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WaferGen Launches $20M Stock Offering; Shares Plummet

NEW YORK (GenomeWeb) – WaferGen Biosystems today priced a public offering of stock and warrants that is expected to bring in gross proceeds of $20 million.

The offering comprises 2,000 units priced at $10,000 per unit. Each unit consists of 2,000 shares of common stock and 2,000 warrants to purchase shares of the firm's common stock. In total, 4 million shares of common stock and warrants to purchase 4 million shares will be issued in the offering. The warrants have a term of five years and an exercise price of $5 per share.

Investors reacted negatively to the offering, sending WaferGen's shares down 53 percent to $4.70 in Friday afternoon trading.

WaferGen granted the underwriters on the offering a 45-day over-allotment option to acquire 600,000 shares of common stock and/or additional warrants to purchase up to 600,000 additional shares of common stock. Ladenburg Thalmann & Co. is the sole book-running manager, while National Securities Corp. and Brean Capital are acting as co-managers of the offering.

WaferGen anticipates net proceeds of $18 million from the offering, prior to any exercise of the over-allotment option. It said that $1.3 million of the funds will be used to repay existing debt, and the rest will be used for general corporate and working capital purposes.

The Fremont, Calif.-based firm makes the SmartChip Real-Time PCR system for gene expression studies and SmartChip TE for next-generation sequencing target enrichment. Earlier this year it acquired the next-generation sequencing library preparation business of IntegenX.

WaferGen also said that its shares would begin trading on the Nasdaq Capital Market under symbol "WGBS" today. It had previously been traded on the OTC Bulletin Board.

A couple of months ago, WaferGen effected a one-for-10 reverse stock split, clearing the way for it to meet listing requirements for the Nasdaq Capital Market.