Delaware
|
84-1072256
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
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)
|
Large accelerated filer
|
|
☑
|
Accelerated filer
|
|
☐
|
Non-accelerated file
|
|
☐
|
Smaller reporting company
|
|
☐
|
Emerging growth company
|
|
☐
|
•
|
In June 2012, the Company raised $14.4 million through the sale of common stock to Abeja Ventures, LLC.
|
•
|
In March 2013, the Company obtained additional capital through the exercise of warrants issued to Abeja Ventures, LLC in the aggregate amount of $20.1 million.
|
•
|
In August 2013, the Company completed a rights offering that raised gross proceeds of $20.0 million.
|
•
|
In April 2014, the Company completed a rights offering that raised gross proceeds of $45.0 million.
|
•
|
In December 2015, the Company completed a publicly marketed common stock offering that raised gross proceeds of $109.3 million.
|
•
|
In May 2017, the Company completed another publicly marketed common stock offering that raised additional gross proceeds of $89.0 million.
|
•
|
In March 2018, the Company completed a convertible debt offering providing additional gross proceeds of $171.5 million.
|
•
|
Automated specimen preparation. The initial step in the process is the automated purification of samples through an on-board and proprietary process to separate live organisms from sample debris.
|
•
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Live-cell immobilization. Following preparation, the purified sample is moved to the imaging cassette where pathogens are immobilized onto the cassette surface such that they can be imaged and analyzed in a stationary position during the identification and antibiotic susceptibility testing.
|
•
|
Identification testing via fluorescent in situ hybridization (FISH). The now immobilized cells are tested with our proprietary FISH probes to enable identification. Because the genetic sequences of bacteria are distinctive, the binding of fluorescently labeled probes indicates the presence of a specific target sequence of RNA associated with a single or group of bacterial species or yeasts. When the probe finds a targeted sequence, it binds to it—generating a fluorescent signal—which is visible by the imaging system on the Accelerate Pheno system. Positive fluorescent signals from more than one target probe indicate polymicrobial samples and a universal bacterial stain discriminates target from non-target bacteria or fungi. The identification result is presented on the Accelerate Pheno system's graphic user interface in approximately 90 minutes from the introduction of the sample into the Accelerate Pheno system.
|
•
|
Susceptibility testing via live-cell optical analysis. With the identification of the pathogen known, the system’s software determines the antibiotic panel to be used for susceptibility testing. These antibiotics, growth media, and additional patient sample are introduced to additional channels on the optical cassette. Finally, our proprietary imaging platform and algorithms determine the minimum inhibitory concentration of the bacteria by observing which antibiotics arrested live cell growth and led to cell death and which antibiotics were ineffective in ceasing live cell growth. The susceptibility test result is presented approximately five hours after the conclusion of the identification test.
|
•
|
design, development, manufacturing, and storage;
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•
|
testing, content, and language of instructions for use and storage;
|
•
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labeling;
|
•
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pre-clinical testing and clinical trials;
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•
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product safety;
|
•
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advertising, promotion, marketing, sales, and distribution;
|
•
|
pre-market clearance and approval;
|
•
|
record-keeping procedures;
|
•
|
advertising and promotion;
|
•
|
recalls and corrective field actions;
|
•
|
post-market reporting, including reporting of deaths, serious injuries, and malfunctions that, if they were to recur, could lead to death or serious injury;
|
•
|
post-market studies and surveillance; and
|
•
|
product import and export.
|
•
|
the QSR, which imposes elaborate development, testing, control, documentation, and other quality assurance requirements on the design and manufacturing process;
|
•
|
establishment registration, which requires establishments involved in the production and distribution of medical devices, intended for commercial distribution in the United States, to register with the FDA;
|
•
|
medical device listing, which requires manufacturers to list the devices they have in commercial distribution with the FDA;
|
•
|
labeling regulations and various statutory provisions, which prohibit false or misleading labeling, as well as the promotion of products for unapproved or “off-label” uses, and impose other restrictions on labeling; and
|
•
|
post-market reporting requirements, which require that manufacturers report to the FDA deaths, serious injuries, and malfunctions that, if they were to recur, could lead to death or serious injury, recalls, and corrective field actions.
|
•
|
untitled letters or warning letters;
|
•
|
fines, injunctions, and civil penalties;
|
•
|
mandatory recall or seizure of our products;
|
•
|
administrative detention or banning of our products;
|
•
|
operating restrictions, partial suspension, or total shutdown of production;
|
•
|
import holds;
|
•
|
refusing to approve pending 510(k) notifications or PMAs;
|
•
|
revocation of 510(k) clearance or pre-market approvals previously granted; and
|
•
|
criminal prosecution and penalties.
|
•
|
the expenses we incur for research and development required to maintain and improve our technology, including the continuing development of the Accelerate Pheno system;
|
•
|
the expenses we incur in connection with the development, marketing authorization and regulatory clearance of the use of the Accelerate Pheno system to test on additional specimen types;
|
•
|
the costs of preparing, filing, prosecuting, defending and enforcing patent claims and other intellectual property related costs, including litigation costs and the results of such litigation;
|
•
|
the expenses we incur in connection with commercialization activities, including product marketing, sales and distribution expenses;
|
•
|
the costs incurred to build manufacturing capabilities;
|
•
|
the expenses to implement our sales strategy;
|
•
|
the costs to attract and retain personnel with the skills required for effective operations; and
|
•
|
the costs associated with being a public company.
|
•
|
required compliance with existing and changing foreign healthcare and other regulatory requirements and laws, such as those relating to patient privacy or handling of bio-hazardous waste;
|
•
|
required compliance with anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, data privacy requirements, labor laws and anti-competition regulations;
|
•
|
export and import restrictions;
|
•
|
various reimbursement and insurance regimes;
|
•
|
laws and business practices favoring local companies;
|
•
|
longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
|
•
|
political and economic instability;
|
•
|
potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers;
|
•
|
foreign exchange controls;
|
•
|
fluctuations due to changes in foreign currency exchange rates;
|
•
|
difficulties and costs of staffing and managing foreign operations; and
|
•
|
impediments with protecting or procuring intellectual property rights.
|
•
|
changes in pre-tax income in various jurisdictions in which we operate that have differing statutory tax rates;
|
•
|
increases in corporate tax rates and the availability of deductions or credits in the United States and elsewhere;
|
•
|
changes in tax laws, regulations, and/or interpretations of such tax laws in multiple jurisdictions, including but not limited to U.S. federal and state regulations or interpretations resulting from the Tax Cuts and Jobs Act of 2017;
|
•
|
tax effects related to purchase accounting for acquisitions; and
|
•
|
resolutions of issues arising from tax examinations and any related interest or penalties.
|
•
|
reliance on third parties for regulatory compliance and quality assurance;
|
•
|
possible breaches of manufacturing agreements by the third parties because of factors beyond our control;
|
•
|
possible regulatory violations or manufacturing problems experienced by our suppliers;
|
•
|
possible termination or non-renewal of agreements by third parties, based on their own business priorities, at times that are costly or inconvenient for us;
|
•
|
the potential obsolescence and/or inability of our suppliers to obtain required components;
|
•
|
the potential delays and expenses of seeking alternate sources of supply or manufacturing services;
|
•
|
the inability to qualify alternate sources without impacting performance claims of our products;
|
•
|
reduced control over pricing, quality and timely delivery due to the difficulties in switching to alternate suppliers or assemblers; and
|
•
|
increases in prices of raw materials and key components.
|
•
|
The federal Anti-Kickback Statute, which prohibits persons from knowingly and willfully offering, providing, soliciting, or receiving any remuneration, directly or indirectly, in exchange for or to induce the referral of an individual, or the purchasing, leasing, ordering, recommending, furnishing or arranging for a good or service, for which payment may be made under a federal health care program, such as Medicare or Medicaid.
|
•
|
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits knowingly and willfully (i) executing a scheme to defraud any health care benefit program, including private payers, or (ii) falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for items or services under a health care benefit program.
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, which also restricts the use and disclosure of protected health information, mandates the adoption of standards relating to the privacy and security of protected health information, and requires us to report certain security breaches to health care provider customers with respect to such information where we are acting as a HIPAA business associate to that customer.
|
•
|
The federal Physician Payment Sunshine Act, which requires manufacturers of certain medical devices to track payments or other transfers of value given to U.S. licensed physicians or teaching hospitals and to report this data to CMS annually for subsequent public disclosure.
|
•
|
The federal False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal health care program. The qui tam provisions of the False Claims Act allow a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government and to share in any monetary recovery.
|
•
|
administrative or judicially imposed sanctions;
|
•
|
injunctions or the imposition of civil penalties;
|
•
|
recall or seizure of our products;
|
•
|
reportable events;
|
•
|
total or partial suspension of production or distribution;
|
•
|
withdrawal or suspension of marketing clearances or approvals;
|
•
|
clinical holds;
|
•
|
warning letters;
|
•
|
refusal to permit the import or export of our products;
|
•
|
criminal prosecution; and
|
•
|
exclusion or debarment from participation in federal health care programs such as Medicare and Medicaid.
|
•
|
we may not be able to demonstrate to the FDA’s satisfaction that our product candidates are safe and effective, sensitive and specific diagnostic tests, for their intended users;
|
•
|
the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and
|
•
|
the manufacturing process or facilities we or our contract manufacturers use may not meet applicable requirements.
|
•
|
our ability to obtain marketing authorization from the FDA or clearance from the FDA to market our product candidates;
|
•
|
market acceptance of our product candidates, if cleared;
|
•
|
the cost and timing of establishing sales, marketing and distribution capabilities;
|
•
|
the cost of our research and development activities;
|
•
|
the ability of healthcare providers to obtain coverage and adequate reimbursement by third-party payers for procedures using our products;
|
•
|
the cost and timing of marketing authorization or regulatory clearances;
|
•
|
the cost of goods associated with our product candidates;
|
•
|
the cost of customer disruptions due to supply disruptions;
|
•
|
the effect of competing technological and market developments; and
|
•
|
the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates.
|
•
|
heighten our vulnerability to adverse general economic conditions and heightened competitive pressures;
|
•
|
require us to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and industry; and
|
•
|
impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes.
|
|
Dec-14
|
Dec-15
|
Dec-16
|
Dec-17
|
Dec-18
|
Dec-19
|
Accelerate Diagnostics, Inc.
|
100.00
|
111.99
|
108.13
|
136.53
|
59.93
|
88.07
|
NASDAQ Composite
|
100.00
|
106.96
|
116.45
|
150.96
|
146.67
|
200.49
|
NASDAQ Biotechnology
|
100.00
|
111.77
|
87.91
|
106.92
|
97.45
|
121.91
|
Equity Compensation Plan
|
|||||||
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the 1st column)
|
||||
Equity compensation plans approved by security holders
|
10,146,894
|
|
$
|
12.26
|
|
2,796,543
|
|
Equity compensation plans not approved by security holders
|
—
|
|
—
|
|
—
|
|
|
Total
|
10,146,894
|
|
$
|
12.26
|
|
2,796,543
|
|
Selected Consolidated Financial Data
(in thousands except per share data)
|
|||||||||||||||
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Net sales
|
$
|
9,297
|
|
$
|
5,670
|
|
$
|
4,177
|
|
$
|
246
|
|
$
|
147
|
|
Loss from operations
|
(72,831
|
)
|
(80,369
|
)
|
(64,184
|
)
|
(66,501
|
)
|
(45,549
|
)
|
|||||
Net loss
|
(84,305
|
)
|
(88,326
|
)
|
(64,028
|
)
|
(66,374
|
)
|
(45,498
|
)
|
|||||
Basic and diluted loss per share (1)
|
(1.55
|
)
|
(1.62
|
)
|
(1.18
|
)
|
(1.29
|
)
|
(1.01
|
)
|
|||||
Cash dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Total assets
|
$
|
134,424
|
|
$
|
185,265
|
|
$
|
125,512
|
|
$
|
82,852
|
|
$
|
139,324
|
|
Other long term liabilities (2)
|
3,598
|
|
53
|
|
21
|
|
—
|
|
—
|
|
|||||
Long term debt
|
130,043
|
|
120,074
|
|
—
|
|
—
|
|
—
|
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Net sales
|
$
|
9,297
|
|
$
|
5,670
|
|
$
|
3,627
|
|
64
|
%
|
|
$
|
5,670
|
|
$
|
4,177
|
|
$
|
1,493
|
|
36
|
%
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Cost of sales
|
$
|
4,897
|
|
$
|
3,187
|
|
$
|
1,710
|
|
54
|
%
|
|
$
|
3,187
|
|
$
|
1,002
|
|
$
|
2,185
|
|
218
|
%
|
Gross profit
|
$
|
4,400
|
|
$
|
2,483
|
|
$
|
1,917
|
|
77
|
%
|
|
$
|
2,483
|
|
$
|
3,175
|
|
$
|
(692
|
)
|
(22
|
)%
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Research and development
|
$
|
25,345
|
|
$
|
27,638
|
|
$
|
(2,293
|
)
|
(8
|
)%
|
|
$
|
27,638
|
|
$
|
22,301
|
|
$
|
5,337
|
|
24
|
%
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Sales, general and administrative
|
$
|
51,886
|
|
$
|
55,214
|
|
$
|
(3,328
|
)
|
(6
|
)%
|
|
$
|
55,214
|
|
$
|
45,058
|
|
$
|
10,156
|
|
23
|
%
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Loss from operations
|
$
|
(72,831
|
)
|
$
|
(80,369
|
)
|
$
|
7,538
|
|
(9
|
)%
|
|
$
|
(80,369
|
)
|
$
|
(64,184
|
)
|
$
|
(16,185
|
)
|
25
|
%
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Total other income (expense), net
|
$
|
(11,585
|
)
|
$
|
(7,746
|
)
|
$
|
(3,839
|
)
|
50
|
%
|
|
$
|
(7,746
|
)
|
$
|
649
|
|
$
|
(8,395
|
)
|
(1,294
|
)%
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||||||||||
Benefit (provision) for income taxes
|
$
|
111
|
|
$
|
(211
|
)
|
$
|
322
|
|
(153
|
)%
|
|
$
|
(211
|
)
|
$
|
(493
|
)
|
$
|
282
|
|
(57
|
)%
|
Cash Flow Summary
(in thousands) |
|||||||||
|
2019
|
2018
|
2017
|
||||||
Net cash used in operating activities
|
$
|
(64,794
|
)
|
$
|
(67,756
|
)
|
$
|
(55,746
|
)
|
Net cash provided by (used in) investing activities
|
52,811
|
|
(20,138
|
)
|
(25,728
|
)
|
|||
Net cash provided by financing activities
|
6,823
|
|
125,771
|
|
90,427
|
|
Payments due by Period
(in thousands)
|
||||||||||||||||||
Contractual Obligations
|
Total
|
2020
|
2021
|
2022
|
2023
|
2024
|
||||||||||||
Operating Lease Obligations
|
$
|
4,352
|
|
$
|
698
|
|
$
|
752
|
|
$
|
879
|
|
$
|
968
|
|
$
|
1,055
|
|
Convertible Notes
|
171,500
|
|
—
|
|
—
|
|
—
|
|
171,500
|
|
—
|
|
||||||
Total
|
$
|
175,852
|
|
$
|
698
|
|
$
|
752
|
|
$
|
879
|
|
$
|
172,468
|
|
$
|
1,055
|
|
•
|
Identification of the contract with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations
|
•
|
Recognition of revenue as we satisfy a performance obligation
|
•
|
Volatility: The expected volatility is based on the historical volatility of the Company's stock price over the most recent period commensurate with the expected term of the stock option award.
|
•
|
Expected term: The estimated expected term for employee awards is based on the calculation published by the SEC in SAB110 for use when there is not a sufficient history of employee exercise patterns. For consultant awards, the estimated expected term is the same as the life of the award.
|
•
|
Risk-free interest rate: The risk-free interest rate is based on published U.S. Treasury rates for a term commensurate with the expected term.
|
•
|
Dividend yield: The dividend yield is estimated as zero as the Company has not paid dividends in the past and does not have any plans to pay any dividends in the foreseeable future.
|
|
December 31,
|
|||||
|
2019
|
2018
|
||||
ASSETS
|
||||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
61,014
|
|
$
|
66,260
|
|
Investments
|
47,437
|
|
100,218
|
|
||
Trade accounts receivable
|
3,222
|
|
1,860
|
|
||
Inventory
|
8,059
|
|
7,746
|
|
||
Prepaid expenses
|
955
|
|
980
|
|
||
Other current assets
|
1,165
|
|
576
|
|
||
Total current assets
|
121,852
|
|
177,640
|
|
||
Property and equipment, net
|
7,905
|
|
7,303
|
|
||
Right of use assets
|
3,917
|
|
—
|
|
||
Other non-current assets
|
750
|
|
322
|
|
||
Total assets
|
$
|
134,424
|
|
$
|
185,265
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||
Current liabilities:
|
|
|
||||
Accounts payable
|
$
|
2,351
|
|
$
|
1,322
|
|
Accrued liabilities
|
3,828
|
|
4,962
|
|
||
Accrued interest
|
1,262
|
|
1,262
|
|
||
Deferred revenue
|
271
|
|
217
|
|
||
Current operating lease liability
|
450
|
|
—
|
|
||
Total current liabilities
|
8,162
|
|
7,763
|
|
||
Non-current operating lease liability
|
3,579
|
|
—
|
|
||
Other non-current liabilities
|
19
|
|
53
|
|
||
Convertible notes
|
130,043
|
|
120,074
|
|
||
Total liabilities
|
141,803
|
|
127,890
|
|
||
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
||
|
|
|
||||
Stockholders' equity (deficit):
|
|
|
||||
Preferred shares, $0.001 par value;
|
|
|
||||
5,000,000 preferred shares authorized and none outstanding as of December 31, 2019 and 2018
|
—
|
|
—
|
|
||
Common stock, $0.001 par value;
|
|
|
||||
85,000,000 common shares authorized with 54,708,792 shares issued and outstanding on December 31, 2019 and 75,000,000 common shares authorized with 54,231,876 shares issued and outstanding on December 31, 2018
|
55
|
|
54
|
|
||
Contributed capital
|
452,344
|
|
432,885
|
|
||
Treasury stock
|
(45,067
|
)
|
(45,067
|
)
|
||
Accumulated deficit
|
(414,653
|
)
|
(330,348
|
)
|
||
Accumulated other comprehensive loss
|
(58
|
)
|
(149
|
)
|
||
Total stockholders' equity (deficit)
|
(7,379
|
)
|
57,375
|
|
||
Total liabilities and stockholders' equity (deficit)
|
$
|
134,424
|
|
$
|
185,265
|
|
|
Years Ended December 31,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
9,297
|
|
$
|
5,670
|
|
$
|
4,177
|
|
|
|
|
|
|
|
|
|||
Cost of sales
|
4,897
|
|
3,187
|
|
1,002
|
|
|||
Gross profit
|
4,400
|
|
2,483
|
|
3,175
|
|
|||
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|||
Research and development
|
25,345
|
|
27,638
|
|
22,301
|
|
|||
Sales, general and administrative
|
51,886
|
|
55,214
|
|
45,058
|
|
|||
Total costs and expenses
|
77,231
|
|
82,852
|
|
67,359
|
|
|||
|
|
|
|
||||||
Loss from operations
|
(72,831
|
)
|
(80,369
|
)
|
(64,184
|
)
|
|||
|
|
|
|
||||||
Other income (expense):
|
|
|
|
||||||
Interest expense
|
(14,256
|
)
|
(10,113
|
)
|
—
|
|
|||
Foreign currency exchange loss
|
(124
|
)
|
(450
|
)
|
(75
|
)
|
|||
Interest and dividend income
|
2,809
|
|
2,845
|
|
908
|
|
|||
Other expense, net
|
(14
|
)
|
(28
|
)
|
(184
|
)
|
|||
Total other income (expense), net
|
(11,585
|
)
|
(7,746
|
)
|
649
|
|
|||
|
|
|
|
||||||
Net loss before income taxes
|
(84,416
|
)
|
(88,115
|
)
|
(63,535
|
)
|
|||
Benefit (provision) for income taxes
|
111
|
|
(211
|
)
|
(493
|
)
|
|||
Net loss
|
$
|
(84,305
|
)
|
$
|
(88,326
|
)
|
$
|
(64,028
|
)
|
|
|
|
|
||||||
Basic and diluted net loss per share
|
$
|
(1.55
|
)
|
$
|
(1.62
|
)
|
$
|
(1.18
|
)
|
Weighted average shares outstanding
|
54,506
|
|
54,494
|
|
54,073
|
|
|||
|
|
|
|
||||||
Other comprehensive loss:
|
|
|
|
||||||
Net loss
|
$
|
(84,305
|
)
|
$
|
(88,326
|
)
|
$
|
(64,028
|
)
|
Net unrealized gain (loss) on available-for-sale investments
|
193
|
|
23
|
|
(117
|
)
|
|||
Foreign currency translation adjustment
|
(102
|
)
|
(172
|
)
|
321
|
|
|||
Comprehensive loss
|
$
|
(84,214
|
)
|
$
|
(88,475
|
)
|
$
|
(63,824
|
)
|
|
Shares
|
Common
Stock Amount |
Contributed
Capital |
Accumulated Deficit
|
Treasury
stock |
Accumulated
Other Comprehensive Income (Loss) |
Total
Stockholders’ Equity (Deficit) |
|||||||||||||
Balances, January 1, 2017
|
51,516
|
|
$
|
52
|
|
$
|
255,257
|
|
$
|
(177,289
|
)
|
$
|
—
|
|
$
|
(204
|
)
|
$
|
77,816
|
|
Net loss
|
—
|
|
—
|
|
—
|
|
(64,028
|
)
|
—
|
|
—
|
|
(64,028
|
)
|
||||||
Issuance of common stock
|
3,085
|
|
3
|
|
83,221
|
|
—
|
|
—
|
|
—
|
|
83,224
|
|
||||||
Exercise of options and warrants
|
1,045
|
|
1
|
|
6,605
|
|
—
|
|
—
|
|
—
|
|
6,606
|
|
||||||
Issuance of common stock under employee purchase plan
|
28
|
|
—
|
|
597
|
|
—
|
|
—
|
|
—
|
|
597
|
|
||||||
Unrealized loss on available-for-sale securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
(117
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
321
|
|
321
|
|
||||||
Cumulative impact of accounting change
|
—
|
|
—
|
|
—
|
|
(655
|
)
|
—
|
|
—
|
|
(655
|
)
|
||||||
Equity-based compensation
|
—
|
|
—
|
|
14,940
|
|
—
|
|
—
|
|
—
|
|
14,940
|
|
||||||
Balances, December 31, 2017
|
55,674
|
|
56
|
|
360,620
|
|
(241,972
|
)
|
—
|
|
—
|
|
118,704
|
|
||||||
Net loss
|
—
|
|
—
|
|
—
|
|
(88,326
|
)
|
—
|
|
—
|
|
(88,326
|
)
|
||||||
Exercise of options and restricted stock awards issued
|
382
|
|
—
|
|
3,749
|
|
—
|
|
—
|
|
—
|
|
3,749
|
|
||||||
Issuance of common stock under employee purchase plan
|
35
|
|
—
|
|
583
|
|
—
|
|
—
|
|
—
|
|
583
|
|
||||||
Unrealized gain on available-for-sale securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
23
|
|
23
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(172
|
)
|
(172
|
)
|
||||||
Repurchase of common stock under Prepaid Forward contract
|
(1,859
|
)
|
(2
|
)
|
—
|
|
—
|
|
(45,067
|
)
|
—
|
|
(45,069
|
)
|
||||||
Issuance of convertible note
|
—
|
|
—
|
|
53,283
|
|
—
|
|
—
|
|
—
|
|
53,283
|
|
||||||
Cumulative impact of accounting change
|
—
|
|
—
|
|
—
|
|
(50
|
)
|
—
|
|
—
|
|
(50
|
)
|
||||||
Equity-based compensation
|
—
|
|
—
|
|
14,650
|
|
—
|
|
—
|
|
—
|
|
14,650
|
|
||||||
Balances, December 31, 2018
|
54,232
|
|
54
|
|
432,885
|
|
(330,348
|
)
|
(45,067
|
)
|
(149
|
)
|
57,375
|
|
||||||
Net loss
|
—
|
|
—
|
|
—
|
|
(84,305
|
)
|
—
|
|
—
|
|
(84,305
|
)
|
||||||
Issuance of common stock
|
56
|
|
—
|
|
1,000
|
|
—
|
|
—
|
|
—
|
|
1,000
|
|
||||||
Exercise of options and restricted stock awards issued
|
396
|
|
1
|
|
5,364
|
|
—
|
|
—
|
|
—
|
|
5,365
|
|
||||||
Issuance of common stock under employee purchase plan
|
25
|
|
—
|
|
458
|
|
—
|
|
—
|
|
—
|
|
458
|
|
||||||
Unrealized gain on available-for-sale securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
193
|
|
193
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(102
|
)
|
(102
|
)
|
||||||
Equity-based compensation
|
—
|
|
—
|
|
12,637
|
|
—
|
|
—
|
|
—
|
|
12,637
|
|
||||||
Balances, December 31, 2019
|
54,709
|
|
$
|
55
|
|
$
|
452,344
|
|
$
|
(414,653
|
)
|
$
|
(45,067
|
)
|
$
|
(58
|
)
|
$
|
(7,379
|
)
|
|
Years Ended December 31,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|||||
Net loss
|
$
|
(84,305
|
)
|
$
|
(88,326
|
)
|
$
|
(64,028
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
2,602
|
|
2,561
|
|
2,196
|
|
|||
Amortization of investment discount
|
(427
|
)
|
(621
|
)
|
326
|
|
|||
Equity-based compensation expense
|
12,618
|
|
14,422
|
|
13,933
|
|
|||
Amortization of debt discount and issuance costs
|
9,969
|
|
6,849
|
|
—
|
|
|||
Loss on disposal of property and equipment
|
837
|
|
678
|
|
240
|
|
|||
(Increase) decrease in assets:
|
|
|
|
|
|
|
|||
Accounts receivable
|
(1,362
|
)
|
86
|
|
(1,912
|
)
|
|||
Inventory
|
(3,655
|
)
|
(4,223
|
)
|
(7,759
|
)
|
|||
Prepaid expense and other assets
|
(752
|
)
|
(250
|
)
|
(459
|
)
|
|||
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
|||
Accounts payable
|
988
|
|
(748
|
)
|
1,064
|
|
|||
Accrued liabilities
|
(1,327
|
)
|
1,426
|
|
596
|
|
|||
Accrued interest
|
—
|
|
1,262
|
|
—
|
|
|||
Deferred revenue and income
|
54
|
|
(904
|
)
|
36
|
|
|||
Deferred compensation
|
(34
|
)
|
32
|
|
21
|
|
|||
Net cash used in operating activities
|
(64,794
|
)
|
(67,756
|
)
|
(55,746
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
||||||
Purchases of equipment
|
(330
|
)
|
(998
|
)
|
(2,966
|
)
|
|||
Purchase of marketable securities
|
(50,226
|
)
|
(120,556
|
)
|
(82,333
|
)
|
|||
Proceeds from sales of marketable securities
|
14,500
|
|
3,000
|
|
11,522
|
|
|||
Maturities of marketable securities
|
88,867
|
|
98,416
|
|
48,049
|
|
|||
Net cash provided by (used in) investing activities
|
52,811
|
|
(20,138
|
)
|
(25,728
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
||||||
Proceeds from issuance of common stock
|
1,458
|
|
583
|
|
83,821
|
|
|||
Proceeds from exercise of options and warrants
|
5,365
|
|
3,749
|
|
6,606
|
|
|||
Proceeds from issuance of convertible note
|
—
|
|
171,500
|
|
—
|
|
|||
Prepayment of forward stock repurchase transaction
|
—
|
|
(45,069
|
)
|
—
|
|
|||
Payment of debt issuance costs
|
—
|
|
(4,992
|
)
|
—
|
|
|||
Net cash provided by financing activities
|
6,823
|
|
125,771
|
|
90,427
|
|
|||
|
|
|
|
||||||
Effect of exchange rate on cash
|
(86
|
)
|
(130
|
)
|
316
|
|
|||
|
|
|
|
||||||
Increase (decrease) in cash and cash equivalents
|
(5,246
|
)
|
37,747
|
|
9,269
|
|
|||
Cash and cash equivalents, beginning of period
|
66,260
|
|
28,513
|
|
19,244
|
|
|||
Cash and cash equivalents, end of period
|
$
|
61,014
|
|
$
|
66,260
|
|
$
|
28,513
|
|
|
Years Ended December 31,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Non-cash investing activities:
|
|
|
|
||||||
Transfer of instruments from inventory to property and equipment
|
$
|
3,361
|
|
$
|
4,767
|
|
$
|
—
|
|
Supplemental cash flow information:
|
|
|
|
||||||
Interest paid
|
$
|
4,288
|
|
$
|
2,001
|
|
$
|
—
|
|
Income taxes paid, net of refunds
|
$
|
41
|
|
$
|
651
|
|
$
|
—
|
|
•
|
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
•
|
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).
|
|
2019
|
2018
|
2017
|
||||||
Beginning balance
|
$
|
215
|
|
$
|
192
|
|
$
|
1
|
|
Provisions
|
411
|
|
420
|
|
331
|
|
|||
Warranty cost incurred
|
(223
|
)
|
(397
|
)
|
(140
|
)
|
|||
|
$
|
403
|
|
$
|
215
|
|
$
|
192
|
|
•
|
Identification of the contract with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations
|
•
|
Recognition of revenue as we satisfy a performance obligation
|
•
|
Volatility: The expected volatility is based on the historical volatility of the Company's stock price over the most recent period commensurate with the expected term of the stock option award.
|
•
|
Expected term: The estimated expected term for employee awards is based on the calculation published by the SEC in SAB110 for use when there is not a sufficient history of employee exercise patterns. For consultant awards, the estimated expected term is the same as the life of the award.
|
•
|
Risk-free interest rate: The risk-free interest rate is based on published U.S. Treasury rates for a term commensurate with the expected term.
|
•
|
Dividend yield: The dividend yield is estimated as zero as the Company has not paid dividends in the past and does not have any plans to pay any dividends in the foreseeable future.
|
|
2019
|
2018
|
2017
|
Customer A
|
*
|
*
|
18%
|
Customer B
|
*
|
*
|
13%
|
|
2019
|
|||||||||||
|
(in thousands)
|
|||||||||||
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
||||||||
Money market funds
|
$
|
43,745
|
|
$
|
—
|
|
$
|
—
|
|
$
|
43,745
|
|
Commercial paper
|
—
|
|
1,993
|
|
—
|
|
1,993
|
|
||||
Corporate notes and bonds
|
—
|
|
1,006
|
|
—
|
|
1,006
|
|
||||
Total cash and cash equivalents
|
$
|
43,745
|
|
$
|
2,999
|
|
$
|
—
|
|
$
|
46,744
|
|
Investments:
|
|
|
|
|
||||||||
Certificates of deposit
|
—
|
|
5,663
|
|
—
|
|
5,663
|
|
||||
US Treasury securities
|
12,579
|
|
—
|
|
—
|
|
12,579
|
|
||||
US Agency securities
|
—
|
|
3,998
|
|
—
|
|
3,998
|
|
||||
Commercial paper
|
—
|
|
2,491
|
|
—
|
|
2,491
|
|
||||
Corporate notes and bonds
|
—
|
|
22,706
|
|
—
|
|
22,706
|
|
||||
Total investments
|
12,579
|
|
34,858
|
|
—
|
|
47,437
|
|
||||
Total assets measured at fair value
|
$
|
56,324
|
|
$
|
37,857
|
|
$
|
—
|
|
$
|
94,181
|
|
|
2018
|
|||||||||||
|
(in thousands)
|
|||||||||||
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
||||||||
Money market funds
|
$
|
38,444
|
|
$
|
—
|
|
$
|
—
|
|
$
|
38,444
|
|
Commercial paper
|
—
|
|
1,493
|
|
—
|
|
1,493
|
|
||||
Total cash and cash equivalents
|
$
|
38,444
|
|
$
|
1,493
|
|
$
|
—
|
|
$
|
39,937
|
|
Investments:
|
|
|
|
|
||||||||
Certificates of deposit
|
—
|
|
10,787
|
|
—
|
|
10,787
|
|
||||
US Treasury securities
|
22,120
|
|
—
|
|
—
|
|
22,120
|
|
||||
US Agency securities
|
—
|
|
7,980
|
|
—
|
|
7,980
|
|
||||
Commercial paper
|
—
|
|
17,025
|
|
—
|
|
17,025
|
|
||||
Asset-backed securities
|
—
|
|
11,998
|
|
—
|
|
11,998
|
|
||||
Corporate notes and bonds
|
—
|
|
30,308
|
|
—
|
|
30,308
|
|
||||
Total investments
|
22,120
|
|
78,098
|
|
—
|
|
100,218
|
|
||||
Total assets measured at fair value
|
$
|
60,564
|
|
$
|
79,591
|
|
$
|
—
|
|
$
|
140,155
|
|
AVAILABLE-FOR-SALE INVESTMENTS
|
||||||||||||
2019
|
||||||||||||
(in thousands)
|
||||||||||||
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
||||||||
Certificates of deposit
|
$
|
5,646
|
|
$
|
17
|
|
$
|
—
|
|
$
|
5,663
|
|
US Treasury securities
|
12,564
|
|
16
|
|
(1
|
)
|
12,579
|
|
||||
US Agency securities
|
4,002
|
|
—
|
|
(4
|
)
|
3,998
|
|
||||
Commercial paper
|
2,492
|
|
—
|
|
(1
|
)
|
2,491
|
|
||||
Corporate notes and bonds
|
22,711
|
|
6
|
|
(11
|
)
|
22,706
|
|
||||
Total
|
$
|
47,415
|
|
$
|
39
|
|
$
|
(17
|
)
|
$
|
47,437
|
|
AVAILABLE-FOR-SALE INVESTMENTS
|
||||||||||||
2018
|
||||||||||||
(in thousands)
|
||||||||||||
|
Amortized Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
||||||||
Certificates of deposit
|
$
|
10,787
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,787
|
|
US Treasury securities
|
22,185
|
|
1
|
|
(66
|
)
|
22,120
|
|
||||
US Agency securities
|
8,024
|
|
1
|
|
(45
|
)
|
7,980
|
|
||||
Commercial paper
|
17,025
|
|
—
|
|
—
|
|
17,025
|
|
||||
Asset-backed securities
|
12,007
|
|
—
|
|
(9
|
)
|
11,998
|
|
||||
Corporate notes and bonds
|
30,361
|
|
—
|
|
(53
|
)
|
30,308
|
|
||||
Total
|
$
|
100,389
|
|
$
|
2
|
|
$
|
(173
|
)
|
$
|
100,218
|
|
AVAILABLE-FOR-SALE INVESTMENT MATURITIES
|
||||||||||||
(in thousands)
|
||||||||||||
|
2019
|
2018
|
||||||||||
|
Amortized
Cost
|
Fair Value
|
Amortized
Cost
|
Fair Value
|
||||||||
Due in less than 1 year
|
$
|
43,627
|
|
$
|
43,650
|
|
$
|
83,030
|
|
$
|
82,893
|
|
Due in 1-5 years
|
3,788
|
|
3,787
|
|
17,359
|
|
17,325
|
|
||||
Total
|
$
|
47,415
|
|
$
|
47,437
|
|
$
|
100,389
|
|
$
|
100,218
|
|
|
2019
|
2018
|
||||
Raw materials
|
$
|
4,854
|
|
$
|
4,064
|
|
Work in process
|
1,561
|
|
495
|
|
||
Finished goods
|
1,644
|
|
3,187
|
|
||
Inventory
|
$
|
8,059
|
|
$
|
7,746
|
|
PROPERTY AND EQUIPMENT
|
||||||
(in thousands)
|
||||||
|
2019
|
2018
|
||||
Computer equipment
|
$
|
2,477
|
|
$
|
2,700
|
|
Technical equipment
|
3,681
|
|
3,868
|
|
||
Facilities
|
3,883
|
|
4,037
|
|
||
Instruments
|
7,491
|
|
5,318
|
|
||
Capital projects in progress
|
238
|
|
91
|
|
||
Total property and equipment
|
$
|
17,770
|
|
$
|
16,014
|
|
Accumulated depreciation
|
(9,865
|
)
|
(8,711
|
)
|
||
Net property and equipment
|
$
|
7,905
|
|
$
|
7,303
|
|
•
|
Milestone 1 – Relocation of Company’s operations and corporate headquarters to Arizona and creation of 15 Qualified Jobs (as defined below).
|
•
|
Milestone 2 – Creation of 30 Qualified Jobs (including Qualified Jobs under Milestone 1).
|
•
|
Milestone 3 – Creation of 40 Qualified Jobs (including Qualified Jobs under Milestones 1 and 2).
|
•
|
Milestone 4 – Creation of 65 Qualified Jobs (including Qualified Jobs under Milestones 1, 2 and 3) and capital investment of at least $4.5 million.
|
|
2019
|
2018
|
||||
Products and services not yet delivered
|
$
|
271
|
|
$
|
217
|
|
Deferred revenue
|
$
|
271
|
|
$
|
217
|
|
•
|
if the Company’s stock price exceeds 130% of the conversion price for 20 of the last 30 trading days of any calendar quarter after June 30, 2018;
|
•
|
during the 5 business day period after any 5 consecutive trading day period in which the Notes’ trading price is less than 98% of the product of the common stock price times the conversion rate; or
|
•
|
the occurrence of certain corporate events, such as a change of control, merger or liquidation.
|
|
2019
|
2018
|
||||
Outstanding principal
|
$
|
171,500
|
|
$
|
171,500
|
|
Unamortized debt discount
|
(39,042
|
)
|
(48,430
|
)
|
||
Unamortized debt issuance
|
(2,415
|
)
|
(2,996
|
)
|
||
Net carrying amount of the liability component
|
$
|
130,043
|
|
$
|
120,074
|
|
|
2019
|
2018
|
2017
|
|||
Shares issuable upon the release of restricted stock awards
|
14
|
|
76
|
|
24
|
|
Shares issuable upon exercise of stock options
|
10,133
|
|
8,091
|
|
7,328
|
|
|
10,147
|
|
8,167
|
|
7,352
|
|
Stock Option Activity
|
|||||
|
Number of Shares
|
Weighted Average Exercise Price per Share
|
|||
Options Outstanding January 1, 2018
|
7,328,131
|
|
$
|
10.16
|
|
Granted
|
1,390,014
|
|
24.46
|
|
|
Forfeited
|
(230,779
|
)
|
21.47
|
|
|
Exercised
|
(357,373
|
)
|
10.49
|
|
|
Expired
|
(39,357
|
)
|
22.24
|
|
|
Options Outstanding December 31, 2018
|
8,090,636
|
|
12.22
|
|
|
Granted
|
3,067,888
|
|
14.52
|
|
|
Forfeited
|
(533,503
|
)
|
20.65
|
|
|
Exercised
|
(383,319
|
)
|
13.99
|
|
|
Expired
|
(109,140
|
)
|
23.86
|
|
|
Options Outstanding December 31, 2019
|
10,132,562
|
|
12.28
|
|
|
Exercisable December 31, 2019
|
6,231,099
|
|
9.17
|
|
RSU and SG Activity
|
|||||
|
Number of Shares
|
Weighted Average Grant Date Fair Value per Share
|
|||
RSUs & SGs Outstanding January 1, 2018
|
24,150
|
|
$
|
20.91
|
|
Granted
|
76,000
|
|
17.33
|
|
|
Forfeited
|
—
|
|
—
|
|
|
Vested/released
|
(24,150
|
)
|
16.58
|
|
|
RSUs & SGs outstanding December 31, 2018
|
76,000
|
|
18.70
|
|
|
Granted
|
11,000
|
|
20.32
|
|
|
Forfeited
|
(60,500
|
)
|
19.74
|
|
|
Vested/released
|
(12,168
|
)
|
17.43
|
|
|
RSUs & SGs outstanding December 31, 2019
|
14,332
|
|
16.66
|
|
RSU and SG Grants
|
|||||||||
|
2019
|
2018
|
2017
|
||||||
Weighted average fair value
|
$
|
20.32
|
|
$
|
17.33
|
|
$
|
22.40
|
|
Equity-Based Compensation Expenses and Tax Benefit
(in thousands)
|
|||||||||
|
2019
|
2018
|
2017
|
||||||
Cost of Sales
|
$
|
277
|
|
$
|
189
|
|
$
|
99
|
|
Research and development
|
4,115
|
|
4,760
|
|
3,738
|
|
|||
Sales, general and administrative
|
8,226
|
|
9,473
|
|
10,096
|
|
|||
Total equity-based compensation expense
|
$
|
12,618
|
|
$
|
14,422
|
|
$
|
13,933
|
|
Recognized tax benefit
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
2019
|
2018
|
2017
|
||||||
U.S. Domestic
|
$
|
(70,452
|
)
|
$
|
(67,508
|
)
|
$
|
(46,849
|
)
|
Foreign
|
(13,964
|
)
|
(20,607
|
)
|
(16,686
|
)
|
|||
Net loss before income taxes
|
$
|
(84,416
|
)
|
$
|
(88,115
|
)
|
$
|
(63,535
|
)
|
|
2019
|
2018
|
2017
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
State
|
8
|
|
14
|
|
—
|
|
|||
Foreign
|
(119
|
)
|
197
|
|
493
|
|
|||
Total current provision
|
(111
|
)
|
211
|
|
493
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
—
|
|
—
|
|
—
|
|
|||
State
|
—
|
|
—
|
|
—
|
|
|||
Foreign
|
—
|
|
—
|
|
—
|
|
|||
Total deferred provision
|
—
|
|
—
|
|
—
|
|
|||
Total (benefit) provision
|
$
|
(111
|
)
|
$
|
211
|
|
$
|
493
|
|
|
2019
|
2018
|
||||
Deferred tax assets:
|
|
|
||||
Net operating loss carryforward
|
$
|
66,319
|
|
$
|
53,189
|
|
Property & equipment
|
403
|
|
648
|
|
||
Inventory
|
397
|
|
395
|
|
||
Stock options
|
13,217
|
|
11,473
|
|
||
Intangible assets, definite-lived
|
38
|
|
40
|
|
||
General business credit
|
11,306
|
|
9,300
|
|
||
Operating Lease Liability - ASC 842
|
908
|
|
—
|
|
||
Other
|
59
|
|
47
|
|
||
Total deferred income tax assets
|
92,647
|
|
75,092
|
|
||
Valuation allowance
|
(81,946
|
)
|
(63,060
|
)
|
||
Deferred tax assets
|
$
|
10,701
|
|
$
|
12,032
|
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
||||
Debt amortization
|
$
|
(9,793
|
)
|
$
|
(12,032
|
)
|
Right of use asset
|
$
|
(908
|
)
|
$
|
—
|
|
Total deferred income tax liabilities
|
$
|
(10,701
|
)
|
$
|
(12,032
|
)
|
|
|
|
||||
Net deferred income taxes
|
$
|
—
|
|
$
|
—
|
|
|
2019
|
2018
|
2017
|
|||
U.S. federal statutory income tax rate
|
(21.00
|
)%
|
(21.00
|
)%
|
(34.00
|
)%
|
State taxes, net of federal tax benefit
|
(3.83
|
)
|
(3.07
|
)
|
(2.62
|
)
|
Permanent and other differences
|
(0.25
|
)
|
(0.26
|
)
|
(2.31
|
)
|
Change in tax rates
|
0.16
|
|
(0.41
|
)
|
(1.02
|
)
|
Tax rate differential
|
3.28
|
|
4.92
|
|
8.99
|
|
Tax cuts and jobs act
|
—
|
|
—
|
|
38.46
|
|
Unrecognized tax benefits
|
0.79
|
|
0.81
|
|
1.20
|
|
Nondeductible equity and other compensation
|
1.12
|
|
(0.17
|
)
|
(4.31
|
)
|
Credit for increased research activities
|
(2.80
|
)
|
(3.12
|
)
|
(4.42
|
)
|
Change in Valuation allowance
|
22.40
|
|
22.54
|
|
0.81
|
|
|
(0.13
|
)%
|
0.24
|
%
|
0.78
|
%
|
|
2019
|
2018
|
2017
|
||||||
Balance at beginning of year
|
$
|
2,983
|
|
$
|
2,141
|
|
$
|
1,101
|
|
Increases for prior positions
|
7
|
|
70
|
|
97
|
|
|||
Increases for current year positions
|
724
|
|
775
|
|
943
|
|
|||
Other increases
|
—
|
|
—
|
|
—
|
|
|||
Decreases due to settlements
|
—
|
|
—
|
|
—
|
|
|||
Expiration of the statute of limitations for the assessment of taxes
|
—
|
|
—
|
|
—
|
|
|||
Other decreases
|
(2
|
)
|
(3
|
)
|
—
|
|
|||
Balance at end of year
|
$
|
3,712
|
|
$
|
2,983
|
|
$
|
2,141
|
|
|
2019
|
||
Cash paid for amounts included in lease liabilities
|
|
||
Operating cash flows from operating leases
|
$
|
644
|
|
ROU assets obtained in exchange for lease obligations
|
|
||
Operating leases
|
3,877
|
|
|
Lease Cost
|
|
||
Operating leases
|
755
|
|
|
Short-term leases
|
$
|
727
|
|
|
2019
|
||
2020
|
$
|
698
|
|
2021
|
752
|
|
|
2022
|
879
|
|
|
2023
|
968
|
|
|
2024
|
1,055
|
|
|
Thereafter
|
612
|
|
|
Total lease payments
|
4,964
|
|
|
Less imputed interest
|
(935
|
)
|
|
|
$
|
4,029
|
|
|
2019
|
||
2020
|
$
|
375
|
|
2021
|
288
|
|
|
2022
|
231
|
|
|
2023
|
69
|
|
|
2024
|
25
|
|
|
Thereafter
|
—
|
|
|
Total undiscounted cash flows
|
988
|
|
|
Less imputed interest
|
(2
|
)
|
|
Present value of lease payments
|
$
|
986
|
|
|
2019
|
2018
|
||||
Domestic
|
$
|
7,244
|
|
$
|
6,309
|
|
Foreign
|
661
|
|
994
|
|
||
|
$
|
7,905
|
|
$
|
7,303
|
|
|
2019
|
2018
|
2017
|
||||||
Domestic
|
$
|
6,705
|
|
$
|
4,153
|
|
$
|
3,016
|
|
Foreign
|
2,592
|
|
1,517
|
|
1,161
|
|
|||
Net sales
|
$
|
9,297
|
|
$
|
5,670
|
|
$
|
4,177
|
|
|
2019
|
2018
|
2017
|
||||||
Accelerate Pheno™ revenue
|
$
|
9,132
|
|
$
|
5,547
|
|
$
|
4,057
|
|
Other revenue
|
165
|
|
123
|
|
120
|
|
|||
Net sales
|
$
|
9,297
|
|
$
|
5,670
|
|
$
|
4,177
|
|
|
2019
|
2018
|
2017
|
||||||
Products
|
$
|
8,839
|
|
$
|
5,576
|
|
$
|
4,157
|
|
Services
|
458
|
|
94
|
|
20
|
|
|||
Net sales
|
$
|
9,297
|
|
$
|
5,670
|
|
$
|
4,177
|
|
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||
Revenue
|
$
|
3,470
|
|
$
|
2,271
|
|
$
|
1,806
|
|
$
|
1,750
|
|
Gross profit
|
$
|
1,513
|
|
$
|
1,154
|
|
$
|
899
|
|
$
|
834
|
|
Loss from operations
|
$
|
(18,269
|
)
|
$
|
(17,653
|
)
|
$
|
(18,087
|
)
|
$
|
(18,822
|
)
|
Net loss
|
$
|
(21,335
|
)
|
$
|
(20,434
|
)
|
$
|
(20,815
|
)
|
$
|
(21,721
|
)
|
Basic and diluted net loss per share
|
$
|
(0.40
|
)
|
$
|
(0.37
|
)
|
$
|
(0.38
|
)
|
$
|
(0.40
|
)
|
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||
Revenue
|
$
|
1,822
|
|
$
|
1,355
|
|
$
|
1,692
|
|
$
|
801
|
|
Gross profit
|
$
|
524
|
|
$
|
675
|
|
$
|
975
|
|
$
|
309
|
|
Loss from operations
|
$
|
(19,759
|
)
|
$
|
(19,369
|
)
|
$
|
(20,415
|
)
|
$
|
(20,826
|
)
|
Net loss
|
$
|
(22,191
|
)
|
$
|
(22,098
|
)
|
$
|
(23,225
|
)
|
$
|
(20,812
|
)
|
Basic and diluted net loss per share
|
$
|
(0.41
|
)
|
$
|
(0.41
|
)
|
$
|
(0.43
|
)
|
$
|
(0.37
|
)
|
|
Page
|
Exhibit No.
|
Description
|
|
Filing Information
|
|
Incorporated by reference to Appendix B of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on November 13, 2012
|
||
|
Incorporated by reference to Exhibit A to the Registrant’s Definitive Information Statement on Schedule 14C filed on July 12, 2013
|
||
|
Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on March 15, 2016
|
||
|
Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on March 15, 2019
|
||
|
Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Annual Report on Form 8-K for the fiscal year ended August 8, 2019
|
||
|
Incorporated by reference to Exhibit 4.1 filed with the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018
|
||
|
Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 28, 2018
|
||
|
Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on March 28, 2018
|
||
|
Filed herewith
|
||
|
Incorporated by reference to Appendix A of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on November 15, 2004
|
||
|
Incorporated by reference to Annex C of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on May 17, 2012
|
||
|
Incorporated by reference to Exhibit 4.4 filed with the Registrant’s Form S-8 Registration Statement (No. 333-182930) on July 30, 2012
|
||
|
Incorporated by reference to Exhibit 10.5 filed with the Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2012
|
||
|
Incorporated by reference to Exhibit 10.10 filed with the Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2012
|
||
|
Incorporated by reference to Appendix A of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 10, 2017
|
||
|
Incorporated by reference to Appendix A of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 10, 2017
|
||
|
Incorporated by reference to Exhibit 10.9.6 filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018
|
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 15, 2019
|
||
|
Incorporated by reference to Exhibit 99.3 to the Form S-8 Registration Statement (No. 333-187439) filed by the Registrant on March 22, 2013
|
||
|
Incorporated by reference to Exhibit 99.4 to the Form S-8 Registration Statement (No. 333-187439) filed by the Registrant on March 22, 2013
|
||
|
Incorporated by reference to Exhibit 10.9.7 filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018
|
||
|
Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 28, 2018
|
||
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 28, 2018
|
||
|
Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on December 28, 2018
|
||
|
Filed herewith
|
||
|
Filed herewith
|
||
|
Filed herewith
|
||
|
Filed herewith
|
||
|
Filed herewith
|
||
|
Filed herewith
|
||
|
Filed herewith
|
||
101
|
XBRL Instance Document
|
|
Filed herewith
|
101
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
101
|
XBRL Taxonomy Calculation Linkbase Document
|
|
Filed herewith
|
101
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
101
|
XBRL Taxonomy Label Linkbase Document
|
|
Filed herewith
|
101
|
XBRL Taxonomy Presentation Linkbase Document
|
|
Filed herewith
|
|
ACCELERATE DIAGNOSTICS, INC.
|
|
|
February 27, 2020
|
By: /s/ Jack Phillips
|
|
Jack Phillips
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Jack Phillips
Jack Phillips
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Steve Reichling
Steve Reichling
|
|
Corporate Secretary, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer)
|
|
February 27, 2020
|
|
|
|
|
|
/s/ John Patience
John Patience
|
|
Chairman of the Board of Directors
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Jack Schuler
Jack Schuler
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Matthew W. Strobeck, Ph.D.
Matthew W. Strobeck, Ph.D.
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Frank ten Brink
Frank ten Brink
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Mark Miller
Mark Miller
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Charles Watts, M.D.
Charles Watts
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Tom Brown
Tom Brown
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Roland D Diggelmann
Roland D Diggelmann
|
|
Director
|
|
February 27, 2020
|
|
|
|
|
|
/s/ Louise Francesconi
Louise Francesconi
|
|
Director
|
|
February 27, 2020
|
•
|
increase or decrease the aggregate number of authorized shares of such class;
|
•
|
increase or decrease the par value of the shares of such class; or
|
•
|
alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely.
|
•
|
the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by the Board of Directors prior to the time the interested stockholder obtained such status;
|
•
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
|
•
|
at or subsequent to such time the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
EXECUTIVE
|
|
Signature:
|
/s/ Lawrence Mehren
|
Printed Name:
|
Lawrence Mehren
|
Date:
|
12/1/2019
|
ACCELERATE DIAGNOSTICS, INC.
|
|
Signature:
|
/s/ John Patience
|
Printed Name:
|
John Patience
|
Title:
|
Chairman of the Board
|
Date:
|
12/1/2019
|
•
|
Stock Option Agreement dated April 20, 2012 by and between Lawrence Mehren and the Company (2,200,000 shares).
|
•
|
Stock Option Agreement dated February 26, 2014 by and between Lawrence Mehren and the Company (52,132 shares).
|
•
|
Stock Option Agreement dated March 18, 2016 by and between Lawrence Mehren and the Company (60,000 shares).
|
•
|
Stock Option Agreement dated March 18, 2016 by and between Lawrence Mehren and the Company (10,408 shares).
|
•
|
Stock Option Agreement dated March 7, 2018 by and between Lawrence Mehren and the Company (25,099 shares).
|
•
|
Stock Option Agreement dated January 1, 2019 by and between Lawrence Mehren and the Company (37,736 shares).
|
|
Date:
|
|
Lawrence Mehren
|
|
|
Provision
|
Agreement
|
Location:
|
Your principal place of employment will be the Company’s principal executive offices in Tucson, Arizona.
|
No Conflicts:
|
Beginning on the Start Date, you will serve as the President and Chief Executive Officer of the Company. In your capacity as the President and Chief Executive Officer, you will have control over, and responsibility for the overall management of the Company and its subsidiaries, and you will report to the Company’s board of directors (the “Board”).
|
Board Seat:
|
So long as you are employed as Chief Executive Officer, the Company will use its reasonable efforts, subject to applicable law and the rules of the Nasdaq Stock Market (“Nasdaq”) and the Company’s bylaws, to cause you to be nominated for election to the Board at the Company’s annual shareholder meeting (and for future years, re-election) as a director of the Company.
|
Base Salary:
|
$595,000 per year (the “Base Salary”) to be paid according to the Company’s normal payroll cycle. Your Base Salary will be reviewed at least annually and may be adjusted upward or downward by the Compensation Committee of the Board of Directors (the “Compensation Committee”) in its sole discretion.
|
CEO Equity Grant:
|
On the Start Date, you will be granted 50,000 Restricted Stock Units under our 2012 Omnibus Equity Incentive Plan, as amended (the “Equity Plan”). The Grant will be subject to a 5-year annual vesting schedule with the first annual vesting and issuance
|
Opportunity:
|
Beginning January 1, 2020 and for each full calendar year during the Term thereafter, you will be eligible to participate in an annual incentive program adopted in writing and approved by the Compensation Committee (the “AIP”). Your target incentive under the AIP will equal 100% of your Base Salary as of the first day of the calendar year, with the opportunity to earn up to (but not exceed) 150% of your Base Salary as of the first day of the calendar year. Whether you are entitled to receive an AIP payment, and the amount and form of such payment, will depend on the attainment of written quantitative and qualitative performance goals, including financial performance goals, establish by the Compensation Committee in its sole discretion. The amount and form of the AIP, if any, will be certified by the Compensation Committee in February of the year following the year to which the AIP relates, and the earned AIP, if any, will be paid to you no later than March 15 of the year following the year to which the AIP relates (e.g., the AIP for 2020, if any, will be paid no later than March 15, 2021). Except as set forth below, you must be employed by the Company through the date the AIP is paid in order to earn and be eligible to receive the AIP.
|
Compensation:
|
Beginning January 1, 2021 and for each full calendar year during the Term thereafter, you will be eligible to receive grants of stock options, performance shares and other awards under the Equity Plan (the “Equity Awards”). The amount of Equity Awards, the mix of Equity Awards, the vesting schedule and the other terms and conditions of the Equity Awards will be established by the Compensation Committee in its sole discretion, provided, that, for the 2021 calendar year your target Equity Award grant will equal 400% of your then Base Salary and will consist of an award mix of 50% non-qualified stock options and 50% performance shares. The Equity Awards will be subject to such other terms and conditions specified by the Compensation Committee, the Equity Plan, the award agreement that you must execute as a condition of the grant(s), and the Company’s insider trading policy.
|
Benefits; Vacation:
|
You will continue to be eligible to participate in the Company’s standard company benefit plans, as such plans may be amended, modified, or terminated by the Company from time to time, with or without notice, in accordance with the applicable benefit and vacation plan documents. For the avoidance of doubt, your participation in such plans will be subject to the terms and conditions set forth in the applicable benefit plan documents.
|
Term:
|
The initial term of your employment under this Agreement shall commence on the Start Date and shall continue until the two (2) year anniversary of the Start Date (the “Initial Term”). The Initial term will automatically extend on the same terms and conditions set forth below for additional one (1) year periods (each a “Renewal Term”), unless either party gives the other party written notice of non-renewal at least 30 days prior to the end of the Initial Term or any Renewal Term. The Initial Term, together with all Renewal Terms, are collectively referred to in this Agreement as the “Term.”
|
of Employment:
|
This Agreement, and your employment hereunder, may be terminated at any time, for any reason, by you or the Company upon at least 30 days prior written notice, provided, that, the Company may terminate your employment immediately for Cause. Upon your termination for any reason, the Company will pay you your accrued but unpaid Base Salary and any accrued but unpaid reasonable business expenses through your date of termination (the “Accrued Obligations”), with such amount paid in compliance in accordance with applicable law. In addition to the Accrued Obligations, you may be entitled to receive severance benefits and Equity Award acceleration as described below.
|
Death or Disability:
|
This Agreement, and your employment hereunder, will terminate immediately upon your death or Disability (as defined in Exhibit A). In such case, you (or your spouse or estate) will be entitled to the Accrued Obligations.
|
a Change of Control:
|
In the event your employment is terminated by the Company without Cause or by you with Good Reason (as defined in Exhibit A) prior to a Change of Control (as defined in Exhibit A), then, in addition to the Accrued Obligations, and subject to your timely execution (and non-revocation) of the release described below, you will be entitled to receive a cash severance payment equal to the sum of: (i) 12 months of your then Base Salary; and (ii) your average earned AIP for over the Term (collectively, the “Base Severance Amount”). The Base Severance Amount will be paid to you in installments over a 12 month period, in accordance with the Company’s normal payroll cycle, with the first installment paid during the first payroll period following the expiration of the release revocation period described below. In addition to the Base Severance Amount, you will be entitled to receive a pro-rata AIP for the year in which your termination occurred, with such pro-rata AIP paid at the same time described above.
|
on Change of Control:
|
Upon the closing of a transaction that results in a Change of Control, and notwithstanding anything in the Equity Plan to the contrary, your Option and other Equity Awards shall fully vest and become exercisable.
|
a Change of Control:
|
In the event your employment is terminated by the Company without Cause or by you with Good Reason (as defined in Exhibit A) during the 12 month period following a Change of Control, then, in addition to the Accrued Obligations, and subject to your timely execution (and non-revocation) of the release described below, you will be entitled receive a cash severance payment equal to the sum of: (i) 18 months of your then Base Salary; and (ii) 18 times the monthly amount that is charged to COBRA qualified beneficiaries for the same medical coverage options elected by you immediately prior to your last day of employment (collectively, the “Enhanced Severance Amount”). The Enhanced Severance Amount will be paid to you in installments over a 18 month period, in accordance with the Company’s normal payroll cycle, with the first installment paid during the first payroll period following the expiration of the release revocation period described below. In addition to the Enhanced Severance Amount, you will be entitled to receive a pro-rata AIP for the year in which your termination occurred, with such pro-rata AIP paid at the same time described above.
|
Receive Severance:
|
In order to receive the severance pay and other benefits described above, you must, no later than 60 days following your last day of employment, execute (and not revoke) a general release and waiver of any claims that you may have in connection with your employment and termination of employment with the Company and its affiliates.
|
Restrictive Covenants:
|
This offer is contingent upon you, on your Start Date, signing the Restrictive Covenant Agreement attached hereto as Exhibit B.
|
Cooperation:
|
Following the termination of your service with the Company for any reason, you agree to cooperate fully with the Company and with the Company’s counsel in connection with any present and future actual or threatened litigation, administrative proceeding or other investigation involving the Company or any affiliate that relates to events, occurrences or conduct occurring (or claimed to have occurred) during your employment. You are hereby instructed to tell the truth in any litigation, administrative proceeding, or other investigation involving the Company and nothing herein shall be deemed or construed to suggest otherwise.
|
Social Media:
|
During the Term and following the termination of your service for any reason, you agree that you will not criticize, defame, be derogatory toward or otherwise disparage the Company, its products, services, or the Company’s past, present and future officers, directors, managers, stockholders, agents, representatives, employees, or affiliates, or its or their business plans or actions, to any third-party, either orally or in writing; provided that that this provision will not preclude you from giving truthful testimony in response to a lawful subpoena or preclude any conduct protected under any local, state or federal law, including those providing “whistleblower” protection to you or the right to engage in concerted activities. Finally, on the date of your termination of service for any reason, you agree to update your profile on social media websites (such as LinkedIn) to reflect that you are no longer an employee of the Company.
|
Dispute Resolution:
|
You and the Company agree to meet to informally in a good faith effort to resolve any issues arising under this Agreement. If the parties are unable to resolve their differences, they agree to submit to binding arbitration in Tucson, Arizona, any and all claims and disputes arising hereunder. The parties agree that any dispute will be heard by a single arbitrator, applying Arizona and Federal substantive law, as applicable, in accordance with the American Arbitration Association’s Employment Arbitration Rules. If necessary, an action may be brought in any court of competent jurisdiction solely to compel arbitration or enforce an arbitration award (or for injunctive relief to enforce the Restrictive Covenants of this Agreement). The prevailing party at arbitration shall be awarded reasonable attorneys’ fees and costs. This agreement to arbitrate survives the termination of your employment.
|
Return of Property:
|
Upon the Company’s request or your termination of employment for any reason, you shall promptly return to the Company all property of the Company, including but not limited to: originals and hard and electronic copies of records, documents, Confidential Information, computer and office equipment, other equipment, plans, designs, electronic devices, keys, access cards, passwords, credit cards, and other tangible and intangible items, in whatever form, in your possession or control. You understand that all electronic mail, equipment, and all computer hardware and software are property of the Company.
|
Miscellaneous:
|
To the extent required by law, the Company shall withhold from any payments due to you under this Agreement any applicable federal, state or local taxes. You hereby acknowledge that neither the Company nor any of its affiliates, shareholders, members, directors, managers, officers, employees, agents or representatives have provided you with any tax-related advice with respect to the matters covered by this Agreement and that you are solely responsible for obtaining your own tax advice with respect to the matters covered by this Agreement.
|
Section 409A of the Code:
|
This Agreement shall comply with Section 409A of the Internal Revenue Code or an exception thereto and each provision of the Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto. Nevertheless, the Company does not and cannot guarantee any particular tax effect or treatment of the amounts due under this Agreement. Except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to you, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided pursuant to this Agreement. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. You do not have any right to make any election regarding the time or form of any payment due under this Agreement. Notwithstanding anything in this Agreement to the contrary, if the Company concludes, that the Base Severance Amount or the Enhanced Severance Amount are subject to Section 409A of the Internal Revenue Code, then no such Severance Amount will be paid prior to your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)). Installment payments made pursuant to this Agreement shall be treated as separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii).
|
Section 280G of the Code:
|
In the event that any payments, distributions, benefits or entitlements of any type payable to you, whether or not payable upon a termination of employment (“Payments”): (i) constitute “parachute payments” within the meaning of Section 280G of the Code; and (ii) but for this Section would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Payments shall be reduced to such lesser amount (the “Reduced Amount”) that would result in no portion of the Payments being subject to the Excise Tax; provided, however, that such Payments shall not be so reduced if a nationally recognized accounting firm or compensation consulting firm selected by the Company (the “Accountants”) determines that without such reduction, you would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Internal Revenue Code, federal, state and local income taxes, social security and Medicare taxes and all other applicable taxes, determined by applying the highest marginal rates which applied (or is likely to apply) to you for the tax year in which the Payments are to be made, or such other rate(s) as the Accountants determine to be likely to apply to you in the relevant tax year(s) in which any of the Payments are expected to be made), an amount that is greater than the amount, on a net after-tax basis, that you would be entitled to retain upon receipt of the Reduced Amount. Unless otherwise agreed in writing, any determination made under this paragraph shall be made in good faith by the Accountants in a timely manner and shall be binding on the parties absent manifest error. In the event of a reduction of Payments pursuant to this paragraph, the Payments shall be reduced in the order determined by the Accountants that results in the greatest economic benefit to you in a manner that would not result in subjecting you to additional tax under Section 409A of the Internal Revenue Code. For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Internal Revenue Code, and other applicable legal authority. The Accountants shall provide detailed supporting calculations to both you and the Company and the Company shall bear the cost of all fees charged by the Accountants in connection with any calculations contemplated by this Section. If the provisions of Sections 280G and 4999 of the Internal Revenue Code are repealed without succession or if the Company determines that such provisions do not apply to it and/or you for whatever reason, this paragraph shall be of no further force or effect.
|
|
Sincerely,
|
|
Accelerate Diagnostics, Inc.
|
|
|
|
By: /s/ John Patience
|
|
John Patience, Chairman, Board of Directors
|
Accepted and agreed to:
|
|
|
|
/s/ Jack Phillips
|
1/31/2020
|
Jack Phillips
|
Date
|
Restrictive Covenants:
|
Non-Solicitation of Customers/Prospective Customers. You agree, for the duration of the Time Limit (as defined below), that you will not, either directly or indirectly, or in any individual or representative capacity, request or solicit any of the Company’s current customers or clients with whom you have had contact in the past year to withdraw, curtail, cancel, or decrease the level of their business with the Company or request that they do business with any third party in competition with the Company. You further agree that, for the duration of the Time Limit, you will not, either directly or indirectly, or in any individual or representative capacity, request or solicit any of the Company’s prospective customers (defined as any person or entity who has been directly solicited to become a customer or client by the Company and with whom you have had contact with within the past year or possesses Confidential Information about) or clients with whom you have had contact with in the past year or possesses Confidential Information about to forgo doing business with the Company or request that such prospective customer or client do business with any third party in competition with the Company.
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Notice to Future Employers:
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You agree that you will notify, and the Company shall have the right to notify, any future or prospective employers, or individuals or entities with whom you may be entering into a contractual relationship, of the Restrictive Covenant provisions of this Agreement for purposes of ensuring that the Company’s interests are protected.
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Information:
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While you are providing services to the Company, the Company may disclose or make available to you, Confidential Information. By signing this Agreement, you agree to: (i) protect and safeguard the confidentiality of the Confidential Information with at least the same degree of care as you would protect your own confidential information, but in no event with less than a commercially reasonable degree of care; and (ii) not use or disclose the Confidential Information, or permit it to be accessed, used or disclosed, for any purpose other than to carry out the duties assigned to you by the Company or as may be required to be disclosed pursuant to applicable federal, state or local law, regulation or a valid order issued by a court or governmental agency of competent jurisdiction. Upon your termination of service for any reason, or upon the Company’s written request, you shall promptly return to the Company all copies, whether in written, electronic or other form or media, of the Confidential Information, or destroy all such copies at the Company’s written request and certify in writing to the Company that such Confidential Information has been destroyed. In addition to all other remedies available at law, the Company may seek equitable relief (including injunctive relief) against you to prevent the breach or threatened breach of this confidentiality covenant and to secure its enforcement. Notwithstanding anything in this Agreement to the contrary, pursuant to the Defend Trade Secrets Act of 2016, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Company’s trade secrets to your attorney and use the trade secret in the court proceeding, if you file any document containing the trade secret under seal and do not disclose the trade secret, except pursuant to court order.
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Definitions:
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For purposes of this Agreement, the following terms shall have the following meanings:
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Miscellaneous:
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This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles. If any term or provision of this Agreement is declared by a court or tribunal of competent jurisdiction to be invalid or unenforceable for any reason, this Agreement shall remain in full force and effect, and either: (i) the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable; or (ii) if such a modification is not possible, this Agreement shall be interpreted as if such invalid or unenforceable provision were not a part hereof.
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Accepted and agreed to:
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/s/ Jack Phillips
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1/31/2020
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Jack Phillips
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Date
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Legal Entity
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Jurisdiction/Domicile
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Accelerate Diagnostics UK Limited
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England
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Accelerate Diagnostics S.L.
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Spain
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Accelerate Diagnostics GmbH
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Germany
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Accelerate Diagnostics SARL
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France
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Accelerate Diagnostics S.r.l
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Italy
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Accelerate Diagnostics B.V.
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Netherlands
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AX Diagnostics C.V.
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Netherlands
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Accelerate Diagnostics Holdings, LLC
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United States
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Accelerate Diagnostics RUS Limited Liability Company
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Russia
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(1)
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Registration Statement (Form S-3 No. 333-217297) of Accelerate Diagnostics, Inc.,
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(2)
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Registration Statement (Form S-8 No. 333-187439) pertaining to the 2012 Omnibus Equity Incentive Plan of Accelerate Diagnostics, Inc.,
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(3)
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Registration Statement (Form S-8 No. 333-199992) pertaining to the 2012 Omnibus Equity Incentive Plan of Accelerate Diagnostics, Inc.,
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(4)
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Registration Statement (Form S-8 No. 333-213072) pertaining to the 2016 Employee Stock Purchase Plan of Accelerate Diagnostics, Inc.,
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(5)
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Registration Statement (Form S-8 No. 333-225585) pertaining to the 2012 Omnibus Equity Incentive Plan of Accelerate Diagnostics, Inc., and
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(6)
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Registration Statement (Form S-8 No. 333-233185) pertaining to the 2012 Omnibus Equity Incentive Plan of Accelerate Diagnostics, Inc.
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1.
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I have reviewed this Annual Report on Form 10-K of Accelerate Diagnostics, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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February 27, 2020
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/s/ Jack Phillips
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Jack Phillips
President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of Accelerate Diagnostics, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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February 27, 2020
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/s/ Steve Reichling
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Steve Reichling
Chief Financial Officer
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(Principal Financial and Accounting Officer)
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February 27, 2020
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/s/ Jack Phillips
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Jack Phillips
President and Chief Executive Officer
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(Principal Executive Officer)
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February 27, 2020
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/s/ Steve Reichling
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Steve Reichling
Chief Financial Officer
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(Principal Financial and Accounting Officer)
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