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: | August 6, 2020 | By: | /s/ Bob Petrou |
Bob Petrou | |||
Chief Financial Officer |
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com 424.288.4098 |
• | Q2 Financial Highlights 2020 vs 2019: |
• | SaaS revenue of $17.5 million vs $18.3 million |
• | Total gross margin of 58%, up from 56% |
• | In July 2020, acquired OpenNMS Group, the world’s premier open source network management company |
• | Expands product and service offerings while opening opportunities beyond healthcare |
• | Allows teams to leverage complementary AI technologies and capabilities in Cloud and SaaS |
• | Clinical Decision Support (Eviti®): |
• | Implemented, through a channel partnership, Eviti Advisor clinical decision support platform with a leading non-profit medical center in New York City |
• | In July, significantly expanded Eviti Connect across the Medicaid population of a leading U.S. health insurance company with the addition of two states |
• | Leveraged the Eviti platform to educate users on the implications of COVID-19 for cancer care and the science behind emerging treatments through videos and instruction. Also, added a feature enabling payers to gain insights to COVID-19 testing relative to oncology treatment plans |
• | Released enhancements to the Eviti platform, including: |
◦ | Return-on-Investment (ROI) reporting: implemented cost savings dashboard enabling more robust and expedited validation of ROI for our customers |
◦ | White blood cell growth factor deviation messaging: added messaging to communicate unexpected use of white blood cell growth factor when a treatment plan is entered, allowing users to make real-time corrections for faster review and approval |
• | Payer Engagement (NaviNet®): |
• | Leveraged the NaviNet platform to enable payers to post updates to their medical policies and other key information - assisting the provider community directly impacted by the COVID-19 pandemic |
• | Launched workflow enhancements that enable providers to update prior authorizations already on file with our payer customers. Payers that enable this option as part of their NaviNet Open services can expect to receive more prior authorization requests electronically, while streamlining the process of managing prior authorizations for their providers |
• | In May, received notice from Molecular Diagnostic Services (MolDx) of a limited coverage determination for Omics CoreSM |
• | In June, announced the publication of four abstracts in the developmental therapeutics session of the American Society of Clinical Oncology (ASCO) 2020 Virtual Scientific Program. In collaboration with ImmunityBio, LLC, the company presented data, gathered from its database, which was used to advance findings in molecularly targeted agents and tumor biology |
• | In June, announced the publication of a study in JCI Insight, a peer reviewed journal dedicated to biomedical research. The study, “Transcriptomic silencing as a potential mechanism of treatment resistance,” explained the importance of using both transcriptomics and genomics for patient tumor interrogation to gain actionable insights into reducing the risk of tumor treatment resistance |
• | Total net revenue was $17.6 million, which included $17.5 million of SaaS revenue. This compares with 2019 second quarter total net revenue of $20.1 million, which included $18.3 million of SaaS revenue and $1.3 million of home health care services revenue, a business the Company divested on June 7, 2019 |
• | Gross profit increased to $10.3 million, or 58% of total net revenue, compared with $11.3 million, or 56% of total net revenue, for the prior year period |
• | Selling, general and administrative (SG&A) expenses declined to $12.0 million from $13.8 million in 2019 second quarter |
• | Research and development (R&D) expenses increased to $4.2 million from $3.4 million, primarily due to investments in product portfolio expansion and growth in data science, machine learning and AI capabilities |
• | Net loss from continuing operations, net of tax, was $48.3 million, or $0.44 per share, which included a non-cash loss from related party equity method investment of $29.9 million and a $6.9 million expense from our fair value bookings commitment liability. This compares with the prior-year second quarter net loss from continuing operations, net of tax, of $17.1 million, or $0.15 per share, which included loss from related party equity method investment of $2.2 million |
• | Non-GAAP net loss from continuing operations was $7.5 million, or $0.07 per share, compared with $6.9 million, or $0.06 per share, for the second quarter of last year |
• | At June 30, 2020, cash and cash equivalents totaled $37.5 million |
June 30, 2020 | December 31, 2019 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 37,526 | $ | 5,243 | |||
Accounts receivable, net | 3,473 | 6,179 | |||||
Related party receivables, net | 1,146 | 823 | |||||
Prepaid expenses and other current assets | 3,359 | 19,341 | |||||
Current assets of discontinued operation | — | 6,327 | |||||
Total current assets | 45,504 | 37,913 | |||||
Property, plant, and equipment, net | 13,206 | 14,985 | |||||
Goodwill | 97,307 | 97,307 | |||||
Intangible assets, net | 47,829 | 51,848 | |||||
Investment in related party | — | 31,702 | |||||
Related party receivable, net of current | 848 | 1,108 | |||||
Operating lease right-of-use assets | 7,776 | 8,470 | |||||
Other assets | 2,038 | 1,818 | |||||
Noncurrent assets of discontinued operation | — | 21,336 | |||||
Total assets | $ | 214,508 | $ | 266,487 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 3,159 | $ | 3,377 | |||
Accrued and other current liabilities | 11,852 | 31,988 | |||||
Deferred revenue | 4,454 | 7,098 | |||||
Related party payables, net | 3,852 | 4,120 | |||||
Notes payable | — | 238 | |||||
Current liabilities of discontinued operation | — | 10,680 | |||||
Total current liabilities | 23,317 | 57,501 | |||||
Deferred revenue, net of current | 687 | 1,129 | |||||
Related party liabilities | 27,644 | 24,227 | |||||
Related party promissory note | 112,666 | 112,666 | |||||
Related party convertible note, net | 9,129 | 8,864 | |||||
Convertible notes, net | 87,518 | 84,648 | |||||
Operating lease liabilities | 8,863 | 9,728 | |||||
Other liabilities | 26,905 | 23,211 | |||||
Noncurrent liabilities of discontinued operation | — | 1,649 | |||||
Total liabilities | 296,729 | 323,623 | |||||
Stockholders' deficit | |||||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 110,929,357 and 110,619,678 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 11 | 11 | |||||
Additional paid-in capital | 890,292 | 889,955 | |||||
Accumulated deficit | (972,108 | ) | (946,884 | ) | |||
Accumulated other comprehensive loss | (416 | ) | (218 | ) | |||
Total stockholders' deficit | (82,221 | ) | (57,136 | ) | |||
Total liabilities and stockholders' deficit | $ | 214,508 | $ | 266,487 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Total net revenue | $ | 17,585 | $ | 20,052 | $ | 35,765 | $ | 40,261 | |||||||
Total cost of revenue | 7,318 | 8,723 | 14,514 | 18,984 | |||||||||||
Gross Profit | 10,267 | 11,329 | 21,251 | 21,277 | |||||||||||
Operating Expenses | |||||||||||||||
Selling, general and administrative | 11,995 | 13,811 | 24,422 | 29,135 | |||||||||||
Research and development | 4,215 | 3,391 | 7,765 | 7,241 | |||||||||||
Amortization of acquisition-related assets | 866 | 1,054 | 1,733 | 2,108 | |||||||||||
Impairment of intangible asset | — | 3,977 | — | 3,977 | |||||||||||
Total operating expenses | 17,076 | 22,233 | 33,920 | 42,461 | |||||||||||
Loss from operations | (6,809 | ) | (10,904 | ) | (12,669 | ) | (21,184 | ) | |||||||
Interest expense, net | (4,773 | ) | (4,473 | ) | (9,430 | ) | (8,887 | ) | |||||||
Other (expense) income, net | (6,751 | ) | 1,069 | (3,297 | ) | (1,436 | ) | ||||||||
Loss from related party equity method investment | (29,918 | ) | (2,208 | ) | (31,702 | ) | (4,418 | ) | |||||||
Loss from continuing operations before income taxes | (48,251 | ) | (16,516 | ) | (57,098 | ) | (35,925 | ) | |||||||
Provision for income taxes | 4 | 622 | 97 | 848 | |||||||||||
Net loss from continuing operations | (48,255 | ) | (17,138 | ) | (57,195 | ) | (36,773 | ) | |||||||
(Loss) income from discontinued operations, net of tax | (34 | ) | 2,425 | 31,971 | 2,137 | ||||||||||
Net loss | $ | (48,289 | ) | $ | (14,713 | ) | $ | (25,224 | ) | $ | (34,636 | ) | |||
Basic and diluted net income (loss) per share | |||||||||||||||
Continuing operations - common stock | $ | (0.44 | ) | $ | (0.15 | ) | $ | (0.52 | ) | $ | (0.33 | ) | |||
Discontinued operations - common stock | $ | — | $ | 0.02 | $ | 0.29 | $ | 0.02 | |||||||
Total net loss per share - common stock | $ | (0.44 | ) | $ | (0.13 | ) | $ | (0.23 | ) | $ | (0.31 | ) | |||
Weighted average shares outstanding | |||||||||||||||
Basic and diluted - common stock | 110,831,456 | 110,209,510 | 110,731,925 | 110,057,981 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue: | |||||||||||||||
Software-as-a-service related | $ | 17,521 | $ | 18,291 | $ | 35,642 | $ | 36,093 | |||||||
Total software-related revenue | 17,521 | 18,291 | 35,642 | 36,093 | |||||||||||
Sequencing and molecular analysis | 64 | 491 | 123 | 1,305 | |||||||||||
Home health care services | — | 1,270 | — | 2,863 | |||||||||||
Total net revenue | $ | 17,585 | $ | 20,052 | $ | 35,765 | $ | 40,261 | |||||||
Cost of Revenue: | |||||||||||||||
Software-as-a-service related | $ | 5,916 | $ | 5,658 | $ | 11,617 | $ | 11,366 | |||||||
Maintenance | — | 97 | — | 167 | |||||||||||
Amortization of developed technologies | 1,143 | 1,143 | 2,286 | 2,376 | |||||||||||
Total software-related cost of revenue | 7,059 | 6,898 | 13,903 | 13,909 | |||||||||||
Sequencing and molecular analysis | 259 | 1,177 | 611 | 3,604 | |||||||||||
Home health care services | — | 648 | — | 1,471 | |||||||||||
Total cost of revenue | $ | 7,318 | $ | 8,723 | $ | 14,514 | $ | 18,984 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net loss from continuing operations | $ | (48,255 | ) | $ | (17,138 | ) | $ | (57,195 | ) | $ | (36,773 | ) | |||
Adjustments to GAAP net loss from continuing operations: | |||||||||||||||
Loss from related party equity method investment | 29,918 | 2,208 | 31,702 | 4,418 | |||||||||||
Stock-based compensation expense from continuing operations | 396 | 673 | 1,049 | 1,323 | |||||||||||
Change in fair value of derivatives liability | 58 | — | 63 | — | |||||||||||
Change in fair value of Bookings Commitment | 6,856 | (989 | ) | 3,727 | 1,505 | ||||||||||
Noncash interest expense related to convertible notes | 1,593 | 1,403 | 3,135 | 2,760 | |||||||||||
Intangible amortization from continuing operations | 2,009 | 2,197 | 4,019 | 4,484 | |||||||||||
Impairment of intangible asset | — | 3,977 | — | 3,977 | |||||||||||
Loss on sale of business | — | 582 | — | 582 | |||||||||||
Securities litigation costs | — | — | (103 | ) | — | ||||||||||
Tax (benefit) provision resulting from certain noncash tax items | (36 | ) | 255 | (36 | ) | 366 | |||||||||
Total adjustments to GAAP net loss from continuing operations | 40,794 | 10,284 | 43,635 | 19,368 | |||||||||||
Net loss from continuing operations - Non-GAAP | $ | (7,461 | ) | $ | (6,854 | ) | $ | (13,560 | ) | $ | (17,405 | ) | |||
Weighted average shares outstanding | 110,831,456 | 110,209,510 | 110,731,925 | 110,057,981 | |||||||||||
Net loss per share from continuing operations - Non-GAAP | $ | (0.07 | ) | $ | (0.06 | ) | $ | (0.12 | ) | $ | (0.16 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net loss per common share from continuing operations | $ | (0.44 | ) | $ | (0.15 | ) | $ | (0.52 | ) | $ | (0.33 | ) | |||
Adjustments to GAAP net loss per common share from continuing operations: | |||||||||||||||
Loss from related party equity method investment | 0.28 | 0.01 | 0.29 | 0.03 | |||||||||||
Stock-based compensation expense from continuing operations | — | 0.01 | 0.01 | 0.01 | |||||||||||
Change in fair value of derivatives liability | — | — | — | — | |||||||||||
Change in fair value of Bookings Commitment | 0.06 | (0.01 | ) | 0.03 | 0.01 | ||||||||||
Noncash interest expense related to convertible notes | 0.01 | 0.01 | 0.03 | 0.03 | |||||||||||
Intangible amortization from continuing operations | 0.02 | 0.02 | 0.04 | 0.04 | |||||||||||
Impairment of intangible asset | — | 0.04 | — | 0.04 | |||||||||||
Loss on sale of business | — | 0.01 | — | 0.01 | |||||||||||
Securities litigation costs | — | — | — | — | |||||||||||
Tax (benefit) provision resulting from certain noncash tax items | — | — | — | — | |||||||||||
Total adjustments to GAAP net loss per common share from continuing operations | 0.37 | 0.09 | 0.40 | 0.17 | |||||||||||
Net loss per common share from continuing operations - Non-GAAP | $ | (0.07 | ) | $ | (0.06 | ) | $ | (0.12 | ) | $ | (0.16 | ) | |||
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