Accelerate Diagnostics Reports Third Quarter 2024 Financial Results
TUCSON, Ariz.,
"We are excited by the momentum we're building across our innovation pipeline, underscored by the successful launch of the clinical trial for our WAVETM system and the Gram-Negative assay. This quarter also marked a significant milestone with FDA clearance of our Accelerate ArcTM system, a testament to our commitment to breakthrough solutions in diagnostics," commented
Third Quarter 2024 Operating Highlights
- Began WAVE system and Gram-Negative assay clinical trial.
- Received 510(k) clearance of the Accelerate Arc system and BC kit, an innovative, automated positive blood culture sample preparation platform.
- Continued to executed contract extensions with several strategic customers with approximately 75% of
U.S. Pheno® customers secured through the anticipated WAVE commercial launch, subject to regulatory approvals. - In
the United States , added five new contracted Pheno instruments during the quarter, ending the quarter with 352 clinically live revenue-generating instruments and another 77 contracted instruments in the process of being implemented.
Third Quarter 2024 Financial Highlights
- Net sales for the quarter were
$3.0 million , compared to$3.3 million for the same quarter of the prior year. The overall decline was driven by lower instrument net sales but was partially offset by an increase from consumable products of 9% compared to the same period in the prior year. - Gross margin was approximately 29% for the quarter, compared to approximately 3% for the same quarter of the prior year. The increase in gross margin reflects both product sales mix, as well as an inventory write-down in the prior year period.
- Selling, general, and administrative (SG&A) costs for the quarter were
$5.6 million , compared to$7.8 million for the same quarter of the prior year. SG&A costs include non-cash stock-based compensation of$1.0 million and$1.5 million , respectively, for the same periods. The decline in SG&A costs is primarily a result of lower employee-related expenses. - Research and development (R&D) costs for the quarter were
$3.8 million , compared to$7.0 million for the same quarter of the prior year. R&D costs include non-cash stock-based compensation of$0.2 million and$0.3 million , respectively, for the same periods. The decline in R&D costs is primarily a result of lower third-party development costs for our WAVE system. - Net loss was
$14.6 million for the quarter, resulting in a net loss per share of$0.59 . - Ended the quarter with total cash, cash equivalents and investment of
$20.9 million , compared to$9.7 million at the start of the quarter. The increase in cash and cash equivalents reflects proceeds from our recent debt issuance of$15 million in aggregate principal, as well as$1.2 million from a refundable R&D tax offset and$0.5 million of proceeds from warrant exercises.
Year-to-date Financial 2024 Highlights
- Net sales were
$8.9 million year-to-date, compared to$9.0 million for the same period of the prior year. The decrease in revenues was driven by lower consumable products sold in the current year period. - Gross margin was approximately 25% year-to-date, compared to 21% for the same period of the prior year.
- SG&A costs year-to-date were
$16.7 million , compared to$25.4 million for the same period of the prior year. SG&A costs include non-cash stock-based compensation of$2.6 million for each of these periods. The decline in SG&A costs is primarily a result of lower employee-related expenses. - R&D costs were
$12.9 million year-to-date, compared to$19.8 million for the same period of the prior year. R&D costs include non-cash stock-based compensation of$0.7 million and$1.1 million , respectively, for the same periods. The decline in R&D costs is primarily a result of lower employee-related expenses, as well as lower third-party development costs for our WAVE system. - Net loss was
$40.5 million year-to-date, resulting in a net loss per share of$1.78 .
Full financial results for the quarter ended
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Use of Non-GAAP Financial Measures
This press release contains certain financial measures that are not recognized measures under accounting principles generally accepted in
Our management and board of directors use expenses excluding the cost of stock-based compensation and certain impairment transactions 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 and certain impairment transactions 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 and certain impairment transactions are non-GAAP financial measures and should be considered in addition to, not as superior to, or as a substitute for, SG&A expenses, R&D expenses, and operating income (loss) reported in accordance with GAAP. The following tables present a reconciliation of SG&A expenses, R&D expenses and operating income (loss) excluding stock-based compensation and certain impairment transactions to comparable GAAP measures for the periods indicated:
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Three Months Ended |
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2024 |
2023 |
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Sales, general and administrative |
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Non-cash equity-based compensation as a component of sales, general and administrative |
963 |
1,488 |
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Sales, general and administrative less non-cash equity-based compensation |
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Three Months Ended |
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2024 |
2023 |
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Research and development |
|
|
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Non-cash equity-based compensation as a component of research and development |
182 |
269 |
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Research and development less non-cash equity-based compensation |
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Three Months Ended |
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2024 |
2023 |
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Loss from operations |
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Non-cash equity-based compensation as a component of loss from operations |
1,155 |
1,815 |
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Inventory write-down |
0 |
1,184 |
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Loss from operations less non-cash equity-based compensation and inventory write-down |
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About
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Forward-Looking Statements
Certain of the statements made in this press release and the related conference call are forward-looking or may have forward-looking implications within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the company intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements, which can be identified by the use of words such as "may," "will," "expect," "believe," "anticipate," "estimate," or "continue," or variations thereon or comparable terminology, include but are not limited to, statements about: the company's future development plans and growth strategy, including beliefs, plans and objectives relating to its future operations, products and performance, such as the anticipated WAVE commercial launch; projections as to when certain key business milestones may be achieved; expectations regarding the potential or benefits of the company's existing and future products and technologies, including the Accelerate Wave system, such as the expectation of the performance of the Wave system based on pre-clinical trials; projections of future demand for the company's products; the company's continued investment in new product development to both enhance its existing products and bring new ones to market; the company's expectations relating to current supply chain impacts and inflationary pressures; the company's expectations regarding its commercial partnerships, including anticipated benefits from such collaborations; the company's intentions and plans relating to regulatory approvals; and the company's liquidity and capital requirements. Actual results or developments may differ materially from those projected or implied in these forward-looking statements due to significant risks and uncertainties, including, but not limited to: volatility throughout the global economy and the related impacts to the businesses of the company's suppliers and customers, whether due to customer demand fluctuations, supply chain constraints and inflationary pressures or otherwise; difficulties in resolving the company's continuing financial condition and ability to obtain additional capital to meet its financial obligations; the company's ability to obtain any regulatory approvals; and less than expected operating and financial benefits resulting from cost cutting measures. Other important factors that could cause the company's actual results to differ materially from those in its forward-looking statements include those discussed in the company's filings with the
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2024 |
2023 |
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Unaudited |
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ASSETS |
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Current assets: |
|
|
|
Cash and cash equivalents |
$ 19,691 |
$ 12,138 |
|
Investments |
1,221 |
1,081 |
|
Trade accounts receivable, net |
2,027 |
2,622 |
|
Inventory |
2,978 |
3,310 |
|
Prepaid expenses |
529 |
380 |
|
Purchase obligation put option asset |
— |
3,419 |
|
Other current assets |
990 |
1,516 |
|
Total current assets |
27,436 |
24,466 |
|
Property and equipment, net |
2,878 |
2,389 |
|
Finance lease assets, net |
626 |
1,518 |
|
Operating lease right of use assets, net |
612 |
1,177 |
|
Other non-current assets |
763 |
1,816 |
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Total assets |
$ 32,315 |
$ 31,366 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities: |
|
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Accounts payable |
$ 4,714 |
$ 4,796 |
|
Accrued liabilities |
2,940 |
3,243 |
|
Accrued interest |
1,010 |
164 |
|
Deferred revenue and income, current |
671 |
1,545 |
|
Current portion of convertible notes |
— |
726 |
|
Common warrant liability |
8,001 |
— |
|
Finance lease, current |
115 |
583 |
|
Operating lease, current |
807 |
977 |
|
Total current liabilities |
18,258 |
12,034 |
|
Finance lease, non-current |
47 |
262 |
|
Operating lease, non-current |
— |
570 |
|
Deferred income, non-current |
2,469 |
1,122 |
|
Other non-current liabilities |
2,017 |
1,164 |
|
Notes payable, non-current |
14,995 |
— |
|
Convertible notes, non-current |
43,010 |
36,102 |
|
Total liabilities |
80,796 |
51,254 |
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Commitments (see Note 15) |
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See accompanying notes to condensed consolidated financial statements. |
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2024 |
2023 |
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Unaudited |
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Stockholders' deficit: |
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|
Preferred shares, |
|
|
|
5,000,000 preferred shares authorized with no shares issued and outstanding on |
— |
— |
|
Common stock, |
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450,000,000 common shares authorized with 24,886,822 shares issued and outstanding on |
25 |
14 |
|
Contributed capital |
706,931 |
694,634 |
|
|
(45,067) |
(45,067) |
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Accumulated deficit |
(709,313) |
(668,857) |
|
Accumulated other comprehensive loss |
(1,057) |
(612) |
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Total stockholders' deficit |
(48,481) |
(19,888) |
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Total liabilities and stockholders' deficit |
$ 32,315 |
$ 31,366 |
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See accompanying notes to condensed consolidated financial statements. |
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Three Months Ended |
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Nine Months Ended |
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2024 |
2023 |
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2024 |
2023 |
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Net sales |
$ 2,975 |
$ 3,299 |
|
$ 8,882 |
$ 9,032 |
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Cost of sales |
2,119 |
2,008 |
|
6,627 |
5,931 |
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Inventory write-down |
— |
1,184 |
|
— |
1,184 |
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Total cost of sales |
2,119 |
3,192 |
|
6,627 |
7,115 |
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Gross profit |
856 |
107 |
|
2,255 |
1,917 |
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Costs and expenses: |
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Research and development |
3,838 |
6,996 |
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12,914 |
19,783 |
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Sales, general and administrative |
5,636 |
7,761 |
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16,719 |
25,432 |
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Total costs and expenses |
9,474 |
14,757 |
|
29,633 |
45,215 |
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Loss from operations |
(8,618) |
(14,650) |
|
(27,378) |
(43,298) |
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Other income (expense): |
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Interest expense |
(3,593) |
(2,205) |
|
(8,632) |
(3,798) |
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Interest expense related-party |
— |
— |
|
— |
(1,817) |
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Gain (loss) on extinguishment of debt |
— |
51 |
|
— |
(6,499) |
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(Loss) on extinguishment of debt related-party |
— |
— |
|
— |
(6,755) |
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Gain on extinguishment of accounts payable |
— |
— |
|
743 |
— |
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Gain (loss) on fair value adjustments |
(3,194) |
18,056 |
|
(5,413) |
13,026 |
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Foreign currency exchange gain (loss) |
523 |
(428) |
|
279 |
(170) |
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Interest income |
179 |
246 |
|
495 |
921 |
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Other income (expense), net |
64 |
(29) |
|
(550) |
56 |
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Total other income (expense), net |
(6,021) |
15,691 |
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(13,078) |
(5,036) |
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Net income (loss) before income taxes |
(14,639) |
1,041 |
|
(40,456) |
(48,334) |
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Provision for income taxes |
— |
(131) |
|
— |
(286) |
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Net income (loss) |
$ (14,639) |
$ 910 |
|
$ (40,456) |
$ (48,620) |
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Basic net income (loss) per share |
$ (0.59) |
$ 0.06 |
|
$ (1.78) |
$ (4.13) |
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Basic weighted average shares outstanding |
24,915 |
14,433 |
|
22,667 |
11,777 |
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Other comprehensive loss: |
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Net income (loss) |
$ (14,639) |
$ 910 |
|
$ (40,456) |
$ (48,620) |
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Net unrealized gain on debt securities available for sale |
— |
— |
|
— |
28 |
|
Foreign currency translation adjustment |
(609) |
293 |
|
(445) |
12 |
|
Comprehensive income (loss) |
$ (15,248) |
$ 1,203 |
|
$ (40,901) |
$ (48,580) |
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See accompanying notes to condensed consolidated financial statements. |
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Nine Months Ended |
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2024 |
2023 |
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Cash flows from operating activities: |
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Net loss |
$ (40,456) |
$ (48,620) |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
2,613 |
2,434 |
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Equity-based compensation |
3,418 |
4,023 |
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Amortization of debt discount and issuance costs |
6,025 |
2,060 |
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Paid-in-Kind (PIK) Interest |
2,036 |
— |
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Amortization of debt discount related-party |
— |
1,033 |
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Provision for bad debts |
95 |
252 |
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Loss on disposal of property and equipment |
106 |
134 |
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Unrealized gain on equity investments |
(129) |
(61) |
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Units offering issuance cost |
680 |
— |
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Loss on extinguishment of debt |
— |
6,499 |
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Loss on extinguishment of debt with related party |
— |
6,755 |
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Gain on extinguishment of accounts payable |
(743) |
— |
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Loss on fair value adjustments |
5,413 |
(13,026) |
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Inventory write-down |
— |
1,184 |
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(Increase) decrease in assets: |
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Accounts receivable |
510 |
(283) |
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Inventory |
(37) |
298 |
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Prepaid expense and other |
597 |
737 |
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Increase (decrease) in liabilities: |
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|
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Accounts payable |
661 |
218 |
|
Accrued liabilities and other |
(1,234) |
261 |
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Accrued interest |
846 |
1,738 |
|
Accrued interest due to related party |
— |
784 |
|
Deferred revenue and income |
473 |
1,139 |
|
Net cash used in operating activities |
(19,126) |
(32,441) |
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Cash flows from investing activities: |
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Purchases of equipment |
(509) |
(925) |
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Maturities of marketable securities |
— |
9,695 |
|
Net cash (used in) provided by investing activities |
(509) |
8,770 |
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See accompanying notes to condensed consolidated financial statements. |
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Nine Months Ended |
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2024 |
2023 |
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Cash flows from financing activities: |
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Proceeds from issuance of Units to related party |
4,750 |
— |
|
Proceeds from issuance of Units |
10,232 |
— |
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Units offering issuance cost |
(1,234) |
— |
|
Proceeds from issuance of common stock to related party |
— |
4,000 |
|
Proceeds from exercise of warrants |
502 |
— |
|
Payments on finance leases |
(683) |
(1,357) |
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Proceeds from issuance of 16.00% Notes |
15,000 |
— |
|
Transaction costs related to debt and equity issuances |
(202) |
(3,731) |
|
Proceeds from issuance of 5.00% Notes |
— |
10,000 |
|
Payment of debt |
(726) |
— |
|
Net cash provided by financing activities |
27,639 |
8,912 |
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Effect of exchange rate on cash |
(451) |
16 |
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Decrease in cash and cash equivalents |
7,553 |
(14,743) |
|
Cash and cash equivalents, beginning of period |
12,138 |
34,905 |
|
Cash and cash equivalents, end of period |
$ 19,691 |
$ 20,162 |
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Non-cash investing activities: |
|
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Net transfer of instruments from inventory to property and equipment |
$ 321 |
$ 88 |
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Non-cash financing activities: |
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Accrued debt issuance costs |
$ 566 |
$ — |
|
Extinguishment of 5.00% Notes through issuance of common stock |
$ 43 |
$ 330 |
|
Capital contribution from the exchange of secured note and accrued interest through the issuance |
$ — |
$ 25,363 |
|
Exchange of 2.50% Notes and accrued interest for 5.00% Notes |
$ — |
$ 56,893 |
|
Debt premium on issuance of 5.00% Notes |
$ — |
$ 6,023 |
|
Bifurcated derivative liability |
$ — |
$ 38,160 |
|
Extinguishment of derivative liability in connection with extinguishment of 5.00% Notes |
$ — |
$ 380 |
|
Issuance of common stock in connection with extinguishment of 5.00% Notes |
$ — |
$ 658 |
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Supplemental cash flow information: |
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Interest paid |
$ 33 |
$ — |
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|
See accompanying notes to condensed consolidated financial statements. |
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