axdx-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____

Commission file number: 001-31822

ACCELERATE DIAGNOSTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware			84-1072256
(State or other jurisdiction			(I.R.S. Employer Identification No.)
of incorporation or organization)

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)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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	AXDX	The Nasdaq Stock Market LLC
value per share		(The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer						☐
Accelerated filer						☐
Non-accelerated filer						☑
Smaller reporting company						☑
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of May 3, 2021, there were 61,044,021 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
Item 4. Controls and Procedures			38
Part II - OTHER INFORMATION
Item 1. Legal Proceedings			39
Item 1A. Risk Factors			39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			39
Item 3. Defaults Upon Senior Securities			39
Item 4. Mine Safety Disclosures			39
Item 5. Other Information			39
Item 6. Exhibits			40

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(in thousands, except share data)


	March 31,		December 31,
	2021		2020
	Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	42,726	$	35,781
Investments	23,954		32,488
Trade accounts receivable	1,976		1,550
Inventory	9,785		9,216
Prepaid expenses	1,891		1,172
Other current assets	1,479		1,780
Total current assets	81,811		81,987
Property and equipment, net	5,825		6,135
Right of use assets	3,007		3,183
Other non-current assets	2,025		2,120
Total assets	$	92,668	$	93,425
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	1,917	$	1,290
Accrued liabilities	3,221		2,991
Accrued interest	191		1,262
Deferred revenue	357		376
Current portion of long-term debt	1,127		553
Current operating lease liability	551		497
Total current liabilities	7,364		6,969
Non-current operating lease liability	2,900		3,063
Other non-current liabilities	453		335
Long-term debt	4,108		4,659
Convertible notes	144,207		141,211
Total liabilities	$	159,032	$	156,237

Commitments and contingencies

Stockholders’ deficit:
Preferred shares, $0.001 par value;
5,000,000 preferred shares authorized and none outstanding as of March 31, 2021 and December 31, 2020	—		—
Common stock, $0.001 par value;
85,000,000 common shares authorized with 59,561,357 shares issued and outstanding on March 31, 2021 and 85,000,000 common shares authorized with 57,607,939 shares issued and outstanding on December 31, 2020	60		58
Contributed capital	495,857		475,072
Treasury stock	(45,067)		(45,067)
Accumulated deficit	(517,205)		(492,966)
Accumulated other comprehensive income (loss)	(9)		91
Total stockholders’ deficit	(66,364)		(62,812)
Total liabilities and stockholders’ deficit	$	92,668	$	93,425

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)


	Three Months Ended
	March 31,		March 31,
	2021		2020
Net sales	$	2,518	$	2,342

Cost of sales	1,621		1,287
Gross profit	897		1,055

Costs and expenses:
Research and development	6,895		5,842
Sales, general and administrative	14,029		12,943
Total costs and expenses	20,924		18,785

Loss from operations	(20,027)		(17,730)

Other income (expense):
Interest expense	(4,090)		(3,749)
Foreign currency exchange loss	(159)		(128)
Interest income	43		380
Other expense, net	(6)		(82)
Total other expense, net	(4,212)		(3,579)

Net loss before income taxes	(24,239)		(21,309)
Provision for income taxes	—		—
Net loss	$	(24,239)	$	(21,309)

Basic and diluted net loss per share	$	(0.41)	$	(0.39)
Weighted average shares outstanding	58,520		54,837

Other comprehensive loss:
Net loss	$	(24,239)	$	(21,309)
Net unrealized (loss) gain on debt securities available-for-sale	(19)		223
Foreign currency translation adjustment	(81)		(15)
Comprehensive loss	$	(24,339)	$	(21,101)

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)


	Three Months Ended
	March 31,		March 31,
	2021		2020
Cash flows from operating activities:
Net loss	$	(24,239)	$	(21,309)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	659		755
Amortization of investment discount	49		(4)
Equity-based compensation	8,839		4,199
Amortization of debt discount and issuance costs	2,996		2,674
Loss on disposal of property and equipment	—		432
Contributions to deferred compensation plan	(112)		—
(Increase) decrease in assets:
Accounts receivable	(401)		(9)
Inventory and instruments in property and equipment	(683)		(1,735)
Prepaid expense and other	(292)		(1,011)
Increase (decrease) in liabilities:
Accounts payable	575		968
Accrued liabilities, and other	183		(1,475)
Accrued interest	(1,048)		(1,071)
Deferred revenue and income	(19)		(85)
Deferred compensation	118		74
Net cash used in operating activities	(13,375)		(17,597)

Cash flows from investing activities:
Purchases of equipment	—		(438)
Purchase of marketable securities	(7,307)		(21,582)
Maturities of marketable securities	15,829		16,664
Net cash provided by (used in) investing activities	8,522		(5,356)

Cash flows from financing activities:
Proceeds from issuance of common stock	10,746		111
Proceeds from exercise of options	1,109		1,318
Net cash provided by financing activities	11,855		1,429

Effect of exchange rate on cash	(

SEC Form 10-Q filed by Accelerate Diagnostics, Inc.