NASDAQ false 0001628945 0001628945 2024-05-16 2024-05-16

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

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 16, 2024

 

 

CUE HEALTH INC.

(Exact name of Registrant, as specified in its charter)

 

 

 

Delaware   001-40824   27-1562193
(State or other jurisdiction
of incorporation)
 

(Commission

File Number)

  (I.R.S. Employer
Identification Number)

Mailing address:

4980 Carroll Canyon Rd.
Suite 100
San Diego, CA 92121
(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):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.00001 per share   HLTH   Nasdaq Capital Market

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 1.02

Termination of a Material Definitive Agreement.

On May 16, 2024, (the “Termination Date”), Cue Health Inc. (the “Company”) terminated its Loan and Security Agreement, dated June 30, 2022 (as amended, the “Loan Agreement”), by and among the Company, the guarantors party thereto, the lenders from time to time party thereto, Comerica Bank, as documentation agent, and East West Bank, as collateral agent and administrative agent. The Loan Agreement provided the Company with a $100.0 million secured revolving credit facility, with a $20.0 million letter of credit subfacility. As of the Termination Date, the Company had no loans outstanding under the Loan Agreement. In connection with the termination of the Loan Agreement, the Company cash collateralized $504,440.40 of letters of credit that were issued under the Loan Agreement.

The foregoing description of the Loan Agreement is not complete and is qualified in its entirety by reference to the full text of the Loan Agreement, a copy of which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 1, 2022.

 

Item 1.03

Bankruptcy or Receivership.

On May 28, 2024, after considering all strategic alternatives, the Company filed a voluntary petition for relief (the “Petition”) under the provisions of Chapter 7 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

The proceeding under the Petition is styled as “In Re: Cue Health Inc.” As a result of filing the Petition, a Chapter 7 trustee will be appointed by the Bankruptcy Court to administer the bankruptcy estate of the Company and to perform the duties set forth in the Bankruptcy Code. The assets of the Company will be liquidated and all claims paid in accordance with the Bankruptcy Code.

A copy of the related press release announcing the Petition is attached hereto as Exhibit 99.1.

 

Item 3.01.

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

As previously disclosed in a Form 12b-25 Notification of Late Filing (the “12b-25”) filed by the Company on May 16, 2024, the Company is delinquent in filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the “Form 10-Q”) with the SEC.

On May 23, 2024, the Company received a notice (the “Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the Company is delinquent in filing its Form 10-Q, the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires companies with securities listed on Nasdaq to timely file all required periodic reports with the SEC. As previously disclosed on a Current Report on Form 8-K filed with the SEC on June 9, 2023, the Company previously received a notice from Nasdaq indicating that, as a result of the Company not satisfying the requirement for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a) (“Rule 5450(a)”) to maintain a minimum bid price of $1 per share, the Company was not in compliance with Rule 5450(a). On November 17, 2023, the Company transitioned to the Nasdaq Capital Market, but as of the date of this Current Report on Form 8-K has not satisfied the requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a) to maintain a minimum bid price of $1 per share.

In accordance with the Notice, the Company has until July 22, 2024 to submit a plan of compliance (the “Plan”) to the Nasdaq staff addressing how it intends to regain compliance with the Rule, and until November 18, 2024, which is 180 calendar days from the original due date of the Form 10-Q, to regain compliance. The Notice will have no immediate effect on the listing or trading of the Company’s common stock. However, the Company does not intend to submit a Plan, and therefore, it is expected that the Company’s common stock will be delisted upon further notice from Nasdaq.

 


Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departures of Certain Officers

As of May 24, 2024, the Company terminated all of its employees and executive officers, including Chief Executive Officer and Co-Founder Clint Sever, Chief Business Officer Chris Achar and Chief Accounting Officer Randall Pollard. The Company notified all employees and executive officers of the upcoming terminations on May 20, 2024.

Departures of Directors

On May 24, 2024, each of the members of the Company’s board of directors, Chris Achar, Joanne Bradford, Carole Faig, Josh Ghaim, Sachin Jain and Maria Martinez (together, the “Remaining Directors”), provided notice of his or her resignation from the Board and all committees thereof, effective upon the Company’s submission of the Petition. The resignations of the Remaining Directors are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

 

Item 7.01

Regulation FD Disclosure.

As previously disclosed in the 12b-25 filed by the Company on May 16, 2024, the Company is delinquent in filing its Form 10-Q with the SEC. In the absence of providing full financial information in a Form 10-Q, the Company is providing limited financial information regarding its performance for the quarter ended March 31, 2024. The tables below set forth certain unaudited financial results for the three months ended March 31, 2024 and 2023 and as of March 31, 2024 and December 31, 2023:


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(In thousands, except share data)

 

     Three Months Ended
March 31,
 
     2024      2023  

Revenue

     

Product revenue

   $ 6,555      $ 24,494  

Grant and other revenue

     3,499        271  
  

 

 

    

 

 

 

Total revenue

     10,054        24,765  

Operating costs and expenses:

     

Cost of product revenue

     16,317        39,823  

Sales and marketing

     6,150        11,248  

Research and development

     29,276        44,733  

General and administrative

     2,349        16,938  

Restructuring expense

     6,145        7,873  
  

 

 

    

 

 

 

Total operating costs and expenses

     60,237        120,615  
  

 

 

    

 

 

 

Loss from operations

     (50,183      (95,850

Interest income

     708        2,143  

Interest expense

     (148      (220

Other income (expense), net

     107        (271
  

 

 

    

 

 

 

Loss before income taxes

     (49,516      (94,198

Income tax expense

     —         —   
  

 

 

    

 

 

 

Net loss

   $ (49,516    $ (94,198
  

 

 

    

 

 

 

Net loss per share – basic & diluted

   $ (0.31    $ (0.62
  

 

 

    

 

 

 

Weighted-average number of shares used in computation of net loss per share – basic & diluted

     158,634,730        151,083,716  
  

 

 

    

 

 

 


CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(In thousands, except share amounts and share data)

 

     March 31, 2024      December 31,
2023
 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 40,223      $ 80,889  

Restricted cash

     800        800  

Accounts receivable, net

     389        1,352  

Inventories, net - current

     13,655        14,039  

Prepaid expenses

     8,326        8,479  

Other current assets

     8,653        4,803  
  

 

 

    

 

 

 

Total current assets

     72,046        110,362  

Non-current inventories, net

     51,301        56,273  

Property and equipment, net

     66,509        72,096  

Operating lease right-of-use assets

     74,001        78,519  

Intangible assets, net

     17,379        19,644  

Other non-current assets

     2,423        2,893  
  

 

 

    

 

 

 

Total assets

   $ 283,659      $ 339,787  
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable

     6,571        7,705  

Accrued liabilities and other current liabilities

     28,761        29,300  

Deferred revenue, current

     134        162  

Operating lease liabilities, current

     5,248        5,142  

Finance lease liabilities, current

     731        1,157  
  

 

 

    

 

 

 

Total current liabilities

     41,445        43,466  

Operating leases liabilities, net of current portion

     38,320        41,640  

Other non-current liabilities

     4,431        4,429  
  

 

 

    

 

 

 

Total liabilities

     84,196        89,535  

Stockholders’ Equity

     

Common stock

     2        2  

Additional paid-in-capital

     840,515        841,788  

Accumulated deficit

     (641,054      (591,538
  

 

 

    

 

 

 

Total stockholders’ equity

     199,463        250,252  
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 283,659      $ 339,787  
  

 

 

    

 

 

 


The information contained in Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, and such information shall not be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements, including, but not limited to, statements related to the Bankruptcy Court proceeding, the submission of the Plan and the Company’s continued listing on Nasdaq. Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” “commitments,” variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon the Company’s current plans, assumptions, beliefs, and expectations. Forward-looking statements are subject to the occurrence of many events outside of the Company’s control. Actual results and the timing of events may differ materially from those contemplated by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things, the risk that the Bankruptcy Court proceeding may take longer than anticipated; the risk that the Company’s common stock may be delisted from Nasdaq; and other risks and uncertainties included in the reports on Forms 10-K, 10-Q and 8-K and in other filings the Company makes with the SEC from time to time, available at www.sec.gov. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements contained herein speak only as of the date hereof. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

Number

  

Description

99.1    Press Release issued by Cue Health Inc. dated May 28, 2024.
104    Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL) document.


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.

 

    Cue Health Inc.
Date: May 28, 2024     By:  

/s/ Ian Sinnott

 

    Name:   Ian Sinnott

 

    Title:   Authorized Signatory

Exhibit 99.1

Cue Health to Pursue Wind Down of the Business

San Diego, CA – May 28, 2024 – Cue Health Inc. (“Cue” or the “Company”) (Nasdaq: HLTH), a healthcare technology company, today announced the Company has filed voluntary petitions under Chapter 7 of the U.S. Bankruptcy Code in the District of Delaware to pursue a wind down of its business.

Cue has been working diligently to strengthen the Company’s financial foundation, including taking a number of actions to reduce costs and improve operational efficiency. Cue also undertook an extensive process to locate additional financing or effect a strategic transaction. Despite its best efforts and after a comprehensive review, Cue’s Board of Directors in consultation with the Company’s advisors, has concluded that it is in the best interest of the Company and its stakeholders to file for Chapter 7 relief.

Cue is grateful to its employees for their contributions, hard work, and commitment to the business, and thankful to its customers and vendors for their partnership over the years.

A bankruptcy trustee will be appointed shortly to gather and sell the Company’s assets and use the proceeds to pay creditors in accordance with the provisions of the Bankruptcy Code.

Contact:

cuehealthcommunications@fticonsulting.com

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Document and Entity Information
May 16, 2024
Cover [Abstract]  
Security Exchange Name NASDAQ
Amendment Flag false
Entity Central Index Key 0001628945
Document Type 8-K
Document Period End Date May 16, 2024
Entity Registrant Name CUE HEALTH INC.
Entity Incorporation State Country Code DE
Entity File Number 001-40824
Entity Tax Identification Number 27-1562193
Entity Address, Address Line One 4980 Carroll Canyon Rd.
Entity Address, Address Line Two Suite 100
Entity Address, City or Town San Diego
Entity Address, State or Province CA
Entity Address, Postal Zip Code 92121
City Area Code (858)
Local Phone Number 412-8151
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Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, par value $0.00001 per share
Trading Symbol HLTH
Entity Emerging Growth Company true
Entity Ex Transition Period false

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