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Cue Health Files for Bankruptcy, Receives Nasdaq Delisting Warning

NEW YORK – Cue Health has filed for bankruptcy and received a warning from the Nasdaq about its stock being delisted, according to documents filed with the US Securities and Exchange Commission. 

Last week, the San Diego-based firm shut down operations after laying off all of its remaining employees, including its executive team. In a Form 8-K filed with the SEC, Cue Health said it has filed voluntary petitions under Chapter 7 of the US Bankruptcy Code in the District of Delaware to pursue a wind down of its business. 

The firm said it "has been working diligently to strengthen the company’s financial foundation, including taking a number of actions to reduce costs and improve operational efficiency." Cue Health also "undertook an extensive process to locate additional financing or effect a strategic transaction," but after a comprehensive review, the board of directors and Cue's advisers "concluded that it is in the best interest of the company and its stakeholders to file for Chapter 7 relief." 

A bankruptcy trustee will be appointed to gather and sell Cue Health's assets and use the proceeds to pay creditors, the firm noted. 

In addition, the firm received a warning letter from the Nasdaq last week notifying it that it is out of compliance with the rule requiring companies to file all required periodic reports with the SEC in a timely manner. Cue was delinquent in filing its Form 10-Q for the first quarter of 2024. The firm also has not satisfied the listing requirement to maintain a minimum bid price of $1.00 per share. 

While Cue has until July 22 to submit a plan of compliance to the Nasdaq, the company said it does not intend to submit such a plan and expects its common stock will be delisted. 

Cue also noted that it has terminated its loan and security agreement with Comerica Bank and East West Bank that provided a $100.0 million secured revolving credit facility and a $20.0 million letter of a credit subfacility.