|
|
|
Delaware
|
|
001-37792
|
|
27-3019889
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits
.
|
Exhibit No.
|
Description
|
Exhibit No.
|
Description
|
|
|
|
|
NantHealth, Inc.
|
|
|
|
|
|
Date:
|
March 28, 2019
|
By:
|
|
/s/ Bob Petrou
|
|
|
|
|
Bob Petrou
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
Total Revenue in Q4 was $22.9 Million
|
◦
|
SaaS revenue of $17.3 million in Q4, up 9% from Q3
|
•
|
Enhanced efficiencies continued to drive significantly lower operating expenses in both Q4 and full year of 2018
|
•
|
For 2018, substantially improved adjusted Non-GAAP bottom line results
|
•
|
Sequencing and Molecular Analysis, 1,021 total tests ordered in Q4, including 539 GPS Cancer® and 482 Liquid GPS
SM
Tests; continued sequential quarterly growth in total tests ordered
|
•
|
Clinical Decision Support (Eviti):
|
◦
|
In Q4, deployed release 7.5, with new features that include:
|
▪
|
A new configuration, known as the Treatment Warning and Deviation Configuration, that enables payers to display custom drug deviation messages, enhancing value-based care and compliance with payer guidelines
|
▪
|
A new analyzer deviation that supports the Febrile Neutropenia (FN) risk factor associated with white blood cell (WBC) growth factors, a key driver of regimen costs
|
▪
|
Updated the Medical Policy QA report that assists partners/resellers with their internal quality assurance process
|
▪
|
Enhanced the Precision Insights Portal, features include:
|
•
|
All treatment plans that are presented to a user are saved and stored, enabling analytics for the understanding of treatment plan trends and improvement in the presentation of the plans to users
|
•
|
Enhanced drug mapping management feature in the portal enables a comparison of the Precision Insights portal recommended drugs to the evidence based Eviti drug recommendation to help align to the standard of care library
|
•
|
Payer Engagement (NaviNet):
|
◦
|
Completed 12 client service implementation projects in Q4, for a total of 57 in 2018
|
◦
|
In Q4, introduced two key features for NaviNet Open
|
▪
|
Routing Attributes for Document Exchange were enhanced to provide health plans more control over document routing to users
|
▪
|
NaviNet Open subscribers are now provided a detailed view of user activity for all Authorization Appeals in a monthly report delivered to the health plan
|
◦
|
In December 2018, at the Healthcare Payers Transformation Assembly hosted by the Millennium Alliance, the company met with Payer groups and led a roundtable discussion entitled, “Looking at the Challenges Health Plans Face with the Convergence of Precision Medicine and Value Based Care.” As a result, the company is engaged in a number of ongoing sales conversations based on discussions initiated at this event
|
•
|
Connected Care (DeviceConX):
|
◦
|
In Q4, completed a DeviceConX implementation in Sweden, which included our first deployment with physiological waveform capabilities
|
◦
|
In Q4, as previously announced, collaborated with B. Braun Australia, GE Healthcare and iProcedures to demonstrate the exchange of data between patient devices and medical records
at the Interoperability Showcase™ as part of the Healthcare Information and Management Systems Society (HIMSS) Asia Pacific Conference
|
◦
|
Significantly increased connectivity license sales in Q1, driving improved recurring maintenance revenue on a go forward basis
|
◦
|
In Q1, deployed DeviceConX Version 5.15 upgrade, with the ability to push OS security patches directly to HBox Connected Care hardware devices
|
•
|
In Q4, total orders (GPS Cancer and Liquid GPS) increased 10% to 1,021 from 930 in Q3
|
•
|
In Q4, the company expanded the molecular analysis reporting of GPS Cancer to provide information on a patient’s pharmacogenomic profile. These results, now available in the GPS Cancer test report, provide insights into potential drug toxicity and/or interactions
|
•
|
In December 2018, at the San Antonio Breast Cancer Symposium, the company and NantOmics presented the findings of three investigations, which examine the theme of providing oncologists with insights that enable cancer treatment tailored to the individual characteristics of each patient
|
•
|
In Q4, expanded existing employer reimbursement contract with Northwest Firefighters Benefits Trust to include Liquid GPS coverage and signed a net new reimbursement contract for both GPS Cancer and Liquid GPS with an additional city fire/police employee trust
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,305
|
|
|
$
|
61,660
|
|
Accounts receivable, net
|
15,286
|
|
|
11,491
|
|
||
Inventories
|
496
|
|
|
839
|
|
||
Deferred implementation costs
|
—
|
|
|
1,960
|
|
||
Related party receivables, net
|
1,007
|
|
|
585
|
|
||
Prepaid expenses and other current assets
|
4,350
|
|
|
5,358
|
|
||
Total current assets
|
39,444
|
|
|
81,893
|
|
||
Property, plant, and equipment, net
|
22,978
|
|
|
18,517
|
|
||
Deferred implementation costs, net of current
|
—
|
|
|
3,951
|
|
||
Goodwill
|
115,930
|
|
|
114,625
|
|
||
Intangible assets, net
|
64,703
|
|
|
69,424
|
|
||
Investment in related party
|
40,000
|
|
|
156,863
|
|
||
Related party receivable, net of current
|
1,611
|
|
|
1,727
|
|
||
Other assets
|
1,671
|
|
|
2,195
|
|
||
Total assets
|
$
|
286,337
|
|
|
$
|
449,195
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
1,650
|
|
|
$
|
3,164
|
|
Accrued and other current liabilities
|
13,832
|
|
|
18,134
|
|
||
Deferred revenue
|
16,263
|
|
|
10,057
|
|
||
Related party payables, net
|
4,791
|
|
|
4,504
|
|
||
Total current liabilities
|
36,536
|
|
|
35,859
|
|
||
Deferred revenue, net of current
|
6,704
|
|
|
7,126
|
|
||
Related party liabilities
|
17,708
|
|
|
11,500
|
|
||
Related party promissory note
|
112,666
|
|
|
112,666
|
|
||
Related party convertible note, net
|
8,378
|
|
|
7,947
|
|
||
Convertible notes, net
|
79,433
|
|
|
74,845
|
|
||
Other liabilities
|
22,081
|
|
|
5,950
|
|
||
Total liabilities
|
283,506
|
|
|
255,893
|
|
||
Stockholders' equity
|
|
|
|
||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 109,491,277 and 108,383,602 shares issued and outstanding at December 31, 2018 (including 1 share of restricted stock) and 2017 (including 3,490 shares of restricted stock), respectively
|
11
|
|
|
10
|
|
||
Additional paid-in capital
|
887,289
|
|
|
886,669
|
|
||
Accumulated deficit
|
(884,122
|
)
|
|
(693,233
|
)
|
||
Accumulated other comprehensive loss
|
(347
|
)
|
|
(144
|
)
|
||
Total stockholders' equity
|
2,831
|
|
|
193,302
|
|
||
Total liabilities and stockholders' equity
|
$
|
286,337
|
|
|
$
|
449,195
|
|
|
Three Months Ended
December 31, |
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total net revenue
|
$
|
22,862
|
|
|
$
|
22,298
|
|
|
$
|
89,464
|
|
|
$
|
86,676
|
|
|
|
|
|
|
|
|
|
||||||||
Total cost of revenue
|
11,393
|
|
|
8,880
|
|
|
44,269
|
|
|
41,522
|
|
||||
Gross profit
|
11,469
|
|
|
13,418
|
|
|
45,195
|
|
|
45,154
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
14,638
|
|
|
20,795
|
|
|
70,763
|
|
|
74,976
|
|
||||
Research and development
|
5,041
|
|
|
8,811
|
|
|
20,916
|
|
|
33,862
|
|
||||
Amortization of acquisition-related assets
|
1,054
|
|
|
1,054
|
|
|
4,217
|
|
|
4,216
|
|
||||
Total operating expenses
|
20,733
|
|
|
30,660
|
|
|
95,896
|
|
|
113,054
|
|
||||
Loss from operations
|
(9,264
|
)
|
|
(17,242
|
)
|
|
(50,701
|
)
|
|
(67,900
|
)
|
||||
Interest expense, net
|
(4,354
|
)
|
|
(4,119
|
)
|
|
(17,120
|
)
|
|
(16,168
|
)
|
||||
Other (loss) income, net
|
(16,948
|
)
|
|
492
|
|
|
(17,876
|
)
|
|
800
|
|
||||
Loss from related party equity method investment, including impairment
|
(18,898
|
)
|
|
(3,981
|
)
|
|
(108,409
|
)
|
|
(50,334
|
)
|
||||
Loss from continuing operations before income taxes
|
(49,464
|
)
|
|
(24,850
|
)
|
|
(194,106
|
)
|
|
(133,602
|
)
|
||||
Benefit from income taxes
|
(244
|
)
|
|
(2,288
|
)
|
|
(3,673
|
)
|
|
(2,203
|
)
|
||||
Net loss from continuing operations
|
(49,220
|
)
|
|
(22,562
|
)
|
|
(190,433
|
)
|
|
(131,399
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
97
|
|
|
928
|
|
|
(1,719
|
)
|
|
(43,812
|
)
|
||||
Net loss
|
$
|
(49,123
|
)
|
|
$
|
(21,634
|
)
|
|
$
|
(192,152
|
)
|
|
$
|
(175,211
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share
|
|
|
|
|
|
|
|
||||||||
Continuing operations - common stock
|
$
|
(0.45
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(1.74
|
)
|
|
$
|
(1.12
|
)
|
Discontinued operations - common stock
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.37
|
)
|
Total net loss per common stock
|
$
|
(0.45
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.76
|
)
|
|
$
|
(1.49
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
109,490,441
|
|
|
107,810,546
|
|
|
109,168,798
|
|
|
116,737,860
|
|
|
Three Months Ended
December 31, 2018 |
||||||||||
|
As Reported
|
|
Adjustments Due To ASC 606
(1)
|
|
Without New Revenue Standard
|
||||||
Total net revenue
|
$
|
22,862
|
|
|
$
|
(642
|
)
|
|
$
|
22,220
|
|
|
|
|
|
|
|
|
|
|
|||
Total cost of revenue
|
11,393
|
|
|
2
|
|
|
11,395
|
|
|||
Gross profit
|
11,469
|
|
|
(644
|
)
|
|
10,825
|
|
|||
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
14,638
|
|
|
(114
|
)
|
|
14,524
|
|
|||
Research and development
|
5,041
|
|
|
—
|
|
|
5,041
|
|
|||
Amortization of acquisition-related assets
|
1,054
|
|
|
—
|
|
|
1,054
|
|
|||
Total operating expenses
|
20,733
|
|
|
(114
|
)
|
|
20,619
|
|
|||
Loss from operations
|
(9,264
|
)
|
|
(530
|
)
|
|
(9,794
|
)
|
|||
Interest expense, net
|
(4,354
|
)
|
|
—
|
|
|
(4,354
|
)
|
|||
Other (loss) income, net
|
(16,948
|
)
|
|
1
|
|
|
(16,947
|
)
|
|||
Loss from related party equity method investment, including impairment
|
(18,898
|
)
|
|
—
|
|
|
(18,898
|
)
|
|||
Loss from continuing operations before income taxes
|
(49,464
|
)
|
|
(529
|
)
|
|
(49,993
|
)
|
|||
(Benefit from) provision for income taxes
|
(244
|
)
|
|
589
|
|
|
345
|
|
|||
Net loss from continuing operations
|
(49,220
|
)
|
|
(1,118
|
)
|
|
(50,338
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
97
|
|
|
—
|
|
|
97
|
|
|||
Net loss
|
$
|
(49,123
|
)
|
|
$
|
(1,118
|
)
|
|
$
|
(50,241
|
)
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share
|
|
|
|
|
|
||||||
Continuing operations - common stock
|
$
|
(0.45
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.46
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
109,490,441
|
|
|
|
|
|
109,490,441
|
|
(1)
|
Financial Accounting Standards Board, ASC 606
Revenue from contracts with customers
("ASC 606")
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
|
As Reported
|
|
Adjustments Due To ASC 606
(1)
|
|
Without New Revenue Standard
|
||||||
Total net revenue
|
|
$
|
89,464
|
|
|
$
|
(2,255
|
)
|
|
$
|
87,209
|
|
|
|
|
|
|
|
|
|
|
||||
Total cost of revenue
|
|
44,269
|
|
|
(108
|
)
|
|
44,161
|
|
|||
Gross profit
|
|
45,195
|
|
|
(2,147
|
)
|
|
43,048
|
|
|||
|
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
|
70,763
|
|
|
302
|
|
|
71,065
|
|
|||
Research and development
|
|
20,916
|
|
|
—
|
|
|
20,916
|
|
|||
Amortization of acquisition-related assets
|
|
4,217
|
|
|
—
|
|
|
4,217
|
|
|||
Total operating expenses
|
|
95,896
|
|
|
302
|
|
|
96,198
|
|
|||
Loss from operations
|
|
(50,701
|
)
|
|
(2,449
|
)
|
|
(53,150
|
)
|
|||
Interest expense, net
|
|
(17,120
|
)
|
|
—
|
|
|
(17,120
|
)
|
|||
Other (loss) income, net
|
|
(17,876
|
)
|
|
—
|
|
|
(17,876
|
)
|
|||
Loss from related party equity method investment, including impairment
|
|
(108,409
|
)
|
|
—
|
|
|
(108,409
|
)
|
|||
Loss from continuing operations before income taxes
|
|
(194,106
|
)
|
|
(2,449
|
)
|
|
(196,555
|
)
|
|||
(Benefit from) provision for income taxes
|
|
(3,673
|
)
|
|
225
|
|
|
(3,448
|
)
|
|||
Net loss from continuing operations
|
|
(190,433
|
)
|
|
(2,674
|
)
|
|
(193,107
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
|
(1,719
|
)
|
|
—
|
|
|
(1,719
|
)
|
|||
Net loss
|
|
$
|
(192,152
|
)
|
|
$
|
(2,674
|
)
|
|
(194,826
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||
Basic and diluted net loss per share
|
|
|
|
|
|
|
||||||
Continuing operations - common stock
|
|
$
|
(1.74
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(1.77
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
|
109,168,798
|
|
|
|
|
|
109,168,798
|
|
(1)
|
Financial Accounting Standards Board, ASC 606
Revenue from contracts with customers
("ASC 606")
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service related
|
$
|
17,326
|
|
|
$
|
15,781
|
|
|
$
|
65,646
|
|
|
$
|
60,730
|
|
Software and hardware related
|
744
|
|
|
2,248
|
|
|
4,534
|
|
|
7,648
|
|
||||
Maintenance
|
2,477
|
|
|
2,239
|
|
|
9,834
|
|
|
10,421
|
|
||||
Total software-related revenue
|
20,547
|
|
|
20,268
|
|
|
80,014
|
|
|
78,799
|
|
||||
Sequencing and molecular analysis
|
622
|
|
|
569
|
|
|
3,129
|
|
|
2,554
|
|
||||
Home health care services
|
1,693
|
|
|
1,461
|
|
|
6,321
|
|
|
5,323
|
|
||||
Total net revenue
|
$
|
22,862
|
|
|
$
|
22,298
|
|
|
$
|
89,464
|
|
|
$
|
86,676
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service related
|
$
|
5,488
|
|
|
$
|
4,652
|
|
|
$
|
23,691
|
|
|
$
|
21,939
|
|
Software and hardware related
|
923
|
|
|
964
|
|
|
3,335
|
|
|
4,749
|
|
||||
Maintenance
|
241
|
|
|
185
|
|
|
924
|
|
|
749
|
|
||||
Amortization of developed technologies
|
1,233
|
|
|
1,143
|
|
|
4,933
|
|
|
5,172
|
|
||||
Total software-related cost of revenue
|
7,885
|
|
|
6,944
|
|
|
32,883
|
|
|
32,609
|
|
||||
Sequencing and molecular analysis
|
2,612
|
|
|
1,222
|
|
|
8,055
|
|
|
6,084
|
|
||||
Home health care services
|
896
|
|
|
714
|
|
|
3,331
|
|
|
2,829
|
|
||||
Total cost of revenue
|
$
|
11,393
|
|
|
$
|
8,880
|
|
|
$
|
44,269
|
|
|
$
|
41,522
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss from continuing operations
|
|
$
|
(49,220
|
)
|
|
$
|
(22,562
|
)
|
|
$
|
(190,433
|
)
|
|
$
|
(131,399
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
|
|
|
|
|
||||||||
Corporate restructuring from continuing operations
(1)
|
|
—
|
|
|
17
|
|
|
—
|
|
|
2,422
|
|
||||
Acquisition related sales incentive
|
|
425
|
|
|
671
|
|
|
1,420
|
|
|
2,732
|
|
||||
Intangible amortization from continuing operations
|
|
2,287
|
|
|
2,197
|
|
|
9,150
|
|
|
9,388
|
|
||||
Loss from related party equity method investment including impairment loss
|
|
18,898
|
|
|
3,981
|
|
|
108,409
|
|
|
50,334
|
|
||||
Non-cash interest expense related to convertible notes
|
|
1,316
|
|
|
1,157
|
|
|
5,019
|
|
|
4,417
|
|
||||
Change in fair value of derivatives liability
|
|
—
|
|
|
(19
|
)
|
|
(7
|
)
|
|
(264
|
)
|
||||
Change in fair value of Bookings Commitment
|
|
16,947
|
|
|
—
|
|
|
16,947
|
|
|
—
|
|
||||
Stock-based compensation expense from continuing operations
|
|
852
|
|
|
8,586
|
|
|
5,657
|
|
|
8,102
|
|
||||
Securities litigation costs
|
|
(392
|
)
|
|
92
|
|
|
1,317
|
|
|
777
|
|
||||
Impairment of equity securities
|
|
—
|
|
|
—
|
|
|
1,750
|
|
|
—
|
|
||||
Tax benefit resulting from certain non-cash tax items
|
|
(111
|
)
|
|
(1,909
|
)
|
|
(3,760
|
)
|
|
(1,976
|
)
|
||||
Total adjustments to GAAP net loss from continuing operations
|
|
40,222
|
|
|
14,773
|
|
|
145,902
|
|
|
75,932
|
|
||||
Net loss - Non-GAAP from continuing operations
|
|
$
|
(8,998
|
)
|
|
$
|
(7,789
|
)
|
|
$
|
(44,531
|
)
|
|
$
|
(55,467
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
109,490,441
|
|
|
107,810,546
|
|
|
109,168,798
|
|
|
116,737,860
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share from continuing operations - Non-GAAP
|
|
$
|
(0.08
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.47
|
)
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss per common share from continuing operations - GAAP
|
$
|
(0.45
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(1.74
|
)
|
|
$
|
(1.12
|
)
|
Adjustments to GAAP net loss per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Corporate restructuring from continuing operations
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
Acquisition related sales incentive
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
||||
Intangible amortization from continuing operations
|
0.02
|
|
|
0.02
|
|
|
0.08
|
|
|
0.08
|
|
||||
Loss from related party equity method investment including impairment loss
|
0.17
|
|
|
0.04
|
|
|
0.98
|
|
|
0.43
|
|
||||
Non-cash interest expense related to convertible notes
|
0.01
|
|
|
0.01
|
|
|
0.05
|
|
|
0.04
|
|
||||
Change in fair value of derivatives liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Change in fair value of Bookings Commitment
|
0.16
|
|
|
—
|
|
|
0.16
|
|
|
—
|
|
||||
Stock-based compensation expense from continuing operations
|
0.01
|
|
|
0.08
|
|
|
0.05
|
|
|
0.07
|
|
||||
Securities litigation costs
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
||||
Impairment of equity securities
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Tax benefit resulting from certain non-cash tax items
|
—
|
|
|
(0.02
|
)
|
|
(0.03
|
)
|
|
(0.02
|
)
|
||||
Total adjustments to GAAP net loss per common share from continuing operations
|
0.37
|
|
|
0.14
|
|
|
1.33
|
|
|
0.65
|
|
||||
Net loss per common share from continuing operations - Non-GAAP
|
$
|
(0.08
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.47
|
)
|
(1)
|
Corporate restructuring includes accrued bonus reversal of $0.5 million for the year ended December 31, 2017.
|