Post by icemandios on Jan 26, 2024 0:36:35 GMT
Item 2.05 Costs Associated with Exit or Disposal Activities.
On January 25, 2024, Cue Health Inc. (“Cue” or the “Company”) implemented a new cost reduction plan (the “CRP”). Management, with the oversight and guidance of the Company’s board of directors, determined to implement the CRP following a review of the Company’s business and operating expenses. The CRP is intended to reduce the Company’s cost structure and improve its operational efficiency beyond the expected cost savings of the cost reduction plans announced on January 5, 2023, April 28, 2023 and January 5, 2024 in the Current Reports on Form 8-K filed with Securities and Exchange Commission on January 5, 2023, April 28, 2023 and January 5, 2024, respectively.
The CRP will include a reduction in the Company’s employee base by 151 employees, which constitutes a reduction of approximately 24% in the Company’s global workforce. In connection with the CRP, the Company estimates that it will record an aggregate restructuring charge related to one-time termination benefits in the range of approximately $3.2 million to $4.0 million. The substantial majority of these charges will result in cash expenditures.
Cash expenditures in connection with the CRP consist of payments for salary, benefits, and unused paid time off for the affected employees from January 25, 2024 through their termination dates, which are expected to occur in late March 2024, reflecting the 60-day notice period required under any applicable Worker Adjustment and Retraining Notification Act. The CRP will also consist of a severance package that includes a cash severance payment and payments to cover the employer premiums and administration fees for continuation of healthcare coverage for a limited period. The severance package, in some cases, may also include an acceleration of the vesting of certain outstanding restricted stock units to affected employees, and in connection therewith, the Company estimates that it will incur non-cash charges of approximately $0.1 million.
Each affected employee’s eligibility for the severance benefits is contingent upon such employee’s execution (and no revocation) of a separation agreement, which includes a general release of claims against the Company. The Company expects payments relating to the CRP to be completed by the end of the third quarter of 2024.
On January 25, 2024, Cue Health Inc. (“Cue” or the “Company”) implemented a new cost reduction plan (the “CRP”). Management, with the oversight and guidance of the Company’s board of directors, determined to implement the CRP following a review of the Company’s business and operating expenses. The CRP is intended to reduce the Company’s cost structure and improve its operational efficiency beyond the expected cost savings of the cost reduction plans announced on January 5, 2023, April 28, 2023 and January 5, 2024 in the Current Reports on Form 8-K filed with Securities and Exchange Commission on January 5, 2023, April 28, 2023 and January 5, 2024, respectively.
The CRP will include a reduction in the Company’s employee base by 151 employees, which constitutes a reduction of approximately 24% in the Company’s global workforce. In connection with the CRP, the Company estimates that it will record an aggregate restructuring charge related to one-time termination benefits in the range of approximately $3.2 million to $4.0 million. The substantial majority of these charges will result in cash expenditures.
Cash expenditures in connection with the CRP consist of payments for salary, benefits, and unused paid time off for the affected employees from January 25, 2024 through their termination dates, which are expected to occur in late March 2024, reflecting the 60-day notice period required under any applicable Worker Adjustment and Retraining Notification Act. The CRP will also consist of a severance package that includes a cash severance payment and payments to cover the employer premiums and administration fees for continuation of healthcare coverage for a limited period. The severance package, in some cases, may also include an acceleration of the vesting of certain outstanding restricted stock units to affected employees, and in connection therewith, the Company estimates that it will incur non-cash charges of approximately $0.1 million.
Each affected employee’s eligibility for the severance benefits is contingent upon such employee’s execution (and no revocation) of a separation agreement, which includes a general release of claims against the Company. The Company expects payments relating to the CRP to be completed by the end of the third quarter of 2024.