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WaferGen Bio-systems Reports Solid Revenue Growth for Q4 and the Year 2013

Companies mentioned in this article: WaferGen Bio-systems, Inc.

FREMONT, Calif., March 13, 2014 /PRNewswire/ -- WaferGen Bio-systems, Inc. (OTCQB: WGBS) announced today its financial results for the fourth quarter and year ended December 31, 2013.

Key Highlights

    --  Revenue for the fourth quarter of 2013 was $490,000, up 55% year over
        year
    --  Net income for the fourth quarter of 2013 was $1.5 million, compared to
        a net loss of $1.0 million in the fourth quarter of 2012
    --  For 2013, total revenue more than doubled to $1.3 million, compared to
        $586,000 in 2012
    --  Cash balance at December 31, 2013 was $10.7 million

Total revenue for the fourth quarter of 2013 was $490,000, up 55% from $316,000 in the fourth quarter of 2012. Net income for the fourth quarter of 2013 was $1.5 million, compared to a net loss of $1.0 million in the fourth quarter of 2012. The net income was primarily due to one-time gains of $1.0 million on the settlement of the Series B convertible preferred shares of our Malaysian subsidiary and $3.4 million when its liquidation commenced.

For the year, total revenue more than doubled to $1.3 million, compared to $586,000 in 2012. The year's net loss was $16.3 million compared to a net loss of $8.2 million in 2012. The increase in the net loss was attributable to non-cash, non-operating expenses largely relating to the capital restructuring that occurred in the third quarter. The operating loss in 2013 was $9.9 million, compared to $9.8 million in 2012.

"We made solid progress in 2013 highlighted by the recapitalization in the latter half of the year which represents a clear turning point for the company," said Ivan Trifunovich, President and CEO of WaferGen. "We launched our SmartChip TE product line, used for target enrichment prior to Next-Generation Sequencing (NGS). We also drastically simplified our capital structure and raised $13.4 million of net proceeds in the third quarter, giving us a cash balance at December 31, 2013 of $10.7 million. On January 6, 2014, we acquired substantially all of the assets of IntegenX's product line used in library preparation for NGS, including the Apollo 324(TM) instrument and PrepX(TM) reagents, which clearly puts us in a strong competitive position going forward. We are excited by the solid progress we have made and at this key inflection point we look forward to continuing the momentum as we further execute our growth strategy."

The Company will shortly file a Form 8-K/A related to the acquisition of the Apollo product line, and plans to hold its first quarterly update call soon after this filing.

About WaferGen

WaferGen Bio-systems, Inc. is an innovative life science company that offers innovative genomic solutions for clinical testing and research. The SmartChip MyDesign(TM )Real-Time PCR System is a high-throughput genetic analysis platform for profiling and validating molecular biomarkers via microRNA and mRNA gene expression profiling, as well as single nucleotide polymorphism (SNP) genotyping. The SmartChip TE(TM) System is a novel product offering for target enrichment geared towards clinical Next-Gen sequencing (NGS). The Company now also offers the Apollo 324(TM)( )product line used in library preparation for NGS. These three complementary technologies offer a powerful set of tools enabling more accurate, faster and cheaper genetic analysis based on Next-Gen Sequencing and Real-Time PCR.

For additional information, please see http://www.wafergen.com

Forward Looking Statements

Certain statements made in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "anticipate" or other comparable terms. Forward-looking statements in this press release may address the following subjects among others: statements regarding the sufficiency of our capital resources, expected operating losses, expected revenues, expected expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Investor Contacts:

Proactive Capital
Jeff Ransom
jramson@proactivecrg.com
646-863-6893

WaferGen Bio-systems, Inc.
John Harland
john.harland@wafergen.com
510-780-2395




                                   WAFERGEN BIO-SYSTEMS, INC. AND SUBSIDIARIES





                                Consolidated Statements of Operations (Unaudited)


                            Three Months Ended December 31,                             Year Ended December 31,
                            -------------------------------                             -----------------------

                             2013                            2012                           2013                       2012
                             ----                            ----                           ----                       ----


    Revenue:

    Product                              $365,465                        $316,177                      $846,414                 $586,176

    License and royalty   125,000                               -                        458,333                          -
                          -------                             ---                        -------                        ---


    Total Revenue                         490,465                         316,177                     1,304,747                  586,176


    Cost of product
     revenue                              239,013                         175,555                       574,195                  420,877
                                          -------                         -------                       -------                  -------


    Gross profit                          251,452                         140,622                       730,552                  165,299
                                          -------                         -------                       -------                  -------


    Operating expenses:

    Sales and marketing                   662,799                         254,392                     2,240,116                  791,915

    Research and
     development                        1,152,979                       1,306,207                     5,399,775                6,161,548

    General and
     administrative                       569,787                         571,641                     3,013,104                2,977,812
                                          -------                         -------                     ---------                ---------


    Total operating
     expenses                           2,385,565                       2,132,240                    10,652,995                9,931,275
                                        ---------                       ---------                    ----------                ---------


    Operating loss                     (2,134,113)                     (1,991,618)                   (9,922,443)              (9,765,976)
                                       ----------                      ----------                    ----------               ----------


    Other income and
     (expenses):

    Interest income                           174                           1,189                         3,091                    7,420

    Interest expense                      (59,625)                       (702,982)                   (2,880,718)              (2,082,558)

    Gain (loss) on
     revaluation of
     derivative
     liabilities, net                    (651,328)                      1,582,164                      (506,195)               3,759,146

    Gain on settlement
     of derivative
     liability          1,012,351                               -                      1,012,351                          -

    Loss on
     extinguishment of
     debt                       -                               -                     (4,970,410)                         -

    Issuance of
     warrants due to
     organic change             -                               -                     (2,553,318)                         -

    Gain on liquidation
     of subsidiary      3,386,297                               -                      3,386,297                          -

    Miscellaneous
     income (expense)                     (63,881)                         42,292                       171,414                 (116,147)
                                          -------                          ------                       -------                 --------


    Total other income
     and (expenses)                     3,623,988                         922,663                    (6,337,488)               1,567,861
                                        ---------                         -------                    ----------                ---------


    Net income (loss)
     before provision
     (benefit) for
     income taxes                       1,489,875                      (1,068,955)                  (16,259,931)              (8,198,115)


    Provision (benefit)
     for income taxes                       3,150                         (34,198)                        6,341                  (21,453)
                                            -----                         -------                         -----                  -------


    Net income (loss)   1,486,725                     (1,034,757)                  (16, 266,272)                 (8,176,662)


    Accretion on Series
     1 convertible
     preferred stock
     associated with
     beneficial
     conversion feature         -                               -                       (898,623)                         -

    Accretion on Series
     A and B
     convertible
     preference shares
     of subsidiary
     associated with
     premium            2,898,550                               -                              -                          -

    Series A-1
     preferred dividend         -                        (204,133)                      (547,171)                  (801,534)
                              ---                        --------                       --------                   --------


    Net income
     (loss)
     attributable
     to common
     stockholders                      $4,385,275                     $(1,238,890)                 $(17,712,066)             $(8,978,196)
                                       ==========                     ===========                   ===========               ==========


    Net income
     (loss) per
     share - basic                          $0.52                          $(2.95)                       $(5.82)                 $(21.42)
                                            =====                          ======                        ======                  =======


    Net income
     (loss) per
     share -
     diluted                                $0.25                          $(2.95)                       $(5.82)                 $(21.42)
                                            =====                          ======                        ======                  =======


    Shares used to
     compute net income
     (loss) per share -
     basic                              8,442,050                         419,287                     3,045,266                  419,165
                                        =========                         =======                     =========                  =======


    Shares used to
     compute net income
     (loss) per share
     -diluted                          17,938,430                         419,287                     3,045,266                  419,165
                                       ==========                         =======                     =========                  =======


                                 WAFERGEN BIO-SYSTEMS, INC. AND SUBSIDIARIES





                                         Consolidated Balance Sheets


                                                          December 31, 2013               December 31, 2012
                                                          -----------------               -----------------

                           Assets                            (Unaudited)
                           ------

     Current
     assets:

    Cash and cash equivalents                                                $10,708,646                     $6,328,753

     Accounts
     receivable                                                                  367,266                        307,759

     Inventories,
     net                                                                         292,650                        495,486

     Prepaid
     expenses
     and
     other
     current
     assets                                                                      350,540                        134,567
                                                                                 -------                        -------


     Total
     current
     assets                                                                   11,719,102                      7,266,565


     Property
     and
     equipment,
     net                                                                         269,618                        874,062

     Other
     assets                                                                       42,209                        756,831
                                                                                  ------                        -------


    Total assets                                                             $12,030,929                     $8,897,458
                                                                             ===========                     ==========


                         Liabilities
                             and
                        Stockholders'
                            Equity
                          (Deficit)
                        -------------

     Current
     liabilities:

    Accounts payable                                                            $980,887                       $474,436

     Accrued
     payroll
     and
     related
     costs                                                                       289,053                        235,404

     Other
     accrued
     expenses                                                                  1,143,335                      1,063,813
                                                                               ---------                      ---------


     Total
     current
     liabilities                                                               2,413,275                      1,773,653


     Long-
     term
     debt,
     net
     of
     discount                                                                  1,683,942                      3,393,159

     Derivative
     liabilities                                                               9,147,507                      2,208,184
                                                                               ---------                      ---------


     Total
     liabilities                                                              13,244,724                      7,374,996
                                                                              ----------                      ---------


     Series
     A
     and
     B
     convertible
     preference
     shares
     of
     subsidiary                                                           -                  1,123,406
                                                                        ---                  ---------


     Stockholders'
     equity
     (deficit):

     Series
     C
     convertible
     preference
     shares
     of
     subsidiary                                                           -                  4,993,728

     Preferred
     Stock                                                                    13,595,662                      9,838,569

     Common
     Stock                                                                    66,028,712                     49,934,027

     Accumulated
     deficit                                                                 (80,838,169)                   (64,571,897)

     Accumulated
     other
     comprehensive
     income                                                               -                    204,629
                                                                        ---                    -------


     Total
     stockholders'
     equity
     (deficit)                                                                (1,213,795)                       399,056
                                                                              ----------                        -------


    Total liabilities and stockholders' equity (deficit)                     $12,030,929                     $8,897,458
                                                                             ===========                     ==========

SOURCE WaferGen Bio-systems, Inc.