Description of Business, Basis of Presentation and Principles of Consolidation	9 Months Ended
Sep. 30, 2021
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 life science company whose mission is to advance precision medicine through its innovative transcriptome-wide profiling technology. The Company derives revenue from sales of its HTG EdgeSeq instrument system and integrated next-generation sequencing-based (“NGS-based”) HTG EdgeSeq assays, from sample processing and custom research use only (“RUO”) assay design services 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 and nine months ended September 30, 2021 approximately 24% and 30% respectively, of the Company’s revenue was generated from sales originated by customers located outside of the United States, compared with 19% and 31% for the three and nine months ended September 30, 2020, respectively. COVID-19 Pandemic The full impact of the COVID-19 pandemic (“COVID-19”) continues to evolve as of the date of this report and management continues to actively monitor the potential impact of the global situation on its financial condition, liquidity and future results of operations, suppliers, industry and workforce. Given the ongoing evolution of COVID-19, including the emergence of variants and resurgences in many areas of the world and the global responses to curb its spread, the Company is not able to fully estimate the effects of COVID-19 on its results of operations, financial condition or liquidity. The Company experienced a significant slowing of product and product-related services revenue generation beginning in March 2020 and continuing throughout 2020 and the three quarters of 2021. The extent of this impact has varied from customer to customer depending upon how they have been directly or indirectly impacted by local stay-at-home orders and other social distancing measures, prioritization by those customers as the immediate impacts of the pandemic have passed, and the workforce and supplier impacts that COVID-19 has had on each customer. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to COVID-19. On April 21, 2020, the Company received proceeds from a loan pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act (the “PPP Loan”) in the amount of $1.7 million from Silicon Valley Bank (“SVB”), as lender (see Note 8). The Company applied for full forgiveness of the PPP Loan in October 2020. In May 2021, the Company received notification that the PPP Loan and related accrued interest, totaling $1,735,792, were forgiven by the U.S. Small Business Administration (“SBA”), and that the PPP Loan note had been canceled. In December 2020, the Consolidated Appropriations Act (the “Appropriations Act”) was signed into law to further address the ongoing impacts of COVID-19. The Appropriations Act introduced several additional potential credits and benefits for employers to consider applying for, including, but not limited to, the ability for employers who have previously obtained a PPP Loan to potentially also qualify for Employee Retention Credits (“ERC”), initially created as part of the CARES Act. In March 2021, the American Rescue Plan of 2021 was enacted to, amongst other things, extend and expand ERC benefits through December 31, 2021. The Company has qualified for certain ERC benefits during the year ended December 31, 2020 and the first three quarters of 2021 and expects to continue to seek out these benefits in future periods as appropriate. ERC benefits of approximately $0.6 million and $1.7 million were included in operating expenses as an offset to the related compensation costs in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2021, respectively. While there remains uncertainty as to the ultimate impact of COVID-19, the Company has considered the known impacts on its business as of the date these condensed consolidated financial statements were issued and has reflected any known or expected impacts in its condensed consolidated financial statements, including consideration of potential impairment risks to its long-lived assets, potential accounts receivable collection risks and potential impacts to its 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 September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The accompanying condensed consolidated financial statements reflect all 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 sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the information and disclosures required by 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, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2021. All share and per share amounts within the condensed consolidated financial statements and notes thereto have been adjusted to reflect the reverse stock split completed by the Company in November 2020 for all periods and dates presented. See Note 14 for more information about the Company’s reverse stock split. Going Concern and Liquidity Management has assessed the Company’s ability to continue as a going concern within one year of issuance of these financial statements. The accompanying interim unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of the assets and satisfaction of liabilities in the normal course of business. However, the Company has had recurring operating losses and negative operating cash flows since its inception and has an accumulated deficit of $203.1 million as of September 30, 2021. As of September 30, 2021, the Company had working capital of $23.7 million and long-term liabilities of $11.5 million. The Company’s liability balances consist primarily of its debt obligations, including an asset-secured loan with Silicon Valley Bank (the “SVB Term Loan”), as well as an obligation to NuvoGen Research, LLC (the “NuvoGen obligation”) (see Note 10). Potentially changing circumstances, including COVID-19 uncertainties, may result in the depletion of the Company’s capital resources more rapidly than it currently anticipates, resulting in the Company not having adequate resources to fund its planned operations and expenditures for at least the next 12 months and to comply with the financial covenant in the Loan and Security Agreement for the SVB Term Loan (the “Loan Agreement”). These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties. The Company will need to raise additional capital to fund its operations and service its 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. In addition, the Company must comply with a financial covenant in the SVB Term Loan requiring the Company to maintain unrestricted cash of not less than the greater of (i) $12.5 million and (ii) an amount equal to six times the amount of the Company’s average monthly Cash Burn (as defined in the Loan Agreement) over the trailing three months. 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 the Loan Agreement, SVB could accelerate the payment of the SVB Term Loan and ultimately foreclose on the Company’s assets. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, HTG Molecular Diagnostics France, SARL, after elimination of all intercompany transactions and balances as of September 30, 2021 and December 31, 2020. Concentration Risks Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains the majority of its cash balances in the form of cash deposits in bank checking and money market accounts in amounts in excess of federally insured limits. Management believes, based upon the quality of the financial institution, that the credit risk with regard to these deposits is not significant. The Company sells its 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 two customers accounted for 27% and 13% of the Company’s total revenue for the three months ended September 30, 2021, compared with the Company’s top two customers accounting for 24% and 10% of the Company’s total revenue for the three months ended September 30, 2020. The Company’s top two customers accounted for 23% and 12% of the Company’s total revenue for the nine months ended September 30, 2021, compared with the Company’s top two customer accounting for 16% and 10% of the Company’s total revenue for the nine months ended September 30, 2020. The largest two customers accounted for 52% and 11% of the Company’s accounts receivable as of September 30, 2021. The largest two customers accounted for approximately 9% each of the Company’s accounts receivable as of December 31, 2020. Three vendors accounted for 26%, 14% and 10% of the Company’s accounts payable as of September 30, 2021, compared with two vendors who accounted for 21% and 20% of the Company’s accounts payable as of December 31, 2020. The Company currently relies on a single supplier to produce a subcomponent used in its 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.

Description of Business, Basis of Presentation and Principles of Consolidation

9 Months Ended

Sep. 30, 2021

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 life science company whose mission is to advance precision medicine through its innovative transcriptome-wide profiling technology. The Company derives revenue from sales of its HTG EdgeSeq instrument system and integrated next-generation sequencing-based (“NGS-based”) HTG EdgeSeq assays, from sample processing and custom research use only (“RUO”) assay design services 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 and nine months ended September 30, 2021 approximately 24% and 30% respectively, of the Company’s revenue was generated from sales originated by customers located outside of the United States, compared with 19% and 31% for the three and nine months ended September 30, 2020, respectively.

COVID-19 Pandemic

The full impact of the COVID-19 pandemic (“COVID-19”) continues to evolve as of the date of this report and management continues to actively monitor the potential impact of the global situation on its financial condition, liquidity and future results of operations, suppliers, industry and workforce. Given the ongoing evolution of COVID-19, including the emergence of variants and resurgences in many areas of the world and the global responses to curb its spread, the Company is not able to fully estimate the effects of COVID-19 on its results of operations, financial condition or liquidity.

The Company experienced a significant slowing of product and product-related services revenue generation beginning in March 2020 and continuing throughout 2020 and the three quarters of 2021. The extent of this impact has varied from customer to customer depending upon how they have been directly or indirectly impacted by local stay-at-home orders and other social distancing measures, prioritization by those customers as the immediate impacts of the pandemic have passed, and the workforce and supplier impacts that COVID-19 has had on each customer.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to COVID-19. On April 21, 2020, the Company received proceeds from a loan pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act (the “PPP Loan”) in the amount of $1.7 million from Silicon Valley Bank (“SVB”), as lender (see Note 8). The Company applied for full forgiveness of the PPP Loan in October 2020. In May 2021, the Company received notification that the PPP Loan and related accrued interest, totaling $1,735,792, were forgiven by the U.S. Small Business Administration (“SBA”), and that the PPP Loan note had been canceled.

In December 2020, the Consolidated Appropriations Act (the “Appropriations Act”) was signed into law to further address the ongoing impacts of COVID-19. The Appropriations Act introduced several additional potential credits and benefits for employers to consider applying for, including, but not limited to, the ability for employers who have previously obtained a PPP Loan to potentially also qualify for Employee Retention Credits (“ERC”), initially created as part of the CARES Act. In March 2021, the American Rescue Plan of 2021 was enacted to, amongst other things, extend and expand ERC benefits through December 31, 2021. The Company has qualified for certain ERC benefits during the year ended December 31, 2020 and the first three quarters of 2021 and expects to continue to seek out these benefits in future periods as appropriate. ERC benefits of approximately $0.6 million and $1.7 million were included in operating expenses as an offset to the related compensation costs in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2021, respectively.

While there remains uncertainty as to the ultimate impact of COVID-19, the Company has considered the known impacts on its business as of the date these condensed consolidated financial statements were issued and has reflected any known or expected impacts in its condensed consolidated financial statements, including consideration of potential impairment risks to its long-lived assets, potential accounts receivable collection risks and potential impacts to its 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 September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The accompanying condensed consolidated financial statements reflect all 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 sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the information and disclosures required by 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, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2021.

All share and per share amounts within the condensed consolidated financial statements and notes thereto have been adjusted to reflect the reverse stock split completed by the Company in November 2020 for all periods and dates presented. See Note 14 for more information about the Company’s reverse stock split.

Going Concern and Liquidity

Management has assessed the Company’s ability to continue as a going concern within one year of issuance of these financial statements. The accompanying interim unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of the assets and satisfaction of liabilities in the normal course of business. However, the Company has had recurring operating losses and negative operating cash flows since its inception and has an accumulated deficit of $203.1 million as of September 30, 2021. As of September 30, 2021, the Company had working capital of $23.7 million and long-term liabilities of $11.5 million. The Company’s liability balances consist primarily of its debt obligations, including an asset-secured loan with Silicon Valley Bank (the “SVB Term Loan”), as well as an obligation to NuvoGen Research, LLC (the “NuvoGen obligation”) (see Note 10). Potentially changing circumstances, including COVID-19 uncertainties, may result in the depletion of the Company’s capital resources more rapidly than it currently anticipates, resulting in the Company not having adequate resources to fund its planned operations and expenditures for at least the next 12 months and to comply with the financial covenant in the Loan and Security Agreement for the SVB Term Loan (the “Loan Agreement”). These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

The Company will need to raise additional capital to fund its operations and service its 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. In addition, the Company must comply with a financial covenant in the SVB Term Loan requiring the Company to maintain unrestricted cash of not less than the greater of (i) $12.5 million and (ii) an amount equal to six times the amount of the Company’s average monthly Cash Burn (as defined in the Loan Agreement) over the trailing three months. 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 the Loan Agreement, SVB could accelerate the payment of the SVB Term Loan and ultimately foreclose on the Company’s assets.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, HTG Molecular Diagnostics France, SARL, after elimination of all intercompany transactions and balances as of September 30, 2021 and December 31, 2020.

Concentration Risks

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains the majority of its cash balances in the form of cash deposits in bank checking and money market

accounts in amounts in excess of federally insured limits. Management believes, based upon the quality of the financial institution, that the credit risk with regard to these deposits is not significant.

The Company sells its 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 two customers accounted for 27% and 13% of the Company’s total revenue for the three months ended September 30, 2021, compared with the Company’s top two customers accounting for 24% and 10% of the Company’s total revenue for the three months ended September 30, 2020. The Company’s top two customers accounted for 23% and 12% of the Company’s total revenue for the nine months ended September 30, 2021, compared with the Company’s top two customer accounting for 16% and 10% of the Company’s total revenue for the nine months ended September 30, 2020.

The largest two customers accounted for 52% and 11% of the Company’s accounts receivable as of September 30, 2021. The largest two customers accounted for approximately 9% each of the Company’s accounts receivable as of December 31, 2020.

Three vendors accounted for 26%, 14% and 10% of the Company’s accounts payable as of September 30, 2021, compared with two vendors who accounted for 21% and 20% of the Company’s accounts payable as of December 31, 2020.

The Company currently relies on a single supplier to produce a subcomponent used in its 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.