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United States securities and exchange commission logo
September 13, 2021
Ayub Khattak
Chief Executive Officer
Cue Health Inc.
4980 Carroll Canyon Rd.
Suite 100
San Diego, CA 92121
Re: Cue Health Inc.
Registration
Statement on Form S-1
Filed September 1,
2021
File No. 333-259250
Dear Mr. Khattak:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-1
Risk Factors, page 25
1. Please expand your risk
factor concerning prospective "significant losses in the future" to
quantify the estimated
expense that you expect to recognize due to the conversion of the
notes referenced on
page F-47 and the cancellation of debt owed by executives that
is referenced on page
F-56. Any other similar known impending charges should also be
disclosed.
Corresponding forewarning disclosure should additionally be included in
MD&A. See Section
501.02 of the Financial Reporting codification.
Ayub Khattak
FirstName
Cue HealthLastNameAyub Khattak
Inc.
Comapany 13,
September NameCue
2021 Health Inc.
September
Page 2 13, 2021 Page 2
FirstName LastName
Cost of Product Revenue, page 111
2. Please clarify your disclosure to quantify and explain the changes in
gross margin between
the March 31st and June 30th quarters. The impact of price changes
and/or changes in
deferred revenue amortization should be disclosed if material.
Revenue, page 111
3. Please expand your disclosure to clarify that approximately $11
million of the referenced
$42.9 million increase in U.S. government revenue was due to an
increase in
your amortization of the U.S. DoD advance in the June 30 quarter
relative to the March 31
quarter. Please also clarify the disclosure to address the extent to
which the revenue
increase was impacted by the introduction of new products, changes in
sales volume
or to changes in sales price. See the guidance in Item 303(b)(2)(iii)
of Regulation S-K.
Non-GAAP Financial Measures, page 114
4. Please expand your disclosure to clarify why the estimated tax impact
is reported to be
only 2% of your aggregate non-GAAP adjustments. In this regard, we
note that your June
30, 2021 effective tax rate is 29% and that your reported statutory
rate is 21%. We may
have further comment.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Sasha Parikh at 202-551-3627 or Al Pavot at 202-551-3738
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Donald Field at 202-551-3680 or Erin Jaskot at 202-551-3442 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences