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Form 8-K Accelerate Diagnostics, For: Aug 15

August 15, 2022 8:27 AM EDT
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

  

Date of report (Date of earliest event reported) August 15, 2022

 

Accelerate Diagnostics, Inc.

(Exact name of registrant as specified in charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-31822   84-1072256
(Commission File Number)   (IRS Employer Identification No.)

 

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)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 value per share AXDX

The Nasdaq Stock Market LLC

(The Nasdaq Capital Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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. ¨

 

 

 

 

 

Item 1.01.Entry into a Material Definitive Agreement.

 

On August 15, 2022, Accelerate Diagnostics, Inc. (the “Company”) entered into an exchange agreement (the “Exchange Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”), a holder of the Company’s 2.50% Convertible Senior Notes due 2023 (the “Notes”). Jack Schuler, who serves as a member of the Company’s board of directors, is the sole trustee of the Schuler Trust. Under the terms of the Exchange Agreement, the Schuler Trust has agreed to exchange with the Company (the “Exchange”) $49,905,000 in aggregate principal amount of Notes held by it for (a) a secured promissory note in an aggregate principal amount of $34,933,500 (the “Secured Note”) and (b) a warrant (the “Warrant”) to acquire the Company’s common stock at an exercise price of $2.12 per share (the “Exercise Price”), which represents the closing price of the Company’s common stock as of August 12, 2022.

 

The Secured Note has a scheduled maturity date of August 15, 2027 and will be repayable upon written demand at any time on or after such date. The Company may, at its option, repay the note in (i) United States dollars or (ii) in the form of common stock of the Company, in a number of shares that is obtained by dividing the total amount of such payment by $2.12, subject to certain adjustments as more fully described in the Secured Note. The Secured Note bears interest at a rate of 5.0% per annum, payable at the option of the Company in the same form, at the earlier of (i) any prepayment of principal and (ii) maturity. The Company may prepay the Secured Note at any time without premium or penalty. The Secured Note contains customary representations and warranties and events of default, including certain “change of control” events involving the Company. The Secured Note is secured by substantially all of the assets of the Company, subject to customary exceptions and limitations, pursuant to a security agreement (the “Security Agreement”), dated as of August 15, 2022, entered into between the Company and the Schuler Trust in connection with the Secured Note. The Secured Note does not restrict the incurrence of future indebtedness by the Company but shall become subordinated in right of payment and lien priority upon the request of any future senior lender.

 

The Warrant may be exercised from February 15, 2023 through the earlier of (i) August 15, 2029 and (ii) the consummation of certain acquisition transactions involving the Company, as set forth in the Warrant. The Warrant is exercisable for up to 2,471,710 shares, or 15% of the principal amount of the Secured Note, divided by the Exercise Price. Such number of shares and the Exercise Price are subject to certain customary proportional adjustments for fundamental events, including stock splits and recapitalizations, as set forth in the Warrant.

 

The Secured Note and the Warrant, and any shares of common stock issuable upon conversion of the Secured Note and/or exercise of the Warrant, are being made in reliance on the exemption from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the terms of the Secured Note and the Warrant, the aggregate number of shares issuable upon conversion of the Secured Note and/or exercise of the Warrant may not exceed 19.99% of the Company’s outstanding shares of common stock (calculated prior to giving effect to such exercise or delivery, as applicable).

 

 

 

 

The foregoing description of the Exchange Agreement, the Secured Note, the Warrant and the Security Agreement is not complete and is qualified in its entirety by reference to the full text of such agreements, which are filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and incorporated herein by reference in their entirety.

 

Item 2.02.Results of Operations and Financial Condition.

 

On August 15, 2022, the Company issued a press release announcing its financial results for the quarter ending June 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference in its entirety.

 

In accordance with General Instruction B.2 for Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 2.03.Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K (this “Report”) is incorporated by reference into this Item 2.03.

 

Item 3.02.Unregistered Sales of Equity Securities.

 

The information set forth in Item 1.01 of this Report is incorporated by reference into this Item 3.02.

 

 

 

 

Item 9.01Financial Statements and Exhibits.

 

(d)           Exhibits.  

 

Exhibit   
Number  Description
10.1  Exchange Agreement, dated as of August 15, 2022, by and between the Company and the Jack W. Schuler Living Trust
    
10.2  Secured Promissory Note, dated as of August 15, 2022, by the Company in favor of the Jack W. Schuler Living Trust
    
10.3  Warrant, dated as of August 15, 2022, issued to the Jack W. Schuler Living Trust
    
10.4  Security Agreement, dated as of August 15, 2022, by and between the Company and the Jack W. Schuler Living Trust
    
99.1  Press Release, dated August 15, 2022
    
104  Cover Page Interactive Data File (cover page XBRL tags are embedded within the Inline XBRL document)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ACCELERATE DIAGNOSTICS, INC.
(Registrant)
Date: August 15, 2022  
   
  /s/ Steve Reichling
  Steve Reichling
  Chief Financial Officer

 

 

 

Exhibit 10.1

 

Exchange Agreement

 

August 15, 2022

 

Accelerate Diagnostics, Inc.

 

2.50% Convertible Senior Notes due 2023

 

The undersigned investor (the “Exchanging Investor”), hereby agrees to exchange, with Accelerate Diagnostics, Inc., a Delaware corporation (the “Company”), certain 2.50% Convertible Senior Notes due 2023, CUSIP 00430HAB8 (the “Notes”) for the Exchange Consideration (as defined below) pursuant to this exchange agreement (this “Agreement” or the “Exchange Agreement”). The Exchanging Investor understands that the exchange (the “Exchange”) is being made without registration of the offer or sale of the New Note or the Warrant (each as defined below) under the Securities Act of 1933, as amended (the “Securities Act”), or any securities laws of any state of the United States or of any other jurisdiction in a private placement pursuant to the exemption from registration provided by Section 3(a)(9) or Section 4(a)(2) of the Securities Act and that the Exchanging Investor participating in the Exchange is required to be an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. Capitalized terms used but not defined in this Agreement have the respective meanings set forth in the Indenture, dated as of March 27, 2018 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”).

 

1.                Exchange. On the basis of the representations, warranties and agreements herein contained and subject to the terms and conditions herein set forth, the Exchanging Investor hereby agrees to exchange an aggregate principal amount of the Notes set forth on Exhibit A hereto (the “Exchanged Notes”) for:

 

(a)                a new secured promissory note (the “New Note”) in an aggregate principal amount of $34,933,500; and

 

(b)                a warrant exercisable for up to 2,471,710 shares of the common stock of the Company (the “Warrant,” and together with the New Note, the “Exchange Consideration”).

 

The Exchanging Investor agrees that he shall hold the Exchanged Notes until the Closing (as defined below). In consideration for the performance of its obligations hereunder (including as described in the immediately preceding sentence), the Company agrees to deliver the Exchange Consideration on the Closing Date (as defined below) to the Exchanging Investor in exchange for its Exchanged Notes.

 

The Exchange shall occur in accordance with the procedures set forth in Exhibit B.2 hereto (the “Exchange Procedures”); provided that each of the Company and the Exchanging Investor acknowledges and agrees that no delivery of Exchange Consideration will be made until the Exchanged Notes have been properly submitted for exchange in accordance with the Exchange Procedures and no accrued interest will be payable by reason of any delay in making such delivery.

 

The closing of the Exchange (the “Closing”) shall take place remotely via the exchange of documents and signatures at 10:00 a.m., New York City time, on August 15, 2022 (the “Closing Date”), or at such other time and place as the Company and the Exchanging Investor may mutually agree. On the Closing Date, subject to satisfaction of the conditions precedent specified herein and the prior receipt by the Company from the Exchanging Investor of the Exchanged Notes, the Company shall deliver the Exchange Consideration in accordance with the instructions specified by the Exchanging Investor in Exhibit B.1. All questions as to the form of all documents and the validity and acceptance of the Exchanged Notes will be determined by the Company, in its sole discretion, which determination shall be final and binding.

 

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Subject to the terms and conditions of this Agreement, upon the Closing, the Exchanging Investor hereby (a) waives any and all other rights with respect to such Exchanged Notes and (b) releases and discharges the Company from any and all claims he may now have, or may have in the future, arising out of, or related to, such Exchanged Notes.

 

2.                Representations and Warranties and Covenants of the Company. As of the date hereof and the Closing Date, the Company represents and warrants to, and covenants with, the Exchanging Investor that:

 

(a)                The Company and each of its subsidiaries are entities duly organized, validly existing and in good standing under the laws of their respective jurisdictions of organization and have the requisite power and authority to own their properties and to carry on their business as now being conducted, except in the case of the Company’s subsidiaries as would not reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations (including results thereof), or financial condition of the Company or its subsidiaries, taken as a whole. The Company and each of its subsidiaries is duly qualified as a foreign entity to do business (where such concept exists) and is in good standing in every jurisdiction (where such concept exists) in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations (including results thereof), or condition (financial or otherwise) of the Company or its subsidiaries, taken as a whole. The Company has the power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the Exchange contemplated hereby.

 

(b)                This Agreement has been duly authorized, executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (A) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (B) general principles of equity, whether such enforceability is considered in a proceeding at law or in equity (the “Enforceability Exceptions”).

 

(c)                This Agreement and consummation of the Exchange will not violate, conflict with or result in a breach of or default under (i) the charter or bylaws of the Company, (ii) any agreement or instrument to which the Company is a party or by which the Company or any of its assets are bound, or (iii) assuming the truth and accuracy of the representations and warranties and compliance with the covenants of the Exchanging Investor herein, any laws, regulations or governmental or judicial decrees, injunctions or orders applicable to the Company and its subsidiaries, except in the case of clauses (ii) or (iii), where such violations, conflicts, breaches or defaults as would not, individually or in the aggregate, materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. No consent, approval, order or authorization of, or registration, declaration or filing with any governmental entity is required on the part of the Company or any of its subsidiaries in connection with the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Exchange, except as may be required under any state or federal securities laws or that may be made or obtained after the Closing without penalty.

 

(d)                From August 15, 2021 to the date of this Agreement, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or timely filed notifications of late filings for any of the foregoing (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents.

 

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(e)                Without the prior written consent of the Exchanging Investor, the Company shall not disclose the name of the Exchanging Investor in any filing or announcement, unless such disclosure is required by applicable law, rule, regulation or legal process based on advice of counsel.

 

(f)                 The Company agrees that it shall, upon request, execute and deliver any additional documents deemed by the Trustee or transfer agent to be reasonably necessary to complete the Exchange.

 

3.                Representations and Warranties and Covenants of the Exchanging Investor. As of the date hereof and as of the Closing Date (except as otherwise set forth below), the Exchanging Investor hereby represents and warrants to, and covenants with, the Company that:

 

(a)                This Agreement constitutes the legal, valid and binding obligation of the Exchanging Investor, enforceable in accordance with its terms, except that such enforcement may be subject to the Enforceability Exceptions.

 

(b)                As of the date hereof and as of the Closing, the Exchanging Investor is the sole legal and beneficial owner of the Exchanged Notes set forth on Exhibit A attached to this Agreement. When the Exchanged Notes are exchanged, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, mortgages, pledges, security interests, restrictions, charges, encumbrances or adverse claims, rights or proxies of any kind (“Liens”). The Exchanging Investor has not, nor prior to the Closing will have, in whole or in part, other than pledges or security interests that the Exchanging Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker, (x) assigned, transferred, hypothecated, pledged, exchanged, submitted for conversion pursuant to the Indenture or otherwise disposed of any of its Exchanged Notes (other than to the Company pursuant hereto), or (y) given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to its Exchanged Notes.

 

(c)                This Agreement and consummation of the Exchange will not violate, conflict with or result in a breach of or default under (i) any agreement or instrument to which the Exchanging Investor is a party or by which the Exchanging Investor or his assets are bound, or (ii) any laws, regulations or governmental or judicial decrees, injunctions or orders applicable to the Company and its subsidiaries. No consent, approval, order or authorization of, or registration, declaration or filing with any governmental entity is required on the part of the Exchanging Investor in connection with the execution, delivery and performance by the Exchanging Investor of this Agreement and the consummation by the Exchanging Investor of the Exchange.

 

(d)                The Exchanging Investor will comply with all applicable laws and regulations in effect necessary for the Exchanging Investor to consummate the transactions contemplated hereby and obtain any consent, approval or permission required for the transactions contemplated hereby and the laws and regulations of any jurisdiction to which the Exchanging Investor is subject, and the Company shall have no responsibility therefor.

 

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(e)                The Exchanging Investor acknowledges that no person has been authorized to give any information or to make any representation or warranty concerning the Company or the Exchange other than the information set forth herein in connection with the Exchanging Investor’s examination of the Company and the terms of the Exchange, the New Note and the Warrant, and the Company does not take, and the Company cannot provide any assurance as to the reliability of, any other information that others may provide to the Exchanging Investor.

 

(f)                 The Exchanging Investor has such knowledge, skill and experience in business, financial and investment matters so that he is capable of evaluating the merits and risks with respect to the Exchange and an investment in the New Note and the Warrant. With the assistance of the Exchanging Investor’s own professional advisors, to the extent that the Exchanging Investor has deemed appropriate, the Exchanging Investor has made his own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Exchange Consideration and the consequences of the Exchange and this Agreement and the Exchanging Investor has made his own independent decision that the investment in the Exchange Consideration is suitable and appropriate for the Exchanging Investor. The Exchanging Investor has considered the suitability of the Exchange Consideration as an investment in light of the Exchanging Investor’s circumstances and financial condition and is able to bear the risks associated with an investment in the Exchange Consideration.

 

(g)                The Exchanging Investor confirms that he is not relying on any communication (written or oral) of the Company or any of its affiliates or representatives as investment advice or as a recommendation to acquire the Exchange Consideration in the Exchange. It is understood that information provided by the Company or any of its affiliates and representatives shall not be considered investment advice or a recommendation to participate in the Exchange, and that none of the Company nor any of its affiliates or representatives is acting or has acted as an advisor to the Exchanging Investor in deciding to participate in the Exchange.

 

(h)                The Exchanging Investor confirms that the Company has not (i) given the Exchanging Investor any guarantee, representation or warranty as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Exchange Consideration or (ii) made any representation or warranty to the Exchanging Investor regarding the legality of an investment in the New Note and the Warrant under applicable legal investment or similar laws or regulations. The Exchanging Investor confirms that he is not relying and has not relied, upon any statement, advice (whether accounting, tax, financial legal or other), representation or warranty by the Company or any of its affiliates or representatives, except for the representations and warranties made by the Company in this Agreement, and that the Exchanging Investor has made his own independent decision that the investment in the New Note and the Warrant is suitable and appropriate for the Exchanging Investor.

 

(i)                 The Exchanging Investor is familiar with the business and financial condition and operations of the Company and the Exchanging Investor has had the opportunity to conduct his own investigation of the Company, the New Note and the Warrant. The Exchanging Investor has had access to the Securities and Exchange Commission filings (the “SEC Filings”) of the Company and such other information concerning the Company and the Exchange Consideration as he deems necessary to enable him to make an informed investment decision concerning the Exchange. The Exchanging Investor has been offered the opportunity to ask such questions of the Company and its representatives and received answers thereto, as he deems necessary to enable him to make an informed investment decision concerning the Exchange.

 

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(j)                 The Exchanging Investor is an “accredited investor” as defined in Rule 501 under the Securities Act. The Exchanging Investor agrees to furnish any additional information regarding the Exchanging Investor reasonably requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the Exchange.

 

(k)                The Exchanging Investor is acquiring the New Note and the Warrant solely for his own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the New Note or the shares issuable upon exercise of the Warrant. The Exchanging Investor understands that the issuance of the New Note and the Warrant have not been registered under the Securities Act or any state securities laws and are being issued without registration under the Securities Act pursuant to Section 3(a)(9) or Section 4(a)(2) of the Securities Act, which exemption depends in part upon the investment intent of the Exchanging Investor and the accuracy of the other representations and warranties made by the Exchanging Investor in this Agreement. The Exchanging Investor understands that the Company is relying upon the representations, warranties and agreements contained in this Agreement (and any supplemental information provided to the Company by the Exchanging Investor) for the purpose of determining whether this transaction meets the requirements for such exemption(s) and to issue the Shares without legends as set forth herein.

 

(l)                 The Exchanging Investor acknowledges that the terms of the Exchange have been mutually negotiated between the Exchanging Investor and the Company. The Exchanging Investor was given a meaningful opportunity to negotiate the terms of the Exchange.

 

(m)              The Exchanging Investor acknowledges that he had a sufficient amount of time to consider whether to participate in the Exchange and that the Company has not placed any pressure on the Exchanging Investor to respond to the opportunity to participate in the Exchange. The Exchanging Investor acknowledges that he has not become aware of the Exchange through any form of general solicitation or advertising within the meaning of Rule 502 under the Securities Act or otherwise through a “public offering” under Section 4(a)(2) of the Securities Act.

 

(n)                The Exchanging Investor will, upon request, execute and deliver any additional documents deemed by the Company and the Trustee or the transfer agent to be reasonably necessary to complete the transactions contemplated by this Agreement.

 

(o)                No later than one (1) business day after the date hereof, the Exchanging Investor agrees to deliver to the Company settlement instructions substantially in the form of Exhibit B.1 attached to this Agreement.

 

(p)                The Exchanging Investor understands that no federal, state, local or foreign agency has passed upon the merits or risks of an investment in the New Note and the Warrant or made any finding or determination concerning the fairness or advisability of this investment.

 

(q)                The Exchanging Investor has been in material compliance with the applicable rules and regulations administered or conducted by the U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”), the applicable rules and regulations of the Foreign Corrupt Practices Act (“FCPA”) and the applicable Anti-Money Laundering (“AML”) rules in the Bank Secrecy Act. The Exchange Investor is not named on the lists of denied parties or blocked persons administered by OFAC, resident in or organized under the laws of a country that is the subject of comprehensive economic sanctions and embargoes administered or conducted by OFAC (“Sanctions”), is not otherwise the subject of Sanctions and has not been found to be in violation or under suspicion of violating OFAC, FCPA or AML rules and regulations.

 

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(r)                 The Exchanging Investor acknowledges that the Company may issue appropriate stop-transfer instructions to its transfer agent, if any, and may make appropriate notations to the same effect in its books and records to ensure compliance with the provisions of this Section 3.

 

(s)                The Exchanging Investor is a resident of the jurisdiction set forth on Exhibit B.1 attached to this Agreement.

 

(t)                 The Exchanging Investor understands that the Company and others will rely upon the truth and accuracy of the foregoing representations, warranties and covenants and agrees that if any of the representations and warranties deemed to have been made by the Exchanging Investor are no longer accurate, the Exchanging Investor shall promptly notify the Company prior to the Closing. The Exchanging Investor understands that, unless the Exchanging Investor notifies the Company in writing to the contrary before the Closing, each of the Exchanging Investor’s representations and warranties contained in this Agreement will be deemed to have been reaffirmed and confirmed as of the Closing.

 

4.                Conditions to Obligations of the Exchanging Investor and the Company. The obligations of the Exchanging Investor and of the Company under this Agreement are subject to the satisfaction at or prior to the Closing of the following conditions precedent: (a) the representations and warranties of the Company contained in Section 2 hereof (with respect to the Exchanging Investor) and of the Exchanging Investor contained in Section 3 hereof (with respect to the Company) shall be true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing, (b) no provision of any applicable law or any judgment, ruling, order, writ, injunction, award or decree of any governmental authority shall be in effect prohibiting or making illegal the consummation of the transactions contemplated by this Agreement and (c) prior to or contemporaneously with the Closing, the Company shall have delivered the New Note and the Warrant to the Exchanging Investor.

 

5.                Waiver, Amendment. Neither this Agreement nor any provisions hereof or thereof shall be modified, changed or discharged, except by an instrument in writing, signed by the Company and the Exchanging Investor.

 

6.                Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the Exchanging Investor without the prior written consent of the other.

 

7.                Waiver of Jury Trial. EACH OF THE COMPANY AND THE EXCHANGING INVESTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

8.                Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to such state’s rules concerning conflicts of laws that might provide for any other choice of law.

 

9.                Submission to Jurisdiction. Each of the Company and the Exchanging Investor: (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted exclusively in the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York; (b) waives any objection that such party may now or hereafter have to the venue of any such suit, action or proceeding; and (c) irrevocably consents to the jurisdiction of the aforesaid courts in any such suit, action or proceeding. Each of the Company and the Exchanging Investor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

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10.             Venue. Each of the Company and the Exchanging Investor irrevocably and unconditionally waives, to the fullest extent such party may legally and effectively do so, any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 9. Each of the Company and the Exchanging Investor irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

11.             Service of Process. Each of the Company and the Exchanging Investor irrevocably consents to service of process in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of the Company or the Exchanging Investor to serve process in any other manner permitted by law.

 

12.             Notices. All notices and other communications to the Company provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally, sent by prepaid overnight courier (providing written proof of delivery) or sent by confirmed electronic mail and will be deemed given on the date so delivered (or, if such day is not a business day, on the first subsequent business day) to the following addresses, or in the case of the Exchanging Investor, the address provided on Exhibit B.1 attached to this Agreement (or such other address as the Company or the Exchanging Investor shall have specified by notice in writing to the other):

 

If to the Company:

Michael Bridge

Senior Vice President and General Counsel

Accelerate Diagnostic, Inc.

3950 S. Country Club Road, Suite 470

Tucson, AZ

Email: [email protected]

 

with a copy to (which shall not constitute notice):

 

 

Michael Tollini

Cooley LLP

1299 Pennsylvania Avenue, NW

Washington, DC 20004-2400

Email: [email protected]

 

13.             Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the Company and the Exchanging Investor and their respective heirs, legal representatives, successors and assigns. This Agreement constitutes the entire agreement between the Company and the Exchanging Investor with respect to the subject matters hereof. This Agreement may be executed by one or more of the parties hereto in any number of separate counterparts (including by electronic means, including email or otherwise), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by electronic transmission (e.g., “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof.

 

14.             Notification of Changes. After the date of this Agreement, each of the Company and the Exchanging Investor hereby covenants and agrees to notify the other upon the occurrence of any event prior to the Closing of the Exchange pursuant to this Agreement that would cause any representation, warranty or covenant of the Company or the Exchanging Investor, as the case may be, contained in this Agreement to be false or incorrect.

 

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15.             Severability. If any term or provision of this Agreement (in whole or in part) is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

16.             Survival. The representations and warranties of the Company and the Exchanging Investor contained in this Agreement or made by or on behalf of the Exchanging Investor pursuant to this Agreement shall survive the consummation of the transactions contemplated hereby.

 

17.             Taxation. The Exchanging Investor acknowledges that either (i) the Company must be provided with a correct taxpayer identification number (“TIN,” generally a person’s social security or federal employer identification number) and certain other information on a properly completed and executed Internal Revenue Service (“IRS”) Form W-9, or (ii) another basis for exemption from backup withholding must be established. See Exhibit C for certain additional information. The Company and its agents shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement such amounts as are required to be deducted or withheld under applicable law. To the extent any such amounts are withheld and remitted to the appropriate taxing authority, such amounts shall be treated for all purposes as having been paid to the Exchanging Investor.

 

18.             Section and Other Headings. The section and other headings contained in Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

 

8

 

 

  Very truly yours,  
   
  ACCELERATE DIAGNOSTICS, INC. 
   
  By /s/ Jack Phillips
    Name: Jack Phillips
    Title: President and Chief Executive Officer 

 

9

 

 

Please confirm that the foregoing correctly sets forth the agreement between the Company and the Exchanging Investor by signing in the space provided below for that purpose.

 

  AGREED AND ACCEPTED:
   
  Exchanging Investor:
   
  /s/ Jack W. Schuler
  Jack W. Schuler, Trustee of the JACK W. SCHULER LIVING TRUST  

 

10

 

 

EXHIBIT A 

 

Exchanging Investor Information

 

Exchanging Investor Name,
Address, Email and Phone
Number
Exchanged Notes 

Jack W. Schuler Living Trust

100 North Field Drive, Suite 360

Lake Forest, IL 60045

Attn: Jack W. Schuler, Trustee

Email: [email protected]

Phone: 224-880-1211

$49,905,000

 

A-1

 

 

EXHIBIT B.1 

 

Exchanging Investor:
Jack W. Schuler Living Trust  
 
Exchanging Investor Address:
100 North Field Drive, Suite 360  
Lake Forest, IL 60045  
 
Telephone: 224-880-1211  
 
Country of Residence:
United States  
 
Taxpayer Identification Number:
   
 
Account for Notes:

 

DTC Participant Number:    
DTC Participant Name:    
DTC Participant Phone Number:    
DTC Participant Contact Email:    
Account # at Bank/Broker:    

 

B.1-1

 

 

Exchange Procedures

 

NOTICE TO INVESTOR

 

These are the Exchange Procedures for the settlement of the exchange of 2.50% Convertible Senior Notes due 2023, CUSIP 00430HAB8 (the “Exchanged Notes”) of Accelerate Diagnostic, Inc., a Delaware corporation (the “Company”), for the Exchange Consideration (as defined in and pursuant to the Exchange Agreement between you and the Company) to be delivered to you, which is expected to occur on or about August 15, 2022. To ensure timely settlement for the Exchange Consideration, please follow the instructions as set forth below.

 

These instructions supersede any prior instructions you received. Your failure to comply with these instructions may delay your receipt of the Exchange Consideration.

 

If you have any questions, please contact Michael Bridge of the Company at 480-330-3656.

 

To deliver Exchanged Notes:

 

You must direct the eligible DTC participant through which you hold a beneficial interest in the Notes to post no later than 9:00 a.m., New York City time, on August 15, 2022 a one-sided withdrawal request through DTC via DWAC for the aggregate principal amount of Exchanged Notes set forth on Exhibit A of the Agreement to be exchanged for Exchange Consideration.

 

To receive Exchange Consideration:

 

To receive the Exchange Consideration:

 

You must provide overnight delivery instructions for the New Note and the Warrant to the Company.

 

Closing: On August 15, 2022, after the Company receives your Notes and your delivery instructions and a withdrawal request in respect of the Exchanged Notes has been posted as specified above, and subject to the satisfaction of the conditions to Closing as set forth in the Exchange Agreement, the Company will deliver the Exchange Consideration in respect of the Exchanged Notes in accordance with the delivery instructions above.

 

B.2-1

 

 

EXHIBIT C 

 

Under U.S. federal income tax law, a holder who exchanges Notes for Exchange Consideration generally must provide such holder’s correct TIN on a properly completed and executed IRS Form W-9 (available from the Company or at www.irs.gov/pub/irs-pdf/fw9.pdf) or otherwise establish a basis for exemption from backup withholding. A TIN is generally an individual holder’s social security number or a holder’s employer identification number. If the correct TIN is not provided, the holder may be subject to a $50 penalty imposed under Section 6723 of the Code. In addition, certain payments made to holders may be subject to U.S. backup withholding (currently set at 24% of the payment). If a holder is required to provide a TIN but does not have a TIN, the holder should consult its tax advisor regarding how to obtain a TIN. Certain holders (including corporations and non-U.S. holders) are not subject to these backup withholding and reporting requirements.

 

A non-U.S. holder (i) will be subject to 30% U.S. federal withholding unless such holder establishes an exemption from, or a reduced rate of, such withholding, and (ii) must establish its status as an exempt recipient from backup withholding and can do so by submitting a properly completed IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-8IMY (and all required attachments), or other applicable IRS Form W-8 (available from the Company or at www.irs.gov), signed, under penalties of perjury, attesting to such holder’s exempt foreign status. This form also may establish an exemption from withholding under Section 1471 through 1474 of the Code.

 

U.S. backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is timely furnished to the IRS.  The Exchanging Investor is urged to consult his tax advisor regarding how to complete the appropriate forms and to determine whether he is exempt from backup withholding or other withholding taxes.

 

C-1

 

Exhibit 10.2

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES IN THE UNITED STATES. THIS NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THIS NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY MAY BECOME SUBORDINATED IN RIGHT OF PAYMENT TO SENIOR INDEBTEDNESS (AS DEFINED BELOW) TO THE EXTENT SET FORTH IN AN INTERCREDITOR AGREEMENT (AS DEFINED BELOW); AND THE HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO EXECUTE AND BE BOUND BY THE PROVISIONS OF ANY SUCH INTERCREDITOR AGREEMENT.

 

SECURED PROMISSORY NOTE

 

 

Date of Note: August 15, 2022
   
Principal Amount of Note: $34,933,500

 

For value received, Accelerate Diagnostics, Inc., a Delaware corporation (the “Borrower”), promises to pay to the undersigned holder or such party’s assigns (the “Holder”) the principal amount set forth above with interest on the outstanding principal amount at a rate equal to 5.0% per annum. Interest shall commence with and include the date hereof and shall continue on the outstanding principal amount until paid in full (or in part pursuant to Section 1(b)). Interest shall be computed on the basis of a year of 365 days for the actual number of days elapsed and shall compound quarterly. Subject to any Intercreditor Agreement, all interest and principal, unless previously prepaid, shall be due and payable upon written demand by Holder on or after the date that is five (5) years from the date of this Note.

 

This secured promissory note (this “Note”) is referred to in and is executed and delivered in connection with that certain Security Agreement dated as of August 15, 2022 and executed by the Borrower in favor of the Secured Parties set forth therein (as the same may from time to time be amended, modified or supplemented or restated, the “Security Agreement”). Additional rights and obligations of the Holder are set forth in the Security Agreement. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Security Agreement.

 

1.                   Basic Terms.

 

(a)                Payments. All payments of interest and principal on this Note shall be (i) in lawful money of the United States of America or (ii) at the election of the Borrower, in the form of common stock of the Borrower; provided that the amount of shares delivered pursuant to clause (ii) hereof shall be the number of shares of common stock (the “Exchange Shares”) that is obtained by dividing the total amount of such payment by the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on the trading day immediately preceding the date of this Note, subject to adjustment in accordance with clause (c) below (the “Exchange Price”), rounded down to the nearest whole share; provided further that the aggregate amount of such shares shall not exceed an aggregate amount of shares, inclusive of any shares exercised by Holder pursuant to a warrant issued in connection with this Note, in excess of 19.99% of the Borrower’s outstanding shares of common stock (calculated prior to giving effect to such payment or exercise, as applicable), and shall be made to the Holder or, if applicable, to the Holder’s permitted assigns. All payments shall be applied first to accrued interest, and thereafter to principal.

 

 

 

 

(b)               Prepayment. The Borrower may prepay this Note in whole or in part at any time without the consent of the Holder, together with all accrued but unpaid interest and the other amounts due hereunder in respect of the amount prepaid, without premium or penalty.

 

(c)                Adjustment of Exchange Price and Exchange Shares.

 

(i)                 In the event of changes in the outstanding common stock of the Borrower by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, consolidation, acquisition of the Borrower, or the like, the number, class and type of shares available under the Note in the aggregate and the Exchange Price shall be correspondingly adjusted to give the Holder, on exchange for the same aggregate Exchange Price, the total number, class, and type of shares or other property as the Holder would have owned had delivery of the shares under the Note been made prior to the event and had the Holder continued to hold such shares until the event requiring adjustment. The form of this Note need not be changed because of any adjustment in the number of Exchange Shares subject to delivery under clause (a).

 

(ii)               Upon the occurrence of each adjustment pursuant to this clause (c), the Borrower at its expense will, at the written request of the Holder, promptly compute such adjustment in accordance with the terms of this Note and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exchange Price and adjusted number or type of Exchange Shares, describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Borrower will promptly deliver a copy of each such certificate to the Holder and to the Borrower’s transfer agent.

 

2.                   Representations and Warranties.

 

(a)                Representations and Warranties of the Borrower. The Borrower hereby represents and warrants to the Holder as of the date this Note was issued as follows:

 

(i)                 Organization, Good Standing and Qualification. The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Borrower has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Borrower is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Borrower or its business (a “Material Adverse Effect”).

 

(ii)               Corporate Power. The Borrower has all requisite corporate power to issue this Note and to carry out and perform its obligations under this Note. The Borrower’s board of directors has approved the issuance of this Note based upon a reasonable belief that the issuance of this Note is appropriate for the Borrower after reasonable inquiry concerning the Borrower’s financing objectives and financial situation.

 

(iii)             Authorization. All corporate action on the part of the Borrower necessary for the issuance and delivery of this Note has been taken. This Note constitutes a valid and binding obligation of the Borrower enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws.

 

2.

 

 

(iv)              Governmental Consents. All consents, approvals, orders or authorizations of, or registrations, qualifications, designations, declarations or filings with, any governmental authority required on the part of the Borrower in connection with issuance of this Note has been obtained.

 

(v)                Compliance with Laws. To its knowledge, the Borrower is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties, which violation of which would have a Material Adverse Effect.

 

(vi)              Compliance with Other Instruments. The Borrower is not in violation or default of any term of its certificate of incorporation or bylaws, or of any provision of any mortgage, indenture or contract to which it is a party and by which it is bound or of any judgment, decree, order or writ, other than such violation(s) that would not have a Material Adverse Effect. The execution, delivery and performance of this Note will not result in any such violation or be in conflict with, or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, decree, order or writ or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Borrower (other than pursuant to the Security Agreement) or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Borrower, its business or operations or any of its assets or properties.

 

(vii)            No “Bad Actor” Disqualification. The Borrower has exercised reasonable care to determine whether any Borrower Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through (viii), as modified by Rules 506(d)(2) and (d)(3), under the Act (“Disqualification Events”). To the Borrower’s knowledge, no Borrower Covered Person is subject to a Disqualification Event. The Borrower has complied, to the extent required, with any disclosure obligations under Rule 506(e) under the Act. For purposes of this Note, “Borrower Covered Persons” are those persons specified in Rule 506(d)(1) under the Act; provided, however, that Borrower Covered Persons do not include (a) the Holder, or (b) any person or entity that is deemed to be an affiliated issuer of the Borrower solely as a result of the relationship between the Borrower and the Holder.

 

(viii)          Offering. Assuming the accuracy of the representations and warranties of the Holder contained in subsection (b) below, the offer, issue and sale of this Note are and will be exempt from the registration and prospectus delivery requirements of the Act, and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws.

 

(ix)              Use of Proceeds. The Borrower shall use the proceeds of this Note solely for the operations of its business, and not for any personal, family or household purpose.

 

(b)               Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Borrower as of the date hereof as follows:

 

(i)                 Purchase for Own Account. The Holder is acquiring this Note solely for the Holder’s own account and beneficial interest for investment and not for sale or with a view to distribution of this Note or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention.

 

3.

 

 

(ii)               Information and Sophistication. Without lessening or obviating the representations and warranties of the Borrower set forth in subsection (a) above, the Holder hereby: (A) acknowledges that the Holder has received all the information the Holder has requested from the Borrower and the Holder considers necessary or appropriate for deciding whether to acquire this Note, (B) represents that the Holder has had an opportunity to ask questions and receive answers from the Borrower regarding the terms and conditions of the offering of this Note and to obtain any additional information necessary to verify the accuracy of the information given the Holder and (C) further represents that the Holder has such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risk of this investment.

 

(iii)             Ability to Bear Economic Risk. The Holder acknowledges that investment in this Note involves a high degree of risk, and represents that the Holder is able, without materially impairing the Holder’s financial condition, to hold this Note for an indefinite period of time and to suffer a complete loss of the Holder’s investment.

 

(iv)              Further Limitations on Disposition. Without in any way limiting the representations set forth above, the Holder further agrees not to make any disposition of all or any portion of this Note unless and until:

 

(1)                there is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(2)                the Holder shall have notified the Borrower of the proposed disposition and furnished the Borrower with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Borrower, the Holder shall have furnished the Borrower with an opinion of counsel, reasonably satisfactory to the Borrower, that such disposition will not require registration under the Act or any applicable state securities laws; provided that no such opinion shall be required for dispositions in compliance with Rule 144 under the Act, except in unusual circumstances.

 

Notwithstanding the provisions of paragraphs (1) and (2) above, no such registration statement or opinion of counsel shall be necessary for transfers to a trust of the Holder or transfers by gift, will or intestate succession to any spouse or lineal descendants or ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent as if they were the Holders hereunder.

 

(v)                Accredited Investor Status. The Holder is an “accredited investor” as such term is defined in Rule 501 under the Act.

 

(vi)              No “Bad Actor” Disqualification. The Holder represents and warrants that the Holder is not subject to any Disqualification Event, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Act and disclosed in writing in reasonable detail to the Borrower. The Holder represents that the Holder has exercised reasonable care to determine the accuracy of the representation made by the Holder in this paragraph, and agrees to notify the Borrower if the Holder becomes aware of any fact that makes the representation given by the Holder hereunder inaccurate.

 

(vii)            Foreign Investors. If the Holder is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the “Code”)), the Holder hereby represents that he, she or it has satisfied itself as to the full observance of the laws of the Holder’s jurisdiction in connection with any invitation to subscribe for this Note or any use of this Note, including (A) the legal requirements within the Holder’s jurisdiction for the purchase of this Note, (B) any foreign exchange restrictions applicable to such purchase, (C) any governmental or other consents that may need to be obtained, and (D) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of this Note. The Holder’s subscription, payment for and continued beneficial ownership of this Note will not violate any applicable securities or other laws of the Holder’s jurisdiction.

 

4.

 

 

(viii)          Forward-Looking Statements. With respect to any forecasts, projections of results and other forward-looking statements and information provided to the Holder, the Holder acknowledges that such statements were prepared based upon assumptions deemed reasonable by the Borrower at the time of preparation. There is no assurance that such statements will prove accurate, and the Borrower has no obligation to update such statements.

 

3.                   Events of Default.

 

If there shall be any Event of Default (as defined below) hereunder, subject to the terms of the Intercreditor Agreement, at the option and upon the declaration of the Holder and upon written notice to the Borrower (which election and notice shall not be required in the case of an Event of Default under subsection (ii) or (iii) below), this Note shall accelerate and all principal and unpaid accrued interest shall become due and payable. The occurrence of any one or more of the following shall constitute an “Event of Default”:

 

(i)                 the Borrower fails to pay timely any of the principal amount due under this Note on the date the same becomes due and payable or any unpaid accrued interest or other amounts due under this Note on the date the same becomes due and payable;

 

(ii)               the Borrower files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing;

 

(iii)             an involuntary petition is filed against the Borrower (unless such petition is dismissed or discharged within 60 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee or assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Borrower);

 

(iv)              an “Event of Default” (as defined in the Security Agreement); or

 

(v)                the occurrence of a transaction in which (a) any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than the Holder or its affiliates, becomes the “beneficial owner” (as defined in Rule 13(d) under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the board of managers of Borrower, who did not have such power before such transaction or (b) the sale of all or substantially all of the assets of the Company and its subsidiaries (taken as a whole) to any “person” (as defined in Rule 13(d) under the Securities Exchange Act of 1934) other than the Holder or its affiliates.

 

5.

 

 

4.                   Miscellaneous Provisions.

 

(a)                Waivers. The Borrower hereby waives demand, notice, presentment, protest and notice of dishonor.

 

(b)               Further Assurances. The Holder agrees and covenants that at any time and from time to time the Holder will promptly execute and deliver to the Borrower such further instruments and documents and take such further action as the Borrower may reasonably require in order to carry out the full intent and purpose of this Note and to comply with state or federal securities laws or other regulatory approvals.

 

(c)                Transfers of Note. This Note may be transferred only upon its surrender to the Borrower for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form reasonably satisfactory to the Borrower. Thereupon, this Note shall be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and registered in the name of, the transferee. Interest and principal as well as any fees provided herein shall be paid solely to the registered holder of this Note. Such payment shall constitute full discharge of the Borrower’s obligation to pay such interest and principal. Notwithstanding the foregoing, the Holder may not assign this Note, whether by operation of law or otherwise, or any rights or duties hereunder without the prior written consent of the Borrower, and any prohibited assignment will be void and of no force or effect; provided that the Holder may assign its right, title and interest in this Note to any person that is controlled by, controls or is under common control with the Holder.

 

(d)               Amendment and Waiver. Any term of this Note may be amended or waived with the written consent of the Borrower and the Holder. Upon the effectuation of such waiver or amendment with the consent of the Holder in conformance with this paragraph, such amendment or waiver shall be effective as to, and binding against any future holder of this Note.

 

(e)                Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of Delaware. In any action among or between any of the parties arising out of or relating to this Note, including any action seeking equitable relief, each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts located in Delaware. Each party hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Note, the transactions contemplated hereby and thereby or the actions of such parties in the negotiation, administration, performance and enforcement hereof and thereof.

 

(f)                 Binding Agreement. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Note, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided in this Note.

 

(g)                Counterparts; Manner of Delivery. This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

(h)               Titles and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing or interpreting this Note.

 

(i)                 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier (or two days after deposit with a recognized international overnight courier with respect to international delivery), specifying next day delivery, with written verification of receipt. All communications to a party shall be sent to the party’s address set forth on the signature page hereto or at such other address(es) as such party may designate by 10 days’ advance written notice to the other party hereto.

 

6.

 

 

(j)                 Expenses. The Borrower and the Holder shall each bear its respective expenses and legal fees incurred with respect to the negotiation, execution and delivery of this Note and the transactions contemplated herein.

 

(k)               Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holder, upon any breach or default of the Borrower under this Note shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by the Holder of any breach or default under this Note, or any waiver by the Holder of any provisions or conditions of this Note, must be in writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Note, or by law or otherwise afforded to the Holder, shall be cumulative and not alternative. This Note shall be void and of no force or effect in the event that the Holder fails to remit the full principal amount to the Borrower within five calendar days of the date of this Note.

 

(l)                 Entire Agreement. This Note constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof, and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

 

(m)              Security Interest. The full amount of this Note is secured by the Collateral identified and described as security therefor in the Security Agreement executed by and delivered by the Borrower to the Holder.

 

(n)               Subordination.

 

(i)                 As of the date hereof, the indebtedness evidenced by this Note is not subordinated. From and after the date hereof, the indebtedness evidenced by this Note shall be expressly subordinated, to the extent and in the manner hereinafter set forth, in right of lien priority to, and in right of payment to the prior payment in full of, any Senior Indebtedness. “Senior Indebtedness” shall mean, unless expressly subordinated to or made on a parity with the amounts due under this Note, the principal of, unpaid interest on and amounts reimbursable, fees, expenses, costs of enforcement and other amounts due in connection with (a) indebtedness of the Borrower to banks or commercial finance or other lending institutions regularly engaged in the business of lending money (including venture capital, investment banking, debt funds, “BDCs” or similar institutions and their affiliates which sometimes engage in lending activities but which are primarily engaged in investments in equity securities), whether or not secured, and (b) any such indebtedness or any debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness, or any indebtedness arising from the satisfaction of such Senior Indebtedness by a guarantor.

 

7.

 

 

(ii)               By acceptance of this Note, the Holder agrees to execute and deliver a customary subordination or intercreditor agreement (the “Intercreditor Agreement”) reasonably requested from time to time by the holders of Senior Indebtedness and, as a condition to the Holder’s rights hereunder, the Borrower may require that the Holder execute such Intercreditor Agreement.

 

[Signature pages follow]

 

8.

 

 

The parties have executed this Secured Promissory Note as of the date first noted above.

 

  BORROWER:
   
  ACCELERATE DIAGNOSTICS, INC.
   
  By: /s/ Jack Phillips
    Name: Jack Phillips
    Title: President and Chief Executive Officer
     
  E-mail: [email protected]
   
  Address:

Accelerate Diagnostics, Inc.

3950 South Country Club Road, Suite 470

Tucson, AZ 85714

 

 

 

 

The parties have executed this Secured Promissory Note as of the date first noted above.

 

  HOLDER:
   
  /s/ Jack W. Schuler
  Jack W. Schuler, Trustee of the JACK W. SCHULER LIVING TRUST
  7
  E-mail: [email protected]
   
  Address: 100 North Field Drive, Suite 360
    Lake Forest, IL 60045
     

 

 

 

 

Exhibit 10.3

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

 

ACCELERATE DIAGNOSTICS, INC.

WARRANT TO PURCHASE COMMON STOCK

 

August 15, 2022

 

Void After August 15, 2029

 

THIS CERTIFIES THAT, for value received, the JACK W. SCHULER LIVING TRUST, or it permitted registered assigns (the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from ACCELERATE DIAGNOSTICS, INC., a Delaware corporation (the “Company”) up to 2,471.710 shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”), subject to Section 2.1. This Warrant has been issued in connection with that certain Secured Promissory Note issued by the Company in favor of the Holder dated of even date herewith (the “Note”).

 

1. DEFINITIONS.

 

Capitalized terms used herein but not otherwise defined herein shall have their respective meanings as set forth in the Note. As used herein, the following terms shall have the following respective meanings:

 

(a) “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

 

(b) “Exercise Period” shall mean the period commencing on the date that is six months after the date hereof and ending at 5:30 p.m. New York City time on the seventh (7th) anniversary of the date hereof.

 

(c) “Exercise Price” shall mean $2.12 per share, subject to adjustment pursuant to Section 4 below.

 

(d) “Exercise Date” shall have the meaning set forth in Section 2.1(b) hereof.

 

(e) “Exercise Shares” shall mean the shares of Common Stock issuable upon exercise of this Warrant.

(f) “Expiration Date” shall mean 5:30 p.m. New York City time on the seventh (7th) anniversary of the date hereof.

 

2. EXERCISE OF WARRANT.

 

2.1. Exercise of Warrant.

 

(a) The rights represented by this Warrant may be exercised in whole or in part at any time during the Exercise Period upon (i) delivery of an executed Notice of Exercise in the form attached hereto to the Company at its address set forth on the signature page hereto (or at such other address as it may designate by notice in writing to the Holder), (ii) surrender of this Warrant and (iii) payment of the Exercise Price for the number of Exercise Shares as to which this Warrant is being exercised. Notwithstanding the foregoing, this Warrant shall not be exercisable, and upon such exercise the Holder shall not have the right to receive, Exercise Shares, inclusive of any Common Shares delivered to Holder pursuant to the Note, in excess of 19.99% of the Borrower’s outstanding shares of Common Stock (calculated prior to giving effect to such exercise or delivery, as applicable). The delivery by (or on behalf of) the Holder of the Exercise Notice and the applicable Exercise Price as provided above shall constitute the Holder’s certification to the Company that his/its representations contained in Section 2(b) of the Note are true and correct as of the Exercise Date as if remade in their entirety (or, in the case of any transferee Holder that is not a party to the Note, such transferee Holder’s certification to the Company that such representations are true and correct as to such assignee Holder as of the Exercise Date).

 

 

 

 

(b) With respect to each exercise of this Warrant pursuant to Section 2.1(a) above, the Exercise Date shall be deemed to be the date the Exercise Price is received by the Company. The Exercise Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the Exercise Date. The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the Exercise Date, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

(c) Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission system if the Company is a participant in such system, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within three business days from the delivery to the Company of the Notice of Exercise, surrender of this Warrant and payment of the aggregate Exercise Price as set forth above.

 

(d) On any exercise of this Warrant, in lieu of payment of the aggregate Exercise Price in the manner as specified in Section 2.1(a) above, but otherwise in accordance with the requirements of Section 2.1, Holder may elect to receive Exercise Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Exercise Shares as are computed using the following formula:

 

X =Y(A-B)/A

 

where:

 

X =the number of shares to be issued to the Holder;

 

Y =the number of Exercise Shares with respect to which this Warrant is being exercised (inclusive of the shares surrendered to the Company in payment of the aggregate Exercise price);

 

A =the Fair Market Value (as determined pursuant to clause (e) below) of one share; and

 

B =the Exercise Price.

 

(e)       If the Company’s Common Stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”), the fair market value of a share of Common Stock shall be the closing price or last sale price of a share of Common Stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is not traded in a Trading Market, the board of directors of the Company shall determine the fair market value of a share of Common Stock in its reasonable good faith judgment.

 

2.2. Issuance of New Warrants. Upon any partial exercise of this Warrant, the Company, at its expense, will forthwith and, in any event within five business days, issue and deliver to the Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable, in the aggregate, for the balance of the number of shares of Common Stock remaining available for purchase under the Warrant.

 

 

 

 

2.3. Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or similar tax which may be payable in respect of any transfer involved in the issuance of, and the preparation and delivery of certificates (if applicable) representing, (i) any Exercise Shares purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s name or the name of any transferee of all or any portion of this Warrant.

 

2.4 Treatment of Warrant Upon Acquisition of Company.

 

(a)       Acquisition. For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving: (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization; or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

(b)       Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant to Section 2.1 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately prior to the consummation of such Acquisition.

 

(c)       The Company shall provide Holder with written notice of its request relating to the Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be delivered to Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair market value of one share of Common Stock as determined in accordance with Section 2.1(e) above would be greater than the Exercise Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 2.1 above as to all shares for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Exercise Shares issued upon such exercise to the Holder.

 

(d)       Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

(e)       As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) Holder would be able to publicly re-sell, within six (6) months following the closing of such Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition.

 

 

 

 

3. COVENANTS OF THE COMPANY.

 

3.1. Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

3.2. No Impairment. Except to the extent as waived or consented to by the Holder, the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against impairment.

 

3.3. Notices of Record Date and Certain Other Events. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least 10 days prior to the date on which any such record is to be taken for the purpose of such dividend or distribution, a notice specifying such date.

 

4. ADJUSTMENT OF EXERCISE PRICE AND EXERCISE SHARES.

 

(a) In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, consolidation, acquisition of the Company, or the like, the number, class and type of shares available under the Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the total number, class, and type of shares or other property as the Holder would have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until the event requiring adjustment. The form of this Warrant need not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.

 

(b) If at any time following delivery by Holder to the Company of a Notice of Exercise but prior to issuance of the applicable Exercise Shares, the holders of Common Stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor:

 

(i) Common Stock or any shares of stock or other securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution (other than a dividend or distribution covered in Section 4(a) above),

 

(ii) any cash paid or payable otherwise than as a cash dividend, or

 

(iii) Common Stock or additional stock or other securities or property (including cash) by way of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock pursuant to Section 4(a) above),

 

then and in each such case, the Holder hereof will be entitled to receive, in addition to the number of shares of Common Stock receivable pursuant to the Notice of Exercise, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property.

 

 

 

 

(c) Upon the occurrence of each adjustment pursuant to this Section 4, the Company at its expense will, at the written request of the Holder, promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Exercise Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

 

5. FRACTIONAL SHARES.

 

No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise Share by such fraction.

 

6. NO STOCKHOLDER RIGHTS.

 

Other than as provided in Section 2.1(a) or otherwise herein, this Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.

 

7. TRANSFER OF WARRANT.

 

Subject to applicable laws and the restrictions on transfer set forth on the first page of this Warrant, this Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder. The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company and its counsel.

 

8. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT.

 

If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

9. NOTICES, ETC.

 

All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address listed on the signature page hereto and to Holder at the applicable address set forth on the applicable signature page to the Note or at such other address as the Company or Holder may designate by 10 days advance written notice to the other parties hereto.

10. ACCEPTANCE.

 

Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

 

 

 

 

11. GOVERNING LAW.

 

This Warrant and all rights, obligations and liabilities hereunder shall be governed by the laws of the State of Delaware.

 

12. AMENDMENT OR WAIVER.

 

Any term of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the Holder. No waivers of any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of August 15, 2022.

 

 

ACCELERATE DIAGNOSTICS, INC.

     
  By: /s/ Jack Phillips
    Name: Jack Phillips
    Title: President and Chief Executive Officer

 

 

 

 

NOTICE OF EXERCISE

 

TO: ACCELERATE DIAGNOSTICS, INC.

 

(1) The undersigned hereby elects to purchase shares of the Common Stock of ACCELERATE DIAGNOSTICS, INC. (the “Company) pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Please issue a certificate or certificates representing said shares of Common Stock of the Company in the name of the undersigned or in such other name as is specified below:

 

(Name)

 

(Address)

 

(3) The undersigned represents that (i) the aforesaid shares of Common Stock are being acquired for the account of the undersigned and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares; (ii) the undersigned is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding his/its investment in the Company; (iii) the undersigned is experienced in making investments of this type and has such knowledge and background in financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting the undersigned’s own interests; (iv) the undersigned understands that the shares of Common Stock issuable upon exercise of this Warrant have not been registered under the Securities Act of 1933, as amended (the “Securities Act), by reason of a specific exemption from the registration provisions of the Securities Act, which exemption depends upon, among other things, the bona fide nature of the investment intent as expressed herein, and, because such securities have not been registered under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available; (v) the undersigned is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until the undersigned has held the shares for the number of years prescribed by Rule 144, that among the conditions for use of the Rule is the availability of current information to the public about the Company; and (vi) the undersigned agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock unless and until there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or the undersigned has provided upon the Company’s reasonable request, an opinion of counsel satisfactory to the Company, stating that such registration is not required.

 

(Date) (Signature)
   
  (Print name)

 

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:

 

Name:  
  (Please Print)
   
Address:  
  (Please Print)

 

Dated: , 20___

 

Holder’s Signature:

 

Holder’s Address:

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

 

 

Exhibit 10.4

 

security agreement

 

This Security Agreement dated as of August 15, 2022 (“Security Agreement”), is made by and among Accelerate Diagnostics, Inc., a Delaware corporation (“Grantor”), and the secured party listed on the signature page hereto (the “Secured Party”).

 

Recitals

 

A.       The Secured Party has made and has agreed to make certain advances of money and to extend certain financial accommodations to Grantor as evidenced by that certain Secured Promissory Note, dated as of August 15, 2022, executed by Grantor in favor of the Secured Party (the “Note”), such advances, future advances, and financial accommodations being referred to herein as the “Loans”.

 

B.       The Secured Party is willing to make the Loans to Grantor, but only upon the condition, among others, that Grantor shall have executed and delivered to the Secured Party this Security Agreement.

 

Agreement

 

Now, Therefore, in order to induce the Secured Party to make the Loans and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Grantor hereby represents, warrants, covenants and agrees as follows:

 

1.               Defined Terms. When used in this Security Agreement the following terms shall have the meanings set forth below (such meanings being equally applicable to both the singular and plural forms of the terms defined). Any term used in the UCC and not defined herein shall have the meaning given to such term in the UCC.

 

Collateral” shall have the meaning assigned to such term in Section 2 of this Security Agreement.

 

Contracts” means all contracts (including any customer, vendor, supplier, service or maintenance contract), personal property leases, licenses, undertakings, purchase orders, permits, franchise agreements or other agreements (other than any right evidenced by Chattel Paper, Documents or Instruments), whether in written or electronic form, in or under which Grantor now holds or hereafter acquires any right, title or interest, including, without limitation, with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof.

 

Copyright License” means any agreement, whether in written or electronic form, in which Grantor now holds or hereafter acquires any interest, granting any right in or to any Copyright or Copyright registration (whether Grantor is the licensee or the licensor thereunder) including, without limitation, licenses pursuant to which Grantor has obtained the exclusive right to use a copyright owned by a third party.

 

1

 

 

Copyrights” means all of the following now owned or hereafter acquired or created (as a work for hire for the benefit of Grantor) by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, in whole or in part: (a) all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any State thereof or any other country; (b) registrations, applications, recordings and proceedings in the United States Copyright Office or in any similar office or agency of the United States, any State thereof or any other country; (c) any continuations, renewals or extensions thereof; (d) any registrations to be issued in any pending applications, and shall include any right or interest in and to work protectable by any of the foregoing which are presently or in the future owned, created or authorized (as a work for hire for the benefit of Grantor) or acquired by Grantor, in whole or in part; (e) prior versions of works covered by copyright and all works based upon, derived from or incorporating such works; (f) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect to copyrights, including, without limitation, damages, claims and recoveries for past, present or future infringement; (g) rights to sue for past, present and future infringements of any copyright; and (h) any other rights corresponding to any of the foregoing rights throughout the world.

 

Event of Default” means (i) any failure by Grantor forthwith to pay or perform any of the Secured Obligations, (ii) any breach by Grantor of any warranty, representation, or covenant set forth herein, and (iii) any “Event of Default” as defined in the Note.

 

Excluded Account” means any Account (including, for the avoidance of doubt, any cash, cash equivalents or other property contained therein) to the extent, and for so long as, such Account (A) is pledged to secure (i) performance of tenders, bids, leases, statutory or regulatory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds, and other obligations of like nature, in each case, in the ordinary course of business or (ii) liability for reimbursement or indemnification obligations in respect of letters of credit or bank guarantees for the benefit of landlords, in each case whether such pledge is by escrow or otherwise or (B) is used specifically and exclusively for payroll, payroll taxes, workers’ compensation or unemployment compensation premiums or benefits, pension benefits, and other employee wage and benefit payments to or for the benefit of any of Grantor’s or any of its Subsidiary’s employees.

 

Excluded Property” means (i) Excluded Accounts (and any assets contained therein), (ii) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Grantor of any Foreign Subsidiary which shares entitle the holder thereof to vote for directors or any other matter, (iii) “intent-to-use” trademarks at all times prior to the first use thereof, whether by the actual use thereof in commerce, the recording of a statement of use with the United States Patent and Trademark Office or otherwise and (iv) any property, right or asset held by Grantor or any Subsidiary to the extent that a grant of a security interest therein is prohibited by any Requirement of Law of a Governmental Authority or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except (A) to the extent that the terms in such contract, license, instrument or other document providing for such prohibition, breach, default or termination, or requiring such consent are not permitted under this Security Agreement or (B) to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under Section 9406, 9407, 9408 or 9409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code of the United States) or principles of equity; provided, however, that such security interest shall attach immediately at such time as such Requirement of Law is not effective or applicable, or such prohibition, breach, default or termination is no longer applicable or is waived, and to the extent severable, shall attach immediately to any portion of the Collateral that does not result in such consequences.

 

2

 

 

Foreign Subsidiary” means (i) any Subsidiary other than a Subsidiary organized under the laws of any state within the United States and (ii) any Subsidiary if it has no material assets other than the Equity Interests of one or more Subsidiaries described in clause (i) of this definition.

 

Governmental Authority” means the government of any nation or any political subdivision thereof, whether state, local, territory, province or otherwise, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supranational bodies such as the European Union or the European Central Bank).

 

Intellectual Property” means any intellectual property, in any medium, of any kind or nature whatsoever, now or hereafter owned or acquired or received by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, and shall include, in any event, any copyright, trademark, patent, license, trade secret, customer list, marketing plan, internet domain name (including any right related to the registration thereof), proprietary or confidential information, mask work, source, object or other programming code, invention (whether or not patented or patentable), technical information, procedure, design, knowledge, know-how, software, data base, data, skill, expertise, recipe, experience, process, model, drawing, material or record.

 

License” means any Copyright License, Patent License, Trademark License or other license of rights or interests, whether in-bound or out-bound, whether in written or electronic form, now or hereafter owned or acquired or received by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, and shall include any renewals or extensions of any of the foregoing thereof.

 

Patent License” means any agreement, whether in written or electronic form, in which Grantor now holds or hereafter acquires any interest, granting any right with respect to any invention on which a Patent is in existence (whether Grantor is the licensee or the licensor thereunder).

 

Patents” means all of the following in which Grantor now holds or hereafter acquires any interest: (a) all letters patent of the United States or any other country, all registrations and recordings thereof and all applications for letters patent of the United States or any other country, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country; (b) all reissues, divisions, continuations, renewals, continuations-in-part or extensions thereof; (c) all petty patents, divisionals and patents of addition; (d) all patents to issue in any such applications; (e) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect to patents, including, without limitation, damages, claims and recoveries for past, present or future infringement; and (f) rights to sue for past, present and future infringements of any patent.

 

3

 

 

Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.

 

Pro Rata” means, as to any Secured Party at any time, the percentage equivalent at such time of such Secured Party’s aggregate unpaid principal amount of Loans, divided by the combined aggregate unpaid principal amount of all Loans of all Secured Parties.

 

Requirement of Law” means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

Secured Obligations” means (a) the obligation of Grantor to repay the Secured Party all of the unpaid principal amount of, accrued interest on (including any interest that accrues after the commencement of bankruptcy) and fees arising under, the Loans and (b) the obligation of Grantor to pay any fees, costs or expenses of the Secured Party under the Note or this Security Agreement.

 

Security Agreement” means this Security Agreement, as the same may from time to time be amended, modified, supplemented or restated.

 

Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Grantor owns or controls fifty percent (50%) or more of the outstanding voting securities.

 

Trademark License” means any agreement, whether in written or electronic form, in which Grantor now holds or hereafter acquires any interest, granting any right in and to any Trademark or Trademark registration (whether Grantor is the licensee or the licensor thereunder).

 

Trademarks” means any of the following in which Grantor now holds or hereafter acquires any interest: (a) any trademarks, tradenames, corporate names, company names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof and any applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country (collectively, the “Marks”); (b) any reissues, extensions or renewals thereof; (c) the goodwill of the business symbolized by or associated with the Marks; (d) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect to the Marks, including, without limitation, damages, claims and recoveries for past, present or future infringement; and (e) rights to sue for past, present and future infringements of the Marks.

 

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UCC” means the Uniform Commercial Code as the same may from time to time be in effect in the State of Delaware (and each reference in this Security Agreement to an Article thereof (denoted as a Division of the UCC as adopted and in effect in the State of Delaware) shall refer to that Article (or Division, as applicable) as from time to time in effect); provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Delaware, the term “UCC” shall mean the Uniform Commercial Code (including the Articles thereof) as in effect at such time in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

 

2.               Grant of Security Interest. As collateral security for the full, prompt, complete and final payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all the Secured Obligations and in order to induce the Secured Party to cause the Loans to be made, Grantor hereby pledges to the Secured Party, and hereby grants to the Secured Party a security interest in, all of Grantor’s right, title and interest in, to and under the following, whether now owned or hereafter acquired (all of which being collectively referred to herein as the “Collateral”):

 

(a)             All Accounts of Grantor;

 

(b)            All Chattel Paper of Grantor;

 

(c)             The Commercial Tort Claims of Grantor;

 

(d)            All Commodity Accounts of Grantor;

 

(e)             All Contracts of Grantor;

 

(f)              All Deposit Accounts of Grantor;

 

(g)             All Documents of Grantor;

 

(h)            All General Intangibles of Grantor, including, without limitation, Intellectual Property;

 

(i)              All Goods of Grantor, including, without limitation, Equipment, Inventory and Fixtures;

 

(j)              All Instruments of Grantor, including, without limitation, Promissory Notes;

 

(k)            All Investment Property of Grantor;

 

(l)              All Letter-of-Credit Rights and Letters of Credit of Grantor;

 

(m)          All Money of Grantor;

 

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(n)            All Securities Accounts of Grantor;

 

(o)             All Supporting Obligations of Grantor;

 

(p)            All property of Grantor held by any Secured Party, or any other party for whom any Secured Party is acting as agent, including, without limitation, all property of every description now or hereafter in the possession or custody of or in transit to any Secured Party or such other party for any purpose, including, without limitation, safekeeping, collection or pledge, for the account of Grantor, or as to which Grantor may have any right or power;

 

(q)            All other goods and personal property of Grantor, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired, existing, leased or consigned by or to Grantor; and

 

(r)             To the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for and rents, profits and products of each of the foregoing.

 

Notwithstanding the foregoing provisions of this Section 2, the grant, assignment and transfer of a security interest as provided herein shall not extend to, and the term “Collateral” shall not include any Excluded Property.

 

If this Security Agreement is terminated in accordance with its terms, the lien granted to the Secured Party hereunder shall continue until the Secured Obligations (other than inchoate indemnity obligations) are satisfied in full. At such time, the Collateral shall be released from the liens created hereby, this Security Agreement and all obligations (other than those expressly stated to survive such termination) of the Secured Party and Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall automatically revert to Grantor. Secured Party shall execute such documents, return any Collateral held by the Secured Party hereunder and take such other steps as are reasonably necessary to accomplish the foregoing, all at Grantor’s sole cost and expense.

 

Upon any sale, lease, transfer or other disposition of any item of Collateral not prohibited by the terms of this Security Agreement or the Note, the Secured Party will, at Grantor’s sole cost and expense, execute and deliver to Grantor such documents as Grantor shall reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted hereby; provided, however, that (i) at the time of such request and such release no Event of Default shall have occurred and be continuing and (ii) Grantor shall have delivered to the Secured Party prior to the date of the proposed release a written request for release describing the item of Collateral, together with a form of release for execution by the Secured Party, and such other information as the Secured Party may reasonably request.

 

3.               Rights of the Secured Party; Collection of Accounts.

 

(a)             Notwithstanding anything contained in this Security Agreement to the contrary, Grantor expressly agrees that it shall remain liable under each of its Contracts, Chattel Paper, Documents, Instruments and Licenses to observe and perform all the conditions and obligations to be observed and performed by it thereunder and that it shall perform all of its duties and obligations thereunder, all in accordance with and pursuant to the terms and provisions of each such Contract, Chattel Paper, Document, Instrument, and License. The Secured Party shall not have any obligation or liability under any such Contract, Chattel Paper, Document, Instrument, or License by reason of or arising out of this Security Agreement or the granting to the Secured Party of a lien therein or the receipt by any Secured Party of any payment relating to any such Contract, Chattel Paper, Document, Instrument, or License pursuant hereto, nor shall any Secured Party be required or obligated in any manner to perform or fulfill any of the obligations of Grantor under or pursuant to any such Contract, Chattel Paper, Document, Instrument, or License, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any such Contract, Chattel Paper, Document, Instrument, or License, or to present or file any claim, or to take any action to collect or enforce any performance or the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

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(b)            Upon the occurrence and during the continuance of any Event of Default, the Secured Party authorizes Grantor to collect its Accounts and, at the request of the Secured Party, Grantor shall deliver all original and other documents evidencing and relating to the performance of labor or service which created such Accounts, including, without limitation, all original orders, invoices and shipping receipts.

 

(c)             The Secured Party may at any time, upon the occurrence and during the continuance of any Event of Default, notify Account Debtors of Grantor, parties to the Contracts of Grantor constituting Collateral, obligors in respect of Instruments of Grantor, and obligors in respect of Chattel Paper of Grantor that the Accounts and the right, title and interest of Grantor in and under such Contracts, Instruments and Chattel Paper have been assigned to the Secured Party and that payments shall be made directly to the Secured Party. Upon the occurrence and during the continuance of any Event of Default, upon the request of the Secured Party, Grantor shall so notify such Account Debtors, parties to such Contracts, obligors in respect of such Instruments and obligors in respect of such Chattel Paper. The Secured Party may, in its name or in the name of others, communicate with such Account Debtors, parties to such Contracts, obligors in respect of such Instruments and obligors in respect of such Chattel Paper to verify with such parties, to the Secured Party’s satisfaction, the existence, amount and terms of any such Accounts, Contracts, Instruments or Chattel Paper.

 

4.               Representations And Warranties. Grantor hereby represents and warrants to the Secured Party that:

 

(a)             This Security Agreement creates a legal and valid security interest on and in all of the Collateral in which Grantor now has rights.

 

(b)            Grantor’s correct legal name and taxpayer identification number are set forth on the signature page hereof. The jurisdiction under whose law Grantor was organized is set forth on the signature page hereof. Grantor’s chief executive office, principal place of business, and the place where Grantor maintains its records concerning the Collateral are presently located at the address set forth on the signature page hereof.

 

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5.               Covenants. Unless the Secured Party otherwise consents (which consent shall not be unreasonably withheld), Grantor covenants and agrees with the Secured Party and the Secured Party that from and after the date of this Security Agreement and until the Secured Obligations have been performed and paid in full and any commitment of the Secured Party to make Loans to Grantor has expired or terminated:

 

5.1            Change of Name, Jurisdiction of Organization, Relocation of Business. Grantor shall not change its name or jurisdiction of organization or relocate its chief executive office, principal place of business or its records from such address(es) provided to the Secured Party pursuant to Section 4(b) above without at least seven (7) days prior notice to the Secured Party.

 

5.2            Further Assurances. At any time and from time to time, upon the written request of the Secured Party, and at the sole expense of Grantor, Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further action as the Secured Party may reasonably deem necessary or desirable to obtain the full benefits of this Security Agreement, including, without limitation, executing, delivering and causing to be filed any financing or continuation statements under the UCC with respect to the security interests granted hereby. Grantor also hereby authorizes the Secured Party to file any such financing or continuation statement without the signature of Grantor.

 

5.3            Insurance. Grantor shall maintain insurance policies insuring the Collateral against loss or damage from such risks and in such amounts and forms and with such companies as are customarily maintained by businesses similar to Grantor.

 

5.4            Taxes, Assessments, Etc. Grantor shall pay promptly when due all property and other taxes, assessments and government charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Collateral, except to the extent the validity or amount thereof is being contested in good faith and adequate reserves are being maintained in connection therewith.

 

5.5            Defense of Intellectual Property. Grantor shall use commercially reasonable efforts to (i) protect, defend and maintain the validity and enforceability of all Copyrights, Patents and Trademarks material to Grantor’s business and (ii) detect infringements of all Copyrights, Patents and Trademarks material to Grantor’s business.

 

6.               Secured Party’s Appointment as Attorney-in-Fact; Performance by Secured Party.

 

(a)             Subject to Section 6(b) below, Grantor hereby irrevocably constitutes and appoints the Secured Party, and any officer or agent of the Secured Party, with full power of substitution, as its true and lawful attorney-in-fact with full, irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in its own name, from time to time at the Secured Party’s discretion, for the purpose of carrying out the terms of this Security Agreement, to take any and all appropriate action and to execute and deliver any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Security Agreement and, without limiting the generality of the foregoing, hereby gives the Secured Party the power and right, on behalf of Grantor, without notice to or assent by Grantor to do the following:

 

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(i)              to ask, demand, collect, receive and give acquittances and receipts for any and all monies due or to become due under any Collateral and, in the name of Grantor, in its own name or otherwise to take possession of, endorse and collect any checks, drafts, notes, acceptances or other Instruments for the payment of monies due under any Collateral and to file any claim or take or commence any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Secured Party for the purpose of collecting any and all such monies due under any Collateral whenever payable;

 

(ii)            to pay or discharge any liens, including, without limitation, any tax lien, levied or placed on or threatened against the Collateral, to effect any repairs or any insurance called for by the terms of this Security Agreement and to pay all or any part of the premiums therefor and the costs thereof, which actions shall be for the benefit of the Secured Party and not Grantor;

 

(iii)          to (1) direct any person liable for any payment under or in respect of any of the Collateral to make payment of any and all monies due or to become due thereunder directly to the Secured Party or as the Secured Party shall direct, (2) receive payment of any and all monies, claims and other amounts due or to become due at any time arising out of or in respect of any Collateral, (3) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with Accounts and other Instruments and Documents constituting or relating to the Collateral, (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce any other right in respect of any Collateral, (5) defend any suit, action or proceeding brought against Grantor with respect to any Collateral, (6) settle, compromise or adjust any suit, action or proceeding described above, and in connection therewith, give such discharges or releases as the Secured Party may deem appropriate, (7) license, or, to the extent permitted by an applicable License, sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any Copyright, Patent or Trademark throughout the world for such term or terms, on such conditions and in such manner as the Secured Party shall in its discretion determine and (8) sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Secured Party were the absolute owner thereof for all purposes; and

 

(iv)           to do, at the Secured Party’s option and Grantor’s expense, at any time, or from time to time, all acts and things which the Secured Party may reasonably deem necessary to protect, preserve or realize upon the Collateral and the Secured Party’s security interest therein in order to effect the intent of this Security Agreement, all as fully and effectively as Grantor might do.

 

(b)            The Secured Party agrees that, except upon the occurrence and during the continuation of an Event of Default, it shall not exercise the power of attorney or any rights granted to the Secured Party pursuant to this Section 6. Grantor hereby ratifies, to the extent permitted by law, all that said attorney shall lawfully do or cause to be done by virtue hereof. The power of attorney granted pursuant to this Section 6 is a power coupled with an interest and shall be irrevocable until the Secured Obligations are completely and indefeasibly paid and performed in full and the Secured Party no longer have any commitment to make any Loans to Grantor.

 

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(c)             If Grantor fails to perform or comply with any of its agreements contained herein and the Secured Party, as provided for by the terms of this Security Agreement, shall perform or comply, or otherwise cause performance or compliance, with such agreement, the reasonable expenses, including reasonable attorneys’ fees and costs, of the Secured Party incurred in connection with such performance or compliance, together with interest thereon at a rate of interest equal to the highest per annum rate of interest charged on the Loans, shall be payable by Grantor to the Secured Party within five (5) business days of demand and shall constitute Secured Obligations secured hereby.

 

7.               Rights And Remedies Upon Default. Beginning on the date which is ten (10) business days after any Event of Default shall have occurred and while such Event of Default is continuing:

 

(a)             The Secured Party, may exercise in addition to all other rights and remedies granted to it under this Security Agreement or the Note, all rights and remedies of a secured party under the UCC. Without limiting the generality of the foregoing, Grantor expressly agrees that in any such event the Secured Party, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Grantor or any other person, may (i) reclaim, take possession, recover, store, maintain, finish, repair, prepare for sale or lease, shop, advertise for sale or lease and sell or lease (in the manner provided herein) the Collateral, and in connection with the liquidation of the Collateral and collection of the accounts receivable pledged as Collateral, use any Trademark, Copyright, or process used or owned by Grantor and (ii) forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and may forthwith sell, lease, assign, give an option or options to purchase or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at public or private sale or sales, at any exchange or broker’s board or at the Secured Party’s offices or elsewhere at such prices as it may deem commercially reasonable, for cash or on credit or for future delivery without assumption of any credit risk. Grantor further agrees, at the Secured Party’s request, to assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall reasonably select, whether at Grantor’s premises or elsewhere. The Secured Party shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale as provided in Section 7(d), below, with Grantor remaining liable for any deficiency remaining unpaid after such application. Grantor agrees that the Secured Party need not give more than twenty (20) days’ notice of the time and place of any public sale or of the time after which a private sale may take place and that such notice is reasonable notification of such matters.

 

(b)            Grantor also agrees to pay all fees, costs and expenses of the Secured Party, including, without limitation, reasonable attorneys’ fees, incurred in connection with the enforcement of any of its rights and remedies hereunder.

 

(c)             Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.

 

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(d)            The Proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be distributed by the Secured Party in the following order of priorities:

 

First, to the Secured Party in an amount sufficient to pay in full the costs of the Secured Party in connection with such sale, disposition or other realization, including all fees, costs, expenses, liabilities and advances incurred or made by the Secured Party in connection therewith, including, without limitation, reasonable attorneys’ fees;

 

Second, to the Secured Party in amounts proportional to the Pro Rata share of the then unpaid Secured Obligations of each Secured Party; and

 

Finally, upon payment in full of the Secured Obligations, to Grantor or its representatives, in accordance with the UCC or as a court of competent jurisdiction may direct.

 

Notwithstanding the foregoing, the terms of this Security Agreement, and the rights and remedies (including the exercise thereof) of the Secured Party set forth herein, are subject to the terms of the Intercreditor Agreements (as defined in the Note).

 

8.               [Reserved].

 

9.               Indemnity. Grantor agrees to defend, indemnify and hold harmless the the Secured Party and its officers, employees, and agents against (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Security Agreement and (b) all losses or expenses in any way suffered, incurred, or paid by the Secured Party as a result of or in any way arising out of, following or consequential to the transactions contemplated by this Security Agreement (including without limitation, reasonable attorneys fees and expenses), except for losses arising from or out of the gross negligence or willful misconduct of the Secured Party.

 

10.            Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Grantor for liquidation or reorganization, should Grantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Grantor’s property and assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

11.            Miscellaneous.

 

11.1         Waivers; Amendments. Any amendment of the Note or this Security Agreement shall require the written consent of Grantor and the Secured Party. Notwithstanding any provision in this Section 11.1 to the contrary, no amendment, modification, termination or waiver affecting or modifying the rights or obligations of the Secured Party hereunder shall be effective unless signed by Grantor and the Secured Party.

 

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11.2         Termination of this Security Agreement. Subject to Section 10 hereof, this Security Agreement shall terminate upon the payment and performance in full of the Secured Obligations and the expiration or termination of any commitment of the Secured Party to make any Loans to Grantor.

 

11.3         Successor and Assigns. This Security Agreement and all obligations of Grantor hereunder shall be binding upon the successors and assigns of Grantor, and shall, together with the rights and remedies of the Secured Party hereunder, inure to the benefit of the Secured Party, any future holder of any of the Secured Obligations, and their respective successors and assigns. No sales of participations in the Secured Obligations or any portion thereof or interest therein, and no sales, assignments, transfers or other dispositions of any agreement governing or instrument evidencing the Secured Obligations or any portion thereof or interest therein, shall in any manner affect the lien granted to the Secured Party hereunder.

 

11.4         Governing Law. In all respects, including all matters of construction, validity and performance, this Security Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws, except to the extent that the UCC provides for the application of the law of a different jurisdiction.

 

11.5         Counterparts; Facsimile or PDF Copies. This Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.  Executed copies of the signature pages of this Security Agreement sent by facsimile or transmitted electronically in Portable Document Format (“PDF”), or any similar format, shall be treated as originals, fully binding and with full legal force and effect, and the parties waive any rights they may have to object to such treatment.

 

[Signature pages follow.]

 

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In Witness Whereof, each of the parties hereto has caused this Security Agreement to be executed and delivered by its duly authorized officer on the date first set forth above.

 

Address Of GrantorAccelerate Diagnostics, Inc.
  
3950 South Country Club Road, Suite 470By: /s/ Jack Phillips
Tucson, AZ 85714Printed Name: Jack Phillips
 Title: President and Chief Executive Officer
  
 Jurisdiction of Organization of Grantor
 Delaware

 

jack w. schuler living trust, as Secured Party 
  
/s/ Jack W. Schuler 
Jack W. Schuler, Trustee of the JACK W. SCHULER LIVING TRUST 

 

 

 

 

Exhibit 99.1

 

Accelerate Diagnostics Reports Second Quarter 2022 Financial Results

 

TUCSON, Ariz., August 15, 2022 -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the second quarter for the period ended June 30, 2022.

 

“In addition to a solid quarter, I am pleased to announce that we will be joining forces with Becton Dickinson to commercialize our products globally,” commented Jack Phillips, Chief Executive Officer of Accelerate Diagnostics, Inc. “Our global commercial partnership with BD comes at a time when the hospital selling environment is improving, we are firing on all cylinders in R&D and are taking meaningful steps to improve our balance sheet. These are exciting times for our company.”

 

Second Quarter 2022 Highlights

 

·Added 8 contracted instruments and brought 3 instruments live in the U.S. in the quarter.

 

·Ended the second quarter with 316 U.S. clinically live and revenue-generating instruments, with another 78 U.S. contracted instruments in the process of being implemented and not yet revenue-generating.

 

·Net sales were $3.9 million, compared to $2.8 million in the second quarter of the prior year, or a 39% increase. Growth was driven by increases in both capital and recurring revenues.

 

·Gross margin was 28% for the quarter, compared to 38% in the second quarter of the prior year. The decline in gross margins resulted from inflation to manufacturing costs and other factors.

 

·Selling, general, and administrative (SG&A) costs for the quarter were $11.5 million, compared to $12.9 million from the same quarter of the prior year. SG&A costs for the quarter excluding non-cash stock-based compensation were $8.3 million, compared to $7.7 million from the same quarter of the prior year. This decrease was driven by continued benefit from cost cutting efforts.

 

·Research and development (R&D) costs for the quarter were $7.6 million, compared to $5.7 million from the same quarter of the prior year. R&D costs excluding non-cash stock-based compensation expense for the quarter were $7.0 million, compared to $4.4 million from the quarter of the prior year. This increase was the result of investment in our next generation AST platform.

 

·Net loss was $17.8 million in the second quarter, resulting in $0.23 net loss per share. Net loss excluding non-cash stock-based compensation expense for the second quarter was $13.8 million.

 

·Net cash used in the quarter excluding financing was $13.6 million.

 

·Signed an agreement in August 2022 to exchange $50 million of convertible debt due March 2023 for a term loan due in five years with no cash interest due during the term. After this transaction, approximately $56 million of the original $172 million convertible debt remains due.

 

Year-to-date 2022 Highlights

 

·Net sales were $6.8 million year-to-date, compared to $5.3 million from the same period of the prior year, or a 28% increase. Growth was driven by increases in both capital and recurring revenues.

 

·Gross margin was 28% year-to-date, compared to 37% from the same period of the prior year. The decline in gross margins resulted from ongoing pandemic-related impacts to manufacturing costs and other factors.

 

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·Selling, general, and administrative (SG&A) costs year-to-date were $22.2 million, compared to $26.9 million from the same period of the prior year. SG&A costs excluding non-cash stock-based compensation were $16.5 million year to date, compared to $15.8 million from the same period of the prior year. This small increase was the result of higher professional services fees paid in the first quarter, partially offset by a decrease in the second quarter driven by cost savings efforts.

 

·Research and development (R&D) costs were $13.6 million year to date, compared to $12.6 million from the same period of the prior year. R&D costs excluding non-cash stock-based compensation expense were $12.7 million year to date, compared to $8.6 million from the same period of the prior year. This increase was the result of investment in our next generation AST platform.

 

·Net loss was $32.0 million year to date, resulting in $0.44 net loss per share. Net loss excluding non-cash stock-based compensation expense was $25.0 million.

 

·Net cash used excluding financing was $26.8 million

 

·Ended the quarter with total cash, investments, and cash equivalents of $36.8 million.

 

Full financial results for the quarter ending June 30, 2022 will be filed on Form 10-Q through the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov.

 

Audio Webcast and Conference Call

 

To listen to the 2022 second quarter financial results, call by phone, +1.877.883.0383 and enter Elite Entry Number: 5467079. International participants may dial +1.412.902.6506. Please dial in 10–15 minutes prior to the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (International) using the replay code 10157979 until August 26, 2021.

 

This conference call will also be webcast and can be accessed from the company’s website at ir.axdx.com. A replay of the audio webcast will be available until November 5, 2021.

 

Use of Non-GAAP Financial Measures

 

This press release contains certain financial measures that are not recognized measures under accounting principles generally accepted in the United States of America (“GAAP”), which include SG&A, R&D, and Net income (loss) amounts excluding stock-based compensation expenses. 

 

Our management and board of directors use expenses excluding the cost of stock-based compensation to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operating and financing plans. Accordingly, we believe that expenses excluding the cost of stock-based compensation provides useful information for investors in understanding and evaluating our operating results in the same manner as our management and our board of directors. Expenses excluding the cost of stock-based compensation is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, SG&A expenses, R&D expenses, and net income (loss) reported in accordance with GAAP. The following tables present a reconciliation of SG&A expenses, R&D expenses and net income (loss) excluding stock-based compensation to comparable GAAP measures for the periods indicated:

 

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   Three Months Ended June 30,   Six Months Ended June 30, 
   (in thousands)   (in thousands) 
   2022   2021   2022   2021 
Sales, General and Administrative  $11,493   $12,910   $22,167   $26,938 
Non-cash equity-based compensation as a component of sales, general and administrative   3,204    5,188    5,646    11,180 
Sales, general and administrative less non-cash equity-based compensation  $8,289   $7,722   $16,521   $15,758 

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   (in thousands)   (in thousands) 
   2022   2021   2022   2021 
Research and Development  $7,576   $5,733   $13,600   $12,629 
Non-cash equity-based compensation as a component of research and development   539    1,328    901    4,074 
Research and development less non-cash equity-based compensation  $7,037   $4,405   $12,699   $8,555 

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   (in thousands)   (in thousands) 
   2022   2021   2022   2021 
Loss from operations  $(17,989)  $(17,590)  $(33,884)  $(37,616)
Non-cash equity-based compensation as a component of loss from operations   3,971    6,590    6,950    15,429 
Loss from operations less non-cash equity-based compensation  $(14,018)  $(11,000)  $(26,934)  $(22,187)

 

About Accelerate Diagnostics, Inc.

 

Accelerate Diagnostics, Inc. is an in vitro diagnostics company dedicated to providing solutions for the global challenges of antibiotic resistance and sepsis. The Accelerate Pheno® system and Accelerate PhenoTest® BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for deadly infections. The FDA cleared system and kit fully automate the sample preparation steps to report phenotypic antibiotic susceptibility results in approximately 7 hours direct from positive blood cultures. Recent external studies indicate the solution offers results 1–2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient days earlier.

 

The “ACCELERATE DIAGNOSTICS” and “ACCELERATE PHENO” and “ACCELERATE PHENOTEST” and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.

 

For more information about the company, its products and technology, or recent publications, visit axdx.com.

 

3

 

 

Forward-Looking Statements

 

Certain of the statements made in this press release are forward looking or may have forward looking implications, such as, among others, Mr. Phillip’s statements regarding the hospital selling environment improving and the productivity of our research and development activities. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics is contained in the section captioned “Risk Factors” in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 14, 2022, and in any other reports that the company files with the Securities and Exchange Commission. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.

 

###

 

For further information: Investor Inquiries & Media Contact: Laura Pierson, Accelerate Diagnostics, +1 520 365-3100, [email protected]

 

Source: Accelerate Diagnostics Inc.

 

4

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(in thousands, except share data)

 

   June 30,   December 31, 
   2022   2021 
   Unaudited     
ASSETS
Current assets:          
Cash and cash equivalents  $4,581   $39,898 
Investments   32,191    23,720 
Trade accounts receivable, net   2,935    2,320 
Inventory   5,304    5,067 
Prepaid expenses   1,429    768 
Other current assets   1,619    1,558 
Total current assets   48,059    73,331 
Property and equipment, net   4,097    5,389 
Finance lease assets, net   2,538     
Operating lease right of use assets, net   2,181    2,510 
Other non-current assets   1,851    1,817 
Total assets  $58,726   $83,047 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:          
Accounts payable  $2,221   $1,983 
Accrued liabilities   5,654    2,853 
Accrued interest   746    909 
Deferred revenue   335    451 
Current portion of long-term debt   84    80 
Finance lease, current   953     
Operating lease, current   732    669 
Total current liabilities   10,725    6,945 
Finance lease, non-current   1,383     
Operating lease, non-current   1,997    2,381 
Other non-current liabilities   757    808 
Convertible notes   105,828    107,984 
Total liabilities  $120,690   $118,118 
           
Commitments and contingencies          
           
Stockholders’ deficit:          
Preferred shares, $0.001 par value;          
5,000,000 preferred shares authorized and 3,954,546 outstanding as of June 30, 2022 and December 31, 2021   4    4 
Common stock, $0.001 par value;          
200,000,000 common shares authorized with 79,701,428 shares issued and outstanding on June 30, 2022 and 100,000,000 common shares authorized with 67,649,018 shares issued and outstanding on December 31, 2021   80    68 
Contributed capital   560,185    580,652 
Treasury stock   (45,067)   (45,067)
Accumulated deficit   (576,734)   (570,668)
Accumulated other comprehensive loss   (432)   (60)
Total stockholders’ deficit   (61,964)   (35,071)
Total liabilities and stockholders’ deficit  $58,726   $83,047 

 

See accompanying notes to condensed consolidated financial statements.

 

5

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30,   June 30,   June 30, 
   2022   2021   2022   2021 
Net sales  $3,861   $2,798   $6,820   $5,316 
                     
Cost of sales   2,781    1,745    4,937    3,365 
Gross profit   1,080    1,053    1,883    1,951 
                     
Costs and expenses:                    
Research and development   7,576    5,733    13,600    12,629 
Sales, general and administrative   11,493    12,910    22,167    26,938 
Total costs and expenses   19,069    18,643    35,767    39,567 
                     
Loss from operations   (17,989)   (17,590)   (33,884)   (37,616)
                     
Other income (expense):                    
Interest expense   (713)   (4,177)   (1,630)   (8,267)
Gain on extinguishment of debt   919        3,565     
Foreign currency exchange gain (loss)   31        40    (159)
Interest income   56    12    78    55 
Other (expense) income, net   (107)   81    (157)   74 
Total other income (expense), net   186    (4,084)   1,896    (8,297)
                     
Net loss before income taxes   (17,803)   (21,674)   (31,988)   (45,913)
Provision for income taxes                
Net loss  $(17,803)  $(21,674)  $(31,988)  $(45,913)
                     
Basic and diluted net loss per share  $(0.23)  $(0.36)  $(0.44)  $(0.77)
Weighted average shares outstanding   76,231    61,049    71,998    59,790 
                     
Other comprehensive loss:                    
Net loss  $(17,803)  $(21,674)  $(31,988)  $(45,913)
Net unrealized (loss) gain on debt securities available-for-sale   (39)   1    (132)   (18)
Foreign currency translation adjustment   (161)   21    (240)   (60)
Comprehensive loss  $(18,003)  $(21,652)  $(32,360)  $(45,991)

 

See accompanying notes to condensed consolidated financial statements.

 

6

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)

 

   Six Months Ended 
   June 30,   June 30, 
   2022   2021 
Cash flows from operating activities:          
Net loss  $(31,988)  $(45,913)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   1,435    1,248 
Amortization of investment discount   79    97 
Equity-based compensation   6,950    15,429 
Amortization of debt discount and issuance costs   284    6,079 
Loss (gain) on disposal of property and equipment   283    (100)
Unrealized loss on equity investments   157     
Gain on extinguishment of debt   (3,565)    
(Increase) decrease in assets:          
Contributions to deferred compensation plan   (110)   (236)
Accounts receivable   (615)   (564)
Inventory   (416)   (524)
Prepaid expense and other   (719)   60 
Increase (decrease) in liabilities:          
Accounts payable   658    564 
Accrued liabilities   2,288    736 
Accrued interest   (159)   45 
Deferred revenue and income   (116)   (94)
Deferred compensation   (51)   245 
Net cash used in operating activities   (25,605)   (22,928)
           
Cash flows from investing activities:          
Purchases of equipment   (447)   (29)
Purchase of marketable securities   (27,504)   (15,699)
Maturities of marketable securities   18,738    23,993 
Net cash (used in) provided by investing activities   (9,213)   8,265 
           
Cash flows from financing activities:          
Proceeds from issuance of common stock       22,122 
Payments on finance leases   (424)    
Proceeds from exercise of options   7    1,222 
Proceeds from issuance of common stocks under employee purchase plan   137    161 
Net cash (used in) provided by financing activities   (280)   23,505 
           
Effect of exchange rate on cash   (219)   (43)
           
(Decrease) increase in cash and cash equivalents   (35,317)   8,799 
Cash and cash equivalents, beginning of period   39,898    35,781 
Cash and cash equivalents, end of period  $4,581   $44,580 

 

See accompanying notes to condensed consolidated financial statements.

 

7

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (CONTINUED)

Unaudited

(in thousands)

 

   Six Months Ended 
   June 30,   June 30, 
   2022   2021 
Non-cash investing activities:          
Net transfer of instruments from inventory to property and equipment  $202   $500 
Supplemental cash flow information:          
Interest paid  $1,506   $2,144 
Extinguishment of Convertible Senior Notes through issuance of common stock  $10,180   $ 

 

See accompanying notes to condensed consolidated financial statements.

 

8

 



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