Great Basin Scientific Inc (NASDAQ:GBSN) announced its corporate restructuring and cost reduction plans. These plans are aimed at redirecting most of the company resources on departments that contribute to revenue growth.
GBSN will streamline some manufacturing and administrative processes
The corporate restructuring will involve the elimination of about 50 employees across the country. The company hopes that reducing the mentioned number of employees in conjunction with some previously implemented cost reduction strategies, it will reduce $10 million to $12 million from its annual expenses, Yahoo Finance reports.
In the announcement, made on Friday last week, GBSN also claimed to have reduced the 2016 Convertible Note to $36 million. The aim is to “grow the company aggressively and sustainably,” said Ryan Ashton, the CEO, and co-founder of GBSN.
Implementation of the cost reduction plan to be complete by April
Great Basin is positive that the restructuring and cost reduction plans will not result in material pre-tax charges. The company has already commenced the cost reduction plans and expects to implement all cost reduction plans by the end of the current financial quarter. Several products are under development, as per the previously announced assays, with the company expecting clinical trials in the course of the year.
An agreement with the 2016 Convertible Note Holders
In the announcement, Great Basin confirmed that it had reached an agreement with the holders of the 2016 Convertible Note. The agreement states that Great Basin will reduce the Note’s principal to $36.3 million (a $35.6 million decrease) that was outstanding at the time of the announcement. What the company gets in exchange is a reduction of money in the restricted cash account, from $57 million to $21.5 million.
Jeff Rona, the company’s CFO, said that the company realized that the funding under the 2016 Note convertible was more than they required. The company appreciates the noteholders for helping reduce the debt obligation.
What Great Basin Scientific does
The company specializes in the molecular diagnostics and uses the chip-based breakthroughs for commercial purposes. The company focuses on creating powerful, but simple, technologies that provide a fast diagnosis on infectious diseases. Its vision is to reduce misdiagnosis and offer cost effective testing of diseases to all patients.