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December 12, 2019
Evan Jones
Chief Executive Officer
OpGen, Inc.
708 Quince Orchard Road, Suite 205
Gaithersburg, MD 20878
Re: OpGen, Inc.
Registration Statement on Form S-4
Filed November 12, 2019
File No. 333-234657
Dear Mr. Jones:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed November 12, 2019
Cover Page
1. Please disclose the expected ownership percentages of Curetis N.V. and
OpGen
shareholders.
2. We note that you will be issuing 2,662,564 shares of Common Stock as the
sole
consideration pursuant to the Implementation Agreement. Please revise
the cover page to
provide the approximate value of the merger consideration. Please also
disclose that the
market value of the shares to be issued could vary significantly from
the market value as
of the date of the proxy statement/prospectus.
Evan Jones
FirstName LastNameEvan Jones
OpGen, Inc.
Comapany12, 2019
December NameOpGen, Inc.
Page 2
December 12, 2019 Page 2
FirstName LastName
Proxy Statement/Prosepctus Summary
OpGen, page 1
3. We note that in July 2019, you received an Additional Information
Request from the FDA
detailing a number of questions relating to your 510(k) application
for your Acuitas AMR
Gene Panel (Isolates) diagnostic test. Please expand your disclosure
here, and in the risk
factor on page 13, to describe the additional information requested.
What is required to consummate the Transaction?, page 42
4. Please revise to identify the conditions that the parties may waive.
Background of the Transaction, page 49
5. Please revise your disclosure throughout this section to provide
greater detail as to the
background of the transaction, including the material issues discussed
and key negotiated
terms. The disclosure should provide shareholders with an
understanding of how, when,
and why the material terms of your proposed transaction evolved and
why this transaction
is being recommended as opposed to any alternatives. In your revised
disclosure, please
ensure that you address the following:
the material terms for any proposals and subsequent proposals and
counter offers;
valuations;
negotiation of the transaction documents and the parties involved;
and
at what point other strategic alternatives were eliminated from
consideration.
6. With reference to the disclosure on page 52 regarding the 19 companies
that executed
non-disclosure agreements and received the CIM, as well as the
conversations and
evaluation of potential transactions with the entities described in
this paragraph, please
revise to clarify whether any proposals were received. If proposals
were received, please
revise to disclose the material terms.
7. We note the disclosure on page 3 that the number of shares
representing the Consideration
would equal 32.3% of the outstanding shares of OpGen common stock.
Please revise the
disclosure on page 55 to explain how the equity allocation of 72.5%
contained in the
principal term sheet evolved into 32.3%.
8. Please supplementally provide us with copies of all materials prepared
by Crosstree and
shared with your board of directors and their representatives,
including copies of all board
books and all transcripts and summaries, that were material to the
board's decision to
approve the Implementation Agreement.
Opinion of OpGen's Financial Advisor, page 57
9. In the analyses where Crosstree examined selected companies or
transactions for the
purposes of comparison, please disclose whether any companies or
transactions that met
the selection criteria were excluded from the analysis and why.
Evan Jones
FirstName LastNameEvan Jones
OpGen, Inc.
Comapany12, 2019
December NameOpGen, Inc.
Page 3
December 12, 2019 Page 3
FirstName LastName
Public Trading Multiples Analysis, page 59
10. We note your disclosure that some of the companies used in the Public
Trading Multiples
Analysis may have financial and operating characteristics that are
materially different
from those of OpGen. For each of the companies used by Crosstree for
their analysis,
please disclose the underlying data for the companies such as the
number of products or
services and whether such products and services have received
marketing clearance in the
United States.
Discounted Cash Flow Analysis, page 61
11. We note the description of the discounted cash flow analysis prepared
by Crosstree. We
further note that Crosstree relied on projections prepared by OpGen's
management when
preparing the discounted cash flow analysis. Please revise your
description of this
analysis to disclose the projections used.
Unaudtied Pro Forma Condensed Combined Financial Information, page 81
12. Please provide an analysis that describes how you considered and that
clearly explains
how you weighted each of the following factors in concluding that
OpGen was the
accounting acquirer in the planned Transaction, giving particular
detail on
possible reduction in the 67.7% ownership interest deemed to be held
by OpGen
shareholders:
the number of shares to be issued to Curetis N.V. under the
Implementation
Agreement;
the number of units and pre-funded units sold in the October 2019
Offering;
the disclosure that the percentage of voting rights held by
OpGen's stockholders will
continue to constitute a majority of the voting rights of the
combined company after
the October 2019 Offering and after closing under the
Implementation Agreement,
currently estimated at 67.7%;
the contractual right held by Curetis N.V. to designate a
majority of the members of
the initial board of directors of OpGen after the closing;
the change in the chief executive officer of OpGen after the
closing to be the chief
executive officer of Curetis N.V;
the retention of the chief financial officer of OpGen as the
chief financial officer of
Newco; and
the agreement between OpGen and Curetis N.V. to add a seventh
director to the
OpGen Board of Directors following the closing of the
Transaction, with such person
recommended by OpGen.
As part of your response, describe the background behind each of the
following
disclosures and describe how these concerns may impact your accounting
treatment as of
the date of the execution of the Implementation Agreement.
Evan Jones
OpGen, Inc.
December 12, 2019
Page 4
"The consummation of the October 2019 Offering had a substantial
impact on the
final determination as to the accounting treatment of the
business combination."
(page 81)
"The pro forma adjustments are preliminary, subject to further
revision as additional
information becomes available and additional analyses are
performed including but
not limited to final assessment of the accounting acquirer...and
could have a material
impact on the accompanying unaudited pro forma condensed combined
financial
information and the combined company's future results of
operations and financial
position." (page 82)
"This anticipated accounting treatment differs from the
anticipated accounting
treatment as of the date of the execution of the Implementation
Agreement, primarily
as a result of the dilution caused by the October 2019 Offering."
(page 62)
Curetis' Business
Curetis' Partnering and Collaboration Agreements, page 140
13. For each agreement discussed in this section, please expand your
disclosure to include the
material terms including financial terms, duration of the agreements
and royalty terms,
and termination provisions. Please also file these agreements as
exhibits or tell us why
you are not required to do so. See Item 601(b)(10) of Regulation S-K.
Acquisition Agreements, page 143
14. For your GEAR asset acquisition, please expand your disclosure to
include the material
terms including financial terms (including the aggregate milestone
payments and royalty
rate or range not to exceed ten percent) and the duration of the
royalty term. Please also
file the GEAR and Gyronimo acquisition agreements as exhibits or tell
us why you are not
required to do so. See Item 601(b)(10) of Regulation S-K.
Patents, page 160
15. We note that you have 148 issued patents and patent applications in
various jurisdictions.
Please revise to disclose for each material patent and patent
application the specific
product(s) to which such patents or patent applications relate, the
type of patent
protection, and applicable jurisdictions.
Material U.S. Federal Income Tax Consequences, page 184
16. We note your disclosure that if the parties' tax treatment of the
Transaction is respected,
the Transaction will not give rise to the recognition of gain or losses
to you or your
stockholders for U.S. federal income tax purposes. Please file a tax
opinion as an exhibit
FirstName LastNameEvan Jones
to the filing or provide us your analysis why the tax consequences are
not material to an
Comapany NameOpGen, Inc.no tax opinion is required to be filed. Refer to Item
601(b)(8) of
investor and therefore
December 12, 2019 Page 4 Section III.A.2 of Staff Legal Bulletin 19.
Regulation S-K and
FirstName LastName
Evan Jones
FirstName LastNameEvan Jones
OpGen, Inc.
Comapany12, 2019
December NameOpGen, Inc.
December 12, 2019 Page 5
Page 5
FirstName LastName
Anti-Takeover Effects of Our Certificate of Incorporation, Bylaws and Delaware
Law
Exclusive Jurisdiction for Certain Actions, page 191
17. We note that your forum selection provision identifies the Court of
Chancery of the State
of Delaware as the sole and exclusive forum for certain litigation,
including any
"derivative action." Please disclose whether this provision applies to
actions arising under
the Securities Act or Exchange Act. In that regard, we note that
Section 27 of the
Exchange Act creates exclusive federal jurisdiction over all suits
brought to enforce any
duty or liability created by the Exchange Act or the rules and
regulations thereunder, and
Section 22 of the Securities Act creates concurrent jurisdiction for
federal and state courts
over all suits brought to enforce any duty or liability created by the
Securities Act or the
rules and regulations thereunder. If the provision applies to
Securities Act claims, please
also revise your prospectus to state that there is uncertainty as to
whether a court would
enforce such provision and that investors cannot waive compliance with
the federal
securities laws and the rules and regulations thereunder. If this
provision does not apply
to actions arising under the Securities Act or Exchange Act, please
also ensure that the
exclusive forum provision in the governing documents states this
clearly, or tell us how
you will inform investors in future filings that the provision does
not apply to any actions
arising under the Securities Act or Exchange Act.
Exhibits
18. Please file the EIB Finance Contract as an exhibit, or tell us why you
do not believe it is
required to be filed. Refer to Item 601(b)(10) of Regulation S-K.
General
19. We note your statement under "References to Additional Information"
following the
Cover Page, that you state that you "do not make any representation as
to the accuracy of
the information" in the industry publications and research, surveys
and studies conducted
by third parties. This statement appears to disclaim the issuer's
responsibility for
information in the registration statement. Please revise.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Evan Jones
OpGen, Inc.
December 12, 2019
Page 6
You may contact Franklin Wyman at 202-551-3660 or Kevin Vaughn at
202-551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jeffrey Gabor at 202-551-2544 or Mary Beth Breslin at 202-551-3625 with
any other
questions.
Sincerely,
FirstName LastNameEvan Jones
Division of
Corporation Finance
Comapany NameOpGen, Inc.
Office of Life
Sciences
December 12, 2019 Page 6
cc: Mary J. Mullany, Esq.
FirstName LastName