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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) May 4, 2020

 

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 (see General Instruction A.2. below):

 

¨ 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 May 7, 2020, Accelerate Diagnostics, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ending March 31, 2020. 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On May 4, 2020, Romney Humphries notified the Company of her intention to resign as Chief Scientific Officer of the Company effective June 30, 2020.

 

In connection with Dr. Humphries’ resignation, the Company and Dr. Humphries entered into a Consulting Services Agreement (the “Agreement”), dated May 5, 2020, pursuant to which Dr. Humphries has agreed to provide certain consulting and transitional services to the Company beginning July 1, 2020 through December 31, 2020, or until earlier terminated in accordance with the Agreement. The Company will pay Dr. Humphries a flat rate per week for up to 10 hours per week for her services. Pursuant to the Agreement, Dr. Humphries has also agreed to certain covenants regarding non-competition, non-disparagement, confidentiality and intellectual proprietary rights.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)           Exhibits. 

 

Exhibit    
Number   Description
     
99.1   Press Release, dated May 7, 2020
     
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: May 7, 2020  
  /s/ Steve Reichling
  Steve Reichling
  Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

Accelerate Diagnostics Announces First Quarter Financial Results and Provides COVID-19 Business Updates

 

TUCSON, Ariz., May 7, 2020 /PRNewswire/ -- Accelerate Diagnostics, Inc. (NASDAQ: AXDX), today announced financial results for the quarter ending March 31, 2020 and provided a business update regarding the impact of the ongoing COVID-19 pandemic on the Company’s operations.

“Our first quarter got off to a solid start, as sales, new contracts, and go-lives all progressed as anticipated through January and February. As we moved into March, hospitals began shifting their focus toward preparing for and treating COVID-19 patients, and these shifting priorities, along with meaningful restrictions on hospital access, led to lower-than-expected new contracts and go-lives for the quarter,” commented Jack Phillips, Chief Executive Officer of Accelerate Diagnostics, Inc. “However, we are adapting our business to maximize our commercial execution in the near term, and we will continue to work diligently on our longer-term initiatives to strengthen our commercial foundation and expand our portfolio of innovative, life-saving products.”

 

2020 First Quarter Financial and Operational Highlights

 

§ Added 13 net new global commercially contracted instruments, including 21 new U.S. contracted instruments.
§ Live U.S. Pheno instruments at the end of the first quarter were 197, with another 239 U.S. contracted Pheno instruments not yet live.
§ Net sales for the first quarter of $2.3 million, compared to $1.8 million in the first quarter of 2019.
§ Gross margin was 45% for the quarter, compared to 48% in the first quarter of 2019.
§ Selling, general, and administrative expenses for the quarter were $12.9 million, compared to $12.7 million in the first quarter of 2019.
§ Research and development (R&D) costs for the quarter were $5.8 million, compared to $6.9 million in the first quarter of 2019.
§ Net loss was $21.3 million in the first quarter, or $0.39 per share, which included $4.2 million in non-cash stock-based compensation expense.
§ Net cash used in the quarter was $16.4 million, and the Company ended the quarter with total cash, investments, and cash equivalents of $92.0 million.
§ Entered into a commercial collaboration agreement with BioCheck, Inc., San Francisco, U.S., including their affiliate, Sophonix Ltd., Beijing, China, to sell serology-based SARS-COV-2 antibody tests (IgG and IgM) in the U.S. and EMEA, as disclosed in a press release dated April 14th, 2020.

 

Full financial results for the quarter ending March 31, 2020 will be filed on Form 10-Q through the Securities and Exchange Commission's (SEC) website at http://www.sec.gov.

 

First Quarter 2020 Results Conference Call Information

 

The company will review full financial results for the first quarter of 2020 after the market close on Thursday, May 7, 2020. The company’s management will host a conference call at 4:30 p.m. Eastern Time that same day to review the results. To listen to the audio webcast online, visit ir.axdx.com. A replay of the audio webcast will be available until August 7, 2020.

 

To listen by phone, dial +1.877.883.0383 and enter the conference ID: 8692081

International participants may dial +1.412.317.6506. 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 10141855 until May 21, 2020.

 

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.

 

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The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and "ACCELERATE PHENOTEST" and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.

 

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, such as, among others, Mr. Phillips statements about adapting our business to maximize our commercial execution in the near term and our longer-term initiative to strengthen our commercial foundation and expand our portfolio of products. 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 February 27, 2020, 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.

 

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEET

(in thousands, except share data)

 

 

    March 31,     December 31,  
    2020     2019  
    Unaudited        
ASSETS
Current assets:                
Cash and cash equivalents   $ 39,487     $ 61,014  
Investments     52,525       47,437  
Trade accounts receivable     3,143       3,222  
Inventory     8,527       8,059  
Prepaid expenses     1,771       955  
Other current assets     1,291       1,165  
Total current assets     106,744       121,852  
Property and equipment, net     8,639       7,905  
Right of use assets     3,742       3,917  
Other non-current assets     868       750  
Total assets   $ 119,993     $ 134,424  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 3,401     $ 2,351  
Accrued liabilities     2,428       3,828  
Accrued interest     191       1,262  
Deferred revenue     186       271  
Current operating lease liability     453       450  
Total current liabilities     6,659       8,162  
Non-current operating lease liability     3,466       3,579  
Other non-current liabilities     93       19  
Convertible notes     132,717       130,043  
Total liabilities   $ 142,935     $ 141,803  
                 
Commitments and contingencies                
                 
Stockholders’ deficit:                
Preferred shares, $0.001 par value;                
5,000,000 preferred shares authorized and none outstanding as of March 31, 2020 and December 31, 2019            
Common stock, $0.001 par value;                
85,000,000 common shares authorized with 54,993,588 shares issued and outstanding on March 31, 2020 and 85,000,000 common shares authorized with 54,708,792 shares issued and outstanding on December 31, 2019     55       55  
Contributed capital     457,987       452,344  
Treasury stock     (45,067 )     (45,067 )
Accumulated deficit     (436,067 )     (414,653 )
Accumulated other comprehensive income (loss)     150       (58 )
Total stockholders’ deficit     (22,942 )     (7,379 )
Total liabilities and stockholders’ deficit   $ 119,993     $ 134,424  

 

See accompanying notes to condensed consolidated financial statements.

 

 

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)

 

    Three Months Ended  
    March 31,     March 31,  
    2020     2019  
Net sales   $ 2,342     $ 1,750  
                 
Cost of sales     1,287       916  
Gross profit     1,055       834  
                 
Costs and expenses:                
Research and development     5,842       6,933  
Sales, general and administrative     12,943       12,723  
Total costs and expenses     18,785       19,656  
                 
Loss from operations     (17,730 )     (18,822 )
                 
Other income (expense):                
Interest expense     (3,749 )     (3,459 )
Foreign currency exchange loss     (128 )     (59 )
Interest income     380       842  
Other expense, net     (82 )     (2 )
Total other expense, net     (3,579 )     (2,678 )
                 
Net loss before income taxes     (21,309 )     (21,500 )
Provision for income taxes           (221 )
Net loss   $ (21,309 )   $ (21,721 )
                 
Basic and diluted net loss per share   $ (0.39 )   $ (0.40 )
Weighted average shares outstanding     54,837       54,337  
                 
Other comprehensive loss:                
Net loss   $ (21,309 )   $ (21,721 )
Net unrealized gain on debt securities available-for-sale     223       121  
Foreign currency translation adjustment     (15 )     (76 )
Comprehensive loss   $ (21,101 )   $ (21,676 )

  

See accompanying notes to condensed consolidated financial statements.

 

 

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)

 

    Three Months Ended  
    March 31,     March 31,  
    2020     2019  
Cash flows from operating activities:                
Net loss   $ (21,309 )   $ (21,721 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     755       626  
Amortization of investment discount     (4 )     (180 )
Equity-based compensation     4,199       3,397  
Provision for bad debt expense     8        
Amortization of debt discount and issuance costs     2,674       2,387  
Unrealized loss on equity investments     8        
Realized loss (gain) on sale of investments     3       (2 )
Loss on disposal of property and equipment     432       329  
(Increase) decrease in assets:                
Accounts receivable     (9 )     (90 )
Inventory     (1,735 )     (1,567 )
Prepaid expense and other     (1,030 )     (1,041 )
Increase (decrease) in liabilities:                
Accounts payable     968       1,151  
Accrued liabilities, and other     (1,475 )     (1,790 )
Accrued interest     (1,071 )     (1,071 )
Deferred revenue and income     (85 )     74  
Deferred compensation     74       (7 )
Net cash used in operating activities     (17,597 )     (19,505 )
                 
Cash flows from investing activities:                
Purchases of equipment     (438 )     (37 )
Purchase of marketable securities     (21,582 )     (12,826 )
Proceeds from sales of marketable securities           9,000  
Maturities of marketable securities     16,664       28,662  
Net cash (used in) provided by investing activities     (5,356 )     24,799  
                 
Cash flows from financing activities:                
Proceeds from issuance of common stock     111       139  
Proceeds from exercise of options     1,318       3,677  
Net cash provided by financing activities     1,429       3,816  
                 
Effect of exchange rate on cash     (3 )     (61 )
                 
(Decrease) increase in cash and cash equivalents     (21,527 )     9,049  
Cash and cash equivalents, beginning of period     61,014       66,260  
Cash and cash equivalents, end of period   $ 39,487     $ 75,309  

  

See accompanying notes to condensed consolidated financial statements.

 

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (CONTINUED)

Unaudited

(in thousands)

 

    Three Months Ended  
    March 31,     March 31,  
    2020     2019  
Non-cash investing activities:                
Transfer of instruments from inventory to property and equipment   $ 1,282     $ 769  
Supplemental cash flow information:                
Interest paid   $ 2,144     $ 2,144  
Income taxes paid, net of refunds   $ 26     $ 2  

  

See accompanying notes to condensed consolidated financial statements.

 

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' DEFICIT

Unaudited

(in thousands)

 

    Three Months Ended  
    March 31,  
    2020     2019  
Common stock shares outstanding                
Beginning     54,709       54,232  
Exercise of options     270       215  
Issuance of common stock under employee purchase plan     15       7  
Ending     54,994       54,454  
                 
Common stock                
Beginning   $ 55     $ 54  
Ending   $ 55     $ 54  
                 
Contributed capital                
Beginning   $ 452,344     $ 432,885  
Exercise of options     1,318       3,677  
Issuance of common stock under employee purchase plan     111       139  
Equity based compensation     4,214       3,453  
Ending   $ 457,987     $ 440,154  

  

See accompanying notes to consolidated financial statements.

  

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)

Unaudited

(in thousands)

 

    Three Months Ended  
    March 31,  
    2020     2019  
Accumulated deficit                
Beginning   $ (414,653 )   $ (330,348 )
Cumulative effect of accounting changes     (105 )      
Net loss     (21,309 )     (21,721 )
Ending   $ (436,067 )   $ (352,069 )
                 
Treasury stock                
Beginning   $ (45,067 )   $ (45,067 )
Ending   $ (45,067 )   $ (45,067 )
                 
Accumulated other comprehensive (loss) income                
Beginning   $ (58 )   $ (149 )
Net unrealized gain on debt securities available-for-sale     223       121  
Foreign currency translation adjustment     (15 )     (76 )
Ending   $ 150     $ (104 )
                 
Total stockholders' (deficit)   $ (22,942 )   $ 42,968  

 

 

See accompanying notes to consolidated financial statements.

 

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