Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | HTGM | |
Entity Registrant Name | HTG Molecular Diagnostics, Inc | |
Entity Central Index Key | 0001169987 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 62,213,479 | |
Entity File Number | 001-37369 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-0912294 | |
Entity Address, Address Line One | 3430 E. Global Loop | |
Entity Address, City or Town | Tucson | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85706 | |
City Area Code | (877) | |
Local Phone Number | 289-2615 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 10,403,697 | $ 7,619,748 |
Short-term investments available-for-sale, at fair value | 21,554,318 | 25,410,222 |
Restricted cash | 3,270,247 | 3,270,247 |
Accounts receivable | 1,202,469 | 3,164,176 |
Inventory, net of allowance of $39,403 at both March 31, 2020 and December 31, 2019 | 1,637,898 | 1,269,667 |
Prepaid expenses and other | 525,647 | 633,522 |
Total current assets | 38,594,276 | 41,367,582 |
Operating lease right-of-use assets | 1,039,045 | 1,209,145 |
Property and equipment, net | 2,169,663 | 2,240,133 |
Other non-current assets | 123,086 | 302,409 |
Total assets | 41,926,070 | 45,119,269 |
Current liabilities: | ||
Accounts payable | 1,666,819 | 1,662,583 |
Accrued liabilities | 1,195,827 | 1,870,296 |
Contract liabilities - current | 409,449 | 426,014 |
NuvoGen obligation - current | 1,093,592 | 1,152,233 |
MidCap Term Loan payable - current | 280,000 | |
Convertible note - current, net of debt issuance costs | 2,991,031 | 2,987,667 |
Operating lease liabilities - current | 696,301 | 758,932 |
Other current liabilities | 36,205 | 41,134 |
Total current liabilities | 8,369,224 | 8,898,859 |
NuvoGen obligation - non-current, net of discount | 4,265,991 | 4,498,777 |
MidCap Term Loan payable - non-current, net of discount and debt issuance costs | 6,629,972 | 6,871,545 |
Operating lease liabilities - non-current | 512,718 | 636,340 |
Other non-current liabilities | 234,981 | 244,114 |
Total liabilities | 20,012,886 | 21,149,635 |
Commitments and Contingencies (Note 15) | ||
Stockholders’ equity: | ||
Series A convertible preferred stock, $0.001 par value; 51,270 shares authorized as of March 31, 2020 and zero shares authorized as of December 31, 2019; 51,270 shares issued and outstanding as of March 31, 2020 and no shares issued and outstanding as of December 31, 2019 | 51 | |
Common stock, $0.001 par value; 200,000,000 shares authorized at March 31, 2020 and December 31, 2019, 62,196,117 shares issued and outstanding at March 31, 2020 and 58,090,233 shares issued and outstanding at December 31, 2019 | 62,196 | 58,090 |
Additional paid-in-capital | 197,578,248 | 194,234,151 |
Accumulated other comprehensive income (loss) | 48,230 | (4,964) |
Accumulated deficit | (175,775,541) | (170,317,643) |
Total stockholders’ equity | 21,913,184 | 23,969,634 |
Total liabilities and stockholders' equity | $ 41,926,070 | $ 45,119,269 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory net allowance | $ 39,403 | $ 39,403 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 62,196,117 | 58,090,233 |
Common stock, shares outstanding | 62,196,117 | 58,090,233 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 51,270 | 0 |
Preferred stock, shares issued | 51,270 | 0 |
Preferred stock, shares outstanding | 51,270 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 2,225,474 | $ 3,202,825 |
Operating expenses: | ||
Cost of product and product-related services revenue | $ 1,015,492 | $ 2,045,527 |
Type of Cost, Good or Service [Extensible List] | htgm:ProductAndProductRelatedServicesMember | htgm:ProductAndProductRelatedServicesMember |
Selling, general and administrative | $ 4,675,263 | $ 4,400,866 |
Research and development | 1,926,275 | 2,074,748 |
Total operating expenses | 7,617,030 | 8,521,141 |
Operating loss | (5,391,556) | (5,318,316) |
Other income (expense): | ||
Interest expense | (225,330) | (233,967) |
Interest income | 141,896 | 181,437 |
Other income | 22,268 | |
Total other expense | (61,166) | (52,530) |
Net loss before income taxes | (5,452,722) | (5,370,846) |
Provision for income taxes | (5,176) | |
Net loss | $ (5,457,898) | $ (5,370,846) |
Net loss per share, basic and diluted | $ (0.08) | $ (0.19) |
Shares used in computing net loss per share, basic and diluted | 64,567,932 | 28,600,679 |
Product and Product-related Services | ||
Revenue: | ||
Total revenue | $ 1,988,137 | $ 2,662,505 |
Collaborative Development Services | ||
Revenue: | ||
Total revenue | $ 237,337 | $ 540,320 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (5,457,898) | $ (5,370,846) |
Other comprehensive income, net of tax effect: | ||
Unrealized gain on short-term investments | 47,697 | 3,353 |
Foreign currency translation adjustment | 5,497 | 6,439 |
Total other comprehensive income | 53,194 | 9,792 |
Comprehensive loss | $ (5,404,704) | $ (5,361,054) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | LP Purchase Agreement | ATM Offering | Private Placement | Series A Convertible Preferred Stock | Series A Convertible Preferred StockPrivate Placement | Common Stock | Common StockLP Purchase Agreement | Common StockATM Offering | Additional Paid-In Capital | Additional Paid-In CapitalLP Purchase Agreement | Additional Paid-In CapitalATM Offering | Additional Paid-In CapitalPrivate Placement | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance at Dec. 31, 2018 | $ 21,092,062 | $ 28,585 | $ 172,086,909 | $ (3,453) | $ (151,019,979) | ||||||||||
Balance, shares at Dec. 31, 2018 | 28,585,449 | ||||||||||||||
Exercise of stock options | 51,570 | $ 22 | 51,548 | ||||||||||||
Exercise of stock options, shares | 21,871 | ||||||||||||||
Stock-based compensation expense | 241,233 | 241,233 | |||||||||||||
Release of restricted stock awards | 13 | $ 13 | |||||||||||||
Release of restricted stock awards, shares | 13,126 | ||||||||||||||
Net share settlement of restricted stock award | (9,685) | $ (4) | (9,681) | ||||||||||||
Net share settlement of restricted stock award, shares | (3,813) | ||||||||||||||
Employee stock purchase plan expense | 16,794 | 16,794 | |||||||||||||
Net loss | (5,370,846) | (5,370,846) | |||||||||||||
Unrealized gain on short-term investments | 3,353 | 3,353 | |||||||||||||
Foreign currency translation adjustment | 6,439 | 6,439 | |||||||||||||
Balance at Mar. 31, 2019 | 16,030,933 | $ 28,616 | 172,386,803 | 6,339 | (156,390,825) | ||||||||||
Balance, shares at Mar. 31, 2019 | 28,616,633 | ||||||||||||||
Balance at Dec. 31, 2019 | 23,969,634 | $ 58,090 | 194,234,151 | (4,964) | (170,317,643) | ||||||||||
Balance, shares at Dec. 31, 2019 | 58,090,233 | ||||||||||||||
Stock-based compensation expense | 415,256 | 415,256 | |||||||||||||
Release of restricted stock awards | 36 | $ 36 | |||||||||||||
Release of restricted stock awards, shares | 35,942 | ||||||||||||||
Net share settlement of restricted stock award | (7,052) | $ (11) | (7,041) | ||||||||||||
Net share settlement of restricted stock award, shares | (11,266) | ||||||||||||||
Employee stock purchase plan expense | 5,379 | 5,379 | |||||||||||||
Issuance of common stock | $ 2,435,912 | $ 615 | $ 4,399 | $ (615) | $ 2,431,513 | ||||||||||
Issuance of common stock, shares | 4,399,062 | 615,384 | 4,399,062 | ||||||||||||
Issuance of preferred stock | 2,424,900 | $ 562,955 | $ 41 | $ 10 | 2,424,859 | $ 562,945 | |||||||||
Issuance of preferred stock, shares | 41,100 | 10,170 | |||||||||||||
Cancellation of common stock received in exchange for Series A convertible preferred stock | (2,424,900) | $ (4,110) | (2,420,790) | ||||||||||||
Cancellation of common stock received in exchange for Series A convertible preferred stock, shares | (4,110,000) | ||||||||||||||
Exercise of pre-funded warrants | 31,768 | $ 3,177 | 28,591 | ||||||||||||
Exercise of pre-funded warrants, shares | 3,176,762 | ||||||||||||||
Transaction costs incurred in connection with LP Purchase Agreement | $ (96,000) | $ (96,000) | |||||||||||||
Net loss | (5,457,898) | (5,457,898) | |||||||||||||
Unrealized gain on short-term investments | 47,697 | 47,697 | |||||||||||||
Foreign currency translation adjustment | 5,497 | 5,497 | |||||||||||||
Balance at Mar. 31, 2020 | $ 21,913,184 | $ 51 | $ 62,196 | $ 197,578,248 | $ 48,230 | $ (175,775,541) | |||||||||
Balance, shares at Mar. 31, 2020 | 51,270 | 62,196,117 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
At the market offering, commissions and issuance costs | $ 174,000 |
Private placement issuance costs | $ 37,075 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net loss | $ (5,457,898) | $ (5,370,846) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 348,633 | 308,984 |
Accretion of discount on NuvoGen obligation | (3,430) | (3,414) |
Provision for excess inventory | 6,947 | 24,296 |
Amortization of QNAH Convertible Note issuance costs | 3,364 | 3,364 |
Amortization of MidCap Credit Facility discount and issuance costs | 42,441 | 39,143 |
Stock-based compensation expense | 415,292 | 241,246 |
Employee stock purchase plan expense | 5,379 | 16,794 |
Amortization of operating lease right-of-use assets | 151,726 | 72,923 |
Accrued interest on available-for-sale securities investments | (74,101) | (72,698) |
Loss on abandonment of assets | 49,226 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,961,707 | 1,662,828 |
Inventory | (375,178) | 103,272 |
Prepaid expenses and other | 139,508 | 9,777 |
Deferred offering costs | 140,320 | |
Accounts payable | (410,806) | (480,546) |
Accrued liabilities | (668,667) | (1,977,373) |
Contract liabilities | (18,794) | (55,246) |
Operating lease liabilities | (186,220) | (115,440) |
Net cash used in operating activities | (3,930,551) | (5,592,936) |
Investing activities | ||
Purchase of property and equipment | (25,231) | (103,316) |
Sales, redemptions and maturities of available-for-sale securities | 8,250,000 | 12,800,000 |
Purchase of available-for-sale securities | (4,272,298) | (8,099,573) |
Net cash provided by investing activities | 3,952,471 | 4,597,111 |
Financing activities | ||
Proceeds from ATM Offering, net | 2,435,912 | |
Proceeds from Series A convertible preferred stock in private placement | 600,030 | |
Proceeds from exercise of pre-funded warrants | 31,768 | |
Payments on NuvoGen obligation | (287,997) | (463,686) |
Payments on financing leases | (11,833) | (13,782) |
Proceeds from exercise of stock options | 51,570 | |
Taxes paid for net share settlement of restricted stock awards | (7,052) | (9,685) |
Payment of deferred offering costs | (30,175) | |
Net cash provided by (used in) financing activities | 2,760,828 | (465,758) |
Effect of exchange rates on cash | 1,201 | 4,063 |
Increase (decrease) in cash, cash equivalents and restricted cash | 2,783,949 | (1,457,520) |
Cash, cash equivalents and restricted cash at beginning of period | 10,889,995 | 11,702,847 |
Cash, cash equivalents and restricted cash at end of period | 13,673,944 | 10,245,327 |
Supplemental disclosure of noncash investing and financing activities | ||
Fixed asset purchases payable and accrued at period end | 289,838 | 13,945 |
Adoption of ASC 842, Leases | 694,352 | |
Deferred offering costs payable and accrued at period end | 108,883 | |
Issuance of Series A convertible preferred stock in exchange for outstanding common stock | 2,424,900 | |
Series A convertible preferred stock in private placement, costs payable and accrued at period end | 37,075 | |
Issuance of common stock in connection with LP Purchase Agreement | 615 | |
LP Purchase Agreement, costs payable and accrued at period end | 96,000 | |
Supplemental cash flow information | ||
Cash paid for interest | $ 164,005 | $ 172,032 |
Description of Business, Basis
Description of Business, Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation and Principles of Consolidation | Note 1. Description of Business, Basis of Presentation and Principles of Consolidation 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 instrument system and integrated next-generation sequencing-based (“NGS-based”) HTG EdgeSeq assays, from services including sample processing and custom research use only (“RUO”) assay design 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 three months ended March 31, 2020 approximately 32% of the Company’s revenue was generated from sales originated by customers located outside of the United States, compared with 27% for the three months ended March 31, 2019. Approximately 33% and 62% of the sales to customers located outside of the United States resulted from collaborative development services revenue generated through 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 8), for the three months ended March 31, 2020 and 2019, respectively. COVID-19 Pandemic On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) originating in Wuhan, China and the risks to the international community as the virus spreads globally. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report and likewise the full impact of the pandemic on the Company’s financial condition, liquidity, and future results of operations is uncertain. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry and workforce. Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company is not able to fully estimate the effects of the COVID-19 pandemic on its results of operations, financial condition or liquidity for the remainder of fiscal year 2020. The Company experienced a significant slowing of product and product-related services revenue generation beginning in March 2020 and believes this period of reduced revenue will continue into at least the second quarter of 2020 due to disruptions to its customers’ businesses as a result of the pandemic. The extent of this impact is likely to vary from customer to customer depending upon how they are directly or indirectly impacted by local stay-at-home orders and other social distancing measures, priorities for the customers when the immediate impacts of the pandemic have passed, and the workforce and supplier impacts that each customer has experienced during the pandemic. The Company has also experienced limited delays in its development efforts as a result of stay-at-home orders and its efforts to prioritize the safety of its employees during this pandemic. The Company believes the COVID-19 pandemic will continue to impact its productivity, supply chains, distribution networks and other areas of its operation as the pandemic’s impact continues to disrupt the Company’s business and the businesses of its vendors, partners and customers . Although the Company cannot estimate the length and gravity of the impact of the COVID-19 pandemic at this time, the COVID-19 pandemic may have a material adverse effect on the Company’s results of operations, financial position and liquidity for the remainder of 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company is currently evaluating the impact of the CARES Act but does not currently expect that these provisions will have a significant impact on the Company’s consolidated financial statements. While there remains uncertainty as to the ultimate impact of the COVID-19 pandemic, the Company has considered the known impacts on its business as of the date of this report and has reflected any known or expected impacts in its accompanying condensed consolidated financial statements, including consideration of potential impairment risks to its long-lived assets, potential accounts receivable collection risks and potential impacts to the Company’s overall liquidity position. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect the accounts of the Company as of March 31, 2020 and for the three months ended March 31, 2020 and 2019. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“US GAAP”) for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows, as of and for the periods presented. The accompanying condensed consolidated balance sheets at December 31, 2019 have been derived from the audited consolidated financial statements at that date but do not include all of the information and disclosures required by US GAAP for annual financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2020. Liquidity The Company believes that its existing resources will be sufficient to fund its planned operations and expenditures for at least the next 12 months from the issuance of these condensed consolidated financial statements. However, the Company will need to raise additional capital to fund its operations and service its near and long-term debt obligations until its revenue reaches a level sufficient to provide for self-sustaining cash flows. There can be no assurance that additional capital will be available on acceptable terms, or at all, or that the Company’s revenue will reach a level sufficient to provide for self-sustaining cash flows. If sufficient additional capital is not available as and when needed, the Company may have to delay, scale back or discontinue one or more product development programs, curtail its commercialization activities, significantly reduce expenses, sell assets (potentially at a discount to their fair value or carrying value), enter into relationships with third parties to develop or commercialize products or technologies that the Company otherwise would have sought to develop or commercialize independently, cease operations altogether, pursue a sale of the Company at a price that may result in a significant loss on investment for its stockholders, file for bankruptcy or seek other protection from creditors, or liquidate all assets. In addition, if the Company defaults under its term loan agreement, its lenders could foreclose on its assets, including some of its cash and cash equivalents, which are held in accounts with other financial institutions. Principles of Consolidation The Company formed a French subsidiary, HTG Molecular Diagnostics France SARL (“HTG France”), in November 2018. The accompanying condensed consolidated financial statements include the accounts of the Company and this wholly owned subsidiary after elimination of all intercompany transactions and balances as of March 31, 2020 and December 31, 2019. Concentration Risks Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, restricted cash, available-for-sale debt securities and uncollateralized accounts receivable. The Company maintains the majority of its cash and restricted 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 available-for-sale debt securities are comprised primarily of investments in money market funds, U.S. Treasury securities and high-quality corporate debt securities. The Company sells its instrument, related consumables, sample processing services, custom RUO assay 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 Company’s top three customers accounted for 28%, 17% and 11% of the Company’s total revenue for the three months ended March 31, 2020, compared with the Company’s top two customers accounting for 57% and 17% of the Company’s total revenue for the three months ended March 31, 2019. The Company’s top two customers accounted for approximately 25% and 19% of the Company’s accounts receivable as of March 31, 2020. The Company’s top two customers accounted for approximately 29% and 25% of the Company’s accounts receivable as of December 31, 2019. 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 processors, which in turn could materially affect the Company’s ability to generate revenue. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with US 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 and reserves, recovery of long‑lived assets, inventory obsolescence and inventory valuation, valuation of accounts receivable and available-for-sale securities. Actual results could materially differ from those estimates, especially in light of the significant uncertainty that remains as to the full impact of the COVID-19 pandemic on the Company’s operations, as well as those of its workforce, supply chains, distribution networks and those of its customers. Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2020. Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated statements of cash flows. March 31, 2020 2019 Cash and cash equivalents $ 10,403,697 $ 6,975,080 Restricted cash - current 3,270,247 — Restricted cash - non-current — 3,270,247 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 13,673,944 $ 10,245,327 In October 2017, the Company received $3.0 million in gross proceeds from, and issued a subordinated convertible promissory note (the “QNAH Convertible Note”) in that principal amount to, QIAGEN North American Holdings, Inc. (“QNAH”). Amounts included in restricted cash represent those required to be set aside in escrow under the terms of the MidCap Term Loan to collateralize the payment that will be due upon maturity of the QNAH Convertible Note (see Note 8). The amounts will be released to the Company upon subsequent delivery of subordination documents for the QNAH Convertible Note to MidCap or conversion of the QNAH Convertible Note. If neither occurs, the amounts will be applied by the escrow agent to repay in full the QNAH Convertible Note at maturity (or in connection with a prepayment at the direction of the Company after September 1, 2020) subject to the terms of the MidCap Term Loan including (i) having at least $18.0 million of unrestricted cash and cash equivalents and (ii) there being no default under the MidCap Credit Facility. Fair Value of Financial Instruments 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 carrying value of the MidCap Term Loan (see Note 8) is estimated to approximate its fair value as the interest rate approximates the market rate for debt with similar terms and risk characteristics. As of March 31, 2020, the estimated aggregate fair value of the QNAH Convertible Note is approximately $3.1 million, based on a discounted cash flow approach and utilizing an option pricing model to value the conversion feature, with key assumptions including expected volatility, discount rates, term and risk-free rates. The NuvoGen obligation is an obligation relating to an asset purchase transaction with a then-common stockholder of the Company. As of March 31, 2020, the estimated aggregate fair value of the NuvoGen obligation is approximately $5.0 million, determined using a Monte Carlo simulation with key assumptions including future revenue, volatility, discount and risk-free rates. The estimated fair values of the QNAH Convertible Note and the NuvoGen obligation represent Level 3 measurements. Leases Effective January 1, 2019, the Company accounts for its leases under Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the condensed consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For financing leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded to rent expense as incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets currently under lease, including facilities and computer equipment. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent on short-term leases on a straight-line basis over the lease term for these leases. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In November 2018, the FASB issued ASU No. 2018-18, which amended ASC 808, Collaborative Arrangements Revenue from Contracts with Customers New Accounting Pronouncements The following are new FASB ASUs that had not been adopted by the Company as of March 31, 2020, and are grouped by their respective effective dates: January 1, 2020 to December 31, 2022 In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made (i.e. as early as the first quarter 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have completed. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures and has yet to elect an adoption date. January 1, 2021 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes January 1, 2023 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3. Inventory Inventory, net of allowance, consisted of the following as of the dates indicated: March 31, December 31, 2020 2019 Raw materials $ 1,202,433 $ 872,947 Work in process 151,029 151,351 Finished goods 323,839 284,772 Total gross inventory 1,677,301 1,309,070 Less inventory allowance (39,403 ) (39,403 ) $ 1,637,898 $ 1,269,667 HTG EdgeSeq instruments at customer locations under evaluation agreements are included in finished goods inventory. Finished goods inventory under evaluation as of March 31, 2020 was $108,381 compared to $79,338 as of December 31, 2019. |
Fair Value Instruments
Fair Value Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Instruments | Note 4. Fair Value Instruments 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 March 31, 2020 and December 31, 2019 in the fair value hierarchy: March 31, 2020 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 9,727,973 $ — $ — $ 9,727,973 Investments available-for-sale at fair value U.S. Treasury securities 6,003,592 — — 6,003,592 Corporate debt securities — 15,550,726 — 15,550,726 Total $ 15,731,565 $ 15,550,726 $ — $ 31,282,291 December 31, 2019 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 7,217,096 $ — $ — $ 7,217,096 Investments available-for-sale at fair value U.S. Treasury securities 5,961,983 — — 5,961,983 Corporate debt securities — 19,448,239 — 19,448,239 Total $ 13,179,079 $ 19,448,239 $ — $ 32,627,318 There are 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 three months ended March 31, 2020 or for the year ended December 31, 2019. Level 1 instruments include investments in money market funds and U.S. Treasuries. 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 the three-month period ended March 31, 2020 or the year-ended December 31, 2019 and did not have any Level 3 financial assets or liabilities during either of these periods. |
Available-for-Sale Securities
Available-for-Sale Securities | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Available-for-Sale Securities | Note 5. Available-for-Sale Securities The Company’s portfolio of available-for-sale securities consists of U.S. Treasuries and high credit quality corporate debt securities. The following is a summary of the Company’s available-for-sale securities at March 31, 2020 and December 31, 2019: March 31, 2020 Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) U.S. Treasury securities $ 5,957,328 $ 46,264 $ — $ 6,003,592 Corporate debt securities 15,550,726 — — 15,550,726 Total available-for-sale securities $ 21,508,054 $ 46,264 $ — $ 21,554,318 December 31, 2019 Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) U.S. Treasury securities $ 5,962,224 $ 394 $ (635 ) $ 5,961,983 Corporate debt securities 19,448,239 — - 19,448,239 Total available-for-sale securities $ 25,410,463 $ 394 $ (635 ) $ 25,410,222 There were no gross unrealized losses relating to the Company’s available-for-sale securities investments as of March 31, 2020. The net adjustment to unrealized holding gains on available-for-sale securities, net of tax in other comprehensive income totaled $47,697 and $3,353 for the three months ended March 31, 2020 and 2019, respectively. Contractual maturities of debt investment securities at March 31, 2020 are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Under 1 Year 1 to 2 Years Total U.S. Treasury securities $ 6,003,592 $ — $ 6,003,592 Corporate debt securities 15,550,726 15,550,726 Total available-for-sale securities $ 21,554,318 $ — $ 21,554,318 For debt securities, the Company determines whether it intends to sell or if it is more likely than not that it will be required to sell impaired securities. This determination considers current and forecasted liquidity requirements, regulatory and capital requirements and securities portfolio management. For all impaired debt securities for which there was no intent or expected requirement to sell, the evaluation considers all available evidence to assess whether it is likely the amortized cost value will be recovered. The Company conducts a regular assessment of its debt securities with unrealized losses to determine whether securities have other-than-temporary impairment considering, among other factors, the nature of the securities, credit rating or financial condition of the issuer, the extent and duration of the unrealized loss, expected cash flows of underlying collateral, market conditions and whether the Company intends to sell or it is more likely than not that the Company will be required to sell the debt securities. As the Company did not have any unrealized losses as of March 31, 2020, there were no |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 6. Property and Equipment Property and equipment, net, consists of the following as of the dates indicated: March 31, December 31, 2020 2019 Furniture & fixtures $ 1,089,151 $ 1,089,371 Leasehold improvements 1,950,232 1,987,997 Equipment used in manufacturing 2,303,740 2,305,340 Equipment used in research & development 2,423,857 2,134,019 Equipment used in the field 182,762 182,762 Software 393,251 374,812 Property and equipment 8,342,993 8,074,301 Less: accumulated depreciation and amortization (6,173,330 ) (5,834,168 ) $ 2,169,663 $ 2,240,133 Depreciation and leasehold improvement amortization expense was $348,633 and $308,984 for the three months ended March 31, 2020 and 2019, respectively. In the first quarter of 2020 the Company closed its applications laboratory in Sausheim, France and, as a result, $28,130 of leasehold improvements related to the abandonment of the laboratory were written off to selling, general and administrative expense during the three months ended March 31, 2020. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities Current [Abstract] | |
Accrued Liabilities | Note 7. Accrued Liabilities Accrued liabilities consist of the following as of the dates indicated: March 31, December 31, 2020 2019 Accrued employee bonuses $ 156,573 $ 900,740 Payroll and employee benefit accruals 401,252 469,530 Accrued professional fees 156,835 43,850 Accrued interest 264,301 245,350 Other accrued liabilities 216,866 210,826 $ 1,195,827 $ 1,870,296 |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Note 8. Debt Obligations MidCap Credit Facility On March 26, 2018 (the “MidCap Closing Date”), the Company entered into a Credit and Security Agreement (Term Loan) (the “MidCap Term Loan”) and a Credit and Security Agreement (Revolving Loan) (the “MidCap Revolving Loan” and together with the MidCap Term Loan, the “MidCap Credit Facility”) with MidCap Financial Trust, as agent. MidCap Financial Trust subsequently assigned its rights and obligations as agent to MidCap Funding IV Trust. On February 26, 2020 (the “Amendment Effective Date”), the Company entered into (i) an amendment to the MidCap Term Loan (the “MidCap Term Loan Amendment”), and (ii) an amendment to the MidCap Revolving Loan (the “MidCap Revolving Loan Amendment,” and together with the MidCap Term Loan Amendment, the “Amendments”). The MidCap Term Loan Amendment extended the interest only payments on the term loan advance by an additional 11 months, with principal on the term loan advance payable in 25 equal monthly installments beginning March 1, 2021 until paid in full on March 1, 2023. If the Company achieves a stated revenue milestone for the 12-month period ending on December 31, 2020, the interest-only period will be further extended by an additional four months, with principal on the term loan advance then payable in 21 equal monthly installments beginning July 1, 2021. In addition, both Amendments (i) permit the use of the $3.3 million of escrowed funds previously deposited by the Company for repayment of the QNAH Convertible Note, subject to such repayment not being made before September 1, 2020, the Company having at least $18.0 million of unrestricted cash and cash equivalents and there being no default under the MidCap Term Loan or the MidCap Revolving Loan and (ii) include a grant by the Company of a security interest in its intellectual property, effective as of the Amendment Effective Date. The remaining principal repayments due under the MidCap Term Loan as of March 31, 2020 are as follows for each fiscal year: 2020 — 2021 2,800,000 2022 3,360,000 2023 840,000 Total MidCap Term Loan payments 7,000,000 Less discount and deferred financing costs (405,028 ) Plus final fee premium 315,000 Total MidCap Term Loan, net $ 6,909,972 Debt discount of approximately $405,028 and $443,455 associated with the MidCap Term Loan, resulting from fees and debt issuance costs, was presented net of MidCap Term Loan payable – non-current, net of discount and debt issuance costs in the accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. Costs incurred in connection with the issuance of the Midcap Revolving Loan of $46,956 and $50,970 are presented as MidCap Revolving Loan costs in other non-current assets in the accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. Amortization of the debt discount associated with the MidCap Term Loan was approximately $38,427 and $35,174 for the three months ended March 31, 2020 and 2019, respectively. Amortization of deferred MidCap Revolving Loan costs was $4,014 and $3,969 for the three months ended March 31, 2020 and 2019, respectively. Amortization of both the debt discount and the revolving loan costs is included in interest expense in the accompanying condensed consolidated statements of operations. 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. There have been no significant modifications or financial events relating to QNAH Convertible Note since disclosures made by the Company in its Annual Report on Form 10-K, filed with the SEC on March 25, 2020. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | Note 9. Revenue from Contracts with Customers 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 design custom RUO assays for the three months ended March 31, 2020 and 2019 as follows: Three Months Ended March 31, 2020 2019 Product revenue: Instruments $ 234,625 $ 140,416 Consumables 545,939 400,818 Total product revenue 780,564 541,234 Product-related services revenue: Custom RUO assay design 629,182 367,859 RUO sample processing 578,391 1,753,412 Total product-related services revenue 1,207,573 2,121,271 Total product and product-related services revenue $ 1,988,137 $ 2,662,505 Because the Company’s agreements for product and product-related services revenue have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Sale of Instruments and Consumables The delivery of each instrument and related installation and calibration are considered to be a single performance obligation, as the HTG EdgeSeq instrument must be professionally installed and calibrated prior to use. Instrument product revenue is generally recognized upon installation and calibration of the instrument by field service engineers, which represents the point at which the customer has the ability to use the instrument and has accepted the asset. Installation generally occurs within one month of instrument shipment. The delivery of each consumable is a separate performance obligation. Consumables revenue is recognized upon transfer of control, which represents the point when the customer has legal title and the significant risks of ownership of the asset. The Company’s standard terms and conditions provide that no right of return exists for instruments and consumables, unless replacement is necessary due to delivery of defective or damaged product. Customer payment terms vary but are typically between 30 and 90 days of revenue being earned from shipment or delivery, as applicable. Shipping and handling fees charged to the Company’s customers for instruments and consumables shipped are included in the accompanying condensed consolidated statements of operations as part of product and product-related services revenue. Shipping and handling costs for sold products shipped to the Company’s customers are included in the accompanying condensed consolidated statements of operations as part of cost of product and product-related services revenue. For sales of consumables in the United States, standard delivery terms are FOB shipping point, unless otherwise specified in the customer contract, reflecting transfer of control to the customer upon shipment. Standard delivery terms for sales to customers outside of the United States are FOB delivery point, unless otherwise specified in the customer contract. The Company has elected the practical expedient to account for shipping and handling as activities to fulfill the promise to transfer the consumables. The Company uses a most likely amount approach to estimate variable consideration arising from its rebate program. The Company’s variable consideration from its rebate program is constrained. The Company provides instruments to certain customers under reagent rental agreements. Under these agreements, the Company installs an instrument 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. The Company measures progress toward complete satisfaction of this performance obligation to provide the instrument and deliver the consumables using an output method based on the number of consumables delivered in relation to the total consumables to be provided under the reagent rental agreement. This is considered to be representative of the delivery of outputs under the arrangement and the best measure of progress because the customer benefits from the instrument only in conjunction with the consumables. 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. 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 product and product-related services RUO Sample Processing The Company also provides sample preparation and 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. This is when the customer can use and benefit from the results of testing and the Company has the present right to payment. Custom RUO Assay Design and Related Agreements The Company enters into custom RUO assay design agreements that may generate up-front fees and subsequent payments that might be earned upon completion of design process phases. The Company measures progress toward complete satisfaction of its performance obligation to perform custom RUO assay design using an output method based on the costs incurred to date compared to total expected costs, as this is representative of the delivery of outputs under the arrangements and the best measure of progress. However, because in most instances the assay design fees are contingent upon completion of each phase of the design project and the decision of the customer to proceed to the next phase, the amount to be included in the transaction price and recognized as revenue is limited to that which the customer is contractually obligated to pay upon completion of that phase, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company recognized revenue of $0 and $41,137 of custom RUO assay design revenue from performance obligations that were satisfied in previous periods for the three months ended March 31, 2020 and 2019, respectively. Collaborative Development Services Revenue The Company enters into collaborative development services agreements with biopharmaceutical companies for the development of NGS-based companion diagnostic assays in support of and in conjunction with, biopharmaceutical companies’ drug development programs. These collaborative development services agreements may generate upfront fees, and in some cases subsequent milestone payments that may be earned upon completion of certain product development milestones or activities. The Company follows ASC 606, Revenue from Contracts with Customers and ASC 808, Collaborative Arrangements to determine the appropriate recognition of revenue under our collaborative research, development and commercialization agreements that contain multiple elements. For the three months ended March 31, 2020 and 2019, collaborative development services revenue was generated through statements of work entered into under the Governing Agreement with QML as follows: Three Months Ended March 31, 2020 2019 Collaborative development services $ 237,337 $ 540,320 Master Assay Development, Commercialization and Manufacturing Agreement In November 2016, the Company entered into the Governing Agreement, which created the 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 sought companion diagnostic programs with biopharmaceutical companies, with QML entering into sponsor project agreements with interested biopharmaceutical companies for specified projects, and QML and the Company entering into statements of work which set forth the rights and obligations of QML and the Company with respect to each project. In November 2019, the Company elected to terminate the Governing Agreement with QML, effective immediately, as a result of QML’s material breach of the Governing Agreement, including QML’s failure to develop an in vitro diagnostic (“IVD”) version of its GeneReader sequencing platform for development of PDP Assays. The Company’s termination of the Governing Agreement did not terminate active statements of work under the Governing Agreement. The Company has determined that SOW Two and SOW Three (each defined below) are collaborative arrangements and that QML meets the definition of a customer under ASC 606. Additionally, each SOW is a separate contract with a single performance obligation to provide development services. Under each SOW, QML pays the Company a monthly fee for development work performed by the Company and its subcontractors (collectively, the “Monthly Fee”). The Monthly Fee is based on the employee and materials costs incurred during the month, which is subject to significant variability from period to period and unknown until the costs are incurred. Therefore, the Monthly Fee, which is based on use of hours and costs as a measure of progress, is included in the transaction price and recognized as revenue over time when the costs are incurred, and the Monthly Fee is billed to QML. It is at this time that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company and QML also share any net profits resulting from performance of the development work as determined pursuant to the Governing Agreement. Such profit-sharing payment(s) are deemed to be variable consideration using the expected value method and are included in the transaction price upon completion of the respective SOW deliverables, acceptance of corresponding deliverables, and the mutual agreement by QML and the Company on the calculation of net profit, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Because each SOW has an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations for each SOW. 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”), which was made effective as of June 2, 2017 (“Onset Date”). The Company and QML amended SOW Two twice in August 2018 and two additional times, in September 2018 and in February 2019. SOW Two addresses development activities conducted by the Company and QML since the Onset Date and those expected to be further conducted by the parties in connection with what is expected to be a multi-stage project leading to the potential development and commercialization of an NGS-based companion diagnostic assay in support of one or more therapeutic development and commercialization programs for a third-party biopharmaceutical company. The initial-phase investigational-use-only (“IUO”) development activities under SOW Two and the first three amendments related to next phases, which include the use of the IUO assay developed in the initial-phase in a retrospective clinical trial and in additional disease indications, have been completed. The fourth amendment of SOW Two, effective as of February 5, 2019, contemplates the use of the IUO assay in multiple biopharmaceutical company clinical trials and additional development activities which could potentially be included in a future companion diagnostic regulatory submission. As of March 31, 2020, development activities agreed upon in the fourth amendment are ongoing and expected to continue into the third quarter of 2020. Revenue of $237,337 inclusive of SOW Two monthly fees and $50,000 of SOW Two profit-sharing payments has been included in collaborative development services revenue in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2020, compared to revenue of $257,699, reflecting SOW Two monthly fees for the three months ended March 31, 2019. Accounts receivable relating to SOW Two of $59,780 and $171,298 remained in the accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. Costs relating to development activities conducted by the Company pursuant to SOW Two of $196,812 and $209,029 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019, respectively. Statement of Work No. Three In January 2018, the Company and QML entered into a third statement of work under the Governing Agreement (“SOW Three”) and amended SOW Three in September 2018. SOW Three relates to development activities for a NGS-based clinical-trial assay (“SOW Three Project”) in connection with a sponsor project agreement between QML and a pharmaceutical company (“Pharma Three”). Initial assay development activities under SOW Three have been completed, and the first amendment to SOW Three provides for the development of an IUO assay, subsequent retrospective testing of clinical trial samples, design verification and, subject to satisfactory achievement of relevant performance and regulatory milestones, regulatory submissions in the United States and European Union necessary for the commercialization of a companion diagnostic for a corresponding Pharma Three drug. There was no revenue recognized or development costs incurred relating to SOW Three for the three months ended March 31, 2020. For the three months ended March 31, 2019, revenue of $282,621 reflecting SOW Three monthly fees has been included in collaborative development services revenue, and costs relating to development activities conducted by the Company pursuant to SOW Three have been included in research and development expense in the condensed consolidated statements of operations. Accounts receivable relating to SOW Three of $0 and $760,274 remained in the condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. Contract Liabilities The Company receives up-front payments from customers for custom RUO assay design services, and occasionally for sample processing services. Payments for instrument extended warranty contracts are made in advance as are payments for certain agreed-upon capital purchases required for collaborative development service projects. The Company recognizes such up-front payments as a contract liability. The contract liability is subsequently reduced at the point in time that the data file is delivered for sample processing services or as the Company satisfies its performance obligations over time for RUO assay design, collaborative development and extended warranty services. Contract liabilities of $580,663 and $599,454 were included in contract liabilities – current and other non-current liabilities in the accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. The Company expects approximately $409,449 of deferred revenue to be realized within the next twelve months and the remaining $171,214 to be realized prior to December 31, 2021. Changes in the Company’s contract liability were as follows as of the dates indicated: Product Revenue Custom RUO Assay Design Sample Processing Total Contract Liability Balance at January 1, 2020 $ 95,148 $ 66,216 $ 438,090 $ 599,454 Deferral of revenue 229,927 300,000 62,329 592,256 Recognition of deferred revenue (214,712 ) (366,216 ) (30,119 ) (611,047 ) Balance at March 31, 2020 $ 110,363 $ — $ 470,300 $ 580,663 Product Revenue Custom RUO Assay Design Sample Processing Total Contract Liability Balance at January 1, 2019 $ 116,547 $ 50,000 $ 244,400 $ 410,947 Deferral of revenue 50,667 11,685 48,327 110,679 Recognition of deferred revenue (36,544 ) (11,685 ) (117,695 ) (165,924 ) Balance at March 31, 2019 $ 130,670 $ 50,000 $ 175,032 $ 355,702 |
Other Agreements
Other Agreements | 3 Months Ended |
Mar. 31, 2020 | |
Other Agreements [Abstract] | |
Other Agreements | Note 10. Other Agreements NuvoGen Obligation Pursuant to the Company’s asset purchase agreement with NuvoGen Research, LLC (“NuvoGen”), as amended, the Company is obligated to pay NuvoGen the greater of $400,000 or 6% of annual revenue until the obligation is paid in full. In addition to fixed quarterly payments of $100,000, revenue-based payments of $33,528 and $187,997 were payable as of March 31, 2020 and December 31, 2019, respectively. There have been no significant modifications to the terms and conditions of the Company’s NuvoGen obligation since the disclosures made in the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2020. Minimum payments to be made in 2020 include $33,528 of revenue-based payments payable as of March 31, 2020 and an estimate of additional revenue-based payments to be made in 2020 relating to actual revenue generated in the second, third and fourth quarters of 2020, estimated using actual revenue generated in the same quarters in 2019. Minimum payments for the remaining periods include only the minimum quarterly payments to be made in each period. Actual payments could vary from what is shown in the table, to the extent that 6% of the Company’s annual revenue in 2020 and beyond exceeds $400,000. The remaining minimum payments to be made to NuvoGen as of March 31, 2020 are as follows for each fiscal year: 2020 1,093,592 2021 400,000 2022 400,000 2023 400,000 2024 400,000 2025 and beyond 2,577,110 Total NuvoGen obligation payments 5,270,702 Plus interest accretion 88,881 Total NuvoGen obligation, net $ 5,359,583 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. The unamortized debt discount was $(88,881) and $(92,311) at March 31, 2020 and December 31, 2019, respectively. Discount accreted during the three months ended March 31, 2020 and 2019 was $(3,430) and $(3,414), respectively. Other Agreements There have been no significant modifications or financial events relating to the development agreement entered into by the Company with Illumina, Inc. since the disclosures made in the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2020. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 11. Net Loss Per Share Basic loss per common share is computed by dividing net loss allocable to common stockholders by the weighted average number of shares of common stock or common stock equivalents outstanding. Diluted loss per common share is computed similar to basic loss per In connection with the Securities Purchase Agreement (see Note 13), the Company issued and sold an aggregate of 5,411,687 pre-funded warrants exercisable for an aggregate of 5,411,687 shares of common stock. The total exercise price of the pre-funded warrants is $0.65 per share, $0.64 of which was pre-funded and paid to the Company upon issuance of the pre-funded warrants. The remaining exercise price of the pre-funded warrants is $0.01 per share. The remaining pre-funded warrants are immediately exercisable and do not expire. As the remaining shares underlying the pre-funded warrants are issuable for nominal consideration of $0.01 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: Three Months Ended March 31, 2020 2019 Options to purchase common stock 4,156,989 1,977,787 Common stock warrants 236,915 236,915 Restricted stock units 210,303 229,581 QNAH convertible note 805,991 783,339 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Proceeds From Issuance Of Preferred Stock Preference Stock And Warrants [Abstract] | |
Warrants | Note 12. 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. In September 2019, in connection with the Securities Purchase Agreement (see Note 13), the Company issued and sold an aggregate of 5,411,687 pre-funded warrants exercisable for an aggregate of 5,411,687 shares of common stock. The total exercise price of the pre-funded warrants is $0.65 per share, $0.64 of which was pre-funded and paid to the Company upon issuance of the pre-funded warrants. The remaining exercise price of the pre-funded warrants is $0.01 per share. In March 2020, 3,176,762 of the pre-funded warrants were exercised for proceeds of $31,768. As of March 31, 2020, the remaining pre-funded warrants remain outstanding and are exercisable by the holders at any time. The following table shows the common stock warrants outstanding as of March 31, 2020: Warrant Issuance Date Shares of Common Exercise Price/Share Expiration Date August 2014 28,713 $ 23.51 2024 December 2014 144,772 14.00 2022 March 2016 45,307 2.76 2026 March 2018 18,123 7.73 2028 September 2019 2,234,925 0.01 N/A |
Stockholders Deficit
Stockholders Deficit | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 13. Stockholders’ Deficit Equity Offerings Securities Purchase Agreement In September 2019, concurrently with the closing of an underwritten public offering, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers, in a private placement transaction, an aggregate of 5,411,687 pre-funded warrants to purchase up to an aggregate of 5,411,687 shares of our common stock (“Warrant Shares”), at a price of $0.64 per warrant (which $0.64 price relates to the pre-funded portion of the total $0.65 exercise price per share). Each pre-funded warrant has a remaining exercise price of $0.01 per share and became immediately exercisable upon issuance, subject to certain beneficial ownership limitations. The exercise price of the pre-funded warrants will be subject to adjustment in the event of any stock dividends and splits, recapitalization, reorganization or similar transaction, as described in the pre-funded warrants. The pre-funded warrants are exercisable on a “cashless” basis in certain circumstances. The pre-funded warrants and the Warrant Shares were not registered under the Securities Act and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. Pursuant to the Securities Purchase Agreement, the Company filed a registration statement on Form S-3 on October 11, 2019 to register the resale of the Warrant Shares, which registration statement was declared effective by the SEC on November 26, 2019. Each Purchaser was an “accredited investor” as defined in Rule 501(a) under the Securities Act. Cantor Fitzgerald & Co. (the “Placement Agent”) acted as the sole placement agent in connection with the private placement of the warrants. Pursuant to a Placement Agency Agreement between the Company and the Placement Agent, the Company agreed to pay the Placement Agent a cash fee equal to 6% of the gross proceeds from the sale of the pre-funded warrants, and to provide reimbursement for certain out-of-pocket expenses. Upon closing, the Company received approximately $3.1 million in net proceeds from the sale of the pre-funded warrants in the private placement, which did not include proceeds subsequently received or that may be received upon exercise of the pre-funded warrants, after deducting the Placement Agent fee and other expenses. In March 2020, 3,176,762 of the pre-funded warrants were exercised for additional proceeds of $31,768. ATM Offering In November 2019, the Company entered into a Controlled Equity Offering Sales Agreement (the “Cantor Sales Agreement”) with Cantor as the sales agent, pursuant to which the Company may offer and sell, from time to time, through Cantor, shares of its common stock, par value $0.001 per share, by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act (the “ATM Offering”). The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-229045). During the three months ended March 31, 2020, the Company sold 4,399,062 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $2.6 million. After deferred offering costs included as non-current assets in the condensed balance sheets as of December 31, 2019 of approximately $0.1 million and paying sales commissions owed in connection with the ATM Offering, the Company’s aggregate net proceeds for the three months ended March 31, 2020 were approximately $2.4 million. Exchange and Private Placement On February 25, 2020, the Company entered into an Exchange and Purchase Agreement (the “Exchange Agreement”) with certain accredited investors (the “Investors”) pursuant to which the Company agreed to (i) issue to the Investors an aggregate of 41,100 shares of its newly designated Series A Convertible Preferred Stock, par value $0.001 per share (“Series A Preferred”), in exchange for the Investors surrendering to the Company for cancellation an aggregate of 4,110,000 shares of its common stock (the “Exchange”) and (ii) sell and issue to the Investors an aggregate of 10,170 shares of Series A Preferred for an aggregate purchase price of $600,030, or $59.00 per share (the “Private Placement”). The common stock acquired in the Exchange was immediately retired. Each share of Series A Preferred is convertible into 100 shares of the Company’s common stock, subject to proportional adjustment and beneficial ownership limitations. In the event of the Company’s liquidation, dissolution or winding up, holders of Series A Preferred will participate pari passu with any distribution of proceeds to holders of the Company’s common stock. Holders of Series A Preferred are entitled to receive dividends on shares of Series A Preferred equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on the Company’s common stock. Shares of Series A Preferred generally have no voting rights, except as required by law. LP Purchase Agreement On March 24, 2020, the Company entered into a purchase agreement ("LP Purchase Agreement") with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which, upon the terms and subject to the conditions and limitations set forth therein, the Company has the right to sell to Lincoln Park up to $20,000,000 of shares of its common stock (“Purchase Shares”) from time to time over the 36-month term of the LP Purchase Agreement. The purchase price of the Purchase Shares will be based on recent closing prices of the Company’s common stock at the time of sale. The Company issued Lincoln Park an aggregate of 615,384 shares of its common stock as consideration for their purchase commitment pursuant to the LP Purchase Agreement. The Company did not receive cash proceeds from the issuance of such shares. The Company has included the value of this commitment consideration, as well as other transaction costs of $0.1 million, in additional paid-in-capital in the accompanying condensed consolidated balance sheet as of March 31, 2020. No shares have been sold under the LP Purchase Agreement as of March 31, 2020. Stock-based Compensation A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at December 31, 2019 2,904,898 $ 2.37 8.0 $ 781 Granted 1,337,500 0.70 Exercised - - $ - Forfeited (49,666 ) 2.76 Expired/Cancelled (35,743 ) 3.70 Balance at March 31, 2020 4,156,989 $ 1.81 8.4 $ - Exercisable at March 31, 2020 1,756,893 $ 2.45 7.1 $ - As of March 31, 2020, total unrecognized compensation cost related stock option awards was approximately $2,214,423, which is expected to be recognized over approximately 1.99 years. The following table summarizes restricted stock unit (“RSU”) award activity for the three months ended March 31, 2020: Number of Shares Weighted- Average Grant Date Fair Value Per Share Balance at December 31, 2019 223,745 $ 2.91 Granted 22,500 0.75 Released (35,942 ) 2.65 Balance at March 31, 2020 210,303 $ 2.73 Vested and unissued at March 31, 2020 23,751 $ 2.67 Vested and unissued awards at March 31, 2020 represents RSU awards for which the vesting date was March 31, 2020, but for which issuance of the awards occurred in April 2020. As of March 31, 2020, the total unrecognized compensation cost related to RSU awards was approximately $493,237, which is expected to be recognized over approximately 2.06 years. Stock-based compensation expense recorded in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019 was as follows: Three Months Ended March 31, 2020 2019 Selling, general and administrative $ 358,012 $ 181,981 Research and development 58,505 48,450 Cost of product and product-related services revenue 4,154 10,815 $ 420,671 $ 241,246 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 14. Leases Operating Leases T he Company leases office space and equipment under agreements classified as operating leases that expire on various dates through 2023. The Company’s most significant active leases as of March 31, 2020 are for office and manufacturing space in Tucson, Arizona, which expire in 2021. The Company also leases a development laboratory space in San Carlos, California, which expires in 2023. The Company’s leases do not include any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Annual rent increases are included in the calculation of the operating lease right-of-use assets. Variable expenses generally represent the Company’s share of the landlord’s operating expenses and are recorded when incurred. Incremental borrowing rates used to discount future lease payments in calculating lease liabilities were estimated by reference to the rate on the Company’s MidCap Term Loan, as this represents the cost of borrowing for secured loans of similar duration. The Company does not have any operating lease arrangements where it acts as a lessor. In the first quarter of 2020 the Company closed its applications laboratory in Sausheim, France and, as a result, $21,096 of operating right-of-use assets related to the abandonment of the laboratory were written off to selling, general and administrative expense during the three months ended March 31, 2020. The components of lease cost for operating leases were as follows: March 31, 2020 2019 Operating leases Operating lease cost $ 205,227 $ 96,181 Variable lease cost 9,456 21,451 Operating lease expense 214,683 117,632 Short-term lease rent expense — 1,497 Total rent expense $ 214,683 $ 119,129 The table below summarizes other information related to the Company’s operating leases: March 31, 2020 2019 Operating cash flows for operating leases $ 218,625 $ 136,272 Establishment of operating lease liabilities arising from obtaining right-of-use assets $ - $ 1,033,107 Weighted-average remaining lease term – operating leases 2.1 1.9 Weighted-average discount rate – operating leases 9.6 % 9.6 % As of March 30, 2020, remaining maturities of our operating leases, excluding short-term leases, are as follows: 2020 $ 662,675 2021 352,243 2022 281,232 2023 70,848 Total 1,366,998 Less present value discount (157,978 ) Operating lease liabilities, net $ 1,209,020 Financing Leases The Company has a number of computer and copier equipment leases that are classified as financing leases. Incremental borrowing rates used to discount future lease payments in calculating lease liabilities were estimated by reference to information received by the Company from bankers regarding estimated current borrowing rates for collateralized loans with similar amount and duration as the leases. The components of lease cost for financing leases were as follows: March 31, 2020 2019 Financing leases Amortization of right-of-use assets $ 12,518 $ 14,696 Interest on lease liability 2,635 2,146 Total financing lease cost $ 15,153 $ 16,842 The table below summarizes other information related to the Company’s financing leases: March 31, 2020 2019 Weighted-average remaining lease term – financing leases 3.6 2.3 Weighted-average discount rate – financing leases 9.77 % 9.77 % As of March 31, 2020, remaining maturities of our financing leases are as follows: 2020 $ 35,603 2021 28,355 2022 20,716 2023 18,396 2024 16,080 Total 119,150 Less present value discount (19,176 ) Financing lease liabilities, net $ 99,974 At March 31, 2020, the Company had financing lease liabilities net of discount of $99,974, of which $36,205 was included in other current liabilities and $63,769 was included in other non-current liabilities, and financing right-of-use assets of $97,078, which were included in property and equipment, net, in the accompanying condensed consolidated balance sheet. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15. 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. Product Warranty The following is a summary of the Company’s general product warranty liability, which is included in accrued liabilities in the accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019. Expense relating to the recording of this reserve is recorded in cost of product and product-related services revenue within the accompanying condensed consolidated statements of operations. Three Months Ended March 31, 2020 2019 Beginning balance $ 94,482 $ 63,461 Cost of warranty claims (7,454 ) (30,347 ) Increase in warranty reserve 3,726 32,817 Ending balance $ 90,754 $ 65,931 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16. Subsequent Events Paycheck Protection Program Loan On April 21, 2020, the Company received proceeds from a loan in the amount of $1,717,000 (the “PPP Loan”) from Silicon Valley Bank, as lender, pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act. The PPP Loan is evidenced by a promissory note (the “Note”), which contains customary events of default relating to, among other things, payment defaults and breaches of representations, warranties or terms of the PPP Loan documents. The PPP Loan matures on April 21, 2022 and bears interest at an annual rate of approximately 1%. Beginning on November 21, 2020, the Company is required to make 18 equal monthly payments of principal and interest. The PPP Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The proceeds from the PPP Loan may only be used for payroll costs (including benefits), rent and utility obligations, and interest on certain of the Company’s other debt obligations. All or a portion of the PPP Loan may be forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if the Company’s full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. In the event the PPP Loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. No assurance can be given that the Company will obtain forgiveness of the PPP Loan in whole or in part. In order to apply for the PPP Loan, the Company certified that, among other things, the current economic uncertainty made the PPP Loan request necessary to support its ongoing operations. If it is determined that the Company was not eligible to receive the PPP Loan, the Company may be subject to penalties and could be required to repay the PPP Loan in its entirety. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
COVID-19 Pandemic | COVID-19 Pandemic On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) originating in Wuhan, China and the risks to the international community as the virus spreads globally. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report and likewise the full impact of the pandemic on the Company’s financial condition, liquidity, and future results of operations is uncertain. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry and workforce. Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company is not able to fully estimate the effects of the COVID-19 pandemic on its results of operations, financial condition or liquidity for the remainder of fiscal year 2020. The Company experienced a significant slowing of product and product-related services revenue generation beginning in March 2020 and believes this period of reduced revenue will continue into at least the second quarter of 2020 due to disruptions to its customers’ businesses as a result of the pandemic. The extent of this impact is likely to vary from customer to customer depending upon how they are directly or indirectly impacted by local stay-at-home orders and other social distancing measures, priorities for the customers when the immediate impacts of the pandemic have passed, and the workforce and supplier impacts that each customer has experienced during the pandemic. The Company has also experienced limited delays in its development efforts as a result of stay-at-home orders and its efforts to prioritize the safety of its employees during this pandemic. The Company believes the COVID-19 pandemic will continue to impact its productivity, supply chains, distribution networks and other areas of its operation as the pandemic’s impact continues to disrupt the Company’s business and the businesses of its vendors, partners and customers . Although the Company cannot estimate the length and gravity of the impact of the COVID-19 pandemic at this time, the COVID-19 pandemic may have a material adverse effect on the Company’s results of operations, financial position and liquidity for the remainder of 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company is currently evaluating the impact of the CARES Act but does not currently expect that these provisions will have a significant impact on the Company’s consolidated financial statements. While there remains uncertainty as to the ultimate impact of the COVID-19 pandemic, the Company has considered the known impacts on its business as of the date of this report and has reflected any known or expected impacts in its accompanying condensed consolidated financial statements, including consideration of potential impairment risks to its long-lived assets, potential accounts receivable collection risks and potential impacts to the Company’s overall liquidity position. |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect the accounts of the Company as of March 31, 2020 and for the three months ended March 31, 2020 and 2019. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“US GAAP”) for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows, as of and for the periods presented. The accompanying condensed consolidated balance sheets at December 31, 2019 have been derived from the audited consolidated financial statements at that date but do not include all of the information and disclosures required by US GAAP for annual financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2020. |
Liquidity | Liquidity The Company believes that its existing resources will be sufficient to fund its planned operations and expenditures for at least the next 12 months from the issuance of these condensed consolidated financial statements. However, the Company will need to raise additional capital to fund its operations and service its near and long-term debt obligations until its revenue reaches a level sufficient to provide for self-sustaining cash flows. There can be no assurance that additional capital will be available on acceptable terms, or at all, or that the Company’s revenue will reach a level sufficient to provide for self-sustaining cash flows. If sufficient additional capital is not available as and when needed, the Company may have to delay, scale back or discontinue one or more product development programs, curtail its commercialization activities, significantly reduce expenses, sell assets (potentially at a discount to their fair value or carrying value), enter into relationships with third parties to develop or commercialize products or technologies that the Company otherwise would have sought to develop or commercialize independently, cease operations altogether, pursue a sale of the Company at a price that may result in a significant loss on investment for its stockholders, file for bankruptcy or seek other protection from creditors, or liquidate all assets. In addition, if the Company defaults under its term loan agreement, its lenders could foreclose on its assets, including some of its cash and cash equivalents, which are held in accounts with other financial institutions. |
Principles of Consolidation | Principles of Consolidation The Company formed a French subsidiary, HTG Molecular Diagnostics France SARL (“HTG France”), in November 2018. The accompanying condensed consolidated financial statements include the accounts of the Company and this wholly owned subsidiary after elimination of all intercompany transactions and balances as of March 31, 2020 and December 31, 2019. |
Concentration Risks | Concentration Risks Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, restricted cash, available-for-sale debt securities and uncollateralized accounts receivable. The Company maintains the majority of its cash and restricted 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 available-for-sale debt securities are comprised primarily of investments in money market funds, U.S. Treasury securities and high-quality corporate debt securities. The Company sells its instrument, related consumables, sample processing services, custom RUO assay 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 Company’s top three customers accounted for 28%, 17% and 11% of the Company’s total revenue for the three months ended March 31, 2020, compared with the Company’s top two customers accounting for 57% and 17% of the Company’s total revenue for the three months ended March 31, 2019. The Company’s top two customers accounted for approximately 25% and 19% of the Company’s accounts receivable as of March 31, 2020. The Company’s top two customers accounted for approximately 29% and 25% of the Company’s accounts receivable as of December 31, 2019. 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 processors, which in turn could materially affect the Company’s ability to generate revenue. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US 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 and reserves, recovery of long‑lived assets, inventory obsolescence and inventory valuation, valuation of accounts receivable and available-for-sale securities. Actual results could materially differ from those estimates, especially in light of the significant uncertainty that remains as to the full impact of the COVID-19 pandemic on the Company’s operations, as well as those of its workforce, supply chains, distribution networks and those of its customers. |
Significant Accounting Policies | Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2020. |
Restricted Cash | Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated statements of cash flows. March 31, 2020 2019 Cash and cash equivalents $ 10,403,697 $ 6,975,080 Restricted cash - current 3,270,247 — Restricted cash - non-current — 3,270,247 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 13,673,944 $ 10,245,327 In October 2017, the Company received $3.0 million in gross proceeds from, and issued a subordinated convertible promissory note (the “QNAH Convertible Note”) in that principal amount to, QIAGEN North American Holdings, Inc. (“QNAH”). Amounts included in restricted cash represent those required to be set aside in escrow under the terms of the MidCap Term Loan to collateralize the payment that will be due upon maturity of the QNAH Convertible Note (see Note 8). The amounts will be released to the Company upon subsequent delivery of subordination documents for the QNAH Convertible Note to MidCap or conversion of the QNAH Convertible Note. If neither occurs, the amounts will be applied by the escrow agent to repay in full the QNAH Convertible Note at maturity (or in connection with a prepayment at the direction of the Company after September 1, 2020) subject to the terms of the MidCap Term Loan including (i) having at least $18.0 million of unrestricted cash and cash equivalents and (ii) there being no default under the MidCap Credit Facility. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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 carrying value of the MidCap Term Loan (see Note 8) is estimated to approximate its fair value as the interest rate approximates the market rate for debt with similar terms and risk characteristics. As of March 31, 2020, the estimated aggregate fair value of the QNAH Convertible Note is approximately $3.1 million, based on a discounted cash flow approach and utilizing an option pricing model to value the conversion feature, with key assumptions including expected volatility, discount rates, term and risk-free rates. The NuvoGen obligation is an obligation relating to an asset purchase transaction with a then-common stockholder of the Company. As of March 31, 2020, the estimated aggregate fair value of the NuvoGen obligation is approximately $5.0 million, determined using a Monte Carlo simulation with key assumptions including future revenue, volatility, discount and risk-free rates. The estimated fair values of the QNAH Convertible Note and the NuvoGen obligation represent Level 3 measurements. |
Leases | Leases Effective January 1, 2019, the Company accounts for its leases under Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the condensed consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For financing leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded to rent expense as incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets currently under lease, including facilities and computer equipment. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent on short-term leases on a straight-line basis over the lease term for these leases. |
Recently Adopted and New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In November 2018, the FASB issued ASU No. 2018-18, which amended ASC 808, Collaborative Arrangements Revenue from Contracts with Customers New Accounting Pronouncements The following are new FASB ASUs that had not been adopted by the Company as of March 31, 2020, and are grouped by their respective effective dates: January 1, 2020 to December 31, 2022 In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made (i.e. as early as the first quarter 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have completed. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures and has yet to elect an adoption date. January 1, 2021 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes January 1, 2023 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated statements of cash flows. March 31, 2020 2019 Cash and cash equivalents $ 10,403,697 $ 6,975,080 Restricted cash - current 3,270,247 — Restricted cash - non-current — 3,270,247 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 13,673,944 $ 10,245,327 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory, net of allowance, consisted of the following as of the dates indicated: March 31, December 31, 2020 2019 Raw materials $ 1,202,433 $ 872,947 Work in process 151,029 151,351 Finished goods 323,839 284,772 Total gross inventory 1,677,301 1,309,070 Less inventory allowance (39,403 ) (39,403 ) $ 1,637,898 $ 1,269,667 |
Fair Value Instruments (Tables)
Fair Value Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and December 31, 2019 in the fair value hierarchy: March 31, 2020 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 9,727,973 $ — $ — $ 9,727,973 Investments available-for-sale at fair value U.S. Treasury securities 6,003,592 — — 6,003,592 Corporate debt securities — 15,550,726 — 15,550,726 Total $ 15,731,565 $ 15,550,726 $ — $ 31,282,291 December 31, 2019 Level 1 Level 2 Level 3 Total Asset included in: Cash and cash equivalents Money market securities $ 7,217,096 $ — $ — $ 7,217,096 Investments available-for-sale at fair value U.S. Treasury securities 5,961,983 — — 5,961,983 Corporate debt securities — 19,448,239 — 19,448,239 Total $ 13,179,079 $ 19,448,239 $ — $ 32,627,318 |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Available-for-sale Securities | The Company’s portfolio of available-for-sale securities consists of U.S. Treasuries and high credit quality corporate debt securities. The following is a summary of the Company’s available-for-sale securities at March 31, 2020 and December 31, 2019: March 31, 2020 Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) U.S. Treasury securities $ 5,957,328 $ 46,264 $ — $ 6,003,592 Corporate debt securities 15,550,726 — — 15,550,726 Total available-for-sale securities $ 21,508,054 $ 46,264 $ — $ 21,554,318 December 31, 2019 Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) U.S. Treasury securities $ 5,962,224 $ 394 $ (635 ) $ 5,961,983 Corporate debt securities 19,448,239 — - 19,448,239 Total available-for-sale securities $ 25,410,463 $ 394 $ (635 ) $ 25,410,222 |
Summary of Contractual Maturities of Debt Investment Securities | Contractual maturities of debt investment securities at March 31, 2020 are shown below. Under 1 Year 1 to 2 Years Total U.S. Treasury securities $ 6,003,592 $ — $ 6,003,592 Corporate debt securities 15,550,726 15,550,726 Total available-for-sale securities $ 21,554,318 $ — $ 21,554,318 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net, consists of the following as of the dates indicated: March 31, December 31, 2020 2019 Furniture & fixtures $ 1,089,151 $ 1,089,371 Leasehold improvements 1,950,232 1,987,997 Equipment used in manufacturing 2,303,740 2,305,340 Equipment used in research & development 2,423,857 2,134,019 Equipment used in the field 182,762 182,762 Software 393,251 374,812 Property and equipment 8,342,993 8,074,301 Less: accumulated depreciation and amortization (6,173,330 ) (5,834,168 ) $ 2,169,663 $ 2,240,133 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | Accrued liabilities consist of the following as of the dates indicated: March 31, December 31, 2020 2019 Accrued employee bonuses $ 156,573 $ 900,740 Payroll and employee benefit accruals 401,252 469,530 Accrued professional fees 156,835 43,850 Accrued interest 264,301 245,350 Other accrued liabilities 216,866 210,826 $ 1,195,827 $ 1,870,296 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Remaining Principal Repayments due Under MidCap Term Loan | The remaining principal repayments due under the MidCap Term Loan as of March 31, 2020 are as follows for each fiscal year: 2020 — 2021 2,800,000 2022 3,360,000 2023 840,000 Total MidCap Term Loan payments 7,000,000 Less discount and deferred financing costs (405,028 ) Plus final fee premium 315,000 Total MidCap Term Loan, net $ 6,909,972 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Product and Product-Related Service Revenue from Sale of Instruments and Consumables | 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 design custom RUO assays for the three months ended March 31, 2020 and 2019 as follows: Three Months Ended March 31, 2020 2019 Product revenue: Instruments $ 234,625 $ 140,416 Consumables 545,939 400,818 Total product revenue 780,564 541,234 Product-related services revenue: Custom RUO assay design 629,182 367,859 RUO sample processing 578,391 1,753,412 Total product-related services revenue 1,207,573 2,121,271 Total product and product-related services revenue $ 1,988,137 $ 2,662,505 |
Schedule of Collaborative Development Services | Collaborative Development Services Revenue The Company enters into collaborative development services agreements with biopharmaceutical companies for the development of NGS-based companion diagnostic assays in support of and in conjunction with, biopharmaceutical companies’ drug development programs. These collaborative development services agreements may generate upfront fees, and in some cases subsequent milestone payments that may be earned upon completion of certain product development milestones or activities. The Company follows ASC 606, Revenue from Contracts with Customers and ASC 808, Collaborative Arrangements to determine the appropriate recognition of revenue under our collaborative research, development and commercialization agreements that contain multiple elements. For the three months ended March 31, 2020 and 2019, collaborative development services revenue was generated through statements of work entered into under the Governing Agreement with QML as follows: Three Months Ended March 31, 2020 2019 Collaborative development services $ 237,337 $ 540,320 |
Schedule of Changes in Contract Liability | Changes in the Company’s contract liability were as follows as of the dates indicated: Product Revenue Custom RUO Assay Design Sample Processing Total Contract Liability Balance at January 1, 2020 $ 95,148 $ 66,216 $ 438,090 $ 599,454 Deferral of revenue 229,927 300,000 62,329 592,256 Recognition of deferred revenue (214,712 ) (366,216 ) (30,119 ) (611,047 ) Balance at March 31, 2020 $ 110,363 $ — $ 470,300 $ 580,663 Product Revenue Custom RUO Assay Design Sample Processing Total Contract Liability Balance at January 1, 2019 $ 116,547 $ 50,000 $ 244,400 $ 410,947 Deferral of revenue 50,667 11,685 48,327 110,679 Recognition of deferred revenue (36,544 ) (11,685 ) (117,695 ) (165,924 ) Balance at March 31, 2019 $ 130,670 $ 50,000 $ 175,032 $ 355,702 |
Other Agreements (Tables)
Other Agreements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Agreements [Abstract] | |
Schedule of Remaining Minimum Principal Payments Due | Minimum payments to be made in 2020 include $33,528 of revenue-based payments payable as of March 31, 2020 and an estimate of additional revenue-based payments to be made in 2020 relating to actual revenue generated in the second, third and fourth quarters of 2020, estimated using actual revenue generated in the same quarters in 2019. Minimum payments for the remaining periods include only the minimum quarterly payments to be made in each period. Actual payments could vary from what is shown in the table, to the extent that 6% of the Company’s annual revenue in 2020 and beyond exceeds $400,000. The remaining minimum payments to be made to NuvoGen as of March 31, 2020 are as follows for each fiscal year: 2020 1,093,592 2021 400,000 2022 400,000 2023 400,000 2024 400,000 2025 and beyond 2,577,110 Total NuvoGen obligation payments 5,270,702 Plus interest accretion 88,881 Total NuvoGen obligation, net $ 5,359,583 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Outstanding Options, Warrants, Restricted Stock Units and Debt Conversion Option Excluded from Computation of Diluted Net Loss per Share | In connection with the Securities Purchase Agreement (see Note 13), the Company issued and sold an aggregate of 5,411,687 pre-funded warrants exercisable for an aggregate of 5,411,687 shares of common stock. The total exercise price of the pre-funded warrants is $0.65 per share, $0.64 of which was pre-funded and paid to the Company upon issuance of the pre-funded warrants. The remaining exercise price of the pre-funded warrants is $0.01 per share. The remaining pre-funded warrants are immediately exercisable and do not expire. As the remaining shares underlying the pre-funded warrants are issuable for nominal consideration of $0.01 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: Three Months Ended March 31, 2020 2019 Options to purchase common stock 4,156,989 1,977,787 Common stock warrants 236,915 236,915 Restricted stock units 210,303 229,581 QNAH convertible note 805,991 783,339 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020: Warrant Issuance Date Shares of Common Exercise Price/Share Expiration Date August 2014 28,713 $ 23.51 2024 December 2014 144,772 14.00 2022 March 2016 45,307 2.76 2026 March 2018 18,123 7.73 2028 September 2019 2,234,925 0.01 N/A |
Stockholders Deficit (Tables)
Stockholders Deficit (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Stock Option Plans Activity | A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at December 31, 2019 2,904,898 $ 2.37 8.0 $ 781 Granted 1,337,500 0.70 Exercised - - $ - Forfeited (49,666 ) 2.76 Expired/Cancelled (35,743 ) 3.70 Balance at March 31, 2020 4,156,989 $ 1.81 8.4 $ - Exercisable at March 31, 2020 1,756,893 $ 2.45 7.1 $ - |
Summary of Restricted Stock Unit ("RSU") Award Activity | The following table summarizes restricted stock unit (“RSU”) award activity for the three months ended March 31, 2020: Number of Shares Weighted- Average Grant Date Fair Value Per Share Balance at December 31, 2019 223,745 $ 2.91 Granted 22,500 0.75 Released (35,942 ) 2.65 Balance at March 31, 2020 210,303 $ 2.73 Vested and unissued at March 31, 2020 23,751 $ 2.67 |
Summary of Stock-Based Compensation Recorded in the Condensed Consolidated Statements of Operations | Stock-based compensation expense recorded in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019 was as follows: Three Months Ended March 31, 2020 2019 Selling, general and administrative $ 358,012 $ 181,981 Research and development 58,505 48,450 Cost of product and product-related services revenue 4,154 10,815 $ 420,671 $ 241,246 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Components of Lease Cost | The components of lease cost for operating leases were as follows: March 31, 2020 2019 Operating leases Operating lease cost $ 205,227 $ 96,181 Variable lease cost 9,456 21,451 Operating lease expense 214,683 117,632 Short-term lease rent expense — 1,497 Total rent expense $ 214,683 $ 119,129 The components of lease cost for financing leases were as follows: March 31, 2020 2019 Financing leases Amortization of right-of-use assets $ 12,518 $ 14,696 Interest on lease liability 2,635 2,146 Total financing lease cost $ 15,153 $ 16,842 |
Summary of Other Information Related to Operating Leases | The table below summarizes other information related to the Company’s operating leases: March 31, 2020 2019 Operating cash flows for operating leases $ 218,625 $ 136,272 Establishment of operating lease liabilities arising from obtaining right-of-use assets $ - $ 1,033,107 Weighted-average remaining lease term – operating leases 2.1 1.9 Weighted-average discount rate – operating leases 9.6 % 9.6 % |
Summary of Remaining Maturities of Operating Leases, Excluding Short-term Leases | As of March 30, 2020, remaining maturities of our operating leases, excluding short-term leases, are as follows: 2020 $ 662,675 2021 352,243 2022 281,232 2023 70,848 Total 1,366,998 Less present value discount (157,978 ) Operating lease liabilities, net $ 1,209,020 |
Summary of Other Information Related to Financing Leases | The table below summarizes other information related to the Company’s financing leases: March 31, 2020 2019 Weighted-average remaining lease term – financing leases 3.6 2.3 Weighted-average discount rate – financing leases 9.77 % 9.77 % |
Summary of Remaining Maturities of Financing Leases | As of March 31, 2020, remaining maturities of our financing leases are as follows: 2020 $ 35,603 2021 28,355 2022 20,716 2023 18,396 2024 16,080 Total 119,150 Less present value discount (19,176 ) Financing lease liabilities, net $ 99,974 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Product Warranty Liability | The following is a summary of the Company’s general product warranty liability, which is included in accrued liabilities in the accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019. Expense relating to the recording of this reserve is recorded in cost of product and product-related services revenue within the accompanying condensed consolidated statements of operations. Three Months Ended March 31, 2020 2019 Beginning balance $ 94,482 $ 63,461 Cost of warranty claims (7,454 ) (30,347 ) Increase in warranty reserve 3,726 32,817 Ending balance $ 90,754 $ 65,931 |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Principles of Consolidation - Additional Information (Details) | Mar. 27, 2020 | Mar. 31, 2020SegmentCustomer | Mar. 31, 2019Customer |
Significant Accounting Policies [Line Items] | |||
Number of operating segments | Segment | 1 | ||
CARES Act of 2020 percentage of NOL carryovers and carrybacks offsetting taxable income | 100.00% | ||
CARES act of 2020, net operating loss carryback period | 5 years | ||
Sales Revenue, Net | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Number of customers | 3 | 2 | |
Sales Revenue, Net | Customer Concentration Risk | Customers Located Outside Of United States | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 32.00% | 27.00% | |
Sales Revenue, Net | Customer Concentration Risk | Customers Located Outside Of United States | QIAGEN Manchester Limited | Collaborative Development Services | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 33.00% | 62.00% | |
Sales Revenue, Net | Customer Concentration Risk | Customer One | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 28.00% | 57.00% | |
Sales Revenue, Net | Customer Concentration Risk | Customer Two | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 17.00% | 17.00% | |
Sales Revenue, Net | Customer Concentration Risk | Customer Three | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 11.00% | ||
Accounts Receivable | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Number of customers | 2 | 2 | |
Accounts Receivable | Customer Concentration Risk | Customer One | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 25.00% | 29.00% | |
Accounts Receivable | Customer Concentration Risk | Customer Two | |||
Significant Accounting Policies [Line Items] | |||
Sales revenue percentage | 19.00% | 25.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 10,403,697 | $ 7,619,748 | $ 6,975,080 |
Restricted cash - current | 3,270,247 | $ 3,270,247 | |
Restricted cash - non-current | 3,270,247 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 13,673,944 | $ 10,245,327 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | |
Oct. 31, 2017 | Mar. 31, 2020 | |
Significant Accounting Policies [Line Items] | ||
Unrestricted cash and cash equivalents | $ 18 | |
NuvoGen Asset Purchase Agreement | ||
Significant Accounting Policies [Line Items] | ||
Convertible debt, fair value | 5 | |
QIAGEN North American Holdings, Inc. | ||
Significant Accounting Policies [Line Items] | ||
Convertible debt, fair value | $ 3.1 | |
QIAGEN North American Holdings, Inc. | Convertible Promissory Note | ||
Significant Accounting Policies [Line Items] | ||
Gross proceeds from issuance of subordinated notes | $ 3 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,202,433 | $ 872,947 |
Work in process | 151,029 | 151,351 |
Finished goods | 323,839 | 284,772 |
Total gross inventory | 1,677,301 | 1,309,070 |
Less inventory allowance | (39,403) | (39,403) |
Inventory, net | $ 1,637,898 | $ 1,269,667 |
Inventory - Additional Informat
Inventory - Additional Information (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Finished goods inventory | $ 323,839 | $ 284,772 |
HTG EdgeSeq | ||
Inventory [Line Items] | ||
Finished goods inventory | $ 108,381 | $ 79,338 |
Fair Value Instruments - Financ
Fair Value Instruments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Asset included in: | ||
Investments available-for-sale at fair value | $ 21,554,318 | $ 25,410,222 |
U.S. Treasury Securities | ||
Asset included in: | ||
Investments available-for-sale at fair value | 6,003,592 | 5,961,983 |
Corporate Debt Securities | ||
Asset included in: | ||
Investments available-for-sale at fair value | 15,550,726 | 19,448,239 |
Fair Value, Measurements, Recurring | ||
Asset included in: | ||
Financial Assets | 31,282,291 | 32,627,318 |
Fair Value, Measurements, Recurring | Money Market Securities | ||
Asset included in: | ||
Cash and cash equivalents | 9,727,973 | 7,217,096 |
Fair Value, Measurements, Recurring | U.S. Treasury Securities | ||
Asset included in: | ||
Investments available-for-sale at fair value | 6,003,592 | 5,961,983 |
Fair Value, Measurements, Recurring | Corporate Debt Securities | ||
Asset included in: | ||
Investments available-for-sale at fair value | 15,550,726 | 19,448,239 |
Fair Value, Measurements, Recurring | Level 1 | ||
Asset included in: | ||
Financial Assets | 15,731,565 | 13,179,079 |
Fair Value, Measurements, Recurring | Level 1 | Money Market Securities | ||
Asset included in: | ||
Cash and cash equivalents | 9,727,973 | 7,217,096 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury Securities | ||
Asset included in: | ||
Investments available-for-sale at fair value | 6,003,592 | 5,961,983 |
Fair Value, Measurements, Recurring | Level 2 | ||
Asset included in: | ||
Financial Assets | 15,550,726 | 19,448,239 |
Fair Value, Measurements, Recurring | Level 2 | Corporate Debt Securities | ||
Asset included in: | ||
Investments available-for-sale at fair value | $ 15,550,726 | $ 19,448,239 |
Fair Value Instruments - Additi
Fair Value Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
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 - Summary of Available-for-sale Securities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 21,508,054 | $ 25,410,463 |
Gross Unrealized Gains | 46,264 | 394 |
Gross Unrealized Losses | 0 | (635) |
Fair Value (Net Carrying Amount) | 21,554,318 | 25,410,222 |
Corporate Debt Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 15,550,726 | 19,448,239 |
Fair Value (Net Carrying Amount) | 15,550,726 | 19,448,239 |
U.S. Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 5,957,328 | 5,962,224 |
Gross Unrealized Gains | 46,264 | 394 |
Gross Unrealized Losses | (635) | |
Fair Value (Net Carrying Amount) | $ 6,003,592 | $ 5,961,983 |
Available-for-Sale Securities_2
Available-for-Sale Securities - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |||
Available-for-sale securities investments, gross unrealized losses | $ 0 | $ 635 | |
Unrealized gain on short and long-term investments | 47,697 | $ 3,353 | |
Other-than-temporary impairment | $ 0 |
Available-for-Sale Securities_3
Available-for-Sale Securities - Summary of Contractual Maturities of Debt Investment Securities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Under 1 Year | $ 21,554,318 | |
Fair Value (Net Carrying Amount) | 21,554,318 | $ 25,410,222 |
U.S. Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Under 1 Year | 6,003,592 | |
Fair Value (Net Carrying Amount) | 6,003,592 | 5,961,983 |
Corporate Debt Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Under 1 Year | 15,550,726 | |
Fair Value (Net Carrying Amount) | $ 15,550,726 | $ 19,448,239 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Abstract] | ||
Furniture & fixtures | $ 1,089,151 | $ 1,089,371 |
Leasehold improvements | 1,950,232 | 1,987,997 |
Equipment used in manufacturing | 2,303,740 | 2,305,340 |
Equipment used in research & development | 2,423,857 | 2,134,019 |
Equipment used in the field | 182,762 | 182,762 |
Software | 393,251 | 374,812 |
Property and equipment | 8,342,993 | 8,074,301 |
Less: accumulated depreciation and amortization | (6,173,330) | (5,834,168) |
Property and equipment, net | $ 2,169,663 | $ 2,240,133 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property Plant And Equipment [Line Items] | ||
Depreciation and leasehold improvement amortization expense | $ 348,633 | $ 308,984 |
Sausheim, France | Selling, General and Administrative Expense | ||
Property Plant And Equipment [Line Items] | ||
Leasehold improvements written off related to abandonment of laboratory | $ 28,130 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Accrued employee bonuses | $ 156,573 | $ 900,740 |
Payroll and employee benefit accruals | 401,252 | 469,530 |
Accrued professional fees | 156,835 | 43,850 |
Accrued interest | 264,301 | 245,350 |
Other accrued liabilities | 216,866 | 210,826 |
Total accrued liabilities | $ 1,195,827 | $ 1,870,296 |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Details) - USD ($) | Feb. 26, 2020 | Oct. 31, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Unrestricted cash and cash equivalents | $ 18,000,000 | ||||
Convertible Promissory Note | QIAGEN North American Holdings, Inc. | |||||
Debt Instrument [Line Items] | |||||
Cash proceeds from issuance of subordinated notes | $ 3,000,000 | ||||
MidCap Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest only payment period | 11 months | ||||
Debt Instrument, Frequency of Periodic Payment | 25 equal monthly installments | ||||
Debt instrument interest only payment period if revenue milestone achieved | 4 months | ||||
Debt instrument frequency of periodic payment if revenue milestone achieved | 21 equal monthly installments | ||||
Repayment of convertible note by previously deposited escrowed funds | $ 3,300,000 | ||||
Unrestricted cash and cash equivalents | $ 18,000,000 | ||||
Debt discount | $ 405,028 | $ 443,455 | |||
Debt instrument, amortization expense | 38,427 | 35,174 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Revolving loan cost | 46,956 | $ 50,970 | |||
Amortization of deferred financing costs | $ 4,014 | $ 3,969 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Remaining Principal Repayments due Under MidCap Term Loan (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total MidCap Term Loan, net | $ 6,629,972 | $ 6,871,545 |
MidCap Credit Facility | ||
Debt Instrument [Line Items] | ||
2021 | 2,800,000 | |
2022 | 3,360,000 | |
2023 | 840,000 | |
Total MidCap Term Loan payments | 7,000,000 | |
Less discount and deferred financing costs | (405,028) | $ (443,455) |
Plus final fee premium | 315,000 | |
Total MidCap Term Loan, net | $ 6,909,972 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Product and Product-Related Service Revenue from Sale of Instruments and Consumables (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | $ 2,225,474 | $ 3,202,825 |
Product and Product-related Services | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 1,988,137 | 2,662,505 |
HTG EdgeSeq | Instruments | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 234,625 | 140,416 |
HTG EdgeSeq | Consumables | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 545,939 | 400,818 |
HTG EdgeSeq | Product revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 780,564 | 541,234 |
HTG EdgeSeq | Custom RUO assay design | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 629,182 | 367,859 |
HTG EdgeSeq | RUO Sample processing | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 578,391 | 1,753,412 |
HTG EdgeSeq | Product-related services revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | 1,207,573 | 2,121,271 |
HTG EdgeSeq | Product and Product-related Services | ||
Disaggregation Of Revenue [Line Items] | ||
Product and product-related services revenue | $ 1,988,137 | $ 2,662,505 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Agreements for product and product-related services revenue, description | The Company’s agreements for product and product-related services revenue have an expected duration of one year or less | |||
Revenue recognized | $ 611,047 | $ 165,924 | ||
Service revenue | 2,225,474 | 3,202,825 | ||
Profit sharing payments | 1,015,492 | 2,045,527 | ||
Accounts receivable | 1,202,469 | $ 3,164,176 | ||
Research and development | 1,926,275 | 2,074,748 | ||
Contract liabilities | 580,663 | 355,702 | 599,454 | $ 410,947 |
SOW Two | ||||
Disaggregation Of Revenue [Line Items] | ||||
Accounts receivable | 59,780 | 171,298 | ||
Research and development | 196,812 | 209,029 | ||
SOW Three | ||||
Disaggregation Of Revenue [Line Items] | ||||
Accounts receivable | 0 | $ 760,274 | ||
Custom RUO Assay Design and Related Agreements | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue recognized | 0 | 41,137 | ||
Collaborative Development Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Service revenue | 237,337 | 540,320 | ||
Collaborative Development Services | SOW Two | ||||
Disaggregation Of Revenue [Line Items] | ||||
Service revenue | 237,337 | 257,699 | ||
Profit sharing payments | 50,000 | |||
Collaborative Development Services | SOW Three | ||||
Disaggregation Of Revenue [Line Items] | ||||
Service revenue | $ 0 | $ 282,621 | ||
Minimum | ||||
Disaggregation Of Revenue [Line Items] | ||||
Customer payment term | 30 days | |||
Maximum | ||||
Disaggregation Of Revenue [Line Items] | ||||
Customer payment term | 90 days | |||
Maximum | QIAGEN Manchester Limited | ||||
Disaggregation Of Revenue [Line Items] | ||||
Term of agreement | 1 year |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Additional Information1 (Details) | Mar. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred revenue to be realized | $ 409,449 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred revenue to be realized | $ 171,214 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Collaborative Development Services (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Service revenue | $ 2,225,474 | $ 3,202,825 |
Collaborative Development Services | ||
Disaggregation Of Revenue [Line Items] | ||
Service revenue | $ 237,337 | $ 540,320 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Schedule of Changes in Contract Liability (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | $ 599,454 | $ 410,947 |
Deferral of revenue | 592,256 | 110,679 |
Recognition of deferred revenue | (611,047) | (165,924) |
Ending Balance | 580,663 | 355,702 |
Product Revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | 95,148 | 116,547 |
Deferral of revenue | 229,927 | 50,667 |
Recognition of deferred revenue | (214,712) | (36,544) |
Ending Balance | 110,363 | 130,670 |
Custom RUO Assay Design | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | 66,216 | 50,000 |
Deferral of revenue | 300,000 | 11,685 |
Recognition of deferred revenue | (366,216) | (11,685) |
Ending Balance | 50,000 | |
Sample Processing | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | 438,090 | 244,400 |
Deferral of revenue | 62,329 | 48,327 |
Recognition of deferred revenue | (30,119) | (117,695) |
Ending Balance | $ 470,300 | $ 175,032 |
Other Agreements - Additional I
Other Agreements - Additional Information (Details) | 3 Months Ended | ||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Other Agreements [Line Items] | |||
Accretion expense | $ (3,430) | $ (3,414) | |
Measurement Input, Default Rate | |||
Other Agreements [Line Items] | |||
Discount rate used to calculate asset purchase obligation | 2.5 | ||
NuvoGen Asset Purchase Agreement | |||
Other Agreements [Line Items] | |||
Asset purchase agreement quarterly installments due from beginning 2019 | $ 400,000 | ||
Percentage on annual revenues for cash consideration to be paid | 6.00% | ||
Asset purchase agreement fixed quarterly payments | $ 100,000 | ||
Additional revenue based payments payable | 33,528 | $ 187,997 | |
NuvoGen | |||
Other Agreements [Line Items] | |||
Convertible notes and related debt discount | (88,881) | $ (92,311) | |
Accretion expense | $ (3,430) | $ (3,414) |
Other Agreements - Schedule of
Other Agreements - Schedule of Remaining Minimum Principal Payments Due (Details) - NuvoGen Asset Purchase Agreement | Mar. 31, 2020USD ($) |
Purchase Obligation Fiscal Year Maturity [Line Items] | |
2020 | $ 1,093,592 |
2021 | 400,000 |
2022 | 400,000 |
2023 | 400,000 |
2024 | 400,000 |
2025 and beyond | 2,577,110 |
Total NuvoGen obligation payments | 5,270,702 |
Plus interest accretion | 88,881 |
Total NuvoGen obligation, net | $ 5,359,583 |
Net Loss per Share - Additional
Net Loss per Share - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Class Of Warrant Or Right [Line Items] | ||||
Proceeds from exercise of pre-funded warrants | $ 31,768 | |||
Pre-funded Warrants | ||||
Class Of Warrant Or Right [Line Items] | ||||
Exercise price of warrants | $ 0.01 | $ 0.01 | ||
Private Placement | Institutional Accredited Investors | ||||
Class Of Warrant Or Right [Line Items] | ||||
Exercise price of warrants | $ 0.65 | $ 0.65 | $ 0.65 | |
Private Placement | Institutional Accredited Investors | Pre-funded Warrants | ||||
Class Of Warrant Or Right [Line Items] | ||||
Issuance of warrants, shares | 5,411,687 | 5,411,687 | 5,411,687 | |
Number of securities called by warrants | 5,411,687 | 5,411,687 | 5,411,687 | |
Exercise price of warrants | $ 0.64 | $ 0.64 | $ 0.64 | |
Exercise price of warrants, exercisable subject to beneficial ownership limitations | $ 0.01 | $ 0.01 | $ 0.01 | |
Warrants exercised | 3,176,762 | 3,176,762 | ||
Proceeds from exercise of pre-funded warrants | $ 31,768 | $ 31,768 | ||
Unexercised warrants outstanding | 2,234,925 | 2,234,925 | 0 |
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 (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
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 | 4,156,989 | 1,977,787 |
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 | 210,303 | 229,581 |
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 | 236,915 | 236,915 |
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 | 805,991 | 783,339 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | |
Class Of Warrant Or Right [Line Items] | |||
Proceeds from exercise of pre-funded warrants | $ 31,768 | ||
Pre-funded Warrants | |||
Class Of Warrant Or Right [Line Items] | |||
Exercise price of warrants | $ 0.01 | $ 0.01 | |
Private Placement | Institutional Accredited Investors | |||
Class Of Warrant Or Right [Line Items] | |||
Exercise price of warrants | $ 0.65 | $ 0.65 | $ 0.65 |
Private Placement | Institutional Accredited Investors | Pre-funded Warrants | |||
Class Of Warrant Or Right [Line Items] | |||
Issuance of warrants, shares | 5,411,687 | 5,411,687 | 5,411,687 |
Number of securities called by warrants | 5,411,687 | 5,411,687 | 5,411,687 |
Exercise price of warrants | $ 0.64 | $ 0.64 | $ 0.64 |
Exercise price of warrants, exercisable subject to beneficial ownership limitations | $ 0.01 | $ 0.01 | $ 0.01 |
Proceeds from exercise of pre-funded warrants | $ 31,768 | $ 31,768 | |
Warrants exercised | 3,176,762 | 3,176,762 |
Warrants -Summary of Outstandin
Warrants -Summary of Outstanding Warrants (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Convertible Note Warrants | |
Class Of Warrant Or Right [Line Items] | |
Warrant Issuance Date | 2014-12 |
Shares of Common Stock Underlying Warrants | shares | 144,772 |
Exercise Price/Share | $ / shares | $ 14 |
Expiration Date | 2022 |
Common Stock Warrants | |
Class Of Warrant Or Right [Line Items] | |
Warrant Issuance Date | 2016-03 |
Shares of Common Stock Underlying Warrants | shares | 45,307 |
Exercise Price/Share | $ / shares | $ 2.76 |
Expiration Date | 2026 |
Common Stock Tranche one | |
Class Of Warrant Or Right [Line Items] | |
Warrant Issuance Date | 2018-03 |
Shares of Common Stock Underlying Warrants | shares | 18,123 |
Exercise Price/Share | $ / shares | $ 7.73 |
Expiration Date | 2028 |
Pre-funded Warrants | |
Class Of Warrant Or Right [Line Items] | |
Warrant Issuance Date | 2019-09 |
Shares of Common Stock Underlying Warrants | shares | 2,234,925 |
Exercise Price/Share | $ / shares | $ 0.01 |
Series E Redeemable Convertible Preferred Stock | |
Class Of Warrant Or Right [Line Items] | |
Warrant Issuance Date | 2014-08 |
Shares of Common Stock Underlying Warrants | shares | 28,713 |
Exercise Price/Share | $ / shares | $ 23.51 |
Expiration Date | 2024 |
Stockholders Deficit - Addition
Stockholders Deficit - Additional Information (Details) - USD ($) | Mar. 24, 2020 | Feb. 25, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2019 |
Class Of Stock [Line Items] | |||||||
Gross proceeds from issuance of common stock | $ 2,600,000 | ||||||
Net proceeds from issuance of common stock from the ATM Offering | $ 2,400,000 | ||||||
Common stock, shares outstanding | 62,196,117 | 62,196,117 | 58,090,233 | ||||
Common stock, shares issued | 62,196,117 | 62,196,117 | 58,090,233 | ||||
Employee Stock Option | |||||||
Class Of Stock [Line Items] | |||||||
Unrecognized compensation expense | $ 2,214,423 | $ 2,214,423 | |||||
Compensation expense period expected to be recognized | 1 year 11 months 26 days | ||||||
Restricted Stock Units R S U | |||||||
Class Of Stock [Line Items] | |||||||
Unrecognized compensation expense | $ 493,237 | $ 493,237 | |||||
Compensation expense period expected to be recognized | 2 years 21 days | ||||||
Vested and unissued RSU awards, description | Vested and unissued awards at March 31, 2020 represents RSU awards for which the vesting date was March 31, 2020, but for which issuance of the awards occurred in April 2020. | ||||||
Vested and unissued RSU awards vesting date | Mar. 31, 2020 | ||||||
Vested and unissued RSU awards issuance date | Apr. 30, 2020 | ||||||
Common Stock | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 4,399,062 | ||||||
Deferred offering costs | $ 100,000 | ||||||
Cantor Sales Agreement | |||||||
Class Of Stock [Line Items] | |||||||
Common stock price per share | $ 0.001 | ||||||
Exchange Agreement | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, shares outstanding | 4,110,000 | ||||||
Conversion of convertible preferred stock into common stock | 100 | ||||||
Exchange Agreement | Series A Convertible Preferred Stock | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 10,170 | ||||||
Preferred stock, shares issued | 41,100 | ||||||
Preferred stock, par value | $ 0.001 | ||||||
Issuance of common stock | $ 600,030 | ||||||
Stock issued, price per share | $ 59 | ||||||
LP Purchase Agreement | Common Stock | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 615,384 | ||||||
Issuance of common stock | $ 615 | ||||||
LP Purchase Agreement | Additional Paid-In Capital | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock | $ (615) | ||||||
Pre-funded Warrants | |||||||
Class Of Stock [Line Items] | |||||||
Exercise price of warrants | $ 0.01 | $ 0.01 | |||||
Lincoln Park | LP Purchase Agreement | |||||||
Class Of Stock [Line Items] | |||||||
Common stock value right to sell, maximum | $ 20,000,000 | ||||||
Agreement term | 36 months | ||||||
Common stock, shares issued | 615,384 | 0 | 0 | ||||
Lincoln Park | LP Purchase Agreement | Additional Paid-In Capital | |||||||
Class Of Stock [Line Items] | |||||||
Commitment consideration and other transaction costs | $ 100,000 | ||||||
Private Placement | Institutional Accredited Investors | |||||||
Class Of Stock [Line Items] | |||||||
Exercise price of warrants | $ 0.65 | $ 0.65 | $ 0.65 | ||||
Private Placement | Institutional Accredited Investors | Pre-funded Warrants | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of warrants, shares | 5,411,687 | 5,411,687 | 5,411,687 | ||||
Number of securities called by warrants | 5,411,687 | 5,411,687 | 5,411,687 | ||||
Exercise price of warrants | $ 0.64 | $ 0.64 | $ 0.64 | ||||
Exercise price of warrants, exercisable subject to beneficial ownership limitations | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Private Placement | Cantor Fitzgerald & Co. | Pre-funded Warrants | |||||||
Class Of Stock [Line Items] | |||||||
Number of securities called by warrants | 3,176,762 | 3,176,762 | |||||
Agent cash fee, percentage of gross proceeds from sale of warrants | 6.00% | ||||||
Net proceeds from sale of warrants | $ 31,768 | $ 3,100,000 |
Stockholders Deficit - Summary
Stockholders Deficit - Summary of Stock Option Plans Activity (Details) - Employee Stock Option - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Beginning Balance | 2,904,898 | |
Number of Shares, Granted | 1,337,500 | |
Number of Shares, Forfeited | (49,666) | |
Number of Shares, Expired/Cancelled | (35,743) | |
Number of Shares, Ending Balance | 4,156,989 | 2,904,898 |
Number of Shares, Exercisable | 1,756,893 | |
Weighted-Average Exercise Price Per Share, Beginning Balance | $ 2.37 | |
Weighted-Average Exercise Price Per Share, Granted | 0.70 | |
Weighted-Average Exercise Price Per Share, Forfeited | 2.76 | |
Weighted-Average Exercise Price Per Share, Expired/Cancelled | 3.70 | |
Weighted-Average Exercise Price Per Share, Ending Balance | 1.81 | $ 2.37 |
Weighted-Average Exercise Price Per Share, Exercisable | $ 2.45 | |
Weighted-Average Remaining Contractual Life, Outstanding | 8 years 4 months 24 days | 8 years |
Weighted-Average Remaining Contractual Life, Exercisable | 7 years 1 month 6 days | |
Aggregate Intrinsic Value, Balance | $ 781 |
Stockholders Deficit - Summar_2
Stockholders Deficit - Summary of Restricted Stock Unit ('RSU') Award Activity (Details) - Restricted Stock Units R S U | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Restricted Stock Units (RSU) | |
Beginning Balance | shares | 223,745 |
Granted | shares | 22,500 |
Released | shares | (35,942) |
Ending Balance | shares | 210,303 |
Vested and unissued at March 31, 2020 | shares | 23,751 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning Balance | $ / shares | $ 2.91 |
Granted | $ / shares | 0.75 |
Released | $ / shares | 2.65 |
Ending Balance | $ / shares | 2.73 |
Vested and unissued at March 31, 2020 | $ / shares | $ 2.67 |
Stockholders Deficit - Summar_3
Stockholders Deficit - Summary of Stock-Based Compensation Recorded in the Condensed Consolidated Statements of Operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 420,671 | $ 241,246 |
Selling, General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 358,012 | 181,981 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 58,505 | 48,450 |
Cost of Product and Product-related Services Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 4,154 | $ 10,815 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Lessee Lease Description [Line Items] | ||
Lease expiration year | 2023 | |
Operating lease, description | The Company’s most significant active leases as of March 31, 2020 are for office and manufacturing space in Tucson, Arizona | |
Operating lease right-of-use assets | $ 1,039,045 | $ 1,209,145 |
Financing lease liabilities, net of discount | 99,974 | |
Financing lease liabilities, current | $ 36,205 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | |
Financing lease liabilities, non current | $ 63,769 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | |
Financing leases, right-of-use assets | $ 97,078 | |
Tucson, Arizona | ||
Lessee Lease Description [Line Items] | ||
Lease expiration year | 2021 | |
San Carlos, California | ||
Lessee Lease Description [Line Items] | ||
Lease expiration year | 2023 | |
Sausheim, France | Selling, General and Administrative Expense | ||
Lessee Lease Description [Line Items] | ||
Operating lease right-of-use assets | $ 21,096 |
Leases - Summary of Components
Leases - Summary of Components of Lease Cost for Operating Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 205,227 | $ 96,181 |
Variable lease cost | 9,456 | 21,451 |
Operating lease expense | 214,683 | 117,632 |
Short-term lease rent expense | 1,497 | |
Total rent expense | $ 214,683 | $ 119,129 |
Leases - Summary of Other Infor
Leases - Summary of Other Information Related to Operating Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 218,625 | $ 136,272 |
Establishment of operating lease liabilities arising from obtaining right-of-use assets | $ 1,033,107 | |
Weighted-average remaining lease term – operating leases | 2 years 1 month 6 days | 1 year 10 months 24 days |
Weighted-average discount rate – operating leases | 9.60% | 9.60% |
Leases - Summary of Remaining M
Leases - Summary of Remaining Maturities of Operating Leases, Excluding Short-term Leases (Details) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 662,675 |
2021 | 352,243 |
2022 | 281,232 |
2023 | 70,848 |
Total | 1,366,998 |
Less present value discount | (157,978) |
Operating lease liabilities, net | $ 1,209,020 |
Leases - Summary of Component_2
Leases - Summary of Components of Lease Cost for Financing Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Amortization of right-of-use assets | $ 12,518 | $ 14,696 |
Interest on lease liability | 2,635 | 2,146 |
Total financing lease cost | $ 15,153 | $ 16,842 |
Leases - Summary of Other Inf_2
Leases - Summary of Other Information Related to Financing Leases (Details) | Mar. 31, 2020 | Mar. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term – financing leases | 3 years 7 months 6 days | 2 years 3 months 18 days |
Weighted-average discount rate – financing leases | 9.77% | 9.77% |
Leases - Summary of Remaining_2
Leases - Summary of Remaining Maturities of Financing Leases (Details) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 35,603 |
2021 | 28,355 |
2022 | 20,716 |
2023 | 18,396 |
2024 | 16,080 |
Total | 119,150 |
Less present value discount | (19,176) |
Financing lease liabilities, net | $ 99,974 |
Commitments and Contingencies -
Commitments and Contingencies - Summary Of Product Warranty Liability (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Beginning balance | $ 94,482 | $ 63,461 |
Cost of warranty claims | (7,454) | (30,347) |
Increase in warranty reserve | 3,726 | 32,817 |
Ending balance | $ 90,754 | $ 65,931 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - Paycheck Protection Program Loan | Apr. 21, 2020USD ($) |
Subsequent Event [Line Items] | |
Loan maturity date | Apr. 21, 2022 |
Loan annual interest rate | 1.00% |
Loan repayment start date | Nov. 21, 2020 |
Loan term | 18 months |
Loan prepayment penalties | $ 0 |
Payroll compensation cost maximum exemption limit | $ 100,000 |
Maximum | |
Subsequent Event [Line Items] | |
Percentage of non-payroll costs forgiven | 25.00% |
Salaries and wages | $ 100,000 |
Minimum | |
Subsequent Event [Line Items] | |
Annual salary reduction rate | 25.00% |
Small Business Administration | |
Subsequent Event [Line Items] | |
Application for loan forgiveness start period | 60 days |
Application for loan forgiveness end period | 120 days |
Silicon Valley Bank | |
Subsequent Event [Line Items] | |
Proceeds from loan | $ 1,717,000 |