SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS (Policies)	12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]
Basis of Accounting	The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting.
Basis of Consolidation	Basis of Consolidation The consolidated financial statements include the accounts of the parent company and subsidiary, after elimination of intercompany transactions.
Use of Estimates	The preparation of the accompanying 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. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to revenue recognition, net accounts receivable, stock-based compensation expense, product warranty reserve, the recoverability of its inventories and long-lived assets, net deferred tax assets (and related valuation allowance) and the fair value of Convertible Notes and common stock prior to the Company’s IPO. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.
Segment Reporting	Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. In addition, the guidance for segment reporting indicates certain quantitative materiality thresholds. The Company views its operations and manages its business in one operating segment which is consistent with how the Chief Executive Officer, who is the chief operating decision maker, reviews the business, makes investment and resource allocation decisions, and assesses operating performance. 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.
Cash and Cash Equivalents	Cash and cash equivalents consist of bank deposits. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Restricted Cash	Restricted cash consists primarily of cash that serves as collateral for the Company’s standby letters of credit. Any cash that is legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring long-term assets, liquidating a long-term liability, or is otherwise unavailable for a period longer than one year from the balance sheet date, the restricted cash is classified as a long-term asset. Otherwise, restricted cash is presented in current assets in the consolidated balance sheets.
Accounts Receivable	The Company grants credit to customers in the normal course of business and the resulting accounts receivable is stated at their net realizable value. The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to accounts receivable and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible.
Concentration of Credit Risk and Other Risk and Uncertainties	Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and trade accounts receivable. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and the deposits are held with large financial institutions. The Company had two customers that represented more than 10% of total product revenue for the year ended December 31, 2022, at 54% and 20%. For the year ended December 31, 2021, the Company had two customers that represented more than 10% of product revenue at 62% and 25%, respectively. For the year ended December 31, 2020, the Company had two customers that represented more than 10% of product revenue at 58% and 22%, respectively. As of December 31, 2022, accounts receivable from one customer with balances due in excess of 10% of total accounts receivable was 54%. As of December 31, 2021, accounts receivable from one customer with balances due in excess of 10% of total accounts receivable was 60%. The Company purchases certain components for its products from two specific suppliers. A change in or loss of these suppliers could cause a delay in filling customer orders and a possible loss of sales, which could adversely affect results of operations.
Inventories	Inventories are valued at lower of cost or net realizable value on a first in, first out basis. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Unabsorbed manufacturing costs are treated as expense in the period incurred. Provisions for excess and obsolete inventory are primarily based on the Company’s estimates of forecasted sales, usage levels, and expiration dates, as applicable for certain disposable products, and assumptions about obsolescence. Provisions are recorded against inventories on hand and for prepayments of excess inventories. Accrued losses are recorded for purchase commitments, measured in the same way as are inventory losses. If actual conditions are less favorable than those we have projected, we may need to increase our reserves for excess and obsolete inventories. Any increases in our reserves will adversely impact our results of operations. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If we are able to sell such inventory any related reserves would be reversed in the period of sale. The value of the inventories that are not expected to be sold within one year of the current reporting period is classified as non-current inventories on the accompanying consolidated balance sheets. Non-current inventories consist of completed Cue Readers and Cue Reader component parts. This inventory is not subject to expiration and is expected to be utilized with future Cue Test Kits.
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. Subject to certain limitations, the Company currently provides some customers with the right to receive a replacement Cue Cartridge for tests that do not produce a valid result, for a period of up to ninety days from the date the test is performed. All warranties are classified as current liabilities within the accrued liabilities and other current liabilities on the consolidated 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.
Fair Value Measurements and Financial Instruments, Fair Value of Common Stock	The carrying value of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these items. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the Company’s long-term borrowings approximates its fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s redeemable convertible preferred stock warrant liabilities and convertible notes are measured at fair value on a recurring basis and are classified as Level 3 liabilities, see Note 12, Fair Value Measurements. The Company records subsequent adjustments to reflect the increase or decrease in estimated fair value at each reporting date in current period earnings. Prior to the IPO, the fair value of the shares of common stock underlying the Company’s stock-based awards was estimated on each grant date by its Board of Directors. In order to determine the fair value of its common stock underlying option grants, the Company’s board of directors considered, among other things, valuations of its common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
Property and Equipment, Net	Property and equipment, net, which consist of manufacturing equipment, laboratory equipment, furniture and fixtures, computers and software, office equipment and leasehold improvements, are stated at cost less depreciation. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the remaining lease term, including any renewal periods that the Company is reasonably certain to exercise. Repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred.
Intangible Assets, Net	Intangible assets, net are recorded at cost and amortized on a straight-line basis over their estimated useful lives. Intangible assets consist of capitalized software costs incurred in the development of internal-use software. The Company determined that costs incurred during the application development stage that are directly related to the actual development of the software are capitalized, while costs incurred in the preliminary project and post implementation stage are expensed as incurred. Additionally, indirect costs related to the software development during the application development stage are expensed as incurred and maintenance costs are expensed as incurred. The Company has concluded that given the rapid changes in technology, the software has a useful life of three years and is amortized on a straight-line basis.
Leases	The Company determines if an arrangement is a lease at inception and if so, determines whether the lease qualifies as an operating or finance lease. Lease balances are included in the consolidated balance sheets as right-of-use assets and lease liabilities. The Company does not recognize right-of-use assets and lease liabilities for short-term leases, which have terms of 12 months or less, on its consolidated balance sheet. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. When the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement dates in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow over a similar term, and on a collateralized basis, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise such options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Cloud Computing Arrangements	These cloud computing arrangements were primarily related to implementation of the Company’s enterprise resource planning system and customer relationship management system, among other software implementations. These costs were recorded in other non-current assets in the consolidated balance sheets.
Deferred Offering Costs	The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received from the equity financing. If a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the consolidated statements of operations.
Impairment of Long-Lived Assets	Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or an asset group may not be recoverable. If such triggering event is determined to have occurred, the asset’s or asset group’s carrying value is compared to the future undiscounted cash flows expected to be generated. If the carrying value exceeds the undiscounted cash flows of the asset, then an impairment exists. An impairment charge is measured as the excess of the asset’s carrying value over its fair value. There were no impairment charges recorded for the years ended December 31, 2022, 2021 and 2020.
Common Stocks Warrants	Common stock warrants are measured at their estimated fair value upon issuance and recorded in additional paid-in capital. Common stock warrants are classified as equity and no subsequent remeasurement is required.
Redeemable Convertible Preferred Stock Warrants and Redeemable Convertible Preferred Stock	The Company accounts for its redeemable convertible preferred stock warrants as liabilities based upon the characteristics and provisions of each instrument. The redeemable convertible preferred stock warrants classified as liabilities are recorded on the Company’s consolidated balance sheets at their fair values on the date of issuance and are revalued on each subsequent balance sheet date, with fair value changes recognized as increases or reductions in the consolidated statement of operations. All of the Company’s outstanding redeemable convertible preferred stock warrants were exercised and converted into shares of Series A and Series B redeemable convertible preferred stock prior to the IPO.Prior to the completion of the IPO, the Company had multiple classes of redeemable convertible preferred stock, all of which were classified as temporary equity in the accompanying consolidated balance sheet as the redemption of the shares were outside of the Company's control.
Revenue Recognition	Product Revenue The Company generates revenue from the sale of its products to government entities, healthcare providers, commercial customers, distributors, and direct-to-consumer (“DTC”) sales. The Company considers purchase orders, which are governed by agreements with a customer, to be a contract with a customer. The contract terms with customers, range in length, from one-time purchases to six-month or twelve-month commitments on a subscription basis where customers purchase a fixed number of products on a monthly basis. DTC sales are conducted via the Company’s website where customers can purchase individual products and subscribe to a Cue+ Membership. The Company considers the DTC customers’ agreement to the terms and conditions at the point of purchase to be a contract with a customer. Cue Readers, Cue Enterprise Dashboards, and Cue Test Kits, composed of Cue Cartridges and Cue Wands, are considered distinct performance obligations. The Cue Health App is integral to the functionality of the Cue Reader and these two components form a single performance obligation. Revenue allocated to Cue Readers and Cue Test Kits is recognized when control of the promised goods has transferred to customers, generally upon shipment, in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Revenue allocated to Cue Enterprise Dashboards is recognized ratably over the term of the service. The Company’s contracts with its customers do not provide for open return rights. The Company estimates returns of products due to defective or nonconforming Cue Readers and replacement Cue Cartridges and records a provision for estimated expenses related to product warranty at the time products are sold. In addition to the above performance obligations, Cue also has performance obligations which include service components comprised of virtual care capabilities accessible through the App. Cue Care provides telemedicine (access to chat with board-certified physicians) and the Company also generates revenue from video proctoring of tests. The transaction price is measured as the amount of consideration the Company expects to receive in exchange for the goods transferred to customers. A contract’s transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis. The Company estimates standalone selling prices for groups of customers with similar circumstances and characteristics. To fulfill its promise to customers for contracts that include telemedicine, the Company maintains relationships with medical service providers, which are professional corporations or other professional entities owned by licensed physicians that engage licensed medical professionals (medical doctors, physician assistants, and nurse practitioners; collectively referred to as “Providers”) to provide telemedicine services. The Company determined that it is an agent in the telemedicine arrangement with its customers because (i) the Providers determine which specific medical services are to be provided during the consultation and (ii) the Providers are primarily responsible for the satisfactory fulfillment and acceptability of the services. As an agent in the telemedicine portion of the contract, the Company recognizes the revenue allocated to the service net of the costs incurred to deliver the service. Revenue from telemedicine services is recognized at a point in time at the inception of the contract with a customer. The Company recognizes receivables when there is an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract. Payment terms are typically 30 to 45 days. No adjustments to consideration are made for financing as the Company expects, at contract inception, that the period between the transfer of a promised good or service and when the customer pays for that good or service will be one year or less. The Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer. See Note 3, Revenue Recognition, for details regarding disaggregation of product revenue by type of customer for the years ended December 31, 2022, 2021 and 2020. Deferred Revenue In October 2020, the Company received a $184.6 million upfront payment (“U.S. DoD Advance”) from the U.S. DoD to increase production capacity of its Cue COVID-19 Test. The Company concluded that the activities related to increasing production do not represent a performance obligation as those activities do not transfer a product or service to the customer. Instead, the upfront payment is an advanced payment for future goods or services because the agreement with the U.S. government included an option to renew the contract which included a material right to obtain products in a future contract at a specified discount, subject to a price floor, from prices offered to commercial customers with a similar volume of purchases. Deferred revenue is recognized upon satisfaction of performance obligations by reference to the total goods or services expected to be provided to the customer, including an estimate of future performance obligations under expected contract renewals, and the corresponding expected consideration or when it is determined that the likelihood of exercise of any material right associated with deferred revenue becomes remote. Grant and Other Revenue Arrangements under which the Company receives grants or contracts to conduct research and development activities constitute non-exchange transactions. Revenue from non-exchange transactions is recognized to the extent of costs incurred in the period, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding. Costs are included in research and development expenses. The Company may enter into collaboration agreements with third parties to conduct research and development activities. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of operations based on the nature of the underlying activity. When the Company has concluded that it has a customer relationship with one of its collaborators, the Company follows the guidance in ASC Topic 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). See Note 3, Revenue Recognition, for details regarding the Company’s agreements with the Biomedical Advanced Research and Development Authority (“BARDA”). 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. Contract assets at the beginning of and end of the year ended December 31, 2022, as well as changes in the balance, were not material. Contract liabilities primarily relate to the U.S. DoD Advance and were recorded in current and non-current deferred revenue on the consolidated balance sheets. See Note 3, Revenue Recognition, for details regarding the activity related to contract liabilities. Cost of Product Revenue Cost of product revenue includes the cost of materials, direct labor, inclusive of salaries and other related costs, including stock-based compensation, depreciation, and manufacturing overhead costs used in the manufacturing of the Cue Test Kits as well as contract manufacturing costs associated with production of the Cue Readers. Cost of product revenue also includes inventory reserve provisions and external-use software development costs. Shipping and Handling Costs The Company elected to account for shipping and handling as activities to fulfill the promise the goods and records them as cost of product revenue.
Sales and Marketing Expense, General and Administrative Expenses	Sales and marketing expense consist primarily of salaries and other related costs, including stock-based compensation, for personnel in sales and marketing, customer support, advertising costs and business development functions. Advertising costs are expensed as incurred. For the years ended December 31, 2022 and 2021, advertising costs were $42.3 million and $15.4 million, respectively. Advertising costs were not material during the year ended December 31, 2020. The Company’s general and administrative expenses consists primarily of salaries and other related costs, including stock-based compensation, for personnel in its executive, finance, and administrative functions. General and administrative expense also includes professional fees for legal, patent, accounting, information technology, auditing, tax and consulting services, travel expenses as well as depreciation and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs. Patent Costs Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are included in general and administrative expenses.
Research and Development Expenses, Accrued Research and Development Costs	Research and development expenses are expensed as incurred. Research and development expenses are primarily comprised of costs and expenses for salaries and other related costs, including stock-based compensation, associated with research and development personnel, contract services, laboratory supplies, facilities, depreciation, and outside services. Costs associated with the Company’s grant and collaboration agreements as well as costs associated with products produced for research and development purposes are recorded within research and development expenses. Accrued Research and Development Costs The Company records accrued expenses for estimated costs of its research and development activities conducted by third-party service providers, which include clinical trial activities, based on the estimated amount of services or supplies provided but not yet invoiced and include these costs in accrued liabilities in the consolidated balance sheets and within research and development expense in the consolidated statements of operations. Any payments made in advance of services or supplies provided are recorded as prepaid assets, which are expensed as the services or supplies are received. The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. Significant judgments and estimates are made in determining the accrued balance in each reporting period. As actual costs become known, the Company adjusts its accrued estimates.
Stock-Based Compensation	The Company estimates the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model on the date of grant. The fair value of equity instruments expected to vest are recognized and amortized on a straight-line basis over the requisite service period of the award, which is generally three to four years; however, the Company’s equity compensation plans allow for any vesting schedule as the Company’s Board of Directors may deem appropriate. The Compensation Committee with oversight from Board of Directors determines the number of shares, the term, the frequency and date, the type, the exercise periods, any performance criteria pursuant to which awards may be granted, and the restrictions and other terms and conditions of each grant in accordance with terms of the plan. The Company recognizes forfeitures as incurred. The BSM option pricing model incorporates various estimates, including the fair value of the Company’s common stock, expected volatility, expected term and risk-free interest rates. The weighted-average expected term of options was calculated using the simplified method. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility incorporates the historical volatility over the expected term of the award of comparable companies whose share prices are publicly available. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield was zero, as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future. There were no options granted during the year ended December 31, 2022. The fair value of restricted stock units (RSUs) is determined based on the fair value of the Company’s common stock at the grant date. The RSUs generally have a vesting term of four years. For RSUs with performance-based vesting conditions, compensation cost is recognized when it is probable that the performance criteria will be achieved. For RSUs with market-based vesting conditions, compensation cost is based on the fair value of the award at grant date and recorded over the requisite service period. Compensation cost is not adjusted if the market condition is not met, as long as the requisite service is provided. The Company estimates the fair value of stock-based payment for awards with market conditions on the date of grant using a Monte Carlo simulation model.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. There have been no items qualifying as other comprehensive income (loss) and, therefore, the Company’s comprehensive income (loss) was the same as its reported net income (loss).
Income Taxes	The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the bases of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would adjust the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability.
Liquidity	The Company’s operations have been primarily financed through a combination of our IPO proceeds, other financing activities, and product sales. Prior to August 2020, we had never generated any revenue from the commercial sale of products, and we had devoted substantially all of our resources to the research and development of our Cue Health Monitoring System. We only first started realizing revenue from commercial product sales in August 2020 following receipt of our first EUA from the U.S. Food and Drug Administration, or FDA, in June 2020 for our COVID-19 test. Our COVID-19 test includes a Cue Reader and a Cue COVID-19 Test Kit comprised of a Cue COVID-19 Cartridge and a Cue Wand. Since receiving our first FDA EUA, we have incurred significant additional expenses in connection with the commercial scale up of our business, including costs associated with scaling up our manufacturing operations, costs associated with the production of our COVID-19 test, sales and marketing expenses, and costs associated with the hiring of new employees, the growth of our business and building out our corporate infrastructure. We expect that our near and longer-term liquidity requirement will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with sales and marketing expense associated with increasing market awareness of our platform and brand generally to individual consumers, enterprises and other target customers, additional research and development expenses associated with expanding our care offerings, expenses associated with being a public company. Our short-term capital expenditure needs relate primarily to the expansion of our research and development capabilities and optimization of existing business processes. The Company has an accumulated deficit of $218.1 million as of December 31, 2022. During the year ended December 31, 2022, the Company has incurred negative cash flows as a result of expending significant resources in expanding its activities combined with a tempering of COVID-19 test demand. This has resulted in a loss from operations, which is expected to continue for at least the next twelve months as we continue to invest in the build out of our commercial organization and corporate infrastructure, as well as our manufacturing capabilities, and continue to engage in research and development as we work to expand our available tests. Our ability to regain profitability is based on numerous factors, many of which are beyond our control, including, among other factors, market acceptance of our products, the length of the COVID-19 pandemic or future epidemics or public health emergencies, future product development, and our ability to expand our menu of tests. Our inability to achieve and maintain profitability, whether in the near term or longer term, may make it difficult to continue to grow our business and accomplish our strategic objectives, and could materially adversely affect our business, financial condition, results of operations and future prospects. The Company believes that its existing cash and cash equivalents and availability under the revolving facility agreement are sufficient for the Company to meet its obligations through at least one year from the date of issuance of the consolidated financial statements. If the Company is unable to achieve and maintain profitability, it will need additional financing to support its continuing operations and pursue its strategic objectives. Additional financing may be achieved through a combination of equity offerings, and debt financings. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all.
Recently Adopted Accounting Pronouncements and New Accounting Pronouncements Not Yet Adopted	None. New Accounting Pronouncements Not Yet Adopted In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). 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 2016-13 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. We are currently updating our existing allowance for doubtful accounts policy and enhancing our controls in order to comply with the new standard and expect the impact to consolidated financial statement to be immaterial.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 Company is currently evaluating the impact of ASU 2020-06 on its financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS (Policies)

12 Months Ended

Dec. 31, 2022

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting.

Basis of Consolidation

The consolidated financial statements include the accounts of the parent company and subsidiary, after elimination of intercompany transactions.

Use of Estimates

The preparation of the accompanying 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.

Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to revenue recognition, net accounts receivable, stock-based compensation expense, product warranty reserve, the recoverability of its inventories and long-lived assets, net deferred tax assets (and related valuation allowance) and the fair value of Convertible Notes and common stock prior to the Company’s IPO. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Segment Reporting

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. In addition, the guidance for segment reporting indicates certain quantitative materiality thresholds. The Company views its operations and manages its business in one operating segment which is consistent with how the Chief Executive Officer, who is the chief operating decision maker, reviews the business, makes investment and resource allocation decisions, and assesses operating performance. 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.

Cash and Cash Equivalents

Cash and cash equivalents consist of bank deposits. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Restricted Cash

Restricted cash consists primarily of cash that serves as collateral for the Company’s standby letters of credit. Any cash that is legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring long-term assets, liquidating a long-term liability, or is otherwise unavailable for a period longer than one year from the balance sheet date, the restricted cash is classified as a long-term asset. Otherwise, restricted cash is presented in current assets in the consolidated balance sheets.

Accounts Receivable

The Company grants credit to customers in the normal course of business and the resulting accounts receivable is stated at their net realizable value. The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to accounts receivable and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible.

Concentration of Credit Risk and Other Risk and Uncertainties

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and trade accounts receivable. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and the deposits are held with large financial institutions.

The Company had two customers that represented more than 10% of total product revenue for the year ended December 31, 2022, at 54% and 20%. For the year ended December 31, 2021, the Company had two customers that

represented more than 10% of product revenue at 62% and 25%, respectively. For the year ended December 31, 2020, the Company had two customers that represented more than 10% of product revenue at 58% and 22%, respectively.

As of December 31, 2022, accounts receivable from one customer with balances due in excess of 10% of total accounts receivable was 54%. As of December 31, 2021, accounts receivable from one customer with balances due in excess of 10% of total accounts receivable was 60%.

The Company purchases certain components for its products from two specific suppliers. A change in or loss of these suppliers could cause a delay in filling customer orders and a possible loss of sales, which could adversely affect results of operations.

Inventories

Inventories are valued at lower of cost or net realizable value on a first in, first out basis. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Unabsorbed manufacturing costs are treated as expense in the period incurred.

Provisions for excess and obsolete inventory are primarily based on the Company’s estimates of forecasted sales, usage levels, and expiration dates, as applicable for certain disposable products, and assumptions about obsolescence. Provisions are recorded against inventories on hand and for prepayments of excess inventories. Accrued losses are recorded for purchase commitments, measured in the same way as are inventory losses. If actual conditions are less favorable than those we have projected, we may need to increase our reserves for excess and obsolete inventories. Any increases in our reserves will adversely impact our results of operations. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If we are able to sell such inventory any related reserves would be reversed in the period of sale.

The value of the inventories that are not expected to be sold within one year of the current reporting period is classified as non-current inventories on the accompanying consolidated balance sheets. Non-current inventories consist of completed Cue Readers and Cue Reader component parts. This inventory is not subject to expiration and is expected to be utilized with future Cue Test Kits.

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. Subject to certain limitations, the Company currently provides some customers with the right to receive a replacement Cue Cartridge for tests that do not produce a valid result, for a period of up to ninety days from the date the test is performed. All warranties are classified as current liabilities within the accrued liabilities and other current liabilities on the consolidated 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.

Fair Value Measurements and Financial Instruments, Fair Value of Common Stock

The carrying value of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these items. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the Company’s long-term borrowings approximates its fair value.

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company’s redeemable convertible preferred stock warrant liabilities and convertible notes are measured at fair value on a recurring basis and are classified as Level 3 liabilities, see Note 12, Fair Value Measurements. The Company records subsequent adjustments to reflect the increase or decrease in estimated fair value at each reporting date in current period earnings.

Prior to the IPO, the fair value of the shares of common stock underlying the Company’s stock-based awards was estimated on each grant date by its Board of Directors. In order to determine the fair value of its common stock underlying option grants, the Company’s board of directors considered, among other things, valuations of its common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Property and Equipment, Net

Property and equipment, net, which consist of manufacturing equipment, laboratory equipment, furniture and fixtures, computers and software, office equipment and leasehold improvements, are stated at cost less depreciation. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the remaining lease term, including any renewal periods that the Company is reasonably certain to exercise. Repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred.

Intangible Assets, Net

Intangible assets, net are recorded at cost and amortized on a straight-line basis over their estimated useful lives. Intangible assets consist of capitalized software costs incurred in the development of internal-use software. The Company determined that costs incurred during the application development stage that are directly related to the actual development of the software are capitalized, while costs incurred in the preliminary project and post implementation stage are expensed as incurred. Additionally, indirect costs related to the software development during the application development stage are expensed as incurred and maintenance costs are expensed as incurred. The Company has concluded that given the rapid changes in technology, the software has a useful life of three years and is amortized on a straight-line basis.

Leases

The Company determines if an arrangement is a lease at inception and if so, determines whether the lease qualifies as an operating or finance lease. Lease balances are included in the consolidated balance sheets as right-of-use assets and lease liabilities. The Company does not recognize right-of-use assets and lease liabilities for short-term leases, which have terms of 12 months or less, on its consolidated balance sheet.

Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. When the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement dates in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow over a similar term, and on a collateralized basis, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise such options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Cloud Computing Arrangements

These cloud computing arrangements were primarily related to implementation of the Company’s enterprise resource planning system and customer relationship management system, among other software implementations. These costs were recorded in other non-current assets in the consolidated balance sheets.

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received from the equity financing. If a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or an asset group may not be recoverable. If such triggering event is determined to have occurred, the asset’s or asset group’s carrying value is compared to the future undiscounted cash flows expected to be generated. If the carrying value exceeds the undiscounted cash flows of the asset, then an impairment exists. An impairment charge is measured as the excess of the asset’s carrying value over its fair value. There were no impairment charges recorded for the years ended December 31, 2022, 2021 and 2020.

Common Stocks Warrants

Common stock warrants are measured at their estimated fair value upon issuance and recorded in additional paid-in capital. Common stock warrants are classified as equity and no subsequent remeasurement is required.

Redeemable Convertible Preferred Stock Warrants and Redeemable Convertible Preferred Stock

The Company accounts for its redeemable convertible preferred stock warrants as liabilities based upon the characteristics and provisions of each instrument. The redeemable convertible preferred stock warrants classified as liabilities are recorded on the Company’s consolidated balance sheets at their fair values on the date of issuance and are revalued on each subsequent balance sheet date, with fair value changes recognized as increases or reductions in the consolidated statement of operations. All of the Company’s outstanding redeemable convertible preferred stock warrants were exercised and converted into shares of Series A and Series B redeemable convertible preferred stock prior to the IPO.Prior to the completion of the IPO, the Company had multiple classes of redeemable convertible preferred stock, all of which were classified as temporary equity in the accompanying consolidated balance sheet as the redemption of the shares were outside of the Company's control.

Revenue Recognition

Product Revenue

The Company generates revenue from the sale of its products to government entities, healthcare providers, commercial customers, distributors, and direct-to-consumer (“DTC”) sales.

The Company considers purchase orders, which are governed by agreements with a customer, to be a contract with a customer. The contract terms with customers, range in length, from one-time purchases to six-month or twelve-month commitments on a subscription basis where customers purchase a fixed number of products on a monthly basis. DTC sales are conducted via the Company’s website where customers can purchase individual products and subscribe to a Cue+ Membership. The Company considers the DTC customers’ agreement to the terms and conditions at the point of purchase to be a contract with a customer.

Cue Readers, Cue Enterprise Dashboards, and Cue Test Kits, composed of Cue Cartridges and Cue Wands, are considered distinct performance obligations. The Cue Health App is integral to the functionality of the Cue Reader and these two components form a single performance obligation. Revenue allocated to Cue Readers and Cue Test Kits is recognized when control of the promised goods has transferred to customers, generally upon shipment, in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Revenue allocated to Cue Enterprise Dashboards is recognized ratably over the term of the service.

The Company’s contracts with its customers do not provide for open return rights. The Company estimates returns of products due to defective or nonconforming Cue Readers and replacement Cue Cartridges and records a provision for estimated expenses related to product warranty at the time products are sold.

In addition to the above performance obligations, Cue also has performance obligations which include service components comprised of virtual care capabilities accessible through the App. Cue Care provides telemedicine (access to chat with board-certified physicians) and the Company also generates revenue from video proctoring of tests.

The transaction price is measured as the amount of consideration the Company expects to receive in exchange for the goods transferred to customers. A contract’s transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis. The Company estimates standalone selling prices for groups of customers with similar circumstances and characteristics.

To fulfill its promise to customers for contracts that include telemedicine, the Company maintains relationships with medical service providers, which are professional corporations or other professional entities owned by licensed physicians that engage licensed medical professionals (medical doctors, physician assistants, and nurse practitioners; collectively referred to as “Providers”) to provide telemedicine services. The Company determined that it is an agent in the telemedicine arrangement with its customers because (i) the Providers determine which specific medical services are to be provided during the consultation and (ii) the Providers are primarily responsible for the satisfactory fulfillment and acceptability of the services. As an agent in the telemedicine portion of the contract, the Company recognizes the revenue

allocated to the service net of the costs incurred to deliver the service. Revenue from telemedicine services is recognized at a point in time at the inception of the contract with a customer.

The Company recognizes receivables when there is an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract. Payment terms are typically 30 to 45 days. No adjustments to consideration are made for financing as the Company expects, at contract inception, that the period between the transfer of a promised good or service and when the customer pays for that good or service will be one year or less.

The Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer.

See Note 3, Revenue Recognition, for details regarding disaggregation of product revenue by type of customer for the years ended December 31, 2022, 2021 and 2020.

Deferred Revenue

In October 2020, the Company received a $184.6 million upfront payment (“U.S. DoD Advance”) from the U.S. DoD to increase production capacity of its Cue COVID-19 Test. The Company concluded that the activities related to increasing production do not represent a performance obligation as those activities do not transfer a product or service to the customer. Instead, the upfront payment is an advanced payment for future goods or services because the agreement with the U.S. government included an option to renew the contract which included a material right to obtain products in a future contract at a specified discount, subject to a price floor, from prices offered to commercial customers with a similar volume of purchases.

Deferred revenue is recognized upon satisfaction of performance obligations by reference to the total goods or services expected to be provided to the customer, including an estimate of future performance obligations under expected contract renewals, and the corresponding expected consideration or when it is determined that the likelihood of exercise of any material right associated with deferred revenue becomes remote.

Grant and Other Revenue

Arrangements under which the Company receives grants or contracts to conduct research and development activities constitute non-exchange transactions. Revenue from non-exchange transactions is recognized to the extent of costs incurred in the period, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding. Costs are included in research and development expenses.

The Company may enter into collaboration agreements with third parties to conduct research and development activities. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of operations based on the nature of the underlying activity. When the Company has concluded that it has a customer relationship with one of its collaborators, the Company follows the guidance in ASC Topic 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”).

See Note 3, Revenue Recognition, for details regarding the Company’s agreements with the Biomedical Advanced Research and Development Authority (“BARDA”).

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. Contract assets at the beginning of and end of the year ended December 31, 2022, as well as changes in the balance, were not material.

Contract liabilities primarily relate to the U.S. DoD Advance and were recorded in current and non-current deferred revenue on the consolidated balance sheets. See Note 3, Revenue Recognition, for details regarding the activity related to contract liabilities.

Cost of Product Revenue

Cost of product revenue includes the cost of materials, direct labor, inclusive of salaries and other related costs, including stock-based compensation, depreciation, and manufacturing overhead costs used in the manufacturing of the Cue Test Kits as well as contract manufacturing costs associated with production of the Cue Readers. Cost of product revenue also includes inventory reserve provisions and external-use software development costs.

Shipping and Handling Costs

The Company elected to account for shipping and handling as activities to fulfill the promise the goods and records them as cost of product revenue.

Sales and Marketing Expense, General and Administrative Expenses

Sales and marketing expense consist primarily of salaries and other related costs, including stock-based compensation, for personnel in sales and marketing, customer support, advertising costs and business development functions. Advertising costs are expensed as incurred. For the years ended December 31, 2022 and 2021, advertising costs were $42.3 million and $15.4 million, respectively. Advertising costs were not material during the year ended December 31, 2020.

The Company’s general and administrative expenses consists primarily of salaries and other related costs, including stock-based compensation, for personnel in its executive, finance, and administrative functions. General and administrative expense also includes professional fees for legal, patent, accounting, information technology, auditing, tax and consulting services, travel expenses as well as depreciation and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs.

Patent Costs

Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are included in general and administrative expenses.

Research and Development Expenses, Accrued Research and Development Costs

Research and development expenses are expensed as incurred. Research and development expenses are primarily comprised of costs and expenses for salaries and other related costs, including stock-based compensation, associated with research and development personnel, contract services, laboratory supplies, facilities, depreciation, and outside services. Costs associated with the Company’s grant and collaboration agreements as well as costs associated with products produced for research and development purposes are recorded within research and development expenses.

Accrued Research and Development Costs

The Company records accrued expenses for estimated costs of its research and development activities conducted by third-party service providers, which include clinical trial activities, based on the estimated amount of services or supplies provided but not yet invoiced and include these costs in accrued liabilities in the consolidated balance sheets and within research and development expense in the consolidated statements of operations. Any payments made in advance of services or supplies provided are recorded as prepaid assets, which are expensed as the services or supplies are received.

The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. Significant judgments and estimates are made in determining the accrued balance in each reporting period. As actual costs become known, the Company adjusts its accrued estimates.

Stock-Based Compensation

The Company estimates the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model on the date of grant. The fair value of equity instruments expected to vest are recognized and amortized on a straight-line basis over the requisite service period of the award, which is generally three to four years; however, the Company’s equity compensation plans allow for any vesting schedule as the Company’s Board of Directors may deem appropriate. The Compensation Committee with oversight from Board of Directors determines the number of shares, the term, the frequency and date, the type, the exercise periods, any performance criteria pursuant to which awards may be granted, and the restrictions and other terms and conditions of each grant in accordance with terms of the plan. The Company recognizes forfeitures as incurred.

The BSM option pricing model incorporates various estimates, including the fair value of the Company’s common stock, expected volatility, expected term and risk-free interest rates. The weighted-average expected term of options was calculated using the simplified method. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility incorporates the historical volatility over the expected term of the award of comparable companies whose share prices are publicly available. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield was zero, as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future. There were no options granted during the year ended December 31, 2022.

The fair value of restricted stock units (RSUs) is determined based on the fair value of the Company’s common stock at the grant date. The RSUs generally have a vesting term of four years. For RSUs with performance-based vesting conditions, compensation cost is recognized when it is probable that the performance criteria will be achieved. For RSUs with market-based vesting conditions, compensation cost is based on the fair value of the award at grant date and recorded over the requisite service period. Compensation cost is not adjusted if the market condition is not met, as long as the requisite service is provided. The Company estimates the fair value of stock-based payment for awards with market conditions on the date of grant using a Monte Carlo simulation model.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. There have been no items qualifying as other comprehensive income (loss) and, therefore, the Company’s comprehensive income (loss) was the same as its reported net income (loss).

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the bases of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would adjust the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the

related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability.

Liquidity

The Company’s operations have been primarily financed through a combination of our IPO proceeds, other financing activities, and product sales. Prior to August 2020, we had never generated any revenue from the commercial sale of products, and we had devoted substantially all of our resources to the research and development of our Cue Health Monitoring System. We only first started realizing revenue from commercial product sales in August 2020 following receipt of our first EUA from the U.S. Food and Drug Administration, or FDA, in June 2020 for our COVID-19 test. Our COVID-19 test includes a Cue Reader and a Cue COVID-19 Test Kit comprised of a Cue COVID-19 Cartridge and a Cue Wand. Since receiving our first FDA EUA, we have incurred significant additional expenses in connection with the commercial scale up of our business, including costs associated with scaling up our manufacturing operations, costs associated with the production of our COVID-19 test, sales and marketing expenses, and costs associated with the hiring of new employees, the growth of our business and building out our corporate infrastructure.

We expect that our near and longer-term liquidity requirement will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with sales and marketing expense associated with increasing market awareness of our platform and brand generally to individual consumers, enterprises and other target customers, additional research and development expenses associated with expanding our care offerings, expenses associated with being a public company. Our short-term capital expenditure needs relate primarily to the expansion of our research and development capabilities and optimization of existing business processes.

The Company has an accumulated deficit of $218.1 million as of December 31, 2022. During the year ended December 31, 2022, the Company has incurred negative cash flows as a result of expending significant resources in expanding its activities combined with a tempering of COVID-19 test demand. This has resulted in a loss from operations, which is expected to continue for at least the next twelve months as we continue to invest in the build out of our commercial organization and corporate infrastructure, as well as our manufacturing capabilities, and continue to engage in research and development as we work to expand our available tests. Our ability to regain profitability is based on numerous factors, many of which are beyond our control, including, among other factors, market acceptance of our products, the length of the COVID-19 pandemic or future epidemics or public health emergencies, future product development, and our ability to expand our menu of tests. Our inability to achieve and maintain profitability, whether in the near term or longer term, may make it difficult to continue to grow our business and accomplish our strategic objectives, and could materially adversely affect our business, financial condition, results of operations and future prospects.

The Company believes that its existing cash and cash equivalents and availability under the revolving facility agreement are sufficient for the Company to meet its obligations through at least one year from the date of issuance of the consolidated financial statements. If the Company is unable to achieve and maintain profitability, it will need additional financing to support its continuing operations and pursue its strategic objectives. Additional financing may be achieved through a combination of equity offerings, and debt financings. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all.

Recently Adopted Accounting Pronouncements and New Accounting Pronouncements Not Yet Adopted

None.

New Accounting Pronouncements Not Yet Adopted

In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). 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 2016-13 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. We are currently updating our existing allowance for doubtful accounts policy and enhancing our controls in order to comply with the new standard and expect the impact to consolidated financial statement to be immaterial.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 Company is currently evaluating the impact of ASU 2020-06 on its financial statements.