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WaferGen Releases Preliminary Q3 Results, Urges Stockholders to Vote for Takara Merger

NEW YORK (GenomeWeb) – WaferGen Bio-systems today released preliminary third quarter earnings, reporting a 20 percent year over year increase in Q3 revenues.

For the three months ended Sept. 30, WaferGen tallied revenues of $2.4 million, compared to $2 million in the third quarter of 2015, primarily driven by sales of SmartChip products and services including ICELL 8 Single-Cell Systems. 

Additionally, the Fremont, California-based firm has issued a letter to stockholders urging them to vote in favor of a proposed merger with Takara Bio.

"We are pleased to release these results, which demonstrate we are on track to achieve consolidated 2016 revenues exceeding $9 million and provide stockholders with transparency and clarity about the benefit they will receive from the merger with Takara Bio," WaferGen CEO Rollie Carlson said in a statement.

In a Form 8-K filed Oct. 28 with the US Securities and Exchange Commission Friday, the firm's board of directors said that while the final offer is contingent on the firm's full-year revenues, it expects shareholders to receive cash consideration "representing a significant premium over the trading price of WaferGen common stock on May 12, 2016."

Per the merger agreement, Takara will pay consideration primarily based on WaferGen's consolidated revenues for the year, minus specified deductions. Depending on the earnings report for the year, Takara could pay WaferGen stockholders approximately $1.00 per share to $1.14 per share. "Such merger consideration per share would represent a premium of 82 percent and 107 percent, respectively, over WaferGen's closing stock price of $.55 on May 12, 2016, the day preceding the announcement of the merger agreement," the company added.

According to the company's filing, more than 40 percent of shareholders have not yet voted on the merger. "Not casting your vote is the same as voting against the merger," the board said, adding that if the merger fails the firm will need to raise cash immediately to continue operating, a move that "would likely be significantly dilutive to WaferGen's stockholders and feature other unfavorable terms."

WaferGen's Q3 revenues do not include $273,000 in deferred revenue, plus backlog purchase orders received during the quarter. These will be booked in the fourth quarter, the firm said.

WaferGen ended the quarter with approximately $5.1 million in cash and cash equivalents.

The firm reiterated its full-year consolidated revenues guidance of between $10 million and $12 million.

In afternoon trading on the Nasdaq, shares of WaferGen were down 4 percent to $.69.

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