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)
February 25, 2021
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))
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.0001 per share NH The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 17 CFR §(§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 17 CFR §(§240.12b-2).

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 February 25, 2021, NantHealth, Inc. publicly disseminated a press release announcing its financial results for the year ended December 31, 2020. 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
99.1





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: February 25, 2021 By:   /s/ Bob Petrou
  Bob Petrou
Chief Financial Officer
(Principal Financial and Accounting Officer)







Exhibit 99.1
NANTHEALTHLOGOAA101A.JPG
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098


NANTHEALTH REPORTS 2020 FOURTH-QUARTER, FULL-YEAR FINANCIAL RESULTS

Q4 Financial Highlights 2020 vs 2019:
Total revenue was $18.6 million
Total software-related revenue was $18.6 million, up from $18.4 million
Total gross margin increased to 61% from 58%

Full-Year Financial Highlights 2020 vs 2019:
Total revenue was $73.2 million vs $77.4 million
Total software-related revenue was $73.0 million, up from $72.8 million
Total gross margin increased to 60% from 56%
Completed sale of Connected Care Business for $47.25 million in February 2020
Acquired The OpenNMS Group, an open source network monitoring company, in July 2020

Culver City, Calif. - February 25, 2021 - NantHealth, Inc. (NASDAQ-GS: NH), a provider of enterprise solutions that help transform complex data into actionable insights, today reported financial results for its fourth quarter and full year ended December 31, 2020.

“While managing our business through the challenges associated with COVID-19 for most of the past year, we advanced our goal of expanding and diversifying NantHealth's software portfolio and services offerings with the acquisition of OpenNMS, continued to invest in our data solutions and AI capabilities, and delivered expanded capabilities on our NaviNet and Eviti SaaS products,” said Ron Louks, Chief Operating Officer, NantHealth. “In addition, as part of our NantHealth Cares initiative, we supported healthcare providers and medical staff by offering, at no cost for the entire month of May, our NaviNet AllPayer platform to providers. I am pleased to report that even with a month of free access, AllPayer revenues grew in 2020 and added more than 1,500 providers to its network."

Software and Services Q4 Highlights:
Clinical Decision Support (Eviti®):
Signed a renewal agreement with a Maryland-based health plan for an additional three years, and expanded products and services within the plan

Continued to expand Eviti Connect across the Medicaid population of a leading U.S. health insurance company. Of the 13 states originally announced, eight states have gone live through the fourth quarter of 2020

Launched Eviti Connect 8.2 which included:







Formulary Redirection ‒ a major expansion of our Treatment Warning and Deviation (TWAD) feature that allows redirection to preferred drugs. This new functionality scales the payer’s ability to enable formulary redirection resulting in significant savings in delivery of care

Smart Justifications ‒ uses Eviti proprietary algorithms to identify characteristics of cancer type and treatment goals that streamline workflow and result in faster time to treatment plan

Payer Engagement (NaviNet®):
Signed a three-year renewal agreement for NaviNet Open with one of the nation’s leading Medicaid managed care organizations, strengthening a nearly 20-year partnership

Launched a collaboration with Sesame, Inc. that enables providers to utilize Sesame’s payment tools giving patients direct access to affordable, high-quality care while increasing practice revenue

Introduced new network analytics solutions focused on providing our health plan partners with actionable insights into their providers’ NaviNet activity:

Document Exchange Insights Reports ‒ provide information on utilization trends, reach into the provider network, and identify opportunities for targeted action to drive greater adoption

Advanced user behavior analytics and user engagement tools ‒ influence the NaviNet product roadmap and augment existing analysis available to our health plans and partners

Enhanced Open Authorizations to more seamlessly inform providers on where and how to request service approval from their patient’s health plan

Network Monitoring and Management (OpenNMS®)
Deployed the OpenNMS flows and streaming analytics solution (300,000 flows per second) in production at a Fortune 500 energy company; decommissioning and replacing their existing solution

Released OpenNMS Horizon 27.0, which introduced digital experience monitoring for in depth monitoring of applications from the vantage point of individual end users and support for OpenConfig, a new industry standard that enables direct streaming of device telemetry data

Precision Medicine and Artificial Intelligence - Highlights:
In December, NantHealth presented significant treatment insights at the 2020 San Antonio Breast Cancer Symposium around the adoption of trastuzumab biosimilars in the treatment of HER2-positive breast cancer and the potential clinical and cost benefits of biosimilars. By examining Eviti data, the study identified an opportunity for payers to successfully redirect providers to biosimilars that offer high-value care at lower costs

In November, NantHealth and ImmunityBio announced the publication in Nature’s Scientific Reports of a study that revealed RNA sequencing is not only viable but may also provide significant clinical value in analyzing a cancer patient’s specific disease biology to enable an optimized treatment decision with a higher likelihood of success

In October, NantHealth, ImmunityBio and NantOmics presented results at the 2020 American Association for Cancer Research Virtual Special Conference on the use of deep-learning models in providing significant risk-assessment of survival in pancreatic cancer patients, holding promise as a prognostic technology

Business and Financial Highlights
For the 2020 fourth quarter:
Total net revenue was $18.6 million, up slightly from $18.6 million in the 2019 fourth quarter.







Gross profit increased to $11.4 million, or 61% of total net revenue, compared with $10.8 million, or 58% of total net revenue, for the prior year period.

Selling, general and administrative (SG&A) expenses declined to $11.7 million from $12.8 million in the 2019 fourth quarter, mainly driven by ongoing cost management efforts and efficiencies in overall processes.

Research and development (R&D) expenses increased to $4.8 million from $3.4 million mainly from the Company's ongoing investments in expanding its data and AI capabilities.

Net loss from continuing operations attributable to NantHealth, net of tax, was $20.1 million, or $0.18 per share, which includes a noncash charge related to the Allscripts Bookings Commitment of $8.1 million. This compares with net loss from continuing operations attributable to NantHealth, net of tax, of $13.2 million, or $0.12 per share, for the 2019 fourth quarter.

On a non-GAAP basis, net loss from continuing operations attributable to NantHealth was $6.2 million, or $0.06 per share, compared with $5.7 million, or $0.05 per share, for the fourth quarter of last year.

For the 2020 full year:
Total net revenue was $73.2 million. This compares with total net revenue of $77.4 million for the 2019 full year, which included $2.9 million of home healthcare services revenue, a business the company divested in June 2019.

Gross profit increased to $43.9 million, or 60% of total net revenue, from $43.3 million, or 56% of total net revenue, for the prior year.

SG&A expense declined substantially to $48.5 million from $55.6 million in 2019, driven by the divestiture of the home healthcare services business, continued efforts to reduce costs and maximize existing resources. R&D expense increased to $17.3 million from $13.9 million in 2019 mainly from ongoing investments in data and AI capabilities.

Net loss from continuing operations attributable to NantHealth, net of tax, was $88.3 million, or $0.80 per share, which includes noncash charges related to the Allscripts Bookings Commitment of $11.2 million and the impairment of the Company's equity method investment in NantOmics of $28.2 million. This compares with net loss from continuing operations attributable to NantHealth, net of tax, of $65.4 million, or $0.59 per share, for the 2019 full year.

On a non-GAAP basis, net loss from continuing operations attributable to NantHealth was $27.0 million, or $0.24 per share, down from $30.1 million, or $0.27 per share, for 2019.

At December 31, 2020, cash and cash equivalents totaled $22.8 million.

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 and full year ended December 31, 2020. 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 9786375. 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 enterprise solutions that help businesses transform complex data into actionable insights. By offering efficient ways to move, interpret, and visualize complex and highly sensitive information, NantHealth enables customers in healthcare, life sciences, logistics, telecommunications and other industries to automate, understand and act on data while keeping it secure and scalable. NantHealth’s product portfolio comprises the latest technology in payer/provider collaboration platforms for real-time coverage decision support (Eviti and NaviNet), molecular analysis (GPS Cancer), and data solutions that provide multi-data analysis, reporting and professional services offerings (Quadris). OpenNMS, a NantHealth subsidiary, helps businesses monitor and manage network health and performance. For more information, visit nanthealth.com, follow us on Twitter, Facebook and LinkedIn, and subscribe to our blog.

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 our systems and solutions 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 solutions; establishing relationships with key thought leaders or key decision makers in order to attract, retain and renew partners and clients and obtain reimbursement for our sequencing and molecular analysis solutions; our ability to grow the market for our solutions; successfully enhancing our solutions to achieve market acceptance and keep pace with technological developments; customer concentration; competition; security breaches; data loss or corruption due to failures or errors in our systems and service disruptions at our data centers; bandwidth limitations; our ability to use, disclose, de-identify or license data and to integrate third-party technologies; our use of “open source” software; 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 our molecular sequencing and analysis solutions; 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,
2020 2019
Assets
Current assets
Cash and cash equivalents $ 22,787  $ 5,243 
Accounts receivable, net 3,273  6,179 
Related party receivables, net 1,031  823 
Prepaid expenses and other current assets 3,504  19,341 
Current assets of discontinued operations —  6,327 
Total current assets 30,595  37,913 
Property, plant, and equipment, net 13,102  14,985 
Goodwill 98,333  97,307 
Intangible assets, net 47,969  51,848 
Investment in related party —  31,702 
Related party receivable, net of current 823  1,108 
Operating lease right-of-use assets 7,539  8,470 
Other assets 1,927  1,818 
Noncurrent assets of discontinued operations —  21,336 
Total assets $ 200,288  $ 266,487 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 5,122  $ 3,377 
Accrued and other current liabilities 13,975  31,988 
Deferred revenue 1,166  7,098 
Related party payables, net 4,238  4,120 
Notes payable 268  238 
Related party convertible note, net 9,411  — 
Convertible notes, net 90,578  — 
Current liabilities of discontinued operations —  10,680 
Total current liabilities 124,758  57,501 
Deferred revenue, net of current 393  1,129 
Related party liabilities 31,091  24,227 
Related party promissory note 112,666  112,666 
Related party convertible note, net
—  8,864 
Convertible notes, net
—  84,648 
Deferred income taxes, net 1,853  1,669 
Operating lease liabilities 8,170  9,728 
Other liabilities 32,757  21,542 
Noncurrent liabilities of discontinued operations —  1,649 
Total liabilities 311,688  323,623 
Stockholders' deficit
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 111,284,733 and 110,619,678 shares issued and outstanding at December 31, 2020 and 2019, respectively 11  11 
Additional paid-in capital
891,583  889,955 
Accumulated deficit
(1,003,210) (946,884)
Accumulated other comprehensive loss
(168) (218)
Total NantHealth stockholders' deficit (111,784) (57,136)
Noncontrolling interests 384  — 
Total stockholders' deficit (111,400) (57,136)
Total liabilities and stockholders' deficit $ 200,288  $ 266,487 






NantHealth, Inc.  
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)  
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2020 2019 2020 2019
Revenue
Software-as-a-service related $ 18,201  $ 18,410  $ 72,198  $ 72,831 
Maintenance 378  —  677  — 
Professional services 24  —  86  — 
Total software-related revenue 18,603  18,410  72,961  72,831 
Sequencing and molecular analysis 39  152  211  1,733 
Home health care services —  —  —  2,863 
Total net revenue 18,642  18,562  73,172  77,427 
Cost of Revenue
Software-as-a-service related 5,504  6,096  23,056  23,100 
Maintenance 230  69  361  357 
Professional services —  16  — 
Amortization of developed technologies 1,247  1,143  4,755  4,662 
Total software-related cost of revenue 6,982  7,308  28,188  28,119 
Sequencing and molecular analysis 211  480  1,038  4,546 
Home health care services —  —  —  1,471 
Total cost of revenue 7,193  7,788  29,226  34,136 
Gross Profit 11,449  10,774  43,946  43,291 
Operating Expenses
Selling, general and administrative 11,670  12,752  48,534  55,595 
Research and development 4,828  3,431  17,274  13,934 
Amortization of acquisition-related assets 985  1,054  3,676  4,216 
Impairment of intangible assets, including internal-use software 729  —  729  3,977 
Total operating expenses 18,212  17,237  70,213  77,722 
Loss from operations (6,763) (6,463) (26,267) (34,431)
Interest expense, net (4,908) (4,601) (19,199) (18,044)
Other expense, net (8,274) (585) (10,824) (5,607)
Loss from related party equity method investment —  (1,916) (31,702) (8,317)
Loss from continuing operations before income taxes (19,945) (13,565) (87,992) (66,399)
Provision for (benefit from) income taxes 273  (359) 447  (1,018)
Net loss from continuing operations (20,218) (13,206) (88,439) (65,381)
Income from discontinued operations, net of tax attributable to NantHealth 38  1,457  31,993  2,619 
Net loss (20,180) (11,749) (56,446) (62,762)
Net loss attributable to noncontrolling interests (78) —  (120) — 
Net loss attributable to NantHealth $ (20,102) $ (11,749) $ (56,326) $ (62,762)
Basic and diluted net loss per share attributable to NantHealth:
Continuing operations - common stock $ (0.18) $ (0.12) $ (0.80) $ (0.59)
Discontinued operations - common stock $ —  $ 0.01  $ 0.29  $ 0.02 
Total net loss per share - common stock $ (0.18) $ (0.11) $ (0.51) $ (0.57)
Weighted average shares outstanding
Basic and diluted - common stock 111,238,540  110,619,780  110,954,858  110,351,638 






NantHealth, Inc.
Non-GAAP Net Loss from Continuing Operations Attributable to NantHealth and Non-GAAP Net Loss Per Share from Continuing Operations Attributable to NantHealth
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2020 2019 2020 2019
Net loss from continuing operations attributable to NantHealth $ (20,140) $ (13,206) $ (88,319) $ (65,381)
Adjustments to GAAP net loss from continuing operations attributable to NantHealth:
Loss from related party equity method investment
—  1,916  31,702  8,317 
Stock-based compensation expense from continuing operations
961  1,566  2,722  2,842 
Change in fair value of derivatives liability
(3) —  — 
Change in fair value of Bookings Commitment
8,098  372  11,168  5,036 
Noncash interest expense related to convertible notes 1,698  1,495  6,477  5,702 
Intangible amortization from continuing operations
2,212  2,197  8,395  8,878 
Impairment of intangible assets, including internal-use software 729  —  729  3,977 
Loss on sale of business
—  —  —  582 
Securities litigation costs
—  28  (103) 528 
Tax provision (benefit) resulting from certain noncash tax items 244  (51) 228  (570)
Total adjustments to GAAP net loss from continuing operations attributable to NantHealth 13,939  7,523  61,322  35,292 
Net loss from continuing operations attributable to NantHealth - Non-GAAP $ (6,201) $ (5,683) $ (26,997) $ (30,089)
Weighted average basic common shares outstanding 111,238,540  110,619,780  110,954,858  110,351,638 
Net loss per common share from continuing operations attributable to NantHealth - Non-GAAP $ (0.06) $ (0.05) $ (0.24) $ (0.27)







Reconciliation of Net Loss per Common Share from Continuing Operations Attributable to NantHealth to Net Loss per Common Share from Continuing Operations Attributable to NantHealth - Non-GAAP (Unaudited):
Three Months Ended December 31, Year Ended December 31,
2020 2019 2020 2019
Net loss per common share from continuing operations attributable to NantHealth $ (0.18) $ (0.12) $ (0.80) $ (0.59)
Adjustments to GAAP net loss per common share from continuing operations attributable to NantHealth:
Loss from related party equity method investment
—  0.03  0.29  0.07 
Stock-based compensation expense from continuing operations
0.01  0.01  0.02  0.03 
Change in fair value of derivatives liability
—  —  —  — 
Change in fair value of Bookings Commitment
0.07  —  0.10  0.05 
Noncash interest expense related to convertible notes 0.01  0.01  0.06  0.05 
Intangible amortization from continuing operations
0.02  0.02  0.08  0.08 
Impairment of intangible assets, including internal-use software 0.01  —  0.01  0.04 
Loss on sale of business
—  —  —  0.01 
Securities litigation costs
—  —  —  — 
Tax provision (benefit) resulting from certain noncash tax items —  —  —  (0.01)
Total adjustments to GAAP net loss per common share from continuing operations attributable to NantHealth 0.12  0.07  0.56  0.32 
Net loss per common share from continuing operations attributable to NantHealth - Non-GAAP $ (0.06) $ (0.05) $ (0.24) $ (0.27)