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): May 11, 2022
(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 May 11, 2022, Cue Health Inc. ("Cue Health" or the "Company"), issued a press release announcing the Company’s financial results for the first quarter ended March 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.
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 issued by Cue Health dated May 11, 2022. | |||||
| 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: May 11, 2022
Cue Health Inc.
| By: | /s/ John Gallagher | |||||||
| Name: | John Gallagher | |||||||
| Title: | Chief Financial Officer | |||||||
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Cue Health Reports First Quarter 2022 Results
____________________
SAN DIEGO, CA – May 11, 2022 – Cue Health Inc. (Nasdaq: HLTH), a healthcare technology company, (“Cue") today reported financial results for the first quarter of 2022.
Recent Highlights
•Revenue of $179.4 million in the first quarter of 2022, compared to $64.5 million in the first quarter of 2021
•235,000+ Cue Readers shipped through the end of the first quarter of 2022, including 72,000+ in the quarter
•Cue Covid-19 Test de novo submission to the U.S. Food and Drug Administration (FDA) for full clearance for at-home and point-of-care use
•Flu clinical studies nearing completion, with full submission to the FDA expected in the third quarter of 2022
•Flu + COVID multiplex starting clinical studies this quarter, ahead of schedule
•RSV expected to begin clinical studies in the third quarter of 2022 and Chlamydia + Gonorrhea multiplex in the second half of 2022, as planned
•Generated cash of $16.6 million in the first quarter 2022, ending with cash and cash equivalents of $426.5 million
“I am pleased with our first quarter 2022 financial results, including $179 million in revenue, which reflects year-over-year growth of 178%. We made excellent progress on our menu expansion activities, with all of our programs on track or ahead of schedule,” said Ayub Khattak, Co-Founder, Chairman and Chief Executive Officer of Cue Health. “Our recent COVID-19 test de novo submission to the FDA marked a major milestone for the company and we believe it will be the first of many submissions as we seek to address a range of diseases and conditions with our menu of molecular diagnostic tests and future care offerings.”
First Quarter 2022 Financial Results
Revenue was $179.4 million in the first quarter 2022, an increase from $64.5 million in the first quarter 2021. The growth was primarily driven by the continued expansion of our customer base and increases in production capacity.
Private Sector revenue grew to 98.0%, or $175.8 million, in the first quarter 2022.
Public Sector revenue was 2.0%, or $3.6 million, in the first quarter 2022, as we completed shipment of our contract with the U.S. Department of Defense in the fourth quarter 2021.
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Disposable test cartridge revenue was $163.2 million in the first quarter 2022.
Product gross margin was 51.1% in the first quarter 2022, compared to 53.4% in the first quarter 2021.
Operating expenses in the first quarter 2022 were $89.9 million, excluding cost of revenues, compared to $19.7 million in the first quarter 2021. The increase was driven by growth in our overall organization, digital marketing spend, and spend related to product development.
Net income was $2.8 million in the first quarter 2022, compared to $13.0 million in the first quarter 2021. Earnings per diluted share was $0.02 in the first quarter 2022, compared to $0.08 in the first quarter 2021.
Cash and cash equivalents were $426.5 million as of March 31, 2022.
Guidance
Cue Health expects second quarter 2022 revenues in the range of $50 million to $55 million.
About Cue Health
Cue Health (Nasdaq: HLTH) is a healthcare technology company that makes it easy for individuals to access 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 a prescription and physician supervision. Outside the United States, Cue Health has received the CE mark in the European Union, Interim Order authorization from Health Canada, regulatory approval from India’s Central Drugs Standard Control Organisation, and PSAR authorization from Singapore’s Health Sciences Authority. 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, including statements related to the submission of any FDA applications and expectations around receiving clearance, growth in our customer base, expectations regarding production capacity, potential technology enhancements and future performance and our guidance, including first quarter 2022 guidance, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements”. The words, without limitation, “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “would,” “develop,” “pave,” “seek,” “offer,” “grow”, “expand” 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 new Omicron-specific genotyping Cue test, our ability to maintain customer growth rates, our ability to increase private sector revenue, our ability maintain or replace the revenue historically generated from our government contracts, our ability to effectively scale our manufacturing capacity to meet contractual obligations with our customers and market demand, and the factors discussed in the "Risk Factors" section of Cue’s
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 to be filed 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.
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)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Revenue | |||||||||||
| Product revenue | $ | 177,454 | $ | 64,499 | |||||||
| Grant and other revenue | 1,956 | — | |||||||||
| Total revenue | 179,410 | 64,499 | |||||||||
| Operating costs and expenses: | |||||||||||
| Cost of product revenue | 86,697 | 30,035 | |||||||||
| Sales and marketing | 34,168 | 430 | |||||||||
| Research and development | 28,787 | 7,409 | |||||||||
| General and administrative | 26,910 | 11,870 | |||||||||
| Total operating costs and expenses | 176,562 | 49,744 | |||||||||
| Income (loss) from operations | 2,848 | 14,755 | |||||||||
| Interest expense | (51) | (535) | |||||||||
| Other income (expense), net | 6 | 37 | |||||||||
| Net income (loss) before income taxes | 2,803 | 14,257 | |||||||||
| Income tax expense (benefit) | — | 1,226 | |||||||||
| Net income (loss) | $ | 2,803 | $ | 13,031 | |||||||
| Net income (loss) per share attributable to common stockholders – basic | $ | 0.02 | $ | 0.09 | |||||||
| Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – basic | 146,526,370 | 18,378,777 | |||||||||
| Net income (loss) per share attributable to common stockholders – diluted | $ | 0.02 | $ | 0.08 | |||||||
| Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – diluted | 153,036,804 | 25,904,338 | |||||||||
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CONDENSED BALANCE SHEETS
(In thousands, except share amounts and share data)
| March 31, 2022 | December 31, 2021 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 426,465 | $ | 409,873 | |||||||
| Restricted cash | 13,838 | 13,837 | |||||||||
| Accounts receivable | 75,830 | 104,589 | |||||||||
| Inventory | 132,567 | 88,388 | |||||||||
| Prepaid expenses | 42,902 | 45,889 | |||||||||
| Other current assets | 9,807 | 7,446 | |||||||||
| Total current assets | 701,409 | 670,022 | |||||||||
| Property and Equipment, Net | 182,750 | 177,456 | |||||||||
| Prepaid rent | 480 | 1,567 | |||||||||
| Operating lease right-of-use assets | 84,212 | 79,474 | |||||||||
| Intangible assets, net | 9,240 | 7,673 | |||||||||
| Other non-current assets | 5,679 | 3,868 | |||||||||
| Total assets | $ | 983,770 | $ | 940,060 | |||||||
| Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 48,842 | $ | 37,208 | |||||||
| Accrued liabilities and other current liabilities | 39,809 | 29,498 | |||||||||
| Income taxes payable | 8,246 | 8,297 | |||||||||
| Deferred revenue, current | 84,629 | 82,165 | |||||||||
| Operating lease liabilities, current | 7,594 | 7,147 | |||||||||
| Finance lease liabilities, current | 2,620 | 2,621 | |||||||||
| Total current liabilities | 191,740 | 166,936 | |||||||||
| Deferred revenue, net of current portion | 10,283 | 10,283 | |||||||||
| Operating leases liabilities, net of current portion | 47,626 | 46,464 | |||||||||
| Finance lease liabilities, net of current portion | 2,627 | 3,271 | |||||||||
| Other non-current liabilities | 6,356 | 6,356 | |||||||||
| Total liabilities | 258,632 | 233,310 | |||||||||
| Commitments and contingencies (Note 16) | |||||||||||
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| Stockholders’ Equity (Deficit) | |||||||||||
Common stock, $0.00001 par value; 500,000,000 and 500,000,000 shares authorized, 146,958,296 and 146,402,991 issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 1 | 1 | |||||||||
| Additional paid-in-capital | 746,352 | 730,767 | |||||||||
| Accumulated deficit | (21,215) | (24,018) | |||||||||
| Total stockholders’ equity (deficit) | 725,138 | 706,750 | |||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 983,770 | $ | 940,060 | |||||||
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