Concerned Stockholders of Cue Health Send Letter to Board
07 10월 2023 - 8:57AM
Business Wire
- Cue Health founder and investor, Kelly Day, and certain other
stockholders
- Calls on the Board to reign in undisciplined expansion and cut
expenditures
- Board should include direct stockholder representation to hold
management to account
Kelly Day and other concerned stockholders who collectively own
7.5% of Cue Health, Inc. (the “Company” or “Cue Health”) (NASDAQ:
HLTH) outstanding stock sent a letter to the board of directors of
Cue Health outlining their urgent concerns for the Company.
The full text of the letter follows:
October 6, 2023
Board of Directors Cue Health, Inc. 4980 Carroll Canyon Rd.,
Suite 100 San Diego, CA 92121
Members of the Board of Directors (the “Board”):
As you know, I was the founder of Cue Health, Inc. (“Cue Health”
or the “Company”) and an investor from the Company’s first seed
round, through subsequent rounds of its financing, and together
with certain other stockholders of the Company (the “Concerned
Stockholders”), own approximately 7.5% of Cue Health’s outstanding
stock. We are long time and deeply engaged stockholders of the
Company. We have reviewed the letter sent by Tarsadia Investments,
LLC to the Company on August 31, 2023, and while we are acting
independently and in our own interests, we believe that they raise
valid concerns regarding the Company.
Since its founding in 2010, Cue Health has developed
game-changing diagnostics to enable lab-quality care at home, work
or at the point of care. The Company enjoyed a substantially
validating moment when Cue’s COVID-19 test received Emergency Use
Authorization from the FDA in June 2020.
However, rather than recognize that the dramatic increase in
Covid-related product revenue was temporary, the Board and
management team took this as a sign to undertake an undisciplined
expansion of the Company’s business outside of its singular area of
excellence. Cue Health has entered fields where it has no prior
expertise or track record and is attempting to compete with
well-funded and well-established competitors.
As a direct consequence, Cue Health’s expenditures have soared,
even as its post-Covid revenues have plummeted. Cue Health’s
quarterly cash burn is alarming, and unless it is brought under
control, we believe it threatens to imperil the Company’s future,
or condemns it to seeking a massively dilutive and punitive
financing. As stockholders are well aware, the markets have
recognized that the Company is on an unsustainable path.
The Concerned Stockholders believe that the Board must take
immediate action to stabilize the Company, substantially reduce its
cash burn, and focus on its core diagnostic business. We continue
to believe that Cue Health’s core technology and diagnostic
platform remains the Company’s foremost value creation opportunity
and should receive the full attention and resources of the Board
and management team.
Cue Health must also remain financially positioned to weather
potential regulatory delays and setbacks, without being
substantially compromised. We believe that management may be guided
by a sense of unwarranted optimism regarding the Company’s future
clinical prospects, and as such has disregarded fiscal
prudence.
Finally, based on the Company’s performance and decision-making
to-date, the Concerned Stockholders believe that the Board is not
adequately supervising management and holding it to account. We
believe the Board should reflect a greater representation of direct
stockholder voices to ensure that it is acting independently of
management.
We are also prepared to meet with the independent members of the
Board to further discuss our views as soon as possible.
I founded Cue Health because I believed in its vision and
potential. The Company’s current course threatens the substantial
progress Cue Health has made and risks its key potential value
creation opportunity. The Concerned Stockholders urge the Board to
heed our voices as long-term stockholders and take action
today.
Sincerely,
Kelly Day, on behalf of the Concerned Stockholders
This document contains forward-looking statements. Such
statements are sometimes indicated by words such as “expects,”
“believes,” “will” and similar expressions. In addition, any
statements that refer to targets, expectations, projections or
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. Such
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual returns could differ materially and
adversely from those expressed or implied in any forward-looking
statements as a result of various factors. Certain information
included in this material is based on data obtained from sources
considered to be reliable. No representation is made with respect
to the accuracy or completeness of such data.
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CueStockholder@gmail.com
Cue Health (NASDAQ:HLTH)
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Cue Health (NASDAQ:HLTH)
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