UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM | ||
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 10, 2021
(Exact name of Registrant, as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
Mailing address:
(Address of principal executive
offices)
Registrant's telephone number, including area code: (858 ) 412-8151
Former name or address, if changed since last report: Not Applicable.
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):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 2.02 Results of Operations and Financial Condition.
On November 10, 2021, Cue Health Inc. (the “Company”), announced the Company’s financial results for the third quarter ended September 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
Item 7.01. Regulation FD Disclosure.
Investors and others should note that we may announce material information to the public through filings with the Securities and Exchange Commission, or the SEC, our website (http://www.cuehealth.com), press releases, public conference calls, and public webcasts. We use these channels, as well as social media, to communicate with our members, clients, and the public about our company, our services and other issues. It is possible that the information we post on social media could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
The information contained this Current Report on Form 8-K and in the accompanying exhibit are “furnished” and 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, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | ||||
| Press Release dated November 10, 2021. | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document). | ||||
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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.
Date: 11/10/2021
Cue Health Inc.
| By: | /s/ John Gallagher | |||||||
| Name: | John Gallagher | |||||||
| Title: | Chief Financial Officer | |||||||
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CUE HEALTH REPORTS THIRD QUARTER 2021 FINANCIAL RESULTS
____________________
SAN DIEGO, CA – November 10, 2021 – Cue Health Inc. (Nasdaq: HLTH), a mission-driven healthcare technology company, today reported financial results for the third quarter ended September 30, 2021.
Third Quarter and Recent Highlights
•Reported record total revenue of $223.7 million for the third quarter of 2021, a 63% increase compared to the second quarter of 2021
◦Public sector revenue of $129.5 million, up 23% for the third quarter of 2021 compared to the second quarter of 2021
◦Private sector revenue of $94.2 million, up 191% for the third quarter of 2021 compared to the second quarter of 2021
•Increased product gross margin to 60.2%, up from 59.9% in the second quarter of 2021
•Added over 50 enterprise, healthcare provider and public sector customers during the third quarter, nearly tripling our direct customer base to over 80
•Completed an initial public offering of 14,375,000 shares, raising $213.9 million in proceeds after underwriting fees
•Strong balance sheet, ending the quarter with cash and cash equivalents of $446.6 million
“In the last few months, we generated record quarterly revenue while entering the public markets, growing our customer base, readying to launch our direct-to-consumer offering with integrated virtual care and in-app travel proctoring, and expanding our team,” said Ayub Khattak, CEO and co-founder of Cue Health. “We’re confident we’ve laid a solid foundation for long-term value creation at Cue and look forward to delivering on our mission of empowering people to live their healthiest lives through personalized, proactive, and informed healthcare.”
Third Quarter 2021 Financial Results
Revenue was $223.7 million for the third quarter of 2021, compared to $137.4 million for the prior quarter and $4.7 million for the prior year. The increase over the prior quarter was made possible by growth in both the public and private sector.
Public Sector revenue was $129.5 million, compared to $105.0 million for the prior quarter. The increase over the prior quarter was driven by additional deliveries to DOD / HHS under the existing agreement.
Private Sector revenue was $94.2 million, compared to $32.4 million for the prior quarter. The increase over the prior quarter was driven by significant additions to the enterprise and provider customer base.
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Disposable test cartridge revenue was $179.0 million for the third quarter of 2021, up 74% from the prior quarter.
Product gross margin was 60.2% for the third quarter of 2021, up from 59.9% in the prior quarter due to the increase in production partially offset by higher labor and material costs.
Operating expenses for the third quarter of 2021 were $47.7 million, compared to $17.6 million for the third quarter of 2021. The increase was driven by growth in our overall organization including Sales and Marketing, R&D, and G&A and includes a one-time equity expense of $12.9 million.
Net income was $19.3 million for the third quarter of 2021 compared to $19.8 million in the second quarter. Earnings per diluted share was $0.13 for the third quarter of 2021 compared to $0.14 in the second quarter.
Cash and cash equivalents were $446.6 million as of September 30, 2021.
Guidance
Cue Health expects full year 2021 revenues in the range of $580.0 million to $590.0 million.
About Cue Health
Cue Health (Nasdaq: HLTH) is a mission-driven healthcare technology company that puts consumers in control of their health information and places diagnostic information at the center of care. Cue Health enables people to manage their health through real-time, actionable, and connected health information, offering individuals and their healthcare providers easy access to lab-quality diagnostics anywhere, anytime, in a device that fits in the palm of the hand. Cue Health’s first-of-its-kind COVID-19 test was the first FDA-authorized molecular diagnostic test for at-home and over-the-counter use without physician supervision. Outside the United States, Cue Health has received the CE mark in the European Union, Interim Order authorization from Health Canada, and regulatory approval from India’s Central Drugs Standard Control Organisation. Cue Health was founded in 2010 and is headquartered in San Diego. For more information, please visit www.cuehealth.com.
Forward-Looking Statements
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements”. The words, without limitation, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these or similar identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those related to the expected capabilities of the Cue Health Platform, the benefits that may be realized from Cue Health’s collaboration with Google Cloud, our ability to maintain customer growth rates, our ability to increase our private sector revenue, and the factors discussed in the “Risk Factors” section of the prospectus dated September 23, 2021 filed by Cue Health with the SEC. Any forward-looking statements contained in this press release are based on the current expectations of Cue’s management team and speak only as of the date hereof, and Cue specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
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This product has not been FDA cleared or approved; but has been authorized by FDA under an Emergency Use Authorization, or EUA. This product has been authorized only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. The emergency use of this product is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360bbb-3(b)(1), unless the declaration is terminated or authorization is revoked sooner.
Contact Us
ICR Westwicke
Caroline Corner
ir@cuehealth.com
(415) 202-5678
Cue Health
press@cuehealth.com
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CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Product revenue | $ | 222,594 | $ | 2,128 | $ | 424,516 | $ | 2,128 | |||||||||||||||
| Grant and other revenue | 1,085 | 2,602 | 1,085 | 7,562 | |||||||||||||||||||
| Total revenue | 223,679 | 4,730 | 425,601 | 9,690 | |||||||||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||||
| Cost of product revenue | 88,569 | 2,641 | 173,746 | 2,641 | |||||||||||||||||||
| Sales and marketing | 5,572 | 19 | 7,531 | 64 | |||||||||||||||||||
| Research and development | 9,079 | 6,878 | 21,150 | 26,558 | |||||||||||||||||||
| General and administrative | 33,084 | 3,694 | 56,336 | 7,458 | |||||||||||||||||||
| Total operating costs and expenses | 136,304 | 13,232 | 258,763 | 36,721 | |||||||||||||||||||
| Income (loss) from operations | 87,375 | (8,502) | 166,838 | (27,031) | |||||||||||||||||||
| Interest expense | (1,786) | 514 | (9,752) | (274) | |||||||||||||||||||
| Change in fair value of redeemable convertible preferred stock warrants | 243 | 20 | 53 | — | |||||||||||||||||||
| Change in fair value of convertible notes | (36,306) | — | (59,560) | — | |||||||||||||||||||
| Loss on extinguishment of debt | — | (610) | (1,998) | (610) | |||||||||||||||||||
| Other income (expense), net | (80) | 40 | (19) | 99 | |||||||||||||||||||
| Net income (loss) before income taxes | 49,446 | (8,538) | 95,562 | (27,816) | |||||||||||||||||||
| Income tax expense | 30,098 | — | 43,374 | — | |||||||||||||||||||
| Net income (loss) | $ | 19,348 | $ | (8,538) | $ | 52,188 | $ | (27,816) | |||||||||||||||
| Net income (loss) per share attributable to common stockholders – basic | $ | 0.14 | $ | (0.52) | $ | 0.37 | $ | (1.72) | |||||||||||||||
| Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – basic | 31,554,720 | 16,556,343 | 22,997,311 | 16,126,647 | |||||||||||||||||||
| Net income (loss) per share attributable to common stockholders – diluted | $ | 0.13 | $ | (0.52) | $ | 0.35 | $ | (1.72) | |||||||||||||||
| Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – diluted | 39,304,978 | 16,556,343 | 30,747,569 | 16,126,647 | |||||||||||||||||||
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CONDENSED BALANCE SHEETS
(In thousands, except share amounts and share data)
(Unaudited)
| September 30, 2021 | December 31, 2020 | ||||||||||
| Assets | |||||||||||
Current assets: | |||||||||||
| Cash and cash equivalents | $ | 446,589 | $ | 121,578 | |||||||
| Restricted cash | 12,000 | 6,000 | |||||||||
| Accounts receivable, net | 90,190 | 4,168 | |||||||||
| Inventory | 70,739 | 36,842 | |||||||||
| Prepaid expenses | 47,922 | 13,847 | |||||||||
| Other current assets | 2,088 | 1,263 | |||||||||
Total current assets | 669,528 | 183,698 | |||||||||
| Restricted cash, non-current | — | 1,677 | |||||||||
| Property and equipment, net | 168,642 | 103,683 | |||||||||
| Prepaid rent | 161 | 16,771 | |||||||||
| Operating lease right-of-use assets | 78,555 | 8,281 | |||||||||
| Intangible assets, net | 3,691 | 2,038 | |||||||||
| Other non-current assets | 1,407 | 180 | |||||||||
| Total assets | $ | 921,984 | $ | 316,328 | |||||||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | |||||||||||
Current liabilities: | |||||||||||
| Accounts payable | $ | 35,148 | $ | 23,847 | |||||||
| Accrued liabilities and other current liabilities | 26,212 | 8,822 | |||||||||
| Income taxes payable | 37,365 | — | |||||||||
| Deferred revenue, current | 76,341 | 115,747 | |||||||||
| Debt, current | — | 5,434 | |||||||||
| Operating lease liabilities, current | 3,960 | 797 | |||||||||
| Finance lease liabilities, current | 2,603 | 1,249 | |||||||||
Total current liabilities | 181,629 | 155,896 | |||||||||
| Redeemable convertible preferred stock warrant liabilities | — | 1,331 | |||||||||
| Deferred revenue, net of current portion | 31,225 | 67,349 | |||||||||
| Operating leases liabilities, net of current portion | 50,027 | 10,472 | |||||||||
| Finance lease liabilities, net of current portion | 3,841 | 1,857 | |||||||||
| Other non-current liabilities | 884 | 4,500 | |||||||||
| Total liabilities | 267,606 | 241,405 | |||||||||
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| Commitments and contingencies | |||||||||||
| Total redeemable convertible preferred stock | — | 176,323 | |||||||||
| Stockholders’ Equity (Deficit) | |||||||||||
Common stock, $0.00001 par value; 500,000,000 and 129,030,355 shares authorized, 146,362,598 and 27,995,780 issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 1 | — | |||||||||
| Additional paid-in-capital | 712,625 | 9,036 | |||||||||
| Accumulated deficit | (58,248) | (110,436) | |||||||||
| Total stockholders’ equity (deficit) | 654,378 | (101,400) | |||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 921,984 | $ | 316,328 | |||||||
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