HTG Molecular Diagnostics, Inc.

Thank you for standing by. This is the conference operator. Welcome to the HDG Molecular Diagnostics, Inc. First Quarter 2022 Earnings Call. As a reminder, all participants are in 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 Ms. Monique Casey with LifeSite Advisors. Please go ahead.

Thank you, operator. 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 build and momentum in 2022, our expectations regarding profiling revenue in future periods, our expectation that customers may use our HTP and hold transcriptome miRNA panel for their studies as a result of the harmonized sample preparation protocol, the importance of the company's HTD transcriptome panel, statements related to the company's HTD therapeutics and drug discovery business, the impacts of recent hires, our planned white paper for specific drug discovery application, HTG becoming a disruptive hybrid life science drug discovery company, expected improvement in the coming quarters or future growth, business momentum and market opportunities and 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 as well as labor and supply chain issues and their impact 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 quarterly report on Form 10-Q for the quarter ended March 31, 2022, filed today with the SEC. 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, May 12, 2022, and the company undertakes no obligation to update any forward-looking statements. With that, I would like to turn the call over to John Lubniewski, Chief Executive Officer. John?

Thank you, Monique. As always, it's a privilege to present the results we've delivered during the past quarter to the hard work of our employees. With that said, it was a challenging quarter for our profiling business. Customer access is still not yet at pre-COVID levels, and we continue to experience delays in our sales cycle due to customer, labor, and supply chain issues. We saw continued market choppiness as we and our customers continue to pull out of the COVID pandemic. While most of our customers have been able to reopen their facilities over the past year, many continue to limit or restrict completely sales and support access to their sites. Further, labor and supply shortages throughout the industry have extended the time it takes to actually get samples to be collected and submitted for sample processing or for profiling in their customer laboratories. Q1 has historically been a lower revenue quarter for the company, and we've typically seen momentum build throughout the remainder of the year, and we expect 2022 to follow the same trend. Taking a closer look at our results, our revenue for this quarter was 1.2 million, compared with 1.4 million for the same period in 2021, primarily reflecting those ongoing delays in our sales cycle. Despite this lower revenue, we continue to see positive market adoption, for our exciting new HTP panel as it represented over 40% of our revenue for the quarter. We continue to rebuild and train our sales and marketing teams in the first quarter of 2022 and are optimistic about the talent we've been able to bring on board. We also hired an experienced commercial leader to focus on OEM opportunities for our HTP panel. We believe both of these moves, in addition to the growing HTP momentum, will drive additional profiling revenue in future periods. As mentioned earlier, we expect revenue to build throughout the remainder of 2022, resulting in full-year 2022 revenue reflecting robust growth over 2021. Of course, this assumes we don't experience any negative or sustained downturn in our sales cycle as a result of the pandemic or broader global economic issues. During the first quarter of 2022, we added four new customers and five new pharma programs. We also added eight new publications referencing HTG technology, bringing this total to over 360 publications. Our team also produced a fourth white paper focusing on our HTP product, this time highlighting the panel's performance in FFPE and extracted RNA when compared to RNA-seq. On the product development front, we continue to fire on all cylinders, reaching our Q1 strategic milestone of introducing a harmonized sample prep protocol that enables customers to use both the new HTP and the whole transcriptome microRNA panel together from a single lysase. We expect this will encourage customers to use both panels in their studies. In our drug discovery business, we made two significant advances. First, we were successful in recruiting Dr. Christina Carruthers from Moderna to lead our target strategy and early development initiatives. She's a significant addition to the team, and I'm confident that she's going to have a great impact on the program very quickly. We also achieved a major milestone in our technology development with the publication of our first proof of approach white paper. This was a major technical feasibility milestone. The white paper confirmed that we can use our advanced profiling technology to differentiate structurally similar small molecules based on transcriptomic profiles. We were able to also differentiate dose-related changes based on transcriptomic profiles. The specifics are as follows. We started with two human cell lines that we then treated with 12 mTOR inhibitors, four being rapamycin and three closely related analogs that we call rapalogs, as well as eight allosteric inhibitors of mTOR. And, as I alluded to a minute ago, we treated with two different dose levels. We then did full transcriptomic profiling of the cell lysates from those 24 samples, and here's what we found. First, our technical replicates were so good with Pearson correlations of 0.6 or better that we can use singlets when we profile. Next, with principal component analysis, we were able to see differential biology via expression analysis, not only in the rapalogs versus the other mTOR inhibitors, but also in the structurally similar rapalogs themselves. Following that, we were also able to see differential biology via expression analysis of the two different doses. And last, we were able to demonstrate directional alignment with the Broad Institute's CMAP link database, which is based on 978 landmark genes. So what does this mean? Well, it means that in a known system, mTOR, we were able to prove the utility of our advanced transcriptomic profiling technology and tie it back to a real and well-annotated database. So what's next? That will be the material for our white paper number two, where we're now going to take our technology and move to a specific drug discovery application. Specifically, we will use our proprietary chemical library and do our first initial screen on our first therapeutic target. This will start the iterative process that we expect will help us to design de-risk molecules, which we believe, through early informed selection, will stand a greater chance for development success. With the data we generated this quarter, we're even more confident that we can make a real difference in enabling a better way to do drug discovery. I'd now like to turn the call over to Sean for a deeper dive on our financials.