HTG Molecular Diagnostics, Inc.

Thank you for standing by. This is the conference operator. Welcome to the HTG Molecular Diagnostics, Inc. fourth quarter 2021 earnings conference call. As a reminder, all participants are in the listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Andrew Erickson from LifeSci Advisors. Please go ahead.

Before we begin the call, let me remind you that the company's remarks include forward-looking statements within the meaning of the federal securities laws, including statements regarding our expected revenue recovery. the importance of the company's HTG transcriptome panel, statements related to the company's HTG therapeutics and drug discovery business, our future growth, business momentum, and market opportunities, and the expected capabilities of our technology. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond HTG's control, including uncertainties regarding the ongoing COVID-19 pandemic and its impacts on HTG and its customers that may cause actual circumstances, events, or results to differ materially from those projected on today's call. Factors that could cause events or results to differ materially include those risks and uncertainties described from time to time in the company's SEC filings, including under the risk factors heading of the company's most recently filed annual report on the Form 10-K. HTG cautions listeners not to place undue reliance on any forward-looking statements. HTG is providing this information as of the date of this call, March 29, 2022, and the company undertakes no obligation to update any forward-looking statement. With that, I would like to turn the call over to John Lubineski, Chief Executive Officer.

John? Thank you, Andrew, and welcome, everybody. We're pleased to be here with you today to review our financial results as well as our performance against strategic milestones in 2021. 2021 was both a recovery year for our profiling business and an exciting expansion year for the future growth of the company. Through completion of our key development milestones in 2021, we introduced what we believe is the most important product in HTG's history with the release of our HTG Transcriptome Panel, or HTP. The release of the HTP set the stage for us to also move forward with the creation of our Drug Discovery Business Unit. using our exciting capabilities in a new and exciting market segment. Throughout 2021, we saw more of our customers resuming operations. They began to bring employees back to their facilities and resume some of their studies that they had planned prior to the pandemic. However, even by the end of the year, customers that were open were still not operating at 100% of pre-COVID capabilities. Many customers had workplace restrictions in place or were impacted by nationwide supply chain and labor shortages. And due to ongoing restrictions, global shutdowns, and careful monitoring of travel risks, our commercial team was restricted for much of the year in its ability to actually visit customer facilities. As a result of these ongoing challenges, we've experienced delays in our sales cycle and continue to react to unexpected speed bumps throughout 2021. While customer interest in our products, especially our recently released HDP product, continues to be strong, we expect some of these challenges that we faced in 2021 to continue into 2022, resulting in a continuing slow recovery of our profiling business as 2022 progresses. Okay, now to the numbers. Total revenue for 2021 was $8.9 million, approximately 4% ahead of 2020. Breaking that down, our direct revenue defined as product and product-related services revenue in our financial statements was $8.9 million, up 13% from 2020, reflecting the continued recovery in our profiling business that I discussed previously. Total revenue in 2020 included approximately $650,000 of collaborative development services revenues, of which we didn't have any active programs in 2021. Our HTTP transcriptome product generated $1.4 million in revenue in less than five months of sales and ended as our number one selling assay. Overall, we added 29 new customers and increased our active EdgeSeq instrument install base by 10 instruments in 2021. On the publication front, we now have more than 350 publications that reference our HTG EdgeSeq technology, a 32% increase over prior year. This is a clear indication that word is getting out about the advantages of HTG ZC technology. In biopharma, we experienced a nice rebound in a number of active programs in 2021. As a reminder, there's three requirements for a program to be included in our active programs metric. First, the program needs to be associated with a pharma-sponsored clinical trial. Second, it needs to be traceable to a program on clinicaltrials.gov. And finally, it needs to have generated revenue for HTG within the last 12 months. We finished 2021 with 62 active programs, up from 50 at the end of 2020. More impressive, of that 62, 48 were new programs and 14 were extensions of previous programs. So over 70% of the active programs in 2020 were either halted or discontinued by our customers during the pandemic. We believe the increase in new programs, again, reflects the spreading excitement about our technology and the drive and energy of our commercial sales team. We also expect to see the recent growth trends suggest to us that we've gone through the worst of the COVID-19 headwinds in pharma, signaling there's further growth ahead of this customer segment in 2022. Turning to our strategic milestones and product development, we were thrilled with the progress that our teams made through 2021. Our development team completed the final elements of our whole transcriptome product development in the fourth quarter. This included validating additional sequencers and expanding our assay protocols to include more biologic sample types. This will help support our commercial sales teams as we continue our focus to diversify our customer base and to expand the use of our technology beyond oncology and into other growth areas such as immune response, diabetes, and infectious disease. publications, such as the recent COVID-19-based publication in Frontiers in Immunology, noted the use of our technology to systematically characterize COVID-19 lymph nodes to better understand the complex immunopathological changes of severe disease, both from a morphological and transcriptomic level and reflect the potential of what our technology can do in regards to these other disease areas for scientific discovery. In our drug discovery business, We have also made substantial progress in a very short amount of time. To help guide our strategy and provide valuable collaboration support, we added our first two scientific advisory board members, Dr. Jerry Radish from the Fred Hutchinson Cancer Center and Dr. Robert Spitali from the University of California at Irvine. We also added therapeutic depth to our board of directors with the addition of biopharma veteran Chris Caristi, formerly of Cost Pharmaceuticals. While this infrastructure was being built, our therapeutic development team was busy moving our vision forward with this exciting new proprietary technology. During this period, we've chosen our first drug target. We've also used our machine learning chemistry capability to search a universe of 33.5 billion potential biologic structures and have designed a library to just a few hundred compounds. From there, we'll have those compounds synthesized and run them in our first cell-based model. Lysates will be analyzed using our full transcriptome EdSeq technology to show we can differentiate between pharmacophores based on full transcriptomic analysis. This is a first critical step for RNA profiling of drug development candidates from human-derived cell-based test systems, providing unique insights into the association between structure-activity relationships and gene and pathway expression. This understanding will help us make well-informed adjustments to the molecular structure of the drug candidates with a more complete understanding of how those structural adjustments actually affect gene expression, our initial approach to early de-risking of a drug candidate. We believe the de-risking of drug candidate molecules early in drug development will result in improved chances for preclinical and clinical development success for these drug candidates. With that, it's my pleasure to turn our call over to our CFO, Sean McMeans, for a review of our financials. Sean?