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|
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Delaware
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27-3019889
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
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9920 Jefferson Blvd
Culver City, California
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90232
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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x
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Page
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PART I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
|
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Item 1.
|
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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the structural change in the market for healthcare in the United States, including uncertainty in the healthcare regulatory framework and regulatory developments in the United States and foreign countries;
|
•
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the evolving treatment paradigm for cancer, including physicians’ use of molecular information and targeted oncology therapeutics and the market size for molecular information products;
|
•
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physicians’ need for precision medicine products and any perceived advantage of our solutions over those of our competitors, including the ability of our comprehensive platform to help physicians treat their patients’ cancers;
|
•
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our ability to generate revenue from sales of products enabled by our molecular and biometric information platforms to physicians in clinical settings;
|
•
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our ability to increase the commercial success of our sequencing and molecular analysis solution;
|
•
|
our plans or ability to obtain reimbursement for our sequencing and molecular analysis solution, including expectations as to our ability or the amount of time it will take to achieve successful reimbursement from third-party payors, such as commercial insurance companies and health maintenance organizations, and government insurance programs, such as Medicare and Medicaid;
|
•
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our ability to effectively manage our growth, including the rate and degree of market acceptance of our solutions;
|
•
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our ability to offer new and innovative products and services;
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•
|
our ability to attract new partners and clients;
|
•
|
our ability to estimate the size of our target market;
|
•
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our ability to maintain and enhance our reputation and brand recognition;
|
•
|
consolidation in the healthcare industry;
|
•
|
competition which could limit our ability to maintain or expand market share within our industry;
|
•
|
restrictions and penalties as a result of privacy and data protection laws;
|
•
|
our use of “open source” software;
|
•
|
our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
|
•
|
data loss or corruption due to failures or errors in our systems and service disruptions at our data centers;
|
•
|
breaches or failures of our security measures;
|
•
|
our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our users;
|
•
|
risks related to future acquisition opportunities;
|
•
|
the requirements of being a public company;
|
•
|
our ability to attract and retain key personnel;
|
•
|
our ability to obtain and maintain intellectual property protection for our solutions and not infringe upon the intellectual property of others; and
|
•
|
our financial performance expectations, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses, including changes in research and development, sales and marketing and general and administrative expenses, and our ability to achieve and maintain future profitability.
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
92,669
|
|
|
$
|
160,353
|
|
Accounts receivable, net
|
11,345
|
|
|
13,728
|
|
||
Inventories
|
2,165
|
|
|
2,217
|
|
||
Deferred implementation costs
|
4,207
|
|
|
3,336
|
|
||
Related party receivables, net
|
1,136
|
|
|
899
|
|
||
Prepaid expenses and other current assets
|
5,228
|
|
|
5,046
|
|
||
Total current assets
|
116,750
|
|
|
185,579
|
|
||
Property, plant, and equipment, net
|
31,773
|
|
|
29,139
|
|
||
Deferred implementation costs, net of current
|
8,882
|
|
|
7,910
|
|
||
Goodwill
|
131,068
|
|
|
131,068
|
|
||
Intangible assets, net
|
109,287
|
|
|
119,126
|
|
||
Investment in related party
|
163,786
|
|
|
207,197
|
|
||
Related party receivable, net of current
|
1,869
|
|
|
1,971
|
|
||
Other assets
|
2,033
|
|
|
2,317
|
|
||
Total assets
|
$
|
565,448
|
|
|
$
|
684,307
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
1,195
|
|
|
$
|
6,720
|
|
Accrued and other current liabilities
|
18,686
|
|
|
25,231
|
|
||
Deferred revenue
|
18,699
|
|
|
17,216
|
|
||
Related party payables, net
|
11,368
|
|
|
8,082
|
|
||
Total current liabilities
|
49,948
|
|
|
57,249
|
|
||
Deferred revenue, net of current
|
12,244
|
|
|
17,238
|
|
||
Related party liabilities
|
8,521
|
|
|
5,612
|
|
||
Related party promissory note
|
112,666
|
|
|
112,666
|
|
||
Related party convertible note, net
|
7,750
|
|
|
7,564
|
|
||
Convertible notes, net
|
72,763
|
|
|
70,810
|
|
||
Deferred income taxes, net
|
1,122
|
|
|
754
|
|
||
Other liabilities
|
619
|
|
|
820
|
|
||
Total liabilities
|
265,633
|
|
|
272,713
|
|
||
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 121,953,800 and 121,250,437 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively (Including 6,976 shares of restricted stock)
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
885,654
|
|
|
886,334
|
|
||
Accumulated deficit
|
(586,452
|
)
|
|
(475,273
|
)
|
||
Accumulated other comprehensive income
|
601
|
|
|
521
|
|
||
Total stockholders' equity
|
299,815
|
|
|
411,594
|
|
||
Total liabilities and stockholders' equity
|
$
|
565,448
|
|
|
$
|
684,307
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
3,446
|
|
|
$
|
4,149
|
|
|
$
|
4,091
|
|
|
$
|
4,823
|
|
Software–as-a-service
|
15,281
|
|
|
15,181
|
|
|
30,512
|
|
|
28,882
|
|
||||
Total software-related revenue
|
18,727
|
|
|
19,330
|
|
|
34,603
|
|
|
33,705
|
|
||||
Maintenance
|
4,693
|
|
|
4,512
|
|
|
7,855
|
|
|
7,650
|
|
||||
Sequencing and molecular analysis
|
450
|
|
|
45
|
|
|
960
|
|
|
45
|
|
||||
Other services
|
2,360
|
|
|
7,603
|
|
|
5,321
|
|
|
9,541
|
|
||||
Total net revenue
|
26,230
|
|
|
31,490
|
|
|
48,739
|
|
|
50,941
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
528
|
|
|
435
|
|
|
840
|
|
|
674
|
|
||||
Software-as-a-service
|
6,226
|
|
|
9,314
|
|
|
13,459
|
|
|
13,737
|
|
||||
Total software-related cost of revenue
|
6,754
|
|
|
9,749
|
|
|
14,299
|
|
|
14,411
|
|
||||
Maintenance
|
954
|
|
|
743
|
|
|
1,816
|
|
|
1,273
|
|
||||
Sequencing and molecular analysis
|
1,512
|
|
|
359
|
|
|
3,050
|
|
|
359
|
|
||||
Other services
|
4,647
|
|
|
7,492
|
|
|
10,325
|
|
|
11,057
|
|
||||
Amortization of developed technologies
|
2,805
|
|
|
3,897
|
|
|
6,211
|
|
|
8,178
|
|
||||
Total cost of revenue
|
16,672
|
|
|
22,240
|
|
|
35,701
|
|
|
35,278
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
9,558
|
|
|
9,250
|
|
|
13,038
|
|
|
15,663
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
22,944
|
|
|
47,248
|
|
|
43,822
|
|
|
74,621
|
|
||||
Research and development
|
11,846
|
|
|
24,322
|
|
|
25,245
|
|
|
35,016
|
|
||||
Amortization of software license and acquisition-related assets
|
1,814
|
|
|
1,813
|
|
|
3,628
|
|
|
3,628
|
|
||||
Total operating expenses
|
36,604
|
|
|
73,383
|
|
|
72,695
|
|
|
113,265
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(27,046
|
)
|
|
(64,133
|
)
|
|
(59,657
|
)
|
|
(97,602
|
)
|
||||
Interest expense, net
|
(4,013
|
)
|
|
(1,758
|
)
|
|
(7,982
|
)
|
|
(3,256
|
)
|
||||
Other income (expense), net
|
57
|
|
|
(77
|
)
|
|
330
|
|
|
261
|
|
||||
Loss from related party equity method investment including impairment loss
|
(38,885
|
)
|
|
(2,375
|
)
|
|
(43,411
|
)
|
|
(5,289
|
)
|
||||
Loss before income taxes
|
(69,887
|
)
|
|
(68,343
|
)
|
|
(110,720
|
)
|
|
(105,886
|
)
|
||||
Provision for (benefit from) income taxes
|
177
|
|
|
(14,211
|
)
|
|
459
|
|
|
(18,609
|
)
|
||||
Net loss
|
$
|
(70,064
|
)
|
|
$
|
(54,132
|
)
|
|
$
|
(111,179
|
)
|
|
$
|
(87,277
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.58
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
(0.91
|
)
|
Basic and diluted - redeemable common stock
|
N/A
|
|
|
$
|
0.25
|
|
|
N/A
|
|
|
$
|
0.49
|
|
||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
121,756,108
|
|
|
104,072,198
|
|
|
121,687,454
|
|
|
101,846,445
|
|
||||
Basic and diluted - redeemable common stock
|
N/A
|
|
|
9,419,152
|
|
|
N/A
|
|
|
10,066,719
|
|
(1)
|
The net income (loss) per share and weighted average shares outstanding for the
three and six
months ended
June 30, 2016
, have been computed to give effect to the LLC Conversion (See Note 15) that occurred on June 1, 2016, prior to the Company’s initial public offering ("IPO"). In conjunction with the LLC Conversion, (a) all of the Company’s outstanding units automatically converted into shares of common stock, based on the relative rights of the Company's pre-IPO equityholders as set forth in the Company's limited liability company agreement and (b) the Company adopted and filed a certificate of incorporation with the Secretary of State of the state of Delaware and adopted bylaws. The Company adopted and filed an amendment to its certificate of incorporation with the Secretary of State of the state of Delaware to effect a 1-for-5.5 reverse stock split of its common stock on June 1, 2016.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(70,064
|
)
|
|
$
|
(54,132
|
)
|
|
$
|
(111,179
|
)
|
|
$
|
(87,277
|
)
|
Other comprehensive income from foreign currency translation gains
|
61
|
|
|
90
|
|
|
80
|
|
|
393
|
|
||||
Comprehensive loss
|
$
|
(70,003
|
)
|
|
$
|
(54,042
|
)
|
|
$
|
(111,099
|
)
|
|
$
|
(86,884
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(111,179
|
)
|
|
$
|
(87,277
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
16,435
|
|
|
15,475
|
|
||
Amortization of debt discounts and deferred financing offering cost
|
2,139
|
|
|
—
|
|
||
Change in fair value of derivatives liability
|
(239
|
)
|
|
—
|
|
||
Unrealized changes in fair value of marketable securities
|
—
|
|
|
(49
|
)
|
||
Realized changes in fair value of marketable securities
|
—
|
|
|
49
|
|
||
Stock-based compensation
|
887
|
|
|
43,788
|
|
||
Deferred income taxes, net
|
375
|
|
|
(19,043
|
)
|
||
Provision for bad debt expense
|
198
|
|
|
552
|
|
||
Inventory provision
|
46
|
|
|
—
|
|
||
Loss from related party equity method investment including impairment loss
|
43,411
|
|
|
5,289
|
|
||
Changes in operating assets and liabilities, net of business combinations:
|
|
|
|
||||
Accounts receivable, net
|
2,205
|
|
|
3,752
|
|
||
Inventories
|
6
|
|
|
(196
|
)
|
||
Related party receivables, net
|
(135
|
)
|
|
(339
|
)
|
||
Prepaid expenses and other current assets
|
(166
|
)
|
|
2,036
|
|
||
Deferred implementation costs
|
(1,504
|
)
|
|
(6,115
|
)
|
||
Accounts payable
|
(3,986
|
)
|
|
(4,814
|
)
|
||
Accrued and other current liabilities
|
(6,223
|
)
|
|
393
|
|
||
Deferred revenue
|
(3,581
|
)
|
|
3,440
|
|
||
Related party payables, net
|
6,272
|
|
|
1,851
|
|
||
Other assets and liabilities
|
301
|
|
|
72
|
|
||
Net cash used in operating activities
|
(54,738
|
)
|
|
(41,136
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property and equipment including internal use software
|
(10,316
|
)
|
|
(8,231
|
)
|
||
Purchases of marketable securities
|
—
|
|
|
(31
|
)
|
||
Proceeds from sales of marketable securities
|
—
|
|
|
1,204
|
|
||
Acquisitions of businesses, net of cash acquired
|
—
|
|
|
(79,423
|
)
|
||
Deferred consideration for acquisition
|
—
|
|
|
1,949
|
|
||
Net cash used in investing activities
|
(10,316
|
)
|
|
(84,532
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Deemed capital contribution from Chairman and CEO
|
—
|
|
|
1,620
|
|
||
Payment of short-term notes payable
|
—
|
|
|
(23,324
|
)
|
||
Proceeds from related party promissory note
|
—
|
|
|
152,666
|
|
||
Proceeds from initial public offering, net of offering costs
|
—
|
|
|
83,566
|
|
||
Tax payments related to stock issued, net of stock withheld, for vested phantom units
|
(2,711
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(2,711
|
)
|
|
214,528
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
81
|
|
|
393
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(67,684
|
)
|
|
89,253
|
|
||
Cash and cash equivalents, beginning of period
|
160,353
|
|
|
5,989
|
|
||
Cash and cash equivalents, end of period
|
$
|
92,669
|
|
|
$
|
95,242
|
|
|
Six Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
(2,836
|
)
|
|
$
|
(5
|
)
|
Interest received
|
30
|
|
|
95
|
|
||
Non-cash transactions:
|
|
|
|
||||
Purchase of property and equipment (including internal use software)
|
863
|
|
|
—
|
|
||
NaviNet escrow receivable
|
—
|
|
|
1,678
|
|
||
Accretion to redemption value of Series F units / redeemable common stock
|
—
|
|
|
4,958
|
|
||
Conversion of related party promissory note and interest payable to common stock
|
—
|
|
|
40,590
|
|
||
Reclassification of redeemable common stock to common stock (former Series F units)
|
—
|
|
|
171,000
|
|
|
Amounts
|
||
Cash paid to 3BE at closing
|
$
|
74,823
|
|
Cash paid to option holders after closing
|
2,580
|
|
|
Cash paid to escrow account
|
6,126
|
|
|
Working capital settlement payment
|
455
|
|
|
Fair value of Series H units
|
52,500
|
|
|
Total consideration
|
$
|
136,484
|
|
|
Amounts
|
||
Cash and restricted cash
|
$
|
4,804
|
|
Accounts receivable, net
|
10,693
|
|
|
Property, plant and equipment
|
5,044
|
|
|
Other assets and liabilities, net
|
4,561
|
|
|
Accounts payable
|
(4,585
|
)
|
|
Accrued and other current liabilities
|
(3,674
|
)
|
|
Deferred revenue
|
(2,603
|
)
|
|
Deferred tax liability
|
(15,508
|
)
|
|
Assumed indebtedness
|
(23,324
|
)
|
|
Trade names
|
3,000
|
|
|
Developed technology
|
32,000
|
|
|
Customer relationships
|
52,000
|
|
|
Goodwill
|
74,076
|
|
|
Total fair value of net assets acquired
|
$
|
136,484
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Finished goods
|
$
|
1,780
|
|
|
$
|
1,840
|
|
Raw materials
|
385
|
|
|
377
|
|
||
Inventories
|
$
|
2,165
|
|
|
$
|
2,217
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Prepaid expenses
|
$
|
4,683
|
|
|
$
|
4,685
|
|
Restricted cash
|
350
|
|
|
100
|
|
||
Other current assets
|
195
|
|
|
261
|
|
||
Prepaid expenses and other current assets
|
$
|
5,228
|
|
|
$
|
5,046
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Payroll and related costs
|
$
|
8,623
|
|
|
$
|
13,248
|
|
NaviNet acquisition accrued earnout (See Note 3)
|
4,009
|
|
|
2,675
|
|
||
Other accrued and other current liabilities
|
6,054
|
|
|
9,308
|
|
||
Accrued and other current liabilities
|
$
|
18,686
|
|
|
$
|
25,231
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Computer equipment and software
|
$
|
20,914
|
|
|
$
|
16,080
|
|
Furniture and equipment
|
7,544
|
|
|
7,533
|
|
||
Leasehold and building improvements
|
4,168
|
|
|
4,051
|
|
||
Internal use software
|
20,106
|
|
|
15,600
|
|
||
Construction in progress
|
882
|
|
|
1,090
|
|
||
|
53,614
|
|
|
44,354
|
|
||
Less: accumulated depreciation and amortization
|
(21,841
|
)
|
|
(15,215
|
)
|
||
Property, plant and equipment, net
|
$
|
31,773
|
|
|
$
|
29,139
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Customer relationships
|
$
|
65,200
|
|
|
$
|
65,200
|
|
Developed technologies
|
98,930
|
|
|
98,930
|
|
||
Software license
|
5,000
|
|
|
5,000
|
|
||
Intellectual property
|
2,400
|
|
|
2,400
|
|
||
Trade name
|
3,000
|
|
|
3,000
|
|
||
|
174,530
|
|
|
174,530
|
|
||
Less: accumulated amortization
|
(65,243
|
)
|
|
(55,404
|
)
|
||
Intangible assets, net
|
$
|
109,287
|
|
|
$
|
119,126
|
|
|
Amounts
|
||
Remainder of 2017
|
$
|
9,239
|
|
2018
|
18,478
|
|
|
2019
|
18,166
|
|
|
2020
|
14,958
|
|
|
2021
|
11,646
|
|
|
Thereafter
|
36,800
|
|
|
Total future intangible amortization expense
|
$
|
109,287
|
|
|
Trailing Six Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Sales
|
$
|
3,806
|
|
|
$
|
1,935
|
|
Gross loss
|
(3,051
|
)
|
|
(1,738
|
)
|
||
Loss from operations
|
(21,654
|
)
|
|
(16,049
|
)
|
||
Net loss
|
(31,506
|
)
|
|
(14,703
|
)
|
||
Net loss attributable to NantOmics
|
(29,633
|
)
|
|
(13,561
|
)
|
|
Related party
|
|
Others
|
|
Total
|
||||||
Balance as of June 30, 2017
|
|
|
|
|
|
||||||
Gross proceeds
|
$
|
10,000
|
|
|
$
|
97,000
|
|
|
$
|
107,000
|
|
Unamortized debt discounts and deferred financing offering costs
|
(2,250
|
)
|
|
(24,237
|
)
|
|
(26,487
|
)
|
|||
Net carrying amount
|
$
|
7,750
|
|
|
$
|
72,763
|
|
|
$
|
80,513
|
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2016
|
|
|
|
|
|
||||||
Gross proceeds
|
$
|
10,000
|
|
|
$
|
97,000
|
|
|
$
|
107,000
|
|
Unamortized debt discounts and deferred financing offering costs
|
(2,436
|
)
|
|
(26,190
|
)
|
|
(28,626
|
)
|
|||
Net carrying amount
|
$
|
7,564
|
|
|
$
|
70,810
|
|
|
$
|
78,374
|
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||||
|
Related party
|
|
Others
|
|
Total
|
|
Related party
|
|
Others
|
|
Total
|
||||||||||||
Accrued coupon interest expense
|
$
|
137
|
|
|
$
|
1,333
|
|
|
$
|
1,470
|
|
|
$
|
275
|
|
|
$
|
2,667
|
|
|
$
|
2,942
|
|
Amortization of debt discounts
|
92
|
|
|
870
|
|
|
962
|
|
|
181
|
|
|
1,711
|
|
|
1,892
|
|
||||||
Amortization of deferred financing offering costs
|
3
|
|
|
123
|
|
|
126
|
|
|
5
|
|
|
242
|
|
|
247
|
|
||||||
Total convertible notes interest expense
|
$
|
232
|
|
|
$
|
2,326
|
|
|
$
|
2,558
|
|
|
$
|
461
|
|
|
$
|
4,620
|
|
|
$
|
5,081
|
|
|
June 30, 2017
|
||||||||||||||
|
Total
fair value
|
|
Quoted price in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
||||||||
Assets -
Cash equivalents
|
$
|
87,852
|
|
|
$
|
87,852
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
- Interest make-whole derivative
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
December 31, 2016
|
||||||||||||||
|
Total
fair value
|
|
Quoted price in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
||||||||
Assets -
Cash equivalents
|
$
|
149,067
|
|
|
$
|
149,067
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
- Interest make-whole derivative
|
271
|
|
|
—
|
|
|
—
|
|
|
271
|
|
|
|
March 31, 2017
|
|
Additions
|
|
Change in fair value
|
|
June 30, 2017
|
||||||||
Interest make-whole derivative liability:
|
|
|
|
|
|
|
|
|
||||||||
Related party
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
Others
|
|
51
|
|
|
—
|
|
|
(22
|
)
|
|
29
|
|
||||
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
32
|
|
|
|
December 31, 2016
|
|
Additions
|
|
Change in fair value
|
|
June 30, 2017
|
||||||||
Interest make-whole derivative liability:
|
|
|
|
|
|
|
|
|
||||||||
Related party
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
|
$
|
3
|
|
Others
|
|
246
|
|
|
—
|
|
|
(217
|
)
|
|
29
|
|
||||
|
|
$
|
271
|
|
|
$
|
—
|
|
|
$
|
(239
|
)
|
|
$
|
32
|
|
|
|
Fair value
|
|
Carrying value
|
|
Face value
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
5.5% convertible senior notes due December 15, 2021:
|
|
|
|
|
|
|
||||||
Balance as of June 30, 2017
|
|
|
|
|
|
|
||||||
Related party
|
|
$
|
7,646
|
|
|
$
|
7,750
|
|
|
$
|
10,000
|
|
Others
|
|
74,160
|
|
|
72,763
|
|
|
97,000
|
|
|||
|
|
$
|
81,806
|
|
|
$
|
80,513
|
|
|
$
|
107,000
|
|
Balance as of December 31, 2016
|
|
|
|
|
|
|
||||||
Related party
|
|
$
|
11,081
|
|
|
$
|
7,564
|
|
|
$
|
10,000
|
|
Others
|
|
107,491
|
|
|
70,810
|
|
|
97,000
|
|
|||
|
|
$
|
118,572
|
|
|
$
|
78,374
|
|
|
$
|
107,000
|
|
|
Pre Conversion
(Units)
|
|
Former Series A Unit Holders
|
420,255,676
|
|
Former Series B Unit Holders
|
19,109,603
|
|
Former Series C Unit Holders
|
3,470,254
|
|
Former Series D Unit Holders
|
3,572,066
|
|
Former Series E Unit Holders
|
35,720,664
|
|
Former Series G Unit Holders
|
59,099,908
|
|
Former Series H Unit Holders
|
15,513,726
|
|
Total Member Units
|
556,741,897
|
|
|
Redeemable Series F Units
|
|
Redeemable Common Stock
|
|
Common Stock and Additional-Paid-in-Capital
|
||||||
Balance at December 31, 2015
|
$
|
166,042
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accretion to redemption value
|
2,625
|
|
|
—
|
|
|
—
|
|
|||
Balance at March 31, 2016
|
168,667
|
|
|
—
|
|
|
—
|
|
|||
Accretion to redemption value
|
1,750
|
|
|
—
|
|
|
—
|
|
|||
Balance at June 1, 2016 pre-LLC Conversion
|
170,417
|
|
|
—
|
|
|
—
|
|
|||
LLC Conversion
|
(170,417
|
)
|
|
170,417
|
|
|
—
|
|
|||
Balance at June 1, 2016 post-LLC Conversion
|
—
|
|
|
170,417
|
|
|
—
|
|
|||
Accretion to redemption value
|
—
|
|
|
583
|
|
|
—
|
|
|||
Balance at June 20, 2016 pre expiration of Put Right
|
—
|
|
|
171,000
|
|
|
—
|
|
|||
Expiration of Put Right at June 20, 2016
|
—
|
|
|
(171,000
|
)
|
|
171,000
|
|
|||
Balance at June 20, 2016 post expiration of Put Right
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
171,000
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Series C / Restricted Stock -
|
|
|
|
|
|
|
|
||||||||
Research and development
|
$
|
31
|
|
|
$
|
(367
|
)
|
|
$
|
46
|
|
|
$
|
(270
|
)
|
|
|
|
|
|
|
|
|
||||||||
Phantom units:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
486
|
|
|
7,032
|
|
|
1,194
|
|
|
7,032
|
|
||||
Selling, general and administrative
|
940
|
|
|
23,577
|
|
|
(412
|
)
|
|
23,577
|
|
||||
Research and development
|
(807
|
)
|
|
13,449
|
|
|
107
|
|
|
13,449
|
|
||||
Total phantom units stock-based compensation expense
|
619
|
|
|
44,058
|
|
|
889
|
|
|
44,058
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Stock options -
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
(13
|
)
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total stock based compensation expense
|
637
|
|
|
43,691
|
|
|
887
|
|
|
43,788
|
|
||||
Amount capitalized to internal-use software and deferred implementation costs
|
205
|
|
|
—
|
|
|
729
|
|
|
—
|
|
||||
Total stock-based compensation cost
|
$
|
842
|
|
|
$
|
43,691
|
|
|
$
|
1,616
|
|
|
$
|
43,788
|
|
|
Number of Units
|
|
Weighted
Average Grant
date value per
phantom unit
|
|
Unvested phantom units outstanding - December 31, 2016
|
4,322,080
|
|
|
$14.95
|
Granted
|
113,656
|
|
|
$4.75
|
Vested
|
(602,271
|
)
|
|
$15.78
|
Forfeited
|
(317,747
|
)
|
|
$15.27
|
Unvested phantom units outstanding - March 31, 2017
|
3,515,718
|
|
|
$14.44
|
Granted
|
—
|
|
|
$—
|
Vested
|
(551,322
|
)
|
|
$13.25
|
Forfeited
|
(374,587
|
)
|
|
$14.69
|
Unvested phantom units outstanding - June 30, 2017
|
2,589,809
|
|
|
$14.66
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
|
Common Stock
|
|
Common Stock
|
|
Redeemable Common Stock
|
|
Common Stock
|
|
Common Stock
|
|
Redeemable Common Stock
|
||||||||||||
Net income (loss) per share numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
$
|
(70,064
|
)
|
|
$
|
(54,132
|
)
|
|
$
|
—
|
|
|
$
|
(111,179
|
)
|
|
$
|
(87,277
|
)
|
|
$
|
—
|
|
Accretion to redemption value of series F/redeemable common stock
|
—
|
|
|
(2,333
|
)
|
|
2,333
|
|
|
—
|
|
|
(4,958
|
)
|
|
4,958
|
|
||||||
Net income (loss) for basic and diluted net income (loss) per share
|
$
|
(70,064
|
)
|
|
$
|
(56,465
|
)
|
|
$
|
2,333
|
|
|
$
|
(111,179
|
)
|
|
$
|
(92,235
|
)
|
|
$
|
4,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) per share denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average shares for basic net loss per share
|
121,756,108
|
|
|
104,072,198
|
|
|
9,419,152
|
|
|
121,687,454
|
|
|
101,846,445
|
|
|
10,066,719
|
|
||||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Weighted-average shares for dilutive net income (loss) per share
|
121,756,108
|
|
|
104,072,198
|
|
|
9,419,152
|
|
|
121,687,454
|
|
|
101,846,445
|
|
|
10,066,719
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic and diluted net income (loss) per share
|
$
|
(0.58
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
0.25
|
|
|
$
|
(0.91
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
0.49
|
|
|
Three and Six Months Ended
June 30, |
||||
|
2017
|
|
2016
|
||
Unvested restricted stock
|
6,976
|
|
|
10,462
|
|
Unvested phantom units
|
2,589,809
|
|
|
4,561,255
|
|
Stock options
|
500,000
|
|
|
—
|
|
Convertible notes
|
8,815,655
|
|
|
—
|
|
•
|
introduce new marketing, education and engagement efforts and foster relationships across the oncology community to drive adoption of GPS Cancer;
|
•
|
pursue reimbursement of GPS Cancer from regional and national third-party payors and government payors;
|
•
|
publish scientific and medical advances;
|
•
|
strengthen our commercial organization to increase our NantHealth solutions client base and to broaden usage of our solutions by existing clients who currently use only NantOS, specific NantOS apps or suites of NantOS apps; and
|
•
|
develop new features and functionality for NantHealth solutions to address the needs of current and future healthcare provider and payor, self-insured employer and biopharmaceutical company clients.
|
(Dollars in thousands, except per share amounts)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(70,064
|
)
|
|
$
|
(54,132
|
)
|
|
$
|
(111,179
|
)
|
|
$
|
(87,277
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from related party equity method investment including impairment loss
|
38,885
|
|
|
2,375
|
|
|
43,411
|
|
|
5,289
|
|
||||
Stock-based compensation expense
|
637
|
|
|
43,691
|
|
|
887
|
|
|
43,788
|
|
||||
Corporate restructuring
|
1,593
|
|
|
179
|
|
|
1,813
|
|
|
2,145
|
|
||||
Acquisition related compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
4,814
|
|
||||
Acquisition related sales incentive
|
671
|
|
|
40
|
|
|
1,334
|
|
|
1,461
|
|
||||
Change in fair value of derivatives liability
|
(24
|
)
|
|
—
|
|
|
(239
|
)
|
|
—
|
|
||||
Non-cash interest expense related to convertible notes
|
1,088
|
|
|
—
|
|
|
2,139
|
|
|
—
|
|
||||
Intangible amortization
|
4,619
|
|
|
5,710
|
|
|
9,839
|
|
|
11,806
|
|
||||
Impacts of intangibles amortization and the conversion from a limited liability company to a corporation on provision for (benefit from) income taxes
|
141
|
|
|
(14,386
|
)
|
|
374
|
|
|
(18,914
|
)
|
||||
Total adjustments to GAAP net loss
|
47,610
|
|
|
37,609
|
|
|
59,558
|
|
|
50,389
|
|
||||
Net loss - Non-GAAP
|
$
|
(22,454
|
)
|
|
$
|
(16,523
|
)
|
|
$
|
(51,621
|
)
|
|
$
|
(36,888
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (1)
|
121,756,108
|
|
|
104,072,198
|
|
|
121,687,454
|
|
|
101,846,445
|
|
||||
Weighted average Series F/redeemable stock (1)(2)
|
—
|
|
|
9,419,152
|
|
|
—
|
|
|
10,066,719
|
|
||||
Shares outstanding - Non-GAAP (1)
|
121,756,108
|
|
|
113,491,350
|
|
|
121,687,454
|
|
|
111,913,164
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share - Non-GAAP (1)
|
$
|
(0.18
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.33
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss per common share
-
GAAP
|
$
|
(0.58
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
(0.91
|
)
|
Adjustments to GAAP net loss per common share:
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment including impairment loss
|
0.32
|
|
|
0.02
|
|
|
0.36
|
|
|
0.05
|
|
||||
Stock-based compensation expense
|
0.01
|
|
|
0.42
|
|
|
0.01
|
|
|
0.43
|
|
||||
Corporate restructuring
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
0.02
|
|
||||
Acquisition related compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
0.05
|
|
||||
Acquisition related sales incentive
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
||||
Change in fair value of derivatives liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Non-cash interest expense related to convertible notes
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Intangible amortization
|
0.04
|
|
|
0.06
|
|
|
0.08
|
|
|
0.13
|
|
||||
Impacts of intangibles amortization and the conversion from a limited liability company to a corporation on provision for (benefit from) income taxes
|
—
|
|
|
(0.14
|
)
|
|
—
|
|
|
(0.19
|
)
|
||||
Accretion to redemption value of Series F/redeemable common stock
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.05
|
|
||||
Dilution from Series F/redeemable common stock
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.03
|
|
||||
Total adjustments to GAAP net loss per common share
|
0.40
|
|
|
0.39
|
|
|
0.49
|
|
|
0.58
|
|
||||
Net loss per common share - Non-GAAP (1)
|
$
|
(0.18
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.33
|
)
|
(1)
|
The net loss per common share - non-GAAP, weighted average shares outstanding, weighted average Series F units/redeemable stock, and shares outstanding - non-GAAP have been computed to give effect to the LLC conversion that occurred June 1, 2016 prior to our IPO. In conjunction with the LLC Conversion, (a) all of our outstanding units automatically converted into shares of common stock, based on the relative rights of our pre-IPO equityholders as set forth in the limited liability company agreement and (b) we adopted and filed a certificate of incorporation with the Secretary of State of the state of Delaware and adopted bylaws. We filed an amended certificate of incorporation to effect a 1-for-5.5 reverse stock split of our common stock on June 1, 2016.
|
(2)
|
The weighted average shares outstanding have been further adjusted to account for the redeemable Series F units (converted to common stock in conjunction with the LLC conversion), whose Put Right expired on June 20, 2016. Prior to June 20, 2016, these units/shares of common stock were classified as redeemable members’/stockholders’ equity in the balance sheet, and as such, were not included in the weighted-average shares outstanding prior to June 20, 2016. The Put Right expired June 20, 2016, and the shares were no longer redeemable and are included in shareholders’ equity following that day. The weighted-average shares are adjusted to include the redeemable common stock in the weighted average shares outstanding for the entire period.
|
▪
|
Software, middleware and hardware
-
Software and hardware cost of revenue includes third-party software and hardware costs directly associated with our solutions.
|
▪
|
Software-as-a-service
-
SaaS cost of revenue includes personnel-related, amortization of deferred implementation costs, depreciation of internal use software and other direct costs associated with the delivery and hosting of NantOS and NantOS apps, including eviti, our cancer-decision support solution, and NaviNet on a subscription basis.
|
▪
|
Maintenance
- Maintenance cost of revenue includes personnel-related and other direct costs associated with the ongoing support or maintenance we provide for our clients.
|
▪
|
Sequencing and molecular analysis
- Sequencing and molecular analysis cost of revenue includes internal costs associated with these services and amounts due to NantOmics under our Reseller Agreement for the sequencing and analysis of whole genome, DNA, RNA and proteomic results.
|
▪
|
Other services
- Other services cost of revenue includes personnel-related costs, amortization of deferred implementation costs, depreciation of internal use software and other direct costs associated with software training and implementation services provided to our clients as well as direct expenses relating to our nursing and therapy services provided to patients in a home care setting.
|
(Dollars in thousands, except per share amounts)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
3,446
|
|
|
$
|
4,149
|
|
|
$
|
4,091
|
|
|
$
|
4,823
|
|
Software–as-a-service
|
15,281
|
|
|
15,181
|
|
|
30,512
|
|
|
28,882
|
|
||||
Total software-related revenue
|
18,727
|
|
|
19,330
|
|
|
34,603
|
|
|
33,705
|
|
||||
Maintenance
|
4,693
|
|
|
4,512
|
|
|
7,855
|
|
|
7,650
|
|
||||
Sequencing and molecular analysis
|
450
|
|
|
45
|
|
|
960
|
|
|
45
|
|
||||
Other services
|
2,360
|
|
|
7,603
|
|
|
5,321
|
|
|
9,541
|
|
||||
Total net revenue
|
26,230
|
|
|
31,490
|
|
|
48,739
|
|
|
50,941
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
528
|
|
|
435
|
|
|
840
|
|
|
674
|
|
||||
Software-as-a-service
|
6,226
|
|
|
9,314
|
|
|
13,459
|
|
|
13,737
|
|
||||
Total software-related cost of revenue
|
6,754
|
|
|
9,749
|
|
|
14,299
|
|
|
14,411
|
|
||||
Maintenance
|
954
|
|
|
743
|
|
|
1,816
|
|
|
1,273
|
|
||||
Sequencing and molecular analysis
|
1,512
|
|
|
359
|
|
|
3,050
|
|
|
359
|
|
||||
Other services
|
4,647
|
|
|
7,492
|
|
|
10,325
|
|
|
11,057
|
|
||||
Amortization of developed technologies
|
2,805
|
|
|
3,897
|
|
|
6,211
|
|
|
8,178
|
|
||||
Total cost of revenue
|
16,672
|
|
|
22,240
|
|
|
35,701
|
|
|
35,278
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
9,558
|
|
|
9,250
|
|
|
13,038
|
|
|
15,663
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
22,944
|
|
|
47,248
|
|
|
43,822
|
|
|
74,621
|
|
||||
Research and development
|
11,846
|
|
|
24,322
|
|
|
25,245
|
|
|
35,016
|
|
||||
Amortization of software license and acquisition-related assets
|
1,814
|
|
|
1,813
|
|
|
3,628
|
|
|
3,628
|
|
||||
Total operating expenses
|
36,604
|
|
|
73,383
|
|
|
72,695
|
|
|
113,265
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(27,046
|
)
|
|
(64,133
|
)
|
|
(59,657
|
)
|
|
(97,602
|
)
|
||||
Interest expense, net
|
(4,013
|
)
|
|
(1,758
|
)
|
|
(7,982
|
)
|
|
(3,256
|
)
|
||||
Other income (expense), net
|
57
|
|
|
(77
|
)
|
|
330
|
|
|
261
|
|
||||
Loss from related party equity method investment including impairment loss
|
(38,885
|
)
|
|
(2,375
|
)
|
|
(43,411
|
)
|
|
(5,289
|
)
|
||||
Loss before income taxes
|
(69,887
|
)
|
|
(68,343
|
)
|
|
(110,720
|
)
|
|
(105,886
|
)
|
||||
Provision for (benefit from) income taxes
|
177
|
|
|
(14,211
|
)
|
|
459
|
|
|
(18,609
|
)
|
||||
Net loss
|
$
|
(70,064
|
)
|
|
$
|
(54,132
|
)
|
|
$
|
(111,179
|
)
|
|
$
|
(87,277
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.58
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
(0.91
|
)
|
Basic and diluted - redeemable common stock
|
N/A
|
|
|
$
|
0.25
|
|
|
N/A
|
|
|
$
|
0.49
|
|
||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
121,756,108
|
|
|
104,072,198
|
|
|
121,687,454
|
|
|
101,846,445
|
|
||||
Basic and diluted - redeemable common stock
|
N/A
|
|
|
9,419,152
|
|
|
N/A
|
|
|
10,066,719
|
|
(1)
|
The net income (loss) per share and weighted average shares outstanding for the
three and six
months ended
June 30, 2016
, have been computed to give effect to the LLC Conversion (See Note 15
of the accompanying Condensed Consolidated Financial Statements
) that occurred on June 1, 2016, prior to our IPO. In conjunction with the LLC Conversion, (a) all of our outstanding units automatically converted into shares of common stock, based on the relative rights of our pre-IPO equityholders as set forth in our limited liability company agreement and (b) we adopted and filed a certificate of incorporation with the Secretary of State of the state of Delaware and adopted bylaws. The Company adopted and filed an amendment to its certificate of incorporation with the Secretary of State of the state of Delaware to effect a 1-for-5.5 reverse stock split of its common stock on June 1, 2016.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Revenue:
|
|
|
|
|
|
|
|
||||
Software and hardware
|
13.1
|
%
|
|
13.2
|
%
|
|
8.4
|
%
|
|
9.5
|
%
|
Software–as-a-service
|
58.3
|
%
|
|
48.2
|
%
|
|
62.6
|
%
|
|
56.7
|
%
|
Total software-related revenue
|
71.4
|
%
|
|
61.4
|
%
|
|
71.0
|
%
|
|
66.2
|
%
|
Maintenance
|
17.9
|
%
|
|
14.3
|
%
|
|
16.1
|
%
|
|
15.0
|
%
|
Sequencing and molecular analysis
|
1.7
|
%
|
|
0.1
|
%
|
|
2.0
|
%
|
|
0.1
|
%
|
Other services
|
9.0
|
%
|
|
24.2
|
%
|
|
10.9
|
%
|
|
18.7
|
%
|
Total net revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||
Software and hardware
|
2.0
|
%
|
|
1.4
|
%
|
|
1.7
|
%
|
|
1.3
|
%
|
Software-as-a-service
|
23.7
|
%
|
|
29.6
|
%
|
|
27.6
|
%
|
|
27.0
|
%
|
Total software-related cost of revenue
|
25.7
|
%
|
|
31.0
|
%
|
|
29.3
|
%
|
|
28.3
|
%
|
Maintenance
|
3.6
|
%
|
|
2.4
|
%
|
|
3.7
|
%
|
|
2.5
|
%
|
Sequencing and molecular analysis
|
5.8
|
%
|
|
1.1
|
%
|
|
6.3
|
%
|
|
0.7
|
%
|
Other services
|
17.7
|
%
|
|
23.8
|
%
|
|
21.2
|
%
|
|
21.7
|
%
|
Amortization of developed technologies
|
10.8
|
%
|
|
12.3
|
%
|
|
12.7
|
%
|
|
16.1
|
%
|
Total cost of revenue
|
63.6
|
%
|
|
70.6
|
%
|
|
73.2
|
%
|
|
69.3
|
%
|
|
|
|
|
|
|
|
|
||||
Gross profit
|
36.4
|
%
|
|
29.4
|
%
|
|
26.8
|
%
|
|
30.7
|
%
|
|
|
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
87.4
|
%
|
|
150.1
|
%
|
|
90.0
|
%
|
|
146.5
|
%
|
Research and development
|
45.2
|
%
|
|
77.2
|
%
|
|
51.8
|
%
|
|
68.7
|
%
|
Amortization of software license and acquisition-related assets
|
6.9
|
%
|
|
5.8
|
%
|
|
7.4
|
%
|
|
7.1
|
%
|
Total operating expenses
|
139.5
|
%
|
|
233.1
|
%
|
|
149.2
|
%
|
|
222.3
|
%
|
|
|
|
|
|
|
|
|
||||
Loss from operations
|
(103.1
|
%)
|
|
(203.7
|
%)
|
|
(122.4
|
%)
|
|
(191.6
|
%)
|
Interest expense, net
|
(15.3
|
%)
|
|
(5.6
|
%)
|
|
(16.4
|
%)
|
|
(6.4
|
%)
|
Other income (expense), net
|
0.2
|
%
|
|
(0.2
|
%)
|
|
0.7
|
%
|
|
0.5
|
%
|
Loss from related party equity method investment including impairment loss
|
(148.2
|
%)
|
|
(7.5
|
%)
|
|
(89.1
|
%)
|
|
(10.4
|
%)
|
Loss before income taxes
|
(266.4
|
%)
|
|
(217.0
|
%)
|
|
(227.2
|
%)
|
|
(207.9
|
%)
|
Provision for (benefit from) income taxes
|
0.7
|
%
|
|
(45.1
|
%)
|
|
0.9
|
%
|
|
(36.6
|
%)
|
Net loss
|
(267.1
|
%)
|
|
(171.9
|
%)
|
|
(228.1
|
%)
|
|
(171.3
|
%)
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Software and hardware
|
$
|
3,446
|
|
|
$
|
4,149
|
|
|
$
|
4,091
|
|
|
$
|
4,823
|
|
|
$
|
(703
|
)
|
|
(16.9
|
)%
|
|
$
|
(732
|
)
|
|
(15.2
|
)%
|
Software–as-a-service
|
15,281
|
|
|
15,181
|
|
|
30,512
|
|
|
28,882
|
|
|
100
|
|
|
0.7
|
%
|
|
1,630
|
|
|
5.6
|
%
|
||||||
Total software-related revenues
|
18,727
|
|
|
19,330
|
|
|
34,603
|
|
|
33,705
|
|
|
(603
|
)
|
|
(3.1
|
)%
|
|
898
|
|
|
2.7
|
%
|
||||||
Maintenance
|
4,693
|
|
|
4,512
|
|
|
7,855
|
|
|
7,650
|
|
|
181
|
|
|
4.0
|
%
|
|
205
|
|
|
2.7
|
%
|
||||||
Sequencing and molecular analysis
|
450
|
|
|
45
|
|
|
960
|
|
|
45
|
|
|
405
|
|
|
900.0
|
%
|
|
915
|
|
|
2,033.3
|
%
|
||||||
Other services
|
2,360
|
|
|
7,603
|
|
|
5,321
|
|
|
9,541
|
|
|
(5,243
|
)
|
|
(69.0
|
)%
|
|
(4,220
|
)
|
|
(44.2
|
)%
|
||||||
Total net revenue
|
$
|
26,230
|
|
|
$
|
31,490
|
|
|
$
|
48,739
|
|
|
$
|
50,941
|
|
|
$
|
(5,260
|
)
|
|
(16.7
|
)%
|
|
$
|
(2,202
|
)
|
|
(4.3
|
)%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Software and hardware
|
$
|
528
|
|
|
$
|
435
|
|
|
$
|
840
|
|
|
$
|
674
|
|
|
$
|
93
|
|
|
21.4
|
%
|
|
$
|
166
|
|
|
24.6
|
%
|
Software–as-a-service
|
6,226
|
|
|
9,314
|
|
|
13,459
|
|
|
13,737
|
|
|
(3,088
|
)
|
|
(33.2
|
)%
|
|
(278
|
)
|
|
(2.0
|
)%
|
||||||
Total software-related cost of revenue
|
6,754
|
|
|
9,749
|
|
|
14,299
|
|
|
14,411
|
|
|
(2,995
|
)
|
|
(30.7
|
)%
|
|
(112
|
)
|
|
(0.8
|
)%
|
||||||
Maintenance
|
954
|
|
|
743
|
|
|
1,816
|
|
|
1,273
|
|
|
211
|
|
|
28.4
|
%
|
|
543
|
|
|
42.7
|
%
|
||||||
Sequencing and molecular analysis
|
1,512
|
|
|
359
|
|
|
3,050
|
|
|
359
|
|
|
1,153
|
|
|
321.2
|
%
|
|
2,691
|
|
|
749.6
|
%
|
||||||
Other services
|
4,647
|
|
|
7,492
|
|
|
10,325
|
|
|
11,057
|
|
|
(2,845
|
)
|
|
(38.0
|
)%
|
|
(732
|
)
|
|
(6.6
|
)%
|
||||||
Amortization of developed technologies
|
2,805
|
|
|
3,897
|
|
|
6,211
|
|
|
8,178
|
|
|
(1,092
|
)
|
|
(28.0
|
)%
|
|
(1,967
|
)
|
|
(24.1
|
)%
|
||||||
Total cost of revenue
|
$
|
16,672
|
|
|
$
|
22,240
|
|
|
$
|
35,701
|
|
|
$
|
35,278
|
|
|
$
|
(5,568
|
)
|
|
(25.0
|
)%
|
|
$
|
423
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Selling, general and administrative
|
$
|
22,944
|
|
|
$
|
47,248
|
|
|
$
|
43,822
|
|
|
$
|
74,621
|
|
|
$
|
(24,304
|
)
|
|
(51.4
|
)%
|
|
$
|
(30,799
|
)
|
|
(41.3
|
)%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Research and development
|
$
|
11,846
|
|
|
$
|
24,322
|
|
|
$
|
25,245
|
|
|
$
|
35,016
|
|
|
$
|
(12,476
|
)
|
|
(51.3
|
)%
|
|
$
|
(9,771
|
)
|
|
(27.9
|
)%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Interest expense, net
|
$
|
4,013
|
|
|
$
|
1,758
|
|
|
$
|
7,982
|
|
|
$
|
3,256
|
|
|
$
|
2,255
|
|
|
128.3
|
%
|
|
$
|
4,726
|
|
|
145.1
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
|||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|||||||||||||
Other income (expense), net
|
$
|
57
|
|
|
$
|
(77
|
)
|
|
$
|
330
|
|
|
$
|
261
|
|
|
$
|
134
|
|
|
(174.0)%
|
|
$
|
69
|
|
|
26.4
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
|||||||||||||||||||
(Dollars in thousands)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|||||||||||||
Loss from related party equity method Investment including impairment loss
|
$
|
38,885
|
|
|
$
|
2,375
|
|
|
$
|
43,411
|
|
|
$
|
5,289
|
|
|
$
|
36,510
|
|
|
1,537.3%
|
|
$
|
38,122
|
|
|
720.8
|
%
|
(Dollars in thousands)
|
|
Six Months Ended
June 30, |
||||||
|
|
2017
|
|
2016
|
||||
Cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
(54,738
|
)
|
|
$
|
(41,136
|
)
|
Investing activities
|
|
(10,316
|
)
|
|
(84,532
|
)
|
||
Financing activities
|
|
(2,711
|
)
|
|
214,528
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
81
|
|
|
393
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(67,684
|
)
|
|
$
|
89,253
|
|
•
|
increase our sales and marketing efforts to drive market adoption of NantHealth solutions, GPS Cancer, NantOS and NantOS apps;
|
•
|
address competitive developments;
|
•
|
fund development and marketing efforts of any future platforms and solutions;
|
•
|
expand adoption of GPS Cancer and eviti platform solutions into critical illnesses outside of oncology;
|
•
|
acquire, license or invest in complimentary businesses, technologies or service offerings; and
|
•
|
finance capital expenditures and general and administrative expenses.
|
•
|
Our present and future funding requirements will depend on many factors, including:
|
•
|
our success in driving adoption of GPS Cancer;
|
•
|
our success in making GPS cancer reimbursable by payors;
|
•
|
our ability to achieve revenue growth;
|
•
|
the cost of expanding our products and service offerings, including our sales and marketing efforts;
|
•
|
our ability to achieve interoperability across all of our acquired businesses, technologies and service offerings to deliver networking effects to our clients;
|
•
|
the effect of competing technological and market developments;
|
•
|
costs related to international expansion; and
|
•
|
the potential cost of and delays in product development as a result of any regulatory oversight applicable to our products.
|
•
|
our ability to convince key thought lenders, physicians and caregivers and other key oncology stakeholders of the clinical utility of our entire product offering and its potential advantages over existing sequencing tests, specifically, the advantages of our RNA sequencing, which maps oncology disease pathways versus a patient’s own germline and our quantitative proteomic analysis;
|
•
|
the willingness of physicians, self-insured employers, payors and healthcare providers to utilize GPS Cancer; and
|
•
|
the willingness of commercial third-party payors and government payors to reimburse GPS Cancer, the scope and amount of which will affect patients’ willingness or ability to pay for GPS Cancer and likely heavily influence our customers’ decisions to recommend GPS Cancer.
|
•
|
the price, performance and functionality of our offerings;
|
•
|
the availability, price, performance and functionality of competing solutions;
|
•
|
our ability to develop complementary applications and services;
|
•
|
our continued ability to access the pricing and claims data necessary to enable us to deliver reliable data in our cost estimation and price transparency offering to customers;
|
•
|
the stability, performance and security of our hosting infrastructure and hosting services;
|
•
|
changes in healthcare laws, regulations or trends; and
|
•
|
the business environment of our clients, in particular, headcount reductions by our clients.
|
•
|
damage from fire, power loss and other natural disasters;
|
•
|
communications failures;
|
•
|
software and hardware errors, failures and crashes;
|
•
|
security breaches, computer viruses and similar disruptive problems; and
|
•
|
other potential interruptions.
|
•
|
Electronic Health Record, or EHR, vendors such as Allscripts Healthcare Solutions, Inc., or Allscripts, athenahealth, Inc., or athenahealth, Cerner Corporation, or Cerner, Epic Systems Corporation, or Epic, Flatiron Health Inc., or Flatiron, GE Healthcare, Inc., or GE Healthcare, McKesson Corporation, or McKesson, Medical Information Technology, Inc., or Meditech, and Quality Systems, Inc., or Quality Systems;
|
•
|
Health Information Exchange, or HIE, and integration vendors such as Allscripts, Intersystems Corporation, or Intersystems, and Orion Health Group Limited, or Orion; and
|
•
|
Healthcare information technology decision support vendors such as The Advisory Board Company, Castlight Health, Inc., or Castlight Health, HealthCatalyst, Inc., or HealthCatalyst, International Business Machines Corporation, or IBM, Inovalon Holdings, Inc., or Inovalon, and Truven Health Analytics, or Truven (acquired by IBM).
|
•
|
we or any collaborative partner will make timely filings with the FDA;
|
•
|
the FDA will act favorably or quickly on these submissions;
|
•
|
we or any collaborative partner will not be required to submit additional information;
|
•
|
we or any collaborative partner will not be required to submit an application for premarket approval, rather than a 510(k) premarket notification submission as described below; or
|
•
|
other significant difficulties and costs related to obtaining FDA clearance or approval will not be encountered.
|
•
|
acquiring appropriate and cost-efficient supplies to produce our sequencing and molecular analysis solutions;
|
•
|
delivering our sequencing and molecular analysis solutions in a timely manner to us;
|
•
|
continuing to keep our sequencing and molecular analysis solutions up to date and on pace with current clinical and market developments;
|
•
|
filing, prosecuting and maintaining patents that cover our sequencing and molecular analysis solutions;
|
•
|
complying with CLIA regulations and maintaining a CLIA license and all other applicable state laboratory licenses, including through periodic inspections; and
|
•
|
hiring qualified personnel experienced in completing highly complex laboratory tests.
|
•
|
inability to integrate or benefit from acquired technologies or services in a profitable manner;
|
•
|
unanticipated costs or liabilities associated with the acquisition;
|
•
|
difficulty integrating the accounting systems, operations and personnel of the acquired business;
|
•
|
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
|
•
|
difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;
|
•
|
difficulty in cross-selling our existing solutions and offerings to the acquired business’ customers;
|
•
|
diversion of management’s attention from other business concerns;
|
•
|
adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
|
•
|
the potential loss of key employees;
|
•
|
use of resources that are needed in other parts of our business; and
|
•
|
use of substantial portions of our available cash to consummate the acquisition.
|
•
|
requirements or preferences for domestic products or solutions, which could reduce demand for our products;
|
•
|
differing existing or future regulatory and certification requirements;
|
•
|
management communication and integration problems resulting from cultural and geographic dispersion;
|
•
|
greater difficulty in collecting accounts receivable and longer collection periods;
|
•
|
difficulties in enforcing contracts;
|
•
|
difficulties and costs of staffing and managing non-U.S. operations;
|
•
|
the uncertainty of protection for intellectual property rights in some countries;
|
•
|
tariffs and trade barriers, export regulations and other regulatory and contractual limitations on our ability to sell our products;
|
•
|
greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including export and antitrust regulations, the FCPA and any trade regulations ensuring fair trade practices;
|
•
|
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
|
•
|
potentially adverse tax consequences, including multiple and possibly overlapping tax structures; and
|
•
|
political and economic instability, political unrest and terrorism.
|
•
|
breach of our contractual obligations to clients, which may cause our clients to terminate their relationship with us and may result in potentially significant financial obligations to our clients;
|
•
|
investigation by the federal and state regulatory authorities empowered to enforce HIPAA and other data privacy and security laws, which include the U.S. Department of Health and Human Services, or HHS, the Federal Trade Commission and state attorneys general, and the possible imposition of civil and criminal penalties;
|
•
|
private litigation by individuals adversely affected by any misuse of their personal health information for which we are responsible; and
|
•
|
negative publicity, which may decrease the willingness of current and potential future customers to work with us and negatively affect our sales and operating results.
|
•
|
not experimental or investigational;
|
•
|
medically necessary;
|
•
|
appropriate for the specific patient;
|
•
|
cost-effective;
|
•
|
supported by peer-reviewed publications;
|
•
|
included in clinical practice guidelines; and
|
•
|
supported by clinical utility studies.
|
•
|
requires each medical device manufacturer to pay an excise tax equal to 2.3% of the price for which such manufacturer sells its medical devices. This tax may apply to GPS Cancer and some or all of our products which are in development. The excise tax has been temporarily suspended for calendar years 2016 and 2017, but will be reinstated in 2018 without additional Congressional action.
|
•
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mandates a reduction in payments for clinical laboratory services paid under the Medicare Clinical Laboratory Fee Schedule of 1.75% for the years 2011 through 2015. In addition, a productivity adjustment is made to the fee schedule payment amount.
|
•
|
creates initiatives to promote quality indicators in payment methodologies and the coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures.
|
•
|
announcements by us or our competitors of new products, significant contracts, commercial relationships or capital commitments and the timing of these introductions or announcements;
|
•
|
adverse regulatory or reimbursement announcements;
|
•
|
announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures or capital commitments;
|
•
|
the results of our efforts to develop additional offerings;
|
•
|
our dependence on our customers, partners and collaborators;
|
•
|
regulatory or legal developments in the United States or other countries;
|
•
|
reimbursement decisions regarding our future molecular profiling solutions, including GPS Cancer;
|
•
|
developments or disputes concerning patent applications, issued patents or other proprietary rights;
|
•
|
the recruitment or departure of key management or other personnel;
|
•
|
our ability to successfully commercialize our future products;
|
•
|
the level of expenses related to any of our products;
|
•
|
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
|
•
|
actual or anticipated quarterly variations in our financial results or those of our competitors;
|
•
|
any change to the composition of the board of directors or key personnel;
|
•
|
expiration of contractual lock-up agreements with our executive officers, directors and security holders;
|
•
|
sales of common stock by us or our stockholders in the future, as well as the overall trading volume of our common stock;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
commencement of, or our involvement in, litigation, including claims by our equityholders pertaining to our conversion from a Delaware limited liability company into a Delaware corporation or the pending class action litigation;
|
•
|
general economic, industry and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies; and
|
•
|
the other factors described in this “Risk Factors” section.
|
•
|
being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
|
•
|
not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
|
•
|
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
|
•
|
reduced disclosure obligations regarding executive compensation; and
|
•
|
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
•
|
a requirement that special meetings of stockholders be called only by the board of directors, the president or the chief executive officer;
|
•
|
advance notice requirements for stockholder proposals and nominations for election to our board of directors; and
|
•
|
the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
|
•
|
We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
|
•
|
We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.
|
•
|
We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
|
•
|
We will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification.
|
•
|
The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.
|
•
|
We may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Number
|
|
Exhibit Title
|
|
Form
|
|
File No.
|
|
Filing
|
|
Filed
|
Date
|
Herewith
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.INS**
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
Date:
|
August 11, 2017
|
|
|
|
|
|
|
|
|
By:
|
/s/ Patrick Soon-Shiong
|
|
|
Name:
|
Patrick Soon-Shiong
|
|
|
Its:
|
Chairman, Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Paul Holt
|
|
|
By:
|
Paul Holt
|
|
|
Name:
|
Chief Financial Officer
|
|
|
Its:
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 11, 2017
|
By:
|
/s/ Patrick Soon-Shiong
|
|
|
|
Dr. Patrick Soon-Shiong
|
|
|
|
Chairman, Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 11, 2017
|
By:
|
/s/ Paul Holt
|
|
|
|
Paul Holt
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
(i)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017
to which this Certification is attached as Exhibit 32.1 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act, and
|
(ii)
|
that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NantHealth, Inc.
|
Date:
|
August 11, 2017
|
By:
|
/s/ Patrick Soon-Shiong
|
|
|
|
Dr. Patrick Soon-Shiong
|
|
|
|
Chairman, Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
(i)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017
to which this Certification is attached as Exhibit 32.2 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act, and
|
(ii)
|
that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NantHealth, Inc.
|
Date:
|
August 11, 2017
|
By:
|
/s/ Paul Holt
|
|
|
|
Paul Holt
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|