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WaferGen Completes $15M Private Placement

NEW YORK (GenomeWeb News) — WaferGen Biosystems said today that it has completed a private placement of common stock, Series 1 convertible preferred stock, and warrants to purchase shares of common stock to accredited investors, netting just over $15 million.

WaferGen said that it intends to use the net proceeds for general corporate and working capital purposes, including sales of its SmartChip TE for next-generation sequencing target enrichment and SmartChip MyDesign for high-throughput quantitative PCR.

As previously announced, at the initial closing of the offering on August 27, the company sold $13,668,500 of units, netting approximately $12,300,000. At a subsequent closing on September 30, WaferGen sold an additional $1,369,000 worth of units for net proceeds of approximately $1,200,000.

Immediately prior to the initial closing of the private placement, WaferGen also completed a restructuring transaction, issuing new shares of common stock, Series 1 convertible preferred stock, and warrants to purchase common stock to existing shareholders in exchange for all of the company's outstanding shares of Series A-1 convertible preferred stock, promissory notes convertible into shares of Series A-2 convertible preferred stock, and warrants that had been issued in May 2011.

With the exchange, WaferGen retired about $17.1 million of convertible notes; shares of Series A-1 preferred stock with an aggregate liquidation preference of about $17.1 million; and warrants to acquire an aggregate of 565,180 shares of post-split common stock at an exercise price of $61.62 per share. In exchange, it issued 2,987 shares of Series 1 convertible preferred stock, approximately 1.1 million shares of common stock, and warrants for almost 2.4 million shares of common stock at an exercise price of $2.60 per share.

As a result of the completion of the private placement and the restructuring transaction, WaferGen said it has "dramatically simplified" its capital structure and "significantly strengthened" its balance sheet.

"The successful completion of these restructuring and financing transactions represents a significant achievement for WaferGen," President and CEO Ivan Trifunovich said in a statement. "In the past 18 months, we have made great strides to reposition WaferGen for future success in our target markets. We believe our strengthened balance sheet will enable us to implement important commercialization activities that are critical to the success of our business plan."

The company said that its SmartChip TE product is designed to enable CLIA-certified and clinical research laboratories to obtain uniform coverage of targeted genes in sequencing-based testing, yielding better test specificity and sensitivity. Meantime, the SmartChip MyDesign System provides labs conducting high-throughput qPCR with content design flexibility, cost effectiveness, and no need for pre-amplification.