FREMONT, Calif., Nov. 14, 2013 /PRNewswire/ -- WaferGen Bio-systems, Inc. (OTCQB: WGBS) announced today its financial results for the third quarter ended September 30, 2013.
Total revenue for the third quarter of 2013 was $390,000, up 121% from $177,000 in the third quarter of 2012. Net loss for the third quarter of 2013 was $11.0 million, compared to a net loss of $3.0 million in the third quarter of 2012. The higher net loss was primarily due to one-time charges of $7.6 million consisting of $5.0 million on the extinguishment of debt and $2.6 million for the issuance of warrants in conjunction with the sale of securities described below.
As previously announced, in August and September, 2013, the Company sold $15.0 million of units for net proceeds of approximately $13.4 million resulting in a cash balance at September 30, 2013 of $14.5 million. For additional details regarding the private placement, please see the current report on Form 8-K filed by the Company on October 2, 2013.
Furthermore, as previously reported, immediately prior to the initial closing of the private placement, the Company completed a transaction to simplify its capital structure under which shares of Series A-1 preferred stock with a liquidation preference of $17.1 million, convertible notes with a principal amount of $17.1 million and warrants were exchanged for the same securities issued in the private placement. For additional details regarding the exchange transaction, please see the current report on Form 8-K filed by the Company on August 28, 2013.
The completion of the private placement and the restructuring transaction has dramatically simplified the Company's capital structure and significantly strengthened its balance sheet.
"We believe that the successful capital raise and the simplified capital structure are an important milestone in WaferGen's turnaround effort. More importantly, we are seeing a keen interest in our products, especially the SmartChip TE, which is used for target enrichment prior to Next-Generation Sequencing (NGS). It is already being implemented by some top-tier early-access customers such as BGI, the world's largest genomics institution, and we have a number of ongoing pilot studies with clinical diagnostic labs and translational research centers," said Ivan Trifunovich, President and CEO of Wafergen. He added, "In addition to the current product offering that enables more accurate NGS-based clinical tests, we are working on a new product that would revolutionize the sample preparation prior to sequencing. The streamlined workflow is designed to combine target enrichment and all subsequent library preparation steps into one step on SmartChip TE. This will dramatically reduce time-to-result, hands-on-time and overall cost of diagnostic tests while improving quality and productivity. A working prototype designed for BRCA1/2 genes is being beta-tested with plans to commercially launch it in the first quarter of next year."
The Company is deploying the newly raised capital towards general corporate and working capital purposes, with the emphasis on commercialization activities intended to increase revenues from sales of SmartChip TE (Target Enrichment for Next-Generation Sequencing (NGS)) and SmartChip MyDesign (high-throughput quantitative PCR) products. In particular, SmartChip TE addresses CLIA-certified and clinical research laboratories' significant unmet needs in sequencing-based testing by providing uniform coverage of targeted genes, yielding better test specificity and sensitivity. The superior performance of this new product is based on WaferGen's proprietary technology that relies on massively parallel singleplex PCR reactions, where amplification is cleaner and better controlled, thereby providing more accurate diagnostic test results in the downstream sequencing step. On the qPCR side, the SmartChip MyDesign System has a powerful value proposition of content design flexibility, cost-effectiveness, and no need for pre-amplification.
Besides periodic written announcements, the Company will commence quarterly update calls starting with the reporting of Q4 2013 results.
About WaferGen and the SmartChip Real-Time PCR SystemWaferGen Bio-systems, Inc. is an innovative life science company that offers the SmartChip Real-Time PCR System—a next-generation genetic analysis platform for profiling and validating molecular biomarkers. It provides a range of high-throughput capabilities including microRNA and mRNA gene expression profiling as well as single nucleotide polymorphism (SNP) genotyping. The SmartChip TE System is a new product offering for target enrichment geared towards clinical Next-Gen sequencing.For additional information, please see http://www.wafergen.com
Forward Looking StatementsCertain statements made in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "anticipate" or other comparable terms. Forward-looking statements in this press release may address the following subjects among others: statements regarding the sufficiency of our capital resources, expected operating losses, expected revenues, expected expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Investor Contacts:BPC Financial Marketing
WaferGen Bio-systems, Inc.
510-780-2395WAFERGEN BIO-SYSTEMS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Operations (Unaudited)Three Months Ended September 30,Nine Months Ended September 30,2013201220132012Revenue:Product
269,999License and royalty125,000—333,333—Total Revenue389,547176,608814,282269,999Cost of product revenue192,814144,327335,182245,322Gross profit196,73332,281479,10024,677Operating expenses:Sales and marketing625,390124,6921,577,317537,523Research and development1,581,4491,237,6174,246,7964,855,341General and administrative1,217,899521,9012,443,3172,406,171Total operating expenses3,424,7381,884,2108,267,4307,799,035Operating loss(3,228,005)(1,851,929)(7,788,330)(7,774,358)Other income and (expenses):Interest income8306722,9176,231Interest expense(848,464)(564,009)(2,821,093)(1,379,576)Gain (loss) on revaluation of derivative liabilities, net450,584(385,209)(27,896)2,176,982Loss on extinguishment of debt(4,970,410)—(4,970,410)—Issuance of warrants due to organic change(2,553,318)—(2,553,318)—Miscellaneous income (expense)167,952(181,247)235,295(158,439)Total other income and (expenses)(7,752,826)(1,129,793)(10,134,505)645,198Net loss before provision for income taxes(10,980,831)(2,981,722)(17,922,835)(7,129,160)Provision for income taxes530(14,142)3,19112,745Net loss(10,981,361)(2,967,580)(17,926,026)(7,141,905)Accretion on Series 1 convertible preferred stock associated with beneficial conversion feature(702,970)—(702,970)—Accretion on Series A and B convertible preference shares of subsidiary associated with premium(408,651)—(2,898,550)—Series A-1 preferred dividend(131,219)(201,612)(547,171)(597,401)Net loss attributable to common stockholders
(7,739,306)Net loss per share – basic and diluted
(18.47)Shares used to compute net loss per share – basic and diluted2,814,655419,028709,639419,123WAFERGEN BIO-SYSTEMS, INC. AND SUBSIDIARIESCondensed Consolidated Balance SheetsSeptember 30, 2013December 31, 2012Assets(Unaudited)Current assets:Cash and cash equivalents
6,328,753Accounts receivable349,550307,759Inventories, net363,843495,486Prepaid expenses and other current assets159,821134,567Total current assets15,356,2557,266,565Property and equipment, net351,342874,062Other assets46,287756,831Total assets
8,897,458Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable
474,436Accrued payroll and related costs1,289,975235,404Other accrued expenses1,553,0931,063,813Total current liabilities3,565,6001,773,653Long-term debt, net of discount—3,393,159Derivative liabilities2,236,0802,208,184Total liabilities5,801,6807,374,996Series A and B convertible preference shares of subsidiary4,021,9561,123,406Total stockholders' equity5,930,248399,056Total liabilities and stockholders' equity
|SOURCE WaferGen Bio-systems, Inc.|
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