HTGM HTG Molecular Diagnostics Inc

HTG Molecular Diagnostics, Inc. (NASDAQ:HTGM), a provider of instruments, reagents and services for molecular profiling applications, today reported financial results for the fourth quarter and year ended December 31, 2016.

Recent Accomplishments & Highlights:

• Signed a development, manufacturing and commercialization agreement with a wholly owned affiliate of QIAGEN, N.V.•  QIAGEN North American Holdings also made a minority investment in HTG’s common stock•  Completed technical feasibility assay for QIAGEN GeneReader next-generation sequencing platform
• Obtained CE marking for the HTG EdgeSeq ALKPlus Assay for commercialization of the assay as an in vitro diagnostic (IVD) in the European Union
• Announced availability of new direct sequencing chemistry and initial DNA mutation assay as a service offering in the company’s VERI/O laboratory
• Achieved revenue of $1.5 million for the fourth quarter of 2016 compared to $1.2 million in Q4 2015•  Service revenue increased to $381,000 in the fourth quarter of 2016 from $33,000 in Q4 2015
• Achieved revenue of $5.1 million for the year ended December 31, 2016 compared to $4.0 million for the year ended December 31, 2015•  Service revenue increased to $2.4 million in 2016 from $184,000 in 2015

“In 2016, we believe HTG made significant strides in customer adoption and building a solid platform for long-term growth,” said TJ Johnson, HTG’s President and CEO.

Fourth Quarter 2016 Financial Results:                                                                                                                                                                     

Revenue for the fourth quarter of 2016 was $1.5 million. Net loss from operations was $5.2 million for the fourth quarter of 2016, compared to $5.3 million for the fourth quarter of 2015. Net loss per share was $(0.76) for the fourth quarter of 2016 and $(0.83) for the fourth quarter of 2015.

Full Year 2016 Financial Results:

Revenue for the year ended December 31, 2016 was $5.1 million. Net loss from operations for the year ended December 31, 2016 was $24.3 million, compared to $18.9 million for the year ended December 31, 2015. Net loss per share was $(3.66) for the year ended December 31, 2016 and $(5.03) for the year ended December 31, 2015. HTG ended 2016 with $11.8 million in total cash and investments, including $7.5 million in cash and equivalents and $4.3 million in short term available-for-sale investments, and current liabilities of approximately $10.0 million plus an additional $14.0 million in long-term liabilities.

Conference Call

HTG will host an investment community conference call today beginning at 5:00 p.m. ET. Individuals interested in listening to the conference call may dial (866) 394-4225 for domestic callers, or (678) 509-7535 for international callers, conference ID 91525538, or access the webcast on the investor relations section of the Company’s website at: www.htgmolecular.com. The webcast will be available on the Company’s website for 90 days following the completion of the call.

About HTG:

Headquartered in Tucson, Arizona, HTG’s mission is to empower precision medicine at the local level. In 2013, the company commercialized its first instrument platform and a portfolio of RNA assays that leveraged HTG's original proprietary nuclease protection chemistry. Continuous improvement led to the 2014 launch of the company’s HTG EdgeSeq product line, which automates sample and targeted library preparation for next-generation sequencing. Additional information is available at www.htgmolecular.com.

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 growth prospects, and strategic priorities. Words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements, though 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 our ability to enter into new collaborations with Pharma customers, risks associated with our ability to obtain regulatory clearances or approvals in the United States and other jurisdictions to market panels for diagnostic purposes, our ability to successfully commercialize our products; 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; requirements for 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 Annual Report on Form 10-K for the year ended December 31, 2016. 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.
Statements of Operations
		Three Months Ended December 31,								Years Ended December 31,
		2016				2015				2016				2015
		(Unaudited)
Revenue:
Product		$	1,076,560			$	1,182,287			$	2,759,942			$	3,532,028
Service			381,221				33,466				2,372,788				183,758
Other			—				—				—				325,789
Total revenue			1,457,781				1,215,753				5,132,730				4,041,575
Cost of revenue			1,234,429				796,921				4,135,884				3,335,511
Gross margin			223,352				418,832				996,846				706,064
Operating expenses:
Selling, general and administrative			4,083,832				4,111,249				17,427,777				14,994,410
Research and development			1,384,503				1,650,709				7,900,311				4,601,718
Total operating expenses			5,468,335				5,761,958				25,328,088				19,596,128
Operating loss			(5,244,983	)			(5,343,126	)			(24,331,242	)			(18,890,064	)
Loss from change in stock warrant valuation			—				—				—				(239,683	)
Interest expense, net			(425,649	)			(348,443	)			(1,755,053	)			(1,633,616	)
Loss on settlement of convertible debt			—				—				—				(705,217	)
Other			3,410				2,105				56,863				80,978
Net loss before income taxes			(5,667,222	)			(5,689,463	)			(26,029,432	)			(21,387,602	)
Income taxes			5,859				10,189				10,118				10,189
Net loss			(5,673,081	)			(5,699,652	)			(26,039,550	)			(21,397,791	)
Accretion of redeemable convertible preferred stock discount, issuance costs and dividends			—				—				—				(1,328,594	)
Net loss attributable to common stockholders		$	(5,673,081	)		$	(5,699,652	)		$	(26,039,550	)		$	(22,726,385	)
Net loss per share attributable to common stockholders, basic and diluted		$	(0.76	)		$	(0.83	)		$	(3.66	)		$	(5.03	)
Shares used in computing net loss per share attributable to common stockholders, basic and diluted			7,488,842				6,840,918				7,113,075				4,518,499

HTG Molecular Diagnostics, Inc.
Balance Sheets
		December 31,
		2016				2015
Assets
Current assets:
Cash and cash equivalents		$	7,507,659			$	3,293,983
Short-term investments available-for-sale, at fair value			4,304,901				28,201,507
Accounts receivable			1,377,441				716,246
Inventory, net			1,511,053				2,201,301
Prepaid expenses and other			433,328				445,217
Total current assets			15,134,382				34,858,254
Long-term investments available-for-sale, at fair value			—				2,603,901
Deferred offering costs			49,630				—
Property and equipment, net			3,270,197				1,932,213
Total assets		$	18,454,209			$	39,394,368
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable		$	761,663			$	724,805
Accrued liabilities			1,670,286				1,915,268
Deferred revenue			335,659				47,476
NuvoGen obligation			604,751				543,750
Term loan			6,389,782				3,059,068
Other current liabilities			258,850				29,243
Total current liabilities			10,020,991				6,319,610
Term loan payable - non-current, net of discount and debt issuance costs			5,389,137				7,737,586
NuvoGen obligation - non-current, net of discount			8,017,356				8,415,122
Other			619,587				28,652
Total liabilities			24,047,071				22,500,970
Commitments and Contingencies
Total stockholders’ equity (deficit)			(5,592,862	)			16,893,398
Total liabilities and stockholders' equity (deficit)		$	18,454,209			$	39,394,368

Contact:

Westwicke Partners
Jamar Ismail
Phone: (415) 513-1282
Email: jamar.ismail@westwicke.com

TJ Johnson
President / CEO
HTG Molecular Diagnostic
Phone: (520) 547-2827 x130
Email: tjjohnson@htgmolecular.com