Accelerate Diagnostics(AXDX) - 2024 Q2 - Quarterly Report

Sales Performance - For the three months ended June 30, 2024, net sales increased to $2,986,000, a 2$2,921,000 in the same period of 2023, primarily due to higher sales of Accelerate PhenoTest consumables[226]. - For the six months ended June 30, 2024, net sales reached $5,907,000, reflecting a 3$5,733,000 in the same period of 2023[226]. Product Development and Launches - The Accelerate Pheno system and Accelerate PhenoTest BC Kit have been marketed since 2017, generating revenue primarily from instrument sales and single-use consumable test kits[215]. - The Accelerate Arc system and BC Kit were launched in 2022, with ongoing discussions with the FDA regarding U.S. commercialization as Class I devices exempt from 510(k) clearance requirements[218][219]. - A collaboration with Bruker Corporation was announced in November 2023 to validate the use of the Accelerate Arc system with Bruker's MALDI Biotyper system for microbial identification[222]. - The Accelerate WAVE system, currently in development, aims to deliver AST results within an average of 4.5 hours, enhancing the speed of diagnostics[223]. - The Accelerate WAVE system is expected to process five PBC assays or ten Isolated Colony assays per module, addressing the majority of microbiology lab volumes and workflows[225]. - The company anticipates significant workflow benefits for microbiology labs by offering consolidated PBC and Isolate susceptibility testing on a single rapid AST diagnostic[225]. - The company believes that the cost to produce Accelerate WAVE assays will be significantly lower than the standard costing for the Accelerate PhenoTest BC Kit, potentially improving the company's margin profile[225]. Financial Performance - For the three months ended June 30, 2024, cost of sales increased by $188, or 9$123, or 15%, compared to the same period in 2023, with gross margins of 23% in 2024 versus 27% in 2023[230]. - Research and development expenses for the three months ended June 30, 2024, decreased by $1,917, or 33$2,185, or 29%, compared to the same period in 2023, attributed to lower legal and professional service fees[236]. - Loss from operations for the three months ended June 30, 2024, improved by $3,979, or 32$25.8 million and negative cash flows from operations of $16.0 million for the six months ended June 30, 2024[242]. - The accumulated deficit totaled$694.7 million as of June 30, 2024[242]. - Non-cash equity-based compensation as a component of gross profit decreased by $64, or 65$17,012, or 85%, for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to the completion of restructuring transactions[240]. Restructuring and Financing - The company completed restructuring transactions in June 2023, which included a loss on extinguishment of debt totaling $6.6 million[243]. - The Company completed a public offering in January 2024, generating net proceeds of$11.0 million, with an additional $2.7 million from the Schuler Trust's purchase of Units[244]. - As of June 30, 2024, the Company had$9.7 million in cash and cash equivalents, a decrease of $3.5 million from$13.2 million at December 31, 2023, primarily due to cash used in operations[245]. - The Company has a total contractual material cash requirement of $92.8 million, with$1.1 million due in 2024 and $78.8 million due in 2026[254]. - Net cash used in operating activities for the six months ended June 30, 2024, was$16.0 million, an improvement from $24.2 million in the same period of 2023[258]. - The Company provided$12.8 million in net cash from financing activities for the six months ended June 30, 2024, primarily from the sale and issuance of Units and Pre-Funded Units[262]. - The Company issued $66.9 million in 5.00$11.9 million for raw materials, with delivery required by March 15, 2027[255]. - The Company has experienced significant increases in federal fund rates, impacting the cost of debt financing and overall financial conditions[248]. - The Company exchanged approximately $55.9 million of 2.50$56.9 million of 5.00% Notes, including accrued interest, and settled the outstanding balance of 2.50% Notes for approximately $0.8 million[267]. - As of June 30, 2024,$69.2 million of 5.00% Notes were outstanding[267]. - In January 2024, the Company completed a Public Units Offering consisting of 6.8 million units at a public offering price of $1.50, generating gross proceeds of approximately$10.2 million[271]. - The Schuler Trust purchased 1.2 million Units at a price of $1.73 per Unit, satisfying a purchase obligation and generating additional gross proceeds of approximately$2.0 million[274]. - Aggregate net proceeds from the January 2024 Public Units Offering and private placement offering for the six months ended June 30, 2024, were approximately $13.7 million[275]. - The Company amended the Schuler Purchase Obligation in December 2023, extending the investment deadline to February 15, 2024, with a commitment for the Schuler Trust to purchase$2.0 million at the public offering price if gross proceeds exceeded $10.0 million[270]. - The Company issued approximately 0.5 million shares of common stock to the Schuler Trust for proceeds of$4.0 million in June 2023[268]. - The exercise price for Common Warrants issued in the January 2024 Public Units Offering is $1.65 per share, and they are exercisable for five years[273]. - The Schuler Trust agreed to purchase an additional 1.6 million Units at a price of$1.73 per Unit on or before May 20, 2024, generating approximately $2.7 million[275]. - The Company had no off-balance sheet arrangements as of June 30, 2024[276].