AXDX Accelerate Diagnostics Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

August 10, 2023

 

Accelerate Diagnostics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-31822		84-1072256
(Commission File Number)		(IRS Employer Identification No.)

 

3950 South Country Club Road, Suite 470, Tucson, Arizona		85714
(Address of principal executive offices)		(Zip Code)

 

(520) 365-3100

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value per share	AXDX	The Nasdaq Stock Market LLC (The Nasdaq Capital Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On August 10, 2023, Accelerate Diagnostics, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ending June 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference in its entirety.

 

In accordance with General Instruction B.2 for Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)           Exhibits.

 

Exhibit
Number		Description
99.1		Press Release, dated August 10, 2023
104		Cover Page Interactive Data File (cover page XBRL tags are embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	ACCELERATE DIAGNOSTICS, INC.
	(Registrant)
Date: August 10, 2023
	/s/ David Patience
	David Patience
	Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

Accelerate Diagnostics Reports Second Quarter 2023 Financial Results

 

TUCSON, Ariz., August 10, 2023 -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the second quarter for the period ended June 30, 2023.

 

“Throughout the quarter, we’ve significantly advanced our Wave Program,” stated Jack Phillips, CEO of Accelerate Diagnostics, Inc. “Our recent achievements underscore our commitment to delivering a Wave pre-clinical positive blood culture study by year-end. Moreover, we’re pleased with the ongoing progress of our BD partnership, resulting in the strongest quarter for US contracted instruments since 2021.”

 

Second Quarter 2023 Operating Highlights:

 

·

Added 13 contracted instruments during the quarter. Ended the quarter with 339 U.S. clinically live and revenue-generating instruments, with another 70 U.S. contracted instruments in the process of being implemented and not yet revenue-generating.

 

·

Continue to make significant progress with our Wave development program, now running 1,000 Wave cards a week with more than 100 million images taken to-date to support algorithm development.

 

·

BD commercial partnership continues to progress with more opportunities advancing further in the sales funnel with notable increases in sales funnel velocity.

 

·

Closed various Restructuring Transactions, to extend a portion of the current maturity, lower our overall debt outstanding and simplify our capital structure.

 

Second Quarter 2023 Financial Highlights:

 

·

Net sales were $2.9 million, compared to $3.9 million in the second quarter of the prior year. The decrease in revenues was driven by fewer capital instrument sales in the current quarter.

 

·

Gross margin was 27% for the quarter, compared to 28% in the second quarter of the prior year.

 

·

Selling, general, and administrative (SG&A) costs for the quarter were $7.6 million, compared to $11.5 million for the same quarter of the prior year. SG&A costs for the quarter excluding non-cash stock-based compensation were $6.3 million, compared to $8.3 million for the same quarter of the prior year. This decrease was driven by lower employee-related expenses.

 

·

Research and development (R&D) costs for the quarter were $5.8 million, compared to $7.6 million for the same quarter of the prior year. R&D costs excluding non-cash stock-based compensation expense for the quarter were $5.6 million, compared to $7.0 million for the same quarter of the prior year. This decline in expense driven by reductions of third-party partnership spend as our Wave program continues to advance.

 

·

GAAP net loss was $26.0 million dollars, resulting in a net loss per share of $2.36. Net Loss from Operations, excluding non-cash stock-based compensation expense was $10.9 million.

 

·

Net cash used in the quarter excluding financing was $15.2 million with notable debt and equity issuance costs for professional and legal fees related to our Restructuring Transactions and the company ended the quarter with total cash, investments, and cash equivalents of $30.7 million.

 

 

Year-to-date Financial 2023 Highlights

  

·

Net sales were $5.7 million year-to-date, compared to $6.8 million for the same period of the prior year. The decrease in revenues was driven by fewer capital instrument sales in the current year.

 

·

Gross margin was 32% year-to-date, compared to 28% for the same period of the prior year.

 

·

Selling, general, and administrative (SG&A) costs year-to-date were $17.7 million, compared to $22.2 million for the same period of the prior year. SG&A costs excluding non-cash stock-based compensation were $16.5 million year to date, compared to $16.5 million for the same period of the prior year.

 

·

Research and development (R&D) costs were $12.8 million year to date, compared to $13.6 million for the same period of the prior year. R&D costs excluding non-cash stock-based compensation expense were $11.9 million year to date, compared to $12.7 million for the same period of the prior year. This decline in expense driven by reductions of third-party partnership spend as our Wave program continues to advance.

 

·

GAAP Net loss was $42.8 million year-to-date, resulting in a net loss per share of $4.11. Net Loss from Operations, excluding non-cash stock-based compensation expense was $26.4 million.

 

·

Net cash used excluding financing was $28.9 million

 

The Company is finalizing its analysis of the accounting for the Restructuring Transactions.

 

All share and per share amounts have been retroactively adjusted for all periods presented to reflect the reverse stock split effected on July 11^th, 2023.

 

Full financial results for the quarter ended June 30, 2023 will be filed on Form 10-Q through the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov

 

Audio Webcast and Conference Call Today at 4:30 p.m. Eastern Time

 

To listen by phone, dial +1.877.883.0383 and enter the Elite Entry Number: 4614555. International participants may dial +1.412.902.6506. Please dial in 10-15 minutes prior to the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (International) using the replay code 8685802 until August 31, 2023.

 

This conference call will also be webcast and can be accessed from the company’s website at ir.axdx.com. A replay of the audio webcast will be available until August 31, 2023.

 

Non-GAAP Financial Measures

 

This press release contains certain financial measures that are not recognized measures under accounting principles generally accepted in the United States of America (“GAAP”), which include SG&A, R&D, and operating income (loss) amounts excluding stock-based compensation expenses.

 

Our management and board of directors use expenses excluding the cost of stock-based compensation (net of forfeitures) to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operating and financing plans. Accordingly, we believe that expenses excluding the cost of stock-based compensation provides useful information for investors in understanding and evaluating our operating results in the same manner as our management and our board of directors. Expenses excluding the cost of stock-based compensation is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, SG&A expenses, R&D expenses, and operating income (loss) reported in accordance with GAAP. The following tables present a reconciliation of SG&A expenses, R&D expenses and operating income (loss) excluding stock-based compensation to comparable GAAP measures for the periods indicated:

 

 

		Three Months Ended June 30,								Six Months Ended June 30,
		(in thousands)								(in thousands)
		2023				2022				2023				2022
Sales, General and Administrative		$	7,564			$	11,493			$	17,669			$	22,167
Non-cash equity-based compensation as a component of sales, general and administrative			1,299				3,204				1,159				5,646
Sales, general and administrative less non-cash equity-based compensation		$	6,266			$	8,289			$	16,510			$	16,521

 

		Three Months Ended June 30,								Six Months Ended June 30,
		(in thousands)								(in thousands)
		2023				2022				2023				2022
Research and Development		$	5,820			$	7,576			$	12,788			$	13,600
Non-cash equity-based compensation as a component of research and development			256				539				861				901
Research and development less non-cash equity-based compensation		$	5,563			$	7,037			$	11,927			$	12,699

 

		Three Months Ended June 30,								Six Months Ended June 30,
		(in thousands)								(in thousands)
		2023				2022				2023				2022
Loss from operations		$	(12,585	)		$	(17,989	)		$	(28,647	)		$	(33,884	)
Non-cash equity-based compensation as a component of loss from operations			1,653				3,971				2,208				6,950
Loss from operations less non-cash equity-based compensation		$	(10,932	)		$	(14,018	)		$	(26,439	)		$	(26,934	)

 

About Accelerate Diagnostics, Inc.

 

Accelerate Diagnostics, Inc. is an in vitro diagnostics company dedicated to providing solutions for the global challenges of antibiotic resistance and sepsis. The Accelerate Pheno® system and Accelerate PhenoTest® BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for deadly infections. The FDA cleared system and kit fully automate the sample preparation steps to report phenotypic antibiotic susceptibility results in approximately 7 hours direct from positive blood cultures. Recent external studies indicate the solution offers results 1-2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient days earlier.

 

"Accelerate Diagnostics" and diamond shaped logos and marks are registered trademarks of Accelerate Diagnostics, Inc. Any trade, product or service name referenced in this document using the name "Accelerate" is a trademark and/or property of Accelerate Diagnostics, Inc. All other company and product names may be trademarks, registered trademarks, or service marks of the companies with which they are associated.

 

 

For more information about the company, its products and technology, or recent publications, visit axdx.com.

 

Forward-Looking Statements

 

Certain of the statements made in this press release are forward-looking or may have forward-looking implications. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics is contained in the section captioned “Risk Factors” in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2023, and in any other reports that the company files with the Securities and Exchange Commission. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.

 

###

 

For further information: Investor Inquiries & Media Contact: Laura Pierson, Accelerate Diagnostics, +1 520 365-3100, investors@axdx.com

 

Source: Accelerate Diagnostics Inc.

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(in thousands, except share data)

 

		June 30,				December 31,
		2023				2022
		Unaudited
ASSETS
Current assets:
Cash and cash equivalents		$	29,282			$	34,905
Investments			1,423				10,656
Trade accounts receivable, net			2,342				2,416
Inventory			5,106				5,194
Prepaid expenses			1,274				818
Other current assets			2,812				2,025
Total current assets			42,239				56,014
Property and equipment, net			2,896				3,478
Finance lease assets, net			2,091				2,422
Operating lease right of use assets, net			1,527				1,859
Other non-current assets			1,125				1,242
Total assets		$	49,878			$	65,015
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	4,033			$	4,501
Accrued liabilities			3,229				2,682
Accrued interest			348				472
Deferred revenue			478				547
Current portion of convertible notes			726				56,413
Finance lease, current			1,180				1,113
Operating lease, current			936				829
Derivative liability			42,786				—
Total current liabilities			53,716				66,557
Finance lease, non-current			375				782
Operating lease, non-current			1,064				1,545
Other non-current liabilities			1,097				874
Accrued interest related-party			—				663
Long-term debt related-party			—				16,858
Convertible notes			32,289				—
Total liabilities		$	88,541			$	87,279
Stockholders’ deficit:
Preferred shares, $0.001 par value;
5,000,000 preferred shares authorized with no shares issued and outstanding on June 30, 2023 and 5,000,000 preferred shares authorized with 395,455 shares issued and outstanding on December 31, 2022			—				—
Common stock, $0.001 par value;
450,000,000 common shares authorized with 14,357,953 shares issued and outstanding on June 30, 2023 and 200,000,000 common shares authorized with 9,747,755 shares issued and outstanding on December 31, 2022			14				10
Contributed capital			657,057				630,432
Treasury stock			(45,067	)			(45,067	)
Accumulated deficit			(650,014	)			(607,239	)
Accumulated other comprehensive loss			(653	)			(400	)
Total stockholders’ deficit			(38,663	)			(22,264	)
Total liabilities and stockholders’ deficit		$	49,878			$	65,015

 

See accompanying notes to condensed consolidated financial statements.

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)

 

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2023				2022				2023				2022
Net sales		$	2,921			$	3,861			$	5,733			$	6,820
Cost of sales			2,122				2,781				3,923				4,937
Gross profit			799				1,080				1,810				1,883
Costs and expenses:
Research and development			5,820				7,576				12,788				13,600
Sales, general and administrative			7,564				11,493				17,669				22,167
Total costs and expenses			13,384				19,069				30,457				35,767
Loss from operations			(12,585	)			(17,989	)			(28,647	)			(33,884	)
Other (expense) income:
Interest expense			(1,175	)			(713	)			(1,593	)			(1,630	)
Interest expense related-party			(804	)			—				(1,817	)			—
(Loss) gain on extinguishment of debt			(6,550	)			199				(6,550	)			3,565
(Loss) on financial instruments			(5,030	)			—				(5,030	)			—
Foreign currency exchange gain			25				31				258				40
Interest income			255				56				675				78
Other income (expense), net			40				(107	)			85				(157	)
Total other (expense) income, net			(13,239	)			(534	)			(13,972	)			1,896
Net loss before income taxes			(25,824	)			(18,523	)			(42,619	)			(31,988	)
Provision for income taxes			(156	)			—				(156	)			—
Net loss		$	(25,980	)		$	(18,523	)		$	(42,775	)		$	(31,988	)
Basic and diluted net loss per share		$	(2.36	)		$	(2.43	)		$	(4.11	)		$	(4.44	)
Weighted average shares outstanding			11,009				7,623				10,420				7,200
Other comprehensive loss:
Net loss		$	(25,980	)		$	(18,523	)		$	(42,775	)		$	(31,988	)
Net unrealized gain (loss) on debt securities available-for-sale			4				(39	)			28				(132	)
Foreign currency translation adjustment			(26	)			(161	)			(281	)			(240	)
Comprehensive loss		$	(26,002	)		$	(18,723	)		$	(43,028	)		$	(32,360	)

  

See accompanying notes to condensed consolidated financial statements.

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)

 

		Six Months Ended
		June 30,				June 30,
		2023				2022
Cash flows from operating activities:
Net loss		$	(42,775	)		$	(31,988	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,617				1,435
Amortization of investment discount			—				79
Equity-based compensation			2,208				6,950
Amortization of debt discount and issuance costs			692				284
Amortization of debt discount related-party			1,033				—
Loss on disposal of property and equipment			68				283
Unrealized (gain) loss on equity investments			(90	)			157
Loss (gain) on extinguishment of debt			6,550				(3,565	)
Loss on derivative			5,030				—
(Increase) decrease in assets:
Contributions to deferred compensation plan			—				(110	)
Accounts receivable			74				(615	)
Inventory			(30	)			(416	)
Prepaid expense and other			(78	)			(719	)
Increase (decrease) in liabilities:
Accounts payable			(451	)			658
Accrued liabilities and other			125				2,288
Accrued interest			900				(159	)
Accrued interest from related-party			784				—
Deferred revenue and income			(69	)			(116	)
Deferred compensation			223				(51	)
Net cash used in operating activities			(24,189	)			(25,605	)
Cash flows from investing activities:
Purchases of equipment			(167	)			(447	)
Purchase of marketable securities			—				(27,504	)
Maturities of marketable securities			9,291				18,738
Net cash provided (used) by investing activities			9,124				(9,213	)
Cash flows from financing activities:
Common stock to related party			4,000				—
Payments on finance leases			(540	)			(424	)
Proceeds from exercise of options			—				7
Proceeds from issuance of common stocks under employee purchase plan			—				137
Proceeds from issuance of convertible notes			10,000				—
Transaction costs related to debt and equity issuance			(3,731	)			—
Net cash (used) provided by financing activities			9,729				(280	)
Effect of exchange rate on cash			(287	)			(219	)
Decrease in cash and cash equivalents			(5,623	)			(35,317	)
Cash and cash equivalents, beginning of period			34,905				39,898
Cash and cash equivalents, end of period		$	29,282			$	4,581
Non-cash investing activities:
Net transfer of instruments from inventory to property and equipment		$	88			$	202
Non-cash financing activities:
Extinguishment of 2.50% Convertible Senior Notes (the “2.5% Notes”) through issuance of common stock		$	—			$	10,180
Capital contribution from the exchange of secured note and accrued interest through the issuance of common stock with related party		$	25,363			$	—
Loss from the exchange of secured note and accrued interest through the issuance of common stock with related party		$	6,059			$	—
Capital contribution from the issuance of put option with related party		$	1,336			$	—
Exchange of 2.5% Notes and accrued interest for 5.0% Convertible Senior Notes (the “5.0% Notes”)		$	56,893			$	—
Debt premium on issuance of 5.0% Notes		$	6,023			$	—
Bifurcated derivative liability		$	38,160			$	—
Supplemental cash flow information:
Interest paid		$	—			$	1,506

 

See accompanying notes to condensed consolidated financial statements.

 

v3.23.2

Cover	Aug. 10, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 10, 2023
Entity File Number	001-31822
Entity Registrant Name	Accelerate Diagnostics, Inc.
Entity Central Index Key	0000727207
Entity Tax Identification Number	84-1072256
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3950 South Country Club Road
Entity Address, Address Line Two	Suite 470
Entity Address, City or Town	Tucson
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85714
City Area Code	520
Local Phone Number	365-3100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	AXDX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

---