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United States securities and exchange commission logo
June 11, 2021
Ayub Khattak
Chief Executive Officer
Cue Health Inc.
4980 Carroll Canyon Rd.
Suite 100
San Diego, CA 92121
Re: Cue Health Inc.
Amendment No. 1 to
Draft Registration
Statement on Form S-1
Submitted May 24,
2021
CIK No. 0001628945
Dear Mr. Khattak:
We have reviewed your amended draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 1 to Draft Registration Statement on Form S-1
General
1. Please refer to the
inside cover page artwork and the third graphic. We note your
statement that your
platform is "fast & accurate" and that it provides "lab-quality
diagnostics anywhere in
minutes to make faster and more informed healthcare decisions."
We also note the
associated disclaimer. Please increase the font size of the disclaimer on
each graphic and revise
to clarify that you only have one approved test kit being marketed
pursuant to EUAs.
Ayub Khattak
FirstName
Cue HealthLastNameAyub Khattak
Inc.
Comapany
June NameCue Health Inc.
11, 2021
June 11,
Page 2 2021 Page 2
FirstName LastName
Reinventing How We Interact with Our Health, page 1
2. We note your response to our prior comment 5 and reissue in part.
Please refer to the fifth
paragraph. We note your disclosure that your platform has been built
to "enable fast,
frequent, lab-quality diagnostics." Please revise to balance your
disclosure regarding
providing "lab-quality diagnostics" with the fact that you only have
one approved test kit
being marketed pursuant to EUAs and that the majority of your
diagnostic test kits remain
subject to technical development, clinical studies and FDA approval.
3. We note your response to our prior comment 6 and reissue in part.
Please refer to the
seventh paragraph. Please revise to discuss in greater detail the
steps necessary to receive
FDA approval for the COVID-19 test kit to include 510(k) clearance. In
this regard, we
note that you will be required to conduct additional clinical studies.
Please revise to
discuss the planned clinical studies in greater detail to include
anticipated timing and
costs. Please include enough detail so investors can clearly
understand the steps, costs
and timing to receive FDA approval through the standard regulatory
pathway.
Cue Virtual Care Delivery Apps, page 8
4. We note your response to our prior comment 3 and reissue in part. We
note that your
platform, apps, enterprise dashboard and sole approved product are
relatively new. We
also note your discussion in this section and throughout the
prospectus regarding users,
customers and enterprises and their potential engagement via your
platform, apps and
enterprise dashboard. Please revise to disclose the number of active
users, customers
and enterprises on your platform, apps and enterprise dashboard and
how you define such
terms. In this regard, we note your disclosure that 20 public sector
customers and
enterprises are "set-up" to use your enterprise dashboard. Please
revise to clearly detail if
any users, customers and enterprises are actively using your platform,
apps and enterprise
dashboard. Please include enough detail so investors can clearly
understand if these
products are actively being used or if they are anticipatory in nature
once more test kits
are approved and are commercially available.
Our Expected Future Care Offerings, page 12
5. Please refer to the development pipeline chart on page 13. Please
revise to include an
additional column which sets forth the anticipated timing of the next
development
milestone for each test kit. With respect to the COVID-19 test kit,
please reduce the
arrow to the clinical studies column. In this regard, we note your
disclosure on page 2 that
you will need to complete additional clinical studies in order to be
eligible to receive
510(k) clearance from the FDA.
Use of Proceeds, page 88
6. We note your response to our prior comment 13 and reissue in part. We
note your
disclosure that you intend to use net proceeds to fund research and
development and
Ayub Khattak
FirstName
Cue HealthLastNameAyub Khattak
Inc.
Comapany
June NameCue Health Inc.
11, 2021
June 11,
Page 3 2021 Page 3
FirstName LastName
clinical studies to expand your test menu. With respect to net
proceeds allocated to fund
research and development and clinical studies, please revise to
quantify the amounts
allocated to fund the research and development of each diagnostic test
kit individually and
specify how far in the technical development you expect to reach with
such net
proceeds. If a material amount of other funds are necessary to
complete the
technical development of these diagnostic test kits, state the amounts
and sources of such
other funds. Refer to Instruction 3 of Item 504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
100
7. Please disclose the total amounts of cash payments you have received
under the
Department of Defense Agreement from January 1, 2021 through the
filing date of your
amended registration statement.
U.S. Department of Defense Agreement, page 100
8. We note your disclosure in the third paragraph that you and the U.S.
government are
expected to negotiate and enter into a follow-on supply agreement
which would provide
the U.S. DoD with the right to purchase up to 45% of your quarterly
production for the
duration of the contract at a specified discount to the lowest price
offered by you to a
customer for the same products, equivalent quantities and comparable
terms of sale,
subject to a price floor. Please revise the description of the
discount rate to give investors
a reasonable idea of the rate range, or tell us why you do not believe
such information is
material to investors.
Research and Development Expense, page 104
9. We note your response to our comment 15 and reissue our comment in
part. As you noted
in your response that you do not track research and development costs
on a test by test
basis, please provide other quantitative or qualitative disclosure
that provides more
transparency as to the type of research and development expenses
incurred, for example,
by costs and expenses related to salaries and benefits associated with
research and
development personnel, contract services, laboratory supplies,
facilities, depreciation,
outside services and costs associated with clinical studies and
regulatory submissions, etc.,
as noted in your disclosure. Please ensure that your revised
disclosure reconciles to total
research and development expense on the Statements of Operations.
Adjusted Product Gross Profit, page 105
10. Please disclose how you reasonably concluded that this measure yields
"a better
understanding of cash generated by product sales prior to operating
costs" given that it
fails to exclude the $15,649 non-cash amortization amount that is
included in revenue. In
this regard, we note the disclosure on page F-42 concerning your
amortization of deferred
revenue and the corresponding material adverse impact on your 2021
operating cash
Ayub Khattak
Cue Health Inc.
June 11, 2021
Page 4
flows.
Note 3, page F-15
11. As previously requested, please disclose any contractual restrictions
on how you can use
the DoD advance. Also, tell us how you determined that a restricted
cash Balance Sheet
classification of any unspent amounts was not required.
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.
FirstName LastNameAyub Khattak Sincerely,
Comapany NameCue Health Inc.
Division of
Corporation Finance
June 11, 2021 Page 4 Office of Life
Sciences
FirstName LastName