Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 01, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 $0.00001 per share | |
Trading Symbol | HLTH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 149,432,436 | |
Entity Central Index Key | 0001628945 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 304,654 | $ 409,873 |
Restricted cash | 1,334 | 13,837 |
Accounts receivable, net | 24,779 | 104,589 |
Inventories | 133,309 | 88,388 |
Prepaid expenses | 44,355 | 45,889 |
Other current assets | 13,441 | 7,446 |
Total current assets | 521,872 | 670,022 |
Property and equipment, net | 194,259 | 177,456 |
Operating lease right-of-use assets | 85,284 | 79,474 |
Intangible assets, net | 16,044 | 7,673 |
Other non-current assets | 7,577 | 5,435 |
Total assets | 825,036 | 940,060 |
Current liabilities: | ||
Accounts payable | 32,521 | 37,208 |
Accrued liabilities and other current liabilities | 47,105 | 29,498 |
Income taxes payable | 0 | 8,297 |
Deferred revenue, current | 84,899 | 82,165 |
Operating lease liabilities, current | 8,356 | 7,147 |
Finance lease liabilities, current | 2,581 | 2,621 |
Total current liabilities | 175,462 | 166,936 |
Deferred revenue, net of current portion | 10,283 | 10,283 |
Operating leases liabilities, net of current portion | 44,235 | 46,464 |
Finance lease liabilities, net of current portion | 1,268 | 3,271 |
Other non-current liabilities | 3,828 | 6,356 |
Total liabilities | 235,076 | 233,310 |
Commitments and contingencies (Note 15) | ||
Stockholders’ Equity (Deficit) | ||
Common stock, $0.00001 par value; 500,000,000 and 500,000,000 shares authorized, 149,177,691 and 146,402,991 issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 1 | 1 |
Additional paid-in-capital | 776,527 | 730,767 |
Accumulated deficit | (186,568) | (24,018) |
Total stockholders’ equity | 589,960 | 706,750 |
Total liabilities and stockholders’ equity | $ 825,036 | $ 940,060 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 149,177,691 | 146,402,991 |
Common stock, shares outstanding (in shares) | 149,177,691 | 146,402,991 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Revenue | $ 69,589 | $ 223,679 | $ 336,699 | $ 425,601 |
Operating costs and expenses: | ||||
Sales and marketing | 18,129 | 5,572 | 69,268 | 7,531 |
Research and development | 42,516 | 9,079 | 115,303 | 21,150 |
General and administrative | 25,625 | 33,084 | 77,946 | 56,336 |
Restructuring charges | 137 | 0 | 2,020 | 0 |
Total operating costs and expenses | 137,002 | 136,304 | 503,727 | 258,763 |
(Loss) income from operations | (67,413) | 87,375 | (167,028) | 166,838 |
Interest expense | (346) | (1,786) | (413) | (9,752) |
Change in fair value of redeemable convertible preferred stock warrants | 0 | 243 | 0 | 53 |
Change in fair value of convertible notes | 0 | (36,306) | 0 | (59,560) |
Loss on extinguishment of debt | 0 | 0 | 0 | (1,998) |
Other income (expense), net | 409 | (80) | 458 | (19) |
Net (loss) income before income taxes | (67,350) | 49,446 | (166,983) | 95,562 |
Income tax (benefit) expense | (1,047) | 30,098 | (4,433) | 43,374 |
Net (loss) income | $ (66,303) | $ 19,348 | $ (162,550) | $ 52,188 |
Net (loss) income per share attributable to common stockholders – basic (in dollars per share) | $ (0.45) | $ 0.14 | $ (1.10) | $ 0.37 |
Weighted-average number of shares used in computation of net (loss) income per share attributable to common stockholders – basic (in shares) | 148,285,721 | 31,554,720 | 147,443,196 | 22,997,311 |
Net (loss) income per share attributable to common stockholders – diluted (in dollars per share) | $ (0.45) | $ 0.13 | $ (1.10) | $ 0.35 |
Weighted-average number of shares used in computation of net (loss) income per share attributable to common stockholders – diluted (in shares) | 148,285,721 | 39,304,978 | 147,443,196 | 30,747,569 |
Product revenue | ||||
Revenue | ||||
Revenue | $ 66,660 | $ 222,594 | $ 328,465 | $ 424,516 |
Operating costs and expenses: | ||||
Cost of product revenue | 50,595 | 88,569 | 239,190 | 173,746 |
Grant and other revenue | ||||
Revenue | ||||
Revenue | $ 2,929 | $ 1,085 | $ 8,234 | $ 1,085 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (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, 2020 | 8,350,743 | 46,176,715 | 28,998,607 | ||||
Beginning balance at Dec. 31, 2020 | $ 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 | ||||
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] | |||||||
Exercise of common stock options (in shares) | 1,485,282 | ||||||
Exercise of common stock options | 417 | 417 | |||||
Vesting of restricted stock units (in shares) | 76,557 | ||||||
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 | |||||
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 of $24.0 million | 205,293 | 205,293 | |||||
Exercise of common stock warrant (in shares) | 84,118 | ||||||
Exercise of common stock warrant | 77 | 77 | |||||
Vesting of early exercised stock options | 109 | 109 | |||||
Tax withholding on exercise of stock options and issuance of shares from restricted stock units | (4,586) | (4,586) | |||||
Common stock issued to outgoing directors (in shares) | 128,000 | ||||||
Stock-based compensation | 25,558 | 25,558 | |||||
Net (loss) income | 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 | ||||
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] | |||||||
Exercise of common stock options (in shares) | 436,576 | ||||||
Exercise of common stock options | 159 | 159 | |||||
Vesting of restricted stock units (in shares) | 76,557 | ||||||
Conversion of redeemable convertible preferred stock (in shares) | 83,605,947 | ||||||
Conversion of redeemable convertible preferred stock | 177,691 | 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 | |||||
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 of $24.0 million | 205,293 | 205,293 | |||||
Vesting of early exercised stock options | 46 | 46 | |||||
Tax withholding on exercise of stock options and issuance of shares from restricted stock units | (4,586) | (4,586) | |||||
Common stock issued to outgoing directors (in shares) | 128,000 | ||||||
Stock-based compensation | 19,967 | 19,967 | |||||
Net (loss) income | 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) | |||
Beginning balance (in shares) at Dec. 31, 2021 | 146,402,991 | 146,402,991 | |||||
Beginning balance at Dec. 31, 2021 | $ 706,750 | $ 1 | 730,767 | (24,018) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 1,158,772 | 1,298,215 | |||||
Exercise of common stock options | $ 1,980 | 1,980 | |||||
Vesting of restricted stock units (in shares) | 1,476,485 | ||||||
Tax withholding on exercise of stock options and issuance of shares from restricted stock units | (4,735) | (4,735) | |||||
Stock-based compensation | 48,515 | 48,515 | |||||
Net (loss) income | $ (162,550) | (162,550) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 149,177,691 | 149,177,691 | |||||
Ending balance at Sep. 30, 2022 | $ 589,960 | $ 1 | 776,527 | (186,568) | |||
Beginning balance (in shares) at Jun. 30, 2022 | 147,834,377 | ||||||
Beginning balance at Jun. 30, 2022 | 640,373 | $ 1 | 760,637 | (120,265) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 784,024 | ||||||
Exercise of common stock options | 1,468 | 1,468 | |||||
Vesting of restricted stock units (in shares) | 559,290 | ||||||
Tax withholding on exercise of stock options and issuance of shares from restricted stock units | (1,268) | (1,268) | |||||
Stock-based compensation | 15,690 | 15,690 | |||||
Net (loss) income | $ (66,303) | (66,303) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 149,177,691 | 149,177,691 | |||||
Ending balance at Sep. 30, 2022 | $ 589,960 | $ 1 | $ 776,527 | $ (186,568) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net (loss) income | $ (162,550) | $ 52,188 |
Adjustments to reconcile net (loss) income to net cash, cash equivalents and restricted cash used in operations | ||
Depreciation and amortization | 32,989 | 26,079 |
Change in fair value of redeemable convertible preferred stock warrant liabilities | 0 | (53) |
Change in fair value of convertible notes | 0 | 59,560 |
Stock-based compensation expense | 48,515 | 25,558 |
Loss on extinguishment of debt | 0 | 1,998 |
Non-cash lease expense | 6,215 | 3,462 |
Convertible notes issuance costs | 0 | 6,000 |
Deferred income taxes | (3,478) | 883 |
Interest on lease liabilities | 137 | 154 |
Stock-based compensation expense from issuance of fully vested warrant to vendor | 0 | 1,239 |
Non-cash interest expense | 319 | 1,857 |
Inventory reserve | 33,191 | 0 |
Product warranty reserve | 12,263 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 79,810 | (86,022) |
Inventories | (78,112) | (33,897) |
Prepaid expenses and other current assets | (7,151) | (25,487) |
Other non-current assets | (1,912) | (3,871) |
Operating lease right-of-use assets | (9,364) | 0 |
Accounts payable, accrued liabilities and other current liabilities | 1,138 | 5,270 |
Income taxes payable | (11,331) | 37,365 |
Deferred revenue | 2,734 | (75,529) |
Operating lease liabilities | (3,632) | (15,052) |
Net cash, cash equivalents and restricted cash used in operating activities | (60,219) | (18,298) |
Cash flows from investing activities | ||
Purchase of property and equipment | (43,179) | (74,637) |
Expenditures for software development | (9,767) | (3,524) |
Net cash, cash equivalents and restricted cash used in investing activities | (52,946) | (78,161) |
Cash flows from financing activities | ||
Proceeds from convertible notes | 0 | 235,480 |
Payments for issuance costs of Series C-1 redeemable convertible preferred stock | 0 | 89 |
Payments of issuance costs of convertible notes | 0 | (6,000) |
Proceeds from exercise of common stock options | 1,980 | 418 |
Proceeds from exercise of common stock warrant | 0 | 77 |
Proceeds from issuance of common stock at public offering | 0 | 230,000 |
Payments of issuance costs of public offering | 0 | (22,062) |
Proceeds from debt | 0 | 82,250 |
Tax withholding on exercise of stock options | (4,735) | (4,586) |
Proceeds from employee stock purchase plan activity | 977 | 0 |
Debt issuance and prepayment costs | (599) | (781) |
Repayment of debt | 0 | (87,684) |
Payments for finance leases | (2,180) | (1,408) |
Net cash, cash equivalents and restricted cash (used in) provided by financing activities | (4,557) | 425,793 |
Net change in cash, cash equivalents and restricted cash | (117,722) | 329,334 |
Cash, cash equivalents and restricted cash, beginning balance | 423,710 | 129,255 |
Cash, cash equivalents and restricted cash, ending balance | 305,988 | 458,589 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 304,654 | 446,589 |
Restricted cash, current | 1,334 | 12,000 |
Total cash, cash equivalents and restricted cash | 305,988 | 458,589 |
Supplemental disclosure for cash flow information | ||
Cash paid for taxes | 0 | 5,100 |
Cash paid for interest | 0 | 760 |
Supplemental disclosure for non-cash investing and financing matters | ||
Early exercised stock options liability | 0 | 109 |
Right-of-use assets obtained in exchange for lease obligations | 2,611 | 47,611 |
Prepaid rent reclassified to right-of-use assets | 50 | 15,966 |
Purchase of property and equipment included in accounts payable | 4,313 | 18,708 |
Conversion of preferred shares into common stock | 0 | 176,322 |
Conversion of convertible notes | 297,792 | |
Initial public offering costs included in accounts payable | 0 | 2,644 |
Software development costs included in accounts payable | $ 995 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (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 | $ 24 |
BUSINESS AND BASIS OF ACCOUNTIN
BUSINESS AND BASIS OF ACCOUNTING | 9 Months Ended |
Sep. 30, 2022 | |
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. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited annual financial statements and notes thereto for the year ended December 31, 2021. The unaudited interim condensed consolidated balance sheet as of December 31, 2021 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, 2022 are not necessarily indicative of the results for the fiscal year ending December 31, 2022 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 statement 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 consolidated 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. Initial Public Offering On September 28, 2021, the Company completed its initial public offering (“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 pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company received aggregate net proceeds of approximately $206.0 million after deducting underwriting commissions and legal, accounting, and consulting fees related to the IPO. Upon completion of the IPO, Convertible Notes outstanding, see Note 10, Debt , in the principal amount of $235.5 million and accrued interest of $2.8 million were automatically converted into 18,611,914 shares of common stock. All outstanding shares of the Company’s redeemable convertible preferred stock, see Note 11, Capital 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. Use of Estimates The preparation of the accompanying unaudited interim condensed consolidated 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 usage and recoverability of its inventories and long-lived assets and net deferred tax assets (and related valuation allowance). 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. The majority of revenue to date is from customers located in the United States and the majority of long-lived assets are located in the United States. The Company had an immaterial amount of revenue from customers located in Canada and Singapore and an immaterial amount of long-lived assets are located in Mexico. COVID-19 Impact COVID-19 was declared a global pandemic by the World Health Organization in March 2020 and 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. The FDA issued various emergency use authorizations for COVID-19 vaccines. The widely administered use of an efficacious vaccine or new therapeutic treatment for COVID-19 may reduce the demand for the Cue COVID-19 test and, as a result, the COVID-19 diagnostic testing market may not develop or grow substantially. Given the rapid development of events surrounding the pandemic, there is uncertainty to the Company’s future results and performance. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to the Company's significant accounting policies from its Annual Report on Form 10-K for the fiscal year ended December 31, 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 adopted this standard effective January 1, 2022, using the modified retrospective approach. The standard did not have a material impact on the financial statements for the nine months ended September 30, 2022. In May 2021, the FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 aims to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange based on the economic substance of the modification or exchange. Early adoption is permitted and the guidance must be applied prospectively to all modifications or exchanges that occur on or after the date of adoption. The guidance is effective for annual periods beginning after December 15, 2021. The Company adopted ASU 2021-04 on January 1, 2022 under the prospective method of adoption and there was no impact to our results of operations as we did not modify or exchange any freestanding equity-classified written call options. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832). This ASU requires business entities to disclose information about government assistance they receive if the transactions were accounted for by analogy to either a grant or a contribution accounting model. The disclosure requirements include the nature of the transaction and the related accounting policy used, the line items on the balance sheets and statements of operations that are affected and the amounts applicable to each financial statement line item and the significant terms and conditions of the transactions. The ASU is effective for annual periods beginning after December 15, 2021. The disclosure requirements can be applied either retrospectively or prospectively to all transactions in the scope of the amendments that are reflected in the financial statements at the date of initial application and new transactions that are entered into after the date of initial application. The Company adopted the ASU prospectively on January 1, 2022. The additional annual disclosures required are not expected to have a material impact on the financial statements. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Product Revenue Disaggregation of the product revenue by type of customer for the three and nine months ended September 30, 2022 and 2021, respectively: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Public sector entities $ 780 $ 128,587 $ 6,213 $ 295,708 Private sector customers 65,880 94,007 322,252 128,808 Total product revenue $ 66,660 $ 222,594 $ 328,465 $ 424,516 Product revenue for the three and nine months ended September 30, 2022 includes an immaterial amount of service revenue generated from telemedicine and proctoring services provided to customers. Revenue generated from proctoring is recognized over the term of the contracts with customers. 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, 2022 and 2021: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Product revenue $ 66,660 $ 222,594 $ 328,465 $ 424,516 Cost of product revenue 50,595 88,569 239,190 173,746 Product gross profit $ 16,065 $ 134,025 $ 89,275 $ 250,770 Product gross profit margin 24 % 60 % 27 % 59 % During the three and nine months ended September 30, 2022 , the Compa ny recorded charges of $2.6 million and $45.5 million, respectively (the “inventory charge”) primarily related to excess and obsolescent inventory that is reflected within the cost of product revenue line item of the condensed consolidated statements of operations. This inventory charge is primarily related to an overbuild of inventory and, in addition, identification of certain products which are not expected to perform in line with the Company’s quality standards. The $2.6 million inventory charge recorded during the three months ended September 30, 2022 was recorded to inventory reserve. Of the $45.5 million inventory cha rge recorded during the nine months ended September 30, 2022 , $33.2 million was recorded to inventory reserve and $12.3 million was re corded to product warranty reserve. DoD Agreement In October 2020, the Company entered into a $480.9 million agreement with the U.S. government for the purchase of its Cue COVID-19 Test to meet the unprecedented demand for rapid and accurate molecular diagnostic testing (the “U.S. DoD Agreement”). The Company delivered all of the agreed upon products under the agreement prior to its expiration on December 31, 2021. The U.S. DoD Agreement provided for a $184.6 million upfront payment (the “U.S. DoD Advance”) to facilitate the scaling of the Company’s manufacturing capacity, which was received upon signing the contract. The U.S. DoD Agreement did not provide for the funds to be utilized in any specific manner beyond furthering the purposes of the agreement. The Company was not required to segregate, nor was the Company required to obtain the approval of the U.S. government to use the funds advanced to it under the agreement. The remaining $296.3 million of the agreement was due to the Company upon the delivery of Cue Readers, Cue COVID-19 Test Kits and Cue Control Swab Packs. The U.S. DoD Agreement also provided that, as soon as possible after the completion of the initial U.S. DoD Agreement, the Company and the U.S. government would negotiate in good faith to enter into a follow-on supply agreement based on federal acquisition regulations (a FAR-based contract). The U.S. DoD Agreement provides the U.S. DoD with the right to purchase no more than 45% of our production from the purchased equipment funded by the agreement for the duration of the follow-on contract at a specified discount, subject to a price floor as part of this follow-on contract. The U.S. government is also entitled to certain administrative reporting but does not receive the right to any intellectual property or know-how. The agreement term ended upon completion of the Company’s performance obligations in December 2021. Contract Assets and Liabilities Contract assets primarily relate to the Company’s conditional right to consideration for performance obligations satisfied through direct-to-consumer sales but not billed at the reporting date. Net contract assets were $0.4 million and $1.1 million as of September 30, 2022 and December 31, 2021, respectively, and were recorded in other current assets on the balance sheets. Contract liabilities primarily relate to the U.S. DoD Advance and payments received from customers in advance of performance under the contracts. Contract liabilities are 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, 2022 is as follows: Amount Balance at December 31, 2021 $ 92,448 Unearned revenue from cash received during the period, excluding amounts recognized as revenue during the period 2,734 Revenue recognized related to contract liability balance at the beginning of the period — Balance at September 30, 2022 $ 95,182 As of September 30, 2022, we continue to believe that the deferred revenue related to our satisfaction of estimated future performance obligations of a follow-on agreement with the U.S. DoD is appropriate. Several external factors such as the passage of time with no follow-on contract, the political climate in the U.S. government, the severity of the COVID-19 pandemic/flu season and others may reduce the likelihood of a follow-on contract. We continue to evaluate these factors quarterly and will recognize the deferred revenue over the term of a follow-on contract or when it becomes unlikely that a follow-on contract will be executed. Grant and Other Revenue Grant and other revenue relate to a cost reimbursement agreement with the Biomedical Advanced Research and Development Authority (“BARDA”). The Compan y g enerated $2.9 million and $8.2 million of revenue related to the agreement with BARDA during the three and nine months ended September 30, 2022, respectively. The Company gen erated $0.9 million of revenue related to the agreement with BARDA during the three and nine months ended September 30, 2021. Accounts Receivable |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES As of September 30, 2022 and December 31, 2021, the Company’s inventories consisted of the following: September 30, December 31, Raw materials $ 75,594 $ 46,273 Work-in-process 20,925 10,920 Finished goods 74,445 33,863 Reserve (37,655) (2,668) Total inventories $ 133,309 $ 88,388 During the three and nine months ended September 30, 2022 , the Compa ny recorded charges of $2.6 million and $45.5 million, respectively, primarily related to excess and obsolescent inventory that is reflected within the cost of product revenue line item of the condensed consolidated statements of operations. This inventory charge is primarily related to an overbuild of inventory and, in addition, identification of certain products which are not expected to perform in line with the Company’s quality standards. The $2.6 million charge recorded during the three months ended September 30, 2022 was recorded to inventory reserve. Of the $45.5 million inventory charge recorded during the nine months ended September 30, 2022 , $33.2 million was recorded to inventory reserve and $12.3 million was recorded to product warranty reserve. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | PREPAID EXPENSES As of September 30, 2022 and December 31, 2021, the Company’s prepaid expenses consisted of the following: September 30, December 31, Prepaid expense $ 31,561 $ 30,153 Prepaid inventory 12,794 15,736 Total prepaid expenses $ 44,355 $ 45,889 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET As of September 30, 2022 and December 31, 2021, the Company’s property and equipment, net consisted of the following: September 30, December 31, Construction in progress $ 33,834 $ 4,082 Machinery and equipment 209,434 195,001 Leasehold improvements 21,611 19,302 Furniture and fixtures 1,703 740 Property and equipment 266,582 219,125 Accumulated depreciation and amortization (72,323) (41,669) Total property and equipment, net $ 194,259 $ 177,456 Depreciation and amortization expense related to property and equipment was $8.3 million and $11.4 million for the three months ended September 30, 2022 and 2021, respectively. Depreciation and amortization expense related to property and equipment was $28.6 million and $24.2 million |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS As of September 30, 2022 and December 31, 2021, the Company’s intangible assets consisted of the following: September 30, December 31, Capitalized software $ 16,037 $ 5,638 Accumulated amortization (4,459) (2,067) Capitalized software, net 11,578 3,571 In-process software development 4,466 4,102 Total intangible assets $ 16,044 $ 7,673 Amortization expense related to intangible assets placed in service was $1.0 million and $2.4 million for the three and nine months ended September 30, 2022, respectively. Amortization expense related to intangible assets placed in service 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: 2022 (excluding the nine months ended September 30, 2022) $ 1,099 2023 4,396 2024 3,955 2025 2,128 Total amortization expense $ 11,578 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases real estate and manufacturing and laboratory equipment which are used in the Company’s manufacturing, research and development, and administrative activities. The Company identifies a contract that contains a lease as one which conveys a right, either explicitly or implicitly, to control the use of an identified asset in exchange for consideration. These arrangements are classified as finance leases and operating leases. Finance leases consist of laboratory and manufacturing equipment with remaining terms ranging from 1 year to 3 years. The Company’s operating leases relate to the Company’s manufacturing facilities and office space and have remaining terms from 7 years to 9 years. There were no new material leases entered into during the three and nine months ended September 30, 2022. The right-of-use assets and lease liabilities recognized on the Company’s balance sheet as of September 30, 2022 and December 31, 2021 were as follows: Balance Sheet Location September 30, 2022 December 31, 2021 Assets Right-of-use assets operating leases Operating lease right-of-use assets $ 85,284 $ 79,474 Right-of-use assets finance leases Property and equipment, net 7,723 9,821 Liabilities Operating lease liabilities (current) Operating lease liabilities, current 8,356 7,147 Finance lease liabilities (current) Finance lease liabilities, current 2,581 2,621 Operating lease liabilities (non-current) Operating lease liabilities, net of current portion 44,235 46,464 Finance lease liabilities (non-current) Finance lease liabilities, net of current portion 1,268 3,271 The components of lease expense for the three and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Operating lease cost $ 3,192 $ 2,398 $ 8,749 $ 5,365 Finance lease cost: Amortization of right-of-use assets 819 509 2,098 1,215 Interest on lease liabilities 43 54 137 154 Total lease cost $ 4,054 $ 2,961 $ 10,984 $ 6,734 |
LEASES | LEASES The Company leases real estate and manufacturing and laboratory equipment which are used in the Company’s manufacturing, research and development, and administrative activities. The Company identifies a contract that contains a lease as one which conveys a right, either explicitly or implicitly, to control the use of an identified asset in exchange for consideration. These arrangements are classified as finance leases and operating leases. Finance leases consist of laboratory and manufacturing equipment with remaining terms ranging from 1 year to 3 years. The Company’s operating leases relate to the Company’s manufacturing facilities and office space and have remaining terms from 7 years to 9 years. There were no new material leases entered into during the three and nine months ended September 30, 2022. The right-of-use assets and lease liabilities recognized on the Company’s balance sheet as of September 30, 2022 and December 31, 2021 were as follows: Balance Sheet Location September 30, 2022 December 31, 2021 Assets Right-of-use assets operating leases Operating lease right-of-use assets $ 85,284 $ 79,474 Right-of-use assets finance leases Property and equipment, net 7,723 9,821 Liabilities Operating lease liabilities (current) Operating lease liabilities, current 8,356 7,147 Finance lease liabilities (current) Finance lease liabilities, current 2,581 2,621 Operating lease liabilities (non-current) Operating lease liabilities, net of current portion 44,235 46,464 Finance lease liabilities (non-current) Finance lease liabilities, net of current portion 1,268 3,271 The components of lease expense for the three and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Operating lease cost $ 3,192 $ 2,398 $ 8,749 $ 5,365 Finance lease cost: Amortization of right-of-use assets 819 509 2,098 1,215 Interest on lease liabilities 43 54 137 154 Total lease cost $ 4,054 $ 2,961 $ 10,984 $ 6,734 |
ACCRUED LIABILITIES AND OTHER C
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES | ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES Accrued liabilities and other current liabilities consisted of the following: September 30, December 31, Accrued purchases (1) $ 4,535 $ 285 Accrued payroll and benefits 22,041 13,693 Accrued expenses 3,154 6,371 Accrued sales tax 6,484 4,284 Product warranty reserve (See Note 15. Commitments and Contingencies ) 10,891 4,865 Total accrued liabilities and other current liabilities $ 47,105 $ 29,498 (1) Accrued purchases primarily reflects receipts of goods and services for which we had not yet been invoiced. As we are invoiced for these goods and services, this balance will reduce and accounts payable will increase. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Revolving Credit Agreement In February 2021, the Company entered into a loan and security agreement (“Revolving Credit Agreement”) with a group of lenders with East West Bank, acting as administrative agent and collateral agent for the lenders. In connection 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 for 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 proceeds from the issuance and sale of the Convertible Notes. In June 2021, the Company terminated the Revolving Credit Agreement and was required to pay a fee 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 statements 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 $12.0 million, which was cash collateralized. In November 2021, East West Bank issued to us an additional letter of credit in the amount of $0.5 million. All other obligations under the Revolving Credit Agreement have otherwise been terminated. Convertible Notes In May 2021, the Company issued and sold convertible promissory notes (the “Convertible Notes”) with a principal amount of $235.5 million . The Company recorded a loss of $23.3 million related to the change in estimated fair value of the Convertible Notes in its statement of operations for the six months ended June 30, 2021. All of the Convertible Notes were converted upon the IPO, which was a qualified conversion event. The Convertible Notes’ principal amount 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 December 31, 2021. Secured Revolving Facility Agreement On June 30, 2022, the Company entered into a loan and security agreement (the “2022 Revolving Facility Agreement”) among the Company, the lenders from time to time party thereto and East West Bank, as collateral agent and administrat ive agent (“Agent”). The 2022 Revolving Facility Agreement provides for a $100.0 million secured revolving credit facility, with a $20.0 million letter of credit subfacility. As of September 30, 2022 , there were no revolving loans outstanding and $12.5 million aggregate f ace amount of letters of credit outstanding under the 2022 Revolving Facility Agreement, which reduces the availability to borrow under the revolving credit facility to $87.5 million . The Company recorded $0.6 million in deferred financings costs in connection with the 2022 Revolving Facility Agreement. This balance will be amortized over two years and is classified in other non-current assets since no funds were drawn on the 2022 Revolving Facility Agreement. The revolving loans are available subject to the Company maintaining an asset coverage ratio of not less than 1.20 to 1.00, measured as (x) the sum of specified cash and cash equivalents subject to liens in favor of Agent plus 80% of eligible accounts receivable less the amount of the Company’s outstanding sales tax liability to (y) the principal amount of the outstanding obligations under the 2022 Revolving Facility Agreement. The revolving commitments terminate and the principal amount of outstanding revolving loans, together with accrued and unpaid interest, is due and payable on June 30, 2024. The revolving loans accrue interest at the greater of the prime rate and 3.50%. Interest on the revolving loans is payable monthly in arrears. The Company may borrow, prepay and reborrow revolving loans, without premium or penalty. The Company is required to pay a prepayment fee of 1.0% if the revolving commitments are terminated prior to the maturity date. The Company is also obligated to pay other customary fees for a loan facility of this size and type. The Company’s obligations under the 2022 Revolving Facility Agreement are secured by substantially all of the Company’s assets, and will be guaranteed by, and secured by substantially all of the assets of, its future domestic subsidiaries. As of the closing date, there were no guarantors. The 2022 Revolving Facility Agreement requires the Company to maintain a current ratio of not less than 1.20 to 1.00, measured quarterly. The 2022 Revolving Facility Agreement also requires the Company to maintain at least six months remaining liquidity, determined as set forth in the 2022 Revolving Facility Agreement. Additionally, the 2022 Revolving Facility Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries to, among other things, dispose of assets, effect certain mergers, incur debt, grant liens, pay dividends and distributions on their capital stock, make investments and acquisitions, and enter into transactions with affiliates, in each case subject to customary exceptions for a loan facility of this size and type. The events of default under the 2022 Revolving Facility Agreement include, among others, payment defaults, material misrepresentations, breaches of covenants, cross defaults with certain other material indebtedness, bankruptcy and insolvency events, the occurrence of a material adverse effect, a change of control and judgment defaults. The occurrence of an event of default could result in the acceleration of the Company’s obligations under the 2022 Revolving Facility Agreement, the termination of the lenders’ commitments, a 2% increase in the applicable rate of interest and the exercise by Agent and the lenders of other rights and remedies provided for under the 2022 Revolving Facility Agreement or applicable law. |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2022 | |
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. Common Stock Warrants |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
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 incentive stock options, nonqualified stock options, stock appreciation rights, performance shares, awards of restricted stock and awards of restricted stock units. As of December 31, 2021, with the introduction of a new stock incentive plan, shares are no longer available for future grants under the 2014 Plan. 2021 Stock Incentive Plan In September 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 (incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards). The 2021 Plan initially authorized the issuance of a maximum of 22,399,691 shares of common stock. The number of shares of common stock available for issuance under the 2021 Plan were and will be increased on the first day of each fiscal year beginning with the 2022 fiscal year, in an amount equal to the least of (i) 5% of the number of shares of the Company's common stock outstanding on the first day of such fiscal year and (ii) the number of shares of the Company's common stock determined by the Company's board of directors. As of September 30, 2022 , 3,619,826 shares of common stock were available for issuance under the 2021 Plan. 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 2021 ESPP initially allowed for the sale of 2,834,754 shares of common stock. The number of shares of the Company's common stock to be sold under the 2021 ESPP were and will be increased on the first day of each fiscal year beginning with the 2022 fiscal year, in an amount equal to the least of (i) 8,504,263 shares, (ii) 1% of the number of shares of the Company's common stock outstanding on the first day of such fiscal year and (ii) a number of shares of the Company's common stock determined by the Company's board of directors. The price at which stock is purchased under the 2021 ESPP is equal to 85% of the fair market value of the Company’s common stock on the lesser of either (i) the first business day of the Plan Period or (ii) the Exercise Date. As of September 30, 2022, 4,151,321 shares of common stock were available for sale under the 2021 ESPP. 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, 2022 and 2021, was as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of product revenues $ 865 $ 302 $ 2,267 $ 1,500 Sales and marketing 1,441 11 6,718 37 Research and development 6,212 294 17,780 884 General and administrative 7,172 19,359 21,750 23,136 Total stock-based compensation expense $ 15,690 $ 19,967 $ 48,515 $ 25,558 In total, $0.9 million and $2.3 million of stock-based compensation expense was capitalized to inventory during the manufacturing process during the three and nine months ended September 30, 2022, respectively. An immaterial amount remained in inventory as of September 30, 2022. Stock Options A summary of stock option activity and related information for the nine months ended September 30, 2022 was as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding at January 1, 2022 9,163,160 $ 5.13 6.40 Granted — — Exercised (1,158,772) 0.52 Forfeited (188,209) 12.46 Expired (80,406) 14.62 Outstanding at September 30, 2022 7,735,773 $ 5.55 6.33 Exercisable at September 30, 2022 5,823,768 $ 3.71 5.75 Vested and expected to vest at September 30, 2022 7,735,773 $ 5.55 6.33 There were no stock options granted during the nine months ended September 30, 2022. As of September 30, 2022, there was approximately $9.4 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 2.2 years, on a straight-line basis. Restricted Stock Units Under the 2014 and 2021 Plans, 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, but may be subject to other vesting conditions such as performance or market based conditions. Compensation expense is recognized ratably over the requisite service period. A summary of RSU activity and related information for the nine months ended September 30, 2022 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2022 11,264,235 $ 14.62 $ 164,683 Granted 10,484,399 6.28 65,842 Vested (2,418,758) 14.54 (35,169) Forfeited (733,125) 11.63 (8,526) Outstanding, September 30, 2022 18,596,751 $ 10.05 $ 186,830 As of September 30, 2022, there was approximately $150.2 million of total unrecognized compensation cost related to outstanding RSUs, which is expected to be recognized over a remaining weighted-average vesting period of 3.4 years, on a straight-line basis. Market-Based Performance-Vesting RSUs In September 2021, the Company issued 3,335,300 RSUs that vest based on the satisfaction of both a continued employment condition and the achievement of certain market-based performance goals. Market-based performance-vesting RSUs vest upon the achievement of certain stock price performance over a performance period. There are seven stock price targets which can be achieved over the performance period and are based on an average closing price of the Company’s common stock. Market-based performance-vesting RSU activity for the nine months ended September 30, 2022 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2022 $ 3,335,300 $ 12.82 $ 42,759 Granted — — — Vested — — — Forfeited — — — Outstanding, September 30, 2022 $ 3,335,300 $ 12.82 42,759 Operational-Based Performance-Vesting RSUs In September 2021, the Company iss ued 1,597,272 oper ational-based performance-vesting RSUs that vest based on the satisfaction of both a continued employment condition and the achievement of certain performance goals including meeting certain annual revenue targets and product development milestones. The grant date fair value of operational-based performance-vesting RSUs was estimated based on the fair value of the Company’s common stock on the date of grant. Compensation costs are recorded when achievement of the performance goals is determined to be probable. Operations-based performance-vesting RSU activity for the nine months ended September 30, 2022 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2021 1,597,272 $ 16.00 $ 25,556 Granted — — — Vested (532,424) 16.00 (8,519) Forfeited — — — Outstanding, September 30, 2022 1,064,848 $ 16.00 $ 17,037 |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
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, convertible notes, restricted stock and similar equity instruments granted by the Company. Some restricted stock units vest upon certain performance and market conditions and as they vest, the shares will be included in outstanding common shares. 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 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 2022 2021 2022 2021 Numerator: Net (loss) income $ (66,303) $ 19,348 $ (162,550) $ 52,188 Minus: Income allocated to participating securities — 14,926 — 43,670 Net (loss) income attributable to common stockholders – basic $ (66,303) $ 4,422 $ (162,550) $ 8,518 Plus: Income allocated to non-participating securities — 701 — 2,142 Net (loss) income attributable to common stockholders - diluted $ (66,303) $ 5,123 $ (162,550) $ 10,660 Denominator: Basic weighted-average common shares outstanding 148,285,721 31,554,720 147,443,196 22,997,311 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 148,285,721 39,304,978 147,443,196 30,747,569 Net (loss) income attributable to common stockholders per share Basic $ (0.45) $ 0.14 $ (1.10) $ 0.37 Diluted $ (0.45) $ 0.13 $ (1.10) $ 0.35 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 2022 2021 2022 2021 Stock options 7,735,773 2,767,821 7,735,773 2,767,821 Restricted stock units 18,596,751 9,747,566 18,596,751 9,747,566 Employee stock purchase plan – shares projected to be issued 314,531 — 314,531 — Total 26,647,055 12,515,387 26,647,055 12,515,387 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective income tax rate for the three and nine months ended September 30, 2022 was 1.6% and 2.7%, respectively. The Company’s effective income tax rate for the three and nine months end ed September 30, 2021 was 60.9% and 45.4%, respectively. The effective tax rate for the nine months ended September 30, 2022, differs from the statutory rate due to changes in the amount of the valuation allowance recorded against the Company’s deferred tax assets and the impact of certain state tax credits recorded in the period ended September 30, 2022. The effective tax rate for the nine months ended September 30, 2021 , differs from the statutory rate due to the non-tax deductible items including the charges related to the Convertible Notes and the forgiveness of the promissory notes. During the nine months ended September 30, 2022, the Company completed the application process to obtain income tax credits from the state of California related to the California Competes program and recorded a benefit of approximately $1.7 million. During the nine months ended September 30, 2022, the Company recorded amounts related to uncertain tax positions of approximately $0.3 million. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
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. 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 choose to replace Cue Cartridges that result in cancelled tests and invalid test results. All warranties are classified as current liabilities 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 based on 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 following table provides a reconciliation of the change in estimated warranty liabilities: Amount Balance, December 31, 2021 $ 4,865 Provision for warranties 7,080 Provision for warranties related to the inventory charge (see Note 4, Inventories ) 12,263 Settlements (13,317) Balance, September 30, 2022 $ 10,891 Restructuring Restructuring actions were taken in the second quarter of 2022 in order to reduce costs and improve operations and manufacturing efficiency. As a result of these actions, for the three and nine months ended September 30, 2022, the Company recorded $0.1 million and $2.0 million of charges, respectively, which were reported as restructuring expense in the accompanying condensed consolidated statements of operations. This was accounted for as a one-time termination benefit communicated by period end without an additional service component, so the charge represents the total amount expected to be incurred. As of September 30, 2022, all of the charges have been paid. Standby Letters of Credit During the year ended December 31, 2021, the Company was party to certain letters of credit, primarily related to a letter of credit with Comerica Bank as collateral required by one of the Company’s vendors. During the year ended December 31, 2021, the Company entered into a Revolving Credit Agreement with a capacity of $130.0 million and all but one of the letters of credits were no longer required by the counterparties. The one letter of credit, totaling $6.0 million, was 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 June 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. The letter of credit was increased to $12.0 million in July 2021. In November 2021, East West Bank issued an additional letter of credit in the amount of $0.5 million. All other obligations under the Revolving Credit Agreement have otherwise been terminated. On June 30, 2022, these letters of credit were re-issued under the 2022 Revolving Facility Agreement. The 2022 Revolving Facility Agreement provides fo r a $100.0 million secured revolving credit facility, with a $20.0 million l etter of credit subfacility. As of September 30, 2022, there were no revolving loans outstanding and $12.5 million aggregate face amount of letters of credit outstanding under the 2022 Revolving Facility Agreement, which reduces the availability to borrow under the revolving credit facility to $87.5 million . Restricted Cash In November 2021, $0.8 million of cash was restricted in relation to a customs surety on international imports which remains restricted as of September 30, 2022. The Company also has outstanding cash collateralized letters of credit with Comerica Bank related to its real estate leases totaling $0.5 million as of September 30, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited annual financial statements and notes thereto for the year ended December 31, 2021. The unaudited interim condensed consolidated balance sheet as of December 31, 2021 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, 2022 are not necessarily indicative of the results for the fiscal year ending December 31, 2022 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 statement 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 consolidated 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 | Use of Estimates The preparation of the accompanying unaudited interim condensed consolidated 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 usage and recoverability of its inventories and long-lived assets and net deferred tax assets (and related valuation allowance). The |
Segment Reporting | 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. The majority of revenue to date is from customers located in the United States and the majority of long-lived assets are located in the United States. The Company had an immaterial amount of revenue from customers located in Canada and Singapore and an immaterial amount of long-lived assets are located in Mexico. |
Recent Accounting Pronouncements | 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 adopted this standard effective January 1, 2022, using the modified retrospective approach. The standard did not have a material impact on the financial statements for the nine months ended September 30, 2022. In May 2021, the FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 aims to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange based on the economic substance of the modification or exchange. Early adoption is permitted and the guidance must be applied prospectively to all modifications or exchanges that occur on or after the date of adoption. The guidance is effective for annual periods beginning after December 15, 2021. The Company adopted ASU 2021-04 on January 1, 2022 under the prospective method of adoption and there was no impact to our results of operations as we did not modify or exchange any freestanding equity-classified written call options. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832). This ASU requires business entities to disclose information about government assistance they receive if the transactions were accounted for by analogy to either a grant or a contribution accounting model. The disclosure requirements include the nature of the transaction and the related accounting policy used, the line items on the balance sheets and statements of operations that are affected and the amounts applicable to each financial statement line item and the significant terms and conditions of the transactions. The ASU is effective for annual periods beginning after December 15, 2021. The disclosure requirements can be applied either retrospectively or prospectively to all transactions in the scope of the amendments that are reflected in the financial statements at the date of initial application and new transactions that are entered into after the date of initial application. The Company adopted the ASU prospectively on January 1, 2022. The additional annual disclosures required are not expected to have a material impact on the financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and 2021, respectively: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Public sector entities $ 780 $ 128,587 $ 6,213 $ 295,708 Private sector customers 65,880 94,007 322,252 128,808 Total product revenue $ 66,660 $ 222,594 $ 328,465 $ 424,516 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, 2022 and 2021: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Product revenue $ 66,660 $ 222,594 $ 328,465 $ 424,516 Cost of product revenue 50,595 88,569 239,190 173,746 Product gross profit $ 16,065 $ 134,025 $ 89,275 $ 250,770 Product gross profit margin 24 % 60 % 27 % 59 % |
Schedule of Contract Liabilities | The activity related to contract liabilities for the nine months ended September 30, 2022 is as follows: Amount Balance at December 31, 2021 $ 92,448 Unearned revenue from cash received during the period, excluding amounts recognized as revenue during the period 2,734 Revenue recognized related to contract liability balance at the beginning of the period — Balance at September 30, 2022 $ 95,182 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of September 30, 2022 and December 31, 2021, the Company’s inventories consisted of the following: September 30, December 31, Raw materials $ 75,594 $ 46,273 Work-in-process 20,925 10,920 Finished goods 74,445 33,863 Reserve (37,655) (2,668) Total inventories $ 133,309 $ 88,388 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses | As of September 30, 2022 and December 31, 2021, the Company’s prepaid expenses consisted of the following: September 30, December 31, Prepaid expense $ 31,561 $ 30,153 Prepaid inventory 12,794 15,736 Total prepaid expenses $ 44,355 $ 45,889 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | As of September 30, 2022 and December 31, 2021, the Company’s property and equipment, net consisted of the following: September 30, December 31, Construction in progress $ 33,834 $ 4,082 Machinery and equipment 209,434 195,001 Leasehold improvements 21,611 19,302 Furniture and fixtures 1,703 740 Property and equipment 266,582 219,125 Accumulated depreciation and amortization (72,323) (41,669) Total property and equipment, net $ 194,259 $ 177,456 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | As of September 30, 2022 and December 31, 2021, the Company’s intangible assets consisted of the following: September 30, December 31, Capitalized software $ 16,037 $ 5,638 Accumulated amortization (4,459) (2,067) Capitalized software, net 11,578 3,571 In-process software development 4,466 4,102 Total intangible assets $ 16,044 $ 7,673 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for each of the years ending December 31 is as follows: 2022 (excluding the nine months ended September 30, 2022) $ 1,099 2023 4,396 2024 3,955 2025 2,128 Total amortization expense $ 11,578 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities | The right-of-use assets and lease liabilities recognized on the Company’s balance sheet as of September 30, 2022 and December 31, 2021 were as follows: Balance Sheet Location September 30, 2022 December 31, 2021 Assets Right-of-use assets operating leases Operating lease right-of-use assets $ 85,284 $ 79,474 Right-of-use assets finance leases Property and equipment, net 7,723 9,821 Liabilities Operating lease liabilities (current) Operating lease liabilities, current 8,356 7,147 Finance lease liabilities (current) Finance lease liabilities, current 2,581 2,621 Operating lease liabilities (non-current) Operating lease liabilities, net of current portion 44,235 46,464 Finance lease liabilities (non-current) Finance lease liabilities, net of current portion 1,268 3,271 |
Schedule of Lease Cost | The components of lease expense for the three and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Operating lease cost $ 3,192 $ 2,398 $ 8,749 $ 5,365 Finance lease cost: Amortization of right-of-use assets 819 509 2,098 1,215 Interest on lease liabilities 43 54 137 154 Total lease cost $ 4,054 $ 2,961 $ 10,984 $ 6,734 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities and Other Current Liabilities | Accrued liabilities and other current liabilities consisted of the following: September 30, December 31, Accrued purchases (1) $ 4,535 $ 285 Accrued payroll and benefits 22,041 13,693 Accrued expenses 3,154 6,371 Accrued sales tax 6,484 4,284 Product warranty reserve (See Note 15. Commitments and Contingencies ) 10,891 4,865 Total accrued liabilities and other current liabilities $ 47,105 $ 29,498 (1) Accrued purchases primarily reflects receipts of goods and services for which we had not yet been invoiced. As we are invoiced for these goods and services, this balance will reduce and accounts payable will increase. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and 2021, was as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of product revenues $ 865 $ 302 $ 2,267 $ 1,500 Sales and marketing 1,441 11 6,718 37 Research and development 6,212 294 17,780 884 General and administrative 7,172 19,359 21,750 23,136 Total stock-based compensation expense $ 15,690 $ 19,967 $ 48,515 $ 25,558 |
Schedule of Stock Option Activity and Related Information | A summary of stock option activity and related information for the nine months ended September 30, 2022 was as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding at January 1, 2022 9,163,160 $ 5.13 6.40 Granted — — Exercised (1,158,772) 0.52 Forfeited (188,209) 12.46 Expired (80,406) 14.62 Outstanding at September 30, 2022 7,735,773 $ 5.55 6.33 Exercisable at September 30, 2022 5,823,768 $ 3.71 5.75 Vested and expected to vest at September 30, 2022 7,735,773 $ 5.55 6.33 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of RSU activity and related information for the nine months ended September 30, 2022 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2022 11,264,235 $ 14.62 $ 164,683 Granted 10,484,399 6.28 65,842 Vested (2,418,758) 14.54 (35,169) Forfeited (733,125) 11.63 (8,526) Outstanding, September 30, 2022 18,596,751 $ 10.05 $ 186,830 Market-based performance-vesting RSU activity for the nine months ended September 30, 2022 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2022 $ 3,335,300 $ 12.82 $ 42,759 Granted — — — Vested — — — Forfeited — — — Outstanding, September 30, 2022 $ 3,335,300 $ 12.82 42,759 Operations-based performance-vesting RSU activity for the nine months ended September 30, 2022 was as follows: Underlying Shares Weighted-average Grant Date Fair Value Aggregate Fair Value Outstanding, January 1, 2021 1,597,272 $ 16.00 $ 25,556 Granted — — — Vested (532,424) 16.00 (8,519) Forfeited — — — Outstanding, September 30, 2022 1,064,848 $ 16.00 $ 17,037 |
INCOME (LOSS) PER SHARE (Tables
INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 2021 2022 2021 Numerator: Net (loss) income $ (66,303) $ 19,348 $ (162,550) $ 52,188 Minus: Income allocated to participating securities — 14,926 — 43,670 Net (loss) income attributable to common stockholders – basic $ (66,303) $ 4,422 $ (162,550) $ 8,518 Plus: Income allocated to non-participating securities — 701 — 2,142 Net (loss) income attributable to common stockholders - diluted $ (66,303) $ 5,123 $ (162,550) $ 10,660 Denominator: Basic weighted-average common shares outstanding 148,285,721 31,554,720 147,443,196 22,997,311 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 148,285,721 39,304,978 147,443,196 30,747,569 Net (loss) income attributable to common stockholders per share Basic $ (0.45) $ 0.14 $ (1.10) $ 0.37 Diluted $ (0.45) $ 0.13 $ (1.10) $ 0.35 |
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 2022 2021 2022 2021 Stock options 7,735,773 2,767,821 7,735,773 2,767,821 Restricted stock units 18,596,751 9,747,566 18,596,751 9,747,566 Employee stock purchase plan – shares projected to be issued 314,531 — 314,531 — Total 26,647,055 12,515,387 26,647,055 12,515,387 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following table provides a reconciliation of the change in estimated warranty liabilities: Amount Balance, December 31, 2021 $ 4,865 Provision for warranties 7,080 Provision for warranties related to the inventory charge (see Note 4, Inventories ) 12,263 Settlements (13,317) Balance, September 30, 2022 $ 10,891 |
BUSINESS AND BASIS OF ACCOUNT_2
BUSINESS AND BASIS OF ACCOUNTING (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Sep. 28, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | May 31, 2021 $ / shares | |
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock at public offering | $ | $ 0 | $ 230,000 | ||
Number of operating segments | segment | 1 | |||
Product Concentration Risk | Revenue Benchmark | Cue COVID-19 Test | ||||
Class of Stock [Line Items] | ||||
Concentration risk, percentage | 100% | |||
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 | |||
Convertible Debt | ||||
Class of Stock [Line Items] | ||||
Debt instrument, face amount | $ | $ 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 (in dollars per share) | $ / shares | $ 16 | $ 16 | ||
Proceeds from issuance of common stock at public offering | $ | $ 206,000 | |||
Over-Allotment Option | ||||
Class of Stock [Line Items] | ||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 1,875,000 |
REVENUE - Product Revenue By Cu
REVENUE - Product Revenue By Customer Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 69,589 | $ 223,679 | $ 336,699 | $ 425,601 |
Product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 66,660 | 222,594 | 328,465 | 424,516 |
Product revenue | Public sector entities | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 780 | 128,587 | 6,213 | 295,708 |
Product revenue | Private sector customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 65,880 | $ 94,007 | $ 322,252 | $ 128,808 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Product revenue | $ 69,589 | $ 223,679 | $ 336,699 | $ 425,601 |
Product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Product revenue | 66,660 | 222,594 | 328,465 | 424,516 |
Cost of product revenue | 50,595 | 88,569 | 239,190 | 173,746 |
Product gross profit | $ 16,065 | $ 134,025 | $ 89,275 | $ 250,770 |
Product gross profit margin | 24% | 60% | 27% | 59% |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||||
Inventory write-down | $ 2,600,000 | $ 45,500,000 | ||||
Inventory reserve | 33,191,000 | $ 0 | ||||
Product warranty reserve | 12,263,000 | 0 | ||||
Net contract assets | 400,000 | 400,000 | $ 1,100,000 | |||
Revenue | 69,589,000 | $ 223,679,000 | 336,699,000 | 425,601,000 | ||
Accounts receivable, allowance for doubtful accounts | 2,000,000 | 2,000,000 | $ 300,000 | |||
Product revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 66,660,000 | 222,594,000 | 328,465,000 | 424,516,000 | ||
Product revenue | United States Department of Defense | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Maximum percentage limit to purchase in quarterly production | 45% | |||||
Product revenue | Cue COVID-19 Test | United States Department of Defense | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Agreement value | $ 480,900,000 | |||||
Advance for scaling | 184,600,000 | |||||
Agreement value for sale of product | $ 296,300,000 | |||||
Grant and other revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 2,929,000 | 1,085,000 | 8,234,000 | 1,085,000 | ||
Grant and other revenue | Biomedical Advanced Research And Development Authority (BARDA) | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | $ 2,900,000 | $ 900,000 | $ 8,200,000 | $ 900,000 |
REVENUE - Contract Liability Ac
REVENUE - Contract Liability Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Contract With Customer, Liability Rollforward [Roll Forward] | |
Balance at December 31, 2021 | $ 92,448 |
Unearned revenue from cash received during the period, excluding amounts recognized as revenue during the period | 2,734 |
Revenue recognized related to contract liability balance at the beginning of the period | 0 |
Balance at September 30, 2022 | $ 95,182 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 75,594 | $ 75,594 | $ 46,273 | |
Work-in-process | 20,925 | 20,925 | 10,920 | |
Finished goods | 74,445 | 74,445 | 33,863 | |
Reserve | (37,655) | (37,655) | (2,668) | |
Total inventories | 133,309 | 133,309 | $ 88,388 | |
Inventory write-down | $ 2,600 | 45,500 | ||
Inventory reserve | 33,191 | $ 0 | ||
Product warranty reserve | $ 12,263 | $ 0 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expense | $ 31,561 | $ 30,153 |
Prepaid inventory | 12,794 | 15,736 |
Total prepaid expenses | $ 44,355 | $ 45,889 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 266,582 | $ 219,125 |
Accumulated depreciation and amortization | (72,323) | (41,669) |
Total property and equipment, net | 194,259 | 177,456 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 33,834 | 4,082 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 209,434 | 195,001 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 21,611 | 19,302 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,703 | $ 740 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 8.3 | $ 11.4 | $ 28.6 | $ 24.2 |
INTANGIBLE ASSETS - Finite-Live
INTANGIBLE ASSETS - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized software | $ 16,037 | $ 5,638 |
Accumulated amortization | (4,459) | (2,067) |
Capitalized software, net | 11,578 | 3,571 |
Total intangible assets | 16,044 | 7,673 |
In-process software development | ||
Finite-Lived Intangible Assets [Line Items] | ||
In-process software development | $ 4,466 | $ 4,102 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 1 | $ 0.2 | $ 2.4 | $ 1.9 |
INTANGIBLE ASSETS - Estimated A
INTANGIBLE ASSETS - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 16,044 | $ 7,673 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
2022 (excluding the nine months ended September 30, 2022) | 1,099 | |
2023 | 4,396 | |
2024 | 3,955 | |
2025 | 2,128 | |
Total intangible assets | $ 11,578 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Sep. 30, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Finance lease, remaining lease term (in years) | 1 year |
Operating lease, remaining lease term (in years) | 7 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Finance lease, remaining lease term (in years) | 3 years |
Operating lease, remaining lease term (in years) | 9 years |
LEASES - Right of Use Assets an
LEASES - Right of Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease right-of-use assets | $ 85,284 | $ 79,474 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Right-of-use assets finance leases | $ 7,723 | $ 9,821 |
Liabilities | ||
Operating lease liabilities (current) | 8,356 | 7,147 |
Finance lease liabilities (current) | 2,581 | 2,621 |
Operating lease liabilities (non-current) | 44,235 | 46,464 |
Finance lease liabilities (non-current) | $ 1,268 | $ 3,271 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 3,192 | $ 2,398 | $ 8,749 | $ 5,365 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 819 | 509 | 2,098 | 1,215 |
Interest on lease liabilities | 43 | 54 | 137 | 154 |
Total lease cost | $ 4,054 | $ 2,961 | $ 10,984 | $ 6,734 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued purchases | $ 4,535 | $ 285 |
Accrued payroll and benefits | 22,041 | 13,693 |
Accrued expenses | 3,154 | 6,371 |
Accrued sales tax | 6,484 | 4,284 |
Product warranty reserve | 10,891 | 4,865 |
Total accrued liabilities and other current liabilities | $ 47,105 | $ 29,498 |
DEBT (Details)
DEBT (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||
Jun. 30, 2022 USD ($) | Sep. 28, 2021 USD ($) $ / shares shares | Jun. 30, 2021 | May 31, 2021 USD ($) $ / shares shares | Feb. 28, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Nov. 30, 2021 USD ($) | Jul. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 1,998,000 | |||||||||
Conversion of convertible notes | $ 0 | $ 297,800,000 | 297,792,000 | ||||||||||
IPO | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 16 | $ 16 | |||||||||||
Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 235,500,000 | ||||||||||||
Accrued interest | $ 2,800,000 | ||||||||||||
Debt instrument, convertible, number of equity instruments (in shares) | shares | 18,611,914 | ||||||||||||
May 2021 Convertible Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 235,500,000 | ||||||||||||
Fair value adjustment loss on debt | $ 23,300,000 | ||||||||||||
Accrued interest | $ 2,800,000 | ||||||||||||
Debt instrument, convertible, number of equity instruments (in shares) | shares | 18,611,914 | ||||||||||||
Debt instrument, convertible, conversion discount period one | 20% | ||||||||||||
Long-term debt | $ 0 | ||||||||||||
Revolving Credit Facility | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | 0 | $ 0 | |||||||||||
Debt covenant, percent of eligible accounts receivable less sales tax liability | 80% | 80% | |||||||||||
Revolving Credit Facility | Line of Credit | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Asset coverage ratio | 1.20 | ||||||||||||
Revolving Credit Facility | Line of Credit | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Asset coverage ratio | 1 | ||||||||||||
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 | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate, stated percentage | 3.50% | 3.50% | |||||||||||
Prepayment fee | 1% | ||||||||||||
Interest rate, increase | 2% | ||||||||||||
Revolving Credit Facility | Revolving Credit Agreement | Line of Credit | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Current ratio | 1.20 | ||||||||||||
Revolving Credit Facility | Revolving Credit Agreement | Line of Credit | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Current ratio | 1 | ||||||||||||
Revolving Credit Facility | Revolving Credit Agreement | Comerica Bank | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | 500,000 | $ 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 | $ 6,000,000 | 130,000,000 | $ 130,000,000 | $ 12,000,000 | |||||||||
Repayments of lines of credit | 63,200,000 | ||||||||||||
Debt extinguishment, fee, percentage of outstanding commitment | 1% | ||||||||||||
Write off of deferred debt issuance cost | 700,000 | ||||||||||||
Loss on extinguishment of debt | $ 2,000,000 | ||||||||||||
Revolving Credit Facility | Secured Revolving Facility Agreement | East West Bank | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | |||||||||||
Letter of Credit | 2015 Credit Agreement | Comerica Bank | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit extension limit (up to) | 4,000,000 | ||||||||||||
Letter of Credit | Revolving Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Letters of credit outstanding | $ 12,000,000 | 12,500,000 | 12,500,000 | ||||||||||
Letter of Credit | Revolving Credit Agreement | East West Bank | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Additional letter of credit, issued | $ 500,000 | ||||||||||||
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 | ||||||||||||
Letter of Credit | Secured Revolving Facility Agreement | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Deferred financing cost | 600,000 | 600,000 | |||||||||||
Letter of Credit | Secured Revolving Facility Agreement | East West Bank | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Remaining borrowing capacity | $ 87,500,000 | $ 87,500,000 | |||||||||||
Letter of Credit | Secured Revolving Facility Agreement | East West Bank | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | $ 20,000,000 | |||||||||||
Bridge Loan | 2015 Credit Agreement | Comerica Bank | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit extension limit (up to) | $ 6,000,000 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
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 | 500,000,000 | 500,000,000 |
Preferred stock, shares authorized (in shares) | 50,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | ||
Common Stock Warrants | |||
Class of Stock [Line Items] | |||
Warrants outstanding (in shares) | 75,744 | ||
Exercise price of warrant (in dollars per share) | $ 0.40 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 0 | |||||
Weighted average remaining contractual term (years), outstanding | 6 years 3 months 29 days | 6 years 4 months 24 days | ||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unamortized share-based compensation cost related to unvested stock option awards | $ 9.4 | $ 9.4 | ||||
Expected period for recognition | 2 years 2 months 12 days | |||||
Share-based Payment Arrangement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation cost capitalized in inventory | 0.9 | $ 2.3 | $ 0.9 | $ 2.3 | ||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 4 years | |||||
Award vesting percentage | 25% | |||||
Unrecognized compensation cost | $ 150.2 | $ 150.2 | ||||
Weighted average remaining contractual term (years), outstanding | 3 years 4 months 24 days | |||||
Granted (in shares) | 10,484,399 | |||||
Operations-Based Performance-Vesting RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 1,597,272 | 0 | ||||
2021 Stock Purchase Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Annual percentage increase in shares available | 5% | |||||
Number of shares available for grant (in shares) | 3,619,826 | 3,619,826 | ||||
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 purchase plan – shares projected to be issued | ||||||
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% | |||||
Number of shares available for grant (in shares) | 4,151,321 | 4,151,321 | ||||
Annual increase, number of shares (in shares) | 8,504,263 | 8,504,263 | 8,504,263 | |||
Purchase price of common stock, percent | 85% |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 15,690 | $ 19,967 | $ 48,515 | $ 25,558 |
Cost of product revenues | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 865 | 302 | 2,267 | 1,500 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,441 | 11 | 6,718 | 37 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 6,212 | 294 | 17,780 | 884 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 7,172 | $ 19,359 | $ 21,750 | $ 23,136 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Company's Stock Option Activity (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Options | ||
Outstanding at beginning of period (in shares) | shares | 9,163,160 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (1,158,772) | |
Forfeited (in shares) | shares | (188,209) | |
Expired (in shares) | shares | (80,406) | |
Outstanding at end of period (in shares) | shares | 7,735,773 | 9,163,160 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 5.13 | |
Granted (in dollars per share) | $ / shares | 0 | |
Exercised (in dollars per share) | $ / shares | 0.52 | |
Forfeited (in dollars per share) | $ / shares | 12.46 | |
Expired (in dollars per share) | $ / shares | 14.62 | |
Outstanding at end of period (in dollars per share) | $ / shares | $ 5.55 | $ 5.13 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options, exercisable (in shares) | shares | 5,823,768 | |
Options, vested and expected to vest (in shares) | shares | 7,735,773 | |
Weighted average exercise price, exercisable (in dollars per share) | $ / shares | $ 3.71 | |
Weighted average exercise price, vested and expected to vest (in dollars per share) | $ / shares | $ 5.55 | |
Weighted average remaining contractual term (years), outstanding | 6 years 3 months 29 days | 6 years 4 months 24 days |
Weighted average remaining contractual term (years), exercisable | 5 years 9 months | |
Weighted average remaining contractual term (years), vested and expected to vest | 6 years 3 months 29 days |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of RSU and Performance-Vesting RSUs Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2022 | |
Restricted stock units | ||
Underlying Shares | ||
Outstanding, beginning balance (in shares) | 11,264,235 | |
Granted (in shares) | 10,484,399 | |
Vested (in shares) | (2,418,758) | |
Forfeited (in shares) | (733,125) | |
Outstanding, ending balance (in shares) | 18,596,751 | |
Weighted-average Grant Date Fair Value | ||
Outstanding, beginning balance(in dollars per share) | $ 14.62 | |
Granted (in dollars per share) | 6.28 | |
Vested (in dollars per share) | 14.54 | |
Forfeited (in dollars per share) | 11.63 | |
Outstanding, ending balance (in dollars per share) | $ 10.05 | |
Aggregate Fair Value | ||
Aggregate fair value, beginning balance | $ 164,683 | |
Granted | 65,842 | |
Vested | (35,169) | |
Forfeited | (8,526) | |
Aggregate fair value, ending balance | $ 186,830 | |
Market-Based Performance-Vesting RSUs | ||
Underlying Shares | ||
Outstanding, beginning balance (in shares) | 3,335,300 | |
Granted (in shares) | 3,335,300 | 0 |
Vested (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Outstanding, ending balance (in shares) | 3,335,300 | |
Weighted-average Grant Date Fair Value | ||
Outstanding, beginning balance(in dollars per share) | $ 12.82 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 0 | |
Outstanding, ending balance (in dollars per share) | $ 12.82 | |
Aggregate Fair Value | ||
Aggregate fair value, beginning balance | $ 42,759 | |
Granted | 0 | |
Vested | 0 | |
Forfeited | 0 | |
Aggregate fair value, ending balance | $ 42,759 | |
Operations-Based Performance-Vesting RSUs | ||
Underlying Shares | ||
Outstanding, beginning balance (in shares) | 1,597,272 | |
Granted (in shares) | 1,597,272 | 0 |
Vested (in shares) | (532,424) | |
Forfeited (in shares) | 0 | |
Outstanding, ending balance (in shares) | 1,064,848 | |
Weighted-average Grant Date Fair Value | ||
Outstanding, beginning balance(in dollars per share) | $ 16 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 16 | |
Forfeited (in dollars per share) | 0 | |
Outstanding, ending balance (in dollars per share) | $ 16 | |
Aggregate Fair Value | ||
Aggregate fair value, beginning balance | $ 25,556 | |
Granted | 0 | |
Vested | (8,519) | |
Forfeited | 0 | |
Aggregate fair value, ending balance | $ 17,037 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net (loss) income | $ (66,303) | $ 19,348 | $ (162,550) | $ 52,188 |
Minus: Income allocated to participating securities | 0 | 14,926 | 0 | 43,670 |
Net (loss) income attributable to common stockholders – basic | (66,303) | 4,422 | (162,550) | 8,518 |
Plus: Income allocated to non-participating securities | 0 | 701 | 0 | 2,142 |
Net (loss) income attributable to common stockholders - diluted | $ (66,303) | $ 5,123 | $ (162,550) | $ 10,660 |
Denominator: | ||||
Basic weighted-average common shares outstanding (in shares) | 148,285,721 | 31,554,720 | 147,443,196 | 22,997,311 |
Dilutive potential common stock issuable: | ||||
Diluted weighted-average shares outstanding (in shares) | 148,285,721 | 39,304,978 | 147,443,196 | 30,747,569 |
Net (loss) income attributable to common stockholders per share | ||||
Basic (in dollars per share) | $ (0.45) | $ 0.14 | $ (1.10) | $ 0.37 |
Diluted (in dollars per share) | $ (0.45) | $ 0.13 | $ (1.10) | $ 0.35 |
Stock options | ||||
Dilutive potential common stock issuable: | ||||
Stock options (in shares) | 0 | 7,660,707 | 0 | 7,660,707 |
Common Stock | ||||
Dilutive potential common stock issuable: | ||||
Common stock warrants (in shares) | 0 | 89,551 | 0 | 89,551 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 26,647,055 | 12,515,387 | 26,647,055 | 12,515,387 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7,735,773 | 2,767,821 | 7,735,773 | 2,767,821 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 18,596,751 | 9,747,566 | 18,596,751 | 9,747,566 |
Employee stock purchase plan – shares projected to be issued | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 314,531 | 0 | 314,531 | 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 1.60% | 60.90% | 2.70% | 45.40% |
Income tax credit | $ 1.7 | |||
Unrecognized tax benefits | $ 0.3 | $ 0.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) letter_of_credit | Nov. 30, 2021 USD ($) | Jul. 31, 2021 USD ($) | May 31, 2021 USD ($) | Feb. 28, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Standard product warranty, term | 12 months | |||||||||
Restructuring charges | $ 137,000 | $ 0 | $ 2,020,000 | $ 0 | ||||||
Number of LOC's in effect | letter_of_credit | 1 | |||||||||
Restricted cash | $ 800,000 | |||||||||
Revolving Credit Facility | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 0 | 0 | ||||||||
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 | ||||||
Line of credit facility increase | $ 500,000 | |||||||||
Revolving Credit Facility | Revolving Credit Agreement | Comerica Bank | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 500,000 | 500,000 | ||||||||
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 | |||||||||
Revolving Credit Facility | Secured Revolving Facility Agreement | East West Bank | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||||||
Letter of Credit | Revolving Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 12,500,000 | 12,500,000 | $ 12,000,000 | |||||||
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 | |||||||||
Letter of Credit | Secured Revolving Facility Agreement | East West Bank | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Remaining borrowing capacity | $ 87,500,000 | $ 87,500,000 | ||||||||
Letter of Credit | Secured Revolving Facility Agreement | East West Bank | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Product Warranty Liability (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance, December 31, 2021 | $ 4,865 |
Provision for warranties | 7,080 |
Provision for warranties related to the inventory charge | 12,263 |
Settlements | (13,317) |
Balance, September 30, 2022 | $ 10,891 |