|
|
|
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
.
|
(d)
|
Exhibits. The following is furnished as an exhibit to this Current Report on Form 8-K:
|
Exhibit No.
|
Description
|
99.1
|
Press Release dated March 14, 2018 announcing results for the year ended December 31, 2017.
|
Exhibit No.
|
Description
|
99.1
|
|
|
|
NantHealth, Inc.
|
|
|
|
|
Date: March 14, 2018
|
By:
|
|
/s/ Paul Holt
|
|
|
|
Paul Holt
Chief Financial Officer
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
Total Q4 Revenue of $22.3 Million, Up 25% from $17.8 Million in Prior Year Q4
|
•
|
SAAS Revenue of $15.8 Million in Q4, Up 10% from $14.4 Million in Prior Year Q4
|
•
|
Total Gross Margin increased to 60% in Q4, Up from 39% in Prior Year Q4
|
•
|
Restructuring Plan and Sale
of Provider/Patient Engagement Solutions Business Combined to Reduce Operating Loss by Nearly 53% in Q4 from Prior Year Q4
|
•
|
2017 Full Year Revenue of $86.7 Million, Up 8% over Prior Year
|
•
|
GPS Revenue for 2017 Increases Threefold to $2.6 Million from Prior Year
|
◦
|
606 GPS Commercial Tests Ordered in Q4, Up 11% from Q3
|
◦
|
GPS Tests Ordered Continue to Grow; February Largest Month of Orders to Date
|
•
|
Test Growth:
The company reported 606 GPS Commercial Tests were ordered in Q4, up from 547 in Q3.
|
•
|
New National GPS Cancer Payer:
In Q1 2018, the company signed a new GPS Cancer reimbursement contract with a large, national healthcare IT company.
|
•
|
New Lab Services Arrangement:
In Q1 2018, the company signed a laboratory services agreement with a 20+ facility hospital system for the availability of GPS Cancer testing to its patient community.
|
•
|
Expanded International Adoption:
In Q1 2018, the company signed a strategic reseller agreement with a partner in the United Kingdom for the provision of molecular analysis services for clinical studies and other research initiatives.
|
•
|
FDA Submission:
In Q1 2018, NantHealth submitted a 510K premarket notification application to the FDA for tumor/normal DNA sequencing.
|
•
|
Company to Provide GPS Cancer Molecular Analysis to the University of California San Francisco (UCSF) to Support Research Initiative Focused on Metastatic Breast Cancer:
This study will allow UCSF researchers to utilize advancements made in molecular technology to examine the potential clinical feasibility of molecular profiling, including gene mutations and gene expression in the context of patient care. The biopsy materials collected will also allow researchers to examine immune markers within the tumor architecture. Results of the clinical study to be presented at major medical conferences.
|
•
|
Payer Engagement:
|
◦
|
In Q4 2017, the company signed a three year NaviNet renewal contract with a total contract value of more than $1.2 million and also went live with one of its largest customers for its new Document Exchange solution.
|
◦
|
In Q1 2018,
the company signed another NaviNet renewal contract with a total contract value of approximately $17 million.
|
•
|
Clinical Decision Support:
In Q4 2017,
the
c
ompany signed an expanded services contract with an existing, national insurance carrier customer, with the potential to extend the availability of the Eviti solution to an additional 2.4 million lives.
|
•
|
Connected Care:
|
◦
|
In Q4 2017, the company signed a device connectivity license contract extension with an existing customer, with the potential to expand its solution to additional facilities within the customer’s 74 hospital system.
|
◦
|
The company’s pipeline for device connectivity sales continues to progress, with numerous international opportunities developing through its strategic resellers in Europe and Asia.
|
◦
|
The company presented “The Future of Device Connectivity Across the Continuum of Care” at the Healthcare Information & Management Systems Society (HIMSS) Annual Conference & Exhibition 2018.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Unaudited)
|
||||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
61,660
|
|
|
$
|
157,573
|
|
Accounts receivable, net
|
11,491
|
|
|
11,673
|
|
||
Inventories
|
839
|
|
|
1,685
|
|
||
Deferred implementation costs
|
1,960
|
|
|
606
|
|
||
Related party receivables, net
|
585
|
|
|
693
|
|
||
Prepaid expenses and other current assets
|
5,358
|
|
|
3,356
|
|
||
Current assets of discontinued operations
|
—
|
|
|
9,992
|
|
||
Total current assets
|
81,893
|
|
|
185,578
|
|
||
Property, plant, and equipment, net
|
18,517
|
|
|
20,129
|
|
||
Deferred implementation costs, net of current
|
3,951
|
|
|
3,201
|
|
||
Goodwill
|
114,625
|
|
|
114,625
|
|
||
Intangible assets, net
|
69,424
|
|
|
78,812
|
|
||
Investment in related party
|
156,863
|
|
|
207,197
|
|
||
Related party receivable, net of current
|
1,727
|
|
|
1,971
|
|
||
Other assets
|
2,195
|
|
|
2,195
|
|
||
Noncurrent assets of discontinued operations
|
—
|
|
|
70,683
|
|
||
Total assets
|
$
|
449,195
|
|
|
$
|
684,391
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
3,164
|
|
|
$
|
6,039
|
|
Accrued and other current liabilities
|
18,134
|
|
|
20,032
|
|
||
Deferred revenue
|
10,057
|
|
|
9,600
|
|
||
Related party payables, net
|
4,504
|
|
|
8,082
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
13,496
|
|
||
Total current liabilities
|
35,859
|
|
|
57,249
|
|
||
Deferred revenue, net of current
|
7,126
|
|
|
11,127
|
|
||
Related party liabilities
|
11,500
|
|
|
5,612
|
|
||
Related party promissory note
|
112,666
|
|
|
112,666
|
|
||
Related party convertible note, net
|
7,947
|
|
|
7,564
|
|
||
Convertible notes, net
|
74,845
|
|
|
70,810
|
|
||
Other liabilities
|
5,950
|
|
|
820
|
|
||
Noncurrent liabilities of discontinued operations
|
—
|
|
|
6,949
|
|
||
Total liabilities
|
255,893
|
|
|
272,797
|
|
||
Stockholders' equity
|
|
|
|
||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 108,383,602 and 121,250,437 shares issued and outstanding at December 31, 2017 (including 3,490 shares of restricted stock) and 2016 (including 6,976 shares of restricted stock), respectively
|
10
|
|
|
12
|
|
||
Additional paid-in capital
|
886,669
|
|
|
886,334
|
|
||
Accumulated deficit
|
(693,233
|
)
|
|
(475,273
|
)
|
||
Accumulated other comprehensive (loss) income
|
(144
|
)
|
|
521
|
|
||
Total stockholders' equity
|
193,302
|
|
|
411,594
|
|
||
Total liabilities and stockholders' equity
|
$
|
449,195
|
|
|
$
|
684,391
|
|
|
Three Months Ended
December 31, |
|
Year Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Total net revenue
|
$
|
22,298
|
|
|
$
|
17,846
|
|
|
$
|
86,676
|
|
|
$
|
80,404
|
|
|
|
|
|
|
|
|
|
||||||||
Total cost of revenue
|
8,880
|
|
|
10,893
|
|
|
41,522
|
|
|
44,107
|
|
||||
Gross profit
|
13,418
|
|
|
6,953
|
|
|
45,154
|
|
|
36,297
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
20,795
|
|
|
16,398
|
|
|
74,976
|
|
|
105,258
|
|
||||
Research and development
|
8,811
|
|
|
10,792
|
|
|
33,862
|
|
|
47,310
|
|
||||
Amortization of acquisition-related assets
|
1,054
|
|
|
1,055
|
|
|
4,216
|
|
|
4,217
|
|
||||
Total operating expenses
|
30,660
|
|
|
28,245
|
|
|
113,054
|
|
|
156,785
|
|
||||
Loss from operations
|
(17,242
|
)
|
|
(21,292
|
)
|
|
(67,900
|
)
|
|
(120,488
|
)
|
||||
Interest expense, net
|
(4,119
|
)
|
|
(1,669
|
)
|
|
(16,168
|
)
|
|
(6,429
|
)
|
||||
Other income, net
|
492
|
|
|
3,052
|
|
|
800
|
|
|
3,593
|
|
||||
Loss from related party equity method investment including impairment loss
|
(3,981
|
)
|
|
(33,101
|
)
|
|
(50,334
|
)
|
|
(40,994
|
)
|
||||
Loss from continuing operations before income taxes
|
(24,850
|
)
|
|
(53,010
|
)
|
|
(133,602
|
)
|
|
(164,318
|
)
|
||||
Provision for (benefit from) income taxes
|
(2,288
|
)
|
|
(4,594
|
)
|
|
(2,203
|
)
|
|
(23,797
|
)
|
||||
Net loss from continuing operations
|
(22,562
|
)
|
|
(48,416
|
)
|
|
(131,399
|
)
|
|
(140,521
|
)
|
||||
Loss from discontinued operations, net of tax
|
928
|
|
|
(11,535
|
)
|
|
(43,812
|
)
|
|
(43,581
|
)
|
||||
Net loss
|
$
|
(21,634
|
)
|
|
$
|
(59,951
|
)
|
|
$
|
(175,211
|
)
|
|
$
|
(184,102
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net income (loss) per share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Continued operations - common stock
|
$
|
(0.21
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(1.12
|
)
|
|
$
|
(1.30
|
)
|
Discontinued operations - common stock
|
$
|
0.01
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.39
|
)
|
Total net loss per common stock
|
$
|
(0.20
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(1.49
|
)
|
|
$
|
(1.69
|
)
|
Basic and diluted net income per redeemable common stock
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
0.99
|
|
|||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
107,810,546
|
|
|
121,242,627
|
|
|
116,737,860
|
|
|
111,600,650
|
|
||||
Basic and diluted - redeemable common stock
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
5,005,855
|
|
(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 members' units automatically converted into shares of common stock, based on the relative rights of the Company's pre-IPO equity holders 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.
The net loss per common share for the years ended December 31, 2016 reflects $4,958 in accretion value allocated to the redeemable common stock. 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, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service
|
$
|
15,844
|
|
|
$
|
14,401
|
|
|
$
|
60,707
|
|
|
$
|
56,210
|
|
Software and hardware
|
1,685
|
|
|
673
|
|
|
6,093
|
|
|
6,750
|
|
||||
Total software-related revenue
|
17,529
|
|
|
15,074
|
|
|
66,800
|
|
|
62,960
|
|
||||
Maintenance
|
2,239
|
|
|
2,110
|
|
|
10,421
|
|
|
9,089
|
|
||||
Sequencing and molecular analysis
|
569
|
|
|
482
|
|
|
2,554
|
|
|
604
|
|
||||
Other services
|
1,961
|
|
|
180
|
|
|
6,901
|
|
|
7,751
|
|
||||
Total net revenue
|
$
|
22,298
|
|
|
$
|
17,846
|
|
|
$
|
86,676
|
|
|
$
|
80,404
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software-as-a-service
|
$
|
4,652
|
|
|
$
|
5,092
|
|
|
$
|
21,795
|
|
|
$
|
19,883
|
|
Software and hardware
|
64
|
|
|
148
|
|
|
660
|
|
|
816
|
|
||||
Total software-related cost of revenue
|
4,716
|
|
|
5,240
|
|
|
22,455
|
|
|
20,699
|
|
||||
Maintenance
|
185
|
|
|
177
|
|
|
748
|
|
|
798
|
|
||||
Sequencing and molecular analysis
|
1,222
|
|
|
1,058
|
|
|
6,029
|
|
|
1,987
|
|
||||
Other services
|
1,614
|
|
|
2,822
|
|
|
7,118
|
|
|
12,131
|
|
||||
Amortization of developed technologies
|
1,143
|
|
|
1,596
|
|
|
5,172
|
|
|
8,492
|
|
||||
Total cost of revenue
|
$
|
8,880
|
|
|
$
|
10,893
|
|
|
$
|
41,522
|
|
|
$
|
44,107
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Net loss from continuing operations
|
|
$
|
(22,562
|
)
|
|
$
|
(48,416
|
)
|
|
$
|
(131,399
|
)
|
|
$
|
(140,521
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
|
|
|
|
|
||||||||
Corporate restructuring from continuing operations
(3)
|
|
17
|
|
|
246
|
|
|
2,422
|
|
|
2,544
|
|
||||
Acquisition related compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,814
|
|
||||
Acquisition related sales incentive
|
|
671
|
|
|
939
|
|
|
2,732
|
|
|
2,966
|
|
||||
Intangible amortization from continuing operations
|
|
2,197
|
|
|
2,651
|
|
|
9,388
|
|
|
12,709
|
|
||||
Loss from related party equity method investment including impairment loss
|
|
3,981
|
|
|
33,101
|
|
|
50,334
|
|
|
40,994
|
|
||||
Non-cash interest expense related to convertible notes
|
|
1,157
|
|
|
108
|
|
|
4,417
|
|
|
108
|
|
||||
Change in fair value of derivatives liability
|
|
(19
|
)
|
|
(1,228
|
)
|
|
(264
|
)
|
|
(1,228
|
)
|
||||
Stock-based compensation expense from continuing operations
|
|
8,586
|
|
|
3,599
|
|
|
8,102
|
|
|
44,048
|
|
||||
BP settlement
|
|
—
|
|
|
(842
|
)
|
|
—
|
|
|
(842
|
)
|
||||
Securities litigation costs
|
|
92
|
|
|
—
|
|
|
777
|
|
|
—
|
|
||||
The impact of intangible amortization, impact of the "Tax Act" of 2017, and the conversion from a limited liability company to a corporation on provision for (benefit from) income taxes
|
|
(1,909
|
)
|
|
(4,509
|
)
|
|
(1,796
|
)
|
|
(23,797
|
)
|
||||
Total adjustments to GAAP net loss from continuing operations
|
|
14,773
|
|
|
34,065
|
|
|
76,112
|
|
|
82,316
|
|
||||
Net loss - Non-GAAP from continuing operations
|
|
$
|
(7,789
|
)
|
|
$
|
(14,351
|
)
|
|
$
|
(55,287
|
)
|
|
$
|
(58,205
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
(1)
|
|
107,810,546
|
|
|
121,242,627
|
|
|
116,737,860
|
|
|
111,600,650
|
|
||||
Weighted average Series F/redeemable stock
(1) (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,005,855
|
|
||||
Shares outstanding - Non-GAAP
(1)
|
|
107,810,546
|
|
|
121,242,627
|
|
|
116,737,860
|
|
|
116,606,505
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share from continuing operations - Non-GAAP
(1)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.50
|
)
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Net loss per common share from continuing operations - GAAP
|
$
|
(0.21
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(1.12
|
)
|
|
$
|
(1.30
|
)
|
Adjustments to GAAP net loss per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Corporate restructuring from continuing operations
(3)
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.02
|
|
||||
Acquisition related compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
||||
Acquisition related sales incentive
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|
0.03
|
|
||||
Intangible amortization from continuing operations
|
0.02
|
|
|
0.03
|
|
|
0.08
|
|
|
0.12
|
|
||||
Loss from related party equity method investment including impairment loss
|
0.04
|
|
|
0.27
|
|
|
0.43
|
|
|
0.37
|
|
||||
Non-cash interest expense related to convertible notes
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Change in fair value of derivatives liability
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Stock-based compensation expense from continuing operations
|
0.08
|
|
|
0.03
|
|
|
0.07
|
|
|
0.39
|
|
||||
BP settlement
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Securities litigation costs
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
||||
The impact of intangible amortization, impact of the "Tax Act" of 2017, and the conversion from a limited liability company to a corporation on provision for (benefit from) income taxes
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.02
|
)
|
|
(0.21
|
)
|
||||
Accretion to redemption value of Series F/redeemable common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
||||
Dilution from Series F/redeemable common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
Total adjustments to GAAP net loss per common share from continuing operations
|
0.14
|
|
|
0.28
|
|
|
0.65
|
|
|
0.80
|
|
||||
Net loss per common share from continuing operations - Non-GAAP
(1)
|
$
|
(0.07
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.50
|
)
|
(1)
|
The net loss per common share from continuing operations - 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 initial public offering. 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 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 as of December 31, 2016. The weighted-average shares are adjusted to include the redeemable common stock in the weighted-average shares outstanding for the entire period.
|
(3)
|
Corporate restructuring includes accrued bonus reversal of $0.5 million for the year ended December 31, 2017.
|