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HTG Molecular Diagnostics Files for Chapter 11 Bankruptcy

NEW YORK – HTG Molecular Diagnostics announced on Monday that it has filed for Chapter 11 bankruptcy protection.

The Tucson, Arizona-based company filed its Chapter 11 petition in the US Bankruptcy Court for the District of Delaware. HTG Molecular said it will operate its business as a “debtor-in-possession” under the court's jurisdiction and has filed motions with the court seeking a variety of “first-day” relief to facilitate its ability to continue operating in the ordinary course of business.

According to the company’s bankruptcy petition, the filing of the case “constituted an event of default” that accelerated all of the company’s obligations under the loan agreement with Silicon Valley Bank, which is now a division of First-Citizens Bank and Trust Company. HTG Molecular's outstanding principal amount was about $2.7 million, in addition to accrued interest, applicable fees, and other financial obligations.

The company also indicated in the petition that it notified Byron Lawson, its senior VP and chief commercial officer, on June 1 of his termination of employment, which took effect the day after.

In connection with his termination, the company has entered into a consulting agreement with Lawson under which he has agreed to provide transition services to the company for a period anticipated to be one month in exchange for approximately $23,000 in compensation.

HTG Molecular reported last month that its Q1 2023 revenues were $1.0 million, with a net loss of $5.1 million. The company also issued 1.3 million additional common shares in December 2022 to raise approximately $10 million in gross proceeds.