Skip to main content
Premium Trial:

Request an Annual Quote

Wafergen Effects Reverse Stock Split, Targets $17.3M in Private Placement

NEW YORK (GenomeWeb News) – Wafergen Biosystems announced late on Tuesday a series of moves — including a stock split, a capital restructuring, and a private placement to raise up to roughly $17.3 million — to boost its share price and improve its cash position.

The Fremont, Calif.-based firm effected a one-for-99.39 reverse stock split of its outstanding common stock, reducing its number of issued and outstanding shares to 420,000 from 41.7 million. Wafergen shares began trading on a split-adjusted basis on the OTCBB today and will trade for 20 days under the temporary symbol "WBGSD."

As part of its capital restructuring, Wafergen issued 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 has 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. The stock has a liquidation preference of $2.99, convertible into about 7.5 million shares of common stock. Wafergen also issued about 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.

Additionally, the company issued promissory notes in favor of its Malaysian subsidiary, Wafergen Biosystems Sdn. Bhd., in consideration of the subsidiary canceling the company's obligations under a $5.3 million loan that is outstanding. The new notes have a seven-year term and require a single balloon payment of $6.6 million at the end of the term.

Lastly, the company commenced a private placement to accredited investors of up to $17.25 million of units. The units are being sold for $50,000 each and consist of either 25,000 shares of common stock or 9.9390 shares of Series 1 convertible preferred stock. Each 9.9390 shares have a liquid preference of $.01 and are convertible into 25,000 shares of common stock.

Each unit also consists of warrants to purchase 12,500 shares of Wafergen's common stock.

At the initial closing of the offering on Wednesday, Wafergen issued a total of 5.2 million shares of common stock; 646.0351 shares of Series 1 convertible preferred stock, which is convertible into a total of approximately 1.6 million shares of common stock; and warrants to purchase approximately 3.4 million shares of common stock.

The warrants have a term of five years and an exercise price of $2.60 per share. Each share of Series 1 convertible preferred stock is convertible at any time into 2,515.34 shares of common stock.

The firm said that as of the initial closing, it sold $13.7 million of units for net proceeds of $12.3 million. The funds will go toward product development, sales initiatives, and working capital.

Wafergen earlier this month reported a sharp increase in its second quarter revenues. As of June 30, it had $3 million in cash and cash equivalents.

The Scan

Germline-Targeting HIV Vaccine Shows Promise in Phase I Trial

A National Institutes of Health-led team reports in Science that a broadly neutralizing antibody HIV vaccine induced bnAb precursors in 97 percent of those given the vaccine.

Study Uncovers Genetic Mutation in Childhood Glaucoma

A study in the Journal of Clinical Investigation ties a heterozygous missense variant in thrombospondin 1 to childhood glaucoma.

Gene Co-Expression Database for Humans, Model Organisms Gets Update

GeneFriends has been updated to include gene and transcript co-expression networks based on RNA-seq data from 46,475 human and 34,322 mouse samples, a new paper in Nucleic Acids Research says.

New Study Investigates Genomics of Fanconi Anemia Repair Pathway in Cancer

A Rockefeller University team reports in Nature that FA repair deficiency leads to structural variants that can contribute to genomic instability.