htgm-8k_20181108.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 8, 2018

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. 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition

On November 8, 2018, HTG Molecular Diagnostics, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2018. 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 8, 2018

 

 


 

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 8, 2018

 

By:

 

/s/ Shaun D. McMeans

 

 

 

 

Shaun D. McMeans

 

 

 

 

Senior Vice President and Chief Financial Officer

 

 

htgm-ex991_6.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

 

HTG Molecular Diagnostics Reports Third Quarter 2018 Results

Revenue increased 26% and 101% for the three and nine months ended September 30, 2018 compared to the respective prior year periods

Call scheduled for today, November 8, at 4:30 pm ET

 

 

TUCSON, Ariz., November 8, 2018 HTG Molecular Diagnostics, Inc. (Nasdaq: HTGM) (HTG), a provider of instruments, reagents and services for molecular profiling applications, today reported financial results for the three and nine months ended September 30, 2018.

 

Recent Accomplishments & Highlights:

 

Achieved revenue of $4.7 million and $13.8 million for the three and nine months ended September 30, 2018, respectively, which represents a 26% and 101% increase over the same periods in 2017, respectively.

 

 

Announced three amendments to the second PDP Program (SOW Two) under the Master Assay Development, Commercialization and Manufacturing Agreement (the Governing Agreement) with QIAGEN Manchester Limited (QML). Development activities for the clinical trial assay have been completed, and the amendments relate to the next phase development activities, including the use of the investigational use only (IUO) assay developed in the initial-phase in a retrospective clinical trial and in additional disease indications.

 

 

Entered into an amendment to the third PDP Program (SOW Three) under the Governing Agreement with QML. Initial assay development activities under SOW Three are complete, and the amendment provides for the development of an IUO assay, subsequent retrospective testing of clinical trial samples, design verification and, subject to satisfactory achievement of relevant performance and regulatory milestones, regulatory submission in the US and EU necessary for the commercialization of a companion diagnostic assay for a corresponding pharmaceutical company drug.

 

 

Launched the HTG EdgeSeq Precision Immuno-Oncology Panel and began delivery of orders to translational and clinical researchers working in the field of cancer immunology and/or cancer immunotherapy. This research use only profiling panel provides a large, comprehensive set of genes involved in the host immune response to tumors.

 

 

Announced the pre-launch introduction of the new HTG EdgeSeq Mouse miRNA Whole Transcriptome Assay (WTA) with product availability for shipment expected in the fourth quarter of 2018. The HTG EdgeSeq Mouse miRNA WTA is designed for use with disease mouse models, including oncology, to identify and quantify the expression of a wide range of miRNAs in a variety of sample types, including formalin‑fixed paraffin-embedded tissue.

 

 


 

Appointed Dr. Maureen T. Cronin as HTG’s new Chief Scientific Officer and Senior Vice President in November 2018. Dr. Cronin brings extensive experience in genomic technology, laboratory test and pharmaceutical company therapeutics development, as well as regulatory compliance and academic clinical research to HTG.

 

Third Quarter 2018 Financial Results:

Total revenue for the third quarter of 2018 was $4.7 million, an increase of 26% over the same period in the prior year and included product and product-related services revenue of $1.3 million and collaborative development services revenue of $3.4 million.  Revenue for the third quarter of 2017 included product and product-related services revenue of $1.6 million and collaborative development services revenue of $2.1 million.

 

Net loss from operations for the third quarter of 2018 was $4.8 million compared to $5.4 million for the same period in the prior year. Net loss per share was $(0.17) for the third quarter of 2018 compared to $(0.46) for the same period in the prior year.

 

HTG ended the third quarter of 2018 with $33.8 million of cash, cash equivalents and short term, available-for-sale securities investments.

 

 

2018 Revenue Guidance:

The company believes that its total revenue for the full year ending December 31, 2018 will be in the middle of the range of its previous full year 2018 revenue guidance of $21.0 to $25.0 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:Thursday, November 8, 2018

Time:4:30 p.m. Eastern Time

Toll Free:(800) 458-4121

International:(323) 794-2093

Conference ID:5881694

Webcast:http://public.viavid.com/index.php?id=131460

 

 

About HTG:

HTG is focused on next generation sequencing (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. The company’s mission is to empower precision medicine at the local level.

 

 

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 our Precision Immuno-Oncology Panel and planned HTG EdgeSeq Mouse miRNA Whole Transcriptome Assay, 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 the Precision Immuno-Oncology panel may not function or provide benefits to our customers as expected, the risk that the HTG EdgeSeq Mouse


miRNA Whole Transcriptome Assay may not be available when expected or provide benefits to our customers as expected, the risk that we may not achieve our revenue expectations for 2018 (including, without limitation, due to variations from our expectations in the amount or timing of work we perform under one or more companion diagnostic development programs with large pharma customers, which development programs comprise an increasing portion of our business and therefore have the ability to significantly impact the timing and amount of revenue recognized in one or more fiscal periods), 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, 2018. 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.

 

Condensed Statements of Operations

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and product-related services

 

$

1,314,844

 

 

$

1,592,790

 

 

$

5,071,702

 

 

$

4,422,304

 

Collaborative development services

 

 

3,391,534

 

 

 

2,130,694

 

 

 

8,704,094

 

 

 

2,433,105

 

Total revenue

 

 

4,706,378

 

 

 

3,723,484

 

 

 

13,775,796

 

 

 

6,855,409

 

Cost of revenue

 

 

1,239,702

 

 

 

1,088,987

 

 

 

3,827,447

 

 

 

3,621,193

 

Gross margin

 

 

3,466,676

 

 

 

2,634,497

 

 

 

9,948,349

 

 

 

3,234,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Selling, general and administrative

 

 

4,709,885

 

 

 

4,258,347

 

 

 

15,132,468

 

 

 

12,910,251

 

     Research and development

 

 

3,561,459

 

 

 

3,478,419

 

 

 

8,909,729

 

 

 

6,364,371

 

Total operating expenses

 

 

8,271,344

 

 

 

7,736,766

 

 

 

24,042,197

 

 

 

19,274,622

 

Operating loss

 

 

(4,804,668

)

 

 

(5,102,269

)

 

 

(14,093,848

)

 

 

(16,040,406

)

Loss on settlement of Growth Term Loan

 

 

 

 

 

 

 

 

(105,064

)

 

 

 

Other expense, net

 

 

(38,740

)

 

 

(277,834

)

 

 

(123,627

)

 

 

(996,593

)

Net loss before income taxes

 

 

(4,843,408

)

 

 

(5,380,103

)

 

 

(14,322,539

)

 

 

(17,036,999

)

Provision for income taxes

 

 

 

 

 

743

 

 

 

3,545

 

 

 

1,023

 

Net loss

 

$

(4,843,408

)

 

$

(5,380,846

)

 

$

(14,326,084

)

 

$

(17,038,022

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.17

)

 

$

(0.46

)

 

$

(0.53

)

 

$

(1.74

)

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

 

 

28,434,406

 

 

 

11,603,617

 

 

 

27,184,968

 

 

 

9,794,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

HTG Molecular Diagnostics, Inc.

 

Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2018

 

 

2017

 

Assets

 

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,164,005

 

 

$

9,968,600

 

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

 

 

27,613,031

 

 

 

 

Accounts receivable

 

 

3,361,333

 

 

 

6,356,268

 

Inventory, net of allowance of $39,403 at September 30, 2018 and

   $62,142 at December 31, 2017

 

 

1,129,092

 

 

 

1,180,521

 

Prepaid expenses and other

 

 

688,556

 

 

 

443,068

 

Total current assets

 

 

38,956,017

 

 

 

17,948,457

 

 

 

 

 

 

 

 

 

 

Restricted cash - non-current

 

 

3,270,247

 

 

 

 

Deferred offering costs

 

 

 

 

 

2,953

 

Deferred MidCap revolving loan costs

 

 

71,126

 

 

 

 

Property and equipment, net

 

 

2,614,620

 

 

 

3,304,890

 

Total assets

 

$

44,912,010

 

 

$

21,256,300

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,867,181

 

 

$

2,438,798

 

Accrued liabilities

 

 

2,530,615

 

 

 

3,746,786

 

Contract liabilities - current

 

 

273,763

 

 

 

665,882

 

NuvoGen obligation - current

 

 

593,860

 

 

 

496,442

 

Growth Term Loan payable - net of discount and debt issuance costs

 

 

 

 

 

5,793,599

 

Other current liabilities

 

 

199,621

 

 

 

200,460

 

Total current liabilities

 

 

5,465,040

 

 

 

13,341,967

 

NuvoGen obligation - non-current, net of discount

 

 

6,684,631

 

 

 

7,520,913

 

Convertible note, related party - net of debt issuance costs

 

 

2,970,850

 

 

 

2,960,760

 

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

 

 

6,666,796

 

 

 

 

Other non-current liabilities

 

 

333,367

 

 

 

492,197

 

Total liabilities

 

 

22,120,684

 

 

 

24,315,837

 

Commitments and Contingencies (Note 14)

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 200,000,000 shares authorized at

   September 30, 2018 and December 31, 2017, 28,479,341 shares

   issued and outstanding at September 30, 2018 and 13,929,763

  shares issued and outstanding at December 31, 2017

 

 

28,479

 

 

 

13,929

 

Additional paid-in-capital

 

 

171,663,874

 

 

 

131,492,595

 

Accumulated other comprehensive loss

 

 

(8,882

)

 

 

 

Accumulated deficit

 

 

(148,892,145

)

 

 

(134,566,061

)

Total stockholders’ equity (deficit)

 

 

22,791,326

 

 

 

(3,059,537

)

Total liabilities and stockholders' equity (deficit)

 

$

44,912,010

 

 

$

21,256,300

 

 

 

 

 

 

 

 

 

 


Contact:

 

Ashley Robinson

LifeSci Advisors, LLC

Phone: (617) 775-5956

Email: arr@lifesciadvisors.com

 

TJ Johnson
Chief Executive Officer
HTG Molecular Diagnostics
Phone: (520) 547-2827 x130
Email: tjjohnson@htgmolecular.com