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WaferGen Q1 Revenues Rise Sharply; Company Files Prospectus for Offering by Shareholders

NEW YORK (GenomeWeb News) – WaferGen BioSystems said in a regulatory document that revenues for its first quarter more than doubled year over year.

It separately also announced a stock sale by shareholders of up to more than 112 million shares.

For the three months ended March 31, revenues reached $178,487, up 144 percent from $73,233 during the first quarter of 2012, the Fremont, Calif.-based firm said in its Form 10-Q filed with the US Securities and Exchange Commission on Friday. License and royalty revenues climbed to $83,333 from none a year ago. Product royalties increased to $95,154 from $73,233 a year ago.

In its SEC document, WaferGen said that license and royalty revenues in the recently completed quarter were up as a result of a recently signed agreement. The firm added that future license revenue is expected to be at least $125,000 per quarter in the "near future."

WaferGen did not provide details about the agreement in its Form 10-Q, but in February, it announced a co-marketing deal with Qiagen covering Japan.

Product revenues were up due primarily to the partial recognition of revenues from the sale of a SmartChip Real-Time PCR platform during the recently completed quarter. That sale accounted for 88 percent of product revenues recorded in Q1 2013, WaferGen said.

Real-Time PCR Chip panels and service revenues declined year over year, however, and the firm recorded no SmartSlide revenues in Q1 2013. In the year-ago period SmartSlide made up 21 percent of product revenues, WaferGen said.

Net loss during the quarter rose to $3.8 million, or $0.10 per share, from a net loss of $2.9 million, or $0.07 per share, a year ago.

R&D spending was lowered to $1.4 million, a 30 percent reduction from $2.0 million a year ago, driven by a reduced headcount and lower costs related to depreciation and expensed materials and reagents, the company said.

SG&A spending dropped 29 percent $1.0 million from $1.4 million. The decrease is due mainly to the absence of a one-time expense for severance costs related to the terminations of the firm's former COO Mona Chadha and former CFO Donald Huffman in March 2012, as well as a reduction in professional fees.

WaferGen finished the quarter with $4.6 million in cash and cash equivalents.

Separately, the company filed a prospectus for the offering by selling shareholders of up to 112.3 million shares of its common stock. It will not receive any proceeds from the sale of the stock by the selling stockholders, but it will receive about $34.8 million from the selling stockholders if they exercise their warrants in full. Those funds would go toward working capital and general corporate purposes, WaferGen said.

The shares included in the prospectus include stock issuable upon the conversion of Series A-1 Convertible Preferred Stock; stock issuable upon the conversion of Convertible Promissory Notes; and stock issuable upon the exercise of warrants issued in connection with a private placement offering completed two years ago.

The preferred stock, promissory notes, and warrants were sold for an aggregate price of almost $30.6 million, WaferGen said.