Unless the context requires otherwise, all references in this Current Report on Form 8-K to "the Company," "Accelerate," "we," "us," "our" or similar references mean Accelerate Diagnostics, Inc. together with its consoli

Unless the context requires otherwise,

all references in this Current Report on Form 8-K to "the Company," "Accelerate," "we," "us,"

"our" or similar references mean Accelerate Diagnostics, Inc. together with its consolidated subsidiaries.

Accelerate Diagnostics, Inc. is an in

vitro diagnostics company dedicated to providing solutions that improve patient outcomes and lower healthcare costs through

the rapid diagnosis of serious infections. Microbiology laboratories are in need of new tools to address what the U.S. Centers

for Disease Control and Prevention calls one of the most serious healthcare threats of our time, antibiotic resistance. A significant

contributing factor to the rise of resistance is the overuse and misuse of antibiotics, which is exacerbated by a lack of timely

diagnostic results. The delay of these results is often due to the reliance by microbiology laboratories on traditional culture-based

tests that often take two to three days to complete. Our technology platform is built to address these challenges by delivering

significantly faster and accurate testing of infectious pathogens in various patient sample types.

Since 2004, we have focused our efforts

on the development of an innovative rapid diagnostic platform, the Accelerate ID/AST System , which we refer to as the ID/AST

System or Accelerate ID/AST System, intended for the rapid diagnosis of infectious pathogens. Our goal is to reduce the failure

rate of initial antibiotic drug therapy by shortening lab turnaround time to hours rather than the two to three days now required

to deliver identification and susceptibility results. In our recent multicenter pilot study, the ID/AST System produced an identification

result in approximately 75 minutes after presenting the patient sample to the system, with antibiotic susceptibility testing available

about five hours later. Based on preclinical work, we believe antibiotic susceptibility testing results for the clinical product

will be available between approximately three and five hours after the presentation of the identification result, depending on

the type of bacteria being tested. Blood culture is a routine laboratory process which determines negative from positive samples

through incubation, which we estimate takes on average approximately 12 hours to complete.

The ID/AST System utilizes genotypic technology

to identify, or ID, infectious pathogens and phenotypic technology to conduct antibiotic susceptibility testing, or AST, which

determines whether live bacterial cells are resistant or susceptible to a particular antibiotic. The ID/AST blood culture assay

kit, which we refer to as the Blood Culture Assay Kit, is being investigated for its ability to provide ID and AST results for

patients suspected of bacteremia or fungemia, both life-threatening conditions with high morbidity and mortality risk. The Blood

Culture Assay Kit consists of a highly multiplexed panel of more than 150 individual assays which have the potential to support

clinicians in prescribing optimal antibiotic therapy for patients in this critical condition. The final number of assays included

in the Blood Culture Assay Kit will depend on the results of our upcoming trial to support marketing authorization from the U.S.

Food and Drug Administration ("FDA") and FDA review of each individual assay for marketing authorization. This panel

is designed to cover over 80% of the routine and significant pathogens causing blood stream infections and over 90% of the antibiotics

useful in treating those pathogens. On June 30, 2015, we declared our conformity to the European In Vitro Diagnostic Directive

98/79 EC and applied a CE Mark to the Accelerate ID/AST System and the Blood Culture Assay Kit for in vitro diagnostic

We anticipate commercializing the Accelerate

ID/AST System in the United States, subject to the successful completion of the U.S. registration trial and submission to and

grant by the FDA of a de novo classification request for the ID/AST System, which could occur as early as the third quarter

of 2016. See "Recent developments" below for a description of the results from our recent multicenter pilot study

and more information regarding our upcoming trial to support marketing authorization from the FDA.

Antibiotic resistance has a significant

healthcare impact, costing the U.S. healthcare system an estimated $55 billion per year. This estimate includes $20 billion in

direct costs and $35 billion in indirect costs, such as lost productivity and sick days. Increasing infection rates and misuse

of antibiotics results in serious treatment complications. Recent studies have shown that the number of hospital-acquired infections

in the United States ranges from 214,700 to 1,411,000 per year, contributing to an estimated 75,000 deaths per year. Moreover,

inappropriate antibiotic use is widespread. Of the 33 million patients admitted to U.S. hospitals each year, 56% (19 million) are

put on empiric antibiotic therapy, of which more than half (9 million) are on inappropriate or unnecessary antibiotics.

Rapid AST is designed to address these challenges.

According to a recent company survey of 43 critical care physicians, 95% stated that AST is the most valuable lab test when selecting

optimal antibiotic therapy. Studies have shown that even a modest decrease in the time it takes to deliver an AST result correlates

to reduced length and cost of hospital stay per patient. One such study showed that a five hour reduction in the time to receive

an AST result delivered a two-day reduction in length of stay and a reduction in patient treatment costs of $1,750 per patient.

Based on our conversations with potential customers and review of internal time studies, we estimate that the Blood Culture Assay

Kit will reduce the time to receive an AST result from the time a sample is taken from a patient by a total of 29 hours on average

for the Blood Culture Assay Kit and 52 hours on average for the respiratory kit, which is currently in the initial stages of development.

Based on our analysis, we estimate that the ID/AST System is capable of delivering results in approximately 19 hours from the time

a blood sample is taken from a patient, while current solutions take a total of approximately 48 hours to deliver results. For

respiratory samples, we estimate that the ID/AST System is capable of delivering results in approximately 8 hours from the time

a sample is taken from a patient, while current solutions take a total of approximately 60 hours to deliver results.

Recent reports have indicated estimated

growth in the hospital-acquired disease testing market, a subset of the microbiology market in which we operate, at a combined

average growth rate of 19.3% over seven years, from $2.2 billion in 2012 to an estimated $7.5 billion by 2019. We believe this

growth is driven by the entrance of new technologies coupled with higher volumes due to enhanced screening, immune-compromised

patients and increasing challenges with multidrug-resistant organisms.

Initially, we plan on marketing our system

across three regions: North America, Europe and various countries in the Asia Pacific region. In these geographies, we estimate

there are over 14 million high-acuity tests completed annually across various sample types including blood, respiratory, skin and

soft tissue, and urine. We estimate there are 5 million high-acuity tests annually for blood culture samples globally, including

over 4 million in North America, Europe and various countries in the Asia Pacific region. Based on this estimated test volume,

and an estimated current market price per test of approximately $180, we estimate the total available market of automated microbiological

testing to be approximately $2.5 billion annually in North America, Europe and various countries in the Asia Pacific region, of

which approximately $725 million is attributed to high-acuity tests for blood culture samples.

In addition, based on information compiled

from various competitor annual reports and other publicly available information, as well as our own estimates, we believe there

are nearly 20,000 global instrument placements possible, consisting of approximately 10,000 bioMerieux Vitek 2 installations, 6,000

Danaher Microscan installations and 4,000 instruments from other companies. Based on this estimated total instrument placement

volume, and an estimated average price of an instrument sold for use in the microbiology lab today of approximately $100,000, we

estimate the total available global instrument market for the ID/AST System to be approximately $2.0 billion.

Certain recent government initiatives are

complementary to the ID/AST System. Centers for Medicare and Medicaid Services ("CMS") programs to decrease hospital-acquired

infections directly impact hospital budgets via reimbursement cuts, incentivizing providers to enhance infection-management protocols.

These programs include the Medicare Hospital-Acquired Condition Reduction Program and the Hospital Readmissions Reduction Program.

Similarly, on March 27, 2015, the White House released the National Action Plan for Combating Antibiotic-Resistant Bacteria, which

directly and indirectly promotes rapid susceptibility testing. The plan identifies several milestones to accomplish this goal,

such as calling on the National Institutes of Health to fund new projects and provide prizes aimed at the development of rapid

diagnostic tests that characterize antibiotic susceptibility and improve antibiotic stewardship; mandated implementation of antibiotic

stewardship programs by all hospitals participating in Medicare and Medicaid, to go into effect within three years; and FDA and

CMS's evaluation of new regulatory pathways to promote development and adoption of innovative infectious disease diagnostics.

Our commercial strategy is to focus initially

on high volume and influential accounts in key geographies with a direct sales force in North America and in select European countries.

Early marketing efforts include the planned initiation of 12 market study sites across the United States and European Union. In

support of these efforts, we anticipate establishing an initial sales force of eight to 12 employees based in the European Union

and 17 to 23 employees based in the United States. We may also use third-party distribution partners for certain geographic areas

outside of the United States.

Research and development

We plan to introduce additional test kits

for use on the Accelerate ID/AST System to enable its use with other sample types (e.g., respiratory samples, skin, soft tissue

and urine). In addition, we plan to invest in the development of additional instruments, tests and other microbiology solutions.

To the best of our knowledge, no other company

has a single product with capabilities matching all those of the ID/AST System. The leading companies with automated microbiological

testing products include Becton, Dickinson and Company ("BD"), bioMerieux, Danaher Corporation ("Danaher"),

Bruker Corporation, BioFire Diagnostics, Nanosphere, T2 Biosystems, Abbott and Thermo Fisher Scientific's subsidiary TREK