designated this liability as Level 3. The assumptions used for the fair value calculation as well as the changes in the value of the derivative liability are shown in NOTE 11 DERIVATIVE LIABILITY.

Derivative Instruments

The Company accounts for derivative instruments under the provisions of ASC 815 Derivatives 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 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, with changes in fair value recognized in earnings.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

In February 2016, the FASB issued ASU No. 2016-02 Leases, which requires recognition of leased assets and liabilities on the balance sheet and disclosing key information about leasing arrangements.  This update is effective for annual periods and interim periods with those periods beginning after December 15, 2018.  The Company is evaluating the impact of this standard on its financial statements.

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11 Simplifying the Measurement of Inventory, that simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost or net realizable value test. The ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is still evaluating the impact this standard will have on its financial statements and related disclosures.

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In April 2015, the FASB issued ASU No. 2015-03 Interest – Imputation of Interest, Simplifying the Presentation of Debt Issuance Cost. This standard provides guidance on the balance sheet presentation for debt issuance costs and debt discounts and debt premiums. To simplify the presentation of debt issuance costs, this standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This ASU is effective for fiscal years beginning after December 15, 2015. The Company has adopted this standard and the effects are reflected in its financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15 Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern. The update is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The impact on the Company’s financial statements of adopting ASU 2014-15 is currently being assessed by management.

In May 2014, the FASB issued ASU No. 2014-09Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In April 2015, the FASB deferred the effective date of ASU 2014-09 to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2014-09 on its financial statements.

NOTE 3 GOING CONCERN

The Company’s 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. The Company has incurred substantial losses from operations and negative operating cash flows which raise substantial doubt about the Company’s ability to continue as a going concern.  The Company sustained a net loss for the three months ended March 31, 2016 of $33.7 million and a net loss for the year ended December 31, 2015 of $57.9 million, and has an accumulated deficit of $155.6 million as of March 31, 2016. Whether and when the Company can attain profitability and positive cash flows from operations is uncertain.

The Company intends to continue to develop its products and expand its customer base, but does not have sufficient realized revenues or operating cash flows in order to finance these activities internally.  As a result, the Company intends to seek to obtain financing in order to fund its working capital and development needs. In February 2016 the Company obtained financing by completing another follow-on offering for net proceeds of $5.0 million.

The Company has been able to meet its short-term needs through private placements of convertible preferred securities, an initial public offering (“IPO”), additional follow-on offerings, convertible debt financing and the sale and leaseback of analyzers used to report test results. The Company will continue to seek funding through the issuance of additional equity securities, debt financing, the sale and leaseback of analyzers, or a combination of these items. Any proceeds received from these items could provide the needed funds for continued operations and development programs. The Company can provide no assurance that it will be able to obtain sufficient additional financing that it needs to alleviate doubt about its ability to continue as a going concern. If the Company is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing will be available on acceptable terms, if at all. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to obtain additional financings, the impact on the Company’s operations will be material and adverse.

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NOTE 4 LEASE COMMITMENTS

Capital Leases

The Company has entered into two lease agreements for the sale-leaseback of molecular diagnostic analyzers. The first agreement was entered into in November 2013 and provided for the sale of 125 molecular diagnostic analyzers for a sales price of $2,500,000, which are being leased back for a base period of thirty-six monthly payments of $74,875. The second agreement was entered into in April 2014 for the sale of 75 molecular diagnostic analyzers for a sales price of $1,500,000, which are being leased back for a base period of twenty-four monthly payments of $64,665. At the end of each lease term, the leases shall automatically renew for twelve additional months unless certain conditions are met. As such, the Company is amortizing the capital lease over a forty-eight month period for the first agreement and a thirty-six month period for the second agreement. The lease is accounted for as a capital lease sale-leaseback transaction in accordance with ASC 840, “Leases”.

Operating Leases

The Company leases approximately 35,540 square feet of office space located in Salt Lake City, Utah for use as the executive offices and labs. Base rent payments due under the lease are expected to be approximately $3,472,875 in the aggregate over the term of the lease of 65 months beginning on December 1, 2015. The Company also leases approximately 33,000 square feet of building space at another location in Salt Lake City, Utah for use primarily as manufacturing space and labs. Base rent payments due under these leases total $21,226 per month. The leases expire on April 30, 2017.  The Company also leases certain office equipment such as copiers and printers under operating lease agreements that expire at various dates.

Amounts charged to expense under operating leases were $165,045 and $74,268 for the three months ended March 31, 2016 and 2015, respectively.

NOTE 5 NOTES PAYABLE

The Company purchased certain machinery and equipment under two note payable agreements in January and February 2013. During the three months ended March 31, 2016, both notes were extinguished by making the final payments on the notes in the amount of $5,693.

NOTE 6    CONVERTIBLE NOTES PAYABLE

On December 30, 2015, the Company entered into a Securities Purchase Agreement (“SPA”) with certain investors pursuant to which it agreed to issue $22.1 million in senior secured convertible notes (“Notes”) and Series D Warrants (further described below). The Notes are convertible into 3,946,429 shares of Common Stock at a price equal to $5.60 per share, subject to adjustment for certain dilutive events. $20 million of the notes were issued for cash proceeds totaling $18.4 million with 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 to extinguish 1,050,000 outstanding Series C Warrants at an extinguish value of $2.00 per warrant. The Notes are senior secured obligations of the Company and will rank senior to all outstanding and future indebtedness of the Company. They are secured by a first priority perfected security interest (subject to permitted liens as defined in the Notes) in all of the current and future assets of the Company. The Notes contain standard and customary events of default and the entire principal balance is subject to the default and redemption provisions contained in the Notes, regardless of whether or not any of the proceeds have been released from the Company’s restricted accounts.

In connection with the issuance of the Notes under the SPA, the Company issued Series D Warrants (the “Series D Warrants”), exercisable to acquire 100,090 shares of Common Stock, subject to a one time adjustment on December 31, 2016 under the terms of the Series D Warrants (see NOTE 10 WARRANTS). Each Series D Warrant is exercisable by the holder beginning six months after December 30, 2015 and continuing for a period five years thereafter. The Series D Warrants are exercisable at $5.60 per share of common stock, subject to adjustments for certain dilutive events.

The Company has agreed to make amortization payments with respect to the Notes in twelve (12) equal installments beginning four (4) months after the original date of issuance of December 30, 2015 (each, an “Installment Date”). On each installment date, assuming certain equity conditions are met, the installment payment shall automatically be converted into shares of Common Stock at a conversion rate defined in the agreement.

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Under the terms of the Notes, at closing the Company received an initial tranche of $4.6 million for immediate use for general corporate purposes. The remaining cash proceeds of $13.8 million are being held in a restricted account and will be released to the Company from the Company’s restricted accounts in subsequent equal tranches subject to certain equity conditions.

$20 million of the Notes were issued for cash proceeds of $18.4 million with an original issue discount in the amount of $1.6 million.  The conversion feature in the Notes represents an embedded derivative that requires bifurcation due to the ratchet provision described above related to the conversion feature. The provisions in the Series D Warrants also require the Company to account for the warrants as derivative liabilities. The original issue discount, the fair value of the embedded conversion feature, the fair value of the Series D Warrants and the debt issuance costs are all together considered the debt discount. The Company recorded a debt discount in the amount of $20 million which is being amortized over the life of the note using the effective interest method. For the three months ended March 31, 2016, $6,107,467 of the debt discount had been amortized to interest expense.

The following table summarizes the convertible notes outstanding at March 31, 2016:

Convertible notes payable, principal	$	22,100,000
Debt discounts		(13,828,816	)
Net convertible note payable		8,271,184
Less current portion		(8,271,184	)
Convertible notes payable, long term	$	—

NOTE 7 NOTES PAYABLE – RELATED PARTY

In July 2014, the Company entered into a note agreement for $500,000 with Spring Forth Investments, LLC a company owned by Mr. David Spafford, a director. The original maturity date for the note was July 18, 2015, which was extended by the Company to July 18, 2016 by giving notice and paying an extension fee of $10,000. The note pays interest at an annual rate of 20% and is paid monthly. The Company prepaid the last three months of interest for a total of $25,000 at the time of issuance of the note.  As additional consideration for the note, the Company issued 4,000,000 Series D preferred stock units (which were separable into 4,000,000 shares of Series D preferred stock, 20,000 Class A warrants to purchase 10 shares of common stock at $5.60 per share and 20,000 Class B warrants to purchase 10 shares of common stock at $5.60 per share) at a value of $100,000 or $0.025 per unit. The 4,000,000 shares of Series D Preferred Stock were converted into 10 shares of Common Stock. The Series D preferred stock units were accounted as a debt discount which has been fully amortized.  

NOTE 8 PREFERRED STOCK

The Company had 5,000,000 shares of preferred stock authorized at a par value of $0.001 per share as of March 31, 2016. As of March 31, 2016 there were 74,380 shares of Series E Preferred Stock issued and outstanding which are convertible at the option of the holders into 142 shares of common stock.  During the three months ended March 31, 2016, 13,967 shares of Series E Preferred Stock were converted into 27 shares of common stock.

NOTE 9 COMMON STOCK

The Company had 200,000,000 shares of common stock authorized at a par value of $0.0001 per share as of March 31, 2016. As of March 31, 2016 there were 3,292,683 shares of common stock issued and outstanding. The Company has reserved 2,428,572 of authorized but unissued shares of common stock for issuance pursuant to the convertible notes and associated Series D Warrants.

During the three months ended March 31, 2016, the Company issued 1,520,888 shares of common stock pursuant to the cashless exercise of 5,091,815 Series C Warrants.

During the three months ended March 31, 2016, the Company issued 354,899 shares of common stock pursuant to the cash exercise of 121,540 Underwriter Unit Purchase Options at an exercise price of $11.00 for total proceeds of $1,335,950.  Upon exercise of these options, 121,540 shares of Series E Convertible Preferred Stock were issued and immediately converted into 232 shares of  common stock and 972,320 Series C Warrants were issued and immediately exercised pursuant to the cashless exercise provision into 354,667 shares of common stock.

During the three months ended March 31, 2016, the Company issued 27 shares of common stock pursuant to the conversion of 13,967 shares of Series E Convertible preferred stock (see NOTE 8 PREFERRED STOCK).

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On February 24, 2016, the Company completed a public offering of 39.2 million Units.  Each 35 units consisted of one share of common stock and 52.5 Series E Warrants. The Company received approximately $5.0 million of net proceeds.  Pursuant to the sale of the units, the Company issued 1,120,000 shares of common stock. Each 35 Series E Warrants are exercisable into one share of common stock at $8.75 per share.  The Series E Warrants expire six years from the date of grant, are not exercisable for one year and which exercise is subject to a shareholder vote and an increase in the number of authorized shares of common stock the Company can issue.

NOTE 10 WARRANTS

The following table outlines the warrants outstanding and exercisable as of March 31, 2016:

			Total
			Shares of	Aggregate
	Outstanding	Warrant	Common Stock	Exercise Price
	and	Exercise	Underlying	for One
Warrants	Exercisable	Price	the Warrant	Common Share	Expiration
Class A	1,532,598	$0.0027	755	$5.60	April 2021 - July 2021
Class B	1,310,956	$0.0027	640	$5.60	April 2012 - July 2021
Series B	1,074,082	$8.04	530	$16,873.50	March 2021 - July 2021
Series D	3,503,116	$0.0027	100,090	$5.60	June 2021
Series E	58,800,000	$0.25	1,680,000	$8.75	February 2022
Subordination	105,516	$0.0027	3,015	$5.60	June 2021
Common	463,356	$0.0027- $32.00	230	$5.60 - $67,200.00	April 2016 - July 2021
Total Warrants	66,789,624		1,785,260

Class A Warrants

The Class A Warrants include a provision which provides that the exercise price of the Class A Warrants will be adjusted in connection with certain equity issuances by the Company.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to $5.60 per share of common stock.

Class B Warrants

The Class B Warrants include a provision which provides that the exercise price of the Class B Warrants will be adjusted in connection with certain equity issuances by the Company.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to $5.60 per share of common stock.

Series B Warrants

The Series B Warrants include a provision which provides that the exercise price of the Series B Warrants is subject to reduction in connection with certain equity issuances by the Company that are below the then current market price. In February 2016, as a result of the February 2016 Unit Offering, the price reduction provision was trigged and the exercise price was reduced to $16,873.50 per share of common stock.

Series C Warrants

During the three months ended March 31, 2016, 5,229,973 Series C Warrants were exercised pursuant to the cashless exercise provision.  The Company settled 5,091,815 of the Series C Warrant exercises through the issuance of 1,520,888 shares of common stock and the Company settled 138,158 of the Series C Warrant exercises with cash in the amount of $314,879.

On January 21, 2016 all outstanding Series C Warrants were mandatorily exercised utilizing the cashless provision of the warrants and the corresponding shares of common stock issued.  As of March 31, 2016 there are 47,528 Series C Warrant certificates that have yet to be delivered to the Company representing 15,182 shares of common stock.

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Series D Warrants

The Series D Warrants include a provision which provides that the exercise price of the Series D Warrants will be adjusted in connection with certain equity issuances by the Company subject to a floor exercise price of $7.00 per share of common stock.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to the floor of $7.00 per share of common stock.  In March 2016, pursuant to the approval of the Company’s stockholders of the removal of the exercise floor price, the exercise price was adjusted to $5.60 per share of common stock.

Series E Warrants

In connection with the February 2016 Unit Offering, the Company issued Series E Warrants to purchase 1,680,000 shares of common stock as part of the units sold in the offering (see NOTE 9 COMMON STOCK).  Each 35 Series E Warrant will have an initial exercise price per share of $8.75, subject to certain adjustments. The Series E Warrants are exercisable beginning one year and one day from the date of issuance, but only ifthe Company has obtained stockholder approval (i) for the issuance of shares of common stock issuable upon the exercise of the Series E Warrants pursuant to the applicable rules andregulations of the NASDAQ Capital Market and (ii) to effect an additional reverse split of our common stock and/or increase our authorized sharesof common stock so as to permit the exercise in full of the Series E Warrants.  The Series E Warrants will expire on the fifth anniversary of the date they first become exercisable. One year from the date of issuance, the number of shares of commonstock issuable upon the exercise of the Series E Warrants shall be increased to equal the difference, if positive, obtained by subtracting (x) the number of shares of common stockissuable upon the exercise of the Series E Warrants on the date of issuance) , from (y) the lesser of (A) 7% of the sum of the number of shares of common stock actually outstanding one year from the date of issuance, plus the number of shares ofcommon stock deemed to be outstanding pursuant to the terms of the Series E Warrant, or (B) 200% of the shares of common stock issuable upon the exercise of the Series E Warrants on such date.

The Series E Warrants include a provision that for one year from issuance the exercise price per share will adjust if the Company has certain equity issuances for consideration per share that is less than the current exercise price of the Series E Warrants. The Series E Warrants are exercisable on a cashless basis in the event there is no effective registration statement registering the shares underlying the Series E Warrants.

Subordination Warrants  

The Subordination Warrants include a provision which provides that the exercise price of the Subordination Warrants will be adjusted in connection with certain equity issuances by the Company subject to a floor exercise price of $7.00 per share of common stock.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to the floor of $7.00 per share of common stock.  In March 2016, pursuant to the approval of the Company’s stockholders of the removal of the exercise floor price, the exercise price was adjusted to $5.60 per share of common stock.

Common Warrants

Certain Common Warrants include a provision which provides that the exercise price of these certain Common Warrants will be adjusted in connection with certain equity issuances by the Company.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price of these certain Common Warrants was adjusted to $5.60 per share of common stock.

The following table summarizes the common stock warrant activity during the three months ended March 31, 2016:

						Weighted
						Average
				Weighted		Remainder
	Common			Average		Contractual
	Stock			Exercise		Term in
	Warrants			Price		Years
As of March 31, 2016:
Warrants Outstanding as of January 1, 2016		13,219,597		$	2.71		4.7
Granted		58,800,000		$	0.25		5.9
Exercised		(5,229,973	)	$	2.55		—
Expired		—			—		—
Warrants outstanding as of March 31, 2016		66,789,624		$	0.39		5.8

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Underwriters’ Unit Purchase Option

During the three months ended March 31, 2016, 121,540 Underwriters’ Unit Purchase Options were exercised for cash in the amount of $1,335,950. Pursuant to the exercise of these options, 121,540 shares of Series E Convertible Preferred Stock were issued and immediately converted into 232 shares of common stock and 972,320 Series C Warrants were issued and immediately exercised pursuant to the cashless exercise provision of the Series C Warrants into 354,667 shares of common stock. There are no outstanding Underwriters’ Unit Purchase Options as of March 31, 2016.

NOTE 11    DERIVATIVE LIABILITIES

The derivative liability for our instruments classified as derivative liabilities are recorded at fair value at inception and subsequently re-measured to fair value as long as such instruments are classified as derivative liabilities. Changes in the fair value of the derivative liability was included as a component of Other income (expense) and has no effect on the Company’s cash flows. The valuation methodologies used vary by instrument and include a modified Black-Scholes option valuation model utilizing the fair value of the underlying common stock and a binomial model with Monte Carlo simulation. The Company has determined the fair value measurements to be a level 3 measurement (see NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES).

Class A Warrants, Class B Warrants, Series B Warrants and Certain Common Warrants

Our Class A Warrants, Class B Warrants, Series B Warrants and certain common warrants, have an exercise price adjustment provision that in the event the Company sells shares of any additional stock, subject to certain exceptions, at a price per share less than the original exercise price of the respective warrant, the exercise price shall be adjusted to a price equal to the price paid per share for such additional stock. Our Series B Warrants have an exercise price adjustment provision that in the event the Company sells shares of any additional stock, subject to certain exceptions, at a price per share less than the then current market price, the exercise price shall be adjusted to a price equal to the price paid per share for such additional stock. Such exercise price adjustments prohibit the Company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, these warrants are accounted for as derivative liabilities and are recorded at fair value at each reporting date with the change in fair value being recorded in earnings for the period. In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered for our Class A Warrants, Class B Warrants, Series B Warrants and certain common warrants and the exercise price per share was adjusted accordingly.

The fair value of these warrants was calculated using a modified Black-Scholes option valuation model utilizing the fair value of underlying common stock. Black-Scholes has inherent limitations for use in the case of a warrant with a price protection provision, since the model is designed to be used when the inputs to the model are static throughout the life of a security. Due to the significant variance between the fair market value of the stock and the exercise price, the Black-Scholes option-pricing model resulted in a fair value that equals the current market value of the stock. As such, the fair value of the Class A, Class B, Series B and certain other common warrants was estimated to be $7.17 per share, which was the closing price of the common stock on March 31, 2016. The Company determined the total fair value of these warrants at March 31, 2016 was $13,500.

Series C Warrants and Unit Purchase Option

Our Series C Warrants contained a cashless exercise provision using a predetermined Black Scholes Value. Such provision, if exercised by the holder, would require the Company to settle these warrants, at its option, either by cash payment or the granting of a variable number of common shares. This provision results in the potential for the Company to either have to net cash settle the warrant or potentially issue an indeterminate number of common shares which prohibits the Company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, the warrants and the unit purchase option are accounted for as derivative liabilities and are recorded at fair value at each reporting date with the change in fair value being recorded in earnings for the period. During the three months ended March 31, 2016 all of the remaining Series C Warrants and unit purchase options were exercised.

Convertible Notes Conversion Feature

The convertible notes issued in December 2015 contain provisions that protect holders from future issuances of the Company’s common stock at prices below such convertible notes’ respective conversion price. These provisions could result in modification of the conversion price due to a future equity offering and as such the conversion feature cannot be considered indexed to the Company’s own stock. The note also provides that the Company will repay the principal amount at an initial conversion rate subject to certain adjustments. These features represent an embedded derivative that requires bifurcation and are recorded at fair value at each reporting period with the change in fair value being recorded in earnings for the period.

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The Company determined the fair value of the conversion feature to be $35,096,383 at March 31, 2016 using a binomial model with Monte Carlo simulation to reflect different scenarios where reset may be triggered using the following assumptions:

Trading price of common stock on measurement date	$	7.17
Conversion price (1)	$	4.05
Risk free interest rate (2)		0.59	%
Conversion notes lives in years		1.08
Expected volatility (3)		251	%
Expected dividend yield (4)		-

(1) The conversion price of the convertible notes was calculated based on the formula in the Notes agreement as of the respective measurement date

(2) The risk-free interest rate was determined by management using the 1-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

Series D Warrants and Subordination Warrants

In connection with the issuance of convertible notes in December 2015, the Company issued Series D Warrants to acquire 100,090 shares of common stock. In addition, the Company issued Subordination Warrants to acquire 3,015 shares of common stock. The Series D Warrants and Subordination Warrants contain provisions that will adjust the exercise price upon certain equity issuances.  In addition, these warrants contain a provision for a one-time adjustment at December 31, 2016, to the number of warrants issued. The Company has determined that the provisions contained in the Series D Warrants and the Subordination Warrants could result in modification of the exercise price resulting in a variable number of additional common shares that could be issued. This prohibits the company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, the warrants represent a derivative liability that requires recording at fair value at each reporting period with the change in fair value being recorded in earnings for the period.

The Company determined the fair of the Series D Warrants and Subordination Warrants to be $9,019,277 at March 31, 2016 using a binomial model with Monte Carlo simulation to reflect different scenarios where reset may be triggered and to project the range of the additional shares to be issued on December 31, 2016 using the following assumptions:

Trading price of common stock on measurement date	$	7.17
Exercise price (1)	$	5.60
Risk free interest rate (2)		1.21	%
Warrant lives in years		5.25
Expected volatility (3)		230	%
Expected dividend yield (4)		-

(1) The exercise price of the Series D and Subordination Warrants as defined in the warrant agreement.

(2) The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

Series E Warrants

In connection with the February 2016 Unit Offering, the Company issued Series E Warrants to purchase 1,680,000 shares of common stock as part of the units sold in the offering (see NOTE 9 COMMON STOCK). The Series E Warrants contain a provision that for one year from issuance the exercise price per share will adjust if the Company has certain equity issuances for consideration per share that is less than the current exercise price of the Series E Warrants. In addition, these warrants contain a provision for a one-time adjustment one year from date of issuance, to the number of warrants issued. The Company has determined that the provisions contained in the Series E Warrants could result in modification of the exercise price resulting in a variable number of additional common shares that could be issued. This prohibits the company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, the warrants represent a derivative liability that requires recording at fair value at issuance and again at each reporting period with the change in fair value being recorded in earnings for the period.

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The Company determined the fair of the Series E Warrants to be $11,390,400 at issuance and $11,978,400 at March 31, 2016 using a Black Scholes valuation model using the following assumptions:

	February 24, 2016			March 31, 2016
Trading price of common stock on measurement date	$	6.82		$	7.17
Exercise price (1)	$	8.75		$	8.75
Risk free interest rate (2)		2.73	%		2.75	%
Warrant lives in years		6.01			5.91
Expected volatility (3)		225	%		230	%
Expected dividend yield (4)		-			-

(1) The exercise price of the Series E Warrants as defined in the warrant agreement.

(2) The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

The following summarizes the total change in the value of the derivative liabilities during the three months ended March 31, 2106:

As of March 31, 2016:
Balance at January 1, 2016	$	43,181,472
Issuance of warrants		5,091,677
Exercise of warrants and options		(12,384,852	)
Change in fair value of warrant and option liability		20,219,263
Balance at March 31, 2016	$	56,107,560

NOTE 12 EMPLOYEE STOCK OPTIONS

The Company has three stock based employee compensation plans pursuant to which stock option grants have been made. Under the Great Basin Scientific, Inc. 2014 Omnibus Plan, the 2014 Stock Option Plan and the 2006 Stock Option Plan certain employees and non-employee directors have been granted options to purchase common stock. The Company has 792,034 employee stock options exercisable into 419 shares of common stock outstanding as of March 31, 2016. All options vest in installments over a three to four year period and expire ten years from the date of grant.

Any future employee stock option grants will be made pursuant to the 2014 Omnibus Plan.  As of March 31, 2016, employee stock options exercisable into 125 shares of common stock have been granted pursuant to the 2014 Omnibus Plan and options exercisable into 1,275 shares of common stock remain available for issuance under that plan.

The following table summarizes the Company’s total option activity for the three months ended March 31, 2016:

					Total		Aggregate		Weighted
			Weighted		Shares of		Exercise		Average
			Average		Common		Price		Remaining
			Option		Stock		for One		Contractual
			Exercise		Underlying		Common		Term in
	Options		Price		the Option		Share		Years
As of March 31, 2016:
Options outstanding as of January 1, 2016		792,534	$	2.84		420	$	5,964.00		8.0
Granted		—		—		—		—		—
Exercised		—		—		—		—		—
Forfeited		500	$	2.00		1	$	4,200.00		—
Options outstanding as of March 31, 2016		792,034	$	2.84		419	$	5,964.00		7.8

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Outstanding and exercisable stock options as of March 31, 2016are as follows:

	Options Outstanding						Options Exercisable
	Number of		Remaining				Number of
	Options		Life		Exercise		Options		Exercise
	Outstanding		(Years)		Price		Exercisable		Price
March 31, 2016		792,034		7.8	$	2.84		376,925	$	3.04

The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options vesting period on the straight-line basis. The Company recognized $37,045 in equity-based compensation expenses during the three months ended March 31, 2016. There were $371,862 of total unrecognized compensation cost with a remaining vesting period of 2.46 years and $0 in intrinsic value of outstanding and vested stock options as of March 31, 2016.

NOTE 13 LEGAL PROCEEDINGS

We are not currently a party to any material pending or threatened legal proceeding or regulatory or government investigations. We may become involved in litigation from time to time relating to claims arising in the ordinary course of our business. We do not believe that the ultimate resolution of such claims would have a material effect on our business, results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material effect on our business, results of operations, financial condition and cash flows.

NOTE 14 SUBSEQUENT EVENTS

On April 7, 2016, the Company entered into certain warrant exchange agreements (the “Exchange Agreements”), each by and between the Company and a holder of its outstanding Series E Warrants, pursuant to which the Company and each such holder agreed to exchange outstanding Series E Warrants for shares of common stock of the Company. Pursuant to the Exchange Agreements, the Company issued 650,160 shares of common stock of the Company in exchange for the surrender by the holders to the Company of 58,800,000 Series E Warrants exercisable to acquire approximately 1,680,000 shares of common stock of the Company (representing an exchange ratio of one share of common stock for each 2.584 shares of common stock underlying the surrendered Series E Warrants). The surrendered Series E Warrants were immediately cancelled by the Company and there are no Series E Warrants issued and outstanding.

On April 5, 2016, the Company received notification from the Utah Labor Commission, Occupational Safety and Health Division (ULC) that a former employee filed a claim with the ULC alleging wrongful termination in violation of the Utah Occupational Safety and Health Act, Utah Code. The Company has performed an investigation and believes the claim is without merit.

On May 2, 2016, the holders of the senior secured convertible notes of the Company voluntarily removed restrictions on the Company’s use of an aggregate of $1 million previously funded to the Company and authorized the release of those funds from the restricted cash accounts of the Company.

On May 11, 2016, the Company and certain of the buyers. as set forth in the Schedule of Buyers attached to the Securities Purchase Agreement, dated December 28, 2015 (the “SPA”), in relation to the issuance and sale by the Company of $22.1 million aggregate principal amount of senior secured convertible notes (the “Notes”) and related Series D common stock purchase warrants (the “Warrants”), holding enough of the Notes and Warrants to constitute the Required Holders under Section 10 of the Registration Rights Agreement by and between the Company the Buyers (the “Registration Rights Agreement”) entered into December 30, 2015, entered into Amendment Agreement No.3 to the Registration Rights Agreement (the “Third Amendment Agreement”), whereby the Company and the Buyers agreed to extend the deadline for bringing the initial registration statement required thereunder 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  May 31, 2016 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 Third Amendment Agreement, the Buyers also waived any (i) any breach of the Registration Rights Agreement prior to May 11, 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 Third 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 Third Amendment Agreement for the Company’s failure to have the initial registration statement brought effective by the initial effectiveness deadline.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to assist in understanding our results of operations and our financial condition. Our condensed financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q contains additional information that should be referred to when reviewing this material. Certain statements in this discussion may be forward-looking. These forward-looking statements involve risks and uncertainties, which could cause actual results to differ from those expressed in this report.

Forward-Looking Statements

The statements contained in this quarterly report on Form 10-Q that are not historical facts represent management’s beliefs and assumptions based on currently available information and constitute “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 “Risk Factors,” and “Management Discussion and Analysis of Financial Condition and Result of Operations” 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” in our annual report on Form 10-K, regarding, among other things:

· our expectation that for the foreseeable future, substantially all of our revenue will be derived from sales of our C. diff and Group B Strepdiagnostic tests;

· our ability to expand our sales and marketing capabilities to increase demand for C. diff, Group B Strepand any other diagnostic tests we may develop and gain approval for;

· our ability to develop additional revenue opportunities, including new diagnostic tests;

· the timing of regulatory submissions;

· our ability to maintain regulatory approval of our current diagnostic test and to obtain and maintain regulatory approval for any other diagnostic test we may develop;

· approvals for clinical trials may be delayed or withheld by regulatory agencies;

· pre-clinical and clinical studies may not be successful or confirm earlier results or may not meet expectations, regulatory requirements or performance thresholds for commercial success;

· risks relating to the timing and costs of clinical trials and other expenses;

· management and employee operations and execution risks;

· loss of key personnel;

· competition in the markets we serve;

· our ability to manufacture our C. diff, Group B Strep and other diagnostic tests at sufficient volumes to meet customer needs;

· our ability to reduce the cost to manufacture our C. diff, Group B Strep and other diagnostic tests;

· risks related to market acceptance of diagnostic tests;

· intellectual property risks;

· assumptions regarding the size of the available market, benefits of our diagnostic tests, product pricing and timing of product launches;

· our ability to fund our working capital requirements;

· risks associated with the uncertainty of future financial results;

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· risks associated with raising additional capital when needed and at reasonable terms 

· risks associated with our potential delisting from the NASDAQ Capital Market; and

· risks associated with our reliance on third party suppliers and other organizations that provide goods and services to us.

These risks are not exhaustive. Other sections of this Form 10-Q, “Part II. Item 1A. – Risk Factors” and “Item 1A. – Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2015, as filed with the Commission on March 1, 2016, 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 not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q or to conform these statements to actual results or to changes in our expectations.

You should read this Form 10-Q and the documents that we reference and have filed as exhibits with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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 for C. 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 March 31, 2016, we had 243 customers worldwide (222 in the United States and 21 in the rest of the world), who use an aggregate of 514 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 our C. diff assay, we have developed a Group B Strep assay for which we received FDA clearance in April 2015 and launched commercially in June 2015. We also received two FDA clearances in March of 2016, one for Staph ID/R and one for Shiga toxin producing E. coli. Additionally, we have five other assays in various stages of product development: (i) a pre-surgical nasal screen for Staphylococcus aureus, or SA, (ii) a food borne pathogen panel, (iii) a panel for candida blood infections (iv) a test for pertussis and, (v) a test for CT/NG.

Since inception, we have incurred net losses from operations each year and we expect to continue to incur losses for the foreseeable

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future. Our losses attributable to operations for the fiscal year ending December 31, 2015 and the three months ended March 31, 2016 were approximately $57.9 million and $33.7 million, respectively. As of March 31, 2016, we had an accumulated deficit of $155.6 million.

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:

· Leverage our Low-Cost Platform to Quickly Penetrate the Small and Medium Sized Hospital Market.    We provide our customers with our analyzer at no cost and sell them the disposable, single-use diagnostic cartridges. This allows us to avoid the long sales cycle inherent in selling capital equipment and expand into hospitals that previously could not afford to implement a molecular diagnostic platform.

· 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.

· Expand our Menu of Molecular Diagnostic Assays.    We intend to expand our assay menu to include additional assays for our platform that we believe will satisfy growing medical needs and present attractive commercial opportunities. For example, in 2014 we completed the clinical trials and filed the 510(k) application for our second test for Group B Strep, and in April 2015 we received FDA clearance for our Group B Strep test. In March 2016 we also received clearance for Staph ID/R and for Shiga toxin producing E. coli. We also have a pipeline of assays in late stage product development, including pre-surgical screening, food-borne pathogens, candida, pertussis and CT/NG.

· Reduce our Cost of Sales through Automation and Volume Purchasing.    We manufacture our proprietary diagnostic cartridges and analyzers at our manufacturing facility in Salt Lake City, Utah. We currently hand-build our diagnostic cartridges and purchase materials at higher per unit cost due to low purchase volumes. We believe that investment in automation of portions of the manufacturing and assembly process and volume purchase pricing will significantly improve our gross margins and enhance our ability to provide a low cost solution to customers.

Results of Operations

The following presents an overview of our results of operations for the three months ended March 31, 2016, compared to the three months ended March 31, 2015.

Three months ended March 31, 2016 compared to the three months ended March 31, 2015

Revenue

Revenue increased by $272,692, or 59.4% to $731,422 for the three months ended March 31, 2016 as compared to $458,730 for the three months ended March 31, 2015.  This increase was attributable to the number of customers in the U.S. increasing to 222 for the three months ended March 31, 2016 from 101 for the three months ended March 31, 2015.

Cost of Sales

Cost of sales increased $895,152, or 92.6%, in the three months ended March 31, 2016 to $1,861,745 as compared to $966,593 for the three months ended March 31, 2015. The increase is due mainly to a $299,627 increase in underutilized capacity in our analyzer manufacturing, an $213,833 increase in costs associated with manufacturing additional C. diff and Group B Strep assays to meet the increased demand for our product, $168,086 in depreciation on additional analyzers needed to support the increase in customers and a $213,606 increase in all other cost. The negative gross margin increased to 154.5% in the three months ended March 31, 2016 from 110.71% in the three months ended March 31, 2015 primarily due to the underutilization of capacity in our analyzer manufacturing.

Research and Development

Research and development expenses increased by $794,425, or 52.8%, in the three months ended March 31, 2016 to $2,297,983 as compared to $1,503,558 for the three months ended March 31, 2015.  This increase was due to an increase in salaries and recruiting costs of $330,999 as the result of hiring new developers and scientists, an increase of $238,564 for the supply of internal assays and

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research and development materials associated with the development of our new products, and increase of $157,386 in outside development consultants and $67,476 net increase in all other research and development expenses.

Selling and Marketing

Selling and marketing expenses increased $672,660 or 83.4%, in the three months ended March 31, 2016 to $1,478,778 as compared to $806,118 for the three months ended March 31, 2015. The increase was due to an increase of $518,427 in salaries and travel costs from an increase in sales and marketing personnel as well as increased commissions from the increase in new customers, an increase of $90,833 in marketing and promotional expenses and a $63,400 net increase in all other selling and marketing expenses.

General and Administrative

General and administrative expenses increased $1,148,005, or 108.2%, for the three months ended March 31, 2016 to $2,208,657 as compared to $1,060,652 for the three months ended March 31, 2015.  This increase was due to an increase in legal, accounting and consulting fees in the amount of $433,832, an increase in salaries in the amount of $276,877 due to increased accounting and human resource personnel, an increase in corporate registration and property tax payments in the amount of $189,628, and a $247,668 net increase in all other general and administrative expenses.

Interest Expense

Interest expense increased $6,010,748, or 1,967.0% for the three months ended March 31, 2016 to $6,316,330 as compared to $305,582 for the three months ended March 31, 2015. The increase is due mainly to the convertible note discount amortization in the amount of $6,107,467 partially offset by a decrease in all other interest expense in the amount of $96,719 during 2016 as compared to 2015.

Change in Fair Value of Derivative Liability  

The loss in earnings resulting from the change in fair value of the derivative liability decreased by $46,774,886, or 69.8% for the three months ended March 31, 2016 to $20,219,263 as compared to $66,994,149 for the three months ended March 31, 2015. During the three months ended March 31, 2016 we had an increase in the fair value of our Series E Warrants and embedded conversion feature on convertible notes in the amount of $25,394,166 which was partially offset by the reduction in the fair value of our Series D Warrants and other derivative securities in the amount of $5,174,903.

During the three months ended March 31, 2015 we completed a follow on offering which included the issuance of Series C Warrants.  As a result, we were required to record a loss in earnings in the amount of $55,599,889.  The remaining $11,440,112 loss in earnings was comprised of the increased fair value of our other derivative instruments.  

Liquidity and Capital Resources

We have funded our operations to date primarily with net proceeds from our IPO, our follow-on public offerings, cash exercises of warrants, sales of our preferred stock, convertible notes, and revenues from operations. As of December 31, 2015 and March 31, 2016, we had approximately $4.8 million and $2.3 million, respectively, in cash.  In addition, we have $13.8 million in restricted cash that will be released in equal amounts throughout 2016 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 meet ongoing corporate needs.

In February 2016, the Company completed a follow-on public offering, whereby the Company sold 39,200,000 units at a price of $0.16 per unit for net proceeds of $5.0 million after deducting underwriting commissions and offering costs.  Each 35 units consists of one share of our common stock and 52.5 Series E Warrants.

We have limited liquidity and have not yet established a stabilized source of revenue sufficient to cover operating costs, based on our current estimated burn rate.  Accordingly, as discussed herein, our continuation as a going concern is dependent upon our ability to generate greater revenue through increased sales and/or our ability to raise additional funds through the capital markets.

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Summary Statement of Cash Flows for the ThreeMonths ended March 31, 2016and 2015

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

	March 31,
	2016			2015
Cash used in operating activities	$	(8,150,080	)	$	(3,590,707	)
Cash used in investing activities		(624,501	)		(161,335	)
Cash provided by financing activities		6,294,013			22,322,580
Net increase (decrease) in cash	$	(2,480,568	)	$	18,570,538

Cash Flows from Operating Activities

Cash used in operating activities for the three months ended March 31, 2016 was $8,150,080. The net loss of $33,652,506 was offset by other non-cash items of $6,107,467 for the convertible note debt discount amortization, $20,219,263 for the increase in the fair value of our derivative liability, $563,322 for the increase in depreciation and amortization and $123,318 increase in all other non-cash items. The change in operating assets and liabilities further used cash by another $1,510,944 due to a $899,776 decrease in accounts payable, a $1,006,698 increase in prepaid and other assets as we ordered material for our analyzer manufacturing, a $23,417 increase in accounts receivable and $22,870 increase in inventory partially offset by a $441,817 increase in accrued liablities.  

Cash used in operating activities for the three months ended March 31, 2015 was $3,590,707. The net loss of $71,173,625 was partially offset by other non-cash items of $66,994,149 for the increase in the change in fair value of derivative liability, $339,593 for the increase in depreciation and amortization and $43,720 net increase in all other non-cash items. The change in operating assets and liabilities offset the net loss by another $205,456 due to a $495,060 increase in accrued liabilities relating mainly to payroll and interest, offset by a $181,741 increase in prepaid deposits on our long lead time analyzer parts and $107,863 net increase in all other operating assets and liabilities.  

Cash Flows from Investing Activities

Cash used in investing activities was $624,501 for the three months ended March 31, 2016 and was related to the costs associated with the construction of analyzers and other equipment in the amount of $408,271 and the acquisition of capital equipment in the amount of $216,230.

Cash used in investing activities was $161,335 for the three months ended March 31, 2015 and was related to the acquisition of capital equipment in the amount of $83,566 and the costs associated with the construction of equipment in the amount of $77,769.

Cash Flows from Financing Activities

Cash provided by financing activities for the three months ended March 31, 2016 of $6,294,013 was primarily from the net proceeds in the amount of $5,575,741 from the sale of units in our follow-on offering along with proceeds of $1,135,950 from the exercise of underwriter purchase options partially offset by $314,879 for the cash settlement of the exercise of Series C Warrants and $302,799 in payments made on capital leases and notes payable.

Cash provided by financing activities for the three months ended March 31, 2015 of $22,322,580 was from the proceeds in the amount of $22,154,639 from the sale of units in our follow-on offering in March 2015, proceeds of $250,000 from related party notes payable and $88,000 in proceeds from the exercise of warrants partially offset by $170,059 in payments made on capital leases and 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. Although we have a cash balance of $2.3 million as of March 31, 2016, 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 three months ended March 31, 2016 of $33.7 million and a net loss for the year ended December 31, 2015 of $57.9 million, and have an accumulated deficit of $155.6 million as of March 31, 2016. During the three months ended March 31, 2016, cash used for operations was $8.2 million. Whether and when we can attain profitability and positive cash flows from operations is uncertain.

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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 2016we obtained financing by completing a follow-on offering for net proceeds of $5.0 million.  However, in order to continue operations, we will need to obtain additional financing and the release of funds currently restricted under our convertible notes and obtain additional financing.  The funds currently restricted under our convertible notes will allow us to continue operations through August 2016.

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 additional equity securities, debt financing, the sale and leaseback of analyzers, or a combination of these items. Any proceeds received from these items could provide the needed funds for continued operations and development programs. We can provide no assurance that we will be able to obtain sufficient additional financing that 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 issuing equity securities, our stockholders may 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 adjustments that might result from the outcome of this uncertainty. If we are unable to obtain additional financings, the impact on our operations will be material and adverse.

Critical Accounting Policies

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 the 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 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 revenue from the sale of single use assays sold through our dedicated sales force in the United States, and through a network of distributors in the European Union and 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 assays occurs at the time of shipment.

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 records 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 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

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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 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, 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’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. 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. For the three months ended March 31, 2016 there were no analyzers sold to international distributors.

Derivative Instruments

The Company accounts for derivative instruments under the provisions of ASC 815 Derivatives 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 certain common stock purchase warrants granted by the Company, those warrants 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

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our results in future periods. The outcome of events could differ over time which would require that we make changes in our valuation allowance.

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 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. Since our 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.

Jumpstart Our Business Startups Act of 2012

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was enacted. Section 107 of the JOBS Act, provides 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 apply 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.

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 relating to, (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 of 2002 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 IPO, (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.

Off-Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we have elected not to provide the disclosures required by this item.

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ITEM 4. CONTROLS AND PROCEDURES

Internal Control Over Financial Reporting

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2016 pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation of our disclosure controls and procedures as of March 31, 2016, the CEO and CFO 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 year ended December 31, 2015, our disclosure controls and procedures were not effective as of March 31, 2016.

Material Weakness

As stated in our Form 10-K for the year ended December 31, 2015, 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. Management 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.

We continue to take steps to remediate the underlying causes of the material weakness. As of March 31, 2016, we are in process of implementing and improving our controls and processes. We are in the process of hiring additional accounting and IT personnel to help improve our segregation of duties. In January 2016, we engaged a third-party consultant to assist us in making further improvements to our existing internal controls over financial reporting and we are in the process of formalizing, documenting and implementing written policies and procedures for 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 yet been completed. Because of this material weakness, there is heightened risk that a material misstatement of our annual or quarterly financial statements will not be prevented or detected.

(b) Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than those described above.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On April 5, 2016, we received a notice from the Utah Labor Commission, Occupational Safety and Health Division (ULC) that a former employee filed a claim with the ULC alleging wrongful termination in violation of the Utah Occupational Safety and Health Act, Utah Code.  Based on our investigation, we believe the claim is without merit. We are not currently a party to any other material pending or threatened legal proceeding or regulatory or government investigations. We may become involved in litigation from time to time relating to claims arising in the ordinary course of our business. We do not believe that the ultimate resolution of the investigation by the ULC or other claims in the ordinary course of business would have a material effect on our business, results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material effect on our business, results of operations, financial condition and cash flows.

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ITEM 1A. RISK FACTORS

Except as set forth below, there have not been any material changes to our risk factors as set forth under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the Commission on March 1, 2016.

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 The NASDAQ Listing Qualifications Panel does not grant us an additional grace period during which to regain compliance. 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 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 which we failed to rectify during our initial grace period of 180 calendar days (April 11, 2016).

On April 13, 2016, we received a staff determination letter from the NASDAQ Stock Market indicating that we had not regained compliance with NASDAQ listing requirements regarding having a minimum value of listed securities of $35 million by April 11, 2016 and that our shares of common stock were subject to 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 which we expect to be held in mid-June. We expect the panel to issue its decision on whether to grant us an additional grace period in which to regain compliance or proceed with the delisting of our shares of common stock within 30 days of our hearing date (mid-July).

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.

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 of the Series D warrants. The issuance of shares of our common stock pursuant to the convertible notes and related Series D warrants will result in significant dilution to our stockholders.

Our stockholders may experience significant dilution as a result of shares of our common stock issued pursuant to 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 exercise of the Series D warrants, subject to potential future anti-dilution adjustments. Currently, that reservation amount is 3,428,572. The price at which the Company will convert the installment amounts into common stock is equal 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 that are not subject to a floor price, and at the current conversion rate of $5.60 for such conversions, the $22.1 million in principal amount of convertible notes would be convertible into 3,946,429 shares of our common stock, representing 100.1% dilution to current stockholders based on 3,942,843 shares of common stock issued and outstanding on May 11, 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 2,800.0% dilution to current stockholders based on 3,942,843 shares of Common Stock issued and outstanding on May 11, 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.

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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 $5.60, 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 $5.60 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 agreement pursuant to which we issued the convertible notes and under the terms of the convertible notes to maintain 3,428,572 shares of common stock as an initial reserve amount for issuance of shares upon conversion of the convertible notes 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.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

All unregistered sales of equity securities during the three months ended March 31, 2016 were previously reported on a Current Report on Form 8-K.

Use of Proceeds

Use of Proceeds from Initial Public Offering

On October 8, 2014, the SEC declared effective our IPO registration statement on Form S-1 (File No. 333-197954) related to 1,150,000 shares of common stock and 1,150,000 Series A Warrants, which were sold in combinations of one share of common stock and one Series A Warrant at a public offering price of $7.00 per unit; however, as a result of the offering of units by the Company on February 25, 2015, the Series A Warrants were exercisable at an exercise price of $2.20 per share. Each Series A Warrant is exercisable for one share of common stock and one Series B Warrant. In addition, the managing underwriter, Dawson James Securities, Inc. exercised its option to purchase 172,500 Series A Warrants. The IPO commenced on October 8, 2014 and has not yet terminated in relation to the Series B Warrants covered under the IPO registration statement. As of October 15, 2015, the date the Series A Warrants expired, 1,074,082 Series A Warrants had been exercised, none of which were exercised on a cashless basis. The remaining 248,418 Series A Warrants outstanding expired without being exercised. No Series B Warrants have been exercised to date. We may receive additional proceeds if any of the Series B Warrants are exercised in the future.

The aggregate sale price for securities sold at the initial closing of the IPO is $8,050,000. The aggregate net proceeds received by the Company from the IPO was approximately $6.4 million after deducting total expenses of approximately $1,650,000, including approximately $644,000 in underwriting discounts and commissions and approximately $1,006,000 in other expenses payable by the Company. Since the initial closing of the IPO the Company has received $2.4 million in additional net proceeds from the exercise of Series A Warrants, for total net proceeds from the offering in the amount of $8.8 million.

None of the underwriting discounts and commissions or offering expenses were paid, directly or indirectly, to any of our directors or officers or their associates or to persons owning 10% or more of our common stock or to any of our affiliates.

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As of March 31, 2016, all of the $8.8 million of total net proceeds from our IPO has been used. We had broad discretion in the use of the net proceeds from our IPO. The table below shows a comparison of the use of proceeds as disclosed in our IPO Prospectus with the actual usage of these net proceeds (in millions):

	Disclosed
	use of
	proceeds		Actual		Difference
	in our IPO		use of		over
	prospectus		proceeds		(under)
Research and development expenses	$	1.4	$	1.2	$	(0.2	)
Sales and marketing expenses		1.4		0.9		(0.5	)
Manufacture analyzers for customers		1.1		1.2		0.1
Automate manufacturing facility and increase capacity		0.2		0.5		0.3
General corporate purposes		4.7		5.0		0.3
Total net proceeds	$	8.8	$	8.8	$	—

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The list of exhibits in the Exhibit Index to this quarterly report is incorporated herein by reference.

Exhibit No.	Description
3.1	Seventh Amended and Restated Certificate of Incorporation of Great Basin Scientific, Inc. as amended through March 30, 2016
3.3	Amended and Restated Bylaws of Great Basin Scientific, Inc. (2)
3.4	Form of Certificate of Designation of Series E Convertible Preferred Stock. (5)
3.5	Certificate of Amendment to Certificate of Designation of Series E Convertible Preferred Stock, as filed with the Delaware Secretary of State on June 23, 2015. (7)
4.1	Specimen certificate evidencing shares of common stock. (2)
4.2	Amended and Restated Voting Agreement dated as of July 30, 2014. (1)
4.3	Third Amended and Restated Investor Rights Agreement dated as of April 21, 2014. (1)
4.4	Form of Second Amended and Restated Series C Warrant. (8)
4.5	Form of Warrant to Purchase common stock. (4)
4.6	Form of Warrant to Purchase common stock or Preferred Stock. (4)
4.7	Form of Warrant to Purchase common stock. (4)
4.8	Form of Series A Warrant. (3)
4.9	Form of Series B Warrant. (3)
4.10	Amended and Restated Form of Series C Warrant (amended and restated as of June 23, 2015). (7)

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Exhibit No.	Description
4.11	Form of Unit Purchase Option issued in connection with the Registrant’s follow-on offering. (5)
4.12	Form of Representative’s Warrant issued in connection with the Registrant’s initial public offering. (3)
4.13	Form of Senior Secured Convertible Note, filed as Exhibit A to the Securities Purchase Agreement (9)
4.14	Form of Series D Warrant, filed as Exhibit B to the Securities Purchase Agreement (9)
4.15	Form of Series E Warrant (16)
4.16	Form of Subscription Agreement (16)
10.1	Amendment Agreement to Securities Purchase Agreement between the Company and certain holders of its Notes and Series D warrants, dated February 8, 2016 (10)
10.2	Settlement Agreement between the Company and Dawson James dated February 8, 2016 (11)
10.3	Consulting Agreement between the Company and Dawson James dated February 8, 2016 (11)
10.4	Amendment Agreement to Registration Rights Agreement between the Company and certain holders of its convertible notes and Series D warrants, dated February 13, 2016. (14)
10.5	Placement Agent Agreement by and between the Company and Roth Capital Partners, LLC (16)
10.6	Form of Second Amendment Agreement to the Registration Rights Agreement (17)
10.7	Second Amendment to Lease between Bay Pacific East South Temple, LLC and Great Basin Scientific, Inc. (18)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	BRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

@ Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a grant of confidential treatment from the SEC.

(1) Filed as an exhibit to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-197954) filed with the SEC on August 20, 2014, and incorporated herein by reference.

(2) Filed as an exhibit to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-197954) filed with the SEC on September 8, 2014, and incorporated herein by reference.

(3) Filed as an exhibit to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-197954) filed with the SEC on September 23, 2014, and incorporated herein by reference.

(4) Filed as an exhibit to Amendment No. 4 to the Registrant’s Registration Statement on Form S-1 (File No. 333-197954) filed with the SEC on September 24, 2014, and incorporated herein by reference.

(5) Filed as an exhibit to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-201596) filed with the SEC on February 24, 2015, and incorporated herein by reference.

(7) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-3662) filed with the SEC on June 23, 2015, and incorporated herein by reference.

(8) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on December 7, 2015 and incorporated herein by reference.

(9) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on December 28, 2015 and incorporated herein by reference

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(10) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on February 8, 2016 and incorporated herein by reference  

(11) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on February 8, 2016 and incorporated by reference.

(12) Filed as an exhibit to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-207761) filed with the SEC on February 9, 2016 and incorporated herein by reference.

(13) Filed as an exhibit to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-207761) filed with the SEC on February 11, 2016 and incorporated by reference.

(14) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on February 16, 2016 and incorporated herein by reference.

(15) Filed as an exhibit to Amendment No. 4 to the Registrant’s Registration Statement on Form S-1 (File No. 333-207761) filed with the SEC on February 16, 2016 and incorporated by reference.

(16) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on February 19, 2016 and incorporated herein by reference.

(17) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on February 29, 2016 and incorporated herein by reference.

(18) Filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 001-36662) filed with the SEC on March 16, 2016 and incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GREAT BASIN SCIENTIFIC, INC.
Dated: May 11, 2016		By:	/s/ Ryan Ashton
		Ryan Ashton
		President, Chief Executive Officer, and Director (Principal Executive Officer)
Dated: May 11, 2016		By:	/s/ Jeffrey A. Rona
		Jeffrey A. Rona
		Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-3.1

Exhibit 3.1

SEVENTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

GREAT BASIN SCIENTIFIC, INC.

The undersigned, Ryan Ashton, hereby certifies that:

FIRST: He is the duly elected and acting President of Great Basin Scientific, Inc., a Delaware corporation (the “Corporation”).

SECOND: That the Corporation was originally incorporated pursuant to the General

Corporation Law of the State of Delaware on August 12, 2008, the Amended and Restated

Certificate of Incorporation was filed on August 29, 2008, the Second Amended and Restated

Certificate of Incorporation was filed on February 11, 2010, the Third Amended and Restated

Certificate of Incorporation was filed on December 31, 2012, the Fourth Amended and Restated

Certificate of Incorporation was filed on November 26, 2013, the Fifth Amended and Restated

Certificate of Incorporation was filed on April 21, 2014, and the Sixth Amended and Restated

Certificate of Incorporation was filed on July 25, 2014.

THIRD: The Sixth Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

ARTICLE I

The name of the Corporation is Great Basin Scientific, Inc.

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the Corporation’s registered agent at that address is The Corporation Trust Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”).

ARTICLE IV

A. The total number of shares of capital stock the Corporation is authorized to issue is Fifty-Five Million (55,000,000) shares, consisting of Fifty Million (50,000,000) shares of common stock, par value $0.001 per share (the “Common Stock”), and Five Million (5,000,000) shares of preferred stock, par value $0.001 per share (“Preferred Stock”).

B. The holders of shares of the Common Stock shall be entitled to vote on all matters to be voted on by the stockholders of the Corporation and shall be entitled to one vote for each share thereof held of record.

C. The Preferred Stock may be issued from time to time by the board of directors as shares of one or more classes or series, without further stockholder approval. Subject to the provisions hereof and the limitations prescribed by law, the board of directors is

expressly authorized, by adopting resolutions providing for the issuance of shares of any particular class or series and, if and to the extent from time to time required by law, by filing with the Delaware Secretary of State a certificate setting forth the resolutions so adopted pursuant to the DGCL, to establish the number of shares to be included in each such class or series and to fix the designation and relative powers, including voting powers (which may be full, limited or non-voting powers), preferences, rights, qualifications and limitations and restrictions thereof, relating to the shares of each such class or series. The rights, privileges, preferences and restrictions of any such additional class or series may be subordinated to, pari passu with (including, without limitation, inclusion in provisions with respect to liquidation and acquisition preferences, redemption and/or approval of matters by vote), or senior to any of those of any present or future class or series of Preferred Stock or Common Stock. The board of directors is also authorized to increase or decrease the number of authorized shares of any class or series of Preferred Stock prior or subsequent to the issue of that class or series, but not below the number of shares of such class or series then outstanding. In case the number of shares of any class or series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such class or series.

The authority of the board of directors with respect to each class or series shall include, but not be limited to, determination of the following:

(i) the distinctive class or serial designation of such class or series and the number of shares constituting such class or series;

(ii) the annual dividend rate on shares of such class or series, if any, whether dividends shall be cumulative and, if so, from which date or dates;

(iii) whether the shares of such class or series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon and after which such shares shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(iv) the obligation, if any, of the Corporation to retire shares of such class or series pursuant to a sinking fund;

(v) whether shares of such class or series shall be convertible into, or exchangeable for, shares of stock of any other class or classes and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any;

(vi) whether the shares of such class or series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights;

(vii) the rights of the shares of such class or series in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Corporation; and

(viii) any other relative rights, powers, preferences, qualifications, limitations or restrictions thereof relating to such class or series.

ARTICLE V

The number of directors to constitute the whole board of directors shall be such number (not less than three nor more than twelve) as shall be fixed from time to time by resolution of the board of directors adopted by such vote as may be required in the bylaws. The board of directors shall be divided into three classes as nearly equal in number as may be feasible, hereby designated as Class I, Class II and Class III, with the term of office of one class expiring each year. For the purposes hereof, the initial Class I, Class II and Class III directors shall be so designated by a resolution of the board of directors. Each director shall serve for a term ending on the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected, or until his or her earlier death, resignation or removal; provided, however, that the directors first elected to Class I shall serve for a term ending on the Corporation’s first annual meeting of stockholders following the effectiveness of this Seventh Amended and Restated Certificate of Incorporation, the directors first elected to Class II shall serve for a term ending on the Corporation’s second annual meeting of stockholders following the effectiveness of this Seventh Amended and Restated Certificate of Incorporation, and the directors first elected to Class III shall serve for a term ending on the Corporation’s third annual meeting of stockholders following the effectiveness of this Seventh Amended and Restated Certificate of Incorporation. As long as Hitachi Chemical Co., Ltd. (“Hitachi”) owns at least 5% of the issued and outstanding shares of capital stock of the Corporation Hitachi shall be entitled to -elect one (1) director of the Corporation (the “Hitachi Director”), who shall be a Class III director. Subject to the rights of Hitachi with respect to the Hitachi Director and the rights, if any, of the holders of any Preferred Stock then outstanding, any vacancy in the board of

2

directors, whether because of death, resignation, disqualification, an increase in the authorized number of directors, removal, or any other cause, may be filled by a vote of the majority of the remaining directors, although less than a quorum, or by a sole remaining director. When the board of directors fills a vacancy, the director chosen to fill that vacancy shall complete the term of the director he or she succeeds (or shall complete the term of the class of directors in which the new directorship was created) and shall hold office until such director’s successor shall have been elected and qualified or until such director’s earlier death, resignation or removal. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office. Directors shall continue in office until others are elected and qualified in their stead, or until their earlier death, resignation or removal. When the number of directors is changed, each director then serving as such shall nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term, and any newly created directorships or any decrease in directorships shall be so assigned among the classes by a majority of the directors then in office, though less than a quorum, as to make all classes as nearly equal in number as may be feasible. Any director (other than the Hitachi Director) or the entire board of directors may be removed at any time by the affirmative vote of the holders of at least a majority of the shares then entitled to vote at an election of directors, but only for cause.

Advance notice of stockholder nominations for the election of members of the board of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the bylaws of the Corporation.

Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.

ARTICLE VI

To the extent permitted by law, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if: (i) a consent in writing, setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present, and (ii) such action has been earlier approved by the board of directors. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Special meetings of stockholders may be called only by the Chairman of the board of directors or the Chief Executive Officer or by the board of directors acting pursuant to a resolution adopted by a majority of the board of directors.

ARTICLE VII

In furtherance and not in limitation of the power conferred upon the board of directors by law, the board of directors shall have power to adopt, amend, alter and repeal from time to time the bylaws of the Corporation by majority vote of all directors except that any provision of the bylaws requiring, for board action, a vote of greater than a majority of the board shall not be amended, altered or repealed except by such supermajority vote. The stockholders of the Corporation may only adopt, amend or repeal bylaws with the affirmative vote of the holders of at least a majority of the voting power of all of the shares of the Common Stock outstanding and entitled to vote thereon.

ARTICLE VIII

The Corporation reserves the right to amend this Seventh Amended and Restated Certificate of Incorporation in any manner provided herein or permitted by the DGCL, and all rights and powers, if any, conferred herein on stockholders, directors and officers are subject to the reserved power. Notwithstanding the foregoing, without the affirmative vote of the holders of sixty percent of the voting power of all of the shares of the stock outstanding entitled to vote thereon, voting as a single class, the Corporation shall not alter, amend or repeal Article V, Article VI, Article VIII, or Article IX of this Seventh Amended and Restated Certificate of Incorporation or the provisions of Article IV providing for undesignated Preferred Stock.

3

ARTICLE IX

A. To the fullest extent permitted by the DGCL, as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.

B. The Corporation shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, his or her testator or intestate is or was a director or officer of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation, or any predecessor to the Corporation.

C. Neither any amendment nor repeal of this Article IX, nor the adoption of any provision of the Corporation’s Certificate of Incorporation inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article IX, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

FOURTH: This Seventh Amended and Restated Certificate of Incorporation has been duly approved by the board of directors of the Corporation in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware.

FIFTH: This Seventh Amended and Restated Certificate of Incorporation has been duly approved, in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, by the written consent of the holders of the requisite number of the shares of outstanding stock of entitled to vote thereon, and written notice of such action will be given to the holders of such shares who did not so consent, in accordance with Section 228 of the General Corporation Law of the State of Delaware.

4

IN WITNESS WHEREOF, Great Basin Scientific, Inc. has caused this Seventh Amended and Restated Certificate of Incorporation to be signed by its President on this 14 th day of October , 2014.

GREAT BASIN SCIENTIFIC, INC.
By:	/s/ Ryan Ashton,
	Ryan Ashton,
	President

5

CERTIFICATE OF DESIGNATION OF SERIES E CONVERTIBLE

PREFERRED STOCK OF GREAT BASIN SCIENTIFIC, INC.

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, Great Basin Scientific, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “ Corporation ”), in accordance with the provisions of Section 103 thereof, does hereby submit the following:

WHEREAS, the Certificate of lncorporation of the Corporation (the “ Certificate of Incorporation ”) authorizes the issuance of up to 5,000,000 shares of preferred stock, par value $0.001 per share, of the Corporation (“ Preferred Stock ”) in one or more series, and expressly authorizes the Board of Directors of the Corporation (the “ Board ”), subject to limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such series; and

WHEREAS, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of the shares of such new series.

NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designation (the “ Certificate of Designation ”) establish and fix and herein state and express the designation, rights, preferences, powers, restrictions and limitations of such series of Preferred Stock as follows:

1. Designation . There shall be a series of Preferred Stock that shall be designated as “Series E Convertible Preferred Stock” (the “ Series E Preferred Stock ”) and the number of shares constituting such series shall be 2,860,200. The rights, preferences, powers, restrictions and limitations of the Series E Preferred Stock shall be as set forth herein.

2. Defined Terms . For purposes hereof, the following terms shall have the following meanings:

“ Affiliate ” has the meaning provided for the same term in the Exchange Act.

“ Board ” has the meaning set forth in the Recitals.

“ Certificate of Designation ” has the meaning set forth in the Recitals.

“ Certificate of Incorporation ” has the meaning set forth in the Recitals.

“ Common Stock ” means the common stock, par value $0.001 per share, of the Corporation.

“ Corporation ” has the meaning set forth in the Preamble.

“ Date of Issuance ” means, for any share of Series E Preferred Stock, the date on the prospectus included in the registration statement pursuant to which the units were issued of which the Series E Preferred Stock was a component.

“ Early Conversion Trigger Date ” has the meaning set forth in Section 5.1(b).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Fundamental Transaction ” means that (i) the Corporation or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Corporation or any of its subsidiaries is the surviving corporation) any other Person unless the shareholders of the Corporation immediately prior to such consolidation or merger continue to hold more than 50% of the outstanding shares of Voting Stock after such consolidation or merger, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Corporation (not including any shares of Voting Stock of the Corporation held by the Person

6

or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Corporation (not including any shares of Voting Stock of the Corporation held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Corporation.

“ Maximum Percentage ” has the meaning set forth in Section 5.5.

“ Person ” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association or other entity.

“ Preferred Stock ” has the meaning set forth in the Recitals.

“ Series E Preferred Stock ” has the meaning set forth in Section 1.

“ Transfer Agent ” has the meaning set forth in Section 5.1(b).

“ Voting Stock ” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

3. Rank . With respect to payment of dividends and distribution of assets upon liquidation or dissolution or winding up of the Corporation, whether voluntary or involuntary, the Series E Preferred Stock shall rank equal to the Common Stock on an as converted basis.

4. Voting .

4.1 The Series E Convertible Preferred Stock shall have no voting rights, except as expressly set forth in this Section 4.

4.2 So long as any shares of Series E Preferred Stock are outstanding, the affirmative vote of the holders of at least a majority of the Series E Preferred Stock at the time outstanding, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating any amendment, alteration or repeal of any of the provisions of this Certificate of Designation that materially and adversely affects the powers, preferences or special rights of the Series E Preferred Stock, whether by merger or consolidation or otherwise; provided , however , that in the event of an amendment to terms of the Series E Preferred Stock, including by merger or consolidation, so long as the Series E Preferred Stock remains outstanding with the terms thereof materially unchanged, or the Series E Preferred Stock is converted into, preference securities of the surviving entity, or its ultimate parent, with such powers, preferences or special rights, taken as a whole, not materially less favorable to the holders of the Series E Preferred Stock than the powers, preferences or special rights of the Series E Preferred Stock, taken as a whole, the occurrence of such event shall not be deemed to materially and adversely affect such powers, preferences or special rights of the Series E Preferred Stock, and in such case such holders shall not have any voting rights with respect to the occurrence of such events.

4.3 For purposes of Section 4.2, each share of Series E Preferred Stock shall have one vote per share. Except as set forth herein, the Series E Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers other than as set forth herein, and the consent of the holders thereof shall not be required for the taking of any corporate action.

4.4 No amendment to these terms of the Series E Preferred Stock shall require the vote of the holders of Common Stock (except as required by law) or any series of Preferred Stock other than the Series E Preferred Stock.

7

4.5 Without the consent of the holders of the Series E Preferred Stock, so long as such action does not materially and adversely affect the powers, preferences or special rights of the Series E Preferred Stock, taken as a whole, and to the extent permitted bylaw, the Corporation may amend, alter, supplement, or repeal any terms of this Certificate of Designation for the following purposes:

(a) to cure any ambiguity, or to cure, correct, or supplement any provision that may be ambiguous, defective, or inconsistent; or

(b) to make any provision with respect to matters or questions relating to the Series E Preferred Stock that is not inconsistent with the provisions of this Certificate of Designation.

5. Conversion .

5.1 Right to Convert

(a) Right to Convert . Subject to the provisions of this Section 5, at any time and from time to time on or after the date that is six months after the Date of Issuance, any holder of Series E Preferred Stock shall have the right by written election to the Corporation to convert each share of Series E Preferred Stock held by such holder into four (4) shares of Common Stock (including any fraction of a share).

(b) Early Conversion . Subject to the provisions of this Section 5, if at any time after 30 days from the Date of Issuance, the closing trading price of the Common Stock of the Corporation is above $4.00 per share (subject to adjustment for stock splits, stock dividends or similar events) for 20 consecutive trading days (such twentieth day, the “ Early Conversion Trigger Date ”), then, at any time and from time to time after the 15th day after the Early Conversion Trigger Date, any holder of Series E Preferred Stock shall have the right by written election to the Corporation and the Corporation’s transfer agent American Stock Transfer & Trust Company (the “ Transfer Agent ”), to convert all or any portion of each outstanding share of Series E Preferred Stock (including any fraction of a share) held by such holder into four (4) shares of Common Stock (including any fraction of a share) at any time after 15 days from the Early Conversion Trigger Date.

5.2 Fundamental Transaction Automatic Conversion . Subject to the provisions of this Section 5, if at any time and from time to time on or after the Date of Issuance, the Corporation enters into or is party to a Fundamental Transaction, each share of Series E Preferred Stock shall convert automatically into four (4) shares of Common Stock (including any fraction of a share) immediately prior to consummation of such Fundamental Transaction. To the extent such a conversion would be limited by Section 5.5, the holder shall be entitled to convert the Series E Preferred Stock that it could not initially convert at a later date or dates, provided that at such later date or dates the limitation in Section 5.5 would no longer apply to the holder because such holder would no longer own in excess of the Maximum Percentage (as defined in Section 5.5).

5.3 Procedures for Conversion; Effect of Conversion

(a) Procedures for holder Conversion . In order to effectuate a conversion of shares of Series E Preferred Stock pursuant to Section 5.1(a), a holder shall submit a written election to the Corporation and the Corporation’s Transfer Agent, and that such holder elects to convert such shares, the number of shares elected to be converted. The conversion of such shares hereunder shall be deemed effective as of the date of receipt of such written election by the Corporation’s Transfer Agent. All shares of capital stock issued hereunder by the Corporation shall be duly and validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof.

(b) Effect of Conversion . All shares of Series E Preferred Stock converted as provided in this Section 5 shall no longer be deemed outstanding as of the effective time of the applicable conversion and all rights with respect to such shares shall immediately cease and terminate as of such time, other than the right of the holder to receive shares of Common Stock in exchange therefor.

5.4 Reservation of Stock . The Corporation shall at all times when any shares of Series E Preferred Stock are outstanding reserve and keep available out of its authorized but unissued shares of capital stock, solely for the purpose of issuance upon the conversion of the Series E Preferred Stock, such number of shares of Common Stock issuable upon the conversion of all outstanding Series E Preferred Stock pursuant to this Section 5. The Corporation shall take all such actions as may be necessary to assure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance). The Corporation shall not close its books against the transfer of any of its capital stock in any manner which would prevent the timely conversion of the shares of Series E Preferred Stock.

8

5.5 Limitations on Conversion . Notwithstanding anything to the contrary contained in this Certificate, the Series E Preferred Stock shall not be convertible by a holder to the extent (but only to the extent) that the holder or any of its Affiliates would beneficially own in excess of 4.99% (the “ Maximum Percentage ”) of the Common Stock. To the extent the above limitation applies, the determination of whether the holder’s shares shall be convertible (vis-à-vis other convertible securities owned by the holder or any of its Affiliates) and of which such securities shall be convertible (as among all such securities owned by the holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Corporation for conversion. No prior inability to convert the shares of Series E Preferred Stock pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulationspromulgated thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor holder of the shares of Series E Preferred Stock. The holders of Common Stock shall be third party beneficiaries of this paragraph and the Corporation may not amend or waive this paragraph without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the holder, the Corporation shall within one (1) Business Day confirm orally and in writing to the holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion of convertible securities into Common Stock, including, without limitation, pursuant to this Certificate of Designation or securities issued pursuant to the Certificate of Designation.

6. Status of Converted or Acquired Shares . All shares of Series E Preferred Stock (i) converted into shares of Common Stock in accordance with Section 5 herein or (ii) acquired by the Corporation shall be restored to the status of authorized but unissued shares of undesignated Preferred Stock of the Corporation.

7. Maturity . The Series E Preferred Stock has no maturity date, no sinking fund has been established for the retirement or redemption of Series E Preferred Stock, and the Series E Preferred Stock has no redemption provisions.

8. Notices . Except as otherwise provided herein, all notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent (a) to the Corporation, at its principal executive offices and (b) to any stockholder, at such holder’s address at it appears in the stock records of the Corporation (or at such other address for a stockholder as shall be specified in a notice given in accordance with this Section 8).

9. Amendment and Waiver . No provision of this Certificate of Designation may be amended, modified or waived except by an instrument in writing executed by the Corporation, and any such written amendment, modification or waiver will be binding upon the Corporation and each holder of Series E Preferred Stock; provided , that no amendment, modification or waiver of the terms or relative priorities of the Series E Preferred Stock may be accomplished by the merger, consolidation or other transaction of the Corporation with another corporation or entity unless the Corporation has obtained the prior written consent of the holders in accordance with Section 4 and this Section 9.

[SIGNATURE PAGE FOLLOWS]

9

IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Corporation by its Chief Executive Officer this 2nd day of March, 2015.

GREAT BASIN SCIENTIFIC, INC.
By:	/s/ Ryan Ashton
Name:	Ryan Ashton
Title:	Chief Executive Officer

10

CERTIFICATE OF AMENDMENT

TO THE SEVENTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

GREAT BASIN SCIENTIFIC, INC.

The undersigned, Ryan Ashton, hereby certifies that:

FIRST: He is duly elected and acting President and Chief Executive Officer of Great Basin Scientific, Inc., a Delaware corporation (the “ Corporation ”).

SECOND: Article IV.A. of the Seventh Amended and Restated Certificate of Incorporation of Great Basin Scientific, Inc. is hereby amended and restated in its entirety:

“A. The total number of shares of capital stock the Corporation is authorized to issue is Two Hundred and Five Million (205,000,000) shares, consisting of Two Hundred Million (200,000,000) shares of common stock, par value $0.001 per share (the “Common Stock”), and Five Million (5,000,000) shares of preferred stock, par value $0.001 per share (“Preferred Stock”).”

THIRD: This certificate of Amendment to the Seventh Amended and Restated Certificate of Incorporation has been duly adopted by the board of directors of the Corporation in accordance with the provisions of Section 242 of the Delaware General Corporation Law.

FOURTH: This Certificate of Amendment to the Seventh Amended and Restated Certificate of Incorporation has been duly approved, in accordance with Section 242 of the Delaware General Corporation Law, by the vote of the holders of the requisite number of the shares of outstanding common stock entitled to vote thereon at the annual meeting of the Corporation.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Seventh Amended and Restated Certificate of Incorporation to be signed by its President and Chief Executive Officer on this 2nd day of June, 2015.

GREAT BASIN SCIENTIFIC, INC.
By:	/s/ Ryan Ashton
	Ryan Ashton
	President and Chief Executive Officer

CERTIFICATE OF AMENDMENT OF

CERTIFICATE OF DESIGNATION OF

SERIES E CONVERTIBLE PREFERRED STOCK OF

GREAT BASIN SCIENTIFIC, INC.

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

Great Basin Scientific, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, by its President and Chief Executive Officer, does hereby certify and set forth as follows:

1. The name of the corporation is Great Basin Scientific, Inc. (the “Corporation”).

2. The Corporation’s Certificate of Designation of Series E Convertible Preferred Stock was filed with the Secretary of State of the State of Delaware on March 2, 2015.

3. Effective upon the filing of this Certificate of Amendment, the Certificate of Designation of Series E Convertible Preferred Stock of the Corporation is hereby amended by adding a new Section 5.1(c), which shall read in its entirety as follows:

“5.1(c). Early Conversion Upon Cash Exercise of Series C Warrants . Subject to the provisions of this Section 5, if at any time the holder of Series E Preferred Stock tenders an exercise notice to exercise all eight (8) Series C Warrants contained in each Unit held by such holder for cash, such holder of Series E Preferred Stock shall have the right by written election to the Corporation and the Transfer Agent, to convert all or any portion of each outstanding Share of Series E Preferred Stock (including any fraction of a share) contained in each such Unit held by such holder into four (4) shares of Common Stock (including any fraction of a share) at any time.”

4. Such amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware by the Board of Directors and the holders of the requisite number of shares of Series E Convertible Preferred Stock of the Corporation.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed as of June 22, 2015.

GREAT BASIN SCIENTIFIC, INC.
By:	/s/ Ryan Ashton
Name:	Ryan Ashton
Title:	President and Chief Executive Officer

SECOND

CERTIFICATE OF AMENDMENT

TO

THE SEVENTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

GREAT BASIN SCIENTIFIC, INC.

Great Basin Scientific, Inc. (the “ Corporation ”), a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “ DGCL ”), does hereby certify:

FIRST : That at a meeting of the Board of Directors of the Corporation (the “ Board ”) resolutions were duly adopted authorizing the Corporation to execute and file with the Secretary of State of the State of Delaware amendments (the “ Amendment ”) to the Corporation’s seventh amended and restated certificate of incorporation (the “ Certificate of Incorporation ”) to reclassify, change, and convert every sixty (60) outstanding shares of the Corporation’s common stock, par value $0.001 per share (“ Common Stock ”), into one (1) share of Common Stock, par value $0.0001 per share.

SECOND :

1. Article IV.A of the Corporation’s Certificate of Incorporation is hereby amended by adding the following:

“Upon the effectiveness of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, every sixty (60) shares of the Corporation’s issued and outstanding Common Stock, par value $0.001 per share, that are issued and outstanding immediately prior to 5:00 pm EST on December 11, 2015 shall, automatically and without any further action on the part of the Corporation or the holder thereof, be combined into one (1) validly issued, fully paid and non-assessable share of the Corporation’s Common Stock, par value $0.0001 per share, provided that in the event a stockholder would otherwise be entitled to a fraction of a share of Common Stock pursuant to the provisions of this Article, such stockholder shall receive one whole share of Common Stock in lieu of such fractional share and no fractional shares shall be issued.”

THIRD : That pursuant to a resolution of the Board, a special meeting of the stockholders of the Corporation was duly called and held upon notice in accordance with Section 222 of the DGCL at which meeting the necessary number of shares as required by statute were voted in favor of the Amendment.

FOURTH : That the aforesaid Amendment were duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.

FIFTH : The foregoing amendment shall be effective on December 11, 2015 at 5:00 pm EST.

SIXTH : Except as herein amended, the Corporation’s Certificate of Incorporation shall remain in full force and effect.

1

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by a duly authorized officer on this 10 th day of December, 2015.

GREAT BASIN SCIENTIFIC, INC.
By:	/s/ Ryan Ashton
Name:	Ryan Ashton
Title:	President and Chief Executive Officer

2

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:20 PM 03/30/2016

FILED 01:20 PM 03/30/2016

SR 20161967452 - File Number 4562069

THIRD

CERTIFICATE OF AMENDMENT

TO

THE SEVENTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

GREAT BASIN SCIENTIFIC, INC.

Great Basin Scientific, Inc. (the “Corporation”), a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:

FIRST: That at a meeting of the Board of Directors of the Corporation (the “Board”) resolutions were duly adopted authorizing the Corporation to execute and file with the Secretary of State of the State of Delaware amendments (the “Amendment”) to the Corporation’s seventh amended and restated certificate of incorporation (the “Certificate of Incorporation”) to reclassify, change, and convert every thirty five (35) outstanding shares of the Corporation’s common stock, par value $0.0001 per share (“Common Stock”), into one (I) share of Common Stock, par value $0.0001 per share.

SECOND:

1. Article IV.A of the Corporation’s Certificate of Incorporation is hereby amended by adding the following:

“Upon the effectiveness of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, every thirty five (35) shares of the Corporation’s issued and outstanding Common Stock, par value $0.0001 per share, that are issued and outstanding immediately prior to 5:00 pm EDT on March 30, 2016 shall, automatically and without any further action on the part of the Corporation or the holder thereof, be combined into one (1) validly issued, fully paid and non-assessable share of the Corporation’s Common Stock, par value $0.0001 per share, provided that in the event a stockholder would otherwise be entitled to a fraction of a share of Common Stock pursuant to the provisions of this Article, such stockholder shall receive one whole share of Common Stock in lieu of such fractional share and no fractional shares shall be issued.”

THIRD: That pursuant to a resolution of the Board, a special meeting of the stockholders of the Corporation was duly called and held upon notice in accordance with Section 222 of the DGCL at which meeting the necessary number of shares as required by statute were voted in favor of the Amendment.

FOURTH: That the aforesaid Amendment were duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.

FIFTH: The foregoing amendment shall be effective on March 30, 2016 at 5:00 pm EDT.

SIXTH: Except as herein amended, the Corporation’s Certificate of Incorporation shall remain in full force and effect.

1

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by a duly authorized officer on this 30^thday of March, 2016.

GREAT BASIN SCIENTIFIC, INC.
By:	/s/ Ryan Ashton
Name:	Ryan Ashton
Title:	President and Chief Executive Officer

2

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ryan Ashton certify that:

1. I have reviewed this quarterly report on Form 10-Q of Great Basin Scientific, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Reserved];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2016

/s/ Ryan Ashton

Ryan Ashton

President, Chief Executive Officer, and Director

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey A. Rona certify that:

1. I have reviewed this quarterly report on Form 10-Q of Great Basin Scientific, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Reserved];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2016

/s/ Jeffrey A. Rona 

Jeffrey A. Rona

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Great Basin Scientific, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2016, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Ryan Ashton, President, Chief Executive Officer, and Director of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2016

/s/ Ryan Ashton 

Ryan Ashton

President, Chief Executive Officer, and Director

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Great Basin Scientific, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2016, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey A. Rona, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2016

/s/ Jeffrey A. Rona

Jeffrey A. Rona

Chief Financial Officer

(Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 11, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	GBSN
Entity Registrant Name	Great Basin Scientific, Inc.
Entity Central Index Key	0001512138
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		3,942,843

XML

CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash	$ 2,307,191	$ 4,787,759
Restricted Cash	13,800,478	13,800,000
Accounts receivable, net	348,534	411,390
Inventory	1,156,012	1,133,142
Prepaid and other current assets	1,571,608	564,910
Total current assets	19,183,823	20,697,201
Intangible assets, net	93,465	119,171
Property and equipment, net	8,315,185	7,741,991
Total assets	27,592,473	28,558,363
Current liabilities:
Accounts payable	2,503,422	2,432,459
Accrued expenses	1,754,966	1,313,149
Current portion of notes payable		5,693
Current portion of convertible notes payable, net of discount	8,271,184	1,638,717
Notes payable - related party, net of discount	500,000	500,000
Current portion of capital lease obligations	1,376,049	1,305,426
Current portion of derivative liability	35,096,383
Total current liabilities	49,502,004	7,195,444
Convertible notes payable, net of current portion and debt discount		525,000
Capital lease obligations, net of current portion	483,681	851,410
Derivative liability, net of current portion	21,011,177	43,181,472
Total liabilities	$ 70,996,862	$ 51,753,326
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $.001 par value, 5,000,000 shares authorized; 74,380 and 88,347 shares issued and outstanding, respectively	$ 74	$ 88
Common stock, $.001 par value: 200,000,000 shares authorized; 3,292,683 and 296,869 shares issued and outstanding, respectively	329	30
Additional paid-in capital	112,151,579	98,708,784
Accumulated deficit	(155,556,371)	(121,903,865)
Total stockholders' deficit	(43,404,389)	(23,194,963)
Total liabilities and stockholders' deficit	$ 27,592,473	$ 28,558,363

XML

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	74,380	88,347
Preferred stock, shares outstanding	74,380	88,347
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	3,292,683	296,869
Common stock, shares outstanding	3,292,683	296,869

XML

CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Revenues	$ 731,422	$ 458,730
Cost of sales	1,861,745	966,593
Gross loss	(1,130,323)	(507,863)
Operating expenses:
Research and development	2,297,983	1,503,558
Selling and marketing	1,478,778	806,118
General and administrative	2,208,657	1,060,652
Total operating expenses	5,985,418	3,370,328
Loss from operations	(7,115,741)	(3,878,191)
Other income (expense):
Interest expense	(6,316,330)	(305,582)
Interest income	578	4,297
Change in fair value of derivative liability	(20,219,263)	(66,994,149)
Total other income (expense)	(26,535,015)	(67,295,434)
Loss before provision for income taxes	(33,650,756)	(71,173,625)
Provision for income taxes	(1,750)
Net loss	$ (33,652,506)	$ (71,173,625)
Net loss per common share - basic and diluted	$ (15.26)	$ (29,374.17)
Weighted average common shares - basic and diluted	2,205,230	2,423

XML

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (33,652,506)	$ (71,173,625)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	563,322	339,593
Bad debt expense	86,273
Change in fair value of derivative liability	20,219,263	66,994,149
Employee stock compensation	37,045	18,720
Debt discount amortization	6,107,467	25,000
Changes in operating assets and liabilities:
Increase in accounts receivable	(23,417)	(23,024)
Increase in inventory	(22,870)	(47,602)
Increase in prepaid and other assets	(1,006,698)	(181,741)
Decrease in accounts payable	(899,776)	(37,237)
Increase in accrued liabilities	441,817	495,060
Net cash used in operating activities	(8,150,080)	(3,590,707)
Cash flows from investing activities:
Acquisition of property and equipment	(216,230)	(83,566)
Construction of equipment	(408,271)	(77,769)
Net cash used in investing activities	(624,501)	(161,335)
Cash flows from financing activities:
Proceeds from exercise of warrants	1,335,950	88,000
Proceeds from follow-on offering	5,575,741	22,154,639
Proceeds from issuance of notes payable - related party		250,000
Payment of cash settlement for warrant exercises	(314,879)
Principal payments of capital leases	(297,106)	(158,090)
Principal payments of notes payable	(5,693)	(11,969)
Net cash provided by financing activities	6,294,013	22,322,580
Net increase (decrease) in cash	(2,480,568)	18,570,538
Cash, beginning of the period	4,787,759	2,017,823
Cash, end of the period	2,307,191	20,588,361
Supplemental disclosures of cash flow information:
Interest paid	215,199	241,228
Income taxes paid	1,750
Supplemental schedule of non-cash investing and financing activities:
Initial public offering and follow-on offering costs incurred but unpaid	483,952	453,015
Property and equipment included in accounts payable	486,309	$ 419,693
Cashless exercise of warrants	187
Change in derivative liability from exercised and issued warrants	$ 12,384,852

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DESCRIPTION OF BUSINESS

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS

NOTE 1 DESCRIPTION OF BUSINESS

Great Basin Scientific, Inc. (the “Company”) (d.b.a., Great Basin Corporation) is a Delaware corporation headquartered in Salt Lake City, Utah. The Company was originally incorporated as Diagnostic Micro Arrays, Inc., a Nevada corporation, on June 27, 2003. The Company changed its name to Great Basin Scientific, Inc. on April 19, 2006. On August 12, 2008, the Company took steps to change its corporate domicile from Nevada to Delaware by forming Great Basin Scientific, Inc., a Delaware corporation, and on August 29, 2008, Great Basin Scientific, Inc., a Nevada corporation, was merged with and into Great Basin Scientific, Inc., a Delaware corporation, wherein the Delaware corporation was the sole surviving entity.

The Company is a molecular diagnostic testing company focused on the development and commercialization of its patented, molecular diagnostic platform designed to test for infectious disease, especially hospital-acquired infections. The Company believes that small to medium sized hospital laboratories, those under 400 beds, are in need of simpler and more affordable molecular diagnostic testing methods. The Company markets a system that combines both affordability and ease-of-use, when compared to other commercially available molecular testing methods, which it believes will accelerate the adoption of molecular testing in small to medium sized hospitals. The system includes an analyzer, which is provided for our customers’ use without charge in the United States, and a diagnostic cartridge, which is sold to our customers. The testing platform has the capability to identify up to 64 individual targets at one time. If the test identifies one to three targets, they are referred to as low-plex tests, or tests, and if they identify four or more targets they are referred to as multi-plex panels, or panels. The Company currently has two commercially available tests, the first for clostridium difficile, or C. diff, which received clearance from the Food and Drug Administration, or FDA, in April 2012 and the second for Group B Strep, which received clearance from the FDA in April 2015 and launched commercially in June 2015. The Company received FDA clearance on two more tests in March 2016, Staphylococcus Identification and Resistance Panel, or Staph ID/R panel and Shiga toxin producing E. coli, or STEC, each of which is not yet available for commercial sale. Our customers consist of hospitals, clinics, laboratories and other healthcare providers in the United States, the European Union and New Zealand.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These condensed unaudited financial statements have been prepared to reflect the financial position, results of operations and cash flows of the Company as of March 31, 2016 and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. The accompanying condensed financial statements and notes are unaudited. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements for the year ended December 31, 2015 and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2016 and its results of operations and cash flows for the three months ended March 31, 2016 and 2015. The results for the three months ended March 31, 2016 are not necessarily indicative of the results expected for the full fiscal year or any other interim period.

Net Income (Loss) per Common Share

Basic loss per share (“EPS”) is computed by dividing net loss (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net loss by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include convertible preferred stock, convertible notes, stock options and warrants. The number of potential common shares outstanding is computed using the treasury stock method.

As the Company has incurred losses for the three months ended March 31, 2016 and 2015, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of March 31, 2016 and 2015, there were 5,732,109 and 18,495 potentially dilutive shares, respectively.

Reverse Stock Split

On March 30, 2016, the Company effected a reverse stock split of the Company’s common stock whereby each thirty-five shares of common stock was replaced with one share of common stock (with no fractional shares issued). The par value and the number of authorized shares of the common stock were not adjusted. All common share and per share amounts for all periods presented in these financial statements have been adjusted retroactively to reflect the reverse stock split. The quantity of Series E Preferred Stock, Common Warrants, Class A, Class B, Series A, Series B and Series C Warrants as well as employee and other options were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion and exchange ratios were adjusted for the effect of the reverse stock splits such that upon conversion each 2,100 shares of Series E Preferred Stock will now be converted into four shares of common stock and upon exercise each 2,100 warrants or options will now be converted into one share of common stock. The quantity of Series D and Subordination Warrants were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion ratio has been adjusted such that upon exercise each 35 of the Series D and Subordination Warrants will now be converted into one share of common stock (see NOTE 10 WARRANTS).

Fair Value of Financial Instruments

FASB ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under FASB ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under FASB ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, with the first two inputs considered observable and the last input considered unobservable, that may be used to measure fair value as follows:

· Level one — Quoted market prices in active markets for identical assets or liabilities;

· Level two — Inputs other than level one inputs that are either directly or indirectly observable; and

· Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company issued certain common stock warrants, employee stock options and convertible notes that are required to be recorded at fair value measured at the transaction date. In addition certain other warrants to purchase common stock and convertible notes qualify as derivative liabilities and are therefore required to be recorded at fair value measured at the transaction date and again at each reporting period end. The fair value of these warrants and conversion was determined using estimates and assumptions that are not readily available in public markets and the Company has designated this liability as Level 3. The assumptions used for the fair value calculation as well as the changes in the value of the derivative liability are shown in NOTE 11 DERIVATIVE LIABILITY.

Derivative Instruments

The Company accounts for derivative instruments under the provisions of ASC 815 Derivatives 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 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, with changes in fair value recognized in earnings.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

In February 2016, the FASB issued ASU No. 2016-02 Leases, which requires recognition of leased assets and liabilities on the balance sheet and disclosing key information about leasing arrangements.  This update is effective for annual periods and interim periods with those periods beginning after December 15, 2018.  The Company is evaluating the impact of this standard on its financial statements.

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11 Simplifying the Measurement of Inventory, that simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost or net realizable value test. The ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is still evaluating the impact this standard will have on its financial statements and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03 Interest – Imputation of Interest, Simplifying the Presentation of Debt Issuance Cost. This standard provides guidance on the balance sheet presentation for debt issuance costs and debt discounts and debt premiums. To simplify the presentation of debt issuance costs, this standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This ASU is effective for fiscal years beginning after December 15, 2015. The Company has adopted this standard and the effects are reflected in its financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15 Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern. The update is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The impact on the Company’s financial statements of adopting ASU 2014-15 is currently being assessed by management.

In May 2014, the FASB issued ASU No. 2014-09Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In April 2015, the FASB deferred the effective date of ASU 2014-09 to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2014-09 on its financial statements.

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GOING CONCERN

3 Months Ended

Mar. 31, 2016

Text Block [Abstract]

GOING CONCERN

NOTE 3 GOING CONCERN

The Company’s 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. The Company has incurred substantial losses from operations and negative operating cash flows which raise substantial doubt about the Company’s ability to continue as a going concern.  The Company sustained a net loss for the three months ended March 31, 2016 of $33.7 million and a net loss for the year ended December 31, 2015 of $57.9 million, and has an accumulated deficit of $155.6 million as of March 31, 2016. Whether and when the Company can attain profitability and positive cash flows from operations is uncertain.

The Company intends to continue to develop its products and expand its customer base, but does not have sufficient realized revenues or operating cash flows in order to finance these activities internally.  As a result, the Company intends to seek to obtain financing in order to fund its working capital and development needs. In February 2016 the Company obtained financing by completing another follow-on offering for net proceeds of $5.0 million.

The Company has been able to meet its short-term needs through private placements of convertible preferred securities, an initial public offering (“IPO”), additional follow-on offerings, convertible debt financing and the sale and leaseback of analyzers used to report test results. The Company will continue to seek funding through the issuance of additional equity securities, debt financing, the sale and leaseback of analyzers, or a combination of these items. Any proceeds received from these items could provide the needed funds for continued operations and development programs. The Company can provide no assurance that it will be able to obtain sufficient additional financing that it needs to alleviate doubt about its ability to continue as a going concern. If the Company is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing will be available on acceptable terms, if at all. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to obtain additional financings, the impact on the Company’s operations will be material and adverse.

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LEASE COMMITMENTS

3 Months Ended

Mar. 31, 2016

Commitments And Contingencies Disclosure [Abstract]

LEASE COMMITMENTS

NOTE 4 LEASE COMMITMENTS

Capital Leases

The Company has entered into two lease agreements for the sale-leaseback of molecular diagnostic analyzers. The first agreement was entered into in November 2013 and provided for the sale of 125 molecular diagnostic analyzers for a sales price of $2,500,000, which are being leased back for a base period of thirty-six monthly payments of $74,875. The second agreement was entered into in April 2014 for the sale of 75 molecular diagnostic analyzers for a sales price of $1,500,000, which are being leased back for a base period of twenty-four monthly payments of $64,665. At the end of each lease term, the leases shall automatically renew for twelve additional months unless certain conditions are met. As such, the Company is amortizing the capital lease over a forty-eight month period for the first agreement and a thirty-six month period for the second agreement. The lease is accounted for as a capital lease sale-leaseback transaction in accordance with ASC 840, “Leases”.

Operating Leases

The Company leases approximately 35,540 square feet of office space located in Salt Lake City, Utah for use as the executive offices and labs. Base rent payments due under the lease are expected to be approximately $3,472,875 in the aggregate over the term of the lease of 65 months beginning on December 1, 2015. The Company also leases approximately 33,000 square feet of building space at another location in Salt Lake City, Utah for use primarily as manufacturing space and labs. Base rent payments due under these leases total $21,226 per month. The leases expire on April 30, 2017.  The Company also leases certain office equipment such as copiers and printers under operating lease agreements that expire at various dates.

Amounts charged to expense under operating leases were $165,045 and $74,268 for the three months ended March 31, 2016 and 2015, respectively.

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NOTES PAYABLE

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 5 NOTES PAYABLE

The Company purchased certain machinery and equipment under two note payable agreements in January and February 2013. During the three months ended March 31, 2016, both notes were extinguished by making the final payments on the notes in the amount of $5,693.

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CONVERTIBLE NOTES PAYABLE

3 Months Ended

Mar. 31, 2016

Text Block [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 6    CONVERTIBLE NOTES PAYABLE

On December 30, 2015, the Company entered into a Securities Purchase Agreement (“SPA”) with certain investors pursuant to which it agreed to issue $22.1 million in senior secured convertible notes (“Notes”) and Series D Warrants (further described below). The Notes are convertible into 3,946,429 shares of Common Stock at a price equal to $5.60 per share, subject to adjustment for certain dilutive events. $20 million of the notes were issued for cash proceeds totaling $18.4 million with 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 to extinguish 1,050,000 outstanding Series C Warrants at an extinguish value of $2.00 per warrant. The Notes are senior secured obligations of the Company and will rank senior to all outstanding and future indebtedness of the Company. They are secured by a first priority perfected security interest (subject to permitted liens as defined in the Notes) in all of the current and future assets of the Company. The Notes contain standard and customary events of default and the entire principal balance is subject to the default and redemption provisions contained in the Notes, regardless of whether or not any of the proceeds have been released from the Company’s restricted accounts.

In connection with the issuance of the Notes under the SPA, the Company issued Series D Warrants (the “Series D Warrants”), exercisable to acquire 100,090 shares of Common Stock, subject to a one time adjustment on December 31, 2016 under the terms of the Series D Warrants (see NOTE 10 WARRANTS). Each Series D Warrant is exercisable by the holder beginning six months after December 30, 2015 and continuing for a period five years thereafter. The Series D Warrants are exercisable at $5.60 per share of common stock, subject to adjustments for certain dilutive events.

The Company has agreed to make amortization payments with respect to the Notes in twelve (12) equal installments beginning four (4) months after the original date of issuance of December 30, 2015 (each, an “Installment Date”). On each installment date, assuming certain equity conditions are met, the installment payment shall automatically be converted into shares of Common Stock at a conversion rate defined in the agreement.

Under the terms of the Notes, at closing the Company received an initial tranche of $4.6 million for immediate use for general corporate purposes. The remaining cash proceeds of $13.8 million are being held in a restricted account and will be released to the Company from the Company’s restricted accounts in subsequent equal tranches subject to certain equity conditions.

$20 million of the Notes were issued for cash proceeds of $18.4 million with an original issue discount in the amount of $1.6 million.  The conversion feature in the Notes represents an embedded derivative that requires bifurcation due to the ratchet provision described above related to the conversion feature. The provisions in the Series D Warrants also require the Company to account for the warrants as derivative liabilities. The original issue discount, the fair value of the embedded conversion feature, the fair value of the Series D Warrants and the debt issuance costs are all together considered the debt discount. The Company recorded a debt discount in the amount of $20 million which is being amortized over the life of the note using the effective interest method. For the three months ended March 31, 2016, $6,107,467 of the debt discount had been amortized to interest expense.

The following table summarizes the convertible notes outstanding at March 31, 2016:

Convertible notes payable, principal	$	22,100,000
Debt discounts		(13,828,816	)
Net convertible note payable		8,271,184
Less current portion		(8,271,184	)
Convertible notes payable, long term	$	—

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NOTES PAYABLE-RELATED PARTY

3 Months Ended

Mar. 31, 2016

Text Block [Abstract]

NOTES PAYABLE-RELATED PARTY

NOTE 7 NOTES PAYABLE – RELATED PARTY

In July 2014, the Company entered into a note agreement for $500,000 with Spring Forth Investments, LLC a company owned by Mr. David Spafford, a director. The original maturity date for the note was July 18, 2015, which was extended by the Company to July 18, 2016 by giving notice and paying an extension fee of $10,000. The note pays interest at an annual rate of 20% and is paid monthly. The Company prepaid the last three months of interest for a total of $25,000 at the time of issuance of the note.  As additional consideration for the note, the Company issued 4,000,000 Series D preferred stock units (which were separable into 4,000,000 shares of Series D preferred stock, 20,000 Class A warrants to purchase 10 shares of common stock at $5.60 per share and 20,000 Class B warrants to purchase 10 shares of common stock at $5.60 per share) at a value of $100,000 or $0.025 per unit. The 4,000,000 shares of Series D Preferred Stock were converted into 10 shares of Common Stock. The Series D preferred stock units were accounted as a debt discount which has been fully amortized.  

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PREFERRED STOCK

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

PREFERRED STOCK

NOTE 8 PREFERRED STOCK

The Company had 5,000,000 shares of preferred stock authorized at a par value of $0.001 per share as of March 31, 2016. As of March 31, 2016 there were 74,380 shares of Series E Preferred Stock issued and outstanding which are convertible at the option of the holders into 142 shares of common stock.  During the three months ended March 31, 2016, 13,967 shares of Series E Preferred Stock were converted into 27 shares of common stock.

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COMMON STOCK

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

COMMON STOCK

NOTE 9 COMMON STOCK

The Company had 200,000,000 shares of common stock authorized at a par value of $0.0001 per share as of March 31, 2016. As of March 31, 2016 there were 3,292,683 shares of common stock issued and outstanding. The Company has reserved 2,428,572 of authorized but unissued shares of common stock for issuance pursuant to the convertible notes and associated Series D Warrants.

During the three months ended March 31, 2016, the Company issued 1,520,888 shares of common stock pursuant to the cashless exercise of 5,091,815 Series C Warrants.

During the three months ended March 31, 2016, the Company issued 354,899 shares of common stock pursuant to the cash exercise of 121,540 Underwriter Unit Purchase Options at an exercise price of $11.00 for total proceeds of $1,335,950.  Upon exercise of these options, 121,540 shares of Series E Convertible Preferred Stock were issued and immediately converted into 232 shares of  common stock and 972,320 Series C Warrants were issued and immediately exercised pursuant to the cashless exercise provision into 354,667 shares of common stock.

During the three months ended March 31, 2016, the Company issued 27 shares of common stock pursuant to the conversion of 13,967 shares of Series E Convertible preferred stock (see NOTE 8 PREFERRED STOCK).

On February 24, 2016, the Company completed a public offering of 39.2 million Units.  Each 35 units consisted of one share of common stock and 52.5 Series E Warrants. The Company received approximately $5.0 million of net proceeds.  Pursuant to the sale of the units, the Company issued 1,120,000 shares of common stock. Each 35 Series E Warrants are exercisable into one share of common stock at $8.75 per share.  The Series E Warrants expire six years from the date of grant, are not exercisable for one year and which exercise is subject to a shareholder vote and an increase in the number of authorized shares of common stock the Company can issue.

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WARRANTS

3 Months Ended

Mar. 31, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

WARRANTS

NOTE 10 WARRANTS

The following table outlines the warrants outstanding and exercisable as of March 31, 2016:

			Total
			Shares of	Aggregate
	Outstanding	Warrant	Common Stock	Exercise Price
	and	Exercise	Underlying	for One
Warrants	Exercisable	Price	the Warrant	Common Share	Expiration
Class A	1,532,598	$0.0027	755	$5.60	April 2021 - July 2021
Class B	1,310,956	$0.0027	640	$5.60	April 2012 - July 2021
Series B	1,074,082	$8.04	530	$16,873.50	March 2021 - July 2021
Series D	3,503,116	$0.0027	100,090	$5.60	June 2021
Series E	58,800,000	$0.25	1,680,000	$8.75	February 2022
Subordination	105,516	$0.0027	3,015	$5.60	June 2021
Common	463,356	$0.0027- $32.00	230	$5.60 - $67,200.00	April 2016 - July 2021
Total Warrants	66,789,624		1,785,260

Class A Warrants

The Class A Warrants include a provision which provides that the exercise price of the Class A Warrants will be adjusted in connection with certain equity issuances by the Company.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to $5.60 per share of common stock.

Class B Warrants

The Class B Warrants include a provision which provides that the exercise price of the Class B Warrants will be adjusted in connection with certain equity issuances by the Company.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to $5.60 per share of common stock.

Series B Warrants

The Series B Warrants include a provision which provides that the exercise price of the Series B Warrants is subject to reduction in connection with certain equity issuances by the Company that are below the then current market price. In February 2016, as a result of the February 2016 Unit Offering, the price reduction provision was trigged and the exercise price was reduced to $16,873.50 per share of common stock.

Series C Warrants

During the three months ended March 31, 2016, 5,229,973 Series C Warrants were exercised pursuant to the cashless exercise provision.  The Company settled 5,091,815 of the Series C Warrant exercises through the issuance of 1,520,888 shares of common stock and the Company settled 138,158 of the Series C Warrant exercises with cash in the amount of $314,879.

On January 21, 2016 all outstanding Series C Warrants were mandatorily exercised utilizing the cashless provision of the warrants and the corresponding shares of common stock issued.  As of March 31, 2016 there are 47,528 Series C Warrant certificates that have yet to be delivered to the Company representing 15,182 shares of common stock.

Series D Warrants

The Series D Warrants include a provision which provides that the exercise price of the Series D Warrants will be adjusted in connection with certain equity issuances by the Company subject to a floor exercise price of $7.00 per share of common stock.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to the floor of $7.00 per share of common stock.  In March 2016, pursuant to the approval of the Company’s stockholders of the removal of the exercise floor price, the exercise price was adjusted to $5.60 per share of common stock.

Series E Warrants

In connection with the February 2016 Unit Offering, the Company issued Series E Warrants to purchase 1,680,000 shares of common stock as part of the units sold in the offering (see NOTE 9 COMMON STOCK).  Each 35 Series E Warrant will have an initial exercise price per share of $8.75, subject to certain adjustments. The Series E Warrants are exercisable beginning one year and one day from the date of issuance, but only ifthe Company has obtained stockholder approval (i) for the issuance of shares of common stock issuable upon the exercise of the Series E Warrants pursuant to the applicable rules andregulations of the NASDAQ Capital Market and (ii) to effect an additional reverse split of our common stock and/or increase our authorized sharesof common stock so as to permit the exercise in full of the Series E Warrants.  The Series E Warrants will expire on the fifth anniversary of the date they first become exercisable. One year from the date of issuance, the number of shares of commonstock issuable upon the exercise of the Series E Warrants shall be increased to equal the difference, if positive, obtained by subtracting (x) the number of shares of common stockissuable upon the exercise of the Series E Warrants on the date of issuance) , from (y) the lesser of (A) 7% of the sum of the number of shares of common stock actually outstanding one year from the date of issuance, plus the number of shares ofcommon stock deemed to be outstanding pursuant to the terms of the Series E Warrant, or (B) 200% of the shares of common stock issuable upon the exercise of the Series E Warrants on such date.

The Series E Warrants include a provision that for one year from issuance the exercise price per share will adjust if the Company has certain equity issuances for consideration per share that is less than the current exercise price of the Series E Warrants. The Series E Warrants are exercisable on a cashless basis in the event there is no effective registration statement registering the shares underlying the Series E Warrants.

Subordination Warrants  

The Subordination Warrants include a provision which provides that the exercise price of the Subordination Warrants will be adjusted in connection with certain equity issuances by the Company subject to a floor exercise price of $7.00 per share of common stock.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price was adjusted to the floor of $7.00 per share of common stock.  In March 2016, pursuant to the approval of the Company’s stockholders of the removal of the exercise floor price, the exercise price was adjusted to $5.60 per share of common stock.

Common Warrants

Certain Common Warrants include a provision which provides that the exercise price of these certain Common Warrants will be adjusted in connection with certain equity issuances by the Company.  In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered and the exercise price of these certain Common Warrants was adjusted to $5.60 per share of common stock.

The following table summarizes the common stock warrant activity during the three months ended March 31, 2016:

						Weighted
						Average
				Weighted		Remainder
	Common			Average		Contractual
	Stock			Exercise		Term in
	Warrants			Price		Years
As of March 31, 2016:
Warrants Outstanding as of January 1, 2016		13,219,597		$	2.71		4.7
Granted		58,800,000		$	0.25		5.9
Exercised		(5,229,973	)	$	2.55		—
Expired		—			—		—
Warrants outstanding as of March 31, 2016		66,789,624		$	0.39		5.8

Underwriters’ Unit Purchase Option

During the three months ended March 31, 2016, 121,540 Underwriters’ Unit Purchase Options were exercised for cash in the amount of $1,335,950. Pursuant to the exercise of these options, 121,540 shares of Series E Convertible Preferred Stock were issued and immediately converted into 232 shares of common stock and 972,320 Series C Warrants were issued and immediately exercised pursuant to the cashless exercise provision of the Series C Warrants into 354,667 shares of common stock. There are no outstanding Underwriters’ Unit Purchase Options as of March 31, 2016.

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DERIVATIVE LIABILITIES

3 Months Ended

Mar. 31, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITIES

NOTE 11    DERIVATIVE LIABILITIES

The derivative liability for our instruments classified as derivative liabilities are recorded at fair value at inception and subsequently re-measured to fair value as long as such instruments are classified as derivative liabilities. Changes in the fair value of the derivative liability was included as a component of Other income (expense) and has no effect on the Company’s cash flows. The valuation methodologies used vary by instrument and include a modified Black-Scholes option valuation model utilizing the fair value of the underlying common stock and a binomial model with Monte Carlo simulation. The Company has determined the fair value measurements to be a level 3 measurement (see NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES).

Class A Warrants, Class B Warrants, Series B Warrants and Certain Common Warrants

Our Class A Warrants, Class B Warrants, Series B Warrants and certain common warrants, have an exercise price adjustment provision that in the event the Company sells shares of any additional stock, subject to certain exceptions, at a price per share less than the original exercise price of the respective warrant, the exercise price shall be adjusted to a price equal to the price paid per share for such additional stock. Our Series B Warrants have an exercise price adjustment provision that in the event the Company sells shares of any additional stock, subject to certain exceptions, at a price per share less than the then current market price, the exercise price shall be adjusted to a price equal to the price paid per share for such additional stock. Such exercise price adjustments prohibit the Company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, these warrants are accounted for as derivative liabilities and are recorded at fair value at each reporting date with the change in fair value being recorded in earnings for the period. In February 2016, as a result of the February 2016 Unit Offering, the price adjustment provision was triggered for our Class A Warrants, Class B Warrants, Series B Warrants and certain common warrants and the exercise price per share was adjusted accordingly.

The fair value of these warrants was calculated using a modified Black-Scholes option valuation model utilizing the fair value of underlying common stock. Black-Scholes has inherent limitations for use in the case of a warrant with a price protection provision, since the model is designed to be used when the inputs to the model are static throughout the life of a security. Due to the significant variance between the fair market value of the stock and the exercise price, the Black-Scholes option-pricing model resulted in a fair value that equals the current market value of the stock. As such, the fair value of the Class A, Class B, Series B and certain other common warrants was estimated to be $7.17 per share, which was the closing price of the common stock on March 31, 2016. The Company determined the total fair value of these warrants at March 31, 2016 was $13,500.

Series C Warrants and Unit Purchase Option

Our Series C Warrants contained a cashless exercise provision using a predetermined Black Scholes Value. Such provision, if exercised by the holder, would require the Company to settle these warrants, at its option, either by cash payment or the granting of a variable number of common shares. This provision results in the potential for the Company to either have to net cash settle the warrant or potentially issue an indeterminate number of common shares which prohibits the Company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, the warrants and the unit purchase option are accounted for as derivative liabilities and are recorded at fair value at each reporting date with the change in fair value being recorded in earnings for the period. During the three months ended March 31, 2016 all of the remaining Series C Warrants and unit purchase options were exercised.

Convertible Notes Conversion Feature

The convertible notes issued in December 2015 contain provisions that protect holders from future issuances of the Company’s common stock at prices below such convertible notes’ respective conversion price. These provisions could result in modification of the conversion price due to a future equity offering and as such the conversion feature cannot be considered indexed to the Company’s own stock. The note also provides that the Company will repay the principal amount at an initial conversion rate subject to certain adjustments. These features represent an embedded derivative that requires bifurcation and are recorded at fair value at each reporting period with the change in fair value being recorded in earnings for the period.

The Company determined the fair value of the conversion feature to be $35,096,383 at March 31, 2016 using a binomial model with Monte Carlo simulation to reflect different scenarios where reset may be triggered using the following assumptions:

Trading price of common stock on measurement date	$	7.17
Conversion price (1)	$	4.05
Risk free interest rate (2)		0.59	%
Conversion notes lives in years		1.08
Expected volatility (3)		251	%
Expected dividend yield (4)		-

(1) The conversion price of the convertible notes was calculated based on the formula in the Notes agreement as of the respective measurement date

(2) The risk-free interest rate was determined by management using the 1-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

Series D Warrants and Subordination Warrants

In connection with the issuance of convertible notes in December 2015, the Company issued Series D Warrants to acquire 100,090 shares of common stock. In addition, the Company issued Subordination Warrants to acquire 3,015 shares of common stock. The Series D Warrants and Subordination Warrants contain provisions that will adjust the exercise price upon certain equity issuances.  In addition, these warrants contain a provision for a one-time adjustment at December 31, 2016, to the number of warrants issued. The Company has determined that the provisions contained in the Series D Warrants and the Subordination Warrants could result in modification of the exercise price resulting in a variable number of additional common shares that could be issued. This prohibits the company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, the warrants represent a derivative liability that requires recording at fair value at each reporting period with the change in fair value being recorded in earnings for the period.

The Company determined the fair of the Series D Warrants and Subordination Warrants to be $9,019,277 at March 31, 2016 using a binomial model with Monte Carlo simulation to reflect different scenarios where reset may be triggered and to project the range of the additional shares to be issued on December 31, 2016 using the following assumptions:

Trading price of common stock on measurement date	$	7.17
Exercise price (1)	$	5.60
Risk free interest rate (2)		1.21	%
Warrant lives in years		5.25
Expected volatility (3)		230	%
Expected dividend yield (4)		-

(1) The exercise price of the Series D and Subordination Warrants as defined in the warrant agreement.

(2) The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

Series E Warrants

In connection with the February 2016 Unit Offering, the Company issued Series E Warrants to purchase 1,680,000 shares of common stock as part of the units sold in the offering (see NOTE 9 COMMON STOCK). The Series E Warrants contain a provision that for one year from issuance the exercise price per share will adjust if the Company has certain equity issuances for consideration per share that is less than the current exercise price of the Series E Warrants. In addition, these warrants contain a provision for a one-time adjustment one year from date of issuance, to the number of warrants issued. The Company has determined that the provisions contained in the Series E Warrants could result in modification of the exercise price resulting in a variable number of additional common shares that could be issued. This prohibits the company from being able to conclude that the warrants are indexed to the Company’s own stock. Accordingly, the warrants represent a derivative liability that requires recording at fair value at issuance and again at each reporting period with the change in fair value being recorded in earnings for the period.

The Company determined the fair of the Series E Warrants to be $11,390,400 at issuance and $11,978,400 at March 31, 2016 using a Black Scholes valuation model using the following assumptions:

	February 24, 2016			March 31, 2016
Trading price of common stock on measurement date	$	6.82		$	7.17
Exercise price (1)	$	8.75		$	8.75
Risk free interest rate (2)		2.73	%		2.75	%
Warrant lives in years		6.01			5.91
Expected volatility (3)		225	%		230	%
Expected dividend yield (4)		-			-

(1) The exercise price of the Series E Warrants as defined in the warrant agreement.

(2) The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

The following summarizes the total change in the value of the derivative liabilities during the three months ended March 31, 2106:

As of March 31, 2016:
Balance at January 1, 2016	$	43,181,472
Issuance of warrants		5,091,677
Exercise of warrants and options		(12,384,852	)
Change in fair value of warrant and option liability		20,219,263
Balance at March 31, 2016	$	56,107,560

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EMPLOYEE STOCK OPTIONS

3 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

EMPLOYEE STOCK OPTIONS

NOTE 12 EMPLOYEE STOCK OPTIONS

The Company has three stock based employee compensation plans pursuant to which stock option grants have been made. Under the Great Basin Scientific, Inc. 2014 Omnibus Plan, the 2014 Stock Option Plan and the 2006 Stock Option Plan certain employees and non-employee directors have been granted options to purchase common stock. The Company has 792,034 employee stock options exercisable into 419 shares of common stock outstanding as of March 31, 2016. All options vest in installments over a three to four year period and expire ten years from the date of grant.

Any future employee stock option grants will be made pursuant to the 2014 Omnibus Plan.  As of March 31, 2016, employee stock options exercisable into 125 shares of common stock have been granted pursuant to the 2014 Omnibus Plan and options exercisable into 1,275 shares of common stock remain available for issuance under that plan.

The following table summarizes the Company’s total option activity for the three months ended March 31, 2016:

					Total		Aggregate		Weighted
			Weighted		Shares of		Exercise		Average
			Average		Common		Price		Remaining
			Option		Stock		for One		Contractual
			Exercise		Underlying		Common		Term in
	Options		Price		the Option		Share		Years
As of March 31, 2016:
Options outstanding as of January 1, 2016		792,534	$	2.84		420	$	5,964.00		8.0
Granted		—		—		—		—		—
Exercised		—		—		—		—		—
Forfeited		500	$	2.00		1	$	4,200.00		—
Options outstanding as of March 31, 2016		792,034	$	2.84		419	$	5,964.00		7.8

Outstanding and exercisable stock options as of March 31, 2016 are as follows:

	Options Outstanding						Options Exercisable
	Number of		Remaining				Number of
	Options		Life		Exercise		Options		Exercise
	Outstanding		(Years)		Price		Exercisable		Price
March 31, 2016		792,034		7.8	$	2.84		376,925	$	3.04

The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options vesting period on the straight-line basis. The Company recognized $37,045 in equity-based compensation expenses during the three months ended March 31, 2016. There were $371,862 of total unrecognized compensation cost with a remaining vesting period of 2.46 years and $0 in intrinsic value of outstanding and vested stock options as of March 31, 2016.

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LEGAL PROCEEDINGS

3 Months Ended

Mar. 31, 2016

Commitments And Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

NOTE 13 LEGAL PROCEEDINGS

We are not currently a party to any material pending or threatened legal proceeding or regulatory or government investigations. We may become involved in litigation from time to time relating to claims arising in the ordinary course of our business. We do not believe that the ultimate resolution of such claims would have a material effect on our business, results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material effect on our business, results of operations, financial condition and cash flows.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 14 SUBSEQUENT EVENTS

On April 7, 2016, the Company entered into certain warrant exchange agreements (the “Exchange Agreements”), each by and between the Company and a holder of its outstanding Series E Warrants, pursuant to which the Company and each such holder agreed to exchange outstanding Series E Warrants for shares of common stock of the Company. Pursuant to the Exchange Agreements, the Company issued 650,160 shares of common stock of the Company in exchange for the surrender by the holders to the Company of 58,800,000 Series E Warrants exercisable to acquire approximately 1,680,000 shares of common stock of the Company (representing an exchange ratio of one share of common stock for each 2.584 shares of common stock underlying the surrendered Series E Warrants). The surrendered Series E Warrants were immediately cancelled by the Company and there are no Series E Warrants issued and outstanding.

On April 5, 2016, the Company received notification from the Utah Labor Commission, Occupational Safety and Health Division (ULC) that a former employee filed a claim with the ULC alleging wrongful termination in violation of the Utah Occupational Safety and Health Act, Utah Code. The Company has performed an investigation and believes the claim is without merit.

On May 2, 2016, the holders of the senior secured convertible notes of the Company voluntarily removed restrictions on the Company’s use of an aggregate of $1 million previously funded to the Company and authorized the release of those funds from the restricted cash accounts of the Company.

On May 11, 2016, the Company and certain of the buyers. as set forth in the Schedule of Buyers attached to the Securities Purchase Agreement, dated December 28, 2015 (the “SPA”), in relation to the issuance and sale by the Company of $22.1 million aggregate principal amount of senior secured convertible notes (the “Notes”) and related Series D common stock purchase warrants (the “Warrants”), holding enough of the Notes and Warrants to constitute the Required Holders under Section 10 of the Registration Rights Agreement by and between the Company the Buyers (the “Registration Rights Agreement”) entered into December 30, 2015, entered into Amendment Agreement No.3 to the Registration Rights Agreement (the “Third Amendment Agreement”), whereby the Company and the Buyers agreed to extend the deadline for bringing the initial registration statement required thereunder 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  May 31, 2016 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 Third Amendment Agreement, the Buyers also waived any (i) any breach of the Registration Rights Agreement prior to May 11, 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 Third 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 Third Amendment Agreement for the Company’s failure to have the initial registration statement brought effective by the initial effectiveness deadline.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These condensed unaudited financial statements have been prepared to reflect the financial position, results of operations and cash flows of the Company as of March 31, 2016 and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. The accompanying condensed financial statements and notes are unaudited. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements for the year ended December 31, 2015 and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2016 and its results of operations and cash flows for the three months ended March 31, 2016 and 2015. The results for the three months ended March 31, 2016 are not necessarily indicative of the results expected for the full fiscal year or any other interim period.

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

Basic loss per share (“EPS”) is computed by dividing net loss (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net loss by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include convertible preferred stock, convertible notes, stock options and warrants. The number of potential common shares outstanding is computed using the treasury stock method.

As the Company has incurred losses for the three months ended March 31, 2016 and 2015, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of March 31, 2016 and 2015, there were 5,732,109 and 18,495 potentially dilutive shares, respectively.

Reverse Stock Split

Reverse Stock Split

On March 30, 2016, the Company effected a reverse stock split of the Company’s common stock whereby each thirty-five shares of common stock was replaced with one share of common stock (with no fractional shares issued). The par value and the number of authorized shares of the common stock were not adjusted. All common share and per share amounts for all periods presented in these financial statements have been adjusted retroactively to reflect the reverse stock split. The quantity of Series E Preferred Stock, Common Warrants, Class A, Class B, Series A, Series B and Series C Warrants as well as employee and other options were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion and exchange ratios were adjusted for the effect of the reverse stock splits such that upon conversion each 2,100 shares of Series E Preferred Stock will now be converted into four shares of common stock and upon exercise each 2,100 warrants or options will now be converted into one share of common stock. The quantity of Series D and Subordination Warrants were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion ratio has been adjusted such that upon exercise each 35 of the Series D and Subordination Warrants will now be converted into one share of common stock (see NOTE 10 WARRANTS).

Fair Value of Financial Instruments

Fair Value of Financial Instruments

FASB ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under FASB ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under FASB ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, with the first two inputs considered observable and the last input considered unobservable, that may be used to measure fair value as follows:

· Level one — Quoted market prices in active markets for identical assets or liabilities;

· Level two — Inputs other than level one inputs that are either directly or indirectly observable; and

· Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company issued certain common stock warrants, employee stock options and convertible notes that are required to be recorded at fair value measured at the transaction date. In addition certain other warrants to purchase common stock and convertible notes qualify as derivative liabilities and are therefore required to be recorded at fair value measured at the transaction date and again at each reporting period end. The fair value of these warrants and conversion was determined using estimates and assumptions that are not readily available in public markets and the Company has designated this liability as Level 3. The assumptions used for the fair value calculation as well as the changes in the value of the derivative liability are shown in NOTE 11 DERIVATIVE LIABILITY.

Derivative Instruments

Derivative Instruments

The Company accounts for derivative instruments under the provisions of ASC 815 Derivatives 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 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, with changes in fair value recognized in earnings.

New Accounting Pronouncements

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

In February 2016, the FASB issued ASU No. 2016-02 Leases, which requires recognition of leased assets and liabilities on the balance sheet and disclosing key information about leasing arrangements.  This update is effective for annual periods and interim periods with those periods beginning after December 15, 2018.  The Company is evaluating the impact of this standard on its financial statements.

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11 Simplifying the Measurement of Inventory, that simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost or net realizable value test. The ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is still evaluating the impact this standard will have on its financial statements and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03 Interest – Imputation of Interest, Simplifying the Presentation of Debt Issuance Cost. This standard provides guidance on the balance sheet presentation for debt issuance costs and debt discounts and debt premiums. To simplify the presentation of debt issuance costs, this standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This ASU is effective for fiscal years beginning after December 15, 2015. The Company has adopted this standard and the effects are reflected in its financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15 Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern. The update is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The impact on the Company’s financial statements of adopting ASU 2014-15 is currently being assessed by management.

In May 2014, the FASB issued ASU No. 2014-09Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In April 2015, the FASB deferred the effective date of ASU 2014-09 to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2014-09 on its financial statements.

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CONVERTIBLE NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2016

Text Block [Abstract]

Summary of Convertible Notes Outstanding

The following table summarizes the convertible notes outstanding at March 31, 2016:

Convertible notes payable, principal	$	22,100,000
Debt discounts		(13,828,816	)
Net convertible note payable		8,271,184
Less current portion		(8,271,184	)
Convertible notes payable, long term	$	—

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WARRANTS (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule Of Warrants Outstanding and Exercisable

The following table outlines the warrants outstanding and exercisable as of March 31, 2016:

			Total
			Shares of	Aggregate
	Outstanding	Warrant	Common Stock	Exercise Price
	and	Exercise	Underlying	for One
Warrants	Exercisable	Price	the Warrant	Common Share	Expiration
Class A	1,532,598	$0.0027	755	$5.60	April 2021 - July 2021
Class B	1,310,956	$0.0027	640	$5.60	April 2012 - July 2021
Series B	1,074,082	$8.04	530	$16,873.50	March 2021 - July 2021
Series D	3,503,116	$0.0027	100,090	$5.60	June 2021
Series E	58,800,000	$0.25	1,680,000	$8.75	February 2022
Subordination	105,516	$0.0027	3,015	$5.60	June 2021
Common	463,356	$0.0027- $32.00	230	$5.60 - $67,200.00	April 2016 - July 2021
Total Warrants	66,789,624		1,785,260

Common Stock Warrants Activity

The following table summarizes the common stock warrant activity during the three months ended March 31, 2016:

						Weighted
						Average
				Weighted		Remainder
	Common			Average		Contractual
	Stock			Exercise		Term in
	Warrants			Price		Years
As of March 31, 2016:
Warrants Outstanding as of January 1, 2016		13,219,597		$	2.71		4.7
Granted		58,800,000		$	0.25		5.9
Exercised		(5,229,973	)	$	2.55		—
Expired		—			—		—
Warrants outstanding as of March 31, 2016		66,789,624		$	0.39		5.8

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DERIVATIVE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of Assumptions for Fair Value Measurement Model

The Company determined the fair value of the conversion feature to be $35,096,383 at March 31, 2016 using a binomial model with Monte Carlo simulation to reflect different scenarios where reset may be triggered using the following assumptions:

Trading price of common stock on measurement date	$	7.17
Conversion price (1)	$	4.05
Risk free interest rate (2)		0.59	%
Conversion notes lives in years		1.08
Expected volatility (3)		251	%
Expected dividend yield (4)		-

(1) The conversion price of the convertible notes was calculated based on the formula in the Notes agreement as of the respective measurement date

(2) The risk-free interest rate was determined by management using the 1-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

The Company determined the fair of the Series D Warrants and Subordination Warrants to be $9,019,277 at March 31, 2016 using a binomial model with Monte Carlo simulation to reflect different scenarios where reset may be triggered and to project the range of the additional shares to be issued on December 31, 2016 using the following assumptions:

Trading price of common stock on measurement date	$	7.17
Exercise price (1)	$	5.60
Risk free interest rate (2)		1.21	%
Warrant lives in years		5.25
Expected volatility (3)		230	%
Expected dividend yield (4)		-

(1) The exercise price of the Series D and Subordination Warrants as defined in the warrant agreement.

(2) The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

The Company determined the fair of the Series E Warrants to be $11,390,400 at issuance and $11,978,400 at March 31, 2016 using a Black Scholes valuation model using the following assumptions:

	February 24, 2016			March 31, 2016
Trading price of common stock on measurement date	$	6.82		$	7.17
Exercise price (1)	$	8.75		$	8.75
Risk free interest rate (2)		2.73	%		2.75	%
Warrant lives in years		6.01			5.91
Expected volatility (3)		225	%		230	%
Expected dividend yield (4)		-			-

(1) The exercise price of the Series E Warrants as defined in the warrant agreement.

(2) The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

(3) The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

(4) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

Summary of Change in the Value of the Derivative Liabilities

The following summarizes the total change in the value of the derivative liabilities during the three months ended March 31, 2106:

As of March 31, 2016:
Balance at January 1, 2016	$	43,181,472
Issuance of warrants		5,091,677
Exercise of warrants and options		(12,384,852	)
Change in fair value of warrant and option liability		20,219,263
Balance at March 31, 2016	$	56,107,560

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EMPLOYEE STOCK OPTIONS (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity

The following table summarizes the Company’s total option activity for the three months ended March 31, 2016:

					Total		Aggregate		Weighted
			Weighted		Shares of		Exercise		Average
			Average		Common		Price		Remaining
			Option		Stock		for One		Contractual
			Exercise		Underlying		Common		Term in
	Options		Price		the Option		Share		Years
As of March 31, 2016:
Options outstanding as of January 1, 2016		792,534	$	2.84		420	$	5,964.00		8.0
Granted		—		—		—		—		—
Exercised		—		—		—		—		—
Forfeited		500	$	2.00		1	$	4,200.00		—
Options outstanding as of March 31, 2016		792,034	$	2.84		419	$	5,964.00		7.8

Summary of Stock Options Outstanding and Exercisable

Outstanding and exercisable stock options as of March 31, 2016 are as follows:

	Options Outstanding						Options Exercisable
	Number of		Remaining				Number of
	Options		Life		Exercise		Options		Exercise
	Outstanding		(Years)		Price		Exercisable		Price
March 31, 2016		792,034		7.8	$	2.84		376,925	$	3.04

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Description of Business - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016
Description Of Business [Line Items]
Date of incorporation	Jun. 27, 2003
Nevada Corporation
Description Of Business [Line Items]
Date of merger	Aug. 29, 2008

XML

Summary of Significant Accounting Policies - Additional Information (Detail)		3 Months Ended
	Mar. 30, 2016	Mar. 31, 2016 shares	Mar. 31, 2015 shares
Summary Of Significant Accounting Policies [Line Items]
Dilutive shares excluded from computation of earnings per share		5,732,109	18,495
March 30, 2016
Summary Of Significant Accounting Policies [Line Items]
Conversion and Exchange Ratio		The conversion and exchange ratios were adjusted for the effect of the reverse stock splits such that upon conversion each 2,100 shares of Series E Preferred Stock will now be converted into four shares of common stock and upon exercise each 2,100 warrants or options will now be converted into one share of common stock. The quantity of Series D and Subordination Warrants were not included in the reverse stock split and their outstanding quantities have not been adjusted. However, the conversion ratio has been adjusted such that upon exercise each 35 of the Series D and Subordination Warrants will now be converted into one share of common stock
March 30, 2016 | Common Stock
Summary Of Significant Accounting Policies [Line Items]
Reverse stock split ratio, Description		Each thirty-five shares of common stock was replaced with one share of common stock
Reverse stock split ratio	0.02857143

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Going Concern - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 29, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Liquidity Disclosure Going Concern [Abstract]
Net loss		$ (33,652,506)	$ (71,173,625)	$ 57,900,000
Accumulated deficit		$ (155,556,371)		$ (121,903,865)
Proceeds from issuance of preferred stock	$ 5,000,000

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Lease Commitments - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016 USD ($) ft²	Mar. 31, 2015 USD ($)
Operating Leased Assets [Line Items]
Sale-leaseback transaction lease term	At the end of each lease term, the leases shall automatically renew for twelve additional months unless certain conditions are met.
Amounts charged to expense under operating leases	$ 165,045	$ 74,268
First Agreement
Operating Leased Assets [Line Items]
Proceeds from sale leaseback	$ 2,500,000
Sale-leaseback transaction renewal period	36 months
Sale-leaseback transaction monthly payments	$ 74,875
Amortizing of capital lease	48 months
Second Agreement
Operating Leased Assets [Line Items]
Sale-leaseback transaction agreement date	Apr. 30, 2014
Proceeds from sale leaseback	$ 1,500,000
Sale-leaseback transaction renewal period	24 months
Sale-leaseback transaction monthly payments	$ 64,665
Amortizing of capital lease	36 months
Building Space Lease
Operating Leased Assets [Line Items]
Area Of Leased Space | ft²	33,000
Operating Leases Monthly Base Rent Expense	$ 21,226
Lease Expiration Date	Apr. 30, 2017
Office Space Lease
Operating Leased Assets [Line Items]
Area Of Leased Space | ft²	35,540
Aggregate lease, base	$ 3,472,875
Term of Contract	65 months

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Notes Payable - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Debt Instruments [Abstract]
Extinguishment of notes, final payment amount	$ 5,693	$ 11,969

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Convertible Notes Payable - Additional Information (Detail) - USD ($)		3 Months Ended
	Dec. 30, 2015	Mar. 31, 2016	Mar. 31, 2015
Debt Instrument [Line Items]
Warrants Exercisable		66,837,152
Amortization of Discount costs		$ 6,107,467	$ 25,000
Series D Warrant
Debt Instrument [Line Items]
Exercise price		$ 0.0027
Warrants Exercisable		3,503,116
Securities Purchase Agreement | Series D Warrant
Debt Instrument [Line Items]
Exercise price		$ 5.60
Warrants Exercisable		100,090
Subordination Warrants | Series D Warrant
Debt Instrument [Line Items]
Proceeds from issuance of convertible notes payable		$ 4,600,000
Remaining proceed from issuance of debt		13,800,000
Senior Secured Convertible Note
Debt Instrument [Line Items]
Convertible notes payable, principal		22,100,000
Debt instrument, original issue discount		13,828,816
Senior Secured Convertible Note | Securities Purchase Agreement
Debt Instrument [Line Items]
Convertible notes payable, principal	$ 22,100,000
Debt instrument, number shares to be issued upon conversion	3,946,429
Convertible debt, conversion price	$ 5.60
Senior Secured Convertible Note | Securities Purchase Agreement | Notes issued for cash
Debt Instrument [Line Items]
Convertible notes payable, principal	$ 20,000,000
Note agreement carrying value	18,400,000
Debt instrument, original issue discount	$ 1,600,000	20,000,000
Notes payable, interest rate	6.00%
Amortization of Discount costs		$ 6,107,467
Senior Secured Convertible Note | Securities Purchase Agreement | Notes issued upon exchange of outstanding Series C Warrants
Debt Instrument [Line Items]
Convertible notes payable, principal	$ 2,100,000
Conversion of stock, shares converted	1,050,000
Exercise price	$ 2.00

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Convertible Notes Payable - Summary of Convertible Notes Outstanding (Detail) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Net convertible note payable	$ 8,271,184
Less current portion	(8,271,184)	$ (1,638,717)
Convertible notes payable, long term		$ 525,000
Senior Secured Convertible Note
Debt Instrument [Line Items]
Convertible notes payable, principal	22,100,000
Debt discounts	$ (13,828,816)

XML

Notes Payable - Related Party - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2014	Mar. 31, 2016	Feb. 29, 2016
Related Party Transaction [Line Items]
Warrants Exercisable		66,837,152
Class A Warrant
Related Party Transaction [Line Items]
Warrants Exercisable		1,532,598
Preferred units issued as consideration, warrants price per share		$ 0.0027	$ 5.60
Class B Warrant
Related Party Transaction [Line Items]
Warrants Exercisable		1,310,956
Preferred units issued as consideration, warrants price per share		$ 0.0027	$ 5.60
Spring Forth Investments, LLC | Notes Payable To Related Party
Related Party Transaction [Line Items]
Convertible notes payable, principal	$ 500,000
Notes payable, interest rate	20.00%
Debt Instrument Frequency Of Periodic Payment		monthly
Note maturity date description		The original maturity date for the note was July 18, 2015, which was extended by the Company to July 18, 2016 by giving notice and paying an extension fee of $10,000.
Note extension fee amount	$ 10,000
Notes, maturity date	Jul. 18, 2015	Jul. 18, 2016
Prepaid interest	$ 25,000
Number of preferred units issued as consideration	4,000,000
Value of preferred units issued as consideration	$ 100,000
Preferred units issued as consideration, series D preferred shares	4,000,000
Preferred units issued as consideration, price per share	$ 0.025
Spring Forth Investments, LLC | Notes Payable To Related Party | Common Stock
Related Party Transaction [Line Items]
Conversion of stock, shares issued		10
Spring Forth Investments, LLC | Class A Warrant | Notes Payable To Related Party
Related Party Transaction [Line Items]
Warrants Exercisable	20,000
Preferred units issued as consideration, warrants price per share	$ 5.60
Spring Forth Investments, LLC | Class A Warrant | Notes Payable To Related Party | Common Stock
Related Party Transaction [Line Items]
Conversion of stock, shares issued		10
Spring Forth Investments, LLC | Class B Warrant | Notes Payable To Related Party
Related Party Transaction [Line Items]
Warrants Exercisable	20,000
Preferred units issued as consideration, warrants price per share	$ 5.60
Spring Forth Investments, LLC | Class B Warrant | Notes Payable To Related Party | Common Stock
Related Party Transaction [Line Items]
Conversion of stock, shares issued		10
Spring Forth Investments, LLC | Series D Convertible Preferred Stock | Notes Payable To Related Party
Related Party Transaction [Line Items]
Conversion of stock, shares converted		4,000,000

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Preferred Stock - Additional Information (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Class Of Stock [Line Items]
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares issued	74,380	88,347
Preferred stock, shares outstanding	74,380	88,347
Convertible Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized	5,000,000
Preferred stock, par value	$ 0.001
Series E Convertible Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares issued	74,380
Preferred stock, shares outstanding	74,380
Convertible preferred stock into common stock upon option of holders	142
Conversion of stock, shares converted	13,967
Series E Convertible Preferred Stock | Common Stock
Class Of Stock [Line Items]
Conversion of stock, shares converted	13,967
Conversion of stock, shares issued	27

XML

Common Stock - Additional Information (Detail) - USD ($)		3 Months Ended
	Feb. 24, 2016	Mar. 31, 2016	Mar. 31, 2015	Feb. 29, 2016	Dec. 31, 2015
Class Of Stock [Line Items]
Common stock, shares authorized		200,000,000			200,000,000
Common stock, par value		$ 0.0001			$ 0.0001
Common stock, shares issued		3,292,683			296,869
Common stock, shares outstanding		3,292,683			296,869
Common shares issued upon cashless exercise of warrants		1,520,888
Proceeds from warrants		$ 1,335,950	$ 88,000
IPO
Class Of Stock [Line Items]
Issuance of stock	39,200,000
Proceeds from Issuance of Initial Public Offering	$ 5,000,000
Underwriters Unit Purchase Option
Class Of Stock [Line Items]
Common shares issued upon exercise of warrants		354,899
Warrants exercised		121,540
Preferred units issued as consideration, warrants price per share		$ 11.00
Proceeds from warrants		$ 1,335,950
Common Stock | IPO
Class Of Stock [Line Items]
Number of shares included in preferred unit	1
Series E Convertible Preferred Stock
Class Of Stock [Line Items]
Common shares issued upon exercise of warrants		27
Conversion of stock, shares converted		13,967
Series E Convertible Preferred Stock | Underwriters Unit Purchase Option
Class Of Stock [Line Items]
Warrants exercised		121,540
Conversion of stock, shares issued		232
Series E Convertible Preferred Stock | Common Stock
Class Of Stock [Line Items]
Conversion of stock, shares issued		27
Conversion of stock, shares converted		13,967
Series D Warrant
Class Of Stock [Line Items]
Preferred units issued as consideration, warrants price per share		$ 0.0027
Series D Warrant | Common Stock
Class Of Stock [Line Items]
Preferred units issued as consideration, warrants price per share		$ 5.60		$ 7.00
Series C Warrant
Class Of Stock [Line Items]
Cashless exercise of warrants		5,091,815
Share issued upon exercise of option		1,520,888
Conversion of stock, shares converted		138,158
Series C Warrant | Underwriters Unit Purchase Option
Class Of Stock [Line Items]
Warrants exercised		972,320
Share issued upon exercise of option		354,667
Series C Warrant | Common Stock
Class Of Stock [Line Items]
Issuance of stock		15,182
Series E Warrants [Member]
Class Of Stock [Line Items]
Preferred units issued as consideration, warrants price per share		$ 0.25		$ 8.75
Common shares issued, price per share	$ 6.82	7.17
Series E Warrants [Member] | IPO
Class Of Stock [Line Items]
Number of shares included in preferred unit	52.5
Common shares issued, price per share	$ 8.75
Warrants expiration	6 years
Series E Warrants [Member] | Common Stock | IPO
Class Of Stock [Line Items]
Issuance of stock	1,120,000
Securities Purchase Agreement | Series D Warrant
Class Of Stock [Line Items]
Preferred units issued as consideration, warrants price per share		$ 5.60
Notes issued upon exchange of outstanding Series C Warrants | Securities Purchase Agreement | Series D Warrant
Class Of Stock [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance		2,428,572

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Warrants - Warrants Outstanding and Exercisable (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2016	Feb. 29, 2016
Class Of Warrant Or Right [Line Items]
Warrants outstanding	66,789,624
Warrants Exercisable	66,837,152
Share of Common stock underlying Warrant	1,785,260
Class A Warrant
Class Of Warrant Or Right [Line Items]
Warrants outstanding	1,532,598
Warrants Exercisable	1,532,598
Exercise price	$ 0.0027	$ 5.60
Share of Common stock underlying Warrant	755
Exercise Price Per One Common Share	$ 5.60
Class B Warrant
Class Of Warrant Or Right [Line Items]
Warrants outstanding	1,310,956
Warrants Exercisable	1,310,956
Exercise price	$ 0.0027	5.60
Share of Common stock underlying Warrant	640
Exercise Price Per One Common Share	$ 5.60
Series B Warrant
Class Of Warrant Or Right [Line Items]
Warrants outstanding	1,074,082
Warrants Exercisable	1,074,082
Exercise price	$ 8.04	$ 16,873.50
Share of Common stock underlying Warrant	530
Exercise Price Per One Common Share	$ 16,873.50
Series D Warrant
Class Of Warrant Or Right [Line Items]
Warrants outstanding	3,503,116
Warrants Exercisable	3,503,116
Exercise price	$ 0.0027
Share of Common stock underlying Warrant	100,090
Exercise Price Per One Common Share	$ 5.60
Warrants Expiration	2021-06
Series E Warrants [Member]
Class Of Warrant Or Right [Line Items]
Warrants outstanding	58,800,000
Warrants Exercisable	58,800,000	1,680,000
Exercise price	$ 0.25	$ 8.75
Share of Common stock underlying Warrant	1,680,000
Exercise Price Per One Common Share	$ 8.75
Warrants Expiration	2022-02
Subordination
Class Of Warrant Or Right [Line Items]
Warrants outstanding	105,516
Warrants Exercisable	105,516
Exercise price	$ 0.0027
Share of Common stock underlying Warrant	3,015
Exercise Price Per One Common Share	$ 5.60
Warrants Expiration	2021-06
Common Warrants
Class Of Warrant Or Right [Line Items]
Warrants outstanding	463,356
Warrants Exercisable	463,356
Share of Common stock underlying Warrant	230
Minimum | Class A Warrant
Class Of Warrant Or Right [Line Items]
Warrants Expiration	2021-04
Minimum | Class B Warrant
Class Of Warrant Or Right [Line Items]
Warrants Expiration	2012-04
Minimum | Series B Warrant
Class Of Warrant Or Right [Line Items]
Warrants Expiration	2021-03
Minimum | Common Warrants
Class Of Warrant Or Right [Line Items]
Exercise price	$ 0.0027
Exercise Price Per One Common Share	$ 5.60
Warrants Expiration	2016-04
Maximum | Class A Warrant
Class Of Warrant Or Right [Line Items]
Warrants Expiration	2021-07
Maximum | Class B Warrant
Class Of Warrant Or Right [Line Items]
Warrants Expiration	2021-07
Maximum | Series B Warrant
Class Of Warrant Or Right [Line Items]
Warrants Expiration	2021-07
Maximum | Common Warrants
Class Of Warrant Or Right [Line Items]
Exercise price	$ 32.00
Exercise Price Per One Common Share	$ 67,200.00
Warrants Expiration	2021-07

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Warrants - Class A Warrants - Additional Information (Detail) - $ / shares	Mar. 31, 2016	Feb. 29, 2016
Class A Warrant
Class Of Warrant Or Right [Line Items]
Exercise price	$ 0.0027	$ 5.60

XML

Warrants - Class B Warrants - Additional Information (Detail) - $ / shares	Mar. 31, 2016	Feb. 29, 2016
Class B Warrant
Class Of Warrant Or Right [Line Items]
Exercise price	$ 0.0027	$ 5.60

XML

Warrants - Series B Warrants - Additional Information (Detail) - $ / shares	Mar. 31, 2016	Feb. 29, 2016
Series B Warrant
Class Of Warrant Or Right [Line Items]
Exercise price	$ 8.04	$ 16,873.50

XML

Warrants - Series C Warrants - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016 USD ($) shares
Class Of Warrant Or Right [Line Items]
Warrants outstanding	66,789,624
Series C Warrant
Class Of Warrant Or Right [Line Items]
Cashless exercise of warrants	5,229,973
Proceeds from Options Exercised | $	$ 314,879
Cashless exercise of warrants	5,091,815
Conversion of stock, shares converted	138,158
Share issued upon exercise of option	1,520,888
Warrants outstanding	47,528
Series C Warrant | Common Stock
Class Of Warrant Or Right [Line Items]
Shares, new Issues	15,182

XML

Warrants - Series D Warrants - Additional Information (Detail) - Series D Warrant - $ / shares	Mar. 31, 2016	Feb. 29, 2016
Class Of Warrant Or Right [Line Items]
Exercise price	$ 0.0027
Common Stock
Class Of Warrant Or Right [Line Items]
Exercise price	$ 5.60	$ 7.00

XML

Warrants - Series E Warrants - Additional Information (Detail) - $ / shares	1 Months Ended
	Feb. 29, 2016	Mar. 31, 2016
Class Of Warrant Or Right [Line Items]
Warrants Exercisable		66,837,152
Series E Warrants [Member]
Class Of Warrant Or Right [Line Items]
Warrants Exercisable	1,680,000	58,800,000
Exercise price	$ 8.75	$ 0.25
Percentage of common stock issuable upon exercise of Warrants	200.00%
Series E Warrants [Member] | Senior Secured Convertible Note | Securities Purchase Agreement
Class Of Warrant Or Right [Line Items]
Percentage of common stock outstanding	7.00%

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Warrants - Subordination Warrants - Additional Information (Detail) - $ / shares	Mar. 31, 2016	Feb. 29, 2016
Common Stock | Subordination Warrants
Class Of Warrant Or Right [Line Items]
Exercise price	$ 5.60	$ 7.00

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Warrants - Common Warrants - Additional Information (Detail) - $ / shares	Mar. 31, 2016	Feb. 29, 2016	Dec. 31, 2015
Common Stock Warrants
Class Of Warrant Or Right [Line Items]
Exercise price	$ 0.39	$ 5.60	$ 2.71

XML

Warrants - Common Stock Warrants Activity (Detail) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Class Of Warrant Or Right [Line Items]
Warrants, Ending Balance	66,789,624
Common Stock Warrants
Class Of Warrant Or Right [Line Items]
Warrants, Beginning Balance	13,219,597
Warrants Granted	58,800,000
Warrants Exercised	(5,229,973)
Warrants, Ending Balance	66,789,624	13,219,597
Weighted Average Exercise Price, Warrants Outstanding Beginning Balance	$ 2.71
Weighted Average Exercise Price, Granted	0.25
Weighted Average Exercise Price, Exercised	2.55
Weighted Average Exercise Price, Warrants Outstanding Ending Balance	$ 0.39	$ 2.71
Weighted Average Remainder Contractual Term in Years, Warrants Outstanding	5 years 9 months 18 days	4 years 8 months 12 days
Warrants Weighted Average Remainder Contractual Terms Granted	5 years 10 months 24 days

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Warrants - underwriters Unit Purchase Options - Additional Information (Detail) - Underwriters Unit Purchase Option	3 Months Ended
	Mar. 31, 2016 USD ($) shares
Class Of Warrant Or Right [Line Items]
Warrants exercised	121,540
Series C Warrant
Class Of Warrant Or Right [Line Items]
Warrants exercised	972,320
Warrant exercise for cash | $	$ 1,335,950
Warrants and rights outstanding	0

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Derivative Liabilities - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Dec. 31, 2015	Mar. 31, 2016	Feb. 29, 2016
Derivative [Line Items]
Valuation method		The Black-Scholes option-pricing model
Derivative liability fair value	$ 43,181,472	$ 21,011,177
Warrants Exercisable		66,837,152
Warrants issuance, fair value		$ 5,091,677
Subordination Warrants
Derivative [Line Items]
Warrant to acquire common stock	3,015
Senior Secured Convertible Note | Securities Purchase Agreement | Embedded Derivative Financial Instruments
Derivative [Line Items]
Fair value of conversion feature		35,096,383
Class A And Class B Warrants
Derivative [Line Items]
Derivative liability fair value		$ 13,500
Class A Warrant
Derivative [Line Items]
Warrant, fair value		$ 7.17
Warrants Exercisable		1,532,598
Class B Warrant
Derivative [Line Items]
Warrant, fair value		$ 7.17
Warrants Exercisable		1,310,956
Series B Warrant
Derivative [Line Items]
Warrant, fair value		$ 7.17
Warrants Exercisable		1,074,082
Common Warrants
Derivative [Line Items]
Warrant, fair value		$ 7.17
Warrants Exercisable		463,356
Series D Warrant
Derivative [Line Items]
Warrant to acquire common stock	100,090
Warrants Exercisable		3,503,116
Series D Warrant | Securities Purchase Agreement
Derivative [Line Items]
Warrants Exercisable		100,090
Series D Warrant | Subordination Warrants | Embedded Derivative Financial Instruments
Derivative [Line Items]
Warrants, fair value		$ 9,019,277
Series E Warrants [Member]
Derivative [Line Items]
Warrants, fair value		$ 11,978,400
Warrants Exercisable		58,800,000	1,680,000
Warrants issuance, fair value		$ 11,390,400

XML

Derivative Liabilities - Assumptions Used to Calculate Fair Value (Detail) - $ / shares			3 Months Ended
		Feb. 24, 2016	Mar. 31, 2016
Series D Warrant
Fair Value Assumptions and Methodology for Liabilities [Abstract]
Expected dividend yield			0.00%
Series E Warrants [Member]
Fair Value Assumptions and Methodology for Liabilities [Abstract]
Trading price of common stock on measurement date		$ 6.82	$ 7.17
Conversion price / Exercise price	[1]	$ 8.75	$ 8.75
Risk free interest rate	[2]	2.73%	2.75%
Contractual Term		6 years 4 days	5 years 10 months 28 days
Expected volatility	[3]	225.00%	230.00%
Expected dividend yield			0.00%
Subordination Warrants | Series D Warrant
Fair Value Assumptions and Methodology for Liabilities [Abstract]
Trading price of common stock on measurement date			$ 7.17
Conversion price / Exercise price	[4]		$ 5.60
Risk free interest rate	[2]		1.21%
Contractual Term			5 years 3 months
Expected volatility	[3]		230.00%
Convertible Notes Payable
Fair Value Assumptions and Methodology for Liabilities [Abstract]
Trading price of common stock on measurement date			$ 7.17
Conversion price / Exercise price	[5]		$ 4.05
Risk free interest rate	[6]		0.59%
Contractual Term			1 year 29 days
Expected volatility	[3]		251.00%
Expected dividend yield	[7]		0.00%

[1] The exercise price of the Series E Warrants as defined in the warrant agreement.

[2] The risk-free interest rate was determined by management using the 5-year Treasury Bill as of the respective measurement date.

[3] The volatility factor was estimated by using the historical volatilities of the Company’s trading history.

[4] The exercise price of the Series D and Subordination Warrants as defined in the warrant agreement.

[5] The conversion price of the convertible notes was calculated based on the formula in the Notes agreement as of the respective measurement date

[6] The risk-free interest rate was determined by management using the 1-year Treasury Bill as of the respective measurement date.

[7] Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

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Derivative Liabilities - Assumptions Used to Calculate Fair Value (Parenthetical) (Detail)			3 Months Ended
		Feb. 24, 2016	Mar. 31, 2016
Series D Warrant
Derivative [Line Items]
Dividend yield			0.00%
Conversion feature, threshold consecutive trading days			5 days
Series E Warrants [Member]
Derivative [Line Items]
Contractual Term		6 years 4 days	5 years 10 months 28 days
Dividend yield			0.00%
Convertible Notes Payable
Derivative [Line Items]
Contractual Term			1 year 29 days
Dividend yield	[1]		0.00%
US Treasury Bill Securities [Member] | Series D Warrant
Derivative [Line Items]
Contractual Term			5 years
US Treasury Bill Securities [Member] | Series E Warrants [Member]
Derivative [Line Items]
Contractual Term			5 years
US Treasury Bill Securities [Member] | Convertible Notes Payable
Derivative [Line Items]
Contractual Term			1 year

[1] Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future.

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Derivative Liabilities - Summary of Change in the Value of the Warrant Derivative Liability (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Balance at beginning of period	$ 43,181,472
Issuance of warrants	5,091,677
Exercise of warrants and options	(12,384,852)
Change in fair value of derivative liability	20,219,263	$ 66,994,149
Balance at end of period	$ 56,107,560

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Employee Stock Options - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016 USD ($) CompensationPlan shares	Dec. 31, 2015 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Equity based compensation expense | $	$ 37,045
Unrecognized compensation cost related to stock option | $	$ 371,862
Remaining vesting period of stock option	2 years 5 months 16 days
Intrinsic value of outstanding and vested stock options | $	$ 0
2014 Omnibus Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock options, outstanding	125
Share-based compensation arrangement award number of common stock remain available for issuance	1,275
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock options, outstanding	792,034	792,534
Number of shares exercisable	376,925
Stock options, maturity period	10 years
Number of stock based compensation plans | CompensationPlan	3
Employee Stock Option | Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares exercisable	419
Employee Stock Option | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Option vesting period	3 years
Employee Stock Option | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Option vesting period	4 years

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Employee Stock Options - Summary of Stock Option Activity (Detail) - Employee Stock Option - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of stock options, outstanding	792,534
Number of options, forfeited	500
Number of stock options, outstanding	792,034	792,534
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Balance	$ 2.84
Weighted Average Option Exercise Price, forfeited	2.00
Balance	$ 2.84	$ 2.84
Shares of Common Stock Underlying the Option [Abstract]
Total shares of common stock underlying the option, outstanding	420
Total shares of common stock underlying the option, forfeited	1
Total shares of common stock underlying the option, outstanding	419	420
Aggregate Exercise Price for One Common Share [Abstract]
Aggregate exercise price for one common share, options outstanding	$ 5,964.00	$ 5,964.00
Aggregate exercise price for one common share, options forfeited	$ 4,200.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted average remaining contractual term in Years, outstanding	7 years 9 months 18 days	8 years

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Employee Stock Options - Summary of Stock Options Outstanding and Exercisable (Detail) - Employee Stock Option - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock options, outstanding	792,034	792,534
Options Outstanding , Remaining Life (Years)	7 years 9 months 18 days
Options Outstanding , Exercise Price	$ 2.84	$ 2.84
Options Exercisable , Number of Options Exercisable	376,925
Options Exercisable , Exercise Price	$ 3.04

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Subsequent Events - Additional Information (Detail)	May. 02, 2016 USD ($)	May. 11, 2016 USD ($)	Apr. 07, 2016 shares	Mar. 31, 2016 USD ($) shares	Dec. 30, 2015 USD ($)
Subsequent Event [Line Items]
Outstanding warrants				66,789,624
Shares of common stock underlying warrant				1,785,260
Senior Secured Convertible Note
Subsequent Event [Line Items]
Convertible notes payable, principal | $				$ 22,100,000
Senior Secured Convertible Note | Securities Purchase Agreement
Subsequent Event [Line Items]
Convertible notes payable, principal | $					$ 22,100,000
Series E Warrants [Member]
Subsequent Event [Line Items]
Outstanding warrants				58,800,000
Shares of common stock underlying warrant				1,680,000
Subsequent Event
Subsequent Event [Line Items]
Funds from the restricted cash accounts | $	$ 1,000,000
Subsequent Event | Senior Secured Convertible Note | Securities Purchase Agreement
Subsequent Event [Line Items]
Convertible notes payable, principal | $		$ 22,100,000
Subsequent Event | Series E Warrants [Member]
Subsequent Event [Line Items]
Common shares issued in exchange of warrants			650,160
Outstanding warrants			58,800,000
Shares of common stock underlying warrant			1,680,000
Common stock exchange ratio			0.387
Subsequent Event | Series E Warrants [Member] | Warrants Cancelled [Member]
Subsequent Event [Line Items]
Outstanding warrants			0
Warrants issued			0