Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40590 | |
Entity Registrant Name | Cue Health Inc. | |
Entity Incorporation, State or Country Code | DE | |
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 | |
Title of 12(b) Security | Common Stock, par value $0.00001 per share | |
Trading Symbol | HLTH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 146,362,598 | |
Entity Central Index Key | 0001628945 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
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 | 0 | 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 |
Current liabilities: | ||
Accounts payable | 35,148 | 23,847 |
Accrued liabilities and other current liabilities | 26,212 | 8,822 |
Income taxes payable | 37,365 | 0 |
Deferred revenue, current | 76,341 | 115,747 |
Debt, current | 0 | 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 | 0 | 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 |
Commitments and contingencies (Note 16) | ||
Redeemable Convertible Preferred Stock | ||
Total redeemable convertible preferred stock | 0 | 176,323 |
Stockholders’ Equity (Deficit) | ||
Preferred stock, $0.00001 par value; 50,000,000 and no shares authorized, no shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 0 | 0 |
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 | 0 |
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 |
Series A Redeemable Convertible Preferred Stock | ||
Redeemable Convertible Preferred Stock | ||
Total redeemable convertible preferred stock | 0 | 7,519 |
Series B Redeemable Convertible Preferred Stock | ||
Redeemable Convertible Preferred Stock | ||
Total redeemable convertible preferred stock | 0 | 66,186 |
Series C-1 Redeemable Convertible Preferred Stock | ||
Redeemable Convertible Preferred Stock | ||
Total redeemable convertible preferred stock | 0 | 96,436 |
Series C-2 Redeemable Convertible Preferred Stock | ||
Redeemable Convertible Preferred Stock | ||
Total redeemable convertible preferred stock | $ 0 | $ 6,182 |
CONDENSED BALANCE SHEETS (Una_2
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 500,000,000 | 129,030,355 |
Common stock, shares issued (in shares) | 146,362,598 | 27,995,780 |
Common stock, shares outstanding (in shares) | 146,362,598 | 27,995,780 |
Series A Redeemable Convertible Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Temporary equity, shares authorized (in shares) | 8,721,437 | |
Temporary equity, shares issued (in shares) | 0 | 8,350,743 |
Temporary equity, shares outstanding (in shares) | 0 | 8,350,743 |
Temporary equity, liquidation preference | $ 0 | $ 7,660 |
Series B Redeemable Convertible Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Temporary equity, shares authorized (in shares) | 46,213,620 | |
Temporary equity, shares issued (in shares) | 0 | 46,176,715 |
Temporary equity, shares outstanding (in shares) | 0 | 46,176,715 |
Temporary equity, liquidation preference | $ 0 | $ 66,240 |
Series C-1 Redeemable Convertible Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Temporary equity, shares authorized (in shares) | 27,308,229 | |
Temporary equity, shares issued (in shares) | 0 | 27,308,227 |
Temporary equity, shares outstanding (in shares) | 0 | 27,308,227 |
Temporary equity, liquidation preference | $ 0 | $ 100,000 |
Series C-2 Redeemable Convertible Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Temporary equity, shares authorized (in shares) | 1,690,380 | |
Temporary equity, shares issued (in shares) | 0 | 1,690,380 |
Temporary equity, shares outstanding (in shares) | 0 | 1,690,380 |
Temporary equity, liquidation preference | $ 0 | $ 5,571 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Revenue | $ 223,679 | $ 4,730 | $ 425,601 | $ 9,690 |
Operating costs and expenses: | ||||
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) |
Other income (expense): | ||||
Interest expense | (1,786) | 514 | (9,752) | (274) |
Change in fair value of redeemable convertible preferred stock warrant liabilities | 243 | 20 | 53 | 0 |
Change in fair value of convertible notes | (36,306) | 0 | (59,560) | 0 |
Loss on extinguishment of debt | 0 | (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 | 0 | 43,374 | 0 |
Net income (loss) | $ 19,348 | $ (8,538) | $ 52,188 | $ (27,816) |
Net income (loss) per share attributable to common stockholders – basic (USD per share) | $ 140 | $ (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 (in shares) | 31,554,720 | 16,556,343 | 22,997,311 | 16,126,647 |
Net income (loss) per share attributable to common stockholders – diluted (USD per share) | $ 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 (in shares) | 39,304,978 | 16,556,343 | 30,747,569 | 16,126,647 |
Product | ||||
Revenue | ||||
Revenue | $ 222,594 | $ 2,128 | $ 424,516 | $ 2,128 |
Operating costs and expenses: | ||||
Cost of product revenue | 88,569 | 2,641 | 173,746 | 2,641 |
Grant And Other Revenue | ||||
Revenue | ||||
Revenue | $ 1,085 | $ 2,602 | $ 1,085 | $ 7,562 |
CONDENSED STATEMENT OF CASH FLO
CONDENSED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ 52,188 | $ (27,816) |
Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash used in operations | ||
Depreciation and amortization | 26,079 | 4,367 |
Inventory reserve | 286 | 0 |
Change in fair value of redeemable convertible preferred stock warrant liabilities | (53) | 0 |
Change in fair value of convertible notes | 59,560 | 0 |
Stock-based compensation expense | 25,558 | 242 |
Loss on extinguishment of debt | 1,998 | 610 |
Non-cash lease expense | 3,462 | 421 |
Convertible notes issuance costs | 6,000 | 0 |
Deferred income taxes | 883 | 0 |
Interest on finance leases | 154 | 65 |
Stock-based compensation expense from issuance of fully vested warrant to vendor | 1,239 | 0 |
Non-cash interest expense | 1,857 | 16 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (86,022) | (2,564) |
Inventory | (34,183) | (11,485) |
Prepaid expenses and other current assets | (25,487) | (24,781) |
Other non-current assets | (3,871) | 40 |
Accounts payable, accrued liabilities and other current liabilities | 5,270 | 1,759 |
Income taxes payable | 37,365 | 0 |
Deferred revenue | (75,529) | 0 |
Operating lease liabilities | (15,052) | (119) |
Net cash, cash equivalents and restricted cash used in operating activities | (18,298) | (59,245) |
Cash flows from investing activities | ||
Purchase of property and equipment | (74,637) | (6,123) |
Expenditures for software development | (3,524) | (885) |
Net cash, cash equivalents and restricted cash used in investing activities | (78,161) | (7,008) |
Cash flows from financing activities | ||
Proceeds for Series C-1 redeemable convertible preferred stock | 0 | 100,000 |
Proceeds from convertible notes | 235,480 | 5,563 |
Payments for issuance costs of Series C-1 redeemable convertible preferred stock | 0 | (3,037) |
Proceeds from exercise of redeemable convertible preferred stock warrant | 89 | 0 |
Payments of issuance costs of convertible notes | (6,000) | 0 |
Proceeds from exercise of common stock options | 418 | 729 |
Proceeds from exercise of common stock warrant | 77 | 0 |
Proceeds from issuance of common stock at public offering | 230,000 | 0 |
Payments of issuance costs of public offering | (22,062) | 0 |
Proceeds from debt | 82,250 | 1,658 |
Tax withholding on exercise of stock options | (4,586) | 0 |
Debt issuance and prepayment costs | (781) | 0 |
Repayment of debt | (87,684) | (1,929) |
Payments for finance leases | (1,408) | (385) |
Net cash, cash equivalents and restricted cash provided by financing activities | 425,793 | 102,599 |
Net increase in cash, cash equivalents and restricted cash | 329,334 | 36,346 |
Cash, cash equivalents and restricted cash, beginning balance | 129,255 | 14,505 |
Cash, cash equivalents and restricted cash, ending balance | 458,589 | 50,851 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 446,589 | 49,174 |
Restricted cash, current | 12,000 | 0 |
Restricted cash, non-current | 0 | 1,677 |
Total cash, cash equivalents and restricted cash | 458,589 | 50,851 |
Supplemental disclosure for cash flow information | ||
Cash paid for taxes | 5,100 | 0 |
Cash paid for interest | 760 | 106 |
Supplemental disclosure for non-cash investing and financing matters | ||
Early exercised stock options liability | 109 | 0 |
Right-of-use assets obtained in exchange for lease obligations | 47,611 | 9,738 |
Conversion of preferred shares into common stock | 176,322 | 0 |
Prepaid Rent Reclassified to Right-of-Use Assets | 15,966 | 0 |
Purchase of property and equipment included in accounts payable | 18,708 | 13,208 |
Conversion of convertible notes | 0 | |
Initial public offering costs included in accounts payable | $ 2,644 | $ 0 |
CONDENSED STATEMENTS OF REDEEMA
CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (Unaudited) - USD ($) $ in Thousands | Total | Series A Redeemable Convertible Preferred Stock | Series B Redeemable Convertible Preferred Stock | Series C Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 8,350,743 | 46,176,715 | 0 | ||||
Beginning balance at Dec. 31, 2019 | $ 7,519 | $ 66,186 | $ 0 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Exercise of redeemable convertible preferred stock warrants (in shares) | 27,308,227 | ||||||
Exercise of redeemable convertible preferred stock warrants | $ 96,963 | ||||||
Conversion of redeemable convertible preferred stock (in shares) | 1,690,380 | ||||||
Conversion of redeemable convertible preferred stock | $ 6,182 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Ending balance at Sep. 30, 2020 | $ 7,519 | $ 66,186 | $ 103,145 | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 18,704,118 | ||||||
Beginning balance at Dec. 31, 2019 | $ (58,139) | $ 0 | $ 4,945 | $ (63,084) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 1,918,499 | ||||||
Vesting of early exercised stock options | 729 | 729 | |||||
Stock-based compensation | 242 | 242 | |||||
Vesting of restricted stock and issuance of common stock per restricted stock purchase agreements (in shares) | 7,373,163 | ||||||
Net income (loss) | (27,816) | (27,816) | |||||
Ending balance (in shares) at Sep. 30, 2020 | 27,995,780 | ||||||
Ending balance at Sep. 30, 2020 | (84,984) | $ 0 | 5,916 | (90,900) | |||
Beginning balance (in shares) at Dec. 31, 2019 | 8,350,743 | 46,176,715 | 0 | ||||
Beginning balance at Dec. 31, 2019 | $ 7,519 | $ 66,186 | $ 0 | ||||
Ending balance (in shares) at Dec. 31, 2020 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Ending balance at Dec. 31, 2020 | 176,323 | $ 7,519 | $ 66,186 | $ 102,618 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 18,704,118 | ||||||
Beginning balance at Dec. 31, 2019 | (58,139) | $ 0 | 4,945 | (63,084) | |||
Ending balance (in shares) at Dec. 31, 2020 | 27,995,780 | ||||||
Ending balance at Dec. 31, 2020 | (101,400) | $ 0 | 9,036 | (110,436) | |||
Beginning balance (in shares) at Jun. 30, 2020 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Beginning balance at Jun. 30, 2020 | $ 7,519 | $ 66,186 | $ 103,145 | ||||
Ending balance (in shares) at Sep. 30, 2020 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Ending balance at Sep. 30, 2020 | $ 7,519 | $ 66,186 | $ 103,145 | ||||
Beginning balance (in shares) at Jun. 30, 2020 | 20,224,118 | ||||||
Beginning balance at Jun. 30, 2020 | (76,591) | $ 0 | 5,771 | (82,362) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 398,499 | ||||||
Stock-based compensation | 145 | 145 | |||||
Vesting of restricted stock and issuance of common stock per restricted stock purchase agreements (in shares) | 7,373,163 | ||||||
Net income (loss) | (8,538) | (8,538) | |||||
Ending balance (in shares) at Sep. 30, 2020 | 27,995,780 | ||||||
Ending balance at Sep. 30, 2020 | (84,984) | $ 0 | 5,916 | (90,900) | |||
Beginning balance (in shares) at Dec. 31, 2020 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Beginning balance at Dec. 31, 2020 | 176,323 | $ 7,519 | $ 66,186 | $ 102,618 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Exercise of redeemable convertible preferred stock warrants (in shares) | 48,513 | 31,369 | |||||
Exercise of redeemable convertible preferred stock warrants | $ 831 | $ 537 | |||||
Conversion of redeemable convertible preferred stock (in shares) | (8,399,256) | (46,208,084) | (28,998,607) | ||||
Conversion of redeemable convertible preferred stock | $ (8,350) | $ (66,723) | $ (102,618) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | ||||
Ending balance at Sep. 30, 2021 | 0 | $ 0 | $ 0 | $ 0 | |||
Beginning balance (in shares) at Dec. 31, 2020 | 27,995,780 | ||||||
Beginning balance at Dec. 31, 2020 | (101,400) | $ 0 | 9,036 | (110,436) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of redeemable convertible preferred stock (in shares) | 83,605,947 | ||||||
Conversion of redeemable convertible preferred stock | 177,691 | $ 1 | 177,690 | ||||
Conversion of convertible notes into common stock (in shares) | 18,611,914 | ||||||
Conversion of convertible notes into common stock | $ 297,792 | 297,792 | |||||
Exercise of common stock options (in shares) | 1,698,265 | 1,485,282 | |||||
Exercise of common stock options | $ 417 | 417 | |||||
Stock-based compensation expense from issuance of a fully vested warrant to vendor | 1,239 | 1,239 | |||||
Issuance of common stock at public offering, net of issuance costs (in shares) | 14,375,000 | ||||||
Issuance of common stock at public offering, net of issuance costs | 205,293 | 205,293 | |||||
Exercise of common stock warrants (in shares) | 84,118 | ||||||
Exercise of common stock warrants | 77 | 77 | |||||
Vesting of early exercised stock options | 109 | 109 | |||||
Tax withholding on exercise of stock options and restricted stock units | (4,586) | (4,586) | |||||
Common stock issued to outgoing directors (in shares) | 128,000 | ||||||
Stock-based compensation | 25,558 | 25,558 | |||||
Vesting of restricted stock and issuance of common stock per restricted stock purchase agreements (in shares) | 76,557 | ||||||
Net income (loss) | 52,188 | 52,188 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 146,362,598 | ||||||
Ending balance at Sep. 30, 2021 | 654,378 | $ 1 | 712,625 | (58,248) | |||
Beginning balance (in shares) at Jun. 30, 2021 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Beginning balance at Jun. 30, 2021 | $ 7,519 | $ 66,186 | $ 102,618 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Exercise of redeemable convertible preferred stock warrants (in shares) | 48,513 | 31,369 | |||||
Exercise of redeemable convertible preferred stock warrants | $ 831 | $ 537 | |||||
Conversion of redeemable convertible preferred stock (in shares) | (8,399,256) | (46,208,084) | (28,998,607) | ||||
Conversion of redeemable convertible preferred stock | $ (8,350) | $ (66,723) | $ (102,618) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | ||||
Ending balance at Sep. 30, 2021 | 0 | $ 0 | $ 0 | $ 0 | |||
Beginning balance (in shares) at Jun. 30, 2021 | 29,128,604 | ||||||
Beginning balance at Jun. 30, 2021 | (61,332) | $ 0 | 16,264 | (77,596) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of redeemable convertible preferred stock (in shares) | 83,605,947 | ||||||
Conversion of redeemable convertible preferred stock | 177,691 | $ 1 | 177,690 | ||||
Conversion of convertible notes into common stock (in shares) | 18,611,914 | ||||||
Conversion of convertible notes into common stock | 297,792 | 297,792 | |||||
Exercise of common stock options (in shares) | 436,576 | ||||||
Exercise of common stock options | 159 | 159 | |||||
Issuance of common stock at public offering, net of issuance costs (in shares) | 14,375,000 | ||||||
Issuance of common stock at public offering, net of issuance costs | 205,293 | 205,293 | |||||
Vesting of early exercised stock options | 46 | 46 | |||||
Tax withholding on exercise of stock options and restricted stock units | (4,586) | (4,586) | |||||
Common stock issued to outgoing directors (in shares) | 128,000 | ||||||
Stock-based compensation | 19,967 | 19,967 | |||||
Vesting of restricted stock and issuance of common stock per restricted stock purchase agreements (in shares) | 76,557 | ||||||
Net income (loss) | 19,348 | 19,348 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 146,362,598 | ||||||
Ending balance at Sep. 30, 2021 | $ 654,378 | $ 1 | $ 712,625 | $ (58,248) |
CONDENSED STATEMENTS OF REDEE_2
CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Payments of stock issuance costs | $ 24.7 | $ 24.7 |
BUSINESS AND BASIS OF ACCOUNTIN
BUSINESS AND BASIS OF ACCOUNTING | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF ACCOUNTING | BUSINESS AND BASIS OF ACCOUNTING Organization and Description of Business Cue Health Inc. (the “Company”) was originally formed in the State of California on January 26, 2010, prior to being incorporated in the State of Delaware on December 14, 2017. The Company is a healthcare technology company committed to revolutionizing the healthcare experience by providing individuals with a convenient and connected diagnostic platform that bridges the physical and virtual care continuum. The Company’s proprietary platform, the Cue Health Monitoring System, comprised of the Cue Reader and Cue Test Kit, enables lab-quality diagnostics-led care at home, at work or at the point of care. This platform is designed to empower stakeholders across the healthcare ecosystem, including individuals, enterprises, healthcare providers and payors, and public health agencies with paradigm-shifting access to diagnostic and health data to inform care decisions. The Company’s headquarters are located in San Diego, California. Initial Public Offering The Company’s registration statement related to its initial public offering (“IPO”) was declared effective on September 23, 2021, and the Company’s common stock began trading on the Nasdaq Global Stock Market (“Nasdaq”) on September 24, 2021. On September 28, 2021, the Company completed its IPO of 14,375,000 shares of the Company common stock at an offering price of $16.00 per share, including 1,875,000 shares purchased by the IPO underwriters. The Company received aggregate net proceeds of approximately $205.3 million after deducting underwriting commissions and legal, accounting, and consulting fees related to the IPO. Upon completion of the IPO, Convertible Notes outstanding in the principal amount of $235.5 million and accrued interest of $2.7 million were automatically converted into 18,611,914 shares of common stock. All outstanding shares of the Company’s redeemable convertible preferred stock were converted into 83,605,947 shares of common stock. Immediately prior to the IPO, all of the Company’s outstanding warrants to purchase redeemable convertible preferred stock were converted into the redeemable convertible preferred stock and the related warrant liabilities were reclassified to additional paid-in capital. Basis of Presentation The accompanying unaudited interim condensed financial statements should be read in conjunction with the audited annual financial statements and notes thereto for the year ended December 31, 2020. The unaudited interim condensed balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results for the fiscal year ending December 31, 2021 or any future interim period. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting and, in the opinion of management, include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All such adjustments are of a normal, recurring nature. Certain disclosures have been condensed or omitted from the interim condensed financial statements. The preparation of the accompanying financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses as well as the related disclosure of contingent assets and liabilities. Use of Estimates The preparation of the accompanying financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to revenue recognition, net accounts receivable, equity-based compensation expense, product warranty reserve, the recoverability of its long-lived assets, net deferred tax assets (and related valuation allowance) and the fair value of Company’s common warrants, Convertible Notes and common stock prior to Company’s IPO. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates. Segment Reporting Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. In addition, the guidance for segment reporting indicates certain quantitative materiality thresholds. The Company views its operations and manages its business in one operating segment which is consistent with how the Chief Executive Officer, who is the chief operating decision maker, reviews the business, makes investment and resource allocation decisions, and assesses operating performance. All revenue to date is from customers located in the United States and all long-lived assets are located in the United States. COVID-19 Impact The novel coronavirus (“COVID-19”) that was declared a global pandemic by the World Health Organization in March 2020 adversely impacted global commercial activity but served as a catalyst to accelerating the Company’s product pipeline. The Company’s first commercially available diagnostic test for the Cue Health Monitoring System is the Cue COVID-19 test for ribonucleic acid of SARS-CoV-2, the virus that causes COVID-19. The Company began selling and recording product revenues for its Cue COVID-19 test in August 2020 after obtaining an Emergency Use Authorization (“EUA”) from the Federal Drug Administration (“FDA”) in June 2020. Currently, 100% of the Company’s product revenues are derived from the Cue COVID-19 test. Given the unpredictable nature of the COVID-19 pandemic, the development and potential size of the COVID-19 diagnostic testing market is highly uncertain. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents Cash and cash equivalents consist of bank deposits. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash consists primarily of cash that serves as collateral for the Company’s standby letters of credit. Any cash that is legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring long-term assets, liquidating a long-term liability, or is otherwise unavailable for a period longer than one year from the balance sheet date, the restricted cash is classified as a long-term asset. Otherwise, restricted cash is presented in current assets in the balance sheets. As of September 30, 2021, the Company had $12.0 million of restricted cash included in current assets on the balance sheet. Accounts Receivable The Company grants credit to customers in the normal course of business and the resulting accounts receivables are stated at their net realizable value. The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to accounts receivables and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. As of September 30, 2021, the Company’s allowance for bad debt was $0.3 million. Inventories Inventory is valued at lower of cost or net realizable value on a first in, first out basis. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Inventory owned by the Company that is on hand with contract manufacturers is disclosed as inventory on consignment. Provisions for excess and obsolete inventory are primarily based on the Company’s estimates of forecasted sales, usage levels, and expiration dates, as applicable for certain disposable products, and assumptions about obsolescence. Unabsorbed manufacturing costs are treated as expense in the period incurred. Product Warranty Reserve The Company provides its customers with the right to receive a replacement of defective or nonconforming Cue Readers for a period of up to twelve months from the date of shipment. Although no explicit warranty is provided for Cue Cartridges, the Company may replace Cue Cartridges that result in invalid test results. All warranties are classified as current liabilities and within the accrued liabilities and other current liabilities on the balance sheet. Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are determined historical information that includes test failure rates, replacement frequency, and the overall replacement cost. The Company evaluates the reserve on a quarterly basis and makes adjustments when appropriate. Changes to test failure rates and overall replacement rates could have a material impact on our estimated liability. The product warranty reserve is recorded within accrued liabilities and other current liabilities on the balance sheets and in costs of product revenue in the statements of operations. The following table provides a reconciliation of the change in estimated warranty liabilities: Amount Balance, December 31, 2020 $ — Provision for warranties 7,063 Settlements (834) Balance, September 30, 2021 $ 6,229 Fair Value Measurements and Financial Instruments The carrying value of the Company’s cash and cash equivalents, accounts receivables and accounts payable approximate fair value due to the short-term nature of these items. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the Company’s long-term borrowings approximates its fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records subsequent adjustments to reflect the increase or decrease in estimated fair value at each reporting date in current period earnings. Property and Equipment, Net Property and equipment, net, which consist of manufacturing equipment, laboratory equipment, computers and software, office equipment and leasehold improvements, are stated at cost less depreciation. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the remaining lease term, including any renewal periods that the Company is reasonably certain to exercise. Repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred. The estimated useful lives are as follows: Years Leasehold improvements Shorter of the estimated useful life or lease term Machinery and equipment 3-7 years Furniture and fixtures 7 The Company completed a review of the estimated useful lives of its assets upon receiving FDA EUAs of the Company’s Cue COVID-19 Test in June 2020. This review, based on expected technological advances and demand expectations, reduced the useful life of laboratory equipment from seven seven For the nine months ended September 30, 2020, the change in estimate resulted in an increase in depreciation and amortization expense of $2.2 million, an increase in net loss of $2.2 million and an increase in basic and diluted net loss per share of $0.14 . Intangible Assets Intangible assets are recorded at cost and amortized on a straight-line basis over their estimated useful lives. Intangible assets consist of capitalized software costs incurred in the development of the Cue Health App (the “App”). The Company determined that costs incurred during the application development stage that are directly related to the actual development of the software application are capitalized, while costs incurred in the preliminary project and post implementation stage are expensed as incurred. Additionally, indirect costs related to the software development during the application development stage are expensed as incurred. As the App is constantly updated to the next version once it has reached technological feasibility, the Company separates costs on a reasonable basis between maintenance and upgrades that extend the functionality and useful life of the App. The maintenance costs are expensed as incurred. The Company has concluded that given the rapid changes in technology, the software has a relatively short useful life of three years and is amortized on a straight-line basis. Amortization expense related to the App is recorded in cost of product revenue. Leases The Company determines if an arrangement is a lease at inception and if so, determines whether the lease qualifies as an operating or finance lease. Lease balances are included in the balance sheets as right-of-use assets and lease liabilities. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. When the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement dates in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow over a similar term, and on a collateralized basis, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise such options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received from the equity financing. If a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the condensed statements of operations. There were no deferred offering costs recorded in the Company’s balance sheets as of December 31, 2020. As of September 30, 2021, the deferred offering costs were offset against the proceeds received upon the completion of the IPO. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or an asset group may not be recoverable. If such triggering event is determined to have occurred, the asset’s or asset group’s carrying value is compared to the future undiscounted cash flows expected to be generated. If the carrying value exceeds the undiscounted cash flows of the asset, then an impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value. There were no impairment indicators and no impairment was recorded for the nine months ended September 30, 2021 and the year ended December 31, 2020. Common Stock Warrants Common stock warrants are measured at their estimated fair value upon issuance and recorded in additional paid-in capital. Common stock warrants are classified as equity and no subsequent remeasurement is required. Redeemable Convertible Preferred Stock Warrants The Company accounts for its redeemable convertible preferred stock warrants as liabilities based upon the characteristics and provisions of each instrument. The redeemable convertible preferred stock warrants classified as liabilities are recorded on the Company’s balance sheets at their fair values on the date of issuance and are revalued on each subsequent balance sheet date, with fair value changes recognized as increases or reductions in the statement of operations. All of the Company’s outstanding redeemable convertible preferred stock warrants were exercised and converted into shares of Series A and Series B redeemable convertible preferred stock prior to the IPO. Convertible Notes The Company elected to account for Convertible Notes issued in May 2021 using the fair value option. Such instruments are recognized at estimated fair value, with changes in estimated fair value recorded as a component of earnings in the statements of operations unless the change is a result of a change in credit risk, in which case such change in estimated fair value is recorded within other comprehensive income. Direct issuance costs are expensed as incurred and are included in interest expense in the statements of operations. Increases or decreases in the fair value of the Convertible Notes can result from updates to assumptions such as the expected timing or probability of a qualified financing event, or changes in discount rates. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period. Updates to assumptions could have a significant impact on the Company’s results of operations in any given period. Upon completion of the IPO, outstanding Convertible Notes in the principal amount of $235.5 million and accrued interest of $2.8 million were automatically converted into 18,611,914 shares of commons stock, based on interest accrued through September 27, 2021 and a 20% discount to the IPO price of $16.00 per share. The Company no longer has Convertible Notes outstanding as of September 30, 2021. Redeemable Convertible Preferred Stock Prior to the completion of the IPO, the Company had multiple classes of redeemable convertible preferred stock, all of which were classified as temporary equity in the accompanying condensed balance sheet as the redemption of the shares were outside of the Company's control. In connection with the completion of the IPO in September 2021, all outstanding shares of redeemable convertible preferred stock were automatically converted into an aggregate of 83,605,947 shares of common stock. Revenue Recognition Product Revenue The Company generates revenue from the sale of its Cue Health Monitoring System to government entities, healthcare providers, commercial customers, and through agreements with distributors. See Note 3, Revenue Recognition, for details. The Company considers purchase orders, which are governed by agreements with customers, to be a contract with a customer. The contract terms with customers range in length, from one-time purchases to six-month or twelve-month commitments on a subscription basis where customers purchase a fixed number of products on a monthly basis. The timing of revenue recognition is based on the satisfaction of performance obligations promised to the customer. Cue Readers, Cue Enterprise Dashboards, and Cue Test Kits, composed of Cue Cartridges and Cue Wands, are considered distinct performance obligations. The App is integral to the functionality of the Cue Reader and these components form a single performance obligation. Revenue allocated to Cue Readers and Cue Test Kits is recognized when control of the promised goods has transferred to customers, generally upon shipment, in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Revenue allocated to Cue Enterprise Dashboards is recognized ratably over the term of the service. The Company’s contracts with its customers do not provide for open return rights, except within a reasonable time after receipt of goods in the case of defective or non-conforming product. The Company estimates returns of products due to defective or nonconforming products and records a provision for estimated expenses related to product warranty at the time products are sold. The transaction price is measured as the amount of consideration the Company expects to receive in exchange for the goods transferred to customers. A contract’s transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis. The Company estimates standalone selling prices for groups of customers with similar circumstances and characteristics. The Company recognizes receivables when there is an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract. Payment terms are typically 30 to 45 days. The Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer. See Note 3, Revenue Recognition , for details regarding disaggregation of product revenue by type of customer for the three and nine months ended September 30, 2021 and 2020. Deferred Revenue In October 2020, the Company received a $184.6 million upfront payment (“U.S. DoD Advance”) from the U.S. DoD to increase production capacity of its Cue COVID-19 Test. The Company concluded that the activities related to increasing production do not represent a performance obligation as those activities do not transfer a product or service to the customer. Instead, the upfront payment is an advanced payment for future goods or services because the agreement with the U.S. government included an option to renew the contract which included a material right to obtain products in a future contract at a specified discount, subject to a price floor, from prices offered to commercial customers with similar volume of purchases. Deferred revenue is recognized upon satisfaction of performance obligations by reference to the total goods or services expected to be provided to the customer, including an estimate of future performance obligations under expected contract renewals, and the corresponding expected consideration. Grant and Other Revenue Arrangements under which the Company receives grants or contracts to conduct research and development activities constitute non-exchange transactions. Revenue from such is recognized to the extent of costs incurred in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding. Costs are included in research and development expenses. The Company may enter into collaboration agreements with third parties to conduct research and development activities. The Company evaluates its collaboration agreements for proper classification in its statements of operations based on the nature of the underlying activity. When the Company has concluded that it has a customer relationship with one of its collaborators, the Company follows the guidance in ASC Topic 606, Revenue from Contracts with Customers . See Note 3, Revenue Recognition , for details regarding the Company’s agreements with the Biomedical Advanced Research and Development Authority (“BARDA”) and Janssen. Contract Assets and Liabilities Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed at the reporting date. Contract assets at the beginning of and end of the year ended December 31, 2020, as well as changes in the balance, were not material. Contract liabilities primarily relate to the U.S. DoD Advance and were recorded in current and non-current deferred revenue on the balance sheets. See Note 3, Revenue Recognition , for details regarding the activity related to contract liabilities for the nine months ended September 30, 2021. Revenue Contracts In the second quarter of 2021, the Company entered into a purchase agreement to provide a customer with Cue Readers and in excess of 1,000,000 Cue Test Kits between the effective date of the agreement and December 2021 based on a pre-defined monthly delivery schedule. In the third quarter of 2021, the customer increased its order of Cue Readers and Cue COVID-19 Test Kits. The customer may change the quantities ordered and may terminate the order and/or agreement with a 45 days’ notice. In May 2021, the Company entered into a purchase agreement to provide a customer a one-time order of 1,000 Cue Readers and 300,000 Cue COVID-19 Test Kits on a monthly basis during the 12-month period following the agreement execution date. In August 2021, the Company and customer amended the purchase agreement to reduce the number of Cue COVID-19 Test Kits to 10,000 test kits on a monthly basis until the agreement expiration date. The agreement may be terminated for cause by either party with a 30 days’ notice. In September 2021, the contract with the U.S. Department of Defense (“U.S. DoD Agreement”) was amended to extend delivery of the 6,000,000 Cue Test Kits and other deliverables to December 31, 2021. Cost of Product Revenue Cost of product revenue includes the cost of materials, direct labor, inclusive of salaries and other related costs, including stock-based compensation, depreciation, and manufacturing overhead costs used in the manufacturing of the Cue Test Kits as well as contract manufacturing costs associated with production of the Cue Readers. Cost of product revenue also includes amortization of intangible assets. Shipping and Handling Costs The Company elected to account for shipping and handling as activities to fulfill the promise the goods and records them as cost of product revenue. Sales and Marketing Expenses Sales and marketing expense consist primarily of salaries and other related costs, including stock-based compensation, for personnel in sales and marketing, customer support and business development functions. Research and Development Expenses Research and development expenses are expensed as incurred. Research and development expenses are primarily comprised of costs and expenses for salaries and other related costs, including stock-based compensation, associated with research and development personnel, contract services, laboratory supplies, facilities, depreciation, and outside services. Costs associated with the Company’s grant and collaboration agreements as well as costs associated with products produced for research and development purposes are recorded within research and development expenses. Accrued Research and Development Costs The Company records accrued expenses for estimated costs of its research and development activities conducted by third-party service providers, which include clinical trial activities, based on the estimated amount of services or supplies provided but not yet invoiced and include these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations. Any payments made in advance of services or supplies provided are recorded as prepaid assets, which are expensed as the services or supplies are received. The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. Significant judgments and estimates are made in determining the accrued balance in each reporting period. As actual costs become known, the Company adjusts its accrued estimates. General and Administrative Expenses The Company’s general and administrative expense consists primarily of salaries and other related costs, including stock-based compensation, for personnel in its executive, finance, corporate and business development and administrative functions. General and administrative expense also includes professional fees for legal, patent, accounting, information technology, depreciation, auditing, tax and consulting services, travel expenses and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs. Patent Costs Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are included in general and administrative expenses. Fair Value of Common Stock Prior to the IPO, the fair value of the shares of common stock underlying the Company’s stock-based awards was estimated on each grant date by its board of directors. In order to determine the fair value of its common stock underlying option grants, the Company’s board of directors considered, among other things, valuations of its common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Stock-Based Compensation The Company estimates the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model on the date of grant. The fair value of equity instruments expected to vest are recognized and amortized on a straight-line basis over the requisite service period of the award, which is generally three The BSM option pricing model incorporates various estimates, including the fair value of the Company’s common stock, expected volatility, expected term and risk-free interest rates. The weighted-average expected term of options was calculated using the simplified method. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility incorporates the historical volatility over the expected term of the award of comparable companies whose share prices are publicly available. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield was zero, as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future. For stock-based compensation awards with both performance and market-condition vesting, such as restricted stock units, cost is measured at the grant date, based on the fair value of the award considering the market conditions, and recorded over the requisite service period if the performance condition is probable. The Company estimates the fair value of stock-based payment awards considering the market conditions on the date of grant using a Monte Carlo simulation model. Comprehensive Income Comprehensive income is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. There have been no items qualifying as other comprehensive income and, therefore, the Company’s comprehensive income was the same as its reported net income. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the bases of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would adjust the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Out-of-period Correction Certain immaterial cost of product revenue expenses of $3.0 million were not recognized by the Company in the three and six months ended June 30, 2021. This immaterial prior period error was recognized as an out-of-period adjustment to cost of product revenue in the statements of operations for the three and nine months ended September 30, 2021. Recent Accounting Pronouncements In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. The standard provides guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2017-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued several amendments to the standard. In November 2019, the FASB amended the standard with the issuance of ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The amendment revised the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of ASU 2016-13 on its financial statements. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Product Revenue For the three and nine months ended September 30, 2021, product revenue from public sector entities primarily relates to a $480.9 million agreement the Company entered into with the U.S. government for the purchase of its Cue COVID-19 Test in October 2020 (“the U.S. DoD Agreement”). The U.S. DoD Agreement provided a $184.6 million U.S. DoD Advance to facilitate the scaling of the Company’s manufacturing capacity, which was received upon signing the contract. The remainder of the agreement is for the sale of the Company’s products. Product revenue from private sector customers represented 42% of product revenue in the three months ending September 30, 2021, 24% in the three months ending June 30, 2021 and 4% in the three months ending March 31, 2021. Disaggregation of the product revenue by type of customer for the three and nine months ended September 30, 2021 and 2020, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Public sector entities $ 128,587 $ 1 $ 295,708 $ 1 Private sector customers 94,007 2,127 128,808 2,127 Total product revenue $ 222,594 $ 2,128 $ 424,516 $ 2,128 Product revenue from public sector entities primarily relates to the U.S. DoD Agreement. The following table sets forth the Company’s product gross profit and product gross profit margin for the three and nine months ended September 30, 2020 and 2021: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Product revenue $ 222,594 $ 2,128 $ 424,516 $ 2,128 Cost of product revenue 88,569 2,641 173,746 2,641 Product gross profit $ 134,025 $ (513) $ 250,770 $ (513) Product gross profit margin 60 % (24) % 59 % (24) % Contract Assets and Liabilities Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed at the reporting date. Contract liabilities primarily relate to the U.S. DoD Advance and were recorded in current and non-current deferred revenue on the balance sheets. The activity related to contract liabilities for the nine months ended September 30, 2021 is as follows: Amount Balance at December 31, 2020 $ 183,096 Recognition of U.S. DoD Advance (74,726) Recognition of non-refundable customer deposits (804) Balance at September 30, 2021 $ 107,566 Grant and Other Revenue Grant and other revenue relate to a cost reimbursement agreement with the Biomedical Advanced Research and Development Authority (“BARDA”) and a collaboration agreement with Janssen Pharmaceuticals, Inc. (“Janssen”). The Company generated $2.6 million and $7.6 million of revenue related to the agreement with BARDA during the three and nine months ended September 30, 2020, respectively. The Company generated $0.9 million of revenue related to the agreement with BARDA during the three and nine months ended September 30, 2021. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES As of September 30, 2021, and December 31, 2020, the Company’s inventories consisted of the following: September 30, December 31, Raw materials $ 34,164 $ 29,948 Work-in-process 10,643 4,957 Finished goods 21,216 1,645 Inventory on consignment 5,791 1,081 Reserve (1,075) (789) Total inventories $ 70,739 $ 36,842 Inventory on consignment represents inventory owned by the Company that is on hand with contract manufacturers. The inventory reserve relates to excess and obsolete inventory as a result of ongoing assessments of inventory on hand and the continuous improvement and innovation of its products. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | PREPAID EXPENSES As of September 30, 2021, and December 31, 2020, the Company’s prepaid expenses consisted of the following: September 30, December 31, Prepaid expense $ 33,476 $ 5,152 Prepaid inventory 14,446 8,695 Total prepaid expenses $ 47,922 $ 13,847 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET As of September 30, 2021, and December 31, 2020, the Company’s property and equipment, net consisted of the following: September 30, December 31, Construction in progress $ 861 $ 83,353 Machinery and equipment 175,961 26,972 Leasehold improvements 26,172 2,897 Furniture and fixtures 1,008 683 Property and equipment 204,002 113,905 Accumulated depreciation and amortization (35,360) (10,222) Total property and equipment, net $ 168,642 $ 103,683 Depreciation and amortization expense related to property and equipment was $11.4 million and $1.0 million for the three months ended September 30, 2021 and 2020, respectively. Depreciation and amortization expense related to property and equipment was $24.2 million and $4.4 million for the nine months ended September 30, 2021 and 2020, respectively. The carrying value of assets under finance leases within property and equipment as of September 30, 2021 and December 31, 2020 and was $10.3 million a nd $4.8 million, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS As of September 30, 2021, and December 31, 2020, the Company’s intangible assets consisted of the following: September 30, December 31, Capitalized software $ 5,638 $ 2,114 Accumulated amortization (1,947) (76) Total intangible assets $ 3,691 $ 2,038 Amortization expense related to intangible assets was $0.2 million and $1.9 million for the three and nine months ended September 30, 2021, respectively. Estimated amortization expense for each of the years ending December 31 is as follows: 2021 (excluding the nine months ended September 30, 2021) $ 352 2022 1,409 2023 1,362 2024 568 Total amortization expense $ 3,691 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | LEASESIn September 2020, the Company entered into an agreement to lease a 63,700 square-foot building to be used as manufacturing facility in San Diego, California (“Waples Lease”). The Waples Lease has an initial term of ten years with a renewal option to extend the lease which the Company is not reasonably certain to exercise. The Waples Lease commenced in May 2021 when the Company was granted a temporary certificate of occupancy to install the manufacturing equipment. The Company paid $12.5 million for a landlord-owned improvements recorded as a prepaid rent until the commencement date when those were reclassified into the right-of-use asset. The Company recognized an operating lease right-of use asset of approximately $32.4 million and operating lease liabilities of $19.9 million related to the Waples Lease as of commencement date. In October 2020, the Company entered into an agreement to lease a 197,000 square-foot building to be used as a manufacturing facility in Vista, California (“Vista Lease”). The Vista Lease has an initial term of five years and the Company is reasonably certain to exercise a renewal option to extend the lease term for an additional five years. The Vista Lease commenced in January 2021 when the Company was permitted to install its tenant improvements and manufacturing equipment. The Company recognized an operating lease right-of use asset of approximately $20.5 million and operating lease liabilities of $17.1 million related to the Vista Lease. The Company will receive a tenant reimbursement allowance of $1.6 million to cover a portion of the construction of tenant improvements that began in October 2020. As of September 30, 2021, this reimbursement is recorded in other current assets. Subsequent to the commencement dates of the Waples and Vista leases, the Company made cash payments of $12.7 million related to the ongoing construction of landlord-owned assets. This is presented in operating lease liabilities in the statements of cash flows. In January 2021, the Company entered into a lease agreement for approximately 8,010 square feet in an industrial building in San Diego, California. The initial lease term is three years without any renewal option. This lease was classified as operating lease and recognized in the right of use asset and liability during the period. In August 2021, the Company amended an existing lease agreement to include two additional suites containing approximately 6,932 square feet and 4,976 square feet of rentable area, respectively, in San Diego, California. The lease term is subject to the existing lease agreement expiration date of April 2030, without any renewal option. This lease was classified as an operating lease and recognized in right-of-use asset and lease liabilities during the period. The Company made payments of $0.2 million related to deposits for equipment leases that had not commenced as of September 30, 2021. The payments have been capitalized in prepaid rent and will be reflected in right-of-use assets upon commencement of the leases. The right-of-use assets and lease liabilities recognized on the Company’s balance sheet as of September 30, 2021 were as follows: September 30, 2021 Balance Sheet Location Operating Leases Finance Leases Assets Right-of-use assets operating leases Operating lease right-of-use assets $ 78,555 Right-of-use assets finance leases Property and equipment, net $ 10,316 Liabilities Operating lease liabilities (current) Operating lease liabilities, current 3,960 Finance lease liabilities (current) Finance lease liabilities, current 2,603 Operating lease liabilities (non-current) Operating lease liabilities, net of current portion 50,027 Finance lease liabilities (non-current) Finance lease liabilities, net of current portion 3,841 The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Operating lease cost $ 2,398 $ 393 $ 5,365 $ 1,159 Finance lease cost: Amortization of right-of-use assets 509 153 1,215 297 Interest on lease liabilities 54 26 154 65 Total lease cost $ 2,961 $ 572 $ 6,734 $ 1,521 |
LEASES | LEASESIn September 2020, the Company entered into an agreement to lease a 63,700 square-foot building to be used as manufacturing facility in San Diego, California (“Waples Lease”). The Waples Lease has an initial term of ten years with a renewal option to extend the lease which the Company is not reasonably certain to exercise. The Waples Lease commenced in May 2021 when the Company was granted a temporary certificate of occupancy to install the manufacturing equipment. The Company paid $12.5 million for a landlord-owned improvements recorded as a prepaid rent until the commencement date when those were reclassified into the right-of-use asset. The Company recognized an operating lease right-of use asset of approximately $32.4 million and operating lease liabilities of $19.9 million related to the Waples Lease as of commencement date. In October 2020, the Company entered into an agreement to lease a 197,000 square-foot building to be used as a manufacturing facility in Vista, California (“Vista Lease”). The Vista Lease has an initial term of five years and the Company is reasonably certain to exercise a renewal option to extend the lease term for an additional five years. The Vista Lease commenced in January 2021 when the Company was permitted to install its tenant improvements and manufacturing equipment. The Company recognized an operating lease right-of use asset of approximately $20.5 million and operating lease liabilities of $17.1 million related to the Vista Lease. The Company will receive a tenant reimbursement allowance of $1.6 million to cover a portion of the construction of tenant improvements that began in October 2020. As of September 30, 2021, this reimbursement is recorded in other current assets. Subsequent to the commencement dates of the Waples and Vista leases, the Company made cash payments of $12.7 million related to the ongoing construction of landlord-owned assets. This is presented in operating lease liabilities in the statements of cash flows. In January 2021, the Company entered into a lease agreement for approximately 8,010 square feet in an industrial building in San Diego, California. The initial lease term is three years without any renewal option. This lease was classified as operating lease and recognized in the right of use asset and liability during the period. In August 2021, the Company amended an existing lease agreement to include two additional suites containing approximately 6,932 square feet and 4,976 square feet of rentable area, respectively, in San Diego, California. The lease term is subject to the existing lease agreement expiration date of April 2030, without any renewal option. This lease was classified as an operating lease and recognized in right-of-use asset and lease liabilities during the period. The Company made payments of $0.2 million related to deposits for equipment leases that had not commenced as of September 30, 2021. The payments have been capitalized in prepaid rent and will be reflected in right-of-use assets upon commencement of the leases. The right-of-use assets and lease liabilities recognized on the Company’s balance sheet as of September 30, 2021 were as follows: September 30, 2021 Balance Sheet Location Operating Leases Finance Leases Assets Right-of-use assets operating leases Operating lease right-of-use assets $ 78,555 Right-of-use assets finance leases Property and equipment, net $ 10,316 Liabilities Operating lease liabilities (current) Operating lease liabilities, current 3,960 Finance lease liabilities (current) Finance lease liabilities, current 2,603 Operating lease liabilities (non-current) Operating lease liabilities, net of current portion 50,027 Finance lease liabilities (non-current) Finance lease liabilities, net of current portion 3,841 The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Operating lease cost $ 2,398 $ 393 $ 5,365 $ 1,159 Finance lease cost: Amortization of right-of-use assets 509 153 1,215 297 Interest on lease liabilities 54 26 154 65 Total lease cost $ 2,961 $ 572 $ 6,734 $ 1,521 |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES | CONVERTIBLE NOTES In May 2021, the Company issued and sold convertible promissory notes (“Convertible Notes”) with a principal amount of $235.5 million and incurred $6.0 million of debt issuance costs that have been recorded in interest expense in the statements of operations. The Convertible Notes accrue interest at a simple rate of 3.0% per annum during the first 12-month period and will accrue at a simple rate of 9.0% per annum thereafter. The Convertible Notes are only convertible upon a qualified conversion event or corporate transaction. The Convertible Notes were converted into shares of the Company’s common stock at the then effective conversion price in the case of a qualified going public transaction: (a) an IPO resulting in at least $50.0 million in proceeds, (b) a SPAC combination, or (c) a direct listing. If the Company closes an equity financing with gross proceeds of not less than $50.0 million , then the Convertible Notes, unless previously converted into shares of our common stock, will automatically convert into shares of the same class and series of capital stock of the Company issued to investors in such equity financing. The conversion price with respect to a qualified conversion event, which would be a qualified going public transaction or an equity financing, will incorporate the applicable discount: (i) a 20.0% discount if the qualified conversion event is consummated on or prior to September 30, 2021, and (ii) a 25.0% discount if the qualified conversion event is consummated after September 30, 2021. In the event of certain corporate transactions prior to the conversion of the Convertible Notes or the repayment of the Convertible Notes, each purchaser, in its discretion, shall have the right either (a) to convert, effective immediately prior to the closing of the corporate transaction, all, but not less than all, of the outstanding principal amount of a Convertible Note and all accrued and unpaid interest on such May 2021 Note immediately prior to the closing of a corporate transaction into shares of common stock at the then effective conversion price, or (b) be paid an amount equal to the sum of 1.75 times the outstanding principal amount of a Convertible Notes and all accrued and unpaid interest of such Convertible Notes immediately prior to the closing of a corporate transaction The Convertible Notes include customary events of default. In the event of any default under the Convertible Notes, the interest rate then in effect shall be increased by 3.0%, and then by an additional 3.0% each year thereafter, so long as such event of default continues. Unless earlier converted immediately prior to the qualified conversion event, the Convertible Notes and any unpaid accrued interest will become due in May 2023. The Company elected to account for the Convertible Notes at estimated fair value pursuant to the fair value option and records the change in estimated fair value in the statement of operations. The Company recorded a loss of $36.3 million and $59.6 million related to the change in estimated fair value of the Convertible Notes in its statement of operations for the three and nine months ended September 30, 2021, respectively. All of the Convertible Notes were converted upon the IPO, which was a qualified conversion event. The Convertible Notes’ principal of $235.5 million and accrued interest of $2.8 million was converted into 18,611,914 shares of common stock at a fair value of $297.8 million using a 20% discount to the initial public offing price of $16.00 per share. The Company no longer had outstanding Convertible Notes as of September 30, 2021. with entering into the Revolving Credit Agreement, the Company repaid outstanding amounts of $5.4 million and terminated the prior Loan and Security Agreement with Comerica Bank (“2015 Credit Agreement”) that was initially entered into in May 2015. The 2015 Credit Agreement, as amended, provided for a revolving line with a credit extension of up to $4.0 million and a Growth Capital A Line with a credit extension of up to $6.0 million. The Revolving Credit Agreement provided a revolving credit facility with an aggregate maximum principal amount of $130.0 million and a letter of credit subfacility of $20.0 million. In May 2021, the Company repaid $63.2 million of debt outstanding under the Revolving Credit Agreement with a portion of the net proceeds from the issuance and sale of Convertible Notes. In June 2021, the Company terminated the Revolving Credit Agreement and was required to pay a fee of $1.3 million, equal to 1.00% of the amount of the outstanding revolving commitment. The Company also wrote-off issuance costs of $0.7 million for a total loss on extinguishment of debt of $2.0 million. These amounts were recorded in loss on extinguishment of debt in the statement of operations during the nine months ended September 30, 2021. Upon agreement with East West Bank and the other lenders to the Revolving Credit Agreement, the Company kept in place its outstanding letter of credit in the amount of $6.0 million, which has been cash collateralized. The letter of credit was increased to $12.0 million in July 2021. All other obligations under the Revolving Credit Agreement have otherwise been terminated. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | CONVERTIBLE NOTES In May 2021, the Company issued and sold convertible promissory notes (“Convertible Notes”) with a principal amount of $235.5 million and incurred $6.0 million of debt issuance costs that have been recorded in interest expense in the statements of operations. The Convertible Notes accrue interest at a simple rate of 3.0% per annum during the first 12-month period and will accrue at a simple rate of 9.0% per annum thereafter. The Convertible Notes are only convertible upon a qualified conversion event or corporate transaction. The Convertible Notes were converted into shares of the Company’s common stock at the then effective conversion price in the case of a qualified going public transaction: (a) an IPO resulting in at least $50.0 million in proceeds, (b) a SPAC combination, or (c) a direct listing. If the Company closes an equity financing with gross proceeds of not less than $50.0 million , then the Convertible Notes, unless previously converted into shares of our common stock, will automatically convert into shares of the same class and series of capital stock of the Company issued to investors in such equity financing. The conversion price with respect to a qualified conversion event, which would be a qualified going public transaction or an equity financing, will incorporate the applicable discount: (i) a 20.0% discount if the qualified conversion event is consummated on or prior to September 30, 2021, and (ii) a 25.0% discount if the qualified conversion event is consummated after September 30, 2021. In the event of certain corporate transactions prior to the conversion of the Convertible Notes or the repayment of the Convertible Notes, each purchaser, in its discretion, shall have the right either (a) to convert, effective immediately prior to the closing of the corporate transaction, all, but not less than all, of the outstanding principal amount of a Convertible Note and all accrued and unpaid interest on such May 2021 Note immediately prior to the closing of a corporate transaction into shares of common stock at the then effective conversion price, or (b) be paid an amount equal to the sum of 1.75 times the outstanding principal amount of a Convertible Notes and all accrued and unpaid interest of such Convertible Notes immediately prior to the closing of a corporate transaction The Convertible Notes include customary events of default. In the event of any default under the Convertible Notes, the interest rate then in effect shall be increased by 3.0%, and then by an additional 3.0% each year thereafter, so long as such event of default continues. Unless earlier converted immediately prior to the qualified conversion event, the Convertible Notes and any unpaid accrued interest will become due in May 2023. The Company elected to account for the Convertible Notes at estimated fair value pursuant to the fair value option and records the change in estimated fair value in the statement of operations. The Company recorded a loss of $36.3 million and $59.6 million related to the change in estimated fair value of the Convertible Notes in its statement of operations for the three and nine months ended September 30, 2021, respectively. All of the Convertible Notes were converted upon the IPO, which was a qualified conversion event. The Convertible Notes’ principal of $235.5 million and accrued interest of $2.8 million was converted into 18,611,914 shares of common stock at a fair value of $297.8 million using a 20% discount to the initial public offing price of $16.00 per share. The Company no longer had outstanding Convertible Notes as of September 30, 2021. with entering into the Revolving Credit Agreement, the Company repaid outstanding amounts of $5.4 million and terminated the prior Loan and Security Agreement with Comerica Bank (“2015 Credit Agreement”) that was initially entered into in May 2015. The 2015 Credit Agreement, as amended, provided for a revolving line with a credit extension of up to $4.0 million and a Growth Capital A Line with a credit extension of up to $6.0 million. The Revolving Credit Agreement provided a revolving credit facility with an aggregate maximum principal amount of $130.0 million and a letter of credit subfacility of $20.0 million. In May 2021, the Company repaid $63.2 million of debt outstanding under the Revolving Credit Agreement with a portion of the net proceeds from the issuance and sale of Convertible Notes. In June 2021, the Company terminated the Revolving Credit Agreement and was required to pay a fee of $1.3 million, equal to 1.00% of the amount of the outstanding revolving commitment. The Company also wrote-off issuance costs of $0.7 million for a total loss on extinguishment of debt of $2.0 million. These amounts were recorded in loss on extinguishment of debt in the statement of operations during the nine months ended September 30, 2021. Upon agreement with East West Bank and the other lenders to the Revolving Credit Agreement, the Company kept in place its outstanding letter of credit in the amount of $6.0 million, which has been cash collateralized. The letter of credit was increased to $12.0 million in July 2021. All other obligations under the Revolving Credit Agreement have otherwise been terminated. |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK Amended and Restated Certificate of Incorporation In September 2021, the Company’s board of directors approved and the Company filed its restated amended certificate of incorporation, which authorized the issuance of up to 550,000,000 shares consisting of 500,000,000 shares of common stock and 50,000,000 shares of preferred stock with a par value of $0.00001 per share, respectively. Redeemable Convertible Preferred Stock In connection with the closing of the IPO, all outstanding shares of redeemable convertible preferred stock were converted into 83,605,947 shares of common stock. Redeemable Convertible Preferred Stock Warrants Prior to September 2021, the Company had outstanding warrants to purchase 79,882 redeemable convertible preferred shares. These warrants were classified as liabilities, with changes in fair value recorded through earnings, as the underlying redeemable convertible preferred shares could be redeemed by the holders of these shares upon the occurrence of certain events that are outside of the control of the Company. Immediately prior to the IPO in September 2021 all outstanding warrants were exercised and converted into shares of Series A and Series B redeemable convertible preferred stock prior to the IPO. The related liability was derecognized upon exercise and recorded in temporary equity. Common Stock Warrants As of September 30, 2021, the Company had an outstanding warrant to purchase 75,744 shares of common stock at a purchase price of $0.40 per share. The warrant was issued on August 22, 2017 and expires on August 22, 2027. All shares subject to the warrant have vested as of December 31, 2020. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis within the fair value hierarchy: There are no instruments that were measured at fair value on a recurring basis as of September 30, 2021. December 31, 2020 Recurring Fair Value Measurements Level 1 Level 2 Level 3 Total Redeemable convertible preferred stock warrant liabilities $ — $ — $ 1,331 $ 1,331 There were no transfers between Level 1, Level 2 and Level 3 categories of the fair value hierarchy during the nine months ended September 30, 2020 and 2021. In May 2021, the Company issued and sold Convertible Notes with a principal amount of $235.5 million (See Note 9, Convertible Notes ). The Company elected the fair value option to account for the Convertible Notes and recognized their estimated fair value, with changes in estimated fair value recorded as a component of earnings in the statements of operations. The fair value of the notes was determined based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The Convertible Notes were valued using a scenario-based analysis. Three primary scenarios were considered and assigned a probability weighted to arrive at the estimated fair value. The first scenario considered the value impact of conversion at the 20.0% discount to the issue price if the Company had a qualified conversion event of (a) an IPO, (b) a SPAC combination, (c) or a direct listing, or (d) an equity financing with gross proceeds of not less than $50.0 million, before or on September 30, 2021. The second scenario considered the value impact of conversion at the 25.0% discount to the issue price if the Company had a qualified conversion event of (a) an IPO, (b) a SPAC combination, (c) or a direct listing, or (d) an equity financing with gross proceeds of not less than $50.0 million, after September 30, 2021. The third scenario assumed that a qualified conversion event did not occur, and the Convertible Notes and any unpaid accrued interest are repaid in May 2023. The closing of the IPO was considered a qualified conversion event per the terms of convertible notes. As a result, the Convertible Notes, $235.5 million of principal and $2.8 million of accrued interest through September 27, 2021, were converted into 18,611,914 shares of common stock at 20% discount to the initial public offing price of $16.00 per share. The Company recognized a loss of $36.3 million resulting from the conversion which was recorded in change in fair value of convertible notes in the statements of income for the three months ended September 30, 2021. The following table provides a rollforward of the fair value of the Company’s Convertible Notes and redeemable convertible preferred stock warrant liabilities measured on a recurring basis and classified within Level 3 fair value hierarchy: Redeemable Convertible Preferred Stock Warrants Convertible Notes Balance, December 31, 2020 $ 1,331 $ — Issuance — 235,480 Remeasurement (53) 59,559 Accrued interest — 2,753 Exercise of redeemable convertible preferred stock warrants (1,278) — Conversion into common stock — (297,792) Balance, September 30, 2021 $ — $ — No redeemable convertible preferred stock warrants were outstanding as of September 30, 2021. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock Incentive Plans 2014 Equity Incentive Plan In August 2014, the Company adopted the 2014 Equity Incentive Plan (“2014 Plan”) under which employees, non-employee directors and consultants of the Company may be granted either incentive stock options or non-qualified stock options to purchase shares of the Company’s common stock. In January 2021, the Company increased the number of shares of common stock available for issuance under the 2014 Plan from 20,399,691 to 22,399,691. The Company granted 128,000 shares with a one year restriction to certain non-employee directors effective immediately prior to effectiveness of the registration statement. As of September 30, 2021, and December 31, 2020, shares available for future grant under the 2014 Plan were 0 and 2,950,871, respectively. 2021 Stock Incentive Plan In September of 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”) under which employees, officers and directors, as well as consultants and advisors to the Company are eligible to be granted awards under the 2021 Plan. The authorized number of shares includes 14,173,771 common shares plus such additional number of shares of Common Stock up to 22,399,691 as equal to the number shares reserved in the 2014 Plan above. The 2021 Plan has an annual increase to be added on the first day of each fiscal year commencing January 1, 2022 until and including January 1, 2031 equal to at least 5% of outstanding shares on such date and the number of shares of common stock determined by the board. Up to 56,695,085 shares of common stock is available for issuance under the 2021 Plan may be issued as incentive stock options under the 2021 Plan. As of September 30, 2021, there have been 9,820,216 shares issued and 8,900 shares that have vested. 2021 Employee Stock Purchase Plan In September 2021, the Company adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”) under which employees of the Company can purchase shares of the Company’s common stock commencing on such time and such dates as the board of directors of the Company determine. The number of shares of common stock that have been approved for the purpose is 2,834,754 shares of common stock plus an annual increase to be added on the first day of each fiscal year commencing January 1, 2022 and continuing for each fiscal year until and including January 1, 2032. The annual increase is equal to the least of 8,504,263 shares of common stock, 1% of outstanding shares on such date, and a number of shares of common stock determined by the board of directors. Stock-Based Compensation Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and nine months ended September 30, 2021 and 2020, was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of revenues $ 302 $ — $ 1,500 $ — Sales and marketing 11 — 37 — Research and development 294 41 884 59 General and administrative 19,359 104 23,136 183 Total stock-based compensation expense $ 19,967 $ 145 $ 25,558 $ 242 In total, $0.3 million and $1.5 million of stock-based compensation expense was capitalized to inventory during the manufacturing process during the three and nine months ended September 30, 2021, respectively. Stock Options A summary of stock option activity and related information for three and nine months ended September 30, 2021 was as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding at January 1, 2021 8,344,752 0.61 6.44 Granted 2,975,821 15.61 Exercised (1,698,265) 0.30 Forfeited (310,816) 10.31 Expired (107,792) 0.37 Outstanding at September 30, 2021 9,203,700 4.99 4.88 Exercisable at September 30, 2021 5,775,902 1.02 5.79 Vested and expected to vest at September 30, 2021 9,260,605 4.49 6.49 The estimated fair value of each stock option award granted to employees was determined on the date of grant using the BSM option pricing model with the following assumptions for stock option grants for three months ended September 30, 2020 and 2021: 2021 2020 Expected volatility 40.9% 39.6% Expected term (years) 7.71 7.04 Expected dividend yield 0.00% 0.00% Risk-free interest rate 0.83% 0.41% Grant date fair value $ 6.93 $ 0.57 As of September 30, 2021, there was $12.6 million of unamortized compensation cost related to unvested stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 3.16 years, on a straight-line basis. Restricted Stock Units Restricted stock units (“RSUs”) are generally subject to a 4-year vesting period, with 25% of the shares vesting one year from the vesting commencement date and quarterly thereafter over the remaining vesting term. Compensation expense is recognized over the requisite service period. In February and March 2021, the Company issued a total of 1,049,043 restricted stock units to certain executives under the 2014 Plan with the right to receive common stock shares upon vesting schedule per agreements with certain executives. No additional grants of RSUs are expected under the 2014 Plan. One of the grants to an executive accelerated upon the completion of the IPO, resulting in the vesting of 137,375 restricted stock units. In September 2021 issued an aggregate of 6,707,320 RSUs to certain executives. Approximately 75% or 4,932,573 RSUs, of these grants vest based on the satisfaction of both a continued employment condition and the achievement of certain performance goals, referred to as the performance-vesting RSUs, and approximately 25% or 1,774,747 RSUs vest solely based on the satisfaction of a continued employment condition, referred to as the time-vesting RSUs. The Company also issued 3,240,896 RSUs to other employees, all of which are time-vesting RSUs. Time-vesting RSUs will vest as to 12.5% of the shares of common stock subject to the award on the six-month anniversary of three-month period thereafter until the award is fully vested on the fourth anniversary of the grant date. Performance-vesting RSUs vest upon the achievement of certain stock price performance goals (approximately 70% of the performance-vesting RSUs), target revenue performance goals (approximately 20% of the performance-vesting RSUs), and a product milestone goal. A summary of RSU activity and related information for the nine months ended September 30, 2021 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2021 — $ — $ — Granted 10,869,259 19.58 212,833 Vested (146,274) 17.80 (2,604) Outstanding, September 30, 2021 10,722,985 $ 19.63 $ 210,457 In addition to the RSU activity above, an award of 128,000 fully vested shares of common stock to outgoing members of the board of directors. Recipients are prohibited from selling or otherwise transferring the shares for one year after the date of grant. Restricted Stock Purchase Agreements with Executives In 2018 and 2020, the Company issued shares of common stock pursuant to Restricted Stock Purchase Agreements with its Chief Executive Officer and Chief Product Officer in exchange for nonrecourse promissory notes to finance the entire cost of the shares. These shares are legally issued and outstanding and included on the balance sheet, but they are not treated as outstanding common stock for accounting purposes as they are deemed to be common stock options. As of December 31, 2020, 9,872,293 shares were subject to the Restricted Stock Purchase Agreements. In September, 2021 the Company’s board of directors approved the forgiveness of the Chief Executive Officer’s 2018 promissory notes under which $1.3 million of principal and accrued interest was outstanding for the purchase of 2,444,130 common stock shares. The Company’s board of directors also approved the forgiveness of the Chief Executive Officer’s 2020 promissory notes for the purchase of 4,915,442 shares of common stock under which $7.0 million of principal and accrued interest was outstanding. On September 1, 2021 the Company’s board of directors approved the forgiveness of the Chief Product Officer’s 2020 promissory notes under which $3.5 million of principal and accrued interest was outstanding for the purchase of 2,457,721 common stock shares. The Chief Product Officer’s 2018 promissory note was forgiven in prior periods. The forgiveness of the promissory notes were deemed to be an option modification. The unrecognized grant date fair value and the incremental fair value from the modification resulting from the forgiveness of the promissory notes related to vested shares was recognized in stock-based compensation expense during the nine months ended September 30, 2021 and the unvested portion thereof will be recognized as stock-based compensation expense over the remaining vesting period. This modification resulted in $12.9 million in additional stock-based compensation expense for the three and nine months ended September 30, 2021. Early Exercise Liability The unvested shares of the early-exercised options are held in escrow until the stock option becomes fully vested or until the employee’s termination, whichever occurs first. The right to repurchase these shares lapses over the four-year vesting period. As of September 30, 2021, the early exercise liability was not material and is included in accrued liabilities in the balance sheets. For accounting purposes, the early exercise of options is not considered to be a substantive exercise until the underlying awards vest. The following table summarizes the activity of the unvested common stock issued pursuant to an early exercise of stock option awards during the nine months ended September 30, 2021: Number of Shares Unvested at December 31, 2020 316,666 Early exercised stock options during period — Vested or cancelled (284,998) Unvested at September 30, 2021 31,668 |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average common shares outstanding during the period. Diluted net income (loss) per share attributable to common stockholders is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method and the if-converted method. Dilutive potential common shares include stock options, non-vested shares, redeemable convertible preferred shares, restricted stock and similar equity instruments granted by the Company. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. Basic and diluted net income (loss) attributable to common holders per share is presented in conformity with the two- class method required for participating securities as the redeemable convertible preferred stock, common stock subject to restricted stock purchase agreements, early exercised options, and restricted shares are considered participating securities. Under the two-class method, distributed and undistributed income allocated to participating securities are excluded from net income (loss) attributable to common stockholders for purposes of calculating basic and diluted income (loss) per share. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses, so the net loss for the nine months ended September 30, 2020 was attributed entirely to common stockholders and there is no difference in the number of shares used to calculate basic and diluted shares outstanding. The following table reconciles net income and the weighted-average shares used in computing basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) $ 19,348 $ (8,538) $ 52,188 $ (27,816) Minus: Income allocated to participating securities 14,926 — 43,670 — Net income (loss) attributable to common stockholders – basic $ 4,422 $ (8,538) $ 8,518 $ (27,816) Plus: Income allocated to non-participating securities 701 — 2,142 — Net income (loss) attributable to common stockholders - diluted $ 5,123 $ (8,538) $ 10,660 $ (27,816) Denominator: Basic weighted-average common shares outstanding 31,554,720 16,556,343 22,997,311 16,126,647 Dilutive potential common stock issuable: Common stock warrants 89,551 — 89,551 — Stock options 7,660,707 — 7,660,707 — Diluted weighted-average shares outstanding 39,304,978 16,556,343 30,747,569 16,126,647 Net income (loss) attributable to common stockholders per share Basic $ 0.14 $ (0.52) $ 0.37 $ (1.72) Diluted $ 0.13 $ (0.52) $ 0.35 $ (1.72) In periods of net losses, potentially dilutive securities are not included in the calculation of diluted net income (loss) per share because to do so would be anti-dilutive. Outstanding anti-dilutive securities not included in the diluted net income (loss) per share attributable to common stockholders calculations were as follows (in common stock equivalent shares): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Redeemable convertible preferred stock — 83,526,065 — 83,526,065 Stock options 2,767,821 8,244,751 2,767,821 8,244,751 Restricted stock units 9,747,566 — 9,747,566 — Common stock subject to restricted stock purchase agreements — 9,872,293 — 9,872,293 Common stock warrants — 75,744 — 75,744 Redeemable convertible preferred stock warrants — 79,882 — 79,882 Total 12,515,387 101,798,735 12,515,387 101,798,735 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe Company’s effective income tax rate for the nine months ended September 30, 2021 was 45% compared to 0% in the corresponding period in the prior year. The increase in our provision and effective tax rate was primarily due to the current tax liability arising from an increase in income from operations which exceeded available net operating loss carryforwards. Income taxes for the three months and nine months ended September 30, 2021 include state income taxes in jurisdictions for which the Company does not have available tax attributes. The Company remains under a full valuation allowance with the exception of deferred tax liabilities arising for accelerated depreciation deductions for United States federal tax purposes. The effective tax rate for the three months and nine months ended September 30, 2021 differed from the statutory tax rate primarily due to the non-tax deductible items including the charges related to the Convertible Notes and the forgiveness of the promissory notes. The deduction related to the forgiveness of the promissory notes has limitations applied under Section 162(m) of the Internal Revenue Code. The effective tax rate for the three months and nine months ended September 30, 2020 differed from the statutory tax rate primarily due to the Company maintaining a full valuation allowance against its loss from continuing operations. The Company recorded a valuation allowance against all of its United States federal and state deferred tax assets as of December 31, 2020. At each interim period, the Company evaluates both the positive and negative evidence, which includes, projected future taxable income, scheduled reversals of deferred tax liabilities, prudent tax planning strategies, and recent financial operations, as to whether changes to the valuation assessment are needed. As of September 30, 2021, the Company recorded $0.9 million of deferred tax liability to reflect the expected reversal of deferred tax liabilities in excess of deferred tax assets in certain future tax years. The Company continues to maintain a full valuation allowance on the remaining net deferred tax asset until there is sufficient evidence to support the reversal of all or an additional portion of the allowance. On March 11, 2021, the American Rescue Plan Act H.R. 1319 (ARPA) was enacted and signed into law in the United States. ARPA is a follow up to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The bill includes provisions on taxes, health care, unemployment benefits, direct payments, state and local funding, and other issues. ARPA did not have a significant impact on the Company’s financial statements for the nine months ended September 30, 2021. In April 2021, the Company was awarded a California Competes Tax Credit (CCTC) totaling $20.0 million for a five-year agreement. The CCTC is a competitive income tax credit available to businesses across various industries that want to locate or expand in California. The CCTC can offset California corporate income tax liability and is non-refundable. The credit is allocated in equal increments of $4.0 million over five years for a total of $20.0 million as documented in the CCTC Agreement. The Agreement covers tax years 2021-2025 and is awarded after the completion of each year. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Product Liability The Company’s business exposes it to liability risks from its potential medical diagnostic products. Product liability claims could result in the payment of significant amounts of money and divert management’s attention from running the business. The Company may not be able to maintain insurance on acceptable terms, or the insurance may not provide adequate protection in the case of a product liability claim. To the extent that product liability insurance, if available, does not cover potential claims, the Company would be required to self-insure the risks associated with such claims. The Company believes it carries reasonably adequate insurance for product liability. Standby Letters of Credit As of December 31, 2020, the Company was party to certain letters of credit (“LOC”), primarily related to an LOC with Comerica Bank as collateral required by one of the Company’s vendors. During the nine months ended September 30, 2021, the Company entered into a Revolving Credit Agreement with a capacity of $130.0 million and all but one of the LOCs were no longer required by the counterparties. The one LOC, totaling $6.0 million, has been re-issued under the Revolving Credit Agreement. In May 2021, the Company repaid the debt outstanding under the Revolving Credit Agreement and terminated the agreement in September 2021. Upon agreement with East West Bank and the other lenders to the Revolving Credit Agreement, the Company kept in place its outstanding LOC in the amount of $6.0 million, which has been cash collateralized. The letter of credit was increased to $12.0 million in July 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited interim condensed financial statements should be read in conjunction with the audited annual financial statements and notes thereto for the year ended December 31, 2020. The unaudited interim condensed balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results for the fiscal year ending December 31, 2021 or any future interim period. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting and, in the opinion of management, include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All such adjustments are of a normal, recurring nature. Certain disclosures have been condensed or omitted from the interim condensed financial statements. The preparation of the accompanying financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses as well as the related disclosure of contingent assets and liabilities. |
Use of Estimates | The preparation of the accompanying financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to revenue recognition, net accounts receivable, equity-based compensation expense, product warranty reserve, the |
Segment Reporting | Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. In addition, the guidance for segment reporting indicates certain quantitative materiality thresholds. The Company views its operations and manages its business in one operating segment which is consistent with how the Chief Executive Officer, who is the chief operating decision maker, reviews the business, makes investment and resource allocation decisions, and assesses operating performance. All revenue to date is from customers located in the United States and all long-lived assets are located in the United States. |
Cash and Cash Equivalents, Restricted Cash | Cash and cash equivalents consist of bank deposits. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash |
Accounts Receivable | The Company grants credit to customers in the normal course of business and the resulting accounts receivables are stated at their net realizable value. The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to accounts receivables and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. As of September 30, 2021, the Company’s allowance for bad debt was $0.3 million. |
Inventories | Inventory is valued at lower of cost or net realizable value on a first in, first out basis. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Inventory owned by the Company that is on hand with contract manufacturers is disclosed as inventory on consignment. Provisions for excess and obsolete inventory are primarily based on the Company’s estimates of forecasted sales, usage levels, and expiration dates, as applicable for certain disposable products, and assumptions about obsolescence. Unabsorbed manufacturing costs are treated as expense in the period incurred. |
Product Warranty Reserve | The Company provides its customers with the right to receive a replacement of defective or nonconforming Cue Readers for a period of up to twelve months from the date of shipment. Although no explicit warranty is provided for Cue Cartridges, the Company may replace Cue Cartridges that result in invalid test results. All warranties are classified as current liabilities and within the accrued liabilities and other current liabilities on the balance sheet. Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are determined historical information that includes test failure rates, replacement frequency, and the overall replacement cost. The Company evaluates the reserve on a quarterly basis and makes adjustments when appropriate. Changes to test failure rates and overall replacement rates could have a material impact on our estimated liability. The product warranty reserve is recorded within accrued liabilities and other current liabilities on the balance sheets and in costs of product revenue in the statements of operations. |
Fair Value Measurements and Financial Instruments, Fair Value of Common Stock | The carrying value of the Company’s cash and cash equivalents, accounts receivables and accounts payable approximate fair value due to the short-term nature of these items. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the Company’s long-term borrowings approximates its fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records subsequent adjustments to reflect the increase or decrease in estimated fair value at each reporting date in current period earnings. |
Property and Equipment, Net | Property and equipment, net, which consist of manufacturing equipment, laboratory equipment, computers and software, office equipment and leasehold improvements, are stated at cost less depreciation. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the remaining lease term, including any renewal periods that the Company is reasonably certain to exercise. Repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred. |
Intangible Assets | Intangible assets are recorded at cost and amortized on a straight-line basis over their estimated useful lives. Intangible assets consist of capitalized software costs incurred in the development of the Cue Health App (the “App”). The Company determined that costs incurred during the application development stage that are directly related to the actual development of the software application are capitalized, while costs incurred in the preliminary project and post implementation stage are expensed as incurred. Additionally, indirect costs related to the software development during the application development stage are expensed as incurred. As the App is constantly updated to the next version once it has reached technological feasibility, the Company separates costs on a reasonable basis between maintenance and upgrades that extend the functionality and useful life of the App. The maintenance costs are expensed as incurred. The Company has concluded that given the rapid changes in technology, the software has a relatively short useful life of three years and is amortized on a straight-line basis. Amortization expense related to the App is recorded in cost of product revenue. |
Leases | The Company determines if an arrangement is a lease at inception and if so, determines whether the lease qualifies as an operating or finance lease. Lease balances are included in the balance sheets as right-of-use assets and lease liabilities. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. When the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement dates in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow over a similar term, and on a collateralized basis, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise such options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Deferred Offering Costs | The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received from the equity financing. If a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the condensed statements of operations. |
Impairment of Long-Lived Assets | Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or an asset group may not be recoverable. If such triggering event is determined to have occurred, the asset’s or asset group’s carrying value is compared to the future undiscounted cash flows expected to be generated. If the carrying value exceeds the undiscounted cash flows of the asset, then an impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value. There were no impairment indicators and no impairment was recorded for the nine months ended September 30, 2021 and the year ended December 31, 2020. |
Common Stocks Warrants | Common stock warrants are measured at their estimated fair value upon issuance and recorded in additional paid-in capital. Common stock warrants are classified as equity and no subsequent remeasurement is required. |
Redeemable Convertible Preferred Stock Warrants and Redeemable Convertible Preferred Stock | The Company accounts for its redeemable convertible preferred stock warrants as liabilities based upon the characteristics and provisions of each instrument. The redeemable convertible preferred stock warrants classified as liabilities are recorded on the Company’s balance sheets at their fair values on the date of issuance and are revalued on each subsequent balance sheet date, with fair value changes recognized as increases or reductions in the statement of operations. All of the Company’s outstanding redeemable convertible preferred stock warrants were exercised and converted into shares of Series A and Series B redeemable convertible preferred stock prior to the IPO.Redeemable Convertible Preferred StockPrior to the completion of the IPO, the Company had multiple classes of redeemable convertible preferred stock, all of which were classified as temporary equity in the accompanying condensed balance sheet as the redemption of the shares were outside of the Company's control. |
Convertible Notes | The Company elected to account for Convertible Notes issued in May 2021 using the fair value option. Such instruments are recognized at estimated fair value, with changes in estimated fair value recorded as a component of earnings in the statements of operations unless the change is a result of a change in credit risk, in which case such change in estimated fair value is recorded within other comprehensive income. Direct issuance costs are expensed as incurred and are included in interest expense in the statements of operations. Increases or decreases in the fair value of the Convertible Notes can result from updates to assumptions such as the expected timing or probability of a qualified financing event, or changes in discount rates. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period. Updates to assumptions could have a significant impact on the Company’s results of operations in any given period. |
Revenue Recognition | Product Revenue The Company generates revenue from the sale of its Cue Health Monitoring System to government entities, healthcare providers, commercial customers, and through agreements with distributors. See Note 3, Revenue Recognition, for details. The Company considers purchase orders, which are governed by agreements with customers, to be a contract with a customer. The contract terms with customers range in length, from one-time purchases to six-month or twelve-month commitments on a subscription basis where customers purchase a fixed number of products on a monthly basis. The timing of revenue recognition is based on the satisfaction of performance obligations promised to the customer. Cue Readers, Cue Enterprise Dashboards, and Cue Test Kits, composed of Cue Cartridges and Cue Wands, are considered distinct performance obligations. The App is integral to the functionality of the Cue Reader and these components form a single performance obligation. Revenue allocated to Cue Readers and Cue Test Kits is recognized when control of the promised goods has transferred to customers, generally upon shipment, in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Revenue allocated to Cue Enterprise Dashboards is recognized ratably over the term of the service. The Company’s contracts with its customers do not provide for open return rights, except within a reasonable time after receipt of goods in the case of defective or non-conforming product. The Company estimates returns of products due to defective or nonconforming products and records a provision for estimated expenses related to product warranty at the time products are sold. The transaction price is measured as the amount of consideration the Company expects to receive in exchange for the goods transferred to customers. A contract’s transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis. The Company estimates standalone selling prices for groups of customers with similar circumstances and characteristics. The Company recognizes receivables when there is an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract. Payment terms are typically 30 to 45 days. The Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer. See Note 3, Revenue Recognition , for details regarding disaggregation of product revenue by type of customer for the three and nine months ended September 30, 2021 and 2020. Deferred Revenue In October 2020, the Company received a $184.6 million upfront payment (“U.S. DoD Advance”) from the U.S. DoD to increase production capacity of its Cue COVID-19 Test. The Company concluded that the activities related to increasing production do not represent a performance obligation as those activities do not transfer a product or service to the customer. Instead, the upfront payment is an advanced payment for future goods or services because the agreement with the U.S. government included an option to renew the contract which included a material right to obtain products in a future contract at a specified discount, subject to a price floor, from prices offered to commercial customers with similar volume of purchases. Deferred revenue is recognized upon satisfaction of performance obligations by reference to the total goods or services expected to be provided to the customer, including an estimate of future performance obligations under expected contract renewals, and the corresponding expected consideration. Grant and Other Revenue Arrangements under which the Company receives grants or contracts to conduct research and development activities constitute non-exchange transactions. Revenue from such is recognized to the extent of costs incurred in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding. Costs are included in research and development expenses. The Company may enter into collaboration agreements with third parties to conduct research and development activities. The Company evaluates its collaboration agreements for proper classification in its statements of operations based on the nature of the underlying activity. When the Company has concluded that it has a customer relationship with one of its collaborators, the Company follows the guidance in ASC Topic 606, Revenue from Contracts with Customers . See Note 3, Revenue Recognition , for details regarding the Company’s agreements with the Biomedical Advanced Research and Development Authority (“BARDA”) and Janssen. Contract Assets and Liabilities Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed at the reporting date. Contract assets at the beginning of and end of the year ended December 31, 2020, as well as changes in the balance, were not material. Contract liabilities primarily relate to the U.S. DoD Advance and were recorded in current and non-current deferred revenue on the balance sheets. See Note 3, Revenue Recognition , for details regarding the activity related to contract liabilities for the nine months ended September 30, 2021. Revenue Contracts In the second quarter of 2021, the Company entered into a purchase agreement to provide a customer with Cue Readers and in excess of 1,000,000 Cue Test Kits between the effective date of the agreement and December 2021 based on a pre-defined monthly delivery schedule. In the third quarter of 2021, the customer increased its order of Cue Readers and Cue COVID-19 Test Kits. The customer may change the quantities ordered and may terminate the order and/or agreement with a 45 days’ notice. In May 2021, the Company entered into a purchase agreement to provide a customer a one-time order of 1,000 Cue Readers and 300,000 Cue COVID-19 Test Kits on a monthly basis during the 12-month period following the agreement execution date. In August 2021, the Company and customer amended the purchase agreement to reduce the number of Cue COVID-19 Test Kits to 10,000 test kits on a monthly basis until the agreement expiration date. The agreement may be terminated for cause by either party with a 30 days’ notice. In September 2021, the contract with the U.S. Department of Defense (“U.S. DoD Agreement”) was amended to extend delivery of the 6,000,000 Cue Test Kits and other deliverables to December 31, 2021. Cost of Product Revenue Cost of product revenue includes the cost of materials, direct labor, inclusive of salaries and other related costs, including stock-based compensation, depreciation, and manufacturing overhead costs used in the manufacturing of the Cue Test Kits as well as contract manufacturing costs associated with production of the Cue Readers. Cost of product revenue also includes amortization of intangible assets. Shipping and Handling Costs The Company elected to account for shipping and handling as activities to fulfill the promise the goods and records them as cost of product revenue. |
Sales and Marketing Expense, General and Administrative Expenses | Sales and marketing expense consist primarily of salaries and other related costs, including stock-based compensation, for personnel in sales and marketing, customer support and business development functions.The Company’s general and administrative expense consists primarily of salaries and other related costs, including stock-based compensation, for personnel in its executive, finance, corporate and business development and administrative functions. General and administrative expense also includes professional fees for legal, patent, accounting, information technology, depreciation, auditing, tax and consulting services, travel expenses and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs. Patent Costs Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are included in general and administrative expenses. |
Research and Development Expenses | Research and development expenses are expensed as incurred. Research and development expenses are primarily comprised of costs and expenses for salaries and other related costs, including stock-based compensation, associated with research and development personnel, contract services, laboratory supplies, facilities, depreciation, and outside services. Costs associated with the Company’s grant and collaboration agreements as well as costs associated with products produced for research and development purposes are recorded within research and development expenses. Accrued Research and Development Costs The Company records accrued expenses for estimated costs of its research and development activities conducted by third-party service providers, which include clinical trial activities, based on the estimated amount of services or supplies provided but not yet invoiced and include these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations. Any payments made in advance of services or supplies provided are recorded as prepaid assets, which are expensed as the services or supplies are received. The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. Significant judgments and estimates are made in determining the accrued balance in each reporting period. As actual costs become known, the Company adjusts its accrued estimates. |
Share-Based Compensation | The Company estimates the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model on the date of grant. The fair value of equity instruments expected to vest are recognized and amortized on a straight-line basis over the requisite service period of the award, which is generally three The BSM option pricing model incorporates various estimates, including the fair value of the Company’s common stock, expected volatility, expected term and risk-free interest rates. The weighted-average expected term of options was calculated using the simplified method. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility incorporates the historical volatility over the expected term of the award of comparable companies whose share prices are publicly available. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield was zero, as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future. For stock-based compensation awards with both performance and market-condition vesting, such as restricted stock units, cost is measured at the grant date, based on the fair value of the award considering the market conditions, and recorded over the requisite service period if the performance condition is probable. The Company estimates the fair value of stock-based payment awards considering the market conditions on the date of grant using a Monte Carlo simulation model. |
Income Taxes | The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the bases of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would adjust the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Out-of-period Correction Certain immaterial cost of product revenue expenses of $3.0 million were not recognized by the Company in the three and six months ended June 30, 2021. This immaterial prior period error was recognized as an out-of-period adjustment to cost of product revenue in the statements of operations for the three and nine months ended September 30, 2021. |
Recent Accounting Pronouncements | In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. The standard provides guidance for estimating credit losses on certain types of financial instruments, including trade receivables, by introducing an approach based on expected losses. The expected loss approach will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2017-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued several amendments to the standard. In November 2019, the FASB amended the standard with the issuance of ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The amendment revised the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of ASU 2016-13 on its financial statements.In August 2020, the FASB issued ASU No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The ASU simplifies the accounting for convertible instruments by removing certain models in Subtopic 470-20 and revises the guidance in Subtopic 815-40 to simplify the accounting for contracts in an entity’s own equity. ASU 2020-06 is effective for reporting periods beginning after December 15, 2023 with early adoption permitted for reporting periods beginning after December 15, 2020. The amendment is to be adopted through either a modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements and its adoption method. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Product Warranty Liability | The following table provides a reconciliation of the change in estimated warranty liabilities: Amount Balance, December 31, 2020 $ — Provision for warranties 7,063 Settlements (834) Balance, September 30, 2021 $ 6,229 |
Schedule of Property and Equipment Estimated Useful Lives | The estimated useful lives are as follows: Years Leasehold improvements Shorter of the estimated useful life or lease term Machinery and equipment 3-7 years Furniture and fixtures 7 As of September 30, 2021, and December 31, 2020, the Company’s property and equipment, net consisted of the following: September 30, December 31, Construction in progress $ 861 $ 83,353 Machinery and equipment 175,961 26,972 Leasehold improvements 26,172 2,897 Furniture and fixtures 1,008 683 Property and equipment 204,002 113,905 Accumulated depreciation and amortization (35,360) (10,222) Total property and equipment, net $ 168,642 $ 103,683 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Disaggregation of the product revenue by type of customer for the three and nine months ended September 30, 2021 and 2020, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Public sector entities $ 128,587 $ 1 $ 295,708 $ 1 Private sector customers 94,007 2,127 128,808 2,127 Total product revenue $ 222,594 $ 2,128 $ 424,516 $ 2,128 The following table sets forth the Company’s product gross profit and product gross profit margin for the three and nine months ended September 30, 2020 and 2021: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Product revenue $ 222,594 $ 2,128 $ 424,516 $ 2,128 Cost of product revenue 88,569 2,641 173,746 2,641 Product gross profit $ 134,025 $ (513) $ 250,770 $ (513) Product gross profit margin 60 % (24) % 59 % (24) % |
Schedule of Contract Liabilities | The activity related to contract liabilities for the nine months ended September 30, 2021 is as follows: Amount Balance at December 31, 2020 $ 183,096 Recognition of U.S. DoD Advance (74,726) Recognition of non-refundable customer deposits (804) Balance at September 30, 2021 $ 107,566 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of September 30, 2021, and December 31, 2020, the Company’s inventories consisted of the following: September 30, December 31, Raw materials $ 34,164 $ 29,948 Work-in-process 10,643 4,957 Finished goods 21,216 1,645 Inventory on consignment 5,791 1,081 Reserve (1,075) (789) Total inventories $ 70,739 $ 36,842 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses | As of September 30, 2021, and December 31, 2020, the Company’s prepaid expenses consisted of the following: September 30, December 31, Prepaid expense $ 33,476 $ 5,152 Prepaid inventory 14,446 8,695 Total prepaid expenses $ 47,922 $ 13,847 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The estimated useful lives are as follows: Years Leasehold improvements Shorter of the estimated useful life or lease term Machinery and equipment 3-7 years Furniture and fixtures 7 As of September 30, 2021, and December 31, 2020, the Company’s property and equipment, net consisted of the following: September 30, December 31, Construction in progress $ 861 $ 83,353 Machinery and equipment 175,961 26,972 Leasehold improvements 26,172 2,897 Furniture and fixtures 1,008 683 Property and equipment 204,002 113,905 Accumulated depreciation and amortization (35,360) (10,222) Total property and equipment, net $ 168,642 $ 103,683 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | As of September 30, 2021, and December 31, 2020, the Company’s intangible assets consisted of the following: September 30, December 31, Capitalized software $ 5,638 $ 2,114 Accumulated amortization (1,947) (76) Total intangible assets $ 3,691 $ 2,038 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for each of the years ending December 31 is as follows: 2021 (excluding the nine months ended September 30, 2021) $ 352 2022 1,409 2023 1,362 2024 568 Total amortization expense $ 3,691 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | The right-of-use assets and lease liabilities recognized on the Company’s balance sheet as of September 30, 2021 were as follows: September 30, 2021 Balance Sheet Location Operating Leases Finance Leases Assets Right-of-use assets operating leases Operating lease right-of-use assets $ 78,555 Right-of-use assets finance leases Property and equipment, net $ 10,316 Liabilities Operating lease liabilities (current) Operating lease liabilities, current 3,960 Finance lease liabilities (current) Finance lease liabilities, current 2,603 Operating lease liabilities (non-current) Operating lease liabilities, net of current portion 50,027 Finance lease liabilities (non-current) Finance lease liabilities, net of current portion 3,841 |
Lease, Cost | The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Operating lease cost $ 2,398 $ 393 $ 5,365 $ 1,159 Finance lease cost: Amortization of right-of-use assets 509 153 1,215 297 Interest on lease liabilities 54 26 154 65 Total lease cost $ 2,961 $ 572 $ 6,734 $ 1,521 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis within the fair value hierarchy: There are no instruments that were measured at fair value on a recurring basis as of September 30, 2021. December 31, 2020 Recurring Fair Value Measurements Level 1 Level 2 Level 3 Total Redeemable convertible preferred stock warrant liabilities $ — $ — $ 1,331 $ 1,331 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a rollforward of the fair value of the Company’s Convertible Notes and redeemable convertible preferred stock warrant liabilities measured on a recurring basis and classified within Level 3 fair value hierarchy: Redeemable Convertible Preferred Stock Warrants Convertible Notes Balance, December 31, 2020 $ 1,331 $ — Issuance — 235,480 Remeasurement (53) 59,559 Accrued interest — 2,753 Exercise of redeemable convertible preferred stock warrants (1,278) — Conversion into common stock — (297,792) Balance, September 30, 2021 $ — $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense Related to Awards Issued | Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and nine months ended September 30, 2021 and 2020, was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of revenues $ 302 $ — $ 1,500 $ — Sales and marketing 11 — 37 — Research and development 294 41 884 59 General and administrative 19,359 104 23,136 183 Total stock-based compensation expense $ 19,967 $ 145 $ 25,558 $ 242 |
Schedule of Stock Option Activity and Related Information | A summary of stock option activity and related information for three and nine months ended September 30, 2021 was as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding at January 1, 2021 8,344,752 0.61 6.44 Granted 2,975,821 15.61 Exercised (1,698,265) 0.30 Forfeited (310,816) 10.31 Expired (107,792) 0.37 Outstanding at September 30, 2021 9,203,700 4.99 4.88 Exercisable at September 30, 2021 5,775,902 1.02 5.79 Vested and expected to vest at September 30, 2021 9,260,605 4.49 6.49 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The estimated fair value of each stock option award granted to employees was determined on the date of grant using the BSM option pricing model with the following assumptions for stock option grants for three months ended September 30, 2020 and 2021: 2021 2020 Expected volatility 40.9% 39.6% Expected term (years) 7.71 7.04 Expected dividend yield 0.00% 0.00% Risk-free interest rate 0.83% 0.41% Grant date fair value $ 6.93 $ 0.57 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of RSU activity and related information for the nine months ended September 30, 2021 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2021 — $ — $ — Granted 10,869,259 19.58 212,833 Vested (146,274) 17.80 (2,604) Outstanding, September 30, 2021 10,722,985 $ 19.63 $ 210,457 |
Schedule of Nonvested Share Activity | The following table summarizes the activity of the unvested common stock issued pursuant to an early exercise of stock option awards during the nine months ended September 30, 2021: Number of Shares Unvested at December 31, 2020 316,666 Early exercised stock options during period — Vested or cancelled (284,998) Unvested at September 30, 2021 31,668 |
INCOME (LOSS) PER SHARE (Tables
INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income (Loss) Per Share, Basic and Diluted | The following table reconciles net income and the weighted-average shares used in computing basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) $ 19,348 $ (8,538) $ 52,188 $ (27,816) Minus: Income allocated to participating securities 14,926 — 43,670 — Net income (loss) attributable to common stockholders – basic $ 4,422 $ (8,538) $ 8,518 $ (27,816) Plus: Income allocated to non-participating securities 701 — 2,142 — Net income (loss) attributable to common stockholders - diluted $ 5,123 $ (8,538) $ 10,660 $ (27,816) Denominator: Basic weighted-average common shares outstanding 31,554,720 16,556,343 22,997,311 16,126,647 Dilutive potential common stock issuable: Common stock warrants 89,551 — 89,551 — Stock options 7,660,707 — 7,660,707 — Diluted weighted-average shares outstanding 39,304,978 16,556,343 30,747,569 16,126,647 Net income (loss) attributable to common stockholders per share Basic $ 0.14 $ (0.52) $ 0.37 $ (1.72) Diluted $ 0.13 $ (0.52) $ 0.35 $ (1.72) |
Schedule of Antidilutive Securities Excluded from Computation of Net Income (Loss) Per Share | Outstanding anti-dilutive securities not included in the diluted net income (loss) per share attributable to common stockholders calculations were as follows (in common stock equivalent shares): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Redeemable convertible preferred stock — 83,526,065 — 83,526,065 Stock options 2,767,821 8,244,751 2,767,821 8,244,751 Restricted stock units 9,747,566 — 9,747,566 — Common stock subject to restricted stock purchase agreements — 9,872,293 — 9,872,293 Common stock warrants — 75,744 — 75,744 Redeemable convertible preferred stock warrants — 79,882 — 79,882 Total 12,515,387 101,798,735 12,515,387 101,798,735 |
BUSINESS AND BASIS OF ACCOUNT_2
BUSINESS AND BASIS OF ACCOUNTING (Details) $ / shares in Units, $ in Thousands | Sep. 28, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | May 31, 2021USD ($) |
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock at public offering | $ | $ 230,000 | $ 0 | ||
Shares issued upon conversion (in shares) | shares | 83,605,947 | |||
Number of operating segments | segment | 1 | |||
Redeemable Convertible Preferred Stock Converted into Common Stock | ||||
Class of Stock [Line Items] | ||||
Conversion of redeemable convertible preferred stock (in shares) | shares | 83,605,947 | |||
Product Concentration Risk | Revenue Benchmark | Cue COVID-19 Test | ||||
Class of Stock [Line Items] | ||||
Concentration risk, percentage | 100.00% | |||
Convertible Debt | ||||
Class of Stock [Line Items] | ||||
Debt instrument, face amount | $ | $ 235,500 | |||
Accrued interest | $ | $ 2,700 | |||
Debt instrument, convertible, number of equity instruments (in shares) | shares | 18,611,914 | |||
Convertible Debt | May 2021 Convertible Notes | ||||
Class of Stock [Line Items] | ||||
Debt instrument, face amount | $ | $ 235,500 | $ 235,500 | ||
Accrued interest | $ | $ 2,800 | |||
Debt instrument, convertible, number of equity instruments (in shares) | shares | 18,611,914 | |||
IPO | ||||
Class of Stock [Line Items] | ||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 14,375,000 | |||
Sale of stock, price per share (USD per share) | $ / shares | $ 16 | |||
Proceeds from issuance of common stock at public offering | $ | $ 205,300 | |||
Over-Allotment Option | ||||
Class of Stock [Line Items] | ||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 1,875,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Accounting Policies [Abstract] | |||
Restricted cash | $ 12,000 | $ 6,000 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable Narrative (Details) $ in Millions | Sep. 30, 2021USD ($) |
Accounting Policies [Abstract] | |
Accounts receivable, allowance for bad debt | $ 0.3 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty Reserve Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Standard product warranty, term | 12 months |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty Reserve Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance, December 31, 2020 | $ 0 |
Provision for warranties | 7,063 |
Settlements | (834) |
Balance, September 30, 2021 | $ 6,229 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Property and Equipment Estimated Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Net loss | $ (19,348) | $ 8,538 | $ (52,188) | $ 27,816 | |
Net loss per share, basic and diluted (USD per share) | $ 0.14 | ||||
Property And Equipment, Estimated Useful Lives | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 2,200 | ||||
Net loss | $ 2,200 | ||||
Laboratory Equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, estimated useful lives | 7 years | 5 years | |||
Manufacturing Equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, estimated useful lives | 7 years | 3 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Software | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Deferred Offering Costs Narrative (Details) | Dec. 31, 2020USD ($) |
Accounting Policies [Abstract] | |
Deferred offering costs | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-Lived Assets Narrative (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Impairment, long-lived asset | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Convertible Notes Narrative (Details) - USD ($) | Sep. 28, 2021 | Sep. 30, 2021 | May 31, 2021 |
IPO | |||
Debt Instrument [Line Items] | |||
Sale of stock, price per share (USD per share) | $ 16 | ||
Redeemable Convertible Preferred Stock Converted into Common Stock | |||
Debt Instrument [Line Items] | |||
Conversion of redeemable convertible preferred stock (in shares) | 83,605,947 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 235,500,000 | ||
Accrued interest | $ 2,700,000 | ||
Debt instrument, convertible, number of equity instruments (in shares) | 18,611,914 | ||
May 2021 Convertible Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 235,500,000 | $ 235,500,000 | |
Accrued interest | $ 2,800,000 | ||
Debt instrument, convertible, number of equity instruments (in shares) | 18,611,914 | ||
Debt instrument, convertible, conversion discount period one | 20.00% | ||
Long-term debt | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)cue_Test_Kit | Aug. 31, 2021cue_Test_Kit | May 31, 2021cue_Readercue_Test_Kit | Jun. 30, 2021cue_Test_Kit | Sep. 30, 2021USD ($) | Oct. 31, 2021USD ($) | |
Disaggregation of Revenue [Line Items] | ||||||
Purchase agreement, number of units ordered | 1,000 | 1,000,000 | ||||
Notice period for contract termination | 30 days | 45 days | ||||
Purchase agreement, number of units ordered, monthly amount | cue_Test_Kit | 10,000 | 300,000 | ||||
United States Department of Defense | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Purchase agreement, number of units ordered | cue_Test_Kit | 6,000,000 | |||||
United States Department of Defense | Product | Cue COVID-19 Test | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Advance for scaling | $ | $ 184.6 | $ 184.6 | ||||
United States Department of Defense | Product | Cue COVID-19 Test | Subsequent Event | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Advance for scaling | $ | $ 184.6 | |||||
Minimum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Contract term | 6 months | |||||
Typical payment term | 30 days | |||||
Maximum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Contract term | 12 months | |||||
Typical payment term | 45 days |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-Based Compensation Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Expected dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Out of Period Correction Narrative (Details) - Product - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cost of product revenue | $ 88,569 | $ 2,641 | $ 173,746 | $ 2,641 |
Immaterial Cost Not Previously Recognized | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cost of product revenue | $ 3,000 | $ 3,000 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||
Revenue | $ 223,679 | $ 4,730 | $ 425,601 | $ 9,690 | |||
Product | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue | 222,594 | 2,128 | 424,516 | 2,128 | |||
Product | Private Sector Customers | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue | 94,007 | 2,127 | 128,808 | 2,127 | |||
Product | Private Sector Customers | Revenue Benchmark | Customer Concentration Risk | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | 24.00% | 4.00% | |||||
Product | Cue COVID-19 Test | United States Department of Defense | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Agreement value | $ 480,900 | ||||||
Advance for scaling | 184,600 | 184,600 | |||||
Grant And Other Revenue | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue | 1,085 | 2,602 | 1,085 | 7,562 | |||
Grant And Other Revenue | Biomedical Advanced Research And Development Authority (BARDA) | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue | $ 900 | $ 2,600 | $ 900 | $ 7,600 |
REVENUE - Product Revenue By Cu
REVENUE - Product Revenue By Customer Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 223,679 | $ 4,730 | $ 425,601 | $ 9,690 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 222,594 | 2,128 | 424,516 | 2,128 |
Product | Public Sector Entities | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 128,587 | 1 | 295,708 | 1 |
Product | Private Sector Customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 94,007 | $ 2,127 | $ 128,808 | $ 2,127 |
REVENUE - Product Revenue Gross
REVENUE - Product Revenue Gross Profit and Gross Profit Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 223,679 | $ 4,730 | $ 425,601 | $ 9,690 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 222,594 | 2,128 | 424,516 | 2,128 |
Cost of product revenue | 88,569 | 2,641 | 173,746 | 2,641 |
Product gross profit | $ 134,025 | $ (513) | $ 250,770 | $ (513) |
Product gross profit margin | 60.00% | (24.00%) | 59.00% | (24.00%) |
REVENUE - Contract Liability Ac
REVENUE - Contract Liability Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Contract With Customer, Liability Rollforward [Roll Forward] | |
Balance at December 31, 2020 | $ 183,096 |
Balance at September 30, 2021 | 107,566 |
United States Department of Defense | |
Contract With Customer, Liability Rollforward [Roll Forward] | |
Recognition of U.S. DoD Advance and non-refundable customer deposits | (74,726) |
Non Refundable Customer Deposits | |
Contract With Customer, Liability Rollforward [Roll Forward] | |
Recognition of U.S. DoD Advance and non-refundable customer deposits | $ (804) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 34,164 | $ 29,948 |
Work-in-process | 10,643 | 4,957 |
Finished goods | 21,216 | 1,645 |
Inventory on consignment | 5,791 | 1,081 |
Reserve | (1,075) | (789) |
Total inventories | $ 70,739 | $ 36,842 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expense | $ 33,476 | $ 5,152 |
Prepaid inventory | 14,446 | 8,695 |
Total prepaid expenses | $ 47,922 | $ 13,847 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 204,002 | $ 113,905 |
Accumulated depreciation and amortization | (35,360) | (10,222) |
Total property and equipment, net | 168,642 | 103,683 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 861 | 83,353 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 175,961 | 26,972 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 26,172 | 2,897 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,008 | $ 683 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||||
Depreciation | $ 11,400 | $ 1,000 | $ 24,200 | $ 4,400 | |
Carrying value of finance leases | $ 10,316 | $ 10,316 | $ 4,800 |
INTANGIBLE ASSETS - Finite-Live
INTANGIBLE ASSETS - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized software | $ 5,638 | $ 2,114 |
Accumulated amortization | (1,947) | (76) |
Total amortization expense | $ 3,691 | $ 2,038 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 0.2 | $ 1.9 |
INTANGIBLE ASSETS - Estimated A
INTANGIBLE ASSETS - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 (excluding the nine months ended September 30, 2021) | $ 352 | |
2022 | 1,409 | |
2023 | 1,362 | |
2024 | 568 | |
Total amortization expense | $ 3,691 | $ 2,038 |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Thousands | 1 Months Ended | |||||
Aug. 31, 2021USD ($)ft²suite | Sep. 30, 2020USD ($)ft² | Sep. 30, 2021USD ($) | Jan. 31, 2021ft² | Dec. 31, 2020USD ($) | Oct. 31, 2020USD ($)ft² | |
Lessee, Lease, Description [Line Items] | ||||||
Payment for improvements | $ 12,700 | |||||
Right-of-use assets operating leases | $ 78,555 | $ 8,281 | ||||
Leases that have no yet commenced | $ 200 | |||||
San Diego, California | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of building (in sqft) | ft² | 63,700 | 8,010 | ||||
Term of contract | 10 years | 3 years | ||||
Payment for improvements | $ 12,500 | |||||
Right-of-use assets operating leases | 32,400 | |||||
Operating lease liabilities | $ 19,900 | |||||
Additional suites | suite | 2 | |||||
Vista, California | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of building (in sqft) | ft² | 197,000 | |||||
Term of contract | 5 years | |||||
Right-of-use assets operating leases | $ 20,500 | |||||
Operating lease liabilities | $ 17,100 | |||||
Renewal term | 5 years | |||||
Tenant reimbursement allowance | $ 1,600 | |||||
San Diego, California, Property One | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of building (in sqft) | ft² | 6,932 | |||||
San Diego, California, Property Two | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of building (in sqft) | ft² | 4,976 |
LEASES - Right of Use Assets an
LEASES - Right of Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right-of-use assets operating leases | $ 78,555 | $ 8,281 |
Right-of-use assets finance leases | 10,316 | 4,800 |
Operating lease liabilities (current) | 3,960 | 797 |
Finance lease liabilities (current) | 2,603 | 1,249 |
Operating lease liabilities (non-current) | 50,027 | 10,472 |
Finance lease liabilities (non-current) | $ 3,841 | $ 1,857 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,398 | $ 393 | $ 5,365 | $ 1,159 |
Finance lease cost, Amortization of right-of-use assets | 509 | 153 | 1,215 | 297 |
Interest on finance leases | 54 | 26 | 154 | 65 |
Total lease cost | $ 2,961 | $ 572 | $ 6,734 | $ 1,521 |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) | Sep. 28, 2021 | May 31, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 01, 2022 |
Debt Instrument [Line Items] | ||||||
Conversion of convertible notes | $ 297,792,000 | $ 0 | ||||
IPO | ||||||
Debt Instrument [Line Items] | ||||||
Sale of stock, price per share (USD per share) | $ 16 | |||||
Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 235,500,000 | |||||
Accrued interest | $ 2,700,000 | |||||
Debt instrument, convertible, number of equity instruments (in shares) | 18,611,914 | |||||
May 2021 Convertible Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 235,500,000 | $ 235,500,000 | ||||
Debt issuance costs, gross | $ 6,000,000 | |||||
Debt instrument, interest rate, stated percentage | 3.00% | |||||
Debt instrument, initial interest rate period | 12 months | |||||
Debt instrument, covenant, minimum IPO value threshold | $ 50,000,000 | |||||
Debt instrument, convertible, conversion discount period one | 20.00% | |||||
Debt instrument, convertible, conversion discount period two | 25.00% | |||||
Debt instrument, covenant, outstanding principal multiplier for early conversion rights | 1.75 | |||||
Debt instrument, event of default, annual interest rate increase | 3.00% | |||||
Fair value adjustment loss on debt | $ 36,300,000 | $ 59,600,000 | ||||
Accrued interest | $ 2,800,000 | |||||
Debt instrument, convertible, number of equity instruments (in shares) | 18,611,914 | |||||
Long-term debt | $ 0 | $ 0 | ||||
May 2021 Convertible Notes | Convertible Debt | Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 9.00% |
DEBT (Details)
DEBT (Details) - USD ($) | Feb. 05, 2021 | Jun. 30, 2021 | May 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 31, 2021 | May 31, 2015 |
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of debt | $ 0 | $ 610,000 | $ 1,998,000 | $ 610,000 | |||||
Revolving Credit Facility | 2015 Credit Agreement | Comerica Bank | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 5,400,000 | ||||||||
Revolving Credit Facility | Revolving Credit Agreement | East West Bank | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | 130,000,000 | $ 6,000,000 | $ 130,000,000 | 130,000,000 | $ 12,000,000 | ||||
Repayments of lines of credit | $ 63,200,000 | ||||||||
Debt extinguishment, fee | $ 1,300,000 | ||||||||
Debt extinguishment, fee, percentage of outstanding commitment | 1.00% | ||||||||
Write off of deferred debt issuance cost | 700,000 | ||||||||
Loss on extinguishment of debt | $ 2,000,000 | ||||||||
Letter of Credit | 2015 Credit Agreement | Comerica Bank | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 4,000,000 | ||||||||
Letter of Credit | Revolving Credit Agreement | East West Bank | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | ||||||||
Bridge Loan | 2015 Credit Agreement | Comerica Bank | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 6,000,000 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - $ / shares | Sep. 30, 2021 | Sep. 28, 2021 | Aug. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||||
Common stock and preferred stock, shares authorized (in shares) | 550,000,000 | |||
Common stock, shares authorized (in shares) | 500,000,000 | 129,030,355 | ||
Preferred stock, shares authorized (in shares) | 50,000,000 | 0 | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||
Shares issued upon conversion (in shares) | 83,605,947 | |||
Redeemable convertible preferred stock warrants | ||||
Class of Stock [Line Items] | ||||
Warrants outstanding (in shares) | 79,882 | |||
Common Stock Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants outstanding (in shares) | 75,744 | |||
Exercise price of warrant (USD per share) | $ 0.40 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Financial Instruments, Recurring Basis (Details) - Redeemable convertible preferred stock warrants - Fair Value, Recurring $ in Thousands | Dec. 31, 2020USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants Not Settleable in Cash, Fair Value Disclosure | $ 1,331 |
Fair Value, Inputs, Level 1 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants Not Settleable in Cash, Fair Value Disclosure | 0 |
Fair Value, Inputs, Level 2 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants Not Settleable in Cash, Fair Value Disclosure | 0 |
Fair Value, Inputs, Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants Not Settleable in Cash, Fair Value Disclosure | $ 1,331 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Sep. 28, 2021 | May 31, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
IPO | ||||
Debt Instrument [Line Items] | ||||
Sale of stock, price per share (USD per share) | $ 16 | |||
Redeemable convertible preferred stock | ||||
Debt Instrument [Line Items] | ||||
Warrants outstanding (in shares) | 0 | 0 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 235,500,000 | |||
Accrued interest | $ 2,700,000 | |||
Debt instrument, convertible, number of equity instruments (in shares) | 18,611,914 | |||
May 2021 Convertible Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 235,500,000 | $ 235,500,000 | ||
Debt instrument, convertible, conversion discount period one | 20.00% | |||
Debt instrument, covenant, minimum IPO value threshold | $ 50,000,000 | |||
Debt instrument, convertible, conversion discount period two | 25.00% | |||
Accrued interest | $ 2,800,000 | |||
Debt instrument, convertible, number of equity instruments (in shares) | 18,611,914 | |||
Fair value adjustment loss on debt | $ 36,300,000 | $ 59,600,000 |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value Rollforward , Measured on a Recurring Basis (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Redeemable convertible preferred stock warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Balance, December 31, 2020 | $ 1,331 |
Issuance | 0 |
Remeasurement | (53) |
Accrued interest | 0 |
Exercise of redeemable convertible preferred stock warrants | (1,278) |
Conversion into common stock | 0 |
Balance, September 30, 2021 | 0 |
Convertible Debt | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Balance, December 31, 2020 | 0 |
Issuance | 235,480 |
Remeasurement | 59,559 |
Accrued interest | 2,753 |
Exercise of redeemable convertible preferred stock warrants | 0 |
Conversion into common stock | (297,792) |
Balance, September 30, 2021 | $ 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | Sep. 28, 2021 | Sep. 22, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Jan. 31, 2021 | Aug. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 128,000 | 2,975,821 | ||||||||
Share-based compensation cost capitalized in inventory | $ 0.3 | $ 1.5 | ||||||||
Award vesting period | 4 years | |||||||||
Plan modification, incremental cost | 12.9 | $ 12.9 | ||||||||
Chief Executive Officer | 2018 Promissory Notes | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Forgiveness of promissory note | $ 1.3 | |||||||||
Stock issued during period, new issues (in shares) | 2,444,130 | |||||||||
Chief Executive Officer | 2020 Promissory Notes | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Forgiveness of promissory note | 7 | |||||||||
Stock issued during period, new issues (in shares) | 4,915,442 | |||||||||
Chief Product Officer | 2020 Promissory Notes | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Forgiveness of promissory note | 3.5 | |||||||||
Stock issued during period, new issues (in shares) | 2,457,721 | |||||||||
Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 4 years | |||||||||
Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unamortized share-based compensation cost related to unvested stock option awards | $ 12.6 | $ 12.6 | $ 12.6 | |||||||
Expected period for recognition | 3 years 1 month 28 days | |||||||||
Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 4 years | |||||||||
Award vesting percentage | 25.00% | |||||||||
Granted (in shares) | 6,707,320 | 10,869,259 | ||||||||
Vested (in shares) | 137,375 | 146,274 | ||||||||
Percent representing time based RSUs | 25.00% | 25.00% | 25.00% | |||||||
Fully vested shares granted (in shares) | 128,000 | |||||||||
Restricted Stock Units (RSUs) | Certain Executives | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 1,049,043 | |||||||||
Performance-vesting Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 4,932,573 | |||||||||
Percent representing performance based RSUs | 75.00% | 75.00% | 75.00% | |||||||
Percent vesting based on stock price performance goals | 70.00% | 70.00% | 70.00% | |||||||
Percent vesting based on target revenue performance goals | 20.00% | 20.00% | 20.00% | |||||||
Time-vesting Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percentage | 12.50% | |||||||||
Granted (in shares) | 1,774,747 | |||||||||
Time-vesting Restricted Stock Units (RSUs) | Other Employees | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 3,240,896 | |||||||||
2014 Equity Incentive Plan | Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 22,399,691 | 20,399,691 | ||||||||
Expiration period | 1 year | |||||||||
Number of shares available for grant (in shares) | 0 | 0 | 0 | 2,950,871 | ||||||
2021 Stock Purchase Plan | Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 9,820,216 | |||||||||
Number of shares available for grant (in shares) | 56,695,085 | 56,695,085 | 56,695,085 | |||||||
Annual percentage increase in shares available | 5.00% | |||||||||
Vested (in shares) | 8,900 | |||||||||
2021 Stock Purchase Plan | Stock options | Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 14,173,771 | 14,173,771 | 14,173,771 | |||||||
2021 Stock Purchase Plan | Stock options | Maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 22,399,691 | 22,399,691 | 22,399,691 | |||||||
2021 Employee Stock Purchase Plan | Employee Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (in shares) | 2,834,754 | 2,834,754 | 2,834,754 | |||||||
Annual percentage increase in shares available | 1.00% | |||||||||
Annual increase, number of shares (in shares) | 8,504,263 | 8,504,263 | 8,504,263 | |||||||
Restricted Stock Purchase Agreements | Restricted Stock | Chief Executive Officer and Chief Product Officer | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares subject to agreement (in shares) | 9,872,293 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-Based Compensation (Details) - Share-based Payment Arrangement - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 19,967 | $ 145 | $ 25,558 | $ 242 |
Cost of revenues | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 302 | 0 | 1,500 | 0 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 11 | 0 | 37 | 0 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 294 | 41 | 884 | 59 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 19,359 | $ 104 | $ 23,136 | $ 183 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Company's Stock Option Activity (Details) - $ / shares | Sep. 22, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Options | |||
Outstanding at beginning of period (in shares) | 8,344,752 | ||
Granted (in shares) | 128,000 | 2,975,821 | |
Exercised (in shares) | (1,698,265) | ||
Forfeited (in shares) | (310,816) | ||
Expired (in shares) | (107,792) | ||
Outstanding at end of period (in shares) | 9,203,700 | 8,344,752 | |
Weighted Average Exercise Price | |||
Outstanding at end of period (in dollars per share) | $ 4.99 | $ 0.61 | |
Granted (in dollars per share) | 15.61 | ||
Exercised (in dollars per share) | 0.30 | ||
Forfeited (in dollars per share) | 10.31 | ||
Expired (in dollars per share) | 0.37 | ||
Outstanding at beginning of period (in dollars per share) | $ 0.61 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Options, exercisable (in shares) | 5,775,902 | ||
Options, vested and expected to vest (in shares) | 9,260,605 | ||
Weighted average exercise price, exercisable (in dollars per share) | $ 1.02 | ||
Weighted average exercise price, vested and expected to vest (in dollars per share) | $ 4.49 | ||
Weighted average remaining contractual term (years), outstanding | 4 years 10 months 17 days | 6 years 5 months 8 days | |
Weighted average remaining contractual term (years), exercisable | 5 years 9 months 14 days | ||
Weighted average remaining contractual term (years), vested and expected to vest | 6 years 5 months 26 days |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | |
Fair Value Assumptions | |||
Expected dividend yield | 0.00% | ||
Stock options | |||
Fair Value Assumptions | |||
Expected volatility | 40.90% | 39.60% | |
Expected term (years) | 7 years 8 months 15 days | 7 years 14 days | |
Expected dividend yield | 0.00% | 0.00% | |
Risk-free interest rate | 0.83% | 0.41% | |
Grant date fair value (in dollars per share) | $ 6.93 | $ 0.57 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) - $ / shares | Sep. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Underlying Shares | |||
Outstanding, beginning balance (in shares) | 0 | ||
Granted (in shares) | 6,707,320 | 10,869,259 | |
Vested (in shares) | (137,375) | (146,274) | |
Outstanding, ending balance (in shares) | 10,722,985 | 10,722,985 | |
Weighted-average Grant Date Fair Value | |||
Outstanding, beginning balance (USD per share) | $ 0 | ||
Granted (USD per share) | 19.58 | ||
Vested (USD per share) | 17.80 | ||
Outstanding, ending balance (USD per share) | $ 19.63 | 19.63 | |
Aggregate Fair Value | |||
Aggregate fair value, beginning balance (USD per share) | 0 | ||
Aggregate fair value, granted (USD per share) | 212,833,000 | ||
Aggregate fair value, vested (USD per share) | (2,604,000) | ||
Aggregate fair value, ending balance (USD per share) | $ 210,457,000 | $ 210,457,000 |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of Early Exercise of Stock Options (Details) | 9 Months Ended |
Sep. 30, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Early exercised stock options during period (in shares) | (1,698,265) |
Share-Based Payment Arrangement, Option, Early Exercised | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested, beginning balance (in shares) | 316,666 |
Early exercised stock options during period (in shares) | 0 |
Vested or cancelled (in shares) | (284,998) |
Unvested, ending balance (in shares) | 31,668 |
INCOME (LOSS) PER SHARE - Sched
INCOME (LOSS) PER SHARE - Schedule of Net Income (Loss) Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator [Abstract] | ||||
Net income (loss) | $ 19,348 | $ (8,538) | $ 52,188 | $ (27,816) |
Minus: Income allocated to participating securities | 14,926 | 0 | 43,670 | 0 |
Net income (loss) attributable to common stockholders – basic | 4,422 | (8,538) | 8,518 | (27,816) |
Plus: Income allocated to non-participating securities | 701 | 0 | 2,142 | 0 |
Net income (loss) attributable to common stockholders - diluted | $ 5,123 | $ (8,538) | $ 10,660 | $ (27,816) |
Denominator [Abstract] | ||||
Basic weighted-average common shares outstanding (in shares) | 31,554,720 | 16,556,343 | 22,997,311 | 16,126,647 |
Dilutive potential common stock issuable: | ||||
Common stock warrants (in shares) | 89,551 | 0 | 89,551 | 0 |
Stock options (in shares) | 7,660,707 | 0 | 7,660,707 | 0 |
Diluted weighted-average shares outstanding (in shares) | 39,304,978 | 16,556,343 | 30,747,569 | 16,126,647 |
Net income (loss) attributable to common stockholders per share | ||||
Basic (USD per share) | $ 140 | $ (0.52) | $ 0.37 | $ (1.72) |
Diluted (USD per share) | $ 0.13 | $ (0.52) | $ 0.35 | $ (1.72) |
INCOME (LOSS) PER SHARE - Sch_2
INCOME (LOSS) PER SHARE - Schedule of Antidilutive Securities Excluded from Computation of Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 12,515,387 | 101,798,735 | 12,515,387 | 101,798,735 |
Redeemable convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 83,526,065 | 0 | 83,526,065 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,767,821 | 8,244,751 | 2,767,821 | 8,244,751 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 9,747,566 | 0 | 9,747,566 | 0 |
Common stock subject to restricted stock purchase agreements | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 9,872,293 | 0 | 9,872,293 |
Common stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 75,744 | 0 | 75,744 |
Redeemable convertible preferred stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 79,882 | 0 | 79,882 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Tax Credit Carryforward [Line Items] | |||
Effective income tax rate | 45.00% | 0.00% | |
Deferred tax liability | $ 0.9 | ||
Tax credit carryforward, annual amount | $ 4 | ||
California Competes Tax Credit | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforward | $ 20 | ||
Tax credit carryforward term | 5 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | ||||
Mar. 31, 2021USD ($)installment | Sep. 30, 2021USD ($)letter_of_credit | Jul. 31, 2021USD ($) | Jun. 30, 2021USD ($) | Feb. 05, 2021USD ($) | |
Debt Instrument [Line Items] | |||||
Number of LOC's in effect | letter_of_credit | 1 | ||||
Consulting Services Litigation Case | |||||
Debt Instrument [Line Items] | |||||
Amount awarded to other party | $ 9,000,000 | ||||
Number of payment installments | installment | 4 | ||||
Installment payments period | 18 months | ||||
Loss contingency accrual | $ 4,500,000 | ||||
Revolving Credit Facility | Revolving Credit Agreement | East West Bank | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 130,000,000 | $ 12,000,000 | $ 6,000,000 | $ 130,000,000 | |
Revolving Credit Facility | Revolving Credit Agreement, Remaining Letters Of Credit | East West Bank | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 6,000,000 |