FREMONT, Calif., Nov. 15, 2010 /PRNewswire-FirstCall/ -- WaferGen
Biosystems, Inc. (OTC Bulletin Board: WGBS), a leading developer of
state-of-the-art genomic analysis systems, today reported financial
results for the three and nine months ended September 30, 2010.
"SmartChip system and chip sales drove our results to a third
straight quarter of increased revenue," said Alnoor Shivji, chairman and CEO. "During
the quarter, we continued to ramp up the commercialization of the
SmartChip system, launched in August, to position it as a superior
solution to the growing needs of next generation sequencing where
more efficient and effective biomarker identification and
validation are needed. To help with this effort, we recently
added Gary P. Schroth, Ph.D., as a
new SVP, Genomics Research and Applications. We also
strengthened our business earlier in the quarter with the addition
of Donald D. Huffman as our new
Chief Financial Officer."
Revenue
Revenue for the third quarter ended September 30, 2010 grew to $633,000 compared to $79,000 for the third quarter ended September 30, 2009. Revenue for the nine
months ended September 30, 2010 grew
to $1.5 million compared to
$190,000 for the nine months ended
September 30, 2009. The
majority of the revenue was from sales of a combination of one or
more of the company's SmartChip systems, SmartChips, and/or
SmartChip Gene Expression Profiling Services. The company's revenue
growth for SmartChip system for the third quarter increased
approximately 44 percent over the second quarter 2010. The
company's revenue growth for the full year 2010 is on track to meet
or exceed the $1.5 to $2.0 million
guidance range previously provided.
Net Income/Loss
WaferGen reported a net loss of $5.2
million, or $(0.14) per share
(basic and diluted), for the third quarter of 2010 compared to a
net loss of $3.0 million or
$(0.11) per share (basic and
diluted), for the same period in 2009. The company reported a
net loss of $9.0 million, or
$(0.27) per share (basic and
diluted), for the first nine months ended September 30, 2010 compared to a net loss of
$7.6 million, or $(0.29) per share (basic and diluted), from the
same period in 2009.
The net loss for the three months ended September 30, 2010 and the net loss for the first
nine months of 2010 increased primarily due to increased operating
expenses associated with the commercialization of the SmartChip
system of $3.9 million for the three
months ended September 30, 2010
compared to $2.5 million in the same
period of 2009; and $9.9 million for
the first nine months of 2010 compared to $7.1 million for the first nine months of
2009.
Net loss for the three and nine months ended September 30, 2010, was impacted by warrant
derivative revaluations. Net losses from warrant derivative
revaluations for the three months ended September 30, 2010 were $1.7 million, compared to a net loss of
$548,000 for the three months ended
September 30, 2009; and a net gain
for the nine months ended September 30,
2010 of $15,000 compared to a
loss of $500,000 for the nine months
ended September 30, 2009. These
non-cash losses and gains are attributed to revaluations of
outstanding warrants and result primarily from a fluctuation in the
company's stock price in the period – increase in company stock
price results in losses and vice versa.
Operating Expenses
For the three months ended September 30,
2010, research and development expenses increased to
$2.0 million as compared to
$1.3 million for the three months
ended September 30, 2009. For
the nine months ended September 30,
2010, research and development expenses increased to
$5.1 million, as compared to the
$3.4 million for the nine months
ended September 30, 2009. The
increase in research and development expenses for the three and
nine months ended September 30, 2010
occurred primarily from expenses associated with SmartChip system
development and expansion in facilities costs.
For the three months ended September 30,
2010, sales and marketing expenses increased to $653,000, as compared to $136,000 for the three months ended September 30, 2009. For the nine months
ended September 30, 2010, sales and
marketing expenses increased to $1.4
million, as compared to $452,000 for the nine months ended September 30, 2009. The increase in sales
and marketing expenses in both the third quarter and nine months
ended September 30, 2010 resulted
primarily from increases in additional staff and promotional
activities in conjunction with the commercialization and
early-access sales of SmartChip systems and services.
For the three months ended September 30,
2010, general and administrative expenses increased to
$1.2 million, as compared to
$1.1 million for the three months
ended September 30, 2009. For
the nine months ended September 30,
2010, general and administrative expenses increased to
$3.5 million as compared to
$3.2 million for the nine months
ended September 30, 2009.
General and administrative expenses increased modestly for
the three and nine months ended September
30, 2010 due primarily to higher personnel costs.
Assets
WaferGen ended the third quarter 2010 with approximately
$5.9 million in total current assets,
including $4.4 million in cash and
cash equivalents. The company ended 2009 with approximately
$6.4 million in total current assets,
including $6.0 million in cash and
cash equivalents. WaferGen raised $7.2
million in a registered direct offering that closed on
July 8, 2010.
About WaferGen and the SmartChip Real-Time PCR System
WaferGen Biosystems, Inc. is a leader in the development,
manufacture and sale of state-of-the-art systems for genomic
analysis for the life science and pharmaceutical industries.
The company currently offers the breakthrough SmartChip
Real-Time PCR system, the next-generation Real-Time PCR system for
discovery and validation of biomarkers, or gene expression
patterns, on a single platform. The company believes that the
SmartChip system is ideal for researchers seeking to confirm
discoveries made with the growing use of next-generation
sequencing. In addition, the high throughput capabilities of
the SmartChip system enable researchers to extend their research
across large panels of genes, and hundreds of samples, at a very
reasonable cost.
Combined with next-generation chemistry and optimized assays
being developed by WaferGen under the guidance of David Gelfand, Ph.D., Chief Scientific Officer
and one of the pioneers of PCR, the SmartChip system is designed to
provide accurate, highly sensitive and high-throughput gene
expression profiling capabilities to researchers, clinicians and
pharmaceutical companies.
In addition, the company offers an innovative fee-based service
for gene-expression profiling using the SmartChip System. For
additional information, please see http://www.wafergen.com.
Forward-Looking Statements
This press release contains certain "forward-looking
statements". Such statements include statements relating to
the expected benefits and advantages of the SmartChip service for
gene-expression research, the expected benefits and advantages of
the SmartChip technology to other applications, the expected
throughput levels of the SmartChip Real-Time PCR System, the
company's expected revenue growth for the full year 2010, the
expected benefits to the company of certain recent employee hires,
and other statements relating to future events or to the company's
future financial performance and are not historical facts,
including statements which may be preceded by the words "intends,"
"may," "will," "plans," "expects," "anticipates," "projects,"
"predicts," "estimates," "aims," "believes," "hopes," "potential"
or similar words.
Forward-looking statements are not guarantees of future
performance, are based on certain assumptions and are subject to
various known and unknown risks and uncertainties, many of which
are beyond the control of the company. Actual results may
differ materially from the expectations contained in the
forward-looking statements. Factors that may cause such
differences include the risks that: (i) the company may be
unsuccessful in commercially developing its products or in
achieving market acceptance of new and relatively unproven
technologies; (ii) the company will need to raise additional
capital to meet its business requirements in the future and the
company may not be able to do so on reasonable terms or at all;
(iii) the company's proprietary intellectual property rights may
not adequately protect its products and technologies; and (iv) the
company expects intense competition in its target markets,
including from companies that have much greater resources than the
company, and there can be no assurance that the company will be
able to compete effectively. More detailed information about
the company and the risk factors that may affect the realization of
forward-looking statements is set forth in the company's filings
with the Securities and Exchange Commission, including the
company's Annual Report on Form 10-K for the year ended
December 31, 2009 and the most recent
Form 10-Q. Investors and security holders are urged to read
this document free of charge on the SEC's web site at www.sec.gov.
The company does not undertake to publicly update or revise
its forward-looking statements as a result of new information,
future events or otherwise.
Tables Follow
WAFERGEN
BIOSYSTEMS, INC. AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
|
September 30, 2010
|
|
December 31, 2009
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
4,429,455
|
|
$
|
5,953,639
|
|
|
Accounts
receivable
|
|
|
666,561
|
|
|
258,855
|
|
|
Inventories,
net
|
|
|
361,891
|
|
|
39,970
|
|
|
Prepaid
expenses and other current assets
|
|
|
417,369
|
|
|
138,712
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
5,875,276
|
|
|
6,391,176
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
973,362
|
|
|
441,996
|
|
|
Other assets
|
|
|
47,913
|
|
|
57,982
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
6,896,551
|
|
$
|
6,891,154
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
970,153
|
|
$
|
1,240,397
|
|
|
Accrued
rent
|
|
|
88,542
|
|
|
10,493
|
|
|
Accrued
payroll
|
|
|
329,839
|
|
|
241,586
|
|
|
Accrued
severance pay
|
|
|
44,096
|
|
|
371,596
|
|
|
Accrued
vacation
|
|
|
147,780
|
|
|
117,619
|
|
|
Warranty
reserve
|
|
|
24,800
|
|
|
—
|
|
|
Accrued
other expenses
|
|
|
363,719
|
|
|
157,699
|
|
|
Current
portion of capital lease obligations
|
|
|
12,054
|
|
|
21,663
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
1,980,983
|
|
|
2,161,053
|
|
|
|
|
|
|
|
|
|
|
|
Capital lease obligations, net
of current portion
|
|
|
—
|
|
|
8,852
|
|
|
|
|
|
|
|
|
|
|
|
Put option derivative
liability
|
|
|
131,971
|
|
|
––
|
|
|
|
|
|
|
|
|
|
|
|
Warrant derivative
liability
|
|
|
2,781,580
|
|
|
2,778,191
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible
Preference Shares in subsidiary
|
|
|
3,273,992
|
|
|
3,290,994
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
|
|
|
|
Preferred Stock,
$0.001 par value, 10,000,000 shares authorized, no shares issued
and outstanding
|
|
|
—
|
|
|
—
|
|
|
Common Stock,
$0.001 par value, 300,000,000 shares authorized, 40,926,303 and
33,387,857 shares issued and outstanding at
September 30, 2010, and December 31, 2009,
respectively
|
|
|
40,926
|
|
|
33,388
|
|
|
Additional paid-in
capital
|
|
|
38,544,765
|
|
|
29,017,578
|
|
|
Accumulated
deficit
|
|
|
(40,144,066)
|
|
|
(30,462,283)
|
|
|
Accumulated other
comprehensive income
|
|
|
286,400
|
|
|
63,381
|
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity (deficit)
|
|
|
(1,271,975)
|
|
|
(1,347,936)
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity (deficit)
|
|
$
|
6,896,551
|
|
$
|
6,891,154
|
|
|
|
|
|
|
|
|
|
|
|
|
WAFERGEN
BIOSYSTEMS, INC. AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Period From
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
October 22, 2002
(Inception) to
|
|
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
2010
|
|
|
|
|
|
|
|
|
(As restated)
|
|
|
|
|
|
(As restated)
|
|
|
|
|
|
Revenue
|
|
$
|
633,241
|
|
$
|
78,860
|
|
$
|
1,454,920
|
|
$
|
189,616
|
|
$
|
2,750,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
312,047
|
|
|
66,897
|
|
|
583,796
|
|
|
206,661
|
|
|
1,188,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
321,194
|
|
|
11,963
|
|
|
871,124
|
|
|
(17,045)
|
|
|
1,561,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
653,322
|
|
|
136,055
|
|
|
1,378,271
|
|
|
452,241
|
|
|
4,160,530
|
|
|
Research and
development
|
|
|
2,047,367
|
|
|
1,267,036
|
|
|
5,086,078
|
|
|
3,441,625
|
|
|
20,924,551
|
|
|
General and
administrative
|
|
|
1,248,773
|
|
|
1,063,635
|
|
|
3,452,727
|
|
|
3,170,017
|
|
|
15,225,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
3,949,462
|
|
|
2,466,726
|
|
|
9,917,076
|
|
|
7,063,883
|
|
|
40,311,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(3,628,268)
|
|
|
(2,454,763)
|
|
|
(9,045,952)
|
|
|
(7,080,928)
|
|
|
(38,749,353)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
7,965
|
|
|
5,336
|
|
|
15,072
|
|
|
9,792
|
|
|
274,930
|
|
|
Interest
expense
|
|
|
(280)
|
|
|
(2,435)
|
|
|
(1,954)
|
|
|
(7,195)
|
|
|
(323,408)
|
|
|
Unrealized
gain on fair value of put option, net
|
|
|
124,473
|
|
|
––
|
|
|
124,473
|
|
|
––
|
|
|
124,473
|
|
|
Unrealized
(loss) gain on fair value of warrants, net
|
|
|
(1,665,950)
|
|
|
(548,451)
|
|
|
14,526
|
|
|
(500,383)
|
|
|
(549,596)
|
|
|
Miscellaneous expense
|
|
|
(62,703)
|
|
|
(12,169)
|
|
|
(135,697)
|
|
|
(34,484)
|
|
|
(265,412)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
income and (expenses)
|
|
|
(1,596,495)
|
|
|
(557,719)
|
|
|
16,420
|
|
|
(532,270)
|
|
|
(739,013)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
before provision for income taxes
|
|
|
(5,224,763)
|
|
|
(3,012,482)
|
|
|
(9,029,532)
|
|
|
(7,613,198)
|
|
|
(39,488,366)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(5,224,763)
|
|
|
(3,012,482)
|
|
|
(9,029,532)
|
|
|
(7,613,198)
|
|
|
(39,488,366)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative effect of
reclassification of warrants
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
368,627
|
|
|
Accretion on Redeemable
Convertible Preference Shares in subsidiary associated with
premium
|
|
|
(79,151)
|
|
|
(43,676)
|
|
|
(223,464)
|
|
|
(115,092)
|
|
|
(439,542)
|
|
|
Accretion on Redeemable
Convertible Preference Shares in subsidiary associated with
beneficial conversion feature
|
|
|
(428,787)
|
|
|
––
|
|
|
(428,787)
|
|
|
––
|
|
|
(428,787)
|
|
|
Accretion on Series B
Preferred Stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(155,998)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
|
$
|
(5,732,701)
|
|
$
|
(3,056,158)
|
|
$
|
(9,681,783)
|
|
$
|
(7,728,290)
|
|
$
|
(40,144,066)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share – basic
and diluted
|
|
$
|
(0.14)
|
|
$
|
(0.11)
|
|
$
|
(0.27)
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net loss
per share - basic and diluted
|
|
|
39,851,627
|
|
|
28,912,388
|
|
|
35,756,913
|
|
|
26,394,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:
|
|
Don Huffman, CFO
|
|
don.huffman@wafergen.com
|
|
|
|
Joyce Strand
|
|
joyce.strand@wafergen.com
|
|
510-651-4450
|
|
|
SOURCE WaferGen Biosystems, Inc.