htgm-8k_20201110.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

November 10, 2020

Date of Report (Date of earliest event reported)

 

HTG Molecular Diagnostics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-37369

 

86-0912294

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

3430 E. Global Loop

Tucson, AZ

 

85706

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (877) 289-2615

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.001 par value per share

 

HTGM

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On November 10, 2020, HTG Molecular Diagnostics, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2020. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 and the attached exhibit are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

Exhibit

No.

 

Description

 

 

 

99.1

 

Press release of HTG Molecular Diagnostics, Inc. dated November 10, 2020

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

HTG Molecular Diagnostics, Inc.

 

 

 

 

 

Dated: November 10, 2020

 

By:

 

/s/ Shaun D. McMeans

 

 

 

 

Shaun D. McMeans

 

 

 

 

SVP and Chief Financial Officer

 

 

htgm-ex991_6.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

HTG Molecular Diagnostics Reports Third Quarter 2020 Results

 

Call scheduled for today, November 10, at 4:30pm ET

 

TUCSON, Ariz., November 10, 2020 -- HTG Molecular Diagnostics, Inc. (Nasdaq: HTGM) (HTG), a life science company whose mission is to advance precision medicine, today reported its financial results for the quarter ended September 30, 2020.

 

Recent Business Highlights

 

 

Released HTG EdgeSeq Reveal version 3.0, adding additional software functionalities, including analytic capabilities for use with HTG’s entire RUO profiling assay menu and new RUO oncology applications. HTG EdgeSeq Reveal, originally launched in January 2019, is a web-based biostatistical analysis software suite designed to accelerate customer research by streamlining statistical analysis of samples processed with HTG’s RUO profiling assays.

 

 

Entered into a 10-year Commercialization and Distribution Agreement (Master Agreement) with QIAGEN Manchester Limited (QIAGEN), providing the foundation for HTG and QIAGEN to combine their technological and commercial strengths with the goal to offer pharmaceutical companies global development, distribution and commercialization capabilities for companion diagnostic assays developed on the HTG EdgeSeq platform.

 

“As the impact of COVID-19 placed continued pressure on our core oncology business, including planned studies and laboratory operations of our customers in the third quarter of 2020, we continued to make strategic shifts in our business into areas less impacted by the pandemic,” said John Lubniewski, President and CEO of HTG. “We also believe strategic adjustments made over the past several months to lessen the impact of COVID-19 on our business are working. These efforts have focused on customer diversification to include a larger number of smaller and mid-sized biopharma customers and academic medical centers who have shown signs of returning to work more quickly than our larger customers. We are also targeting the large immune response market, which is often a new call point with our current customer base. Immune response target markets include, but are not limited to, autoimmune disorder and infectious disease. The ultimate impact of COVID-19 remains uncertain, but we are seeing positive trends in non-oncology opportunities and believe direct revenue from our core oncology business will begin to recover to pre-COVID levels in the first half of next year.”

 

Mr. Lubniewski continued, “Our product development team continued to perform on our key milestones during the quarter. We have produced our first white paper on technical feasibility for our approximately 20,000 gene whole transcriptome (WTTx) HTG EdgeSeq panel, and we believe we remain on track to delivering upcoming development and commercialization milestones as well. We have positioned ourselves through careful cost savings, strategic initiatives and a continued focus on strengthening our technology to meet demand and to grow when we and our customers are able to return to normal operations.”

 

Third Quarter 2020 Financial Highlights:

Total revenue for the quarter ended September 30, 2020 was $1.8 million, compared with $5.4 million for the same period in 2019. The decrease in revenue is a result of the impact of the COVID-19 pandemic requiring the closure of customer facilities or continuing to limit the ability of our customers to operate at pre-pandemic levels.  

 

 


Product and product-related services revenue was $1.7 million for the quarter ended September 30, 2020, compared with $4.3 million for the same period in 2019. Throughout the pandemic, HTG’s ability to ship instruments and consumables to customer facilities and the ability of its customers to prepare and ship samples to HTG’s VERI/O laboratory for processing has been limited. In addition to the impacts of the COVID-19 pandemic, this decrease reflects a decline in lower margin subcontracted laboratory services revenue when compared with the third quarter of 2019.

 

Collaborative development services revenue for the quarter ended September 30, 2020 was $0.1 million compared with $1.1 million for the same period in 2019, reflecting the completion of remaining procedures under existing arrangements and ongoing sales efforts to identify and contract new programs in this area.

 

Net loss from operations for the quarter ended September 30, 2020 was $5.2 million, compared with $4.6 million for the third quarter of 2019. Net loss per share was $(0.07) for the third quarter of 2020 compared with $(0.15) for the third quarter of 2019.

 

Cash, cash equivalents and short-term available-for-sale securities totaled $30.5 million as of September 30, 2020, with current liabilities of approximately $6.0 million and non-current liabilities of $14.5 million.

 

Conference Call and Webcast:

HTG will host a conference call for the investment community today beginning at 4:30 p.m. Eastern Time. Conference call and webcast details are as follows:

 

Date:

 

Tuesday, November 10, 2020

Time:

 

4:30 p.m. Eastern Time

Toll Free:

 

(877) 407-0789

International:

 

(201) 689-8562

Conference ID:

 

13711846

Webcast:

 

http://public.viavid.com/index.php?id=141926

 

 

About HTG:

HTG is focused on NGS-based molecular profiling. The company’s proprietary HTG EdgeSeq technology automates complex, highly multiplexed molecular profiling from solid and liquid samples, even when limited in amount. HTG’s customers use its technology to identify biomarkers important for precision medicine, to understand the clinical relevance of these discoveries, and ultimately to identify treatment options. Its mission is to empower precision medicine.

 

 

Safe Harbor Statement:

Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the potential benefits of the Master Agreement with QIAGEN, the anticipated duration of the impact of the COVID-19 pandemic on our business, our being on track to deliver development milestones, our belief that direct revenue from our core oncology business will begin to recover to pre-COVID levels in the first half of next year, and our expectations for increased demand for our products and services in the future and our ability to meet those demands and for growth in our business. Words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements necessarily contain these identifying words. These forward-looking statements are based upon management’s current expectations, are subject to known and unknown risks, and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, including, without limitation, risks associated with the impact of the COVID-19 pandemic on us and our customers; the risk that we may not establish new and significant collaboration development arrangements; risks associated with our ability to develop and commercialize our products, including our WTTx product; the risk that our products and services may not be adopted by biopharmaceutical companies or other customers as anticipated, or at all; our ability to manufacture our products to meet demand; the level and availability of


third party payor reimbursement for our products; our ability to protect our intellectual property rights and proprietary technologies; our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties; competition in our industry; additional capital and credit availability; our ability to attract and retain qualified personnel; and product liability claims. These and other factors are described in greater detail in our filings with the Securities and Exchange Commission, including without limitation our Quarterly Report on Form 10‑Q for the quarter ended September 30, 2020. All forward-looking statements contained in this press release speak only as of the date on which they were made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

 

Contact:

 

Ashley Robinson

Phone: (617) 430-7577

Email: arr@lifesciadvisors.com

 

 

 

-Financial tables follow-



 

HTG Molecular Diagnostics, Inc.

 

Condensed Consolidated Statements of Operations

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and product-related services

 

$

1,701,068

 

 

$

4,311,043

 

 

$

5,417,731

 

 

$

11,397,916

 

Collaborative development services

 

 

76,030

 

 

 

1,093,750

 

 

 

548,135

 

 

 

3,006,022

 

Total revenue

 

 

1,777,098

 

 

 

5,404,793

 

 

 

5,965,866

 

 

 

14,403,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Cost of product and product-related                          

        services revenue

 

 

940,892

 

 

 

2,939,007

 

 

 

2,931,026

 

 

 

7,492,905

 

     Selling, general and administrative

 

 

4,752,321

 

 

 

4,516,341

 

 

 

13,683,069

 

 

 

13,657,917

 

     Research and development

 

 

1,255,416

 

 

 

2,570,355

 

 

 

4,914,467

 

 

 

7,898,742

 

Total operating expenses

 

 

6,948,629

 

 

 

10,025,703

 

 

 

21,528,562

 

 

 

29,049,564

 

Operating loss

 

 

(5,171,531

)

 

 

(4,620,910

)

 

 

(15,562,696

)

 

 

(14,645,626

)

Other income (expense), net

 

 

(238,676

)

 

 

(123,000

)

 

 

(482,599

)

 

 

(259,552

)

Loss on extinguishment of MidCap Credit

     Facility and QNAH Convertible Note

 

 

 

 

 

 

 

 

(522,394

)

 

 

 

Net loss before income taxes

 

 

(5,410,207

)

 

 

(4,743,910

)

 

 

(16,567,689

)

 

 

(14,905,178

)

Benefit from (provision for) income taxes

 

 

(1,581

)

 

 

3,678

 

 

 

(12,548

)

 

 

(3,170

)

Net loss

 

$

(5,411,788

)

 

$

(4,740,232

)

 

$

(16,580,237

)

 

$

(14,908,348

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.07

)

 

$

(0.15

)

 

$

(0.25

)

 

$

(0.50

)

Shares used in computing net loss per share, basic and diluted

 

 

72,323,436

 

 

 

31,367,044

 

 

 

67,567,031

 

 

 

29,551,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



HTG Molecular Diagnostics, Inc.

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,884,468

 

 

$

7,619,748

 

Short-term investments available-for-sale, at fair value

 

 

11,632,160

 

 

 

25,410,222

 

Restricted cash

 

 

 

 

 

3,270,247

 

Accounts receivable

 

 

1,370,201

 

 

 

3,164,176

 

Inventory, net

 

 

1,538,553

 

 

 

1,269,667

 

Prepaid expenses and other

 

 

946,979

 

 

 

633,522

 

Total current assets

 

 

34,372,361

 

 

 

41,367,582

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

746,185

 

 

 

1,209,145

 

Property and equipment, net

 

 

1,526,698

 

 

 

2,240,133

 

Other non-current assets

 

 

64,861

 

 

 

302,409

 

Total assets

 

$

36,710,105

 

 

$

45,119,269

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

875,236

 

 

$

1,662,583

 

Accrued liabilities

 

 

1,386,825

 

 

 

1,870,296

 

Contract liabilities - current

 

 

348,274

 

 

 

426,014

 

NuvoGen obligation - current

 

 

645,949

 

 

 

1,152,233

 

Short-term debt, net

 

 

2,266,884

 

 

 

2,987,667

 

Operating lease liabilities - current

 

 

436,663

 

 

 

758,932

 

Other current liabilities

 

 

26,620

 

 

 

41,134

 

Total current liabilities

 

 

5,986,451

 

 

 

8,898,859

 

NuvoGen obligation - non-current, net of discount

 

 

4,455,968

 

 

 

4,498,777

 

Long-term debt, net

 

 

9,446,985

 

 

 

6,871,545

 

Operating lease liabilities - non-current

 

 

390,233

 

 

 

636,340

 

Other non-current liabilities

 

 

229,114

 

 

 

244,114

 

Total liabilities

 

 

20,508,751

 

 

 

21,149,635

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

16,201,354

 

 

 

23,969,634

 

Total liabilities and stockholders' equity

 

$

36,710,105

 

 

$

45,119,269