|
|
|
Delaware
|
|
001-37792
|
|
27-3019889
|
(State or other jurisdiction of
incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.0001 per share
|
NH
|
Nasdaq Stock Market LLC
|
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits.
|
|
|
NantHealth, Inc.
|
|
|
|
|
|
Date:
|
November 7, 2019
|
By:
|
/s/ Bob Petrou
|
|
|
|
Bob Petrou
|
|
|
|
Chief Financial Officer
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
Q3 Financial Highlights:
|
◦
|
Total revenue was $22.4 million
|
◦
|
SaaS revenue was $18.3 million, up 15% from Q3 2018
|
◦
|
Total gross margin increased to 63% from 50% in Q3 2018
|
◦
|
Company was cash flow positive, with cash growing by $2.3 million from Q2 2019 to $9.3 million at Q3 2019
|
•
|
Software and Service business: in Q3, Eviti acquired one new customer and renewed two customer contracts for a total contract value exceeding $40 million
|
•
|
Clinical Decision Support (Eviti®):
|
◦
|
Renewed a partnership contract with a leading provider of clinical solutions. The contract has a three-year term and a minimum estimated total value of $38.4 million
|
◦
|
Signed an agreement with Wexford Health Sources, one of the nation’s largest correctional healthcare companies, bringing evidence-based standards and value-based oncology care to patients
|
◦
|
Renewed an agreement with a large national health plan for federal employees, retirees and their families. Plan members will continue to receive streamlined preauthorization of cancer care
|
◦
|
Launched several enhancements designed to provide payers with additional information about care management, including the intended use of brand name drugs and visibility into settings where care is provided. Payers with multiple plans can now permit their users to view multiple dashboards, which saves time by reducing the need for multiple logins and passwords
|
◦
|
Received full accreditation from URAC for the Eviti platform. Eviti continues to meet URAC Health Utilization Management standards, valid through September 1, 2022. The designation recognizes those companies abiding by evidence-based standards and value-based care
|
•
|
Payer Engagement (NaviNet®):
|
◦
|
Added Navinet’s Authorization Attachment application to the NaviNet implementation for one of the nation’s largest health insurance organizations. This feature ensures providers receive the right supporting documentation to make more informed, timely decisions
|
◦
|
Expanded NaviNet Open functionality to provide additional notifications within the Authorization application, enabling users to receive information timely and respond quickly to critical requests, eliminating potential delays in caring for patients
|
◦
|
NaviNet’s AllPayer product completed the conversion of 3,602 provider offices, more than 80% of AllPayer customers, from a legacy pricing model which will result in more than $1.0 million of additional annual recurring revenue
|
•
|
Connected Care (VCX, DCX):
|
◦
|
Introduced VCX 3.0 (formerly VitalsConX), designed to reduce patient overstays and facilitate faster decision making. VCX 3.0 accelerates automated vital sign capture and provides easy entry of other customized observations at the point of care. Updates include streamlined data validation and a touch-based user interface to document vital signs quickly and easily. VCX 3.0 now supports “smart” patient vital sign monitors, including GE VC150
|
◦
|
Announced new Shuttle cable features to help improve data collection, efficiency and accuracy using a medical-grade serial-to-USB interface cable
|
◦
|
Signed a contract with Baxter expanding DCX (formerly DeviceConX) medical device driver development, enabling Baxter to connect additional devices to electronic medical record (EMR) systems.
|
◦
|
In Q4, at the HIMSS Asia Pacific 2019 meeting, NantHealth led the Interoperability Showcase along with GE Healthcare, AirStrip and iProcedures. Together, the companies showcased how clinicians can spend less time on documentation and more time analyzing data in near real-time to improve patient outcomes
|
•
|
Presented a poster on GPS Cancer at the IASLC (World Lung) meeting in Barcelona. Dr. Hossein Borghaei, Fox Chase Cancer Center, and authors from NantHealth and NantOmics, presented a poster, “222 NSCLC’s Classified by PAM50: Luminal A NSCLC Is a Distinct Subtype with Low TMB and Immune Suppressive TME.” The poster concludes NantHealth and NantOmics can use GPS Cancer to identify a unique subset of patients who are likely to be resistant to conventional immune checkpoint inhibitor therapy, using a method that has not previously been well characterized in this clinical setting
|
•
|
Presented a poster at the European Society for Medical Oncology (ESMO) meeting. NantHealth and NantOmics, together with investigators from Moffitt Cancer Center, presented a poster, “Differential expression of immunoregulatory molecules and highly-associated cancer genes may provide novel insights into strategic trial design for therapeutics.” The poster describes novel associations of immune checkpoint gene expression with cancer related genomic mutations beyond Tumor Mutation Burden (TMB) as a biomarker for immunotherapy response
|
•
|
For the 2019 third quarter, total net revenue was $22.4 million, compared with $22.3 million in the 2018 third quarter. On June 7, 2019, the Company completed the divestiture of its home health care services business. Accordingly, financial results for the 2019 third quarter do not include the results of operations from this business, which over the last year averaged approximately $1.5 million of revenue per quarter.
|
•
|
Gross profit increased to $14.0 million, or 63% of total net revenue, compared with $11.1 million, or 50% of total net revenue, for the prior year period. The increase was primarily driven by continued growth of the Company’s higher margin SaaS business and overall cost management.
|
•
|
Selling, general and administrative expenses declined to $15.1 million from $17.0 million in 2018 third quarter. The decrease was mainly driven by ongoing cost management efforts and efficiencies in overall processes.
|
•
|
Research and development expenses decreased to $4.6 million from $4.8 million.
|
•
|
Net loss from continuing operations, net of tax, was $16.4 million, or $0.15 per share, compared with $97.5 million, or $0.89 per share, for the 2018 third quarter.
|
•
|
On a non-GAAP basis, net loss from continuing operations was $7.4 million, or $0.07 per share, down from $10.8 million, or $0.10 per share, for the third quarter of last year. The improvement reflects the company’s ongoing efforts to manage costs, growth of its SaaS business and efficiencies and process improvements.
|
•
|
At September 30, 2019, cash and cash equivalents totaled $9.3 million, an increase of $2.3 million from June 30, 2019.
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,326
|
|
|
$
|
18,305
|
|
Accounts receivable, net
|
10,948
|
|
|
15,286
|
|
||
Inventories
|
202
|
|
|
496
|
|
||
Related party receivables, net
|
1,047
|
|
|
1,007
|
|
||
Prepaid expenses and other current assets
|
23,670
|
|
|
4,350
|
|
||
Total current assets
|
45,193
|
|
|
39,444
|
|
||
Property, plant, and equipment, net
|
16,351
|
|
|
22,978
|
|
||
Goodwill
|
115,930
|
|
|
115,930
|
|
||
Intangible assets, net
|
54,045
|
|
|
64,703
|
|
||
Investment in related party
|
33,612
|
|
|
40,000
|
|
||
Related party receivable, net of current
|
1,029
|
|
|
1,611
|
|
||
Operating lease right-of-use assets
|
10,353
|
|
|
—
|
|
||
Other assets
|
1,903
|
|
|
1,671
|
|
||
Total assets
|
$
|
278,416
|
|
|
$
|
286,337
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity (Deficit)
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
2,912
|
|
|
$
|
1,650
|
|
Accrued and other current liabilities
|
35,044
|
|
|
13,832
|
|
||
Deferred revenue
|
17,792
|
|
|
16,263
|
|
||
Related party payables, net
|
3,771
|
|
|
4,791
|
|
||
Notes payable
|
946
|
|
|
—
|
|
||
Total current liabilities
|
60,465
|
|
|
36,536
|
|
||
Deferred revenue, net of current
|
2,764
|
|
|
6,704
|
|
||
Related party liabilities
|
22,583
|
|
|
17,708
|
|
||
Related party promissory note
|
112,666
|
|
|
112,666
|
|
||
Related party convertible note, net
|
8,736
|
|
|
8,378
|
|
||
Convertible notes, net
|
83,281
|
|
|
79,433
|
|
||
Operating lease liabilities
|
11,418
|
|
|
—
|
|
||
Other liabilities
|
23,080
|
|
|
22,081
|
|
||
Total liabilities
|
324,993
|
|
|
283,506
|
|
||
|
|
|
|
||||
Stockholders' equity (deficit)
|
|
|
|
||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 110,619,906 and 109,491,277 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
|
11
|
|
|
11
|
|
||
Additional paid-in capital
|
888,994
|
|
|
887,289
|
|
||
Accumulated deficit
|
(935,135
|
)
|
|
(884,122
|
)
|
||
Accumulated other comprehensive loss
|
(447
|
)
|
|
(347
|
)
|
||
Total stockholders' (deficit) equity
|
(46,577
|
)
|
|
2,831
|
|
||
Total liabilities and stockholders' equity (deficit)
|
$
|
278,416
|
|
|
$
|
286,337
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total net revenue
|
$
|
22,356
|
|
|
$
|
22,292
|
|
|
$
|
71,771
|
|
|
$
|
66,603
|
|
|
|
|
|
|
|
|
|
||||||||
Total cost of revenue
|
8,372
|
|
|
11,226
|
|
|
29,478
|
|
|
32,878
|
|
||||
Gross Profit
|
13,984
|
|
|
11,066
|
|
|
42,293
|
|
|
33,725
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
15,136
|
|
|
17,001
|
|
|
47,101
|
|
|
56,123
|
|
||||
Research and development
|
4,568
|
|
|
4,835
|
|
|
14,232
|
|
|
15,875
|
|
||||
Amortization of acquisition-related assets
|
1,054
|
|
|
1,054
|
|
|
3,163
|
|
|
3,163
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
3,977
|
|
|
—
|
|
||||
Total operating expenses
|
20,758
|
|
|
22,890
|
|
|
68,473
|
|
|
75,161
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(6,774
|
)
|
|
(11,824
|
)
|
|
(26,180
|
)
|
|
(41,436
|
)
|
||||
Interest expense, net
|
(4,556
|
)
|
|
(4,306
|
)
|
|
(13,443
|
)
|
|
(12,766
|
)
|
||||
Other (expense) income, net
|
(3,588
|
)
|
|
226
|
|
|
(5,039
|
)
|
|
(928
|
)
|
||||
Loss from related party equity method investment
|
(1,983
|
)
|
|
(83,306
|
)
|
|
(6,401
|
)
|
|
(89,512
|
)
|
||||
Loss from continuing operations before income taxes
|
(16,901
|
)
|
|
(99,210
|
)
|
|
(51,063
|
)
|
|
(144,642
|
)
|
||||
Benefit from income taxes
|
(527
|
)
|
|
(1,778
|
)
|
|
(168
|
)
|
|
(3,429
|
)
|
||||
Net loss from continuing operations
|
(16,374
|
)
|
|
(97,432
|
)
|
|
(50,895
|
)
|
|
(141,213
|
)
|
||||
Loss from discontinued operations, net of tax
|
(3
|
)
|
|
(32
|
)
|
|
(118
|
)
|
|
(1,817
|
)
|
||||
Net loss
|
$
|
(16,377
|
)
|
|
$
|
(97,464
|
)
|
|
$
|
(51,013
|
)
|
|
$
|
(143,030
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.15
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(1.29
|
)
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total net loss per share
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.15
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(1.31
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
110,619,905
|
|
|
109,471,712
|
|
|
110,261,279
|
|
|
109,060,408
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service related
|
$
|
18,328
|
|
|
$
|
15,937
|
|
|
$
|
54,421
|
|
|
$
|
48,323
|
|
Software and hardware related
|
1,009
|
|
|
1,450
|
|
|
5,135
|
|
|
3,790
|
|
||||
Maintenance
|
2,743
|
|
|
2,522
|
|
|
7,771
|
|
|
7,357
|
|
||||
Total software-related revenue
|
22,080
|
|
|
19,909
|
|
|
67,327
|
|
|
59,470
|
|
||||
Sequencing and molecular analysis
|
276
|
|
|
742
|
|
|
1,581
|
|
|
2,506
|
|
||||
Home health care services
|
—
|
|
|
1,641
|
|
|
2,863
|
|
|
4,627
|
|
||||
Total net revenue
|
$
|
22,356
|
|
|
$
|
22,292
|
|
|
$
|
71,771
|
|
|
$
|
66,603
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service related
|
$
|
5,659
|
|
|
$
|
5,863
|
|
|
$
|
17,155
|
|
|
$
|
18,205
|
|
Software and hardware related
|
624
|
|
|
737
|
|
|
2,203
|
|
|
2,412
|
|
||||
Maintenance
|
484
|
|
|
234
|
|
|
1,065
|
|
|
683
|
|
||||
Amortization of developed technologies
|
1,143
|
|
|
1,233
|
|
|
3,519
|
|
|
3,700
|
|
||||
Total software-related cost of revenue
|
7,910
|
|
|
8,067
|
|
|
23,942
|
|
|
25,000
|
|
||||
Sequencing and molecular analysis
|
462
|
|
|
2,323
|
|
|
4,065
|
|
|
5,443
|
|
||||
Home health care services
|
—
|
|
|
836
|
|
|
1,471
|
|
|
2,435
|
|
||||
Total cost of revenue
|
$
|
8,372
|
|
|
$
|
11,226
|
|
|
$
|
29,478
|
|
|
$
|
32,878
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss from continuing operations
|
$
|
(16,374
|
)
|
|
$
|
(97,432
|
)
|
|
$
|
(50,895
|
)
|
|
$
|
(141,213
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment
|
1,983
|
|
|
83,306
|
|
|
6,401
|
|
|
89,512
|
|
||||
Stock-based compensation expense from continuing operations
|
526
|
|
|
373
|
|
|
1,849
|
|
|
4,805
|
|
||||
Acquisition related sales incentive
|
—
|
|
|
425
|
|
|
—
|
|
|
995
|
|
||||
Change in fair value of derivatives liability
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Change in fair value of Bookings Commitment
|
3,159
|
|
|
—
|
|
|
4,664
|
|
|
—
|
|
||||
Impairment of investment in IOBS
|
—
|
|
|
—
|
|
|
—
|
|
|
1,750
|
|
||||
Noncash interest expense related to convertible notes
|
1,447
|
|
|
1,273
|
|
|
4,207
|
|
|
3,702
|
|
||||
Intangible amortization from continuing operations
|
2,197
|
|
|
2,287
|
|
|
6,682
|
|
|
6,863
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
3,977
|
|
|
—
|
|
||||
Loss on sale of business
|
—
|
|
|
—
|
|
|
582
|
|
|
—
|
|
||||
Securities litigation costs
|
500
|
|
|
887
|
|
|
500
|
|
|
1,709
|
|
||||
Tax benefit resulting from certain noncash tax items
|
(885
|
)
|
|
(1,943
|
)
|
|
(519
|
)
|
|
(3,649
|
)
|
||||
Total adjustments to GAAP net loss from continuing operations
|
8,927
|
|
|
86,603
|
|
|
28,343
|
|
|
105,680
|
|
||||
Net loss from continuing operations - Non-GAAP
|
$
|
(7,447
|
)
|
|
$
|
(10,829
|
)
|
|
$
|
(22,552
|
)
|
|
$
|
(35,533
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
110,619,905
|
|
|
109,471,712
|
|
|
110,261,279
|
|
|
109,060,408
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share from continuing operations - Non-GAAP
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.33
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss from continuing operations
|
$
|
(0.15
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(1.29
|
)
|
Adjustments to GAAP net loss per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment
|
0.03
|
|
|
0.77
|
|
|
0.05
|
|
|
0.82
|
|
||||
Stock-based compensation expense from continuing operations
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.04
|
|
||||
Acquisition related sales incentive
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Change in fair value of derivatives liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Change in fair value of Bookings Commitment
|
0.03
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Impairment of Investment in IOBS
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
Noncash interest expense related to convertible notes
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.03
|
|
||||
Intangible amortization from continuing operations
|
0.02
|
|
|
0.02
|
|
|
0.06
|
|
|
0.05
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Loss on sale of business
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
||||
Securities litigation costs
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
||||
Tax benefit resulting from certain noncash tax items
|
(0.01
|
)
|
|
(0.02
|
)
|
|
—
|
|
|
(0.03
|
)
|
||||
Total adjustments to GAAP net loss per common share from continuing operations
|
0.08
|
|
|
0.79
|
|
|
0.26
|
|
|
0.96
|
|
||||
Net loss per common share from continuing operations - Non-GAAP
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.33
|
)
|