htgm-8k_20190806.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

August 6, 2019

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))

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. 

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

 

 


 

Item 2.02 Results of Operations and Financial Condition

On August 6, 2019, HTG Molecular Diagnostics, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2019. 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 August 6, 2019

 

 


 

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: August 6, 2019

 

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 Second Quarter 2019 Results

Product and product-related services revenue increased by 119% and 89%, respectively,

compared to the three and six-month periods in the prior year

 

Call scheduled for today, August 6, at 4:30pm ET

 

 

TUCSON, Ariz., August 6, 2019 -- HTG Molecular Diagnostics, Inc. (Nasdaq:HTGM) (HTG), a diagnostic company whose mission is to advance precision medicine, today reported its financial results for the second quarter ended June 30, 2019.

 

 

Recent Accomplishments & Highlights:

 

Achieved product and product-related services revenue of $4.4 million and $7.1 million for the three and six-month periods ended June 30, 2019, respectively, representing a 119% and an 89% increase over the respective periods in 2018 and reflecting growth in both research use only (RUO) profiling and molecular diagnostics (MDx) revenue.

 

Announced the release of its HTG EdgeSeq Reveal data analytics software, version 1.2.0, that will further enable customers to streamline their analysis of samples processed on the HTG EdgeSeq platform with additional HTG EdgeSeq assays.  

 

Introduced two previously released assays, the HTG EdgeSeq DLBCL Cell of Origin Assay and the HTG EdgeSeq Lung Fusions RUO Assay, for use with the Thermo Fisher Scientific Ion Torrent TM Ion S5 next-generation sequencing (NGS) platform.

 

 

“We are very pleased to see continued growth in our RUO profiling business coupled with building momentum in our molecular diagnostics business this quarter. We anticipate continued strong performance from both segments throughout the balance of the year as we see positive growth in both our biopharmaceutical customers’ project pipelines and expansion of our relationships with academic medical centers in the United States and in Europe,” said John Lubniewski, President and CEO of HTG. “Collaborative development services revenue declined compared to 2018, as expected this quarter, due to reduced activity in our two active PDP development programs. In the meantime, we continue to actively pursue additional precision diagnostic partnerships with Biopharma partners. As we pass the midpoint of 2019, we remain confident in our ability to continue to execute on our corporate strategy.”


 


 

Second Quarter 2019 Financial Results:

Total revenue for the second quarter of 2019 was $5.8 million, an increase of 18% over the same period in the prior year and an 81% increase over the first quarter of 2019. The increase in revenue this quarter was primarily due to the steady growth of the company’s core RUO profiling business.

 

Product and product-related services revenue for the second quarter of 2019 was $4.4 million, an increase of 119% over the same period in the prior year and a 66% increase over the first quarter of 2019. Collaborative development services revenue for the second quarter of 2019 was $1.4 million compared to $2.9 million in the same period in 2018 and $0.5 million for the first quarter of 2019.

 

Net loss from operations for the second quarter of 2019 was $4.7 million, compared to $4.1 million for the second quarter of 2018 and $5.3 million for the first quarter of 2019. Net loss per share was $(0.17) for the second quarter of 2019 compared to $(0.14) for the second quarter of 2018 and $(0.19) for the first quarter of 2019.

 

HTG ended the second quarter with $21.6 million in cash, cash equivalents and short-term available-for-sale securities and current liabilities of approximately $8.0 million plus an additional $15.5 million in non-current liabilities. An additional $3.3 million of restricted cash was held in connection with a convertible note that is included in non-current liabilities as of June 30, 2019.  

 

2019 Revenue Guidance:

The company believes that its total revenue for the full year ending December 31, 2019 will be in the range of $23.0 to $26.0 million.

 

 

Conference Call and Webcast:

HTG will host an investment community conference call today beginning at 4:30 p.m. Eastern Time. Conference call and webcast details follow:

 

Date:

 

Tuesday, August 6, 2019

Time:

 

4:30pm Eastern Time

Toll Free:

 

(877) 407-0789

International:

 

(201) 689-8562

Conference ID:

 

13692789

Webcast:

 

http://public.viavid.com/index.php?id=135458

 

 

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 expected continued strong performance, growth of various lines of business and our revenue and operational expectations. 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, the risk that we may

 


 

not achieve our revenue expectations for 2019; the risk that we may not realize the benefits expected under our collaboration agreements; risks associated with our ability to successfully commercialize our products; 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 effectively manage our anticipated growth; 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 June 30, 2019. 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.

 

 

-Financial tables follow-


 


 

HTG Molecular Diagnostics, Inc.

 

Consolidated Statements of Operations

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and product-related services

 

$

4,424,368

 

 

$

2,023,312

 

 

$

7,086,873

 

 

$

3,756,858

 

Collaborative development services

 

 

1,371,952

 

 

 

2,887,454

 

 

 

1,912,272

 

 

 

5,312,560

 

Total revenue

 

 

5,796,320

 

 

 

4,910,766

 

 

 

8,999,145

 

 

 

9,069,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Cost of product and product-related services revenue

 

 

2,508,371

 

 

 

1,450,682

 

 

 

4,553,898

 

 

 

2,587,745

 

     Selling, general and administrative

 

 

4,740,710

 

 

 

4,764,751

 

 

 

9,141,576

 

 

 

10,422,583

 

     Research and development

 

 

3,253,639

 

 

 

2,758,984

 

 

 

5,328,387

 

 

 

5,348,270

 

Total operating expenses

 

 

10,502,720

 

 

 

8,974,417

 

 

 

19,023,861

 

 

 

18,358,598

 

Operating loss

 

 

(4,706,400

)

 

 

(4,063,651

)

 

 

(10,024,716

)

 

 

(9,289,180

)

Loss on settlement of Growth Term Loan

 

 

 

 

 

 

 

 

 

 

 

(105,064

)

Interest income (expense), net

 

 

(84,022

)

 

 

(35,533

)

 

 

(136,552

)

 

 

(84,887

)

Net loss before income taxes

 

 

(4,790,422

)

 

 

(4,099,184

)

 

 

(10,161,268

)

 

 

(9,479,131

)

Provision for income taxes

 

 

6,848

 

 

 

3,545

 

 

 

6,848

 

 

 

3,545

 

Net loss

 

$

(4,797,270

)

 

$

(4,102,729

)

 

$

(10,168,116

)

 

$

(9,482,676

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.17

)

 

$

(0.14

)

 

$

(0.36

)

 

$

(0.36

)

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

 

 

28,657,384

 

 

 

28,375,379

 

 

 

28,629,189

 

 

 

26,549,895

 


 


 

HTG Molecular Diagnostics, Inc.

 

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,813,589

 

 

$

8,432,600

 

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

 

 

9,753,727

 

 

 

22,681,049

 

Accounts receivable

 

 

3,981,103

 

 

 

5,012,678

 

Inventory, net

 

 

1,160,682

 

 

 

1,306,609

 

Prepaid expenses and other

 

 

1,069,180

 

 

 

568,209

 

Total current assets

 

 

27,778,281

 

 

 

38,001,145

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

3,270,247

 

 

 

3,270,247

 

Deferred offering costs

 

 

198,088

 

 

 

59,030

 

Deferred MidCap revolving loan costs

 

 

59,086

 

 

 

67,068

 

Operating lease right-of-use assets, net

 

 

1,394,664

 

 

 

 

Property and equipment, net

 

 

2,424,625

 

 

 

2,373,790

 

Total assets

 

$

35,124,991

 

 

$

43,771,280

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,357,343

 

 

$

1,849,921

 

Accrued liabilities

 

 

1,499,510

 

 

 

3,358,465

 

Contract liabilities - current

 

 

486,994

 

 

 

332,711

 

NuvoGen obligation - current

 

 

1,286,152

 

 

 

1,290,234

 

MidCap Term Loan payable - current

 

 

583,333

 

 

 

 

Operating lease liabilities - current

 

 

682,863

 

 

 

 

Other current liabilities

 

 

63,344

 

 

 

186,043

 

Total current liabilities

 

 

7,959,539

 

 

 

7,017,374

 

NuvoGen obligation - non-current, net of discount

 

 

5,044,263

 

 

 

5,702,519

 

Convertible note, related party - net of debt issuance costs

 

 

2,980,940

 

 

 

2,974,213

 

MidCap Term Loan payable - non-current, net of discount and debt issuance costs

 

 

6,194,422

 

 

 

6,704,641

 

Operating lease liabilities - non-current

 

 

976,786

 

 

 

 

Other non-current liabilities

 

 

299,049

 

 

 

280,471

 

Total liabilities

 

 

23,454,999

 

 

 

22,679,218

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

11,669,992

 

 

 

21,092,062

 

Total liabilities and stockholders' equity

 

$

35,124,991

 

 

$

43,771,280

 

 

 

 

 

 

 

 

 

 

 


 


 

Contact:

 

Ashley Robinson

LifeSci Advisors, LLC

Phone: (617) 535-7742

Email: arr@lifesciadvisors.com