Accelerate Diagnostics(US:AXDX)2023-05-14 16:00Business Operations and Market Focus - The company reported a significant focus on addressing antibiotic resistance through rapid diagnostics, which is a major healthcare threat according to the CDC[195] - The Accelerate Pheno system and the Accelerate PhenoTest BC Kit have been marketed since 2017, generating revenue primarily from instrument sales and consumable test kits[197] - In 2022, the company launched the Accelerate Arc system and BC Kit, which automates microbial cell concentration from blood culture samples, receiving CE IVDR registration in June 2022[199] - A sales and marketing agreement with BD was established in August 2022 to leverage BD's global sales team and reduce marketing expenses[200] - The company is investing in new product development, including enhancements to the Accelerate Pheno system and a next-generation AST platform aimed at lower costs and higher throughput[201] Financial Performance - For the three months ended March 31, 2023, net sales were $2,812,000, a decrease of $146,000 or 5% compared to $2,958,000 in the same period of 2022[209] - Total revenues decreased due to lower sales of Accelerate PhenoTest instruments, partially offset by increased revenue from Accelerate PhenoTest BC Kits[210] - Cost of sales for the three months ended March 31, 2023 was $1,801,000, a decrease of $355,000 or 16% from $2,156,000 in 2022[211] - Gross profit increased to $1,011,000 for the three months ended March 31, 2023, up $209,000 or 26% from $802,000 in 2022, resulting in a gross margin of 36%[214] - Research and development expenses rose to $6,968,000, an increase of $944,000 or 16% compared to $6,024,000 in the same period of 2022[216] - Sales, general and administrative expenses decreased to $10,105,000, down $568,000 or 5% from $10,673,000 in 2022[218] - The loss from operations for the three months ended March 31, 2023 was $16,062,000, an increase of $167,000 or 1% compared to $15,895,000 in 2022[221] - The company reported total other expense of $733,000 for the three months ended March 31, 2023, a decrease of $3,163,000 compared to other income of $2,430,000 in 2022[223] - As of March 31, 2023, the company had an accumulated deficit of $624.0 million and a net loss of $16.8 million for the period[225] Cash Flow and Financial Position - Cash and cash equivalents decreased to $31.9 million as of March 31, 2023, down $13.7 million from $45.6 million at December 31, 2022[227] - The Company has substantial doubt about its ability to continue as a going concern due to inadequate financial resources to pay outstanding debt obligations and fund forecasted operating costs for at least twelve months from the filing date[229] - As of March 31, 2023, the Company's total contractual material cash requirements amount to $119.4 million, with $58.97 million due in 2023[235] - The Company reported net cash used in operating activities of $13.37 million for the three months ended March 31, 2023, compared to $12.61 million for the same period in 2022, reflecting a change of $761,000[239] - The net cash provided by investing activities was $8.21 million for the three months ended March 31, 2023, primarily due to maturities of marketable securities[241] Debt and Financing Activities - The Company issued $150 million in Convertible Senior Notes with a 2.50% interest rate, and as of March 31, 2023, the outstanding principal amount was $56.6 million[243] - The Company has a non-cancellable purchase obligation of $11.9 million for raw materials, with a delivery deadline of March 15, 2027[235] - The Company may repay secured notes in cash or common stock, with a limit of 19.99% of outstanding shares for stock repayment[236] - The Company entered into a Restructuring Support Agreement to negotiate the restructuring of its capital structure, including the Convertible Notes and Secured Note[244] - As of March 31, 2023, the Company had $39.1 million available for future sales under its at-the-market equity offering program[252] - The Company is exploring additional funding through potential equity and/or debt financing arrangements to support its operations[230] Stock Issuance and Agreements - In 2021, the Company issued 3,954,546 shares of Series A Preferred Stock, generating total proceeds of approximately $30.5 million[254] - The Company completed a public offering of 17,500,000 shares of common stock at a price of $2.00 per share, resulting in net proceeds of approximately $32.9 million after expenses[257] - The Schuler Trust agreed to purchase 2,439,024 shares of common stock at a price of $1.64 per share, totaling an aggregate purchase price of $4.0 million[256] - The Secured Note has a maturity date of August 15, 2027, with an interest rate of 5.0% per annum, and can be repaid in cash or common stock at a price of $2.12 per share[258] - The Company received approximately $1.5 million from the issuance of 201,820 shares of common stock under the December 2020 Securities Purchase Agreement[253] - The Company extended the closing date of the Private Placement with the Schuler Trust from March 24, 2023, to April 20, 2023[256] Accounting and Reporting - The Company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments that may affect reported amounts[261] - The Company does not have any restrictions on incurring future indebtedness related to the Secured Note[258] - There have been no material changes to the Company's critical accounting policies and estimates since the last report[261]