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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