|
|
|
Delaware
|
|
001-37792
|
|
27-3019889
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits
.
|
|
|
|
|
NantHealth, Inc.
|
|
|
|
|
|
Date:
|
November 15, 2018
|
By:
|
|
/s/ Bob Petrou
|
|
|
|
|
Bob Petrou
|
|
|
|
|
Interim Chief Financial Officer
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
Total Revenue in Q3 was $22.3 Million
|
◦
|
SaaS revenue of $15.9 million in Q3, up 5% from $15.2 million in prior year Q3
|
◦
|
Enhanced efficiencies continued to drive reduced operating expenses and improved adjusted bottom line results
|
•
|
Sequencing and Molecular Analysis, 930 total tests ordered in Q3, including 461 GPS Cancer® and 469 Liquid GPS® Tests; continued sequential quarterly growth in total tests ordered
|
•
|
Appointed new executives to lead the company’s strategy and business development, as well as global sales
|
•
|
SaaS business hit all time high with approximately 80 million covered lives across Eviti and NaviNet
|
•
|
In September 2018, at the IASLC 19
th
World Conference on Lung Cancer
, the company and NantOmics presented two posters and a mini-oral presentation titled “Blood Based Biomarkers: RNA, KRAS and PD-L1 Strongly Matching with Tissue and Showing Correlation with Clinical Responses In NSCLC Patients,” with investigational data showing (i) association between clinical response and changes in plasma cfRNA levels and (ii) that plasma levels of PD-L1 expression, while on immunotherapy, could be used to monitor clinical responses.
|
•
|
In October 2018, at ESMO
, the world’s second largest cancer symposium, the company, along with NantOmics, conducted one oral presentation and presented four papers, including papers demonstrating the promise of Liquid GPS, the company’s blood-based molecular test that provides oncologists with a powerful tool for non-invasive tumor profiling and quantitative monitoring of treatment response.
|
•
|
Expanded Sequencing and Molecular Analysis Reimbursement Arrangements:
In Q3, the company expanded its GPS reimbursement contract with a large, national employer in the healthcare industry to include reimbursement for its Liquid GPS test and, in Q4, the company expanded GPS Cancer and Liquid GPS coverage for firefighters through the execution of an additional reimbursement contract benefiting members of a city-wide firefighter union.
|
•
|
Payer Engagement (NaviNet):
|
◦
|
In Q3, executed a large-scale implementation of NaviNet Open Authorizations with a key
|
•
|
Clinical Decision Support (Eviti):
|
◦
|
Released new functionality with drug specific justifications, enabling the capture of key data to ensure quicker pre-authorization and clinical integrity.
|
◦
|
Completed a new statewide implementation with a large existing payer in Kentucky, adding 250,000 covered lives. This implementation followed a similar success in Florida in Q2 for the same national payer.
|
•
|
Connected Care:
|
◦
|
In Q4, collaborated with B. Braun Australia, GE Healthcare and iProcedures to demonstrate the exchange of data between patient devices and medical records
at the HIMSS Interoperability Showcase™ as part of the Healthcare Information and Management Systems Society (HIMSS) Asia Pacific Conference.
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
22,841
|
|
|
$
|
61,660
|
|
Accounts receivable, net
|
17,202
|
|
|
11,491
|
|
||
Inventories
|
654
|
|
|
839
|
|
||
Deferred implementation costs
|
11
|
|
|
1,960
|
|
||
Related party receivables, net
|
1,293
|
|
|
585
|
|
||
Prepaid expenses and other current assets
|
5,188
|
|
|
5,358
|
|
||
Total current assets
|
47,189
|
|
|
81,893
|
|
||
Property, plant, and equipment, net
|
24,942
|
|
|
18,517
|
|
||
Deferred implementation costs, net of current
|
3
|
|
|
3,951
|
|
||
Goodwill
|
115,930
|
|
|
114,625
|
|
||
Intangible assets, net
|
66,990
|
|
|
69,424
|
|
||
Investment in related party
|
59,000
|
|
|
156,863
|
|
||
Related party receivable, net of current
|
1,611
|
|
|
1,727
|
|
||
Other assets
|
1,848
|
|
|
2,195
|
|
||
Total assets
|
$
|
317,513
|
|
|
$
|
449,195
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
2,222
|
|
|
$
|
3,164
|
|
Accrued and other current liabilities
|
15,562
|
|
|
18,134
|
|
||
Deferred revenue
|
14,866
|
|
|
10,057
|
|
||
Related party payables, net
|
5,283
|
|
|
4,504
|
|
||
Total current liabilities
|
37,933
|
|
|
35,859
|
|
||
Deferred revenue, net of current
|
8,061
|
|
|
7,126
|
|
||
Related party liabilities
|
16,138
|
|
|
11,500
|
|
||
Related party promissory note
|
112,666
|
|
|
112,666
|
|
||
Related party convertible note, net
|
8,265
|
|
|
7,947
|
|
||
Convertible notes, net
|
78,230
|
|
|
74,845
|
|
||
Other liabilities
|
5,025
|
|
|
5,950
|
|
||
Total liabilities
|
266,318
|
|
|
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 September 30, 2018 and December 31, 2017, respectively (including 3,490 shares of restricted stock at both dates)
|
11
|
|
|
10
|
|
||
Additional paid-in capital
|
886,363
|
|
|
886,669
|
|
||
Accumulated deficit
|
(834,999
|
)
|
|
(693,233
|
)
|
||
Accumulated other comprehensive loss
|
(180
|
)
|
|
(144
|
)
|
||
Total stockholders' equity
|
51,195
|
|
|
193,302
|
|
||
Total liabilities and stockholders' equity
|
$
|
317,513
|
|
|
$
|
449,195
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total net revenue
|
$
|
22,292
|
|
|
$
|
21,760
|
|
|
$
|
66,603
|
|
|
$
|
64,378
|
|
|
|
|
|
|
|
|
|
||||||||
Total cost of revenue
|
11,226
|
|
|
11,472
|
|
|
32,878
|
|
|
32,643
|
|
||||
Gross Profit
|
11,066
|
|
|
10,288
|
|
|
33,725
|
|
|
31,735
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
17,001
|
|
|
17,521
|
|
|
56,123
|
|
|
54,181
|
|
||||
Research and development
|
4,835
|
|
|
7,749
|
|
|
15,875
|
|
|
25,051
|
|
||||
Amortization of acquisition-related assets
|
1,054
|
|
|
1,054
|
|
|
3,163
|
|
|
3,163
|
|
||||
Total operating expenses
|
22,890
|
|
|
26,324
|
|
|
75,161
|
|
|
82,395
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(11,824
|
)
|
|
(16,036
|
)
|
|
(41,436
|
)
|
|
(50,660
|
)
|
||||
Interest expense, net
|
(4,306
|
)
|
|
(4,067
|
)
|
|
(12,766
|
)
|
|
(12,049
|
)
|
||||
Other income (expense), net
|
226
|
|
|
60
|
|
|
(928
|
)
|
|
308
|
|
||||
Loss from related party equity method investment, including impairment
|
(83,306
|
)
|
|
(2,942
|
)
|
|
(89,512
|
)
|
|
(46,353
|
)
|
||||
Loss from continuing operations before income taxes
|
(99,210
|
)
|
|
(22,985
|
)
|
|
(144,642
|
)
|
|
(108,754
|
)
|
||||
(Benefit from) provision for income taxes
|
(1,778
|
)
|
|
30
|
|
|
(3,429
|
)
|
|
85
|
|
||||
Net loss from continuing operations
|
(97,432
|
)
|
|
(23,015
|
)
|
|
(141,213
|
)
|
|
(108,839
|
)
|
||||
Loss from discontinued operations, net of tax
|
(32
|
)
|
|
(19,383
|
)
|
|
(1,817
|
)
|
|
(44,738
|
)
|
||||
Net loss
|
$
|
(97,464
|
)
|
|
$
|
(42,398
|
)
|
|
$
|
(143,030
|
)
|
|
$
|
(153,577
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.89
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
(0.91
|
)
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
—
|
|
|
$
|
(0.17
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.37
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total net income (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.89
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(1.28
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
109,471,712
|
|
|
115,924,122
|
|
|
109,060,408
|
|
|
119,745,231
|
|
|
Three Months Ended September 30, 2018
|
||||||||||
|
As Reported
|
|
Adjustments due to ASC 606
1
|
|
Without new Revenue Standard
|
||||||
|
|
|
|
|
|
||||||
Total net revenue
|
$
|
22,292
|
|
|
$
|
(258
|
)
|
|
$
|
22,034
|
|
|
|
|
|
|
|
||||||
Total cost of revenue
|
11,226
|
|
|
(29
|
)
|
|
11,197
|
|
|||
Gross Profit
|
11,066
|
|
|
(229
|
)
|
|
10,837
|
|
|||
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
17,001
|
|
|
(59
|
)
|
|
16,942
|
|
|||
Research and development
|
4,835
|
|
|
—
|
|
|
4,835
|
|
|||
Amortization of acquisition-related assets
|
1,054
|
|
|
—
|
|
|
1,054
|
|
|||
Total operating expenses
|
22,890
|
|
|
(59
|
)
|
|
22,831
|
|
|||
|
|
|
|
|
|
||||||
Loss from operations
|
(11,824
|
)
|
|
(170
|
)
|
|
(11,994
|
)
|
|||
Interest expense, net
|
(4,306
|
)
|
|
—
|
|
|
(4,306
|
)
|
|||
Other income (expense), net
|
226
|
|
|
—
|
|
|
226
|
|
|||
Loss from related party equity method investment, including impairment
|
(83,306
|
)
|
|
—
|
|
|
(83,306
|
)
|
|||
Loss from continuing operations before income taxes
|
(99,210
|
)
|
|
(170
|
)
|
|
(99,380
|
)
|
|||
Benefit from income taxes
|
(1,778
|
)
|
|
(110
|
)
|
|
(1,888
|
)
|
|||
Net loss from continuing operations
|
(97,432
|
)
|
|
(60
|
)
|
|
(97,492
|
)
|
|||
Loss from discontinued operations, net of tax
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
|||
Net loss
|
$
|
(97,464
|
)
|
|
$
|
(60
|
)
|
|
$
|
(97,524
|
)
|
|
|
|
|
|
|
||||||
Net loss per share:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
$
|
(0.89
|
)
|
|
$
|
—
|
|
|
$
|
(0.89
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
109,471,712
|
|
|
|
|
109,471,712
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
|
As Reported
|
|
Adjustments due to ASC 606
|
|
Without new Revenue Standard
|
||||||
|
|
|
|
|
|
||||||
Total net revenue
|
$
|
66,603
|
|
|
$
|
(1,615
|
)
|
|
$
|
64,988
|
|
|
|
|
|
|
|
||||||
Total cost of revenue
|
32,878
|
|
|
(111
|
)
|
|
32,767
|
|
|||
Gross Profit
|
33,725
|
|
|
(1,504
|
)
|
|
32,221
|
|
|||
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
56,123
|
|
|
425
|
|
|
56,548
|
|
|||
Research and development
|
15,875
|
|
|
—
|
|
|
15,875
|
|
|||
Amortization of acquisition-related assets
|
3,163
|
|
|
—
|
|
|
3,163
|
|
|||
Total operating expenses
|
75,161
|
|
|
425
|
|
|
75,586
|
|
|||
|
|
|
|
|
|
||||||
Loss from operations
|
(41,436
|
)
|
|
(1,929
|
)
|
|
(43,365
|
)
|
|||
Interest expense, net
|
(12,766
|
)
|
|
—
|
|
|
(12,766
|
)
|
|||
Other income (expense), net
|
(928
|
)
|
|
—
|
|
|
(928
|
)
|
|||
Loss from related party equity method investment
|
(89,512
|
)
|
|
—
|
|
|
(89,512
|
)
|
|||
Loss from continuing operations before income taxes
|
(144,642
|
)
|
|
(1,929
|
)
|
|
(146,571
|
)
|
|||
(Benefit from) provision for income taxes
|
(3,429
|
)
|
|
(349
|
)
|
|
(3,778
|
)
|
|||
Net loss from continuing operations
|
(141,213
|
)
|
|
(1,580
|
)
|
|
(142,793
|
)
|
|||
Loss from discontinued operations, net of tax
|
(1,817
|
)
|
|
—
|
|
|
(1,817
|
)
|
|||
Net Loss
|
$
|
(143,030
|
)
|
|
$
|
(1,580
|
)
|
|
$
|
(144,610
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per share:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
$
|
(1.31
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(1.33
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
109,060,408
|
|
|
|
|
109,060,408
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service related
|
$
|
15,937
|
|
|
$
|
15,205
|
|
|
$
|
48,323
|
|
|
$
|
44,948
|
|
Software and hardware related
|
$
|
1,450
|
|
|
$
|
1,523
|
|
|
$
|
3,790
|
|
|
$
|
5,400
|
|
Maintenance
|
2,522
|
|
|
2,696
|
|
|
7,357
|
|
|
8,183
|
|
||||
Total software-related revenue
|
19,909
|
|
|
19,424
|
|
|
59,470
|
|
|
58,531
|
|
||||
Sequencing and molecular analysis
|
742
|
|
|
1,025
|
|
|
2,506
|
|
|
1,985
|
|
||||
Home health care services
|
1,641
|
|
|
1,311
|
|
|
4,627
|
|
|
3,862
|
|
||||
Total net revenue
|
$
|
22,292
|
|
|
$
|
21,760
|
|
|
$
|
66,603
|
|
|
$
|
64,378
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service related
|
$
|
5,863
|
|
|
$
|
5,859
|
|
|
$
|
18,205
|
|
|
$
|
17,287
|
|
Software and hardware related
|
737
|
|
|
1,757
|
|
|
2,412
|
|
|
3,785
|
|
||||
Maintenance
|
234
|
|
|
274
|
|
|
683
|
|
|
564
|
|
||||
Amortization of developed technologies
|
1,233
|
|
|
1,143
|
|
|
3,700
|
|
|
4,029
|
|
||||
Total software-related cost of revenue
|
8,067
|
|
|
9,033
|
|
|
25,000
|
|
|
25,665
|
|
||||
Sequencing and molecular analysis
|
2,323
|
|
|
1,757
|
|
|
5,443
|
|
|
4,862
|
|
||||
Home health care services
|
836
|
|
|
682
|
|
|
2,435
|
|
|
2,116
|
|
||||
Total cost of revenue
|
$
|
11,226
|
|
|
$
|
11,472
|
|
|
$
|
32,878
|
|
|
$
|
32,643
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
||||||||||
Net loss from continuing operations
|
$
|
(97,432
|
)
|
|
$
|
(23,015
|
)
|
|
$
|
(141,213
|
)
|
|
$
|
(108,839
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment including impairment loss
|
83,306
|
|
|
2,942
|
|
|
89,512
|
|
|
46,353
|
|
||||
Stock-based compensation expense from continuing operations
|
373
|
|
|
(170
|
)
|
|
4,805
|
|
|
(485
|
)
|
||||
Corporate restructuring from continuing operations
|
—
|
|
|
807
|
|
|
—
|
|
|
2,396
|
|
||||
Acquisition related sales incentive
|
425
|
|
|
727
|
|
|
995
|
|
|
2,061
|
|
||||
Change in fair value of derivatives liability
|
(5
|
)
|
|
(6
|
)
|
|
(7
|
)
|
|
(245
|
)
|
||||
Noncash interest expense related to convertible notes
|
1,273
|
|
|
1,121
|
|
|
3,702
|
|
|
3,260
|
|
||||
Intangible amortization from continuing operations
|
2,287
|
|
|
2,197
|
|
|
6,863
|
|
|
7,192
|
|
||||
Securities litigation costs
|
887
|
|
|
500
|
|
|
1,709
|
|
|
685
|
|
||||
Impairment of equity securities
|
—
|
|
|
—
|
|
|
1,750
|
|
|
—
|
|
||||
Tax benefit resulting from certain noncash tax items
|
(1,943
|
)
|
|
—
|
|
|
(3,649
|
)
|
|
—
|
|
||||
Total adjustments to GAAP net loss from continuing operations
|
86,603
|
|
|
8,118
|
|
|
105,680
|
|
|
61,217
|
|
||||
Net loss - Non-GAAP from continuing operations
|
$
|
(10,829
|
)
|
|
$
|
(14,897
|
)
|
|
$
|
(35,533
|
)
|
|
$
|
(47,622
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
109,471,712
|
|
|
115,924,122
|
|
|
109,060,408
|
|
|
119,745,231
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share from continuing operations - Non-GAAP
|
$
|
(0.10
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.40
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss from continuing operations
|
$
|
(0.89
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
(0.91
|
)
|
Adjustments to GAAP net loss per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment including impairment loss
|
0.77
|
|
|
0.03
|
|
|
0.82
|
|
|
0.39
|
|
||||
Stock-based compensation expense from continuing operations
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Corporate restructuring from continuing operations
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
||||
Acquisition related sales incentive
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
||||
Change in fair value of derivatives liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Noncash interest expense related to convertible notes
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
|
||||
Intangible amortization from continuing operations
|
0.02
|
|
|
0.01
|
|
|
0.05
|
|
|
0.04
|
|
||||
Securities litigation costs
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|
0.01
|
|
||||
Impairment of equity securities
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Tax benefit resulting from certain noncash tax items
|
(0.02
|
)
|
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
||||
Total adjustments to GAAP net loss per common share from continuing operations
|
0.79
|
|
|
0.07
|
|
|
0.96
|
|
|
0.51
|
|
||||
Net loss per common share from continuing operations - Non-GAAP
|
$
|
(0.10
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.40
|
)
|