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. |
Exhibit No. | Description |
99.1 |
NantHealth, Inc. | |||
Date: | May 7, 2020 | By: | /s/ Bob Petrou |
Bob Petrou | |||
Chief Financial Officer |
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com 424.288.4098 |
• | Q1 Financial Highlights 2020 vs 2019: |
• | SaaS revenue was $18.1 million, up 2% |
• | Total gross margin increased to 60% from 49% |
• | Appointed Deanna L. Wise, Senior Vice President and Chief Information Officer for Banner Health, to Board of Directors |
• | Completed Sale of Connected Care Business in February 2020, which generated a partial quarter of revenues of $1.2 million |
• | Clinical Decision Support (Eviti®): |
• | In January, presented Eviti Connect real world data on treatment patterns for patients with advanced colorectal cancer (CRC) at the 2020 Gastrointestinal Cancer Symposium sponsored by the American Society of Clinical Oncology (ASCO). The ability to identify treatment patterns through data analysis can provide unique and critical information to pharma, payers and provider networks to optimize treatment strategies |
• | In January, signed a three-year renewal agreement with one of the largest non-profit rural health plans in |
• | Signed an agreement with a leading U.S. health insurance company to roll out Eviti Connect across their Medicaid population to additional states, as previously announced. In addition to the pilot states, four of the added states are now live with Eviti Connect, and implementation is underway across three more states, with the remaining states scheduled to go live in the third quarter |
• | Deployed significant workflow and database enhancements to the Eviti platform including: |
◦ | Warning notifications: allows users to configure a warning and/or deviation notification to alert the submitter when a drug does not comply with the preferred drug program, saving review cycle time and ensuring patients receive correct care |
◦ | Payer-customized messaging: allows users to indicate when specific data is required in order to complete the Patient Insurance ID field, reducing submission delays |
• | Payer Engagement (NaviNet®): |
• | In January, added new payer customer, The Health Plan, servicing members in Ohio and West Virginia, as previously reported. The 5-year agreement includes NaviNet Open as a key component of The Health Plan’s payer-provider collaboration strategy |
• | Launched significant enhancements to the NaviNet Open platform, including AllPayer self-service subscription management workflow. This new storefront, an addition to the NaviNet AllPayer solution, enables the provider office to quickly create and manage subscriptions for our AllPayer offerings, allowing providers to expand their NaviNet access to nearly all health plans offered to their patients |
• | In January, presented GPS Cancer platform data revealing increased opportunities for HER2 directed therapy in colorectal cancer patients at the 2020 Gastrointestinal Cancer Symposium sponsored by the American Society of Clinical Oncology (ASCO), as reported previously. The data showed that up to 40% more patients may be eligible for HER2 directed therapies, which have implications for drug development and clinical trials |
• | In January, NantHealth and NantOmics presented an initial report on a novel artificial intelligence (AI) platform for aiding pathologists in image-based lung cancer subtyping at the Society for Imaging Science and Technology’s International Symposium on Electronic Imaging 2020, as reported previously. This novel machine vision software platform accurately subtypes lung cancer pathology and achieves high concordance with analysis performed by trained medical pathologists. |
• | In February, NantHealth and NantOmics announced the publication of a peer-reviewed study in Breast Cancer Research, a Springer Nature journal, on a novel AI technique in breast cancer, as reported previously. The study reports on a novel deep-learning system of digital pathology images and omics data used together to more precisely identify mechanisms of therapy resistance. |
• | For the 2020 first quarter, total net revenue was $18.2 million, which included $18.1 million of SaaS revenue. This compares with 2019 first quarter total net revenue of $20.2 million, which included $17.8 million of SaaS revenue and $1.6 million of home health care services revenue, a business the Company divested on June 7, 2019. |
• | Gross profit increased to $11.0 million, or 60% of total net revenue, compared with $9.9 million, or 49% 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, the divestiture of lower margin businesses and overall cost |
• | Selling, general and administrative (SG&A) expenses declined to $12.4 million from $15.3 million in 2019 first quarter, mainly driven by ongoing cost management efforts and efficiencies in overall processes. Research and development (R&D) expenses decreased to $3.6 million from $3.9 million. |
• | Net loss from continuing operations, net of tax, was $8.9 million, or $0.08 per share, compared with $19.6 million, or $0.18 per share, for the 2019 first quarter. |
• | On a non-GAAP basis, net loss from continuing operations was $6.1 million, or $0.06 per share, down from $10.6 million, or $0.10 per share, for the first quarter of last year. The improvement reflects the company’s ongoing efforts to manage costs, growth of its SaaS business and better overall financial performance. |
• | At March 31, 2020, cash and cash equivalents totaled $47.5 million. |
March 31, 2020 | December 31, 2019 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 47,478 | $ | 5,243 | |||
Accounts receivable, net | 6,816 | 6,179 | |||||
Related party receivables, net | 657 | 823 | |||||
Prepaid expenses and other current assets | 3,680 | 19,341 | |||||
Current assets of discontinued operation | — | 6,327 | |||||
Total current assets | 58,631 | 37,913 | |||||
Property, plant, and equipment, net | 13,755 | 14,985 | |||||
Goodwill | 97,307 | 97,307 | |||||
Intangible assets, net | 49,838 | 51,848 | |||||
Investment in related party | 29,918 | 31,702 | |||||
Related party receivable, net of current | 1,274 | 1,108 | |||||
Operating lease right-of-use assets | 8,092 | 8,470 | |||||
Other assets | 2,144 | 1,818 | |||||
Noncurrent assets of discontinued operation | — | 21,336 | |||||
Total assets | $ | 260,959 | $ | 266,487 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 3,314 | $ | 3,377 | |||
Accrued and other current liabilities | 17,033 | 31,988 | |||||
Deferred revenue | 5,523 | 7,098 | |||||
Related party payables, net | 4,552 | 4,120 | |||||
Notes payable | — | 238 | |||||
Current liabilities of discontinued operation | — | 10,680 | |||||
Total current liabilities | 30,422 | 57,501 | |||||
Deferred revenue, net of current | 1,148 | 1,129 | |||||
Related party liabilities | 25,931 | 24,227 | |||||
Related party promissory note | 112,666 | 112,666 | |||||
Related party convertible note, net | 8,994 | 8,864 | |||||
Convertible notes, net | 86,060 | 84,648 | |||||
Operating lease liabilities | 9,264 | 9,728 | |||||
Other liabilities | 20,065 | 23,211 | |||||
Noncurrent liabilities of discontinued operation | — | 1,649 | |||||
Total liabilities | 294,550 | 323,623 | |||||
Stockholders' deficit | |||||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 110,619,678 and 110,619,678 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 11 | 11 | |||||
Additional paid-in capital | 890,623 | 889,955 | |||||
Accumulated deficit | (923,819 | ) | (946,884 | ) | |||
Accumulated other comprehensive loss | (406 | ) | (218 | ) | |||
Total stockholders' deficit | (33,591 | ) | (57,136 | ) | |||
Total liabilities and stockholders' deficit | $ | 260,959 | $ | 266,487 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Total net revenue | $ | 18,180 | $ | 20,209 | |||
Total cost of revenue | 7,196 | 10,261 | |||||
Gross Profit | 10,984 | 9,948 | |||||
Operating Expenses | |||||||
Selling, general and administrative | 12,427 | 15,324 | |||||
Research and development | 3,550 | 3,850 | |||||
Amortization of acquisition-related assets | 867 | 1,054 | |||||
Total operating expenses | 16,844 | 20,228 | |||||
Loss from operations | (5,860 | ) | (10,280 | ) | |||
Interest expense, net | (4,657 | ) | (4,414 | ) | |||
Other income (expense), net | 3,454 | (2,505 | ) | ||||
Loss from related party equity method investment | (1,784 | ) | (2,210 | ) | |||
Loss from continuing operations before income taxes | (8,847 | ) | (19,409 | ) | |||
Provision for income taxes | 93 | 226 | |||||
Net loss from continuing operations | (8,940 | ) | (19,635 | ) | |||
Income (loss) from discontinued operations, net of tax | 32,005 | (288 | ) | ||||
Net income (loss) | $ | 23,065 | $ | (19,923 | ) | ||
Basic and diluted net income (loss) per share | |||||||
Continuing operations - common stock | $ | (0.08 | ) | $ | (0.18 | ) | |
Discontinued operations - common stock | $ | 0.29 | $ | — | |||
Total net income (loss) per share - common stock | $ | 0.21 | $ | (0.18 | ) | ||
Weighted average shares outstanding | |||||||
Basic and diluted - common stock | 110,619,780 | 109,904,336 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenue: | |||||||
Software-as-a-service related | $ | 18,121 | $ | 17,802 | |||
Total software-related revenue | 18,121 | 17,802 | |||||
Sequencing and molecular analysis | 59 | 814 | |||||
Home health care services | — | 1,593 | |||||
Total net revenue | $ | 18,180 | $ | 20,209 | |||
Cost of Revenue: | |||||||
Software-as-a-service related | $ | 5,701 | $ | 5,708 | |||
Maintenance | — | 70 | |||||
Amortization of developed technologies | 1,143 | 1,233 | |||||
Total software-related cost of revenue | 6,844 | 7,011 | |||||
Sequencing and molecular analysis | 352 | 2,427 | |||||
Home health care services | — | 823 | |||||
Total cost of revenue | $ | 7,196 | $ | 10,261 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net loss from continuing operations | $ | (8,940 | ) | $ | (19,635 | ) | |
Adjustments to GAAP net loss from continuing operations: | |||||||
Loss from related party equity method investment | 1,784 | 2,210 | |||||
Stock-based compensation expense from continuing operations | 732 | 625 | |||||
Change in fair value of derivatives liability | 5 | — | |||||
Change in fair value of Bookings Commitment | (3,128 | ) | 2,494 | ||||
Noncash interest expense related to convertible notes | 1,542 | 1,357 | |||||
Intangible amortization from continuing operations | 2,010 | 2,287 | |||||
Securities litigation costs | (103 | ) | — | ||||
Tax provision resulting from certain noncash tax items | — | 111 | |||||
Total adjustments to GAAP net loss from continuing operations | 2,842 | 9,084 | |||||
Net loss from continuing operations - Non-GAAP | $ | (6,098 | ) | $ | (10,551 | ) | |
Weighted average shares outstanding | 110,619,780 | 109,904,336 | |||||
Net loss per share from continuing operations - Non-GAAP | $ | (0.06 | ) | $ | (0.10 | ) |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net loss per common share from continuing operations | $ | (0.08 | ) | $ | (0.18 | ) | |
Adjustments to GAAP net loss per common share from continuing operations: | |||||||
Loss from related party equity method investment | 0.01 | 0.02 | |||||
Stock-based compensation expense from continuing operations | 0.01 | 0.01 | |||||
Change in fair value of derivatives liability | — | — | |||||
Change in fair value of Bookings Commitment | (0.03 | ) | 0.02 | ||||
Noncash interest expense related to convertible notes | 0.01 | 0.01 | |||||
Intangible amortization from continuing operations | 0.02 | 0.02 | |||||
Securities litigation costs | — | — | |||||
Tax provision resulting from certain noncash tax items | — | — | |||||
Total adjustments to GAAP net loss per common share from continuing operations | 0.02 | 0.08 | |||||
Net loss per common share from continuing operations - Non-GAAP | $ | (0.06 | ) | $ | (0.10 | ) |
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