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

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEET

(in thousands, except share data)

March 31,

December 31,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$

39,487

$

61,014

Investments

52,525

47,437

Trade accounts receivable

3,143

3,222

Inventory

8,527

8,059

Prepaid expenses

1,771

955

Other current assets

1,291

1,165

Total current assets

106,744

121,852

Property and equipment, net

8,639

7,905

Right of use assets

3,742

3,917

Other non-current assets

868

750

Total assets

$

119,993

$

134,424

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

3,401

$

2,351

Accrued liabilities

2,428

3,828

Accrued interest

191

1,262

Deferred revenue

186

271

Current operating lease liability

453

450

Total current liabilities

6,659

8,162

Non-current operating lease liability

3,466

3,579

Other non-current liabilities

93

19

Convertible notes

132,717

130,043

Total liabilities

$

142,935

$

141,803

Commitments and contingencies

Stockholders' deficit:

Preferred shares, $0.001 par value;

5,000,000 preferred shares authorized and none outstanding as of March 31, 2020 and December 31, 2019

—

—

Common stock, $0.001 par value;

85,000,000 common shares authorized with 54,993,588 shares issued and outstanding on March 31, 2020 and 85,000,000 common shares authorized with 54,708,792 shares issued and outstanding on December 31, 2019

55

55

Contributed capital

457,987

452,344

Treasury stock

(45,067)

(45,067)

Accumulated deficit

(436,067)

(414,653)

Accumulated other comprehensive income (loss)

150

(58)

Total stockholders' deficit

(22,942)

(7,379)

Total liabilities and stockholders' deficit

$

119,993

$

134,424

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)

Three Months Ended

March 31,

March 31,

2020

2019

Net sales

$

2,342

$

1,750

Cost of sales

1,287

916

Gross profit

1,055

834

Costs and expenses:

Research and development

5,842

6,933

Sales, general and administrative

12,943

12,723

Total costs and expenses

18,785

19,656

Loss from operations

(17,730)

(18,822)

Other income (expense):

Interest expense

(3,749)

(3,459)

Foreign currency exchange loss

(128)

(59)

Interest income

380

842

Other expense, net

(82)

(2)

Total other expense, net

(3,579)

(2,678)

Net loss before income taxes

(21,309)

(21,500)

Provision for income taxes

—

(221)

Net loss

$

(21,309)

$

(21,721)

Basic and diluted net loss per share

$

(0.39)

$

(0.40)

Weighted average shares outstanding

54,837

54,337

Other comprehensive loss:

Net loss

$

(21,309)

$

(21,721)

Net unrealized gain on debt securities available-for-sale

223

121

Foreign currency translation adjustment

(15)

(76)

Comprehensive loss

$

(21,101)

$

(21,676)

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)

Three Months Ended

March 31,

March 31,

2020

2019

Cash flows from operating activities:

Net loss

$

(21,309)

$

(21,721)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

755

626

Amortization of investment discount

(4)

(180)

Equity-based compensation

4,199

3,397

Provision for bad debt expense

8

—

Amortization of debt discount and issuance costs

2,674

2,387

Unrealized loss on equity investments

8

—

Realized loss (gain) on sale of investments

3

(2)

Loss on disposal of property and equipment

432

329

(Increase) decrease in assets:

Accounts receivable

(9)

(90)

Inventory

(1,735)

(1,567)

Prepaid expense and other

(1,030)

(1,041)

Increase (decrease) in liabilities:

Accounts payable

968

1,151

Accrued liabilities, and other

(1,475)

(1,790)

Accrued interest

(1,071)

(1,071)

Deferred revenue and income

(85)

74

Deferred compensation

74

(7)

Net cash used in operating activities

(17,597)

(19,505)

Cash flows from investing activities:

Purchases of equipment

(438)

(37)

Purchase of marketable securities

(21,582)

(12,826)

Proceeds from sales of marketable securities

—

9,000

Maturities of marketable securities

16,664

28,662

Net cash (used in) provided by investing activities

(5,356)

24,799

Cash flows from financing activities:

Proceeds from issuance of common stock

111

139

Proceeds from exercise of options

1,318

3,677

Net cash provided by financing activities

1,429

3,816

Effect of exchange rate on cash

(3)

(61)

(Decrease) increase in cash and cash equivalents

(21,527)

9,049

Cash and cash equivalents, beginning of period

61,014

66,260

Cash and cash equivalents, end of period

$

39,487

$

75,309

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (CONTINUED)

Unaudited

(in thousands)

Three Months Ended

March 31,

March 31,

2020

2019

Non-cash investing activities:

Transfer of instruments from inventory to property and equipment

$

1,282

$

769

Supplemental cash flow information:

Interest paid

$

2,144

$

2,144

Income taxes paid, net of refunds

$

26

$

2

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' DEFICIT

Unaudited

(in thousands)

Three Months Ended

March 31,

2020

2019

Common stock shares outstanding

Beginning

54,709

54,232

Exercise of options

270

215

Issuance of common stock under employee purchase plan

15

7

Ending

54,994

54,454

Common stock

Beginning

$

55

$

54

Ending

$

55

$

54

Contributed capital

Beginning

$

452,344

$

432,885

Exercise of options

1,318

3,677

Issuance of common stock under employee purchase plan

111

139

Equity based compensation

4,214

3,453

Ending

$

457,987

$

440,154

See accompanying notes to consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)

Unaudited

(in thousands)

Three Months Ended

March 31,

2020

2019

Accumulated deficit

Beginning

$

(414,653)

$

(330,348)

Cumulative effect of accounting changes

(105)

—

Net loss

(21,309)

(21,721)

Ending

$

(436,067)

$

(352,069)

Treasury stock

Beginning

$

(45,067)

$

(45,067)

Ending

$

(45,067)

$

(45,067)

Accumulated other comprehensive (loss) income

Beginning

$

(58)

$

(149)

Net unrealized gain on debt securities available-for-sale

223

121

Foreign currency translation adjustment

(15)

(76)

Ending

$

150

$

(104)

Total stockholders' (deficit)

$

(22,942)

$

42,968

See accompanying notes to consolidated financial statements.