|
|
|
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
|
99.1
|
Press Release dated March 30, 2017 announcing results for the year ended December 31, 2016.
|
|
|
|
NantHEalth, Inc.
|
|
|
|
|
Date: March 30, 2017
|
By:
|
|
/s/ Paul Holt
|
|
|
|
Paul Holt
Chief Financial Officer
|
Exhibit No.
|
Description
|
99.1
|
Press Release dated March 30, 2017 announcing results for the year ended December 31, 2016.
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
GPS Cancer Adoption by Oncologists Increased in Q4: 264 Oncologists Ordered 1,286 GPS Commercial & Research Tests YTD, with 452 tests in Q4, of which 326 Commercial and 126 Research
|
◦
|
First Consecutive 100 GPS Cancer Tests Completed at a Single Academic Institution (Feb-Nov 2016) Demonstrating Significant Increase in Identification of a FDA Approved Drug or Clinical Trial for Patients with Refractory Cancer
|
◦
|
Expanded Adoption of GPS Cancer in Florida with Genomics Laboratory Licensing by the State of Florida in Q4 with 138 tests ordered in 2016
|
•
|
GPS Cancer Payor Coverage: Total of Eight Payer Contracts with Self-Employed and Payors Now Cover GPS Cancer; Potential Sales Pipeline of GPS Cancer Payors Increased to 27 in Q4 from 18 in Q3
|
◦
|
International Association of Fire Fighters (IAFF) endorses GPS Cancer as a benefit for approximately 310,000 IAFF employee members and approximately 300,000 beneficiaries across the US and Canada
|
◦
|
Pilot Trial with Horizon Blue Cross Blue Shield New Jersey for GPS Cancer Initiated
|
◦
|
Discussions Underway with CMS for Both Potential Local Coverage Determination (LCD) and National Coverage for GPS Cancer
|
•
|
NantOS, Device Connect and NaviNet: Completed 39 Go Live Projects; Number 2 Market Share in Connected Care with over 25,000 Device Connects Licenses Sold to Date with 18 EMRs Integrated Across more than 300 Provider Client Sites
|
◦
|
Increases NantOS and NaviNet contractual commitments from 35 in Q3 to 96 in Q4
|
◦
|
Full Year 2016 Total Net Revenue Increased 72% to $100 Million from $58 Million in 2015 With SaaS Revenue Increasing More Than 181%
|
•
|
First Consecutive 100 GPS Cancer Tests (Feb-Nov 2016) Completed in a Single Academic Institution
Demonstrating Significant Increase Identification of an FDA Approved Drug or Clinical Trial for Patients with Refractory Cancer
|
•
|
Number of covered cancer lives:
at December 31, 2016, the number of patients with cancer covered by a payer for GPS testing was approximately 322,000 including lives anticipated upon completion of a pilot project with Horizon Blue Cross Blue Shield
|
•
|
Number of GPS Cancer payers:
at December 31, 2016 the number of payers covering GPS Cancer was eight. Discussions are in progress with 27 payers, which includes self-insured employers and insurers, increasing from 18 in Q3
|
•
|
Potential Local Coverage Determination (LCD) & Potential National Coverage by CMS
: Discussions are underway to potentially provide both local coverage and national coverage with CMS and FDA regarding
|
•
|
Number of GPS Cancer tests:
1,286 GPS Commercial & Research Tests YTD with 452 ordered in Q4; 233 commercial tests delivered in Q4, up from 154 in Q3. Number of Oncologists Ordering GPS Cancer Increased to 264 in Q4 from 181 in Q3
|
•
|
Expanded adoption
of GPS Cancer in Florida with the new Genomics Lab licensing agreement with the state
|
•
|
The International Association of Fire Fighters (
IAFF
)
has endorsed
G
PS Cancer, as a valuable benefit that will be accessible for approximately 310,000 IAFF members and 300,000 beneficiaries across the US and Canada
|
•
|
87 GPS Cancer tests
were ordered under an agreement with a pediatric cancer research institution in California
|
•
|
Completed 19 go-live projects across NantOS and device connects
|
•
|
Completed 20 go-live projects, of which 19 were on NaviNet and one on NaviNet Document Exchange
|
•
|
Increased, renewed or expanded contractual commitment to 96 current clients from 35 at the end of Q3
|
•
|
In December, together with NantKwest and NantOmics, we announced the public availability of QUILT Programs (Quantum Immuno-oncology Lifelong Trial), aimed to harness and orchestrate all elements of the immune system through the testing of novel treatment combinations, within the national clinical trials database,
www.ClinicalTrials.gov
. QUILT utilizes
GPS Cancer
- a unique, comprehensive set of tests integrating quantitative proteomics, and whole genome (DNA) and transcriptome (RNA) sequencing-to provide oncologists with a full molecular profile of each patient’s cancer not only for an initial biopsy before the trial begins, but throughout the trial process to fully understand how each therapy impacts the patient’s tumor activity.
|
•
|
In December, we entered into an exclusive reseller agreement for
GPS Cancer
advanced molecular analysis with
Lunatus
, a company focused on linking international healthcare companies and regional healthcare professionals in Arabian Gulf and Middle East markets.
|
•
|
In November, we entered into an exclusive reseller agreement for
GPS Cancer
tests with
Sorgente
, the market leader in biobank, stem cell and now molecular profiling testing in Italy.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
160,353
|
|
|
$
|
5,989
|
|
Marketable securities
|
—
|
|
|
1,243
|
|
||
Accounts receivable, net
|
13,728
|
|
|
11,472
|
|
||
Inventories
|
2,217
|
|
|
2,146
|
|
||
Deferred implementation costs
|
3,336
|
|
|
2,224
|
|
||
Related party receivables, net
|
899
|
|
|
1,245
|
|
||
Prepaid expenses and other current assets
|
5,046
|
|
|
8,707
|
|
||
Total current assets
|
185,579
|
|
|
33,026
|
|
||
Property, plant, and equipment, net
|
29,139
|
|
|
13,899
|
|
||
Deferred implementation costs, net of current
|
7,910
|
|
|
1,930
|
|
||
Goodwill
|
131,068
|
|
|
56,718
|
|
||
Intangible assets, net
|
119,126
|
|
|
54,971
|
|
||
Investment in related party
|
207,197
|
|
|
248,191
|
|
||
Related party receivable, net of current
|
1,971
|
|
|
1,300
|
|
||
Other assets
|
2,317
|
|
|
1,918
|
|
||
Total assets
|
$
|
684,307
|
|
|
$
|
411,953
|
|
|
|
|
|
||||
Liabilities and Stockholders' / Members' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
6,720
|
|
|
$
|
6,447
|
|
Accrued and other current liabilities
|
25,231
|
|
|
15,967
|
|
||
Deferred revenue
|
17,216
|
|
|
10,656
|
|
||
Related party payables, net
|
8,082
|
|
|
10,166
|
|
||
Total current liabilities
|
57,249
|
|
|
43,236
|
|
||
Deferred revenue, net of current
|
17,238
|
|
|
17,312
|
|
||
Related party liabilities
|
5,612
|
|
|
—
|
|
||
Related party promissory note
|
112,666
|
|
|
—
|
|
||
Related party convertible note, net
|
7,564
|
|
|
—
|
|
||
Convertible notes, net
|
70,810
|
|
|
—
|
|
||
Other liabilities
|
1,574
|
|
|
358
|
|
||
Total liabilities
|
272,713
|
|
|
60,906
|
|
||
|
|
|
|
||||
Redeemable Series F units: 53,580,996 units issued and outstanding at December 31, 2015
|
—
|
|
|
166,042
|
|
||
|
|
|
|
||||
Stockholders' / members' equity
|
|
|
|
||||
Members' equity, 541,228,171 units issued and outstanding at December 31, 2015
|
—
|
|
|
476,263
|
|
||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 121,250,437 shares issued and outstanding at December 31, 2016 (Including 6,976 restricted stock)
|
12
|
|
|
—
|
|
||
Preferred stock, $0.0001 par value per share, 20,000,000 shares authorized; no shares issued and outstanding at December 31, 2016
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
886,334
|
|
|
—
|
|
||
Accumulated deficit
|
(475,273
|
)
|
|
(291,171
|
)
|
||
Accumulated other comprehensive income (loss)
|
521
|
|
|
(87
|
)
|
||
Total stockholders' / members' equity
|
411,594
|
|
|
185,005
|
|
||
Total liabilities and stockholders' / members' equity
|
$
|
684,307
|
|
|
$
|
411,953
|
|
|
Three Months Ended
December 31, |
|
Year Ended December 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Unaudited)
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
Total Net Revenue
|
$
|
24,082
|
|
|
$
|
20,405
|
|
|
$
|
100,380
|
|
|
$
|
58,304
|
|
|
|
|
|
|
|
|
|
||||||||
Total Cost of Revenue
|
19,820
|
|
|
10,853
|
|
|
72,334
|
|
|
34,809
|
|
||||
Gross profit
|
4,262
|
|
|
9,552
|
|
|
28,046
|
|
|
23,495
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
21,317
|
|
|
16,635
|
|
|
120,653
|
|
|
69,021
|
|
||||
Research and development
|
12,766
|
|
|
7,158
|
|
|
61,637
|
|
|
23,835
|
|
||||
Amortization of software license and acquisition-related assets
|
1,815
|
|
|
760
|
|
|
7,257
|
|
|
1,542
|
|
||||
Total operating expenses
|
35,898
|
|
|
24,553
|
|
|
189,547
|
|
|
94,398
|
|
||||
Loss from operations
|
(31,636
|
)
|
|
(15,001
|
)
|
|
(161,501
|
)
|
|
(70,903
|
)
|
||||
Interest expense, net
|
(1,669
|
)
|
|
—
|
|
|
(6,340
|
)
|
|
(627
|
)
|
||||
Other income (expense), net
|
1,997
|
|
|
(9
|
)
|
|
1,922
|
|
|
2,508
|
|
||||
Loss from related party equity method investment
|
(33,101
|
)
|
|
(2,439
|
)
|
|
(40,994
|
)
|
|
(2,584
|
)
|
||||
Loss before income taxes
|
(64,409
|
)
|
|
(17,449
|
)
|
|
(206,913
|
)
|
|
(71,606
|
)
|
||||
Provision for (benefit from) income taxes
|
(4,458
|
)
|
|
403
|
|
|
(22,811
|
)
|
|
405
|
|
||||
Net loss
|
$
|
(59,951
|
)
|
|
$
|
(17,852
|
)
|
|
$
|
(184,102
|
)
|
|
$
|
(72,011
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock (2)
|
$
|
(0.49
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.69
|
)
|
|
$
|
(0.99
|
)
|
Basic and diluted - redeemable common stock
|
N/A
|
|
|
$
|
1.50
|
|
|
$
|
0.99
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
121,242,627
|
|
|
95,900,612
|
|
|
111,600,650
|
|
|
88,970,842
|
|
||||
Basic and diluted - redeemable common stock
|
N/A
|
|
|
10,714,285
|
|
|
5,005,855
|
|
|
10,714,285
|
|
1)
|
The net income (loss) per share and weighted-average shares outstanding have been computed to give effect to the LLC Conversion 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.
|
2)
|
The net income (loss) per share for the common stock for the year ended December 31, 2016 and each of the periods ended December 31, 2015 reflects $4,958 and $16,042, respectively in accretion value allocated to the redeemable common stock, respectively. The redeemable common stock contained a put right, which expired unexercised on June 20, 2016. As a result of and as of that date, the shares were no longer redeemable and were included in common stock.
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Unaudited)
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
1,028
|
|
|
$
|
2,420
|
|
|
$
|
8,242
|
|
|
$
|
14,616
|
|
Software–as-a-service
|
14,874
|
|
|
9,373
|
|
|
58,359
|
|
|
20,734
|
|
||||
Total software-related revenue
|
15,902
|
|
|
11,793
|
|
|
66,601
|
|
|
35,350
|
|
||||
Maintenance
|
3,384
|
|
|
2,515
|
|
|
14,238
|
|
|
10,452
|
|
||||
Sequencing and molecular analysis
|
482
|
|
|
—
|
|
|
604
|
|
|
75
|
|
||||
Other services
|
4,314
|
|
|
6,097
|
|
|
18,937
|
|
|
12,427
|
|
||||
Total net revenue
|
$
|
24,082
|
|
|
$
|
20,405
|
|
|
$
|
100,380
|
|
|
$
|
58,304
|
|
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
396
|
|
|
$
|
387
|
|
|
$
|
1,834
|
|
|
$
|
90
|
|
Software-as-a-service
|
6,046
|
|
|
1,559
|
|
|
24,713
|
|
|
7,019
|
|
||||
Total software-related cost of revenue
|
6,442
|
|
|
1,946
|
|
|
26,547
|
|
|
7,109
|
|
||||
Maintenance
|
775
|
|
|
968
|
|
|
2,750
|
|
|
1,874
|
|
||||
Sequencing and molecular analysis
|
1,058
|
|
|
—
|
|
|
1,987
|
|
|
39
|
|
||||
Other services
|
7,841
|
|
|
4,800
|
|
|
25,462
|
|
|
15,202
|
|
||||
Amortization of developed technologies
|
3,704
|
|
|
3,139
|
|
|
15,588
|
|
|
10,585
|
|
||||
Total cost of revenue
|
$
|
19,820
|
|
|
$
|
10,853
|
|
|
$
|
72,334
|
|
|
$
|
34,809
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(Unaudited)
|
|
|
|
|
||||||||||
Net loss
|
|
$
|
(59,951
|
)
|
|
$
|
(17,852
|
)
|
|
$
|
(184,102
|
)
|
|
$
|
(72,011
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment
|
|
33,101
|
|
|
2,439
|
|
|
40,994
|
|
|
2,584
|
|
||||
Stock-based compensation expense
|
|
4,970
|
|
|
79
|
|
|
53,952
|
|
|
1,429
|
|
||||
Corporate restructuring
|
|
248
|
|
|
141
|
|
|
2,794
|
|
|
1,905
|
|
||||
BP settlement
|
|
(842
|
)
|
|
—
|
|
|
(842
|
)
|
|
—
|
|
||||
Acquisition related compensation expense
|
|
—
|
|
|
—
|
|
|
4,814
|
|
|
—
|
|
||||
Sales incentive
|
|
939
|
|
|
—
|
|
|
2,966
|
|
|
—
|
|
||||
Change in fair value of derivatives liability
|
|
(1,228
|
)
|
|
—
|
|
|
(1,228
|
)
|
|
—
|
|
||||
Non-cash interest expense related to convertible notes
|
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
||||
Intangible amortization
|
|
5,519
|
|
|
3,899
|
|
|
22,845
|
|
|
12,127
|
|
||||
Provision for (benefit from) income taxes
|
|
(4,509
|
)
|
|
403
|
|
|
(23,260
|
)
|
|
403
|
|
||||
Total adjustments to GAAP net loss
|
|
38,306
|
|
|
6,961
|
|
|
103,143
|
|
|
18,448
|
|
||||
Net loss - Non-GAAP
|
|
$
|
(21,645
|
)
|
|
$
|
(10,891
|
)
|
|
$
|
(80,959
|
)
|
|
$
|
(53,563
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Shares outstanding
|
|
121,242,627
|
|
|
95,900,612
|
|
|
111,600,650
|
|
|
88,970,842
|
|
||||
Series F redeemable stock
|
|
—
|
|
|
10,714,285
|
|
|
5,005,855
|
|
|
10,714,285
|
|
||||
Shares outstanding - Non-GAAP
|
|
121,242,627
|
|
|
106,614,897
|
|
|
116,606,505
|
|
|
99,685,127
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss per Share - Non-GAAP
|
|
$
|
(0.18
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.69
|
)
|
|
$
|
(0.54
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(Unaudited)
|
|
|
|
|
||||||||||
Net loss per common share - GAAP
|
|
$
|
(0.49
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.69
|
)
|
|
$
|
(0.99
|
)
|
Adjustments to GAAP net loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment
|
|
0.27
|
|
|
0.03
|
|
|
0.37
|
|
|
0.03
|
|
||||
Stock-based compensation expense
|
|
0.04
|
|
|
—
|
|
|
0.48
|
|
|
0.02
|
|
||||
Corporate restructuring
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
0.02
|
|
||||
BP settlement
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
Acquisition related compensation expense
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Sales incentive
|
|
0.01
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Change in fair value of derivatives liability
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
Non-cash interest expense related to convertible notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Intangible amortization
|
|
0.05
|
|
|
0.04
|
|
|
0.20
|
|
|
0.14
|
|
||||
Provision for (benefit from) income taxes
|
|
(0.04
|
)
|
|
—
|
|
|
(0.21
|
)
|
|
—
|
|
||||
Accretion to redemption value of Series F/redeemable common stock
|
|
—
|
|
|
0.17
|
|
|
0.04
|
|
|
0.18
|
|
||||
Dilution from Series F/redeemable common stock
|
|
—
|
|
|
0.01
|
|
|
0.04
|
|
|
0.06
|
|
||||
Total adjustments to GAAP net loss per common share
|
|
0.31
|
|
|
0.25
|
|
|
1.00
|
|
|
0.45
|
|
||||
Net loss per Share - Non-GAAP
|
|
$
|
(0.18
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.69
|
)
|
|
$
|
(0.54
|
)
|
3)
|
Net loss - Non-GAAP excludes, among others, the effects of (1) loss from related party equity method investment, (2) stock based compensation expense, (3) intangible amortization, (4) corporate restructuring expenses, (5) acquisition related compensation expense, (6) BP settlement other income, (7) acquisition-related sales incentives, which have been recorded as contra revenue, (8) change in fair value of derivatives liability, (9) non-cash interest expense related to convertible notes, and (10) Provision for (benefit from) income taxes adjustment includes the impact of the conversion from a limited liability corporation to a corporation, the impact of convertible notes offering and the impact of intangibles amortization. Adjusted shares outstanding include Series F redeemable shares as if converted to common shares on January 1, 2015.
|