UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended March 31, 2024

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

For the transition period from __________ to __________

Commission File Number 001-37367

OPGEN, INC.

(Exact name of registrant as specified in its charter)

Delaware		06-1614015
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

23219 Stringtown Road, Suite 300, Clarksburg, MD		20871
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (240) 813-1260

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class		Trading Symbols		Name of each exchange on which registered
Common Stock		OPGN		Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by 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 ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

1,348,974 shares of the Company’s common stock, par value $0.01 per share, were outstanding as of July 5, 2024.

OPGEN, INC.

TABLE OF CONTENTS FOR FORM 10-Q

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS		ii

PART I.	FINANCIAL INFORMATION	1

Item 1.	Unaudited Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023	2
	Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the three months ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION	40

Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41

SIGNATURES		42

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q of OpGen, Inc. contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In this quarterly report, we refer to OpGen, Inc. as the “Company,” “we,” “our” or “us.” All statements other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect” or the negative version of these words and similar expressions are intended to identify forward-looking statements.

We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part I Item 1A “Risk Factors” of our most recent annual report on Form 10-K and any risk factors included in Part II Item 1A “Risk Factors” of this quarterly report on Form 10-Q. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances included herein may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

●

our liquidity and working capital requirements, including our cash requirements over the next 12 months;

●

our ability to maintain compliance with the ongoing listing requirements for the Nasdaq Capital Market;

●

our ability to execute upon and achieve the benefits of the strategic direction under the Company’s new leadership and Board;

●

our ability to identify and realize the benefits of potential strategic transactions;

●

adverse effects on our business condition and results of operations from general economic and market conditions and overall fluctuations in the United States and international markets, including deteriorating market conditions due to investor concerns regarding inflation;

●

our use of proceeds from capital financing transactions;

●

compliance with the U.S. regulations applicable to our business; and

●

our expectations regarding future revenue and expenses.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. These risks should not be construed as exhaustive and should be read in conjunction with our other disclosures, including but not limited to the risk factors described in Part I Item 1A “Risk Factors” of our most recent annual report on Form 10-K and any risk factors included in Part II, Item 1A of this quarterly report. Other risks may be described from time to time in our filings made under the securities laws. New risks emerge from time to time. It is not possible for our management to predict all risks. All forward-looking statements in this quarterly report speak only as of the date made and are based on our current beliefs and expectations. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

NOTE REGARDING TRADEMARKS

We own various U.S. federal trademark registrations and applications and unregistered trademarks and servicemarks, including but not limited to OpGen^® and Acuitas^®. All other trademarks, servicemarks or trade names referred to in this quarterly report are the property of their respective owners. Solely for convenience, the trademarks and trade names in this quarterly report are sometimes referred to without the ^® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies, products or services.

Part I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

OpGen, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)


	March 31, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	267,493		$	1,151,823
Accounts receivable, net		37,968			103,316
Prepaid expenses and other current assets		227,112			324,735
Total current assets		532,573			1,579,874
Finance lease right-of-use assets, net		-			138
Indemnification assets		2,135,545			-
Other noncurrent assets		302,262			302,262
Total assets	$	2,970,380		$	1,882,274

Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable	$	191,575		$	111,149
Accrued compensation and benefits		47,828			127,601
Accrued liabilities		378,586			135,476
Deferred revenue		8,571			25,926
EIB loan guaranty		10,920,451			10,873,867
Short-term finance lease liabilities		-			280
Short-term operating lease liabilities		154,117			147,943
Total current liabilities		11,701,128			11,422,242
Long-term operating lease liabilities, net of short-term amount		1,981,428			2,021,616
Total liabilities		13,682,556			13,443,858

Commitments and contingencies (Note 8)

Stockholders’ deficit
Series D convertible preferred stock, $0.01 par value; 1,000 shares authorized; 250 shares issued and outstanding at March 31, 2024 and December 31, 2023		2			2,500
Series E convertible preferred stock, $0.01 par value; 3,000,000 shares authorized; 200,000 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		2,000			-
Common stock, $0.01 par value; 100,000,000 shares authorized; 1,303,739 and 1,282,686 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		13,037			12,827
Additional paid-in capital		294,380,054			293,991,529
Accumulated deficit		(305,107,269	)		(305,493,302	)
Accumulated other comprehensive loss		-			(75,138	)
Total stockholders’ deficit		(10,712,176	)		(11,561,584	)
Total liabilities and stockholders’ deficit	$	2,970,380		$	1,882,274

See accompanying notes to unaudited condensed consolidated financial statements.

OpGen, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited)


	Three months ended March 31,
	2024			2023
Revenue
Product sales	$	141,373		$	410,897
Laboratory services		26,776			21,673
Collaboration revenue		-			480,874
Total revenue		168,149			913,444

Operating expenses
Cost of products sold		73,236			592,378
Cost of services		1,575			128,306
Research and development, net		25,856			1,812,831
General and administrative		1,642,054			2,423,953
Sales and marketing		128,646			1,026,087
Total operating expenses		1,871,367			5,983,555

Operating loss		(1,703,218	)		(5,070,111	)

Other income (expense)
Interest and other income		9			30,106
Gain on lease indemnification		2,135,545			-
Interest expense		-			(617,298	)
Foreign currency transaction gains (losses)		281			(91,994	)
Change in fair value of derivative financial instruments		-			12,694
Change in fair value of EIB loan guaranty		(46,584	)		-
Total other income (expense)		2,089,251			(666,492	)

Income (loss) before income taxes		386,033			(5,736,603	)
Provision for income taxes		-			-
Net income (loss)	$	386,033		$	(5,736,603	)
Net income (loss) allocated to preferred stockholders		(113,225	)		-
Net income (loss) available to common stockholders	$	272,808		$	(5,736,603	)

Earnings (loss) per share attributable to common stockholders
Basic	$	0.212		$	(12.53	)
Diluted	$	0.207		$	(12.53	)

Weighted average shares outstanding
Basic		1,284,305			457,727
Diluted		1,331,578			457,727

Net income (loss)	$	386,033		$	(5,736,603	)
Other comprehensive income - foreign currency translation		-			153,067
Comprehensive income (loss)	$	386,033		$	(5,583,536	)

See accompanying notes to unaudited condensed consolidated financial statements.

OpGen, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity

(unaudited)


	Common Stock						Preferred Stock					Additional			Accumulated Other Comprehensive
	Number of Shares			Amount			Number of Shares		Amount			Paid-in Capital			Income (Loss)			Accumulated Deficit			Total
Balances at December 31, 2022		289,992		$	2,900			-	$	-		$	281,193,260		$	(795,840	)	$	(272,824,772	)	$	7,575,548
Issuance of RSUs		1,163			12			-		-			(12	)		-			-			-
Stock compensation expense		-			-			-		-			211,122			-			-			211,122
Offering of common stock and warrants, net of issuance costs		258,621			2,586			-		-			6,971,464			-			-			6,974,050
Share cancellation		(220	)		(2	)		-		-			2			-			-			-
Foreign currency translation		-			-			-		-			-			153,067			-			153,067
Net loss		-			-			-		-			-			-			(5,736,603	)		(5,736,603	)
Balances at March 31, 2023		549,556		$	5,496			-	$	-		$	288,375,836		$	(642,773	)	$	(278,561,375	)	$	9,177,184

Balances at December 31, 2023		1,282,686		$	12,827			250	$	2,500		$	293,991,529		$	(75,138	)	$	(305,493,302	)	$	(11,561,584	)
Issuance of RSUs		21,053			210			-		-			(210	)		-			-			-
Stock compensation expense		-			-			-		-			188,237			-			-			188,237
Offering of preferred stock		-			-			200,000		2,000			198,000			-			-			200,000
Reclassification of preferred stock par value to additional paid-in capital (out of period adjustment; see Note 3)		-			-			-		(2,498	)		2,498			-			-			-
Elimination of translation adjustments of previously dissolved subsidiaries (out of period adjustment; see Note 3)		-			-			-		-			-			75,138			-			75,138
Net income		-			-			-		-			-			-			386,033			386,033
Balances at March 31, 2024		1,303,739		$	13,037			200,250	$	2,002		$	294,380,054		$	-		$	(305,107,269	)	$	(10,712,176	)

See accompanying notes to unaudited condensed consolidated financial statements.

OpGen, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Three months ended March 31,
	2024			2023
Cash flows from operating activities
Net income (loss)	$	386,033		$	(5,736,603	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		138			350,452
Non-cash interest expense		-			456,679
Gain on lease indemnification		(2,135,545	)		-
Stock compensation expense		188,237			211,122
Change in inventory reserve		(13,240	)		256,814
Loss on deconsolidation of subsidiaries		75,138			-
Change in fair value of derivative liabilities		-			(12,694	)
Change in fair value of EIB loan guaranty		46,584			-
Changes in operating assets and liabilities
Accounts receivable		65,348			(142,177	)
Inventory		13,240			(195,029	)
Other assets		97,623			3,498
Accounts payable		80,426			(157,139	)
Accrued compensation and other liabilities		129,323			100,388
Deferred revenue		(17,355	)		(97,929	)
Net cash used in operating activities		(1,084,050	)		(4,962,618	)

Cash flows from investing activities
Purchases of property and equipment		-			(330,446	)
Net cash used in investing activities		-			(330,446	)

Cash flows from financing activities
Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs		-			6,974,050
Proceeds from issuance of preferred stock		200,000			-
Payments on debt		-			(2,229,560	)
Payments on finance lease obligations		(280	)		(841	)
Net cash provided by financing activities		199,720			4,743,649

Effects of exchange rates on cash		-			150,186

Net decrease in cash and cash equivalents and restricted cash		(884,330	)		(399,229	)
Cash and cash equivalents and restricted cash at beginning of period		1,454,085			7,935,659
Cash and cash equivalents and restricted cash at end of period	$	569,755		$	7,536,430

Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	56,320

Supplemental disclosures of noncash investing and financing activities
Right-of-use assets acquired through operating leases	$	-		$	801,321

See accompanying notes to unaudited condensed consolidated financial statements.

OpGen, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2024

Note 1 – Organization

OpGen, Inc. (“OpGen” or the “Company”) was incorporated in Delaware in 2001. On April 1, 2020, OpGen completed its business combination transaction (the “Transaction”) with Curetis N.V., a public company with limited liability under the laws of the Netherlands (the “Seller” or “Curetis N.V.”), as contemplated by the Implementation Agreement, dated as of September 4, 2019 (the “Implementation Agreement”) by and among the Company, the Seller, and Crystal GmbH, a private limited liability company organized under the laws of the Federal Republic of Germany and wholly owned subsidiary of the Company (the “Purchaser”). Pursuant to the Implementation Agreement, the Purchaser acquired all the shares of Curetis GmbH, a private limited liability company organized under the laws of the Federal Republic of Germany (“Curetis GmbH”), and certain other assets and liabilities of the Seller (together, “Curetis”). As of December 31, 2022, Crystal GmbH has been dissolved and merged into Curetis GmbH. On November 6, 2023, Curetis filed a petition for insolvency with the district court of Stuttgart, Germany, and Ares Genetics filed a petition for insolvency with the commercial court in Vienna, Austria, and insolvency administrators in the respective jurisdictions assumed control over the assets and liabilities of these entities. The Company’s headquarters and principal operations were located at 9717 Key West Avenue, Suite 100, in Rockville, Maryland, through the end of the first quarter of 2024. Upon assignment of the Company’s lease, the Company operates virtually. The Company operates in one business segment.

OpGen Overview

From inception through November 2023, OpGen operated as a precision medicine company harnessing the power of molecular diagnostics and informatics to help combat infectious disease. The Company, along with its subsidiaries, Curetis and Ares Genetics, developed and commercialized molecular microbiology solutions helping to guide clinicians with more rapid and actionable information about life threatening infections to improve patient outcomes and decrease the spread of infections caused by multidrug-resistant microorganisms, or MDROs.

During the year ended December 31, 2023, the Company implemented certain cash management initiatives, including restructuring its U.S. operations by reducing headcount from 24 to 5 and has since continued scaling down operations at OpGen’s U.S. headquarters to the core functions of a U.S. Nasdaq listed company with only minimal distribution, marketing, and sales support, allowing the Company to conserve cash and focus on the functions needed to pursue potential strategic alternatives. However, on November 6, 2023, Curetis filed a petition for insolvency with the district court of Stuttgart, Germany, and Ares Genetics filed a petition for insolvency with the commercial court in Vienna, Austria. The insolvency proceedings of Curetis and Ares Genetics were adjudicated under the insolvency laws of Germany and Austria, respectively.

The insolvency administrators assumed control over the assets and liabilities of Curetis and Ares Genetics, respectively, which eliminated the authority and power of the Company and its officers to act on behalf of the subsidiaries. The loss of control required that the Company no longer include Curetis and Ares Genetics in its consolidated financial statements. Prior to the insolvency filings, Curetis and Ares Genetics had been included in the Company’s consolidated financial statements. As part of the insolvency proceedings, in April 2024, the insolvency administrator for Curetis notified the Company that all of Curetis’ assets were sold to Camtech Pte Ltd., a Singaporean family office. In April 2024, the insolvency administrator for Ares Genetics notified the Company that all of Ares Genetics’ assets were sold to bioMerieux S.A.

Since the insolvency filings and through the three months ended March 31, 2024, the Company continues to sell the Curetis Unyvero products to its existing customers in the United States via drop shipments from Curetis directly to customer locations. The Unyvero tests are sold to hospitals, laboratories, and public health organizations as products and on a fee-for-service basis. When hospital and health system clients purchase our products, we bill them directly for the purchase of test kits and consumables. As of March 31, 2024, OpGen had an installed base of approximately 28 Unyvero A50 Analyzers across the United States in different types of hospitals and laboratories, including installations for clinical studies. The sale of Ares Genetics’ related products and services was discontinued during the first quarter of 2024 due to the sale of the Ares Genetics assets to a strategic acquiror by its insolvency administrator in Austria.

In March 2024, the Company entered into a securities purchase agreement (the “March 2024 Purchase Agreement”) with David E. Lazar, pursuant to which the Company agreed to sell 3,000,000 shares of Series E Convertible Preferred Stock (“Series E Preferred Stock”) to Mr. Lazar at a price of $1.00 per share for aggregate gross proceeds of $3.0 million. In connection with the transactions contemplated by the March 2024 Purchase Agreement, the members of the Board of Directors, prior to the closing of such transactions, resigned and a new Board of Directors was appointed, of which Mr. Lazar was appointed Chairman. The focus of OpGen going forward under new leadership and a new Board of Directors will be on the sale of the Company or the identification of a privately held company to complete a reverse merger or similar strategic transaction.

Note 2 – Going Concern and Management’s Plans

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Since inception, the Company has incurred, and continues to incur, significant losses from operations and negative operating cash flows. Historically, the Company has funded its operations primarily through external investor financing arrangements and significant actions taken by the Company, including the following:

●

On March 26, 2024, the Company entered into an Inducement Offer to Amend Common Stock Purchase Warrants (the “Offer”) with an investor (the “Investor”). Pursuant to the Offer, the investor agreed to waive certain rights that would otherwise have been triggered under their warrants as a result of the transactions contemplated by the March 2024 Purchase Agreement, in exchange for the Company entering into the March 2024 Purchase Agreement.