Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8‑K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 28, 2019
NantHealth, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
001-37792
 
27-3019889
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
9920 Jefferson Boulevard
Culver City, California 90232
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (310) 883-1300

Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  x


 





Item 2.02
Results of Operations and Financial Condition.

On March 28, 2019, NantHealth, Inc. publicly disseminated a press release announcing its financial results for the year ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01
Financial Statements and Exhibits.

(d) Exhibits. The following is furnished as an exhibit to this Current Report on Form 8-K:

Exhibit No.
Description






EXHIBIT INDEX
Exhibit No.
Description






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
NantHealth, Inc.
 
 
 
 
Date:
March 28, 2019
By:
 
/s/ Bob Petrou
 
 
 
 
Bob Petrou
 
 
 
 
Chief Financial Officer
 
 
 
 
(Principal Financial and Accounting Officer)


Exhibit





Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12806641&doc=3
 
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
 

NANTHEALTH REPORTS 2018 FOURTH-QUARTER, FULL-YEAR FINANCIAL RESULTS

Total Revenue in Q4 was $22.9 Million
SaaS revenue of $17.3 million in Q4, up 9% from Q3
Enhanced efficiencies continued to drive significantly lower operating expenses in both Q4 and full year of 2018
For 2018, substantially improved adjusted Non-GAAP bottom line results
Sequencing and Molecular Analysis, 1,021 total tests ordered in Q4, including 539 GPS Cancer® and 482 Liquid GPSSM Tests; continued sequential quarterly growth in total tests ordered

Culver City, Calif. - March 28, 2019 - NantHealth, Inc. (NASDAQ-GS: NH), a next-generation, evidence-based, personalized healthcare company, today reported financial results for its fourth quarter ended December 31, 2018.

“Our financial results over 2018 reflect continued overall progress to our business,” said Bob Petrou, Interim Chief Financial Officer of NantHealth. “On a sequential quarterly basis, we grew revenue, significantly lowered total operating expenses and reduced our cash burn. We are particularly pleased with the growth of our entire SaaS business. Looking ahead, our well-developed sales pipeline bodes well for the company’s topline, and our entire team is focused on further growing the business, managing costs and driving meaningful improvement in our financial performance.”

Software and Services Highlights:
Clinical Decision Support (Eviti):
In Q4, deployed release 7.5, with new features that include:
A new configuration, known as the Treatment Warning and Deviation Configuration, that enables payers to display custom drug deviation messages, enhancing value-based care and compliance with payer guidelines
A new analyzer deviation that supports the Febrile Neutropenia (FN) risk factor associated with white blood cell (WBC) growth factors, a key driver of regimen costs
Updated the Medical Policy QA report that assists partners/resellers with their internal quality assurance process
Enhanced the Precision Insights Portal, features include:
All treatment plans that are presented to a user are saved and stored, enabling analytics for the understanding of treatment plan trends and improvement in the presentation of the plans to users
Enhanced drug mapping management feature in the portal enables a comparison of the Precision Insights portal recommended drugs to the evidence based Eviti drug recommendation to help align to the standard of care library

Payer Engagement (NaviNet):
Completed 12 client service implementation projects in Q4, for a total of 57 in 2018
In Q4, introduced two key features for NaviNet Open
Routing Attributes for Document Exchange were enhanced to provide health plans more control over document routing to users








NaviNet Open subscribers are now provided a detailed view of user activity for all Authorization Appeals in a monthly report delivered to the health plan
In December 2018, at the Healthcare Payers Transformation Assembly hosted by the Millennium Alliance, the company met with Payer groups and led a roundtable discussion entitled, “Looking at the Challenges Health Plans Face with the Convergence of Precision Medicine and Value Based Care.” As a result, the company is engaged in a number of ongoing sales conversations based on discussions initiated at this event

Connected Care (DeviceConX):
In Q4, completed a DeviceConX implementation in Sweden, which included our first deployment with physiological waveform capabilities
In Q4, as previously announced, collaborated with B. Braun Australia, GE Healthcare and iProcedures to demonstrate the exchange of data between patient devices and medical records at the Interoperability Showcase™ as part of the Healthcare Information and Management Systems Society (HIMSS) Asia Pacific Conference
Significantly increased connectivity license sales in Q1, driving improved recurring maintenance revenue on a go forward basis
In Q1, deployed DeviceConX Version 5.15 upgrade, with the ability to push OS security patches directly to HBox Connected Care hardware devices

Sequencing and Molecular Analysis - Highlights
In Q4, total orders (GPS Cancer and Liquid GPS) increased 10% to 1,021 from 930 in Q3
In Q4, the company expanded the molecular analysis reporting of GPS Cancer to provide information on a patient’s pharmacogenomic profile. These results, now available in the GPS Cancer test report, provide insights into potential drug toxicity and/or interactions
In December 2018, at the San Antonio Breast Cancer Symposium, the company and NantOmics presented the findings of three investigations, which examine the theme of providing oncologists with insights that enable cancer treatment tailored to the individual characteristics of each patient
In Q4, expanded existing employer reimbursement contract with Northwest Firefighters Benefits Trust to include Liquid GPS coverage and signed a net new reimbursement contract for both GPS Cancer and Liquid GPS with an additional city fire/police employee trust

Business and Financial Highlights
The company adopted a new revenue recognition standard on January 1, 2018. Please note that the financial results presented below include only new revenue standard values. For additional information and reconciliations of the company’s financial results between the new and previous revenue recognition standard, see the additional tables included in this press release and in the company’s Form 10-K to be filed with the Securities and Exchange Commission.

For the 2018 full year, total net revenue increased 3.2% to $89.5 million from $86.7 million in 2017. Gross profit was $45.2 million, or 51% of total net revenue, compared with $45.2 million, or 52% of total net revenue, for the prior year. Selling, general and administrative (SG&A) expenses decreased to $70.8 million from $75.0 million in 2017. Research and development (R&D) expenses decreased to $20.9 million from $33.9 million in 2017.

Financial results for 2018 included a non-cash charge for loss from related party equity method investment, including impairment, of $108.4 million, and an unrealized loss from change in fair value of the Bookings Commitment liability of $16.9 million. Net loss from continuing operations, net of tax, was $190.4 million, or $1.74 per share, compared with $131.4 million, or $1.12 per share, for the 2017 full year. Loss from discontinued operations, net of tax, was $1.7 million, or $0.02 per share, compared with $43.8 million, or $0.37 per share. Net loss was $192.2 million, or $1.76 per share, compared with $175.2 million, or $1.49 per share, for 2017.









For the 2018 full year, on a non-GAAP basis, adjusted net loss from continuing operations was $44.5 million, or $0.41 per share, compared with $55.5 million, or $0.47 per share, for 2017.

For the 2018 fourth quarter, total net revenue was $22.9 million, compared with $22.3 million in 2017 fourth quarter. Gross profit was $11.5 million, or 50% of total net revenue, compared with $13.4 million, or 60% of total net revenue, for the prior year. SG&A expenses declined to $14.6 million, from $20.8 million in 2017 fourth quarter. R&D expenses decreased to $5.0 million from $8.8 million.

Financial results for the fourth quarter of 2018 included a non-cash charge for loss from related party equity method investment, including impairment, of $18.9 million, and an unrealized loss from change in fair value of the Bookings Commitment liability of $16.9 million. Net loss from continuing operations, net of tax, was $49.2 million, or $0.45 per share, compared with $22.6 million, or $0.21 per share, for the 2017 fourth quarter. Net loss was $49.1 million, or $0.45 per share, compared with $21.6 million, or $0.20 per share, for 2017 fourth quarter.

For the 2018 fourth quarter, on a non-GAAP basis, adjusted net loss from continuing operations was $9.0 million, or $0.08 per share, compared with $7.8 million, or $0.07 per share, for the 2017 fourth quarter.

In August 2017, NantHealth sold its provider/patient engagement assets to Allscripts to focus on core competencies and accelerate the plan to achieve profitability. As a result, the company has classified the current and prior period operating results of its provider/patient engagement business as discontinued operations. All results presented above represent the company’s continuing operations.

Conference Call Information and Forward-Looking Statements
Later today, the company will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) to review its results of operations for the fourth quarter ended December 31, 2018. The conference call will be available to interested parties by dialing 844-309-3709 from the U.S. or Canada, or 281-962-4864 from international locations, passcode 1059708. The call will be broadcast via the Internet at www.nanthealth.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding topics such as the company’s financial status and performance, regulatory and operational developments, and other comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial measures, including adjusted net loss and adjusted net loss per share, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. Other companies may define these measures in different ways. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. Non-GAAP per share numbers are calculated based on one class of common stock and do not incorporate the effects, if any, of using the two-class method.









About NantHealth, Inc.
NantHealth, a member of the NantWorks ecosystem of companies, provides leading solutions across the continuum of care for physicians, payers, patients and biopharmaceutical organizations. NantHealth enables the use of cutting edge data and technology towards the goal of empowering clinical decision support and improving patient outcomes. NantHealth’s comprehensive product portfolio combines the latest technology in molecular analysis (GPS Cancer® and Liquid GPSSM payer/provider platforms that exchange information in near-real time (NaviNet and Eviti), and connected care solutions that deliver Medical Device Interoperability (MDI). NantHealth’s GPS Cancer® molecular profiling provides comprehensive DNA & RNA tumor-normal profiling combined with pharmacogenomics analysis. Liquid GPSSM provides non-invasive testing of cfDNA and cfRNA to monitor cancer mutations and potentially select targeted therapies, chemotherapies, and immunotherapies. For more information, please visit www.nanthealth.com.

About GPS Cancer®
GPS Cancer® is a unique, comprehensive test available through NantHealth. GPS Cancer integrates tumor/normal DNA and RNA sequencing, with enhanced expression analysis and bioinformatics of complex biologic pathway systems, providing oncologists with a comprehensive molecular profile of a patient’s cancer to inform personalized treatment strategies. GPS Cancer testing is conducted in CLIA-certified and CAP-accredited laboratories. For more information, visit https://www.nanthealth.com/gps-cancer/.

About Liquid GPSSM 
Liquid GPS is a blood-based molecular test that provides oncologists with a powerful tool for noninvasive tumor profiling and quantitative monitoring of treatment response. Liquid GPS looks beyond cfDNA to cfRNA, which allows profiling and trending of actionable biomarkers that cannot be assessed through cfDNA alone. In addition to providing molecular insight into key guidelines-based biomarkers (e.g., EGFR, ALK, ROS1, KRAS), this powerful RNA-based approach enables a variety of capabilities and applications not typically available from a liquid biopsy test. For more information, visit https://www.nanthealth.com/liquid-gps/.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. Risks and uncertainties include, but are not limited to: our ability to successfully integrate a complex learning system to address a wide range of healthcare issues; our ability to successfully amass the requisite data to achieve maximum network effects; appropriately allocating financial and human resources across a broad array of product and service offerings; raising additional capital as necessary to fund our operations; achieving significant commercial market acceptance for our sequencing and molecular analysis solutions; establish relationships with, key thought leaders or payers’ key decision makers in order to establish GPS Cancer and Liquid GPS as a standard of care for patients with cancer; our ability to grow the market for our Systems Infrastructure, and applications; successfully enhancing our Systems Infrastructure and applications to achieve market acceptance and keep pace with technological developments; customer concentration; competition; security breaches; bandwidth limitations; our ability to continue our relationship with NantOmics; our ability to obtain regulatory approvals; dependence upon senior management; the need to comply with and meet applicable laws and regulations; unexpected adverse events; clinical adoption and market acceptance of GPS Cancer and Liquid GPS; and anticipated cost savings. We undertake no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in our reports filed with the Securities and Exchange Commission.


# # #
FINANCIAL TABLES FOLLOW









NantHealth, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited) 
 
December 31,
 
2018
 
2017
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
18,305

 
$
61,660

Accounts receivable, net
15,286

 
11,491

Inventories
496

 
839

Deferred implementation costs

 
1,960

Related party receivables, net
1,007

 
585

Prepaid expenses and other current assets
4,350

 
5,358

Total current assets
39,444

 
81,893

Property, plant, and equipment, net
22,978

 
18,517

Deferred implementation costs, net of current

 
3,951

Goodwill
115,930

 
114,625

Intangible assets, net
64,703

 
69,424

Investment in related party
40,000

 
156,863

Related party receivable, net of current
1,611

 
1,727

Other assets
1,671

 
2,195

Total assets
$
286,337

 
$
449,195

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
1,650

 
$
3,164

Accrued and other current liabilities
13,832

 
18,134

Deferred revenue
16,263

 
10,057

Related party payables, net
4,791

 
4,504

Total current liabilities
36,536

 
35,859

Deferred revenue, net of current
6,704

 
7,126

Related party liabilities
17,708

 
11,500

Related party promissory note
112,666

 
112,666

Related party convertible note, net
8,378

 
7,947

Convertible notes, net
79,433

 
74,845

Other liabilities
22,081

 
5,950

Total liabilities
283,506

 
255,893

Stockholders' equity
 
 
 
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 109,491,277 and 108,383,602 shares issued and outstanding at December 31, 2018 (including 1 share of restricted stock) and 2017 (including 3,490 shares of restricted stock), respectively
11

 
10

Additional paid-in capital
887,289

 
886,669

Accumulated deficit
(884,122
)
 
(693,233
)
Accumulated other comprehensive loss
(347
)
 
(144
)
Total stockholders' equity
2,831

 
193,302

Total liabilities and stockholders' equity
$
286,337

 
$
449,195









NantHealth, Inc.  
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)  
(Unaudited)  

 
Three Months Ended 
 December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Total net revenue
$
22,862

 
$
22,298

 
$
89,464

 
$
86,676

 
 
 
 
 
 
 
 
Total cost of revenue
11,393

 
8,880

 
44,269

 
41,522

Gross profit
11,469

 
13,418

 
45,195

 
45,154

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Selling, general and administrative
14,638

 
20,795

 
70,763

 
74,976

Research and development
5,041

 
8,811

 
20,916

 
33,862

Amortization of acquisition-related assets
1,054

 
1,054

 
4,217

 
4,216

Total operating expenses
20,733

 
30,660

 
95,896

 
113,054

Loss from operations
(9,264
)
 
(17,242
)
 
(50,701
)
 
(67,900
)
Interest expense, net
(4,354
)
 
(4,119
)
 
(17,120
)
 
(16,168
)
Other (loss) income, net
(16,948
)
 
492

 
(17,876
)
 
800

Loss from related party equity method investment, including impairment
(18,898
)
 
(3,981
)
 
(108,409
)
 
(50,334
)
Loss from continuing operations before income taxes
(49,464
)
 
(24,850
)
 
(194,106
)
 
(133,602
)
Benefit from income taxes
(244
)
 
(2,288
)
 
(3,673
)
 
(2,203
)
Net loss from continuing operations
(49,220
)
 
(22,562
)
 
(190,433
)
 
(131,399
)
Income (loss) from discontinued operations, net of tax
97

 
928

 
(1,719
)
 
(43,812
)
Net loss
$
(49,123
)
 
$
(21,634
)
 
$
(192,152
)
 
$
(175,211
)
 
 
 
 
 
 
 
 
Basic and diluted net loss per share
 
 
 
 
 
 
 
Continuing operations - common stock
$
(0.45
)
 
$
(0.21
)
 
$
(1.74
)
 
$
(1.12
)
Discontinued operations - common stock
$

 
$
0.01

 
$
(0.02
)
 
$
(0.37
)
Total net loss per common stock
$
(0.45
)
 
$
(0.20
)
 
$
(1.76
)
 
$
(1.49
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic and diluted - common stock
109,490,441

 
107,810,546

 
109,168,798

 
116,737,860









NantHealth, Inc.  
Consolidated Statements of Operations
Reconciliation of Results Under ASC 606 and ASC 605
(Dollars in thousands, except per share amounts)
(Unaudited)


Three Months Ended 
 December 31, 2018

As Reported

Adjustments Due To ASC 606 (1)

Without New Revenue Standard
Total net revenue
$
22,862


$
(642
)

$
22,220










Total cost of revenue
11,393


2


11,395

Gross profit
11,469


(644
)

10,825







Operating Expenses:





Selling, general and administrative
14,638


(114
)

14,524

Research and development
5,041




5,041

Amortization of acquisition-related assets
1,054




1,054

Total operating expenses
20,733


(114
)

20,619

Loss from operations
(9,264
)

(530
)

(9,794
)
Interest expense, net
(4,354
)



(4,354
)
Other (loss) income, net
(16,948
)

1


(16,947
)
Loss from related party equity method investment, including impairment
(18,898
)



(18,898
)
Loss from continuing operations before income taxes
(49,464
)

(529
)

(49,993
)
(Benefit from) provision for income taxes
(244
)

589


345

Net loss from continuing operations
(49,220
)

(1,118
)

(50,338
)
Income (loss) from discontinued operations, net of tax
97




97

Net loss
$
(49,123
)

$
(1,118
)

$
(50,241
)






Basic and diluted net loss per share





Continuing operations - common stock
$
(0.45
)

$
(0.01
)

$
(0.46
)






Weighted average shares outstanding:





Basic and diluted - common stock
109,490,441





109,490,441


(1) 
Financial Accounting Standards Board, ASC 606 Revenue from contracts with customers ("ASC 606")

















NantHealth, Inc.  
Consolidated Statements of Operations
Reconciliation of Results Under ASC 606 and ASC 605
(Dollars in thousands, except per share amounts)
(Unaudited)



Year Ended December 31, 2018


As Reported

Adjustments Due To ASC 606 (1)

Without New Revenue Standard
Total net revenue

$
89,464


$
(2,255
)

$
87,209










Total cost of revenue

44,269


(108
)

44,161

Gross profit

45,195


(2,147
)

43,048








Operating Expenses:







Selling, general and administrative

70,763


302


71,065

Research and development

20,916




20,916

Amortization of acquisition-related assets

4,217




4,217

Total operating expenses

95,896


302


96,198

Loss from operations

(50,701
)

(2,449
)

(53,150
)
Interest expense, net

(17,120
)



(17,120
)
Other (loss) income, net

(17,876
)



(17,876
)
Loss from related party equity method investment, including impairment

(108,409
)



(108,409
)
Loss from continuing operations before income taxes

(194,106
)

(2,449
)

(196,555
)
(Benefit from) provision for income taxes

(3,673
)

225


(3,448
)
Net loss from continuing operations

(190,433
)

(2,674
)

(193,107
)
Income (loss) from discontinued operations, net of tax

(1,719
)



(1,719
)
Net loss

$
(192,152
)

$
(2,674
)

(194,826
)










Basic and diluted net loss per share






Continuing operations - common stock

$
(1.74
)

$
(0.03
)

$
(1.77
)







Weighted average shares outstanding:






Basic and diluted - common stock

109,168,798





109,168,798


(1) 
Financial Accounting Standards Board, ASC 606 Revenue from contracts with customers ("ASC 606")









NantHealth, Inc.
Supplemental Revenue Schedule
(Dollars in thousands)
(Unaudited)

 
Three Months Ended 
 December 31,
 
Year Ended 
 December 31,
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
 
 
 
 
 
Software-as-a-service related
$
17,326

 
$
15,781

 
$
65,646

 
$
60,730

Software and hardware related
744

 
2,248

 
4,534

 
7,648

Maintenance
2,477

 
2,239

 
9,834

 
10,421

Total software-related revenue
20,547

 
20,268

 
80,014

 
78,799

Sequencing and molecular analysis
622

 
569

 
3,129

 
2,554

Home health care services
1,693

 
1,461

 
6,321

 
5,323

Total net revenue
$
22,862

 
$
22,298

 
$
89,464

 
$
86,676

 
 
 
 
 
 
 
 
Cost of Revenue:
 
 
 
 
 
 
 
Software-as-a-service related
$
5,488

 
$
4,652

 
$
23,691

 
$
21,939

Software and hardware related
923

 
964

 
3,335

 
4,749

Maintenance
241

 
185

 
924

 
749

Amortization of developed technologies
1,233

 
1,143

 
4,933

 
5,172

Total software-related cost of revenue
7,885

 
6,944

 
32,883

 
32,609

Sequencing and molecular analysis
2,612

 
1,222

 
8,055

 
6,084

Home health care services
896

 
714

 
3,331

 
2,829

Total cost of revenue
$
11,393

 
$
8,880

 
$
44,269

 
$
41,522









NantHealth, Inc.
Non-GAAP Net Loss from Continuing Operations and Non-GAAP Net Loss Per Share from Continuing Operations
(Dollars in thousands, except per share amounts)
(Unaudited)

 
 
Three Months Ended 
 December 31,
 
Year Ended 
 December 31,
 
 
2018
 
2017
 
2018
 
2017
Net loss from continuing operations
 
$
(49,220
)
 
$
(22,562
)
 
$
(190,433
)
 
$
(131,399
)
Adjustments to GAAP net loss:
 
 
 
 
 
 
 
 
Corporate restructuring from continuing operations (1)
 

 
17

 

 
2,422

Acquisition related sales incentive
 
425

 
671

 
1,420

 
2,732

Intangible amortization from continuing operations
 
2,287

 
2,197

 
9,150

 
9,388

Loss from related party equity method investment including impairment loss
 
18,898

 
3,981

 
108,409

 
50,334

Non-cash interest expense related to convertible notes
 
1,316

 
1,157

 
5,019

 
4,417

Change in fair value of derivatives liability
 

 
(19
)
 
(7
)
 
(264
)
Change in fair value of Bookings Commitment
 
16,947

 

 
16,947

 

Stock-based compensation expense from continuing operations
 
852

 
8,586

 
5,657

 
8,102

Securities litigation costs
 
(392
)
 
92

 
1,317

 
777

Impairment of equity securities
 

 

 
1,750

 

Tax benefit resulting from certain non-cash tax items
 
(111
)
 
(1,909
)
 
(3,760
)
 
(1,976
)
Total adjustments to GAAP net loss from continuing operations
 
40,222

 
14,773

 
145,902

 
75,932

Net loss - Non-GAAP from continuing operations
 
$
(8,998
)
 
$
(7,789
)
 
$
(44,531
)
 
$
(55,467
)
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
109,490,441

 
107,810,546

 
109,168,798

 
116,737,860

 
 
 
 
 
 
 
 
 
Net loss per share from continuing operations - Non-GAAP
 
$
(0.08
)
 
$
(0.07
)
 
$
(0.41
)
 
$
(0.47
)








Reconciliation of Net Loss from Continuing Operations per Common Share to Net Loss per Common Share from Continuing Operations - Non-GAAP (Unaudited):

 
Three Months Ended 
 December 31,
 
Year Ended 
 December 31,
 
2018
 
2017
 
2018
 
2017
Net loss per common share from continuing operations - GAAP
$
(0.45
)
 
$
(0.21
)
 
$
(1.74
)
 
$
(1.12
)
Adjustments to GAAP net loss per common share from continuing operations:
 
 
 
 
 
 
 
Corporate restructuring from continuing operations (1)

 

 

 
0.02

Acquisition related sales incentive

 
0.01

 
0.01

 
0.02

Intangible amortization from continuing operations
0.02

 
0.02

 
0.08

 
0.08

Loss from related party equity method investment including impairment loss
0.17

 
0.04

 
0.98

 
0.43

Non-cash interest expense related to convertible notes
0.01

 
0.01

 
0.05

 
0.04

Change in fair value of derivatives liability

 

 

 

Change in fair value of Bookings Commitment
0.16

 

 
0.16

 

Stock-based compensation expense from continuing operations
0.01

 
0.08

 
0.05

 
0.07

Securities litigation costs

 

 
0.01

 
0.01

Impairment of equity securities

 

 
0.02

 

Tax benefit resulting from certain non-cash tax items

 
(0.02
)
 
(0.03
)
 
(0.02
)
Total adjustments to GAAP net loss per common share from continuing operations
0.37

 
0.14

 
1.33

 
0.65

Net loss per common share from continuing operations - Non-GAAP
$
(0.08
)
 
$
(0.07
)
 
$
(0.41
)
 
$
(0.47
)

(1) 
Corporate restructuring includes accrued bonus reversal of $0.5 million for the year ended December 31, 2017.