Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 16, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HTGM | ||
Entity Registrant Name | HTG Molecular Diagnostics, Inc | ||
Entity Central Index Key | 1,169,987 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 28,355,800 | ||
Entity Public Float | $ 30,213,142 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 9,968,600 | $ 7,507,659 |
Short-term investments available-for-sale, at fair value | 4,304,901 | |
Accounts receivable | 6,356,268 | 1,377,441 |
Inventory, net of allowance of $62,142 at December 31, 2017 and $270,307 at December 31, 2016 | 1,180,521 | 1,511,053 |
Prepaid expenses and other | 443,068 | 433,328 |
Total current assets | 17,948,457 | 15,134,382 |
Deferred offering costs | 2,953 | 49,630 |
Property and equipment, net | 3,304,890 | 3,270,197 |
Total assets | 21,256,300 | 18,454,209 |
Current liabilities: | ||
Accounts payable | 2,438,798 | 761,663 |
Accrued liabilities | 3,746,786 | 1,670,286 |
Deferred revenue - current | 665,882 | 335,659 |
NuvoGen obligation - current | 496,442 | 604,751 |
Term loan payable - current, net of discount and debt issuance costs of $64,807 at December 31, 2017 and $0 at December 31, 2016 | 5,793,599 | 6,389,782 |
Other current liabilities | 200,460 | 258,850 |
Total current liabilities | 13,341,967 | 10,020,991 |
Term loan payable - non-current, net of discount and debt issuance costs of $0 at December 31, 2017 and $263,378 at December 31, 2016 | 5,389,137 | |
NuvoGen obligation - non-current, net of discount | 7,520,913 | 8,017,356 |
Convertible note, related party - net of debt issuance costs | 2,960,760 | |
Other non-current liabilities | 492,197 | 619,587 |
Total liabilities | 24,315,837 | 24,047,071 |
Commitments and Contingencies (Note 13) | ||
Stockholders’ deficit: | ||
Common stock, $0.001 par value; 200,000,000 shares authorized at December 31, 2017 and December 31, 2016; 13,929,763 shares issued and outstanding, at December 31, 2017; 7,939,967 and 7,938,571 shares issued and outstanding, respectively, at December 31, 2016 | 13,929 | 7,938 |
Additional paid-in-capital | 131,492,595 | 110,081,334 |
Treasury stock, no shares as of December 31, 2017 and 1,396 shares as of December 31, 2016 | (75,000) | |
Accumulated other comprehensive loss | (1,090) | |
Accumulated deficit | (134,566,061) | (115,606,044) |
Total stockholders’ deficit | (3,059,537) | (5,592,862) |
Total liabilities and stockholders' deficit | $ 21,256,300 | $ 18,454,209 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Inventory net allowance | $ 62,142 | $ 270,307 |
Term loan payable discount and debt issuance costs current | 64,807 | 0 |
Term loan payable discount and debt issuance costs non-current | $ 0 | $ 263,378 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 13,929,763 | 7,939,967 |
Common stock, shares outstanding | 13,929,763 | 7,938,571 |
Treasury stock, shares | 1,396 | 1,396 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | ||
Product and product-related services | $ 6,797,255 | $ 5,132,730 |
Collaborative development services | 7,962,312 | |
Total revenue | 14,759,567 | 5,132,730 |
Cost of revenue | 4,971,806 | 4,135,884 |
Gross margin | 9,787,761 | 996,846 |
Operating expenses: | ||
Selling, general and administrative | 17,513,742 | 17,427,777 |
Research and development | 9,996,627 | 7,900,311 |
Total operating expenses | 27,510,369 | 25,328,088 |
Operating loss | (17,722,608) | (24,331,242) |
Other income (expense): | ||
Interest expense | (1,307,674) | (1,867,466) |
Interest income | 73,178 | 112,413 |
Other income | 8 | 56,863 |
Total other income (expense) | (1,234,488) | (1,698,190) |
Net loss before income taxes | (18,957,096) | (26,029,432) |
Provision for income taxes | 2,921 | 10,118 |
Net loss | $ (18,960,017) | $ (26,039,550) |
Net loss per share, basic and diluted | $ (1.79) | $ (3.66) |
Shares used in computing net loss per share, basic and diluted | 10,597,318 | 7,113,075 |
Statements of Comprehensive Los
Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (18,960,017) | $ (26,039,550) |
Other comprehensive income, net of tax effect: | ||
Unrealized gain on short and long-term investments | 1,090 | 40,267 |
Comprehensive loss | $ (18,958,927) | $ (25,999,283) |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance at Dec. 31, 2015 | $ 16,893,398 | $ 6,844 | $ 106,569,405 | $ (75,000) | $ (41,357) | $ (89,566,494) |
Balance, shares at Dec. 31, 2015 | 6,844,242 | |||||
Stock issued for payment of 2015 annual bonus | 364,910 | $ 133 | 364,777 | |||
Stock issued for payment of 2015 annual bonus, shares | 133,179 | |||||
Exercise of stock options | 23,851 | $ 11 | 23,840 | |||
Exercise of stock options, shares | 11,093 | |||||
Stock-based compensation expense | 903,547 | 903,547 | ||||
Vesting of restricted stock units | 37 | $ 37 | ||||
Vesting of restricted stock units, shares | 36,762 | |||||
Stock issued under stock purchase plan | 273,218 | $ 80 | 273,138 | |||
Stock issued under stock purchase plan, shares | 79,962 | |||||
Stock issued for private investment | 1,825,000 | $ 833 | 1,824,167 | |||
Stock issued for private investment, shares | 833,333 | |||||
Growth Term Loan B warrant discount | 122,460 | 122,460 | ||||
Net loss | (26,039,550) | (26,039,550) | ||||
Other comprehensive income | 40,267 | 40,267 | ||||
Balance at Dec. 31, 2016 | (5,592,862) | $ 7,938 | 110,081,334 | (75,000) | (1,090) | (115,606,044) |
Balance, shares at Dec. 31, 2016 | 7,938,571 | |||||
Exercise of stock options | 112,138 | $ 42 | 112,096 | |||
Exercise of stock options, shares | 41,815 | |||||
Stock-based compensation expense | 1,376,633 | 1,376,633 | ||||
Vesting of restricted stock units | 336 | $ 336 | ||||
Vesting of restricted stock units, shares | 336,333 | |||||
Stock issued under stock purchase plan | $ 325,667 | $ 141 | 325,526 | |||
Stock issued under stock purchase plan, shares | 61,141 | 141,082 | ||||
Issuance of common stock from the ATM Offering | $ 19,677,478 | $ 5,472 | 19,672,006 | |||
Issuance of common stock from the ATM Offering, Shares | 5,471,962 | 5,471,962 | ||||
Retirement of treasury stock | (75,000) | $ 75,000 | ||||
Net loss | $ (18,960,017) | (18,960,017) | ||||
Other comprehensive income | 1,090 | $ 1,090 | ||||
Balance at Dec. 31, 2017 | $ (3,059,537) | $ 13,929 | $ 131,492,595 | $ (134,566,061) | ||
Balance, shares at Dec. 31, 2017 | 13,929,763 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Deficit (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
At the market offering, issuance costs | $ 0.8 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | ||
Net loss | $ (18,960,017) | $ (26,039,550) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,241,873 | 1,473,778 |
Accretion of discount on NuvoGen obligation | 195,248 | 206,985 |
Provision for excess inventory | 366,963 | 723,466 |
Amortization of Growth Term Loan discount and issuance costs | 404,462 | 551,121 |
Amortization of QNAH Convertible Note issuance costs | 1,269 | |
Stock-based compensation expense | 1,376,969 | 903,584 |
Employee stock purchase plan expense | 59,118 | 98,544 |
Accretion of incentive from landlord | (142,000) | (130,167) |
Accrued interest on available-for-sale securities investments | 172,045 | |
Loss on disposal of assets | 81,539 | 98,685 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,978,827) | (661,195) |
Inventory | 77,176 | (33,218) |
Prepaid expenses and other | (3,749) | 11,889 |
Deferred offering costs | 49,630 | |
Accounts payable | 1,225,954 | 10,073 |
Accrued liabilities | 2,076,500 | 119,928 |
Deferred revenue | 355,584 | 259,824 |
Net cash used in operating activities | (16,572,308) | (22,234,208) |
Investing activities | ||
Purchase of property and equipment | (1,020,531) | (1,946,515) |
Sales, redemptions and maturities of available-for-sale securities | 4,300,000 | 29,750,000 |
Purchase of available-for-sale securities | (3,381,271) | |
Net cash provided by investing activities | 3,279,469 | 24,422,214 |
Financing activities | ||
Proceeds from issuance of convertible note to QNAH, a related party | 3,000,000 | |
QNAH Convertible Note financing costs | (40,509) | |
Proceeds from Growth Term Loan | 5,000,000 | |
Payments on Growth Term Loan | (6,389,782) | (4,446,396) |
Proceeds from ATM Offering, net | 19,908,954 | |
ATM Offering costs | (231,476) | |
Proceeds from private investor | 2,000,000 | |
Payments on NuvoGen obligation | (800,000) | (543,750) |
Payments on capital leases | (69,142) | (133,079) |
Proceeds from exercise of stock options | 112,138 | 23,851 |
Proceeds from shares purchased under the stock purchase plan | 266,549 | 174,674 |
Payment of deferred offering costs | (2,952) | (49,630) |
Net cash provided by financing activities | 15,753,780 | 2,025,670 |
Increase in cash and cash equivalents | 2,460,941 | 4,213,676 |
Cash and cash equivalents at beginning of year | 7,507,659 | 3,293,983 |
Cash and cash equivalents at end of year | 9,968,600 | 7,507,659 |
Noncash investing and financing activities | ||
Fixed asset purchases payable and accrued at year end | 477,966 | 26,785 |
Carrying value of demonstration units transferred from property and equipment to inventory | 113,607 | |
Stock issued for settlement of accrued bonus | (364,910) | |
Purchase of property and equipment under capital lease | 227,147 | |
Incentive from landlord | 710,000 | |
Retirement of treasury stock | 75,000 | |
Supplemental cash flow information | ||
Cash paid for interest | 698,065 | 1,109,359 |
Cash paid for taxes | $ 1,967 | $ 7,090 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1. Description of Business HTG Molecular Diagnostics, Inc. (the “Company”) is a provider of instruments, reagents and services for molecular profiling applications. The Company derives revenue from sales of its HTG EdgeSeq automation system and integrated next-generation sequencing-based HTG EdgeSeq assays, from services including sample processing and custom research use only (“RUO”) assay development and from collaborative development services. The Company operates in one segment and its customers are located primarily in the United States and Europe. For the year ended December 31, 2017, approximately 67% of the Company’s revenue was generated from sales originated by customers located outside of the United States, compared with 16% for the year ended December 31, 2016. The increase in sales to customers located outside of the United States is primarily the result of collaborative development services revenue generated from the Master Assay Development, Commercialization and Manufacturing Agreement (the “Governing Agreement”), with QIAGEN Manchester Limited (“QML”), a wholly owned subsidiary of QIAGEN N.V. (See Note 15), which accounted for 80% of sales to customers located outside of the United States. |
Basis of presentation and Summa
Basis of presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2. Basis of Presentation and Summary of Significant Accounting Policies Accounting The financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Reclassifications Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Going Concern and Liquidity The Company implemented the criteria of Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory In April 2016, the FASB issued ASU No. 2016-09, Share-Based Payment: Simplifying the Accounting for Share-Based Payments Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include revenue recognition, stock-based compensation expense, bonus accrual, income tax valuation allowances, recovery of long‑lived assets, inventory obsolescence and inventory valuation. Actual results could materially differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents consist of cash on deposit with financial institutions, money market instruments and high credit quality corporate debt securities purchased with a term of three months or less. Accounts Receivable Accounts receivable represent valid claims against debtors. Management reviews accounts receivable regularly to determine, using the specific identification method, if any receivable amounts will potentially be uncollectible and to estimate the amount of allowance for doubtful accounts necessary to reduce accounts receivable to its estimated net realizable value. There were no receivable amounts requiring an allowance for doubtful accounts as of December 31, 2017 or December 31, 2016. Investments The Company classifies its debt securities as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive loss, net of tax. Realized gains, realized losses and declines in value of securities judged to be other-than-temporary, are included in other income (expense) within the accompanying statements of operations. The cost of investments for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Interest earned on all securities is included in other income (expense) within the accompanying statements of operations. Investments in securities with maturities of less than one year, or where management’s intent is to use the investments to fund current operations, or to make them available for current operations, are classified as short-term investments. If the estimated fair value of a security is below its carrying value, the Company evaluates whether it is more likely than not that it will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. The Company also evaluates whether or not it intends to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, the Company considers whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are charged against other income (expense). Fair Value of Financial Instruments Fair value measurements are based on the premise that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities on the reporting date. Level 2 – Pricing inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Pricing inputs are generally unobservable and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require management’s judgment or estimation of assumptions that market participants would use in pricing the assets or liabilities. The fair values are therefore determined using factors that involve considerable judgment and interpretations, including but not limited to private and public comparables, third-party appraisals, discounted cash flow models, and fund manager estimates. The carrying value of financial instruments classified as current assets and current liabilities approximate fair value due to their liquidity and short-term nature. Investments that are classified as available-for-sale are recorded at fair value, which was determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The QNAH Convertible Note is an obligation to a greater than 5% common stockholder of the Company (see Note 15). As of December 31, 2017, the estimated aggregate fair value of the QNAH Convertible Note is approximately $2.8 million. The fair value estimate is based on the note’s discounted cash flows and estimated option value of the conversion terms. The estimated fair value of the QNAH Convertible Note represents a Level 3 measurement. The NuvoGen obligation is an obligation relating to an asset purchase transaction with a then-common stockholder of the Company. Although the obligation is considered a financial instrument, the Company is unable to reasonably determine its fair value as the remaining payments due under the obligation will be made at the greater of a minimum quarterly payment or 6% of revenue, causing variability in the timing and amount of payments and the term of the remaining obligation. Inventory, net Inventory, consisting of raw materials, work in process and finished goods, is stated at the lower of cost (first-in, first-out) or net realizable value. Cost is determined using a standard cost system, whereby the standard costs are updated periodically to reflect current costs and net realizable value represents the lower of replacement cost or estimated net realizable value. The Company reserves or writes down its inventory for estimated obsolescence or inventory in excess of reasonably expected near term sales or unmarketable inventory, in an amount equal to the difference between the cost of inventory and the estimated market value, based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Inventory impairment charges establish a new cost basis for inventory and charges are not reversed subsequently to income, even if circumstances later suggest that increased carrying amounts are recoverable. The reserve for shrinkage and excess inventory was 62,142 and $270,307 as of December 31, 2017 and 2016, respectively. Inventory of $208,112 and 167,100 was written off directly to cost of revenue in the accompanying statements of operations for the years ended December 31, 2017 and 2016, respectively. Equipment that is under evaluation for purchase remains in inventory as the Company maintains title to the equipment throughout the evaluation period. The period of time customers use to evaluate the Company’s equipment generally ranges from 90 to 180 days, and in certain circumstances the evaluation period may need to be extended beyond that period. However, in no case will the evaluation period exceed one year. If the customer has not purchased the equipment or entered into a reagent rental agreement with the Company after evaluating the product for one year, the equipment is returned to the Company or the customer is allowed to continue use of the equipment, in which case the equipment is written off to selling, general and administrative expense in the accompanying statement of operations. HTG EdgeSeq instruments at customer locations under evaluation agreements are included in finished goods inventory. Finished goods inventory under evaluation as of December 31, 2017 was $53,365 compared to $185,557 as of December 31, 2016. Property and Equipment, net Property and equipment are stated at historical cost and depreciated over their useful lives, which range from three to five years, using the straight-line method. Equipment used in the field is amortized using the straight-line method over the lesser of the period of the related reagent rental or collaborative development services agreement where applicable or the estimated useful life. Leasehold improvements are amortized using the straight-line method over the lesser of the remaining lease term or the estimated useful life. Certain leasehold improvements constructed by the landlord of the Company’s Tucson, AZ facilities as an incentive for the Company to extend its leases are included in leasehold improvements on the balance sheets as of December 31, 2017. The total cost of the improvements constructed by the landlord of $710,000 was capitalized when construction was completed in February 2016, and is being amortized over the remaining term of the lease agreement. The incentive of $710,000 has been recognized as deferred rent within other current liabilities and other liabilities on the balance sheets and is being accreted over the lease term as a reduction of rent expense (see Note 13). Depreciation and leasehold improvement amortization expense was $1,241,873 for the year ended December 31, 2017, and $1,473,778 for the year ended December 31, 2016. Costs incurred in the development and installation of software for internal use and in the development of the Company’s website are expensed or capitalized, depending on whether they are incurred in the preliminary project stage (expensed), application development stage (capitalized), or post-implementation stage (expensed). Amounts capitalized following project completion are amortized on a straight-line basis over the useful life of the developed asset, which is generally three years. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to the estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flow, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Although the Company has accumulated losses since inception, the Company believes the future cash flows will be sufficient to exceed the carrying value of the Company’s long-lived assets. There were no impairments of long-lived assets during the years ended December 31, 2017 and 2016. Deferred Financing Costs and Debt Discounts Certain costs incurred in connection with the Growth Term Loans and the QNAH Convertible Note have been deferred and are being amortized. Debt issuance costs and debt discount relating to the Growth Term Loans are being presented as a direct reduction of term loan payable – current, net of discount and debt issuance costs as of December 31, 2017 and as a direct reduction of term loan payable – non-current, net of discount and debt issuance costs as of December 31, 2016 in the accompanying balance sheets. Debt issuance costs and debt discount are being amortized over the term of the Growth Term Loans using the effective interest method. The Company has recorded approximately $6,269 and $24,909 of Growth Term Loans deferred financing costs in the accompanying balance sheets as of December 31, 2017 and 2016, respectively. Deferred financing cost amortization expense relating to the Growth Term Loans for the years ended December 31, 2017 and 2016 was $18,640 and $27,468, respectively, and is included in interest expense in the accompanying statements of operations. The Company has recorded approximately $58,538 and $238,469 of discounts associated with Growth Term Loan A and Growth Term Loan B in the accompanying balance sheets as of December 31, 2017 and 2016, respectively. Amortization of the discounts associated with the Growth Term Loans totaled $179,931 and $249,868 for the years ended December 31, 2017 and 2016, and is included in interest expense in the accompanying statements of operations. Debt issuance costs of $39,240 relating to the QNAH Convertible Note are being presented as a direct reduction of Convertible Note, related party – net of debt issuance costs as of December 31, 2017. There was no QNAH Convertible Note liability or related financing costs as of December 31, 2016. Deferred financing cost amortization relating to the QNAH Convertible Note for the years ended December 31, 2017 and 2016 was $1,269 and $0, respectively, and is included in interest expense in the accompanying statements of operations. Deferred Offering Costs Deferred offering costs represent legal and other direct costs related to stock offering transactions. Deferred offering costs of $2,953 included as current assets in the accompanying balance sheets as of December 31, 2017 represent legal costs incurred during the year ended December 31, 2017 by the Company in contemplation of the issuance of additional shares in a future financing transaction. There were deferred offering costs of $49,630 included in the accompanying balance sheets as of December 31, 2016. Deferred Revenue Deferred revenue represents cash receipts for products or services to be provided in future periods, including up-front fees received relating to custom RUO assay development and sample processing services and collaboration development services. When products are delivered or data is provided to customers for sample processing services rendered, deferred revenue is recognized as earned. Up-front fees received for custom RUO assay development and collaborative development services are recognized as development procedures are completed and outputs are produced on a proportional performance basis. Revenue Recognition The Company recognizes revenue from the sale of instruments, consumables, sample processing, custom RUO assay development and collaboration services when the following four basic criteria are met: (1) a contract has been entered into with a customer or persuasive evidence of an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed or determinable, and (4) collectability is reasonably assured. Contracts which combine one or more services, or services with sales of products or consumables are accounted for as multiple element arrangements under ASC 605-25, as described under Product and Product-related Services Revenue The Company had product and product-related services revenue consisting of revenue from the sale of instruments and consumables and the use of the HTG EdgeSeq proprietary technology to process samples and develop custom RUO assays for the years ended December 31, 2017 and 2016 as follows: Years Ended December 31, 2017 2016 Product revenue: Instruments $ 385,143 $ 522,813 Consumables 1,463,347 2,237,129 Total product revenue 1,848,490 2,759,942 Product-related services revenue: Custom RUO assay development 419,515 235,818 Sample processing 4,529,250 2,136,970 Total product-related services revenue 4,948,765 2,372,788 Total product and product-related services revenue $ 6,797,255 $ 5,132,730 Sale of instruments and consumables Instrument product revenue is generally recognized upon installation and calibration of the instrument by field service engineers, unless the customer has specified any other acceptance criteria. The sale of instruments and related installation and calibration are considered to be one unit of accounting, as instruments are required to be professionally installed and calibrated before use. Installation generally occurs within one month of shipment. Consumables are considered to be separate units of accounting as they are sold separately from instruments. Consumables revenue is recognized upon transfer of ownership. The Company’s standard terms and conditions provide that no right of return exists for instruments or consumables, unless replacement is necessary due to delivery of defective or damaged products. Shipping and handling fees charged to the Company’s customers for instruments and consumables shipped are included in the accompanying statements of operations as part of product and product-related service revenue. Shipping and handling costs for sold products shipped to the Company’s customers are included on the accompanying statements of operations as part of cost of revenue. When a contract involves multiple elements, the items included in the arrangement, referred to as deliverables, are evaluated to determine whether they represent separate units of accounting in accordance with ASC 605-25, Revenue Recognition – Multiple-Element Arrangements (“ The Company provides instruments to certain customers under reagent rental agreements. Under these agreements, the Company installs instruments in the customer’s facility without a fee and the customer agrees to purchase consumable products at a stated price over the term of the agreement; in some instances, the agreements do not contain a minimum purchase requirement. Terms range from several months to multiple years and may automatically renew in several month or multiple year increments unless either party notifies the other in advance that the agreement will not renew. This represents a multiple element arrangement and because all consideration under the reagent rental agreement is contingent on the sale of consumables, no consideration has been allocated to the instrument and no revenue has been recognized upon installation of the instrument. The Company expects to recover the cost of the instrument under the agreement through the fees charged for consumables, to the extent sold, over the term of the agreement. In reagent rental agreements, the Company retains title to the instrument and title is transferred to the customer at no additional charge at the conclusion of the initial arrangement. Because the pattern of revenue from the arrangement cannot be reasonably estimated, the cost of the instrument is amortized on a straight-line basis over the term of the arrangement, unless there is no minimum consumable product purchase in which case the instrument would be expensed as cost of revenue. Cost to maintain the instrument while title remains with the Company is charged to selling, general and administrative expense as incurred. The Company offers customers the opportunity to purchase separately-priced extended warranty contracts to provide for service upon conclusion of the standard one-year warranty period. The revenue from these contracts is recorded as a component of deferred revenue in the balance sheets at the inception of the contract. Extended warranty product revenue is recognized over the contract service period as part of product and product-related services revenue on the accompanying statements of operations. Service Revenue Custom RUO Assay Development The Company enters into custom RUO assay development agreements that may generate up-front fees and subsequent payments which might be earned upon completion of design process phases. The Company is able to estimate the total cost of services under these arrangements and recognizes revenue using a proportional performance revenue recognition model, under which revenue is recognized as performance occurs based on the delivery of the relative outputs under the respective agreement. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangements. Revenue recognized at any point in time is limited to cash received and amounts contractually due. Changes in estimates of total expected costs are accounted for prospectively as a change in estimate. From period to period, custom RUO assay development revenue can fluctuate substantially based on the completion of development-related phases. Sample Processing Services The Company also provides sample processing services and molecular profiling of retrospective cohorts for its customers through its VERI/O laboratory, whereby the customer provides samples to be processed using HTG EdgeSeq technology specified in the order. Customers are charged a per sample fee for sample processing services which is recognized as revenue upon delivery of a data file to the customer showing the results of testing, and completing delivery of the agreed upon service. Collaborative Development Services The Company follows ASC 605-25, Revenue Recognition – Multiple-Element Arrangements and ASC 808, Collaborative Arrangements to determine the appropriate recognition of revenue for its collaborative development services. Collaborative development services revenue includes services performed by the Company on biopharmaceutical company companion diagnostic development programs using its HTG EdgeSeq proprietary technology to develop, seek regulatory approval for and commercialize companion diagnostics for biopharmaceutical company drug candidates and corresponding therapeutics. These agreements often contain multiple elements, or deliverables, which may include access to the Company’s technology through grants of licenses to its intellectual property, research and development services and participation in joint development steering committees, amongst others. The payments the Company receives under these arrangements typically include one or more of the following: non-refundable up-front fees, monthly development service fees, milestone payments upon acceptance of contract deliverables or profit sharing payments for completed contract milestones. From period to period, collaborative development services revenue can fluctuate substantially based on the achievement of development-related milestones and the timing and number of development-related milestones in the project plan. Product Warranty The Company generally provides a one-year warranty on its HTG EdgeSeq systems covering the performance of system hardware and software in conformance with customer specifications under normal use and protecting against defects in materials and workmanship. The Company may, at its option, replace, repair or exchange products covered under valid warranty claims. A provision for estimated warranty costs is recognized at the time of sale, through cost of revenue, based upon recent historical experience and other relevant information as it becomes available. The Company continuously assesses the adequacy of its product warranty accrual by reviewing actual claims and adjusts the provision as needed. Research and Development Expenses Research and development expenses represent costs incurred internally for research and development activities and costs incurred externally to fund research activities. These costs include those generated through research and development efforts for the improvement and expansion of the Company’s proprietary technology and product offerings as well as those related to third-party collaborative development agreements, for which related revenue is included in collaborative development services revenue in the accompanying statements of operations. Advertising All costs associated with advertising and promotions are expensed as incurred. Advertising expense was $245 and $49,022 for the years ended December 31, 2017 and 2016, respectively, and is included as a component of selling, general and administrative expenses on the accompanying statements of operations. Stock-Based Compensation The Company incurs stock-based compensation expense relating to grants under its equity incentive plans of restricted stock units (“RSUs”) and stock options to employees, consultants and non-employee directors, and stock purchase rights granted under its employee stock purchase plan (“ESPP”). The Company recognizes expense for stock-based awards to employees and non-employee directors based on the fair value of awards on the date of grant. The fair value of RSUs is based on the quoted market price of the Company’s common stock on the date of grant. The fair value of ESPP rights and stock options granted pursuant to the Company’s equity incentive plans is estimated on the date of grant using the Black-Scholes option pricing model. The determination of the fair value utilizing the Black-Scholes option pricing model is affected by the fair value of the Company’s stock price and several assumptions, including volatility, expected term, risk-free interest rate, and dividend yield. Generally, these assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. The Company elected to change its policy surrounding forfeitures of equity awards with the adoption of the guidance in ASU No. 2016-09 on January 1, 2017. The Company no longer estimates the number of awards expected to be forfeited but instead accounts for such forfeitures as they occur. For stock-based awards to consultants, the fair value of the stock-based award is used to measure the transaction, as the Company believes this to be a more reliable measure of fair value than the services received. The fair value of each award is remeasured at each measurement date until performance by the nonemployee is complete. Stock-based compensation to nonemployees is recognized as expense over the requisite service period, which is generally the vesting period for awards, on a straight-line basis. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts and tax base of assets and liabilities using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established against net deferred tax assets for the uncertainty it presents of the Company’s ability to use the net deferred tax assets, in this case, primarily carryforwards of net operating tax losses and research and development tax credits. In assessing the realizability of net deferred tax assets the Company has assessed the likelihood that net deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not “more likely than not” or there is an insufficient history of operating profits, a valuation allowance is established. The Company records the valuation allowance in the period the Company determines that it is not more likely than not that net deferred tax assets will be realized. For the years ended December 31, 2017 and 2016, the Company has provided a full valuation allowance for all net deferred tax assets due to their current realization being considered remote in the near term. Uncertain tax positions taken or expected to be taken in a tax return are accounted for using the more likely than not threshold for financial statement recognition and measurement. The 2017 Tax Act, which was signed into law on December 22, 2017, significantly revises the Internal Revenue Code of 1986, as amended (the “IRC”) (see Note 14). Comprehensive loss Comprehensive loss includes certain changes in equity that are excluded from net loss. Specifically, unrealized gains and losses on short and long-term available-for-sale investments are included in comprehensive loss. Concentration Risks Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains the majority of its cash balances in the form of cash deposits in bank checking and money market accounts in amounts in excess of federally insured limits. Management believes, based upon the quality of the financial institution, that the credit risk with regard to these deposits is not significant. The Company sells its instruments, consumables, sample processing services, custom RUO panel design and collaborative development services primarily to biopharmaceutical companies, academic institutions and molecular labs. The Company routinely assesses the financial strength of its customers and credit losses have been minimal to date. The top two customers accounted for 54% and 8% of the Company’s revenue for the year ended December 31, 2017, compared with 29% and 12% for the year ended December 31, 2016. The largest two customers accounted for approximately 66% and 11% of the Company’s net accounts receivable as of December 31, 2017. The largest of these amounts represents accounts receivable relating to work performed under two statements of work entered into under the Company’s Governing Agreement with QML. The largest two customers accounted for approximately 28% and 15% of the Company’s net accounts receivable at December 31, 2016. Three vendors accounted for 23%, 17% and 15% of the Company’s accounts payable as of December 31, 2017 primarily related to the Company’s collaborative development services programs. Two vendors accounted for 11% and 8% of the Company’s accounts payable at December 31, 2016. The Company currently relies on a single supplier to supply a subcomponent used in the HTG EdgeSeq processors. A loss of this supplier could significantly delay the delivery of products, which in turn would materially affect the Company’s ability to generate revenue. New Accounting Pronouncements The following are new FASB ASUs that had not been adopted by the Company as of December 31, 2017, and are grouped by their respective effective dates: January 1, 2018 In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In March 2016, the FASB issued ASU No. 2016-08, Revenue Recognition: Clarifying the new Revenue Standard’s Principal-Versus-Agent Guidance In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The new revenue standard and the standards that amend it are effective for public entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company will adopt ASC 606 using the full retrospective approach, which will not have an effect on 2017 or 2016 revenue recognit |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3. Inventory Inventory, net of allowance, consisted of the following as of the date indicated: December 31, 2017 2016 Raw materials $ 984,328 $ 1,222,437 Work in process 376 1,762 Finished goods 257,959 557,161 Total gross inventory 1,242,663 1,781,360 Less inventory allowance (62,142 ) (270,307 ) $ 1,180,521 $ 1,511,053 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 4. Fair Value Financial assets and liabilities measured at fair value are classified in their entirety in the fair value hierarchy, based on the lowest level input significant to the fair value measurement. The following table classifies the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and 2016, respectively, in the fair value hierarchy: Balance at December 31, 2017 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 8,521,054 $ — $ — $ 8,521,054 Total $ 8,521,054 $ — $ — $ 8,521,054 Balance at December 31, 2016 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 6,443,102 $ — $ — $ 6,443,102 Investments available-for-sale at fair value U.S. government obligations $ 1,300,663 $ — $ — $ 1,300,663 Corporate debt securities $ — $ 3,004,238 $ — $ 3,004,238 Total $ 7,743,765 $ 3,004,238 $ — $ 10,748,003 There were no other financial instruments subject to fair value measurement on a recurring basis. Transfers to and from Levels 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the years ended December 31, 2017 and 2016. Level 1 instruments include investments in money market funds, U.S. Treasuries and U.S. government agency obligations. These instruments are valued using quoted market prices for identical unrestricted instruments in active markets. The Company defines active markets for debt instruments based on both the average daily trading volume and the number of days with trading activity. Level 2 instruments include corporate debt securities. Valuations of Level 2 instruments can be verified to quoted prices, recent trading activity for identical or similar instruments, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. Consideration is given to the nature of the quotations (e.g. indicative or firm) and the relationship of recent market activity to the prices provided from alternative pricing sources. Fair values of these assets and liabilities are based on prices provided by independent market participants that are based on observable inputs using market-based valuation techniques. These valuation models and analytical tools use market pricing or similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids and/or offers. The Company did not adjust any of the valuations received from these third parties with respect to any of its Level 1 or 2 securities for either of the years ended December 31, 2017 or 2016 and did not have any Level 3 financial assets or liabilities during either of these periods. |
Available for Sale Securities
Available for Sale Securities | 12 Months Ended |
Dec. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Available for Sale Securities | Note 5. Available for Sale Securities The Company had no available-for-sale securities as of December 31, 2017. The following is a summary of the Company’s available-for-sale securities at December 31, 2016: December 31, 2016 Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) U.S. Treasury securities $ 1,300,151 $ 512 $ — $ 1,300,663 Corporate debt securities 3,005,840 — (1,602 ) 3,004,238 Total available-for-sale securities $ 4,305,991 $ 512 $ (1,602 ) $ 4,304,901 The net adjustment to unrealized gain (loss) on short and long-term available-for-sale securities in other comprehensive income totaled $1,090 and $40,267, for the years ended December 31, 2017 and 2016, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 6. Property and Equipment Property and equipment, net consists of the following: December 31, 2017 2016 Furniture & fixtures $ 582,007 $ 494,589 Leasehold improvements 1,863,698 1,847,378 Equipment used in manufacturing 1,963,558 1,395,651 Equipment used in research & development 1,328,556 1,121,676 Equipment used in the field 130,552 131,096 Software and intangible assets 373,683 245,736 Construction in progress 255,641 176,963 6,497,695 5,413,089 Less: accumulated depreciation and amortization (3,192,805 ) (2,142,892 ) $ 3,304,890 $ 3,270,197 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities Current [Abstract] | |
Accrued Liabilities | Note 7. Accrued Liabilities Accrued liabilities consist of the following: December 31, 2017 2016 Accrued employee bonuses $ 3,049,109 $ 954,120 Payroll and employee benefit accruals 369,275 308,186 Accrued professional fees 101,150 79,029 Accrued interest 45,544 82,591 Other accrued liabilities 181,708 246,360 $ 3,746,786 $ 1,670,286 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Note 8. Debt Obligations. Growth Term Loan In August 2014, the Company entered into a Loan and Security Agreement (the “Growth Term Loan”) with a syndicate of two 11.0 5.0 1 The Growth Term Loan requires the Company to maintain compliance with specific operating and reporting covenants and does not require financial covenants. The Growth Term Loan is secured by a lien covering substantially all of the Company’s assets, excluding patents, trademarks and other intellectual property rights (except for rights to payment related to the sale, licensing or disposition of such intellectual property rights) and certain other specified property. If the Company were to default under the Growth Term Loan, its lenders could foreclose on its assets, including substantially all of its cash, which is held in accounts with its lenders. The remaining principal repayments due under the Growth Term Loan as of December 31, 2017, are as follows: 2018 Growth Term Loan payments $ 5,163,822 Less discount and deferred financing costs (64,807 ) Plus final fee premium 694,584 Total Growth Term Loan, net $ 5,793,599 Following the August 2015 amendment, the final payment percentage on the Growth Term Loan was increased to 4.75%, resulting in a final fee premium relating to Growth Term Loan A of $522,500 and a final fee premium relating to the Growth Term Loan B of $ 237,500 . The Company received Growth Term Loan A proceeds net of a $ 0.3 23,396 23.51 August 22, 2024 In connection with the funding of Growth Term Loan B, in March 2016, the Company issued Oxford Finance LLC a common stock warrant exercisable for 45,307 2.759 5,317 23.51 122,460 Total amortization expense for the Growth Term Loan A and B warrant discounts and the Growth Term Loan A original issuance discount was $179,931 and $249,868 for the years ended December 31, 2017 and 2016, respectively, and is included in interest expense in the accompanying statements of operations. The Company has also recorded approximately $6,269 and $24,909 of deferred financing costs net of the related debt in the accompanying balance sheets as of December 31, 2017 and 2016, respectively, in accordance with ASU 2015-03, which was adopted on January 1, 2016. Growth Term Loan deferred financing cost amortization expense was $18,640 and $27,468 for the years ended December 31, 2017 and 2016, respectively, and is included in interest expense in the accompanying statements of operations. The June 2016 Growth Term Loan amendment modified the definitions of permitted indebtedness and permitted liens to provide for an increased maximum amount of permitted indebtedness, authorize a new category of permitted indebtedness and authorize a new category of permitted liens. Other Debt Obligations to Related Parties Refer to Note 15 below for discussion of debt obligations to related parties. |
Other Agreements
Other Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Other Agreements [Abstract] | |
Other Agreements | Note 9. Other Agreements NuvoGen Obligation The Company entered into an asset purchase agreement in 2001, as amended, with NuvoGen Research, LLC (“NuvoGen”) to acquire certain intellectual property from NuvoGen. The Company accounted for the transaction as an asset acquisition. However, as the intellectual property was determined to not have an alternative future use, the upfront consideration was expensed. In exchange for the intellectual property, the Company initially paid NuvoGen 5,587 shares of the Company’s common stock, fixed payments of $740,000 over the first two years of the agreement and agreed to pay NuvoGen the greater of $400,000 annually, in quarterly installments, or 6% of its yearly revenue, which percentage payment would be reduced by any fixed payment installments made during the applicable period, until the total aggregate cash compensation paid to NuvoGen under the agreement equaled $15,000,000. Certain terms of the agreement were amended in November 2003, September 2004, November 2012 and February 2014. Pursuant to the latest amendment to the agreement, the Company paid yearly fixed fees, in quarterly installments, to NuvoGen of $800,000 and $543,750 for the years ended December 31, 2017 and 2016, respectively. Although the amendment allowed for the deferral of any revenue-based payments through December 31, 2017, no revenue-based payments have been deferred, and additional revenue-based payments of $85,574 and $0 were payable as of December 31, 2017 and 2016, respectively, for the amount by which 6% of revenue exceeded the applicable fixed fee. As of January 1, 2018, the Company, again, is obligated to pay the greater of $400,000 or 6% of annual revenues until the obligation is paid in full. As of that date and continuing until the remaining obligation has been paid in full, interest on the remaining unpaid obligation will accrue and compound annually at a rate of 2.5% per year. Accrued interest on this unpaid obligation is payable on the date that the remaining obligation is paid in full. The obligation was, but is no longer, secured by certain patents and trademarks. The remaining minimum principal payments due to NuvoGen on the remaining unpaid obligation at December 31, 2017 are as follows, although actual payments could be significantly more than provided in the table in 2018 and beyond to the extent that 6% of revenue exceeds $400,000: 2018 $ 400,000 2019 400,000 2020 400,000 2021 400,000 2022 400,000 2023 and beyond 5,898,743 Total NuvoGen obligation payments 7,898,743 Less discount 118,612 Total NuvoGen obligation, net $ 8,017,355 The Company has recorded the obligation at the estimated present value of the future payments using a discount rate of 2.5%, the Company’s estimate of its effective borrowing rate for similar obligations. Unamortized debt discount was $(118,612) and $76,636 at December 31, 2017 and 2016, respectively. Discount accreted during the years ended December 31, 2017 and 2016 was $195,248, and $206,985, respectively. Illumina, Inc. Agreement In June 2017, the Company entered into an Amended and Restated Development and Component Supply Agreement with Illumina, Inc., (“Illumina”), effective May 31, 2017 (the “Restated Agreement”), which amended and restated the parties’ IVD Test Development and Component Supply Agreement entered into in October 2014 (the “Original Agreement”). The Restated Agreement provides for the development and worldwide commercialization by the Company of nuclease-protection-based RNA or DNA profiling tests (“IVD test kits”) for use with Illumina’s MiSeqDx sequencer in the field of diagnostic oncology testing in humans (the “Field”). Under the Restated Agreement, the parties have agreed to continue activities under the first development plan which was entered into pursuant to the Original Agreement, and the Company may, at its discretion, submit additional development plans for IVD test kits in the Field to Illumina for its approval, not to be unreasonably withheld. Under each development plan, Illumina will provide specified regulatory support and rights, and develop and deliver to the Company an executable version of custom software, which, when deployed on Illumina’s MiSeqDx sequencer, would enable sequencing by the end-user of the subject IVD test kit probe library. Illumina retains ownership of the custom software, subject to the Company’s right to use the custom software in connection with the commercialization of IVD test kits. The Company is required to pay Illumina up to $0.6 million in the aggregate upon achievement of specified regulatory milestones relating to the IVD test kits, though none of these regulatory milestones have been reached through December 31, 2017. In addition, the Company has agreed to pay Illumina a single digit percentage royalty on net sales of any IVD test kits that the Company commercializes pursuant to the Restated Agreement. The Company submitted two additional development plans for IVD test kits to Illumina in the second quarter and fourth quarters of 2017. Following receipt of the custom software module for the first of these test kits, the Company paid Illumina $50,000. No payments were made to Illumina during the year ended December 31, 2016. Costs incurred for development plans under the Restated Agreement have been expensed as incurred to research and development expense in the accompanying statements of operations. Absent earlier termination, the Restated Agreement will expire in May 2027; however, Illumina is no longer obligated to notify the Company of changes in its products that may affect the Company’s IVD test kits after May 31, 2023. The Company may terminate the Restated Agreement at any time upon 90 days’ written notice and may terminate any development plan under the Restated Agreement upon 30 days’ prior written notice. Illumina may terminate the Restated Agreement upon 30 days’ prior written notice if the Company undergoes certain changes of control, subject to a transition period of up to 12 months for then-ongoing development plans. Either party may terminate the Restated Agreement upon the other party’s material breach of the Restated Agreement that remains uncured for 30 days, or upon the other party’s bankruptcy. Invetech PTY Ltd. Agreement In September 2015, the Company entered into a development and professional services agreement with Invetech PTY Ltd. (“Invetech”), for the conduct of research and development of a next generation automated sample library preparation instrument. This instrument is intended for laboratories with low volume sample throughput. This instrument design and development program is being referred to as Project JANUS. The agreement requires the execution of a development plan for each stage of the project. Upon full execution and delivery of each development plan, the Company will pay Invetech development fee installments for that development plan. Stage 0 was completed during the second half of 2015. In July 2016, the Company entered into an amendment with Invetech, extending and concluding Stage 1.1 through the end of July 2016 and further suspending Invetech’s project development activities until the Company makes the decision to resume further external development efforts consistent with its development priorities. The Invetech agreement remains in effect through completion of all tasks and the Company’s acceptance of all deliverables under each development plan unless terminated earlier as provided for in the agreement. Research and development expense included in the statements of operations relating to Invetech development fee installments was $0 and $2.3 million for the years ended December 31, 2017 and 2016, respectively. Bristol-Myers Squibb Company Agreement In May 2016, the Company entered into a Collaboration Agreement with Bristol-Myers Squibb Company (“BMS”) for the development of custom RUO assays for BMS based on the Company’s HTG EdgeSeq technology. Following development of each assay, at BMS’s request, the Company may also perform sample processing services using such custom RUO assay(s) and/or supply the custom RUO assay(s) to BMS or its third-party subcontractors. Additional custom RUO assay development related to immuno-oncology research may be undertaken pursuant to the agreement in accordance with a mutually acceptable work plan, which is incorporated by written amendment. BMS paid an initial non-refundable, non-creditable program set-up fee, and has agreed to pay an annual non-refundable, non-creditable project management fee in quarterly installments, as well as a fee for each assay developed. Each such fee was or is in the low six-figure range. At BMS’s request, custom RUO assay kits will be supplied and sample processing services will be performed by the Company. The agreement will expire on May 11, 2019 60 90 The agreement is a multiple-element arrangement under ASC 605-25. Custom RUO assay development services, custom kit sales and sample processing services were each designated as an option to purchase additional products or services as described under ASC 605-25, and, as such, will not be considered in the initial allocation of contract consideration based on relative selling prices. Each custom RUO assay development service has three phases and each phase comprises multiple deliverables. Completion of all three phases is required for BMS to derive benefit from the respective deliverables; therefore, the three phases of an assay’s development will be combined as one unit of accounting for revenue recognition purposes. Under ASC 605-25, fixed or determinable contract consideration is allocated to the deliverables with stand-alone value, and revenue is recognized for each such deliverable according to the method appropriate for each deliverable. All of the fixed or determinable contract consideration will be allocated to one deliverable, which is the research and development services culminating in the delivery of two custom RUO assays. The quarterly project management fees and the initial set-up fee are being recognized as the custom RUO assay development services are performed on a proportional performance basis. Each assay development fee is also being recognized on a proportional performance basis as these services are provided. Because the assay development fees are contingent upon completion of each individual phase of the design project and the decision by BMS to proceed to the next phase, the amount recognized will be limited to that which BMS is contractually obligated to pay upon completion of that phase. For the years ended December 31, 2017 and 2016, $125,000 and $189,422, respectively, was recognized under the agreement as product and product-related services revenue in the statements of operations. Deferred revenue relating to this agreement of $160,106 was included in the balance sheets as of both December 31, 2017 and 2016. See Note 16 for discussion of the amendment of this agreement in the first quarter of 2018. Merck KGaA Agreement In October 2016, the Company entered a Master CDx Agreement with Merck KGaA, Darmstadt, Germany, (“Merck KGaA”) to serve as the basis for one or more project agreements to develop, seek regulatory approval for, and commercialize companion diagnostics for Merck KGaA drug candidates and corresponding therapeutics. Concurrently, the parties entered into a first project agreement under the agreement concerning the Company’s sequencing-based DLBCL cell of origin assay (“DLBCL Assay”) and Merck KGaA’s investigational drug, M7583 (the “Project”). The Project has three stages aligned with timelines and outcomes of M7583 development. The timing of the Company’s activities and payments may be affected by M7583 development activities and timing which are controlled by Merck KGaA. During stages 1 and 2, the Company will perform specified DLBCL Assay development activities. In stage 3, the Company will obtain applicable regulatory approvals on the DLBCL Assay and make it commercially available in the United States and certain other jurisdictions. Stages 2 and 3 each have an up-front payment and all stages of the Project have milestone-based payments. The Company is eligible to receive up to a total of approximately $1,850,000 over the next five years and $9,900,000 over a period of approximately nine years in fixed or determinable contract consideration comprising up-front and milestone payments. In addition, during stages 1 and 2 of the Project, the Company may sell DLBCL Assay kits and/or perform sample processing services upon request of, and as instructed by, Merck KGaA. The up-front and milestone-based payments could be delayed due to the risks of completing development activities and obtaining regulatory approvals within projected timeframes. Merck KGaA may terminate the Project by providing 90 days’ prior written notice to the Company, at which point Merck KGaA will reimburse HTG for costs incurred during the termination period, of an amount not to exceed non-cancellable, non-reimbursable expenses, and HTG will reimburse Merck KGaA for any costs that have been prepaid without being incurred prior to termination. Further, either party may also terminate the agreement upon the other party’s material breach that remains uncured for 45 The agreement is a multiple-element arrangement under ASC 605-25 and a collaborative arrangement under ASC 808. Kit sales and sample processing services have been designated as an option to purchase additional products or services as described under ASC 605-25, and, as such, will not be considered in the initial allocation of contract consideration based on relative selling prices. The remaining deliverables, including licenses to HTG patents and research and development services, do not have standalone value and are combined into one unit of accounting. Under ASC 605-25, fixed or determinable contract consideration is allocated to the deliverables with stand-alone value, and revenue is recognized for each such deliverable according to the method appropriate for each deliverable. All of the fixed or determinable contract consideration will be allocated to one deliverable, which is the research and development services. Non-refundable up‑front payments will be received at the initiation of stages 2 and 3. These payments will be recognized as revenue over the period that the research services are expected to occur. All other payments are contingent upon completion of milestones. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the Project. Revenue recognized at any point in time is limited to cash received and amounts contractually due. The Company earned the first milestone-based payment under the Master Agreement in the second quarter of 2017, resulting in recognition of collaborative development service revenue of $25,000 and $0 using the proportional performance method of revenue recognition for the years ended December 31, 2017 and 2016, respectively. No additional milestones have been reached as of December 31, 2017. Other Agreements with Related Parties Refer to Note 15 below for discussion of agreements with related parties. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 10. Net Loss Per Share Net loss attributable to common stockholders per share is computed by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock or common stock equivalents outstanding. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share for the periods presented: Years Ended December 31, 2017 2016 Numerator: Net loss $ (18,960,017 ) $ (26,039,550 ) Denominator: Weighted-average shares outstanding-basic and diluted 10,597,318 7,113,075 Net loss per share, basic and diluted $ (1.79 ) $ (3.66 ) The following outstanding options, warrants, restricted stock units and debt conversion option were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive: Years Ended December 31, 2017 2016 Options to purchase common stock 1,517,771 1,161,705 Common stock warrants 219,723 219,723 Restricted stock units 26,666 355,499 QNAH Convertible Note 755,178 - |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Proceeds From Issuance Of Preferred Stock Preference Stock And Warrants [Abstract] | |
Warrants | Note 11. Warrants In connection with certain of its redeemable convertible preferred stock issuances, convertible debt financings and other financing arrangements, the Company has issued warrants for shares of its common stock and various issues of its redeemable convertible preferred stock which have since been converted to common stock warrants. On August 22, 2014, in connection with the Company’s entry into the Growth Term Loan (see Note 8), the Company issued to the two-lender syndicate warrants exercisable for an aggregate of 2,512,562 0.2189 23,396 23.51 August 22, 2024 45,307 2.759 5,317 23.51 On December 30, 2014, in connection with the Company’s entry into convertible note agreements, the Company agreed to issue warrants (“Convertible Note Warrants”) to the holders exercisable for an aggregate of 9,311,586 0.2189 1,354 144,772 14.00 January 15, 2022 The following table shows the common stock warrants outstanding as of December 31, 2017 and 2016: Shares of Common Exercise Price/Share Expiration Date 28,713 23.51 2024 144,772 14.00 2022 931 6.45 2019 45,307 2.76 2026 |
Stockholders Deficit
Stockholders Deficit | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 12. Stockholders’ Deficit Cantor Fitzgerald & Co. Market Offering In April 2017, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Cantor, shares of the Company’s common stock, par value $0.001 per share, by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “ATM Offering”). In April 2017, the Company also filed a prospectus supplement (File No. 333-216977) with the SEC relating to the offer and sale of up to $20,000,000 of common stock in the ATM Offering. In June 2017, the Company filed an amendment to the prospectus supplement with the SEC to increase the amount of common stock that may be offered and sold in the ATM Offering under the Sales Agreement to $40,000,000 in the aggregate, inclusive of the common stock previously sold in the ATM Offering prior to the date of the amendment. As of December 31, 2017, the Company has sold 5,471,962 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $20.5 million. After $0.6 million of sales commissions and $0.2 million of other offering expenses paid by the Company in connection with the ATM Offering, the Company’s aggregate net proceeds through December 31, 2017 were approximately $19.7 million. These costs have been recorded as a reduction of proceeds received in arriving at the amount recorded in additional paid-in capital in the accompanying balance sheets as of December 31, 2017. Common Stock Pursuant to the Company Amended and Restated Certificate of Incorporation, the Company is authorized to issue 200,000,000 shares of common stock at a par value of $0.001 per share. As of December 31, 2017, 13,929,763 shares were issued and outstanding. As of December 31, 2016, 7,939,967 and 7,938,571 shares were issued and outstanding, respectively. Each share of common stock is entitled to one vote. The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, no liability for further call or assessment, and are not entitled to cumulative voting rights. Treasury Stock Shares of common stock repurchased by the Company are recorded as treasury stock and result in an increase of stockholders’ deficit on the balance sheets. Reacquired common shares may be retired by resolution of the Board of Directors and resume the status of authorized and unissued common shares. In January 2017, the Company’s Board of Directors retired 1,396 shares of treasury stock to be returned to the status of authorized and unissued shares of the Company’s common stock. There was no additional treasury stock activity for the years ended December 31, 2017 and 2016. Preferred Stock Pursuant to the Company’s certificate of incorporation the Company has been authorized to issue 10,000,000 shares of preferred stock, each having a par value of $0.001. The preferred stock may be issued from time to time in one or more series with the authorization of the Company’s Board of Directors. The Board of Directors can determine voting power for each series issued, as well as designation, preferences, and relative, participating, optional or other rights and such qualifications, limitations or restrictions thereof. Stock-based Compensation The Company incurs stock-based compensation expense relating to the grants under its equity incentive plans of RSUs and stock options to employees, non-employee directors and consultants of the Company and its affiliates and through its employee stock purchase plan. Amounts recognized in the accompanying statements of operations with respect to the Company’s stock-based compensation and employee stock purchase plan were as follows: Years Ended December 31, 2017 2016 Selling, general and administrative $ 1,012,253 $ 721,473 Research and development 319,916 217,553 Cost of revenue 103,918 63,102 $ 1,436,087 $ 1,002,128 Equity Incentive Plans The Company initially established the 2001 Stock Option Plan (the “2001 Plan”), which included incentive and nonqualified stock options and restricted stock to be granted to directors, officers, employees, consultants and others. The 2001 Plan terminated and no further awards were granted under the 2001 Plan upon the effective date of the Company’s 2011 Equity Incentive Plan (the “2011 Plan”). In February 2014, the number of shares reserved under the 2011 Plan was increased to 20% of the total outstanding shares of the Company calculated on a fully diluted basis. The shares reserved under the 2011 Plan were required to be kept at that percentage with each subsequent equity financing. No new equity awards may be granted under the 2011 Plan. On May 11, 2015, 940,112 shares were reserved for issuance under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), including 14,006 remaining shares reserved under the 2011 Plan. As of December 31, 2017, there were 8,169 shares available for issuance under the 2014 Plan. On January 1, 2018, an additional 557,190 shares were registered for issuance under the 2014 Plan pursuant to an evergreen provision contained in the 2014 Plan. The Company’s Board of Directors determines the grant date for all awards granted under the 2014 Plan. The option exercise price of stock options granted is generally equal to the closing price of the Company’s common stock on the date of grant. All stock options granted have a ten-year term. The vesting period of stock options and RSUs is established by the Board of Directors but typically ranges between one and four years. The following table summarizes stock option activity during the two-year period ended December 31, 2017: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at January 1, 2016 736,645 $ 4.18 7.5 $ 947,794 Granted 563,400 2.46 Exercised (11,093 ) 2.15 $ 2,126 Forfeited (70,754 ) 4.6 Expired/Cancelled (56,493 ) 3.97 Balance at December 31, 2016 1,161,705 $ 3.35 7.7 $ 36,887 Granted 494,500 2.09 Exercised (41,815 ) 2.68 $ 152,130 Forfeited (81,676 ) 2.64 Expired/Cancelled (14,943 ) 6.15 Balance at December 31, 2017 1,517,771 $ 2.97 7.5 $ 67,242 Vested and expected to vest at December 31, 2017 1,517,771 $ 2.97 7.5 $ 67,242 Exercisable at December 31, 2016 593,670 $ 3.46 6.4 $ 28,822 Exercisable at December 31, 2017 851,996 $ 3.31 6.5 $ 248 The weighted-average fair value of stock options granted was $1.14 and $1.59 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, total unrecognized compensation cost related to stock option awards was approximately $723,590, which is expected to be recognized over approximately 1.76 years. In April 2016, in connection with the severance of an employee, the Company accelerated the vesting of 8,957 unvested stock options, as well as the period following termination whereby all of the employee’s vested stock options, including those accelerated as part of the severance agreement, could be exercised for a two-year period from the termination date. As a result of this modification, the Company recorded incremental stock-based compensation expense of approximately $13,500 for the year ended December 31, 2016. The fair value of each stock option granted has been determined using the Black-Scholes option pricing model. The material factors incorporated in the Black-Scholes model in estimating the fair value of the stock options granted for the periods presented were as follows: 2017 2016 Fair value of common stock $1.71 - 3.46 $1.98 - 2.88 Risk-free interest rate 1.75% - 2.20% 1.13% - 2.08% Expected volatility 58.5% - 62.6% 59.9% - 93.7% Expected term 5.1 to 6.3 years 4.8 to 6.2 years Expected dividend yield 0% 0% • Expected stock price volatility . The expected volatility assumption is derived from the volatility of the Company’s common stock in recent periods, as well as that of publicly traded industry competitors, over a period approximately equal to the expected term. • Risk-free interest rate . The risk-free interest rate assumption is based on observed interest rates on the date of grant with maturities approximately equal to the expected term. • Expected term . The expected term represents the period that the stock-based awards are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term because of a lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method provided by the SEC. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the stock options. • Expected dividend yield . The expected dividend is assumed to be zero as the Company has never paid dividends and does not anticipate paying any dividends on its common stock. In addition to the assumptions used in the Black-Scholes option-pricing model outlined above, the Company elected to change its policy surrounding forfeitures of equity awards with the adoption of the guidance in ASU No. 2016-09 on January 1, 2017. As of that date, the Company no longer estimates a forfeiture rate to calculate stock-based compensation. The Company implemented this portion of the guidance using a modified retrospective approach. The cumulative adjustment was not material to additional paid-in capital. The Company will continue to use judgment in evaluating the expected volatility and expected terms utilized for the Company’s stock-based compensation calculations on a prospective basis. The following table summarizes RSU award activity during the two-year period ended December 31, 2017: Number of Shares Weighted- Average Grant Date Fair Value Per Share Balance at January 1, 2016 27,500 $ 5.45 Granted 389,761 2.43 Vested (36,762 ) 2.90 Forfeited (25,000 ) 2.46 Balance at December31, 2016 355,499 $ 2.41 Granted 10,000 1.75 Vested (336,333 ) 2.47 Forfeited (2,500 ) 2.46 Balance at December 31, 2017 26,666 $ 2.78 Vested and expected to vest at December 31, 2017 26,666 $ 2.78 The weighted-average fair value of RSUs granted was $1.75 and $2.43 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, total unrecognized compensation cost related to RSU awards was approximately $53,368, which is expected to be recognized over approximately 1.78 years. 2014 Employee Stock Purchase Plan In April 2015, the Company’s stockholders approved the 2014 Employee Stock Purchase Plan (“ESPP”), which became effective in May 2015. Initially, the ESPP authorized the issuance of up to 110,820 shares of common stock pursuant to purchase rights granted to the Company’s employees or to employees of any of the Company’s designated affiliates. The number of shares of common stock reserved for issuance automatically increases on January 1 of each calendar year, from January 1, 2016 to January 1, 2024 by the least of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (ii) 195,000 shares, or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii). The ESPP enables participants to contribute up to 15% of such participant’s eligible compensation during a defined period (not to exceed 27 months) to purchase common stock of the Company. The purchase price of common stock under the ESPP is the lesser of: (i) 85% of the fair market value of a share of the Company’s common stock on the first day of an offering or (ii) 85% of the fair market value of the Company’s common stock at the applicable purchase date. During the year ended December 31, 2017, employees purchased 39,972 shares at $1.79 per share and 39,969 shares at $1.61 per share at the end of each of the ESPP’s six-month purchase periods. During the year ended December 31, 2016, employees purchased 39,984 shares at $1.83 per share and 39,978 shares at $2.54 per share at the end of each of the ESPP’s six-month purchase periods. As of December 31, 2017, approximately 98,744 shares of the Company’s common stock were reserved for future issuance under the ESPP. On January 1, 2018, an additional 139,297 shares were registered for issuance pursuant to an evergreen provision contained in the ESPP. The Company recognizes ESPP expense based on the fair value of the ESPP stock purchase rights, estimated for each six-month purchase period using the Black-Scholes option pricing model. The model requires the Company to make subjective assumptions, including expected stock price volatility, risk free rate of return and estimated life. The fair value of equity-based awards is amortized straight-line over the vesting period of the award. The material factors incorporated in the Black-Scholes model in estimating the fair value of the ESPP awards for the periods presented were as follows: 2017 2016 Fair value of common stock $2.11 - 3.17 $3.03 - 4.09 Risk-free interest rate 0.61% - 1.12% 0.41% - 0.48% Expected volatility 68.0% - 70.0% 70.0% Expected term 0.5 years 0.5 years Expected dividend yield -% -% • Fair value of common stock . Estimated as the price of the Company’s common stock on the first day of each offering period. • Expected stock price volatility . The expected volatility assumption is derived from the average volatility of the Company’s common stock in recent periods, as well as that of publicly traded industry competitors, over a period approximately equal to the expected term. • Risk-free interest rate . The risk-free interest rate assumption is based on observed interest rates on the first day of the purchase period with maturities approximately equal to the expected term. • Expected term . The expected term represents the length of a purchase period under the ESPP. • Expected dividend yield . The expected dividend is assumed to be zero as the Company has never paid dividends and does not anticipate paying any dividends on its common stock. Stock Purchase Plan In December 2015, the Board of Directors adopted a Stock Purchase Plan (the “Purchase Plan”) which allows directors, any individual deemed by the Board of Directors to be an officer for purposes of Section 16 of the Exchange Act, and anyone designated by the Board of Directors as eligible to participate in the Purchase Plan to purchase shares of the Company’s common stock from the Company at fair market value. The aggregate number of shares of common stock that may be issued under the Purchase Plan shall not exceed 250,000 shares of common stock, and a maximum of 7,500 shares of common stock may be purchased by any one participant on any one purchase date. The Board of Directors or an authorized committee must review and approve each individual request to purchase common stock under the Purchase Plan. Cash received from the sale of common stock by the Company to eligible participants for the year ended December 31, 2017 was $130,649 which resulted in the sale of 61,141 shares of the Company’s common stock at fair market value. No common stock was sold by the Company under the Purchase Plan for the year ended December 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Legal Matters The Company’s industry is characterized by frequent claims and litigation, including claims regarding intellectual property and product liability. As a result, the Company may be subject to various legal proceedings from time to time. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Any current litigation is considered immaterial and counter claims have been assessed as remote. Employment Agreements The Company has entered into employment agreements or other arrangements with certain named executive officers, which provides salary continuation payments, bonuses and, in certain instances, the acceleration of the vesting of certain equity awards to individuals in the event that the individual is terminated other than for cause, as defined in the applicable agreement. Indemnification Agreements In the course of operating its business, the Company has entered into, and continues to enter into, separate indemnification agreements with the Company’s directors and executive officers, in addition to the indemnification provided for in the Company’s amended and restated bylaws. These agreements may require the Company to indemnify its directors and executive officers for certain expenses incurred in any action or proceeding arising out of their services as one of the Company’s directors or executive officers. Leases The Company leases office and laboratory space under two non-cancelable operating leases in Tucson, Arizona. five years $804,000 710,000 710,000 11,833 The Company’s annual minimum facility lease payments before common area maintenance charges as of December 31, 2017 are as follows: 2018 $ 512,533 2019 514,977 2020 517,457 2021 43,139 $ 1,588,106 Rent expense, including common area maintenance costs for the Company’s facilities leases was $570,979, including $142,000 of depreciation for capitalized leasehold improvements for the year ended December 31, 2017. Rent expense, including common area maintenance costs for the Company’s facility leases was $561,293, including $130,167 of depreciation for capitalized leasehold improvements for the year ended December 31, 2016. As of December 31, 2017, the Company also has capital lease commitments consisting of approximately $83,000 under leases for computer equipment varying in length from 36-48 months that have not been included in the minimum lease payments schedule above. Product Warranty The following is a summary of the Company’s general product warranty liability, which is included in accrued liabilities in the accompanying balance sheets for the years ended December 31, 2017 and 2016: Years Ended December 31, 2017 2016 Beginning balance $ 50,426 $ 20,213 Cost of warranty claims (9,814 ) (71,404 ) Increase (decrease) in warranty reserve (3,456 ) 101,617 Ending balance $ 37,156 $ 50,426 Defined Contribution Plan In January 2003, the Company established a defined contribution plan (“401(k) Plan”) under section 401(k) of the IRC. All employees who are over the age of 21 and who are expected to work at least 1,000 hours in a calendar year are eligible for participation in the 401(k) Plan upon commencement of employment with the Company. The Company may make discretionary contributions to the 401(k) Plan, but has not done so during the years ended December 31, 2017 and 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes The Company provides for income taxes based upon management’s estimate of taxable income or loss for each respective period. The Company recognizes an asset or liability for the deferred tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These temporary differences would result in deductible or taxable amounts in future years, when the reported amounts of the assets are recovered or liabilities are settled, respectively. In each period since inception, the Company has recorded a valuation allowance for the full amount of its net deferred tax assets, as the realization of the net deferred tax assets is uncertain. As a result, the Company has not recorded any federal or state income tax benefit in the statements of operations; however, state income tax expense has been recorded for state minimum taxes. The Company periodically reviews its filing positions for all open tax years in all U.S. federal, state and international jurisdictions where the Company is or might be required to file tax returns or other required reports. The Company applies a two-step approach to recognizing and measuring uncertain tax positions. The Company evaluates the tax position for recognition by determining if the weight of available evidence indicates that it is “more likely than not” that the position will be sustained on audit, including resolution of related appeals or litigation process, if any. The term “more likely than not” means a likelihood of more than 50 percent. If the tax position is not more likely than not to be sustained in a court of last resort, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the more likely than not criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution. Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect the Company’s results of operations, financial position and cash flows. The Company has not identified any uncertain tax positions at December 31, 2017 or 2016. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 31, 2017 or 2016, and has not recognized interest or penalties during the years ended December 31, 2017 and 2016, since there are no material unrecognized tax benefits. Management of the Company does not expect a material change to the amount of unrecognized tax benefits to occur within the next 12 months. The components of income tax expense are as follows: Years Ended December 31, 2017 2016 Current: Federal $ — $ — State 2,921 10,118 Total current income tax expense $ 2,921 $ 10,118 Deferred: Federal $ — $ — State — — Total deferred income tax expense $ — $ — Total income tax expense $ 2,921 $ 10,118 The Company’s actual income tax expense for the years ended December 31, 2017 and 2016 differ from the expected amount computed by applying the statutory federal income tax rate of 34% to loss before income taxes as follows: Years Ended December 31, 2017 2016 Computed tax (benefit) at 34% $ (6,445,413 ) $ (8,850,007 ) State taxes, net of federal benefit (532,952 ) (462,609 ) Stock-based compensation 231,396 210,367 Expiring state NOL carryforwards — 94,962 Return to provision (15,375 ) 248,263 Other 20,292 25,718 Research and development tax credit - state (576,525 ) (453,071 ) Research and development tax credit - federal (440,058 ) (341,785 ) Federal rate change on deferred items as of enactment date 16,232,211 — Change in valuation reserve (8,470,655 ) 9,538,280 $ 2,921 $ 10,118 Deferred tax assets and liabilities comprise the following: Years Ended December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 29,475,597 $ 37,114,445 Research and development credits 3,114,091 2,132,050 Deferred revenue 204,061 177,683 Inventory reserve 15,134 99,583 Fixed assets and intangibles 147,395 193,833 Accrued NuvoGen liability 1,952,567 3,176,449 Accrued expense 24,500 351,505 Other 74,986 233,438 35,008,331 43,478,986 Valuation allowance (35,008,331 ) (43,478,986 ) Deferred tax asset, net $ — $ — On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), which makes broad and complex changes to the IRC. Certain of these changes may be applicable to the Company, including but not limited to, reducing the U.S. federal corporate tax rate from 35% to 21%, creating a new limitation on deductible interest expense, eliminating the corporate alternative minimum tax, modifying the rules related to uses and limitations of net operating loss carryforwards generated in tax years ending after December 31, 2017, and changing the rules pertaining to the taxation of profits earned abroad. Changes in tax rates and tax laws are accounted for in the period of enactment. The Tax Act reduces the corporate tax rate to 21% effective January 1, 2018. Consequently, we have recorded a decrease related to deferred tax assets of $16,232,211, exclusive of the corresponding change in the valuation allowance, as of December 31, 2017. Due to the full valuation allowance on the deferred tax assets, there is no net adjustment to deferred tax expense or benefit due to the reduction of the corporate tax rate. As of December 31, 2017, the Company has estimated federal and state net operating loss (“NOL”) carryforwards of approximately $121,980,841 and $79,222,187 for federal and state income tax purposes, respectively. The Company’s federal NOLs are scheduled to expire from 2021 through 2037. The Company’s state NOLs are scheduled to expire from 2027 through 2037. The Company’s federal and state tax credit carryforwards begin expiring in 2021 and 2018, respectively. The Company’s federal NOL carryforwards have the following expiration dates: Year of Expiration Carryforwards Federal NOL carryforwards 2021 $ 211,806 2023 1,635,651 2024 1,217,290 2025 1,409,498 2026 1,175,594 2027 1,676,458 2028 3,037,785 2029 3,753,314 2030 623,235 2031 5,435,312 2032 10,913,787 2033 12,095,966 2034 14,190,409 2035 21,112,183 2036 24,302,042 2037 19,190,511 $ 121,980,841 For financial reporting purposes, valuation allowances of $35,008,331 and $43,478,986 at December 31, 2017 and 2016, respectively, have been established to offset deferred tax assets relating primarily to NOLs and research and development credits. The decrease in the valuation allowance of $8,470,655 for the year ended December 31, 2017 was due to an increase of $7,761,556 related to additional operating losses, and a decrease of $16,232,211 related to the impact of the Tax Act on the deferred balances as of the enactment date. The Company has established a valuation allowance against its entire tax asset. As a result, the Company does not recognize any tax benefit until it is in a taxpaying position or there is sufficient positive evidence leading to the conclusion that it is more likely than not to realize the tax benefit. A preliminary analysis of past and subsequent equity offerings by the Company, and other transactions that have an impact on the Company’s ownership structure, concluded that the Company may have experienced one or more ownership changes under Sections 382 and 383 of the IRC. Provisions of the IRC place special limitations on the usage of NOLs and credits following an ownership change. Such limitations may limit or eliminate the potential future tax benefit to be realized by the Company from its accumulated NOLs and research and development credits. The Company files income tax returns in the United States, Arizona, California, Texas and various other state jurisdictions, with varying statutes of limitations. As of December 31, 2017, the earliest year subject to examination is 2014 for U.S. federal tax purposes. The earliest year subject to examination is 2013 for Arizona, California and Texas, and 2009 for the remaining state jurisdictions. However, the Company’s NOL carryforwards for periods ending December 31, 2001 and thereafter remain subject to examination by the United States and certain states. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15. Related Party Transactions QML Master Assay Development, Commercialization and Manufacturing Agreement In November 2016, the Company and QML entered into the Governing Agreement, which creates a framework for QML and the Company to combine their technological and commercial strengths to offer biopharmaceutical companies a complete NGS-based solution for the development, manufacture and commercialization of companion diagnostic assays. Under the Governing Agreement, the parties jointly seek companion diagnostic programs with biopharmaceutical companies, QML enters into sponsor project agreements with interested biopharmaceutical companies for specified projects, and QML and the Company enter into statements of work, which set forth the rights and obligations of QML and the Company with respect to each project. The parties’ relationship under the Governing Agreement is exclusive in the oncology field. Such exclusivity in the oncology field may be lost and become non-exclusive if certain performance targets are not met. Projects may be undertaken in non-oncology fields at each party’s discretion on a non-exclusive basis. QML and the Company share net profits under each statement of work, based on whether development of particular assays under a statement of work are primarily based on HTG or QML intellectual property. Each statement of work provides additional financial terms for the corresponding Project, which terms depend on the respective development and/or commercialization activities of the parties. The Governing Agreement has a five-year term. However, either party may terminate the Governing Agreement upon (i) the other party’s uncured material breach, bankruptcy or insolvency, (ii) specified events affecting all statements of work, or (iii) a change of control by either party, except neither party will have such change of control termination right to the extent the termination of the Governing Agreement relates to SOW One, SOW Two or SOW Three (each defined below). In the event a party terminates the Governing Agreement for its own change of control, a $2.0 million termination payment will be payable to the non-terminating party. Statement of Work No. One In June 2017, the Company and QML entered into the first statement of work under the Governing Agreement, and amended such first statement of work in December 2017 (collectively, “SOW One”). SOW One addressed the initial activities of the Company and QML in support of the development and potential commercialization of a next generation sequencing-based companion diagnostic assay that is the subject of a sponsor project agreement between QML and a biopharmaceutical company (“Pharma One”). The parties expect certain development, manufacturing and commercialization activities for the assay to be the subject of a second sponsor project agreement and corresponding additional statements of work under the Governing Agreement. The Company has determined that SOW One is a collaborative arrangement under ASC 808 and a multiple-element arrangement under ASC 605-25. After reviewing the deliverables under the arrangement, the Company concluded that all of the fixed and determinable contract consideration should be allocated to the development services to be performed by the Company. QML pays the Company a monthly fee for development work performed by Company and its subcontractors (collectively, the “Monthly Fee”). The Monthly Fee is not contingent upon successful acceptance of project milestones by Pharma One; therefore, the Monthly Fee is recognized as the respective payment amount becomes fixed or determinable and collectability from QML is reasonably assured. The Company and QML also will share any net profits resulting from performance of the development work as determined pursuant to the Governing Agreement. Such profit sharing payment(s) is deemed to be fixed or determinable upon completion of SOW One deliverables, acceptance of corresponding deliverables by Pharma One, and the mutual agreement by QML and the Company on the calculation of net profit. Revenue of $2,604,892, relating to SOW One Monthly Fees, and $1,272,080, relating to SOW One profit sharing payments have been included in collaborative development services revenue in the accompanying statements of operations for the year ended December 31, 2017. Accounts receivable of $2,429,152 remains in the balance sheets as of December 31, 2017. Costs relating to development activities conducted by the Company pursuant to SOW One of $2,129,138 have been included in research and development expense in the accompanying statements of operations for the year ended December 31, 2017. No costs or revenue relating to SOW One were included in the accompanying statements of operations for the year ended December 31, 2016 as SOW One was not effective until June 2017. SOW One will expire when all activities and deliverables have been completed by the respective responsible party and all payments from QML to the Company have been delivered, including any required profit sharing payment, unless terminated earlier in accordance with the terms of the Governing Agreement. Contemporaneous with entry into SOW One, the Governing Agreement was amended to provide that neither the Company nor QML may terminate SOW One or the Governing Agreement to the extent it relates to SOW One in the event of a change of control. Statement of Work No. Two In October 2017, the Company and QML entered into the second statement of work under the Governing Agreement (“SOW Two”). SOW Two was made effective as of June 2, 2017 (“Onset Date”). SOW Two addresses development activities conducted by the Company and QML since the Onset Date and those expected to be further conducted by parties in connection with a sponsor project agreement, dated June 2, 2017, between QML and BMS (the “BMS/QML SPA”). The development work performed and expected to be performed by the Company and QML under SOW Two (“Initial Phase Work”) is expected to form the basis of a multi-stage project leading to the potential development and commercialization of a companion diagnostic assay in support of one or more of BMS’s therapeutic development and commercialization programs. SOW Two will expire upon completion of the Initial Phase Work and receipt by the Company of all amounts due for such work, which the Company believes will occur in mid‑2018 barring any unexpected project delays. QML will pay the Company mid-single digit millions of dollars for the Initial Phase Work performed by the Company under SOW Two. In addition, the Company and QML will share in any net profits (as determined under the Governing Agreement) generated by the Initial Phase Work on an approximately quarterly basis throughout the SOW Two term. SOW Two also provides that, notwithstanding anything in the Governing Agreement to the contrary, neither QML nor the Company shall have the right to terminate SOW Two or the Governing Agreement to the extent it relates to SOW Two upon a change of control of either party. Concurrent with SOW Two, as a condition to BMS’s approval of SOW Two, the Company, QML and BMS entered into a Supplement Agreement, made effective as of the Onset Date. The Supplement Agreement establishes certain rights and obligations of the parties with regard to confidential information and other intellectual property needed to perform, and/or produced as a result of, the Initial Phase Work. The Company will receive sole ownership of “HTG Technology Improvements” (as defined in the Supplement Agreement) that may be produced as a result of the Initial Phase Work, and has agreed to grant certain royalty‑free, non-exclusive license rights to its technology in the event of a project delay caused by the Company and to certain patent rights the Company may obtain as a result of the Initial Phase Work. In addition, the Company will have joint ownership of certain other results of the Initial Phase Work, and royalty‑free, non‑exclusive license rights to BMS‑ or QML-owned (solely or jointly) patents resulting from the Initial Phase Work. The Supplement Agreement will expire or terminate upon expiration or termination of the BMS/QML SPA, which is expected to be approximately coextensive with the term of SOW Two. Revenue of $2,988,211, relating to SOW Two Monthly Fees, and $1,072,130, relating to SOW Two profit sharing payments have been included in collaborative development services revenue in the accompanying statements of operations for the year ended December 31, 2017. Accounts receivable of $1,796,157 remains in the balance sheets as of December 31, 2017. Costs relating to development activities conducted by the Company pursuant to SOW Two of $2,645,825 have been included in research and development expense in the accompanying statements of operations for the year ended December 31, 2017. No costs or revenue relating to SOW Two were included in the accompanying statements of operations for the year ended December 31, 2016 as SOW Two was not established until October 2017. Statement of Work No. Three See Note 16 for discussion of the third statement of work entered into under the Governing Agreement subsequent to December 31, 2017. QNAH Stock Purchase Agreement Pursuant to a stock purchase agreement, entered concurrent with the Governing Agreement, QNAH, purchased 833,333 shares of the Company’s common stock on November 17, 2016 at $2.40 per share, for a total purchase price of $2.0 million. The purchase price for the shares of common stock purchased by QNAH reflected the parties’ agreement as to the fair market value of the shares. However, the portion of the purchase price per share that exceeded the most recently reported closing price of the Company’s common stock, or $175,000 in the aggregate, was attributed to the Governing Agreement and recorded as deferred revenue. This deferred revenue is being recognized on a straight-line basis over the Governing Agreement’s five-year term. The Company recognized $35,000 and $4,375 of this consideration as revenue for the years ended December 31, 2017 and 2016, respectively. The second tranche closing contemplated by the stock purchase agreement did not occur, and accordingly, QNAH did not purchase any additional shares under the stock purchase agreement. QNAH does not have, and as of December 31, 2017 did not have, any further obligation to purchase common stock under the stock purchase agreement. QNAH Convertible Note Agreement In October 2017, the Company issued a subordinated convertible promissory note to QNAH in the principal amount of $3.0 million against receipt of cash proceeds equal to such principal amount. The QNAH Convertible Note bears simple interest at the rate of 3.0% per annum and matures on October 26, 2020 (the “Maturity Date”). Neither interest nor principal payment are due until the Maturity Date, subject to earlier conversion. The Company’s indebtedness under the QNAH Convertible Note is expressly subordinated in right of payment to the Company’s prior repayment in full of its indebtedness under its Growth Term Loan. QNAH may elect to convert all or any portion of the outstanding principal balance of the Note and all unpaid accrued interest thereon at any time prior to the Maturity Date into shares of the Company’s common stock at a conversion price of $3.984 per share. The Company recorded $40,510 of deferred financing costs incurred in connection with the issuance of the note under the QNAH Convertible Note. Amortization of the QNAH Convertible Note deferred financing costs was $1,269 for the year ended December 31, 2017. Interest accrued on the QNAH Convertible Note for the year ended December 31, 2017 was $8,630. Both amounts were included in interest expense in the accompanying statements of operations for the year ended December 31, 2017. There was no interest accrued or deferred financing cost amortization relating to the QNAH Convertible Note for the year ended December 31, 2016. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16. Subsequent Events Public Offerings In January 2018, the Company sold 261,352 shares of common stock at then-market prices under its Sales Agreement with Cantor, resulting in gross proceeds of $0.6 million. In February 2018, the Company and Cantor mutually agreed to terminate the Sales Agreement. In January 2018, the Company completed an underwritten public offering of 13,915,000 shares of its common stock at a price of $2.90 per share, including 1,815,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company sold its common stock through an underwriting agreement with Leerink Partners LLC and Cantor as representatives of the underwriters for the offering. The aggregate net proceeds to the Company from the offering were approximately $37.7 million, after deducting the underwriting discounts and commissions and offering expenses. Statement of Work No. Three In January 2018, the Company and QML entered into a third statement of work (“SOW Three”) under the parties’ Governing Agreement. SOW Three relates to development activities for a next generation sequencing-based clinical-trial assay (“SOW Three Project”) in connection with a sponsor project agreement between QML and a pharmaceutical company (“Pharma Three”). If successfully completed, the SOW Three Project is expected to lead to subsequent assay development activities and the potential commercialization of a companion diagnostic assay for a corresponding Pharma Three drug. Under the terms of SOW Three, the Company has agreed to assign its rights in certain SOW Three Project-related intellectual property (“Project IP”) predominantly related to Pharma Three’s drug candidate(s) to QML for ultimate assignment to Pharma Three in accordance with the sponsor project agreement between QML and Pharma Three. Improvements to the background intellectual property of the Company, QML and Pharma Three generally will be owned solely by the respective party. Otherwise, Project IP will be jointly owned among the Company, QML and Pharma Three. Pursuant to the terms of SOW Three, if Pharma Three terminates the sponsor project agreement with QML or the SOW Three Project due to the Company’s uncured material breach of SOW Three, the Company will be required to negotiate in good faith with Pharma Three a non-exclusive, royalty-bearing license to certain Company intellectual property as reasonably necessary for Pharma Three to research, develop and commercialize an IVD assay meeting the same specifications as SOW Three. Neither QML nor the Company have the right to terminate SOW Three or the Governing Agreement to the extent it relates to SOW Three upon a change of control of either party. In addition, if Pharma Three terminates the sponsor project agreement or the SOW Three Project for an uncured material breach that is directly caused by the Company or QML, then, for the non-breaching party, the exclusivity obligation of the Governing Agreement will terminate solely with respect to the development for Pharma Three and/or its affiliates of an IVD assay meeting the same specifications as in SOW Three. SOW Three expires upon completion of the SOW Three Project and receipt by the Company of all amounts due for such work. |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting The financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Going Concern | Going Concern and Liquidity The Company implemented the criteria of Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Recently Adopted and New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory In April 2016, the FASB issued ASU No. 2016-09, Share-Based Payment: Simplifying the Accounting for Share-Based Payments New Accounting Pronouncements The following are new FASB ASUs that had not been adopted by the Company as of December 31, 2017, and are grouped by their respective effective dates: January 1, 2018 In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In March 2016, the FASB issued ASU No. 2016-08, Revenue Recognition: Clarifying the new Revenue Standard’s Principal-Versus-Agent Guidance In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The new revenue standard and the standards that amend it are effective for public entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company will adopt ASC 606 using the full retrospective approach, which will not have an effect on 2017 or 2016 revenue recognition and will have no cumulative effect on opening equity, as the timing and measurement of revenue recognition will be materially the same as under ASC 605. The Company will present additional quantitative and qualitative disclosures regarding identified revenue streams and performance obligations. We have identified and are implementing changes to our business processes and internal controls relating to implementation of the new standard. While the adoption of this guidance will not have a material impact on the Company’s financial statements, our disclosures will change to meet the requirements of this new guidance for the first quarter of 2018. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting January 1, 2019 In February 2016, the FASB issued ASU No. 2016-02, Leases, In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features January 1, 2020 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include revenue recognition, stock-based compensation expense, bonus accrual, income tax valuation allowances, recovery of long‑lived assets, inventory obsolescence and inventory valuation. Actual results could materially differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents consist of cash on deposit with financial institutions, money market instruments and high credit quality corporate debt securities purchased with a term of three months or less. |
Accounts Receivable | Accounts Receivable Accounts receivable represent valid claims against debtors. Management reviews accounts receivable regularly to determine, using the specific identification method, if any receivable amounts will potentially be uncollectible and to estimate the amount of allowance for doubtful accounts necessary to reduce accounts receivable to its estimated net realizable value. There were no receivable amounts requiring an allowance for doubtful accounts as of December 31, 2017 or December 31, 2016. |
Investments | Investments The Company classifies its debt securities as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive loss, net of tax. Realized gains, realized losses and declines in value of securities judged to be other-than-temporary, are included in other income (expense) within the accompanying statements of operations. The cost of investments for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Interest earned on all securities is included in other income (expense) within the accompanying statements of operations. Investments in securities with maturities of less than one year, or where management’s intent is to use the investments to fund current operations, or to make them available for current operations, are classified as short-term investments. If the estimated fair value of a security is below its carrying value, the Company evaluates whether it is more likely than not that it will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. The Company also evaluates whether or not it intends to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, the Company considers whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are charged against other income (expense). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value measurements are based on the premise that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities on the reporting date. Level 2 – Pricing inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Pricing inputs are generally unobservable and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require management’s judgment or estimation of assumptions that market participants would use in pricing the assets or liabilities. The fair values are therefore determined using factors that involve considerable judgment and interpretations, including but not limited to private and public comparables, third-party appraisals, discounted cash flow models, and fund manager estimates. The carrying value of financial instruments classified as current assets and current liabilities approximate fair value due to their liquidity and short-term nature. Investments that are classified as available-for-sale are recorded at fair value, which was determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The QNAH Convertible Note is an obligation to a greater than 5% common stockholder of the Company (see Note 15). As of December 31, 2017, the estimated aggregate fair value of the QNAH Convertible Note is approximately $2.8 million. The fair value estimate is based on the note’s discounted cash flows and estimated option value of the conversion terms. The estimated fair value of the QNAH Convertible Note represents a Level 3 measurement. The NuvoGen obligation is an obligation relating to an asset purchase transaction with a then-common stockholder of the Company. Although the obligation is considered a financial instrument, the Company is unable to reasonably determine its fair value as the remaining payments due under the obligation will be made at the greater of a minimum quarterly payment or 6% of revenue, causing variability in the timing and amount of payments and the term of the remaining obligation. |
Inventory, net | Inventory, net Inventory, consisting of raw materials, work in process and finished goods, is stated at the lower of cost (first-in, first-out) or net realizable value. Cost is determined using a standard cost system, whereby the standard costs are updated periodically to reflect current costs and net realizable value represents the lower of replacement cost or estimated net realizable value. The Company reserves or writes down its inventory for estimated obsolescence or inventory in excess of reasonably expected near term sales or unmarketable inventory, in an amount equal to the difference between the cost of inventory and the estimated market value, based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Inventory impairment charges establish a new cost basis for inventory and charges are not reversed subsequently to income, even if circumstances later suggest that increased carrying amounts are recoverable. The reserve for shrinkage and excess inventory was 62,142 and $270,307 as of December 31, 2017 and 2016, respectively. Inventory of $208,112 and 167,100 was written off directly to cost of revenue in the accompanying statements of operations for the years ended December 31, 2017 and 2016, respectively. Equipment that is under evaluation for purchase remains in inventory as the Company maintains title to the equipment throughout the evaluation period. The period of time customers use to evaluate the Company’s equipment generally ranges from 90 to 180 days, and in certain circumstances the evaluation period may need to be extended beyond that period. However, in no case will the evaluation period exceed one year. If the customer has not purchased the equipment or entered into a reagent rental agreement with the Company after evaluating the product for one year, the equipment is returned to the Company or the customer is allowed to continue use of the equipment, in which case the equipment is written off to selling, general and administrative expense in the accompanying statement of operations. HTG EdgeSeq instruments at customer locations under evaluation agreements are included in finished goods inventory. Finished goods inventory under evaluation as of December 31, 2017 was $53,365 compared to $185,557 as of December 31, 2016. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at historical cost and depreciated over their useful lives, which range from three to five years, using the straight-line method. Equipment used in the field is amortized using the straight-line method over the lesser of the period of the related reagent rental or collaborative development services agreement where applicable or the estimated useful life. Leasehold improvements are amortized using the straight-line method over the lesser of the remaining lease term or the estimated useful life. Certain leasehold improvements constructed by the landlord of the Company’s Tucson, AZ facilities as an incentive for the Company to extend its leases are included in leasehold improvements on the balance sheets as of December 31, 2017. The total cost of the improvements constructed by the landlord of $710,000 was capitalized when construction was completed in February 2016, and is being amortized over the remaining term of the lease agreement. The incentive of $710,000 has been recognized as deferred rent within other current liabilities and other liabilities on the balance sheets and is being accreted over the lease term as a reduction of rent expense (see Note 13). Depreciation and leasehold improvement amortization expense was $1,241,873 for the year ended December 31, 2017, and $1,473,778 for the year ended December 31, 2016. Costs incurred in the development and installation of software for internal use and in the development of the Company’s website are expensed or capitalized, depending on whether they are incurred in the preliminary project stage (expensed), application development stage (capitalized), or post-implementation stage (expensed). Amounts capitalized following project completion are amortized on a straight-line basis over the useful life of the developed asset, which is generally three years. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to the estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flow, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Although the Company has accumulated losses since inception, the Company believes the future cash flows will be sufficient to exceed the carrying value of the Company’s long-lived assets. There were no impairments of long-lived assets during the years ended December 31, 2017 and 2016. |
Deferred Financing Costs and Debt Discounts | Deferred Financing Costs and Debt Discounts Certain costs incurred in connection with the Growth Term Loans and the QNAH Convertible Note have been deferred and are being amortized. Debt issuance costs and debt discount relating to the Growth Term Loans are being presented as a direct reduction of term loan payable – current, net of discount and debt issuance costs as of December 31, 2017 and as a direct reduction of term loan payable – non-current, net of discount and debt issuance costs as of December 31, 2016 in the accompanying balance sheets. Debt issuance costs and debt discount are being amortized over the term of the Growth Term Loans using the effective interest method. The Company has recorded approximately $6,269 and $24,909 of Growth Term Loans deferred financing costs in the accompanying balance sheets as of December 31, 2017 and 2016, respectively. Deferred financing cost amortization expense relating to the Growth Term Loans for the years ended December 31, 2017 and 2016 was $18,640 and $27,468, respectively, and is included in interest expense in the accompanying statements of operations. The Company has recorded approximately $58,538 and $238,469 of discounts associated with Growth Term Loan A and Growth Term Loan B in the accompanying balance sheets as of December 31, 2017 and 2016, respectively. Amortization of the discounts associated with the Growth Term Loans totaled $179,931 and $249,868 for the years ended December 31, 2017 and 2016, and is included in interest expense in the accompanying statements of operations. Debt issuance costs of $39,240 relating to the QNAH Convertible Note are being presented as a direct reduction of Convertible Note, related party – net of debt issuance costs as of December 31, 2017. There was no QNAH Convertible Note liability or related financing costs as of December 31, 2016. Deferred financing cost amortization relating to the QNAH Convertible Note for the years ended December 31, 2017 and 2016 was $1,269 and $0, respectively, and is included in interest expense in the accompanying statements of operations. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs represent legal and other direct costs related to stock offering transactions. Deferred offering costs of $2,953 included as current assets in the accompanying balance sheets as of December 31, 2017 represent legal costs incurred during the year ended December 31, 2017 by the Company in contemplation of the issuance of additional shares in a future financing transaction. There were deferred offering costs of $49,630 included in the accompanying balance sheets as of December 31, 2016. |
Deferred Revenue | Deferred Revenue Deferred revenue represents cash receipts for products or services to be provided in future periods, including up-front fees received relating to custom RUO assay development and sample processing services and collaboration development services. When products are delivered or data is provided to customers for sample processing services rendered, deferred revenue is recognized as earned. Up-front fees received for custom RUO assay development and collaborative development services are recognized as development procedures are completed and outputs are produced on a proportional performance basis. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from the sale of instruments, consumables, sample processing, custom RUO assay development and collaboration services when the following four basic criteria are met: (1) a contract has been entered into with a customer or persuasive evidence of an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed or determinable, and (4) collectability is reasonably assured. Contracts which combine one or more services, or services with sales of products or consumables are accounted for as multiple element arrangements under ASC 605-25, as described under Product and Product-related Services Revenue The Company had product and product-related services revenue consisting of revenue from the sale of instruments and consumables and the use of the HTG EdgeSeq proprietary technology to process samples and develop custom RUO assays for the years ended December 31, 2017 and 2016 as follows: Years Ended December 31, 2017 2016 Product revenue: Instruments $ 385,143 $ 522,813 Consumables 1,463,347 2,237,129 Total product revenue 1,848,490 2,759,942 Product-related services revenue: Custom RUO assay development 419,515 235,818 Sample processing 4,529,250 2,136,970 Total product-related services revenue 4,948,765 2,372,788 Total product and product-related services revenue $ 6,797,255 $ 5,132,730 Sale of instruments and consumables Instrument product revenue is generally recognized upon installation and calibration of the instrument by field service engineers, unless the customer has specified any other acceptance criteria. The sale of instruments and related installation and calibration are considered to be one unit of accounting, as instruments are required to be professionally installed and calibrated before use. Installation generally occurs within one month of shipment. Consumables are considered to be separate units of accounting as they are sold separately from instruments. Consumables revenue is recognized upon transfer of ownership. The Company’s standard terms and conditions provide that no right of return exists for instruments or consumables, unless replacement is necessary due to delivery of defective or damaged products. Shipping and handling fees charged to the Company’s customers for instruments and consumables shipped are included in the accompanying statements of operations as part of product and product-related service revenue. Shipping and handling costs for sold products shipped to the Company’s customers are included on the accompanying statements of operations as part of cost of revenue. When a contract involves multiple elements, the items included in the arrangement, referred to as deliverables, are evaluated to determine whether they represent separate units of accounting in accordance with ASC 605-25, Revenue Recognition – Multiple-Element Arrangements (“ The Company provides instruments to certain customers under reagent rental agreements. Under these agreements, the Company installs instruments in the customer’s facility without a fee and the customer agrees to purchase consumable products at a stated price over the term of the agreement; in some instances, the agreements do not contain a minimum purchase requirement. Terms range from several months to multiple years and may automatically renew in several month or multiple year increments unless either party notifies the other in advance that the agreement will not renew. This represents a multiple element arrangement and because all consideration under the reagent rental agreement is contingent on the sale of consumables, no consideration has been allocated to the instrument and no revenue has been recognized upon installation of the instrument. The Company expects to recover the cost of the instrument under the agreement through the fees charged for consumables, to the extent sold, over the term of the agreement. In reagent rental agreements, the Company retains title to the instrument and title is transferred to the customer at no additional charge at the conclusion of the initial arrangement. Because the pattern of revenue from the arrangement cannot be reasonably estimated, the cost of the instrument is amortized on a straight-line basis over the term of the arrangement, unless there is no minimum consumable product purchase in which case the instrument would be expensed as cost of revenue. Cost to maintain the instrument while title remains with the Company is charged to selling, general and administrative expense as incurred. The Company offers customers the opportunity to purchase separately-priced extended warranty contracts to provide for service upon conclusion of the standard one-year warranty period. The revenue from these contracts is recorded as a component of deferred revenue in the balance sheets at the inception of the contract. Extended warranty product revenue is recognized over the contract service period as part of product and product-related services revenue on the accompanying statements of operations. Service Revenue Custom RUO Assay Development The Company enters into custom RUO assay development agreements that may generate up-front fees and subsequent payments which might be earned upon completion of design process phases. The Company is able to estimate the total cost of services under these arrangements and recognizes revenue using a proportional performance revenue recognition model, under which revenue is recognized as performance occurs based on the delivery of the relative outputs under the respective agreement. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangements. Revenue recognized at any point in time is limited to cash received and amounts contractually due. Changes in estimates of total expected costs are accounted for prospectively as a change in estimate. From period to period, custom RUO assay development revenue can fluctuate substantially based on the completion of development-related phases. Sample Processing Services The Company also provides sample processing services and molecular profiling of retrospective cohorts for its customers through its VERI/O laboratory, whereby the customer provides samples to be processed using HTG EdgeSeq technology specified in the order. Customers are charged a per sample fee for sample processing services which is recognized as revenue upon delivery of a data file to the customer showing the results of testing, and completing delivery of the agreed upon service. Collaborative Development Services The Company follows ASC 605-25, Revenue Recognition – Multiple-Element Arrangements and ASC 808, Collaborative Arrangements to determine the appropriate recognition of revenue for its collaborative development services. Collaborative development services revenue includes services performed by the Company on biopharmaceutical company companion diagnostic development programs using its HTG EdgeSeq proprietary technology to develop, seek regulatory approval for and commercialize companion diagnostics for biopharmaceutical company drug candidates and corresponding therapeutics. These agreements often contain multiple elements, or deliverables, which may include access to the Company’s technology through grants of licenses to its intellectual property, research and development services and participation in joint development steering committees, amongst others. The payments the Company receives under these arrangements typically include one or more of the following: non-refundable up-front fees, monthly development service fees, milestone payments upon acceptance of contract deliverables or profit sharing payments for completed contract milestones. From period to period, collaborative development services revenue can fluctuate substantially based on the achievement of development-related milestones and the timing and number of development-related milestones in the project plan. |
Product Warranty | Product Warranty The Company generally provides a one-year warranty on its HTG EdgeSeq systems covering the performance of system hardware and software in conformance with customer specifications under normal use and protecting against defects in materials and workmanship. The Company may, at its option, replace, repair or exchange products covered under valid warranty claims. A provision for estimated warranty costs is recognized at the time of sale, through cost of revenue, based upon recent historical experience and other relevant information as it becomes available. The Company continuously assesses the adequacy of its product warranty accrual by reviewing actual claims and adjusts the provision as needed. |
Research and Development Expenses | Research and Development Expenses Research and development expenses represent costs incurred internally for research and development activities and costs incurred externally to fund research activities. These costs include those generated through research and development efforts for the improvement and expansion of the Company’s proprietary technology and product offerings as well as those related to third-party collaborative development agreements, for which related revenue is included in collaborative development services revenue in the accompanying statements of operations. |
Advertising | Advertising All costs associated with advertising and promotions are expensed as incurred. Advertising expense was $245 and $49,022 for the years ended December 31, 2017 and 2016, respectively, and is included as a component of selling, general and administrative expenses on the accompanying statements of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company incurs stock-based compensation expense relating to grants under its equity incentive plans of restricted stock units (“RSUs”) and stock options to employees, consultants and non-employee directors, and stock purchase rights granted under its employee stock purchase plan (“ESPP”). The Company recognizes expense for stock-based awards to employees and non-employee directors based on the fair value of awards on the date of grant. The fair value of RSUs is based on the quoted market price of the Company’s common stock on the date of grant. The fair value of ESPP rights and stock options granted pursuant to the Company’s equity incentive plans is estimated on the date of grant using the Black-Scholes option pricing model. The determination of the fair value utilizing the Black-Scholes option pricing model is affected by the fair value of the Company’s stock price and several assumptions, including volatility, expected term, risk-free interest rate, and dividend yield. Generally, these assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. The Company elected to change its policy surrounding forfeitures of equity awards with the adoption of the guidance in ASU No. 2016-09 on January 1, 2017. The Company no longer estimates the number of awards expected to be forfeited but instead accounts for such forfeitures as they occur. For stock-based awards to consultants, the fair value of the stock-based award is used to measure the transaction, as the Company believes this to be a more reliable measure of fair value than the services received. The fair value of each award is remeasured at each measurement date until performance by the nonemployee is complete. Stock-based compensation to nonemployees is recognized as expense over the requisite service period, which is generally the vesting period for awards, on a straight-line basis. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts and tax base of assets and liabilities using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established against net deferred tax assets for the uncertainty it presents of the Company’s ability to use the net deferred tax assets, in this case, primarily carryforwards of net operating tax losses and research and development tax credits. In assessing the realizability of net deferred tax assets the Company has assessed the likelihood that net deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not “more likely than not” or there is an insufficient history of operating profits, a valuation allowance is established. The Company records the valuation allowance in the period the Company determines that it is not more likely than not that net deferred tax assets will be realized. For the years ended December 31, 2017 and 2016, the Company has provided a full valuation allowance for all net deferred tax assets due to their current realization being considered remote in the near term. Uncertain tax positions taken or expected to be taken in a tax return are accounted for using the more likely than not threshold for financial statement recognition and measurement. The 2017 Tax Act, which was signed into law on December 22, 2017, significantly revises the Internal Revenue Code of 1986, as amended (the “IRC”) (see Note 14). |
Comprehensive Loss | Comprehensive loss Comprehensive loss includes certain changes in equity that are excluded from net loss. Specifically, unrealized gains and losses on short and long-term available-for-sale investments are included in comprehensive loss. |
Concentration Risks | Concentration Risks Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains the majority of its cash balances in the form of cash deposits in bank checking and money market accounts in amounts in excess of federally insured limits. Management believes, based upon the quality of the financial institution, that the credit risk with regard to these deposits is not significant. The Company sells its instruments, consumables, sample processing services, custom RUO panel design and collaborative development services primarily to biopharmaceutical companies, academic institutions and molecular labs. The Company routinely assesses the financial strength of its customers and credit losses have been minimal to date. The top two customers accounted for 54% and 8% of the Company’s revenue for the year ended December 31, 2017, compared with 29% and 12% for the year ended December 31, 2016. The largest two customers accounted for approximately 66% and 11% of the Company’s net accounts receivable as of December 31, 2017. The largest of these amounts represents accounts receivable relating to work performed under two statements of work entered into under the Company’s Governing Agreement with QML. The largest two customers accounted for approximately 28% and 15% of the Company’s net accounts receivable at December 31, 2016. Three vendors accounted for 23%, 17% and 15% of the Company’s accounts payable as of December 31, 2017 primarily related to the Company’s collaborative development services programs. Two vendors accounted for 11% and 8% of the Company’s accounts payable at December 31, 2016. The Company currently relies on a single supplier to supply a subcomponent used in the HTG EdgeSeq processors. A loss of this supplier could significantly delay the delivery of products, which in turn would materially affect the Company’s ability to generate revenue. |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Product and Product-Related Service Revenue from Sale of Instruments and Consumables | The Company had product and product-related services revenue consisting of revenue from the sale of instruments and consumables and the use of the HTG EdgeSeq proprietary technology to process samples and develop custom RUO assays for the years ended December 31, 2017 and 2016 as follows: Years Ended December 31, 2017 2016 Product revenue: Instruments $ 385,143 $ 522,813 Consumables 1,463,347 2,237,129 Total product revenue 1,848,490 2,759,942 Product-related services revenue: Custom RUO assay development 419,515 235,818 Sample processing 4,529,250 2,136,970 Total product-related services revenue 4,948,765 2,372,788 Total product and product-related services revenue $ 6,797,255 $ 5,132,730 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory, net of allowance, consisted of the following as of the date indicated: December 31, 2017 2016 Raw materials $ 984,328 $ 1,222,437 Work in process 376 1,762 Finished goods 257,959 557,161 Total gross inventory 1,242,663 1,781,360 Less inventory allowance (62,142 ) (270,307 ) $ 1,180,521 $ 1,511,053 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table classifies the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and 2016, respectively, in the fair value hierarchy: Balance at December 31, 2017 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 8,521,054 $ — $ — $ 8,521,054 Total $ 8,521,054 $ — $ — $ 8,521,054 Balance at December 31, 2016 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 6,443,102 $ — $ — $ 6,443,102 Investments available-for-sale at fair value U.S. government obligations $ 1,300,663 $ — $ — $ 1,300,663 Corporate debt securities $ — $ 3,004,238 $ — $ 3,004,238 Total $ 7,743,765 $ 3,004,238 $ — $ 10,748,003 |
Available for Sale Securities (
Available for Sale Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Available-for-sale Securities | The Company had no available-for-sale securities as of December 31, 2017. The following is a summary of the Company’s available-for-sale securities at December 31, 2016: December 31, 2016 Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) U.S. Treasury securities $ 1,300,151 $ 512 $ — $ 1,300,663 Corporate debt securities 3,005,840 — (1,602 ) 3,004,238 Total available-for-sale securities $ 4,305,991 $ 512 $ (1,602 ) $ 4,304,901 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net consists of the following: December 31, 2017 2016 Furniture & fixtures $ 582,007 $ 494,589 Leasehold improvements 1,863,698 1,847,378 Equipment used in manufacturing 1,963,558 1,395,651 Equipment used in research & development 1,328,556 1,121,676 Equipment used in the field 130,552 131,096 Software and intangible assets 373,683 245,736 Construction in progress 255,641 176,963 6,497,695 5,413,089 Less: accumulated depreciation and amortization (3,192,805 ) (2,142,892 ) $ 3,304,890 $ 3,270,197 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | Accrued liabilities consist of the following: December 31, 2017 2016 Accrued employee bonuses $ 3,049,109 $ 954,120 Payroll and employee benefit accruals 369,275 308,186 Accrued professional fees 101,150 79,029 Accrued interest 45,544 82,591 Other accrued liabilities 181,708 246,360 $ 3,746,786 $ 1,670,286 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Principal Repayments Due Under Term Loan | The remaining principal repayments due under the Growth Term Loan as of December 31, 2017, are as follows: 2018 Growth Term Loan payments $ 5,163,822 Less discount and deferred financing costs (64,807 ) Plus final fee premium 694,584 Total Growth Term Loan, net $ 5,793,599 |
Other Agreements (Tables)
Other Agreements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Remaining Minimum Principal Payments Due | The remaining minimum principal payments due to NuvoGen on the remaining unpaid obligation at December 31, 2017 are as follows, although actual payments could be significantly more than provided in the table in 2018 and beyond to the extent that 6% of revenue exceeds $400,000: 2018 $ 400,000 2019 400,000 2020 400,000 2021 400,000 2022 400,000 2023 and beyond 5,898,743 Total NuvoGen obligation payments 7,898,743 Less discount 118,612 Total NuvoGen obligation, net $ 8,017,355 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator Used in Computing Basic and Diluted Net Loss per Share | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share for the periods presented: Years Ended December 31, 2017 2016 Numerator: Net loss $ (18,960,017 ) $ (26,039,550 ) Denominator: Weighted-average shares outstanding-basic and diluted 10,597,318 7,113,075 Net loss per share, basic and diluted $ (1.79 ) $ (3.66 ) |
Outstanding Options, Warrants, Restricted Stock Units and Debt Conversion Option Excluded from Computation of Diluted Net Loss per Share | The following outstanding options, warrants, restricted stock units and debt conversion option were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive: Years Ended December 31, 2017 2016 Options to purchase common stock 1,517,771 1,161,705 Common stock warrants 219,723 219,723 Restricted stock units 26,666 355,499 QNAH Convertible Note 755,178 - |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Proceeds From Issuance Of Preferred Stock Preference Stock And Warrants [Abstract] | |
Summary of Outstanding Warrants | The following table shows the common stock warrants outstanding as of December 31, 2017 and 2016: Shares of Common Exercise Price/Share Expiration Date 28,713 23.51 2024 144,772 14.00 2022 931 6.45 2019 45,307 2.76 2026 |
Stockholders Deficit (Tables)
Stockholders Deficit (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Stock-Based Compensation | The Company incurs stock-based compensation expense relating to the grants under its equity incentive plans of RSUs and stock options to employees, non-employee directors and consultants of the Company and its affiliates and through its employee stock purchase plan. Amounts recognized in the accompanying statements of operations with respect to the Company’s stock-based compensation and employee stock purchase plan were as follows: Years Ended December 31, 2017 2016 Selling, general and administrative $ 1,012,253 $ 721,473 Research and development 319,916 217,553 Cost of revenue 103,918 63,102 $ 1,436,087 $ 1,002,128 |
Summary of Stock Option Plans Activity | The following table summarizes stock option activity during the two-year period ended December 31, 2017: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at January 1, 2016 736,645 $ 4.18 7.5 $ 947,794 Granted 563,400 2.46 Exercised (11,093 ) 2.15 $ 2,126 Forfeited (70,754 ) 4.6 Expired/Cancelled (56,493 ) 3.97 Balance at December 31, 2016 1,161,705 $ 3.35 7.7 $ 36,887 Granted 494,500 2.09 Exercised (41,815 ) 2.68 $ 152,130 Forfeited (81,676 ) 2.64 Expired/Cancelled (14,943 ) 6.15 Balance at December 31, 2017 1,517,771 $ 2.97 7.5 $ 67,242 Vested and expected to vest at December 31, 2017 1,517,771 $ 2.97 7.5 $ 67,242 Exercisable at December 31, 2016 593,670 $ 3.46 6.4 $ 28,822 Exercisable at December 31, 2017 851,996 $ 3.31 6.5 $ 248 |
Summary of Material Factors Incorporated in Black-Scholes Model In Estimating Fair Value of Options Granted | The material factors incorporated in the Black-Scholes model in estimating the fair value of the stock options granted for the periods presented were as follows: 2017 2016 Fair value of common stock $1.71 - 3.46 $1.98 - 2.88 Risk-free interest rate 1.75% - 2.20% 1.13% - 2.08% Expected volatility 58.5% - 62.6% 59.9% - 93.7% Expected term 5.1 to 6.3 years 4.8 to 6.2 years Expected dividend yield 0% 0% |
Summary of RSU Award Activity | The following table summarizes RSU award activity during the two-year period ended December 31, 2017: Number of Shares Weighted- Average Grant Date Fair Value Per Share Balance at January 1, 2016 27,500 $ 5.45 Granted 389,761 2.43 Vested (36,762 ) 2.90 Forfeited (25,000 ) 2.46 Balance at December31, 2016 355,499 $ 2.41 Granted 10,000 1.75 Vested (336,333 ) 2.47 Forfeited (2,500 ) 2.46 Balance at December 31, 2017 26,666 $ 2.78 Vested and expected to vest at December 31, 2017 26,666 $ 2.78 |
Employee Stock Purchase Plan | |
Summary of Material Factors Incorporated in Black-Scholes Model In Estimating Fair Value of Options Granted | The material factors incorporated in the Black-Scholes model in estimating the fair value of the ESPP awards for the periods presented were as follows: 2017 2016 Fair value of common stock $2.11 - 3.17 $3.03 - 4.09 Risk-free interest rate 0.61% - 1.12% 0.41% - 0.48% Expected volatility 68.0% - 70.0% 70.0% Expected term 0.5 years 0.5 years Expected dividend yield -% -% |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Minimum Facility Lease Payments Before Common Area Maintenance Charges | The Company’s annual minimum facility lease payments before common area maintenance charges as of December 31, 2017 are as follows: 2018 $ 512,533 2019 514,977 2020 517,457 2021 43,139 $ 1,588,106 |
Summary of Product Warranty Liability included in Accrued Liabilities in Balance Sheets | The following is a summary of the Company’s general product warranty liability, which is included in accrued liabilities in the accompanying balance sheets for the years ended December 31, 2017 and 2016: Years Ended December 31, 2017 2016 Beginning balance $ 50,426 $ 20,213 Cost of warranty claims (9,814 ) (71,404 ) Increase (decrease) in warranty reserve (3,456 ) 101,617 Ending balance $ 37,156 $ 50,426 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The components of income tax expense are as follows: Years Ended December 31, 2017 2016 Current: Federal $ — $ — State 2,921 10,118 Total current income tax expense $ 2,921 $ 10,118 Deferred: Federal $ — $ — State — — Total deferred income tax expense $ — $ — Total income tax expense $ 2,921 $ 10,118 |
Schedule of Difference in Actual Income Tax Expense Computed by Applying the Statutory Federal Income Tax Rate to Loss Before Income Taxes | The Company’s actual income tax expense for the years ended December 31, 2017 and 2016 differ from the expected amount computed by applying the statutory federal income tax rate of 34% to loss before income taxes as follows: Years Ended December 31, 2017 2016 Computed tax (benefit) at 34% $ (6,445,413 ) $ (8,850,007 ) State taxes, net of federal benefit (532,952 ) (462,609 ) Stock-based compensation 231,396 210,367 Expiring state NOL carryforwards — 94,962 Return to provision (15,375 ) 248,263 Other 20,292 25,718 Research and development tax credit - state (576,525 ) (453,071 ) Research and development tax credit - federal (440,058 ) (341,785 ) Federal rate change on deferred items as of enactment date 16,232,211 — Change in valuation reserve (8,470,655 ) 9,538,280 $ 2,921 $ 10,118 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities comprise the following: Years Ended December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 29,475,597 $ 37,114,445 Research and development credits 3,114,091 2,132,050 Deferred revenue 204,061 177,683 Inventory reserve 15,134 99,583 Fixed assets and intangibles 147,395 193,833 Accrued NuvoGen liability 1,952,567 3,176,449 Accrued expense 24,500 351,505 Other 74,986 233,438 35,008,331 43,478,986 Valuation allowance (35,008,331 ) (43,478,986 ) Deferred tax asset, net $ — $ — |
Summary of Federal Net Operating Loss Carryforwards | The Company’s federal NOL carryforwards have the following expiration dates: Year of Expiration Carryforwards Federal NOL carryforwards 2021 $ 211,806 2023 1,635,651 2024 1,217,290 2025 1,409,498 2026 1,175,594 2027 1,676,458 2028 3,037,785 2029 3,753,314 2030 623,235 2031 5,435,312 2032 10,913,787 2033 12,095,966 2034 14,190,409 2035 21,112,183 2036 24,302,042 2037 19,190,511 $ 121,980,841 |
Description of Business - Addit
Description of Business - Additional Information (Details) - Segment | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | ||
Number of operating segments | 1 | |
Sales Revenue, Net | Customer Concentration Risk | Customers Located Outside Of United States | ||
Significant Accounting Policies [Line Items] | ||
Sales revenue percentage | 67.00% | 16.00% |
Sales Revenue, Net | Customer Concentration Risk | Customers Located Outside Of United States | QIAGEN Manchester Limited | ||
Significant Accounting Policies [Line Items] | ||
Sales revenue percentage | 80.00% |
Basis of Presentation and Sum40
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | Jan. 23, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)CustomerVendorshares | Dec. 31, 2016USD ($)CustomerVendor | Dec. 31, 2015USD ($) | Aug. 31, 2014USD ($) |
Significant Accounting Policies [Line Items] | |||||
Prior Period Reclassification Adjustment | $ 0 | ||||
Accumulated deficit | 134,566,061 | $ 115,606,044 | |||
Cash and cash equivalents | 9,968,600 | 7,507,659 | $ 3,293,983 | ||
Current liabilities | $ 13,341,967 | 10,020,991 | |||
Long-term liabilities | 5,389,137 | ||||
Issuance of common stock | shares | 5,471,962 | ||||
Allowance for Doubtful Accounts Receivable | $ 0 | 0 | |||
Maturity period of investments | less than one year | ||||
Reserve for shrinkage and excess inventory | $ 62,142 | 270,307 | |||
Inventory written off directly to cost of revenue | 208,112 | 167,100 | |||
Finished goods inventory | 257,959 | 557,161 | |||
Leasehold improvements | 710,000 | ||||
Depreciation and leasehold improvement amortization expense | 1,241,873 | 1,473,778 | |||
Impairment of Long-lived assets | 0 | 0 | |||
Debt instrument, amortization expense | 195,248 | 206,985 | |||
Deferred offering costs, current | 2,953 | 49,630 | |||
Advertising and promotion expense incurred | 245 | $ 49,022 | |||
Accounting Standards Update 2016-02 | Office and Equipment Leases | |||||
Significant Accounting Policies [Line Items] | |||||
Gross-up amount of leases effect in balance sheets | $ 2,000,000 | ||||
Supplier Concentration Risk | Accounts Payable | |||||
Significant Accounting Policies [Line Items] | |||||
Number of vendors | Vendor | 3 | 2 | |||
Supplier Concentration Risk | Accounts Payable | Vendor One | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 23.00% | 11.00% | |||
Supplier Concentration Risk | Accounts Payable | Vendor Two | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 17.00% | 8.00% | |||
Supplier Concentration Risk | Accounts Payable | Vendor Three | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 15.00% | ||||
Sales Revenue, Net | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Number of customers | Customer | 2 | 2 | |||
Sales Revenue, Net | Customer Concentration Risk | Customer One | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 54.00% | 29.00% | |||
Sales Revenue, Net | Customer Concentration Risk | Customer Two | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 8.00% | 12.00% | |||
Accounts Receivable | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Number of customers | Customer | 2 | 2 | |||
Accounts Receivable | Customer Concentration Risk | Customer One | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 66.00% | 28.00% | |||
Accounts Receivable | Customer Concentration Risk | Customer Two | |||||
Significant Accounting Policies [Line Items] | |||||
Sales revenue percentage | 11.00% | 15.00% | |||
Software and Software Development Costs | |||||
Significant Accounting Policies [Line Items] | |||||
Long-term asset, estimated life | 3 years | ||||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Period of time customers use to evaluate the Company’s equipment | 90 days | ||||
Long-term asset, estimated life | 3 years | ||||
Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Period of time customers use to evaluate the Company’s equipment | 180 days | ||||
Long-term asset, estimated life | 5 years | ||||
NuvoGen Asset Purchase Agreement | |||||
Significant Accounting Policies [Line Items] | |||||
Percentage of revenue for remaining payment due under obligation | 6.00% | ||||
QIAGEN North American Holdings, Inc. | |||||
Significant Accounting Policies [Line Items] | |||||
Percentage of convertible note to a minimum of common stockholders | 5.00% | ||||
Convertible debt, fair value | $ 2,800,000 | ||||
HTG EdgeSeq | |||||
Significant Accounting Policies [Line Items] | |||||
Finished goods inventory | 53,365 | $ 185,557 | |||
Underwritten Public Offering | |||||
Significant Accounting Policies [Line Items] | |||||
Issuance of common stock | shares | 13,915,000 | ||||
Common stock price per share | $ / shares | $ 2.90 | ||||
Proceeds from issuance of underwritten public offering, net of underwriting discounts and commissoins and offering expenses | $ 37,700,000 | ||||
NuvoGen | |||||
Significant Accounting Policies [Line Items] | |||||
Long-term liabilities | 11,000,000 | ||||
Growth Term Loan | |||||
Significant Accounting Policies [Line Items] | |||||
Deferred financing costs | 6,269 | 24,909 | |||
Deferred financing cost amortization expense | 18,640 | 27,468 | |||
Debt instrument, amortization expense | 179,931 | 249,868 | |||
Growth Term Loan A | |||||
Significant Accounting Policies [Line Items] | |||||
Debt instrument, amortization expense | 58,538 | 238,469 | |||
Debt issuance costs, net | $ 300,000 | ||||
Growth Term Loan B | |||||
Significant Accounting Policies [Line Items] | |||||
Debt instrument, amortization expense | 58,538 | 238,469 | |||
Convertible Promissory Note | QIAGEN North American Holdings, Inc. | |||||
Significant Accounting Policies [Line Items] | |||||
Deferred financing cost amortization expense | 1,269 | 0 | |||
Debt issuance costs, net | $ 39,240 | $ 0 |
Basis of Presentation and Sum41
Basis of Presentation and Summary of Significant Accounting Policies - Product and Product-Related Service Revenue from Sale of Instruments and Consumables (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Revenue Reconciling Item [Line Items] | ||
Total product revenue | $ 6,797,255 | $ 5,132,730 |
Total product-related services revenue | 7,962,312 | |
HTG EdgeSeq | ||
Segment Reporting Revenue Reconciling Item [Line Items] | ||
Total product revenue | 1,848,490 | 2,759,942 |
Total product-related services revenue | 4,948,765 | 2,372,788 |
Total product and product-related services revenue | 6,797,255 | 5,132,730 |
Instruments | HTG EdgeSeq | ||
Segment Reporting Revenue Reconciling Item [Line Items] | ||
Total product revenue | 385,143 | 522,813 |
Consumables | HTG EdgeSeq | ||
Segment Reporting Revenue Reconciling Item [Line Items] | ||
Total product revenue | 1,463,347 | 2,237,129 |
Custom RUO assay development | HTG EdgeSeq | ||
Segment Reporting Revenue Reconciling Item [Line Items] | ||
Total product-related services revenue | 419,515 | 235,818 |
Sample processing | HTG EdgeSeq | ||
Segment Reporting Revenue Reconciling Item [Line Items] | ||
Total product-related services revenue | $ 4,529,250 | $ 2,136,970 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 984,328 | $ 1,222,437 |
Work in process | 376 | 1,762 |
Finished goods | 257,959 | 557,161 |
Total gross inventory | 1,242,663 | 1,781,360 |
Less inventory allowance | (62,142) | (270,307) |
Inventory, net | $ 1,180,521 | $ 1,511,053 |
Fair Value - Financial Assets a
Fair Value - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Asset included in: | ||
Financial Assets | $ 8,521,054 | $ 10,748,003 |
Cash and Cash Equivalents | Money Market Securities | ||
Asset included in: | ||
Financial Assets | 8,521,054 | 6,443,102 |
Investments Available-for-sale at Fair Value | U.S. Government Obligations | ||
Asset included in: | ||
Financial Assets | 1,300,663 | |
Investments Available-for-sale at Fair Value | Corporate Debt Securities | ||
Asset included in: | ||
Financial Assets | 3,004,238 | |
Level 1 | ||
Asset included in: | ||
Financial Assets | 8,521,054 | 7,743,765 |
Level 1 | Cash and Cash Equivalents | Money Market Securities | ||
Asset included in: | ||
Financial Assets | $ 8,521,054 | 6,443,102 |
Level 1 | Investments Available-for-sale at Fair Value | U.S. Government Obligations | ||
Asset included in: | ||
Financial Assets | 1,300,663 | |
Level 2 | ||
Asset included in: | ||
Financial Assets | 3,004,238 | |
Level 2 | Investments Available-for-sale at Fair Value | Corporate Debt Securities | ||
Asset included in: | ||
Financial Assets | $ 3,004,238 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
Fair value assets, Level 1 to Level 2 transfers, Amount | $ 0 | $ 0 |
Fair value, assets, Level 2 to Level 1 transfers, Amount | 0 | 0 |
Fair value, liabilities, Level 1 to Level 2 transfers, Amount | 0 | 0 |
Fair value, liabilities, Level 2 to Level 1 transfers, Amount | 0 | 0 |
Fair value, measurement with unobservable inputs reconciliation, recurring basis, asset transfers into Level 3 | 0 | 0 |
Fair value, measurement with unobservable inputs reconciliation, recurring Basis, asset, transfers out of Level 3 | 0 | 0 |
Fair Value, measurement with unobservable inputs reconciliation, liability, transfers into Level 3 | 0 | 0 |
Fair Value, measurement with unobservable inputs reconciliation, liability, transfers out of Level 3 | $ 0 | $ 0 |
Available for Sale Securities -
Available for Sale Securities - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Investments Debt And Equity Securities [Abstract] | ||
Available for sale securities | $ 0 | $ 4,304,901 |
Unrealized gain on short and long-term investments | $ 1,090 | $ 40,267 |
Available for Sale Securities46
Available for Sale Securities - Summary of Available-for-sale Securities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 4,305,991 | |
Gross Unrealized Gains | 512 | |
Gross Unrealized Losses | (1,602) | |
Fair Value (Net Carrying Amount) | $ 0 | 4,304,901 |
U.S. Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 1,300,151 | |
Gross Unrealized Gains | 512 | |
Fair Value (Net Carrying Amount) | 1,300,663 | |
Corporate Debt Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 3,005,840 | |
Gross Unrealized Losses | (1,602) | |
Fair Value (Net Carrying Amount) | $ 3,004,238 |
Summary Of Property and Equipme
Summary Of Property and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Abstract] | ||
Furniture & fixtures | $ 582,007 | $ 494,589 |
Leasehold improvements | 1,863,698 | 1,847,378 |
Equipment used in manufacturing | 1,963,558 | 1,395,651 |
Equipment used in research & development | 1,328,556 | 1,121,676 |
Equipment used in the field | 130,552 | 131,096 |
Software and intangible assets | 373,683 | 245,736 |
Construction in progress | 255,641 | 176,963 |
Total property and equipment, gross | 6,497,695 | 5,413,089 |
Less: accumulated depreciation and amortization | (3,192,805) | (2,142,892) |
Property and equipment, net | $ 3,304,890 | $ 3,270,197 |
Summary of Accrued Liabilities
Summary of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accrued employee bonuses | $ 3,049,109 | $ 954,120 |
Payroll and employee benefit accruals | 369,275 | 308,186 |
Accrued professional fees | 101,150 | 79,029 |
Accrued interest | 45,544 | 82,591 |
Other accrued liabilities | 181,708 | 246,360 |
Total accrued liabilities | $ 3,746,786 | $ 1,670,286 |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||
Aug. 31, 2014USD ($)Institution | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Institution | Mar. 31, 2016USD ($)$ / sharesshares | Aug. 31, 2015 | May 31, 2015$ / sharesshares | Aug. 22, 2014USD ($) | |
Debt Obligations [Line Items] | |||||||
Investment income, amortization of premium | $ 205,890 | $ 273,786 | |||||
Debt instrument, amortization expense | 195,248 | $ 206,985 | |||||
Growth Term Loan | |||||||
Debt Obligations [Line Items] | |||||||
Number of loan lending institutions | Institution | 2 | 2 | |||||
Final Payment Percentage | 4.75% | ||||||
Debt instrument, amortization expense | 179,931 | $ 249,868 | |||||
Deferred financing costs | 6,269 | 24,909 | |||||
Amortization of deferred financing costs | 18,640 | 27,468 | |||||
Growth Term Loan | Scenario Forecast Two | |||||||
Debt Obligations [Line Items] | |||||||
prepayment fee Percentage | 1.00% | ||||||
Growth Term Loan A | |||||||
Debt Obligations [Line Items] | |||||||
Term loan payable | $ 11,000,000 | ||||||
Debt instrument, fixed rate | 8.50% | ||||||
Debt instrument, maturity date | Sep. 30, 2018 | ||||||
Investment income, amortization of premium | 522,500 | ||||||
Debt issuance costs | $ 300,000 | ||||||
Debt instrument, amortization expense | 58,538 | 238,469 | |||||
Growth Term Loan A | Series E Stock | |||||||
Debt Obligations [Line Items] | |||||||
Warrants issued to acquire shares | shares | 23,396 | ||||||
Warrants exercise price | $ / shares | $ 23.51 | ||||||
Warrant Expiration Date | Aug. 22, 2024 | ||||||
Growth Term Loan B | |||||||
Debt Obligations [Line Items] | |||||||
Term loan payable | $ 5,000,000 | ||||||
Debt instrument, fixed rate | 8.75% | ||||||
Debt instrument, maturity date | Sep. 30, 2018 | ||||||
Investment income, amortization of premium | 237,500 | ||||||
Fair value of warrants | $ 122,460 | ||||||
Debt instrument, amortization expense | $ 58,538 | $ 238,469 | |||||
Growth Term Loan B | Oxford Finance LLC | |||||||
Debt Obligations [Line Items] | |||||||
Warrants exercise price | $ / shares | $ 2.759 | ||||||
Financial institution warrant issued, share | shares | 45,307 | ||||||
Growth Term Loan B | Silicon Valley Bank | |||||||
Debt Obligations [Line Items] | |||||||
Warrants exercise price | $ / shares | $ 23.51 | ||||||
Financial institution warrant issued, share | shares | 5,317 |
Debt Obligations - Principal Re
Debt Obligations - Principal Repayments Due Under Term Loan (Details) - Term Loan | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
2018 Growth Term Loan payments | $ 5,163,822 |
Less discount and deferred financing costs | (64,807) |
Plus final fee premium | 694,584 |
Total Growth Term Loan, net | $ 5,793,599 |
Other Agreements - Additional I
Other Agreements - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Other Agreements [Line Items] | ||
Upfront consideration paid in exchange of common stock | 5,587 | |
Asset purchase agreement fixed payments paid for first two years | $ 740,000 | |
Percentage on annual revenues for cash consideration to be paid | 6.00% | |
Asset purchase agreement aggregate cash compensation paid | $ 15,000,000 | |
Discount rate used to calculate asset purchase obligation | 2.50% | |
Debt instrument, amortization expense | $ 195,248 | $ 206,985 |
Research and development | $ 9,996,627 | 7,900,311 |
Agreement expiration date | May 31, 2027 | |
Description on termination of agreement | The Company may terminate the Restated Agreement at any time upon 90 days’ written notice and may terminate any development plan under the Restated Agreement upon 30 days’ prior written notice. Illumina may terminate the Restated Agreement upon 30 days’ prior written notice if the Company undergoes certain changes of control, subject to a transition period of up to 12 months for then-ongoing development plans. Either party may terminate the Restated Agreement upon the other party’s material breach of the Restated Agreement that remains uncured for 30 days, or upon the other party’s bankruptcy. | |
Service revenue for research and development services | $ 7,962,312 | |
Recognition of deferred revenue | 160,106 | 160,106 |
Collaborative Arrangement | ||
Other Agreements [Line Items] | ||
Service revenue for research and development services | $ 125,000 | 189,422 |
Bristol-Myers Squibb | ||
Other Agreements [Line Items] | ||
Agreement expiration date | May 11, 2019 | |
Agreement termination notice period | 90 days | |
Number of days material breach remains uncured | 60 days | |
Agreement commencement period | 2016-05 | |
Merck KGaA Agreement | ||
Other Agreements [Line Items] | ||
Agreement termination notice period | 90 days | |
Number of days material breach remains uncured | 45 days | |
Description on termination of agreement | Merck KGaA may terminate the Project by providing 90 days’ prior written notice to the Company, at which point Merck KGaA will reimburse HTG for costs incurred during the termination period, of an amount not to exceed non-cancellable, non-reimbursable expenses, and HTG will reimburse Merck KGaA for any costs that have been prepaid without being incurred prior to termination. Further, either party may also terminate the agreement upon the other party’s material breach that remains uncured for 45 days or upon the other party’s bankruptcy. | |
Agreement commencement period | 2016-10 | |
Service revenue for research and development services | $ 25,000 | 0 |
Up-front and milestone payments receivable | $ 9,900,000 | |
Up-front and milestone payments receivable period | 9 years | |
Additional service revenue for research and development services | $ 0 | |
Merck KGaA Agreement | Maximum | ||
Other Agreements [Line Items] | ||
Up-front and milestone payments receivable | $ 1,850,000 | |
Up-front and milestone payments receivable period | 5 years | |
Illumina, Inc. Agreement | ||
Other Agreements [Line Items] | ||
Aggregate payment upon achievement of specified regulatory milestones | $ 600,000 | |
Research and development | $ 50,000 | 0 |
Agreement termination notice period | 90 days | |
Development plan agreement termination notice period | 30 days | |
Number of days material breach remains uncured | 30 days | |
Invetech PTY Ltd. Agreement | ||
Other Agreements [Line Items] | ||
Research and development | $ 0 | 2,300,000 |
NuvoGen Asset Purchase Agreement | ||
Other Agreements [Line Items] | ||
Asset purchase agreement yearly fixed fees paid | 800,000 | 543,750 |
Asset purchase agreement quarterly installments due from beginning 2018 | 400,000 | |
Accrued revenue-based payments | 0 | |
Additional revenue based payments payable | $ 85,574 | 0 |
Percentage of compounded annual interest on unpaid Obligation | 2.50% | |
NuvoGen | ||
Other Agreements [Line Items] | ||
Convertible notes and related debt discount | $ (118,612) | 76,636 |
Debt instrument, amortization expense | $ 195,248 | $ 206,985 |
Other Agreements - Schedule of
Other Agreements - Schedule of Remaining Minimum Principal Payments Due (Details) - NuvoGen Asset Purchase Agreement | Dec. 31, 2017USD ($) |
Purchase Obligation Fiscal Year Maturity [Line Items] | |
2,018 | $ 400,000 |
2,019 | 400,000 |
2,020 | 400,000 |
2,021 | 400,000 |
2,022 | 400,000 |
2023 and beyond | 5,898,743 |
Total NuvoGen obligation payments | 7,898,743 |
Less discount | 118,612 |
Total NuvoGen obligation, net | $ 8,017,355 |
Net Loss per Share - Reconcilia
Net Loss per Share - Reconciliation of Numerator and Denominator Used in Computing Basic and Diluted Net Loss per Share (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | ||
Net loss | $ (18,960,017) | $ (26,039,550) |
Denominator: | ||
Weighted-average shares outstanding-basic and diluted | 10,597,318 | 7,113,075 |
Net loss per share, basic and diluted | $ (1.79) | $ (3.66) |
Net Loss per Share - Outstandin
Net Loss per Share - Outstanding Options, Warrants, Restricted Stock Units and Debt Conversion Option Excluded from Computation of Diluted Net Loss per Share (Detail) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options to purchase common stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net loss per share | 1,517,771 | 1,161,705 |
Restricted Stock Units R S U | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net loss per share | 26,666 | 355,499 |
Warrants | Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net loss per share | 219,723 | 219,723 |
QNAH Convertible Note | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net loss per share | 755,178 |
Warrants - Additional Informati
Warrants - Additional Information (Details) | Jan. 15, 2015USD ($)$ / sharesshares | Aug. 31, 2014Institution | Dec. 31, 2017$ / shares | Dec. 31, 2016Institution | Mar. 31, 2016$ / sharesshares | May 11, 2015$ / sharesshares | Aug. 22, 2014$ / sharesshares |
Growth Term Loan | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Number of loan lending institutions | Institution | 2 | 2 | |||||
Series E Redeemable Convertible Preferred Stock | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Warrants issued to acquire shares | shares | 5,317 | 23,396 | 2,512,562 | ||||
Warrants exercise price | $ / shares | $ 23.51 | $ 23.51 | $ 23.51 | $ 0.2189 | |||
Warrant Expiration Date | Aug. 22, 2024 | ||||||
Common Stock Warrants one | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Warrants issued to acquire shares | shares | 45,307 | ||||||
Warrants exercise price | $ / shares | $ 6.45 | $ 2.759 | |||||
Convertible Note Warrants | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Warrants issued to acquire shares | shares | 9,311,586 | ||||||
Warrants exercise price | $ / shares | $ 0.2189 | $ 14 | |||||
Warrant Expiration Date | Jan. 15, 2022 | ||||||
Aggregate consideration | $ | $ 1,354 | ||||||
Convertible Note Warrants | IPO | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Warrants issued to acquire shares | shares | 144,772 | ||||||
Warrants exercise price | $ / shares | $ 14 |
Warrants -Summary of Outstandin
Warrants -Summary of Outstanding Warrants (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | May 11, 2015 | Jan. 15, 2015 | Aug. 22, 2014 | |
Convertible Note Warrants | ||||||
Class Of Warrant Or Right [Line Items] | ||||||
Shares of Common Stock Underlying Warrants | 144,772 | 144,772 | ||||
Exercise Price/Share | $ 14 | $ 0.2189 | ||||
Expiration Date | 2,022 | |||||
Common Stock Warrants one | ||||||
Class Of Warrant Or Right [Line Items] | ||||||
Shares of Common Stock Underlying Warrants | 931 | 931 | ||||
Exercise Price/Share | $ 6.45 | $ 2.759 | ||||
Expiration Date | 2,019 | |||||
Common Stock Warrants | ||||||
Class Of Warrant Or Right [Line Items] | ||||||
Shares of Common Stock Underlying Warrants | 45,307 | 45,307 | ||||
Exercise Price/Share | $ 2.76 | |||||
Expiration Date | 2,026 | |||||
Series E Redeemable Convertible Preferred Stock | ||||||
Class Of Warrant Or Right [Line Items] | ||||||
Shares of Common Stock Underlying Warrants | 28,713 | 28,713 | ||||
Exercise Price/Share | $ 23.51 | $ 23.51 | $ 23.51 | $ 0.2189 | ||
Expiration Date | 2,024 |
Stockholders Deficit - Addition
Stockholders Deficit - Additional Information (Details) - USD ($) | Jan. 01, 2018 | Jun. 30, 2017 | Apr. 30, 2017 | Jan. 31, 2018 | Jan. 31, 2017 | Apr. 30, 2016 | Feb. 28, 2014 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 11, 2015 |
Class Of Stock [Line Items] | |||||||||||||||
Issuance of common stock from the ATM Offering, Shares | 5,471,962 | ||||||||||||||
Gross proceeds from issuance of common stock | $ 20,500,000 | ||||||||||||||
Sales commission | 600,000 | ||||||||||||||
Other offering expenses paid | 200,000 | ||||||||||||||
Issuance of common stock from the ATM Offering | $ 19,677,478 | ||||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Common stock, shares issued | 13,929,763 | 7,939,967 | 13,929,763 | 7,939,967 | |||||||||||
Common stock, shares outstanding | 13,929,763 | 7,938,571 | 13,929,763 | 7,938,571 | |||||||||||
Common stock, voting rights | Each share of common stock is entitled to one vote. | ||||||||||||||
Common stock, conversion features | The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, no liability for further call or assessment, and are not entitled to cumulative voting rights. | ||||||||||||||
Additional treasury stock | 0 | 0 | |||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||||||
Options exercise period | 2 years | ||||||||||||||
Share based compensation arrangement by share based payment award, options, grants in period, weighted average grant date fair value | $ 1.14 | $ 1.59 | |||||||||||||
Accelerated vesting of unvested stock options | 8,957 | ||||||||||||||
Incremental stock-based compensation expense | $ 13,500 | ||||||||||||||
Maximum aggregate number of common stock available purchase under employee stock purchase plan | 250,000 | ||||||||||||||
Maximum number of shares that may be purchased by eligible participants under employee stock purchase plan | 7,500 | ||||||||||||||
Stock issued under employee stock purchase plans | 61,141 | ||||||||||||||
2014 Employee Stock Purchase Plan | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Percentage of increase on outstanding shares | 1.00% | ||||||||||||||
Shares reserved for issuance | 98,744 | 98,744 | |||||||||||||
Maximum aggregate number of common stock available purchase under employee stock purchase plan | 110,820 | 110,820 | |||||||||||||
Common stock reserved for issuance, Description | The number of shares of common stock reserved for issuance automatically increases on January 1 of each calendar year, from January 1, 2016 to January 1, 2024 by the least of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (ii) 195,000 shares, or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii). | ||||||||||||||
Common stock issuance offering date | Jan. 1, 2016 | ||||||||||||||
Common stock issuance expiration date | Jan. 1, 2024 | ||||||||||||||
Options to purchase common stock outstanding | 195,000 | 195,000 | |||||||||||||
Maximum contribution eligible compensation during a period to purchase common stock | 15.00% | 15.00% | |||||||||||||
Fair market value of company common stock, shares offering price | 85.00% | ||||||||||||||
Fair market value of company common stock, shares purchase price | 85.00% | ||||||||||||||
Common stock shares issued | 39,969 | 39,972 | 39,978 | 39,984 | |||||||||||
Weighted average price per share | $ 1.79 | $ 1.61 | $ 1.79 | $ 2.54 | $ 1.83 | $ 1.61 | $ 2.54 | ||||||||
Employee Stock Purchase Plan | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Common stock shares issued | 0 | ||||||||||||||
Proceeds from issuance of underwritten public offering, net of underwriting discounts and commissoins and offering expenses | $ 130,649 | ||||||||||||||
Subsequent Event | 2014 Employee Stock Purchase Plan | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Number of additional shares registered for issuance | 139,297 | ||||||||||||||
Two Thousand Fourteen Equity Incentive Plan | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Shares reserved for issuance | 940,112 | ||||||||||||||
Number of shares available for issuance | 8,169 | 8,169 | |||||||||||||
Options granted in term | 10 years | ||||||||||||||
Two Thousand Fourteen Equity Incentive Plan | Subsequent Event | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Number of additional shares registered for issuance | 557,190 | ||||||||||||||
Stock-based Compensation | 2011 Equity Incentive Plan | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Percentage of increase on outstanding shares | 20.00% | ||||||||||||||
Number of Shares, Granted | 0 | ||||||||||||||
Employee Stock Option | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Number of Shares, Granted | 494,500 | 563,400 | |||||||||||||
Unrecognized compensation expense | $ 723,590 | $ 723,590 | |||||||||||||
Compensation expense period expected to be recognized | 1 year 9 months 3 days | ||||||||||||||
Options to purchase common stock outstanding | 1,517,771 | 1,161,705 | 1,517,771 | 1,161,705 | 736,645 | ||||||||||
Employee Stock Option | 2011 Equity Incentive Plan | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Shares reserved for issuance | 14,006 | ||||||||||||||
Restricted Stock Units R S U | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Share based compensation arrangement by share based payment award, options, grants in period, weighted average grant date fair value | $ 1.75 | $ 2.43 | |||||||||||||
Unrecognized compensation expense | $ 53,368 | $ 53,368 | |||||||||||||
Compensation expense period expected to be recognized | 1 year 9 months 10 days | ||||||||||||||
Board Of Directors | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Retirement of treasury stock, shares | 1,396 | ||||||||||||||
Board Of Directors | Two Thousand Fourteen Equity Incentive Plan | Minimum | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Options exercise period | 1 year | ||||||||||||||
Board Of Directors | Two Thousand Fourteen Equity Incentive Plan | Maximum | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Options exercise period | 4 years | ||||||||||||||
Sales Agreement | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Common stock price per share | $ 0.001 | ||||||||||||||
Common stock aggregate offering price | $ 40,000,000 | $ 20,000,000 | |||||||||||||
Sales Agreement | Subsequent Event | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Issuance of common stock from the ATM Offering, Shares | 261,352 | ||||||||||||||
Gross proceeds from issuance of common stock | $ 600,000 |
Stockholders Deficit - Summary
Stockholders Deficit - Summary of Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 1,436,087 | $ 1,002,128 |
Selling, General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 1,012,253 | 721,473 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 319,916 | 217,553 |
Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 103,918 | $ 63,102 |
Stockholders Deficit - Summar59
Stockholders Deficit - Summary of Stock Option Plans Activity (Details) - Employee Stock Option - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Beginning Balance | 1,161,705 | 736,645 | |
Number of Shares, Granted | 494,500 | 563,400 | |
Number of Shares, Exercised | (41,815) | (11,093) | |
Number of Shares, Forfeited | (81,676) | (70,754) | |
Number of Shares, Expired/Cancelled | (14,943) | (56,493) | |
Number of Shares, Ending Balance | 1,517,771 | 1,161,705 | 736,645 |
Number of Shares, Vested and expected to vest | 1,517,771 | ||
Number of Shares, Exercisable | 851,996 | 593,670 | |
Weighted-Average Exercise Price Per Share, Beginning Balance | $ 3.35 | $ 4.18 | |
Weighted-Average Exercise Price Per Share, Granted | 2.09 | 2.46 | |
Weighted-Average Exercise Price Per Share, Exercised | 2.68 | 2.15 | |
Weighted-Average Exercise Price Per Share, Forfeited | 2.64 | 4.6 | |
Weighted-Average Exercise Price Per Share, Expired/Cancelled | 6.15 | 3.97 | |
Weighted-Average Exercise Price Per Share, Ending Balance | 2.97 | 3.35 | $ 4.18 |
Weighted-Average Exercise Price Per Share, Vested and expected to vest | 2.97 | ||
Weighted-Average Exercise Price Per Share, Exercisable | $ 3.31 | $ 3.46 | |
Weighted-Average Remaining Contractual Life, Outstanding | 7 years 6 months | 7 years 8 months 12 days | 7 years 6 months |
Weighted-Average Remaining Contractual Life, Vested and expected to vest | 7 years 6 months | ||
Weighted-Average Remaining Contractual Life, Exercisable | 6 years 6 months | 6 years 4 months 24 days | |
Aggregate Intrinsic Value, Balance | $ 67,242 | $ 36,887 | $ 947,794 |
Aggregate Intrinsic Value, Exercised | 152,130 | 2,126 | |
Aggregate Intrinsic Value, Vested and expected to vest | 67,242 | ||
Aggregate Intrinsic Value, Exercisable | $ 248 | $ 28,822 |
Stockholders Deficit - Summar60
Stockholders Deficit - Summary of Material Factors Incorporated in Black-Scholes Model in Estimating Fair Value of Options Granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.75% | 1.13% |
Risk-free interest rate, maximum | 2.20% | 2.08% |
Expected volatility, minimum | 58.50% | 59.90% |
Expected volatility, maximum | 62.60% | 93.70% |
Expected dividend yield | 0.00% | 0.00% |
Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.61% | 0.41% |
Risk-free interest rate, maximum | 1.12% | 0.48% |
Expected volatility, minimum | 68.00% | |
Expected volatility, maximum | 70.00% | |
Expected term | 6 months | 6 months |
Expected volatility | 70.00% | |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term | 5 years 1 month 6 days | 4 years 9 months 18 days |
Minimum | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value of common stock | $ 1.71 | $ 1.98 |
Minimum | Common Stock | Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value of common stock | $ 2.11 | $ 3.03 |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term | 6 years 3 months 18 days | 6 years 2 months 12 days |
Maximum | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value of common stock | $ 3.46 | $ 2.88 |
Maximum | Common Stock | Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value of common stock | $ 3.17 | $ 4.09 |
Stockholders Deficit - Summar61
Stockholders Deficit - Summary of Material Factors Incorporated in Black-Scholes Model in Estimating Fair Value of Options Granted (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Class Of Stock [Line Items] | |
Expected dividend assumed value | $ 0 |
2014 Employee Stock Purchase Plan | |
Class Of Stock [Line Items] | |
Expected dividend assumed value | $ 0 |
Stockholders Deficit - Summar62
Stockholders Deficit - Summary of RSU Award Activity (Details) - Restricted Stock Units R S U - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock Units (RSU) | ||
Beginning Balance | 355,499 | 27,500 |
Granted | 10,000 | 389,761 |
Vested | (336,333) | (36,762) |
Forfeited | (2,500) | (25,000) |
Ending Balance | 26,666 | 355,499 |
Vested and expected to vest at December 31, 2017 | 26,666 | |
Weighted Average Grant Date Fair Value Per Share | ||
Beginning Balance | $ 2.41 | $ 5.45 |
Granted | 1.75 | 2.43 |
Vested | 2.47 | 2.90 |
Forfeited | 2.46 | 2.46 |
Ending Balance | 2.78 | $ 2.41 |
Vested and expected to vest at December 31, 2017 | $ 2.78 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies [Line Items] | ||
Lease expiration term | The Company leases office and laboratory space under two non-cancelable operating leases in Tucson, Arizona. | |
Lease extension term, in years | 5 years | |
Expected increase in lease rent | $ 804,000 | |
Leasehold improvements | $ 710,000 | |
Monthly accreted lease term as reduction of rent expense | 11,833 | |
Rent expense and common area maintenance costs under operating leases | 570,979 | 561,293 |
Discretionary contributions company may make | 0 | 0 |
Computer Equipment | ||
Commitments And Contingencies [Line Items] | ||
Capital lease commitments | $ 83,000 | |
Computer Equipment | Minimum | ||
Commitments And Contingencies [Line Items] | ||
Capital lease commitment period | 36 months | |
Computer Equipment | Maximum | ||
Commitments And Contingencies [Line Items] | ||
Capital lease commitment period | 48 months | |
Capitalized Leasehold Improvements | ||
Commitments And Contingencies [Line Items] | ||
Depreciation | $ 142,000 | $ 130,167 |
Commitments and Contingencies64
Commitments and Contingencies - Minimum Facility Lease Payments Before Common Area Maintenance Charges (Details) | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,018 | $ 512,533 |
2,019 | 514,977 |
2,020 | 517,457 |
2,021 | 43,139 |
Total minimum lease payments | $ 1,588,106 |
Commitments and Contingencies65
Commitments and Contingencies - Schedule Of Product Warranty Liability included in Accrued Liabilities in Balance Sheets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Beginning balance | $ 50,426 | $ 20,213 |
Cost of warranty claims | (9,814) | (71,404) |
Increase (decrease) in warranty reserve | (3,456) | 101,617 |
Ending balance | $ 37,156 | $ 50,426 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Line Items] | |||
Income tax examination, likelihood of unfavorable settlement | greater than 50 percent | ||
Uncertain tax positions | $ 0 | $ 0 | |
Accrued interest or penalties | 0 | 0 | |
Recognized interest or penalties | $ 0 | 0 | |
U.S. federal corporate tax rate | 34.00% | ||
Tax cuts and jobs act of 2017, change in tax rate, decrease in deferred tax assets | $ 16,232,211 | ||
Tax cuts and jobs act of 2017, change in tax rate, net adjustment in deferred tax expense | 0 | ||
Valuation allowance | 35,008,331 | 43,478,986 | |
Change in valuation reserve | (8,470,655) | $ 9,538,280 | |
Increase related to additional operating losses | 7,761,556 | ||
Tax cuts and jobs cut act of 2017, change in tax rate, decrease in valuation allowance | 16,232,211 | ||
Federal | |||
Income Tax Disclosure [Line Items] | |||
NOL carryforwards | 121,980,841 | ||
State | |||
Income Tax Disclosure [Line Items] | |||
NOL carryforwards | $ 79,222,187 | ||
Beginning Expiration Year | Federal | |||
Income Tax Disclosure [Line Items] | |||
Tax credit carryforward, expiration year | 2,021 | ||
Beginning Expiration Year | State | |||
Income Tax Disclosure [Line Items] | |||
Tax credit carryforward, expiration year | 2,018 | ||
Maximum | |||
Income Tax Disclosure [Line Items] | |||
U.S. federal corporate tax rate | 35.00% | ||
Maximum | Federal | |||
Income Tax Disclosure [Line Items] | |||
NOL carryforward expiration year | 2,037 | ||
Maximum | State | |||
Income Tax Disclosure [Line Items] | |||
NOL carryforward expiration year | 2,037 | ||
Minimum | Federal | |||
Income Tax Disclosure [Line Items] | |||
NOL carryforward expiration year | 2,021 | ||
Minimum | State | |||
Income Tax Disclosure [Line Items] | |||
NOL carryforward expiration year | 2,027 | ||
Scenario Plan | |||
Income Tax Disclosure [Line Items] | |||
U.S. federal corporate tax rate | 21.00% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | ||
State | $ 2,921 | $ 10,118 |
Total current income tax expense | 2,921 | 10,118 |
Total income tax expense | $ 2,921 | $ 10,118 |
Income Taxes - Difference in Ac
Income Taxes - Difference in Actual Income Tax Expense Computed by Applying the Statutory Federal Income Tax Rate to Loss Before Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Line Items] | ||
Computed tax (benefit) at 34% | $ (6,445,413) | $ (8,850,007) |
State taxes, net of federal benefit | (532,952) | (462,609) |
Stock-based compensation | 231,396 | 210,367 |
Expiring state NOL carryforwards | 94,962 | |
Return to provision | (15,375) | 248,263 |
Other | 20,292 | 25,718 |
Federal rate change on deferred items as of enactment date | 16,232,211 | |
Change in valuation reserve | (8,470,655) | 9,538,280 |
Total income tax expense | 2,921 | 10,118 |
State | ||
Income Tax Disclosure [Line Items] | ||
Research and development tax credit | (576,525) | (453,071) |
Federal | ||
Income Tax Disclosure [Line Items] | ||
Research and development tax credit | $ (440,058) | $ (341,785) |
Income Taxes - Difference in 69
Income Taxes - Difference in Actual Income Tax Expense Computed by Applying the Statutory Federal Income Tax Rate to Loss Before Income Taxes (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Statutory federal income tax rate | 34.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 29,475,597 | $ 37,114,445 |
Research and development credits | 3,114,091 | 2,132,050 |
Deferred revenue | 204,061 | 177,683 |
Inventory reserve | 15,134 | 99,583 |
Fixed assets and intangibles | 147,395 | 193,833 |
Accrued liability | 24,500 | 351,505 |
Other | 74,986 | 233,438 |
Total deferred tax assets | 35,008,331 | 43,478,986 |
Valuation allowance | (35,008,331) | (43,478,986) |
NuvoGen | ||
Deferred tax assets: | ||
Accrued liability | $ 1,952,567 | $ 3,176,449 |
Income Taxes - Schedule of Fede
Income Taxes - Schedule of Federal Net Operating Loss Carryforwards (Details) - Federal | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards | $ 121,980,841 |
2,021 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,021 |
Federal NOL carryforwards | $ 211,806 |
2,023 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,023 |
Federal NOL carryforwards | $ 1,635,651 |
2,024 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,024 |
Federal NOL carryforwards | $ 1,217,290 |
2,025 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,025 |
Federal NOL carryforwards | $ 1,409,498 |
2,026 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,026 |
Federal NOL carryforwards | $ 1,175,594 |
2,027 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,027 |
Federal NOL carryforwards | $ 1,676,458 |
2,028 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,028 |
Federal NOL carryforwards | $ 3,037,785 |
2,029 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,029 |
Federal NOL carryforwards | $ 3,753,314 |
2,030 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,030 |
Federal NOL carryforwards | $ 623,235 |
2,031 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,031 |
Federal NOL carryforwards | $ 5,435,312 |
2,032 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,032 |
Federal NOL carryforwards | $ 10,913,787 |
2,033 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,033 |
Federal NOL carryforwards | $ 12,095,966 |
2,034 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,034 |
Federal NOL carryforwards | $ 14,190,409 |
2,035 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,035 |
Federal NOL carryforwards | $ 21,112,183 |
2,036 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,036 |
Federal NOL carryforwards | $ 24,302,042 |
2,037 | |
Operating Loss Carryforwards [Line Items] | |
Federal NOL carryforwards, expiration year | 2,037 |
Federal NOL carryforwards | $ 19,190,511 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 17, 2016 | |
Related Party Transaction [Line Items] | ||||
Service Revenue | $ 7,962,312 | |||
Accounts receivable | 6,356,268 | $ 1,377,441 | ||
Research and development | 9,996,627 | 7,900,311 | ||
Revenues | $ 14,759,567 | $ 5,132,730 | ||
Common stock, shares issued | 13,929,763 | 7,939,967 | ||
Common stock value | $ 13,929 | $ 7,938 | ||
SOW One | ||||
Related Party Transaction [Line Items] | ||||
Service Revenue | 2,604,892 | |||
Profit sharing payments included in collaborative development services revenue | 1,272,080 | |||
Accounts receivable | 2,429,152 | |||
Research and development | 2,129,138 | |||
Costs | 0 | |||
Revenues | 0 | |||
SOW Two | ||||
Related Party Transaction [Line Items] | ||||
Service Revenue | 2,988,211 | |||
Profit sharing payments included in collaborative development services revenue | 1,072,130 | |||
Accounts receivable | 1,796,157 | |||
Research and development | $ 2,645,825 | |||
Costs | 0 | |||
Revenues | 0 | |||
QIAGEN Manchester Limited | ||||
Related Party Transaction [Line Items] | ||||
Agreement commencement period | 2016-11 | |||
Term of agreement | 5 years | |||
Termination payment | $ 2,000,000 | |||
QIAGEN North American Holdings Incorporation | ||||
Related Party Transaction [Line Items] | ||||
Revenues | 35,000 | 4,375 | ||
Common stock, shares issued | 833,333 | |||
Common stock value | $ 2,000,000 | |||
Deferred revenue | $ 175,000 | |||
Deferred revenue recognition period | 5 years | |||
QIAGEN North American Holdings Incorporation | Convertible Promissory Note | ||||
Related Party Transaction [Line Items] | ||||
Cash proceeds from issuance of subordinated notes | $ 3,000,000 | |||
Debt instrument, interest rate | 3.00% | |||
Debt instrument, maturity date | Oct. 26, 2020 | |||
Conversion price per share | $ 3.984 | |||
Deferred financing costs | $ 40,510 | |||
Amortization of deferred financing costs | 1,269 | 0 | ||
QIAGEN North American Holdings Incorporation | Convertible Promissory Note | Interest Expense | ||||
Related Party Transaction [Line Items] | ||||
Amortization of deferred financing costs | 1,269 | 0 | ||
Interest accrued | $ 8,630 | $ 0 | ||
QIAGEN North American Holdings Incorporation | Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Shares issued price per share | $ 2.40 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 23, 2018 | Feb. 28, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2017 |
Subsequent Event [Line Items] | |||||
Issuance of common stock from initial public offering, shares | 5,471,962 | ||||
Gross proceeds from issuance of common stock | $ 20.5 | ||||
Underwritten Public Offering | |||||
Subsequent Event [Line Items] | |||||
Issuance of common stock from initial public offering, shares | 13,915,000 | ||||
Common stock, offering price per share | $ 2.90 | ||||
Sales Agreement | |||||
Subsequent Event [Line Items] | |||||
Common stock, offering price per share | $ 0.001 | ||||
Subsequent Event | Underwritten Public Offering | |||||
Subsequent Event [Line Items] | |||||
Issuance of common stock from initial public offering, shares | 13,915,000 | ||||
Common stock, offering price per share | $ 2.90 | ||||
Net proceeds from initial public offering after underwriters' discounts, commissions and offering expenses | $ 37.7 | ||||
Subsequent Event | Over-Allotment Option | |||||
Subsequent Event [Line Items] | |||||
Issuance of common stock from initial public offering, shares | 1,815,000 | ||||
Subsequent Event | Sales Agreement | |||||
Subsequent Event [Line Items] | |||||
Issuance of common stock from initial public offering, shares | 261,352 | ||||
Gross proceeds from issuance of common stock | $ 0.6 | ||||
Agreement termination period | 2018-02 |