|
|
|
|
|
Delaware
|
|
27-3019889
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
9920 Jefferson Blvd
Culver City, California
|
|
90230
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, $0.0001 par value
|
|
NASDAQ Global Select Market
|
|
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Page
|
PART I.
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Item 1.
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Item 2.
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Item 3.
|
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Item 4.
|
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PART II.
|
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Item 1.
|
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Item 1A.
|
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Item 2.
|
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Item 3.
|
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Item 4.
|
||
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Item 5.
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Item 6.
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||
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|
|
•
|
the structural change in the market for healthcare in the United States, including uncertainty in the healthcare regulatory framework and regulatory developments in the United States and foreign countries;
|
•
|
the evolving treatment paradigm for cancer, including physicians’ use of molecular information and targeted oncology therapeutics and the market size for molecular information products;
|
•
|
physicians’ need for precision medicine products and any perceived advantage of our solutions over those of our competitors, including the ability of our comprehensive platform to help physicians treat their patients’ cancers;
|
•
|
our ability to generate revenue from sales of products enabled by our molecular and biometric information platforms to physicians in clinical settings;
|
•
|
our ability to increase the commercial success of our sequencing and molecular analysis solution;
|
•
|
our plans or ability to obtain reimbursement for our sequencing and molecular analysis solution, including expectations as to our ability or the amount of time it will take to achieve successful reimbursement from third-party payors, such as commercial insurance companies and health maintenance organizations, and government insurance programs, such as Medicare and Medicaid;
|
•
|
our ability to effectively manage our growth, including the rate and degree of market acceptance of our solutions;
|
•
|
our ability to offer new and innovative products and services;
|
•
|
our ability to attract new partners and clients;
|
•
|
our ability to estimate the size of our target market;
|
•
|
our ability to maintain and enhance our reputation and brand recognition;
|
•
|
consolidation in the healthcare industry;
|
•
|
competition which could limit our ability to maintain or expand market share within our industry;
|
•
|
restrictions and penalties as a result of privacy and data protection laws;
|
•
|
our use of “open source” software;
|
•
|
our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
|
•
|
data loss or corruption due to failures or errors in our systems and service disruptions at our data centers;
|
•
|
breaches or failures of our security measures;
|
•
|
our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our users;
|
•
|
risks related to future acquisition opportunities;
|
•
|
the requirements of being a public company;
|
•
|
our ability to attract and retain key personnel;
|
•
|
our ability to obtain and maintain intellectual property protection for our solutions and not infringe upon the intellectual property of others; and
|
•
|
our financial performance expectations, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses, including changes in research and development, sales and marketing and general and administrative expenses, and our ability to achieve and maintain future profitability.
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
95,242
|
|
|
$
|
5,989
|
|
Marketable securities
|
71
|
|
|
1,243
|
|
||
Accounts receivable, net
|
17,165
|
|
|
11,472
|
|
||
Inventories, net
|
2,342
|
|
|
2,146
|
|
||
Deferred implementation costs
|
3,922
|
|
|
2,224
|
|
||
Related party receivables, net
|
856
|
|
|
1,245
|
|
||
Prepaid expenses and other current assets
|
8,708
|
|
|
8,707
|
|
||
Total current assets
|
128,306
|
|
|
33,026
|
|
||
Property, plant, and equipment, net
|
26,413
|
|
|
13,899
|
|
||
Deferred implementation costs, net of current
|
6,347
|
|
|
1,930
|
|
||
Goodwill
|
133,426
|
|
|
56,718
|
|
||
Intangible assets, net
|
130,165
|
|
|
54,971
|
|
||
Investments in related parties
|
242,901
|
|
|
248,191
|
|
||
Related party receivables, net of current
|
2,028
|
|
|
1,300
|
|
||
Other assets
|
2,276
|
|
|
1,918
|
|
||
Total assets
|
$
|
671,862
|
|
|
$
|
411,953
|
|
|
|
|
|
||||
Liabilities and Stockholders' / Members' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
6,218
|
|
|
$
|
6,447
|
|
Accrued expenses
|
20,770
|
|
|
14,423
|
|
||
Deferred revenue
|
19,292
|
|
|
10,656
|
|
||
Related party payables, net
|
8,671
|
|
|
10,166
|
|
||
Other current liabilities
|
596
|
|
|
1,544
|
|
||
Total current liabilities
|
55,547
|
|
|
43,236
|
|
||
Deferred revenue, net of current
|
14,725
|
|
|
17,312
|
|
||
Related party payables, net of current
|
2,755
|
|
|
—
|
|
||
Related party promissory note
|
112,666
|
|
|
—
|
|
||
Deferred income taxes, net
|
622
|
|
|
—
|
|
||
Other liabilities
|
428
|
|
|
358
|
|
||
Total liabilities
|
186,743
|
|
|
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 (Note 16)
|
—
|
|
|
476,263
|
|
||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 120,165,026 shares issued and outstanding at June 30, 2016
|
12
|
|
|
—
|
|
||
Additional paid-in capital
|
863,249
|
|
|
—
|
|
||
Accumulated deficit
|
(378,448
|
)
|
|
(291,171
|
)
|
||
Accumulated other comprehensive income (loss)
|
306
|
|
|
(87
|
)
|
||
Total stockholders' / members' equity
|
485,119
|
|
|
185,005
|
|
||
Total liabilities and stockholders' / members' equity
|
$
|
671,862
|
|
|
$
|
411,953
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
4,149
|
|
|
$
|
3,942
|
|
|
$
|
4,823
|
|
|
$
|
7,703
|
|
Software–as-a-service
|
15,181
|
|
|
3,412
|
|
|
28,882
|
|
|
7,218
|
|
||||
Total software-related revenue
|
19,330
|
|
|
7,354
|
|
|
33,705
|
|
|
14,921
|
|
||||
Maintenance
|
4,512
|
|
|
2,545
|
|
|
7,650
|
|
|
5,040
|
|
||||
Sequencing and molecular analysis
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
||||
Other services
|
7,603
|
|
|
1,853
|
|
|
9,541
|
|
|
3,533
|
|
||||
Total net revenue
|
31,490
|
|
|
11,752
|
|
|
50,941
|
|
|
23,494
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
435
|
|
|
91
|
|
|
674
|
|
|
(371
|
)
|
||||
Software-as-a-service
|
9,314
|
|
|
1,830
|
|
|
13,737
|
|
|
3,790
|
|
||||
Total software-related cost of revenue
|
9,749
|
|
|
1,921
|
|
|
14,411
|
|
|
3,419
|
|
||||
Maintenance
|
743
|
|
|
102
|
|
|
1,273
|
|
|
212
|
|
||||
Sequencing and molecular analysis
|
359
|
|
|
—
|
|
|
359
|
|
|
—
|
|
||||
Other services
|
7,492
|
|
|
2,030
|
|
|
11,057
|
|
|
3,677
|
|
||||
Amortization of developed technologies
|
3,897
|
|
|
2,246
|
|
|
8,178
|
|
|
4,557
|
|
||||
Total cost of revenue
|
22,240
|
|
|
6,299
|
|
|
35,278
|
|
|
11,865
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
9,250
|
|
|
5,453
|
|
|
15,663
|
|
|
11,629
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
47,248
|
|
|
17,847
|
|
|
74,621
|
|
|
34,239
|
|
||||
Research and development
|
24,322
|
|
|
4,960
|
|
|
35,016
|
|
|
9,650
|
|
||||
Amortization of software license and acquisition-related assets
|
1,813
|
|
|
(11
|
)
|
|
3,628
|
|
|
22
|
|
||||
Total operating expenses
|
73,383
|
|
|
22,796
|
|
|
113,265
|
|
|
43,911
|
|
||||
Loss from operations
|
(64,133
|
)
|
|
(17,343
|
)
|
|
(97,602
|
)
|
|
(32,282
|
)
|
||||
Interest expense, net
|
(1,758
|
)
|
|
(303
|
)
|
|
(3,256
|
)
|
|
(628
|
)
|
||||
Other income (expense), net
|
(77
|
)
|
|
555
|
|
|
261
|
|
|
1,855
|
|
||||
Loss from equity method investments
|
(2,375
|
)
|
|
(145
|
)
|
|
(5,289
|
)
|
|
(145
|
)
|
||||
Loss before income taxes
|
(68,343
|
)
|
|
(17,236
|
)
|
|
(105,886
|
)
|
|
(31,200
|
)
|
||||
Provision for (benefit from) income taxes
|
(14,211
|
)
|
|
—
|
|
|
(18,609
|
)
|
|
1
|
|
||||
Net loss
|
$
|
(54,132
|
)
|
|
$
|
(17,236
|
)
|
|
$
|
(87,277
|
)
|
|
$
|
(31,201
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (1)
|
$
|
(0.52
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
(0.38
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (1)
|
104,072,198
|
|
|
82,406,012
|
|
|
101,846,445
|
|
|
82,014,695
|
|
(1)
|
The net loss per share and weighted-average shares outstanding have been computed to give effect to the LLC Conversion (See Note 16) that occurred June 1, 2016 prior to the Company’s 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. See Note 18 for the calculation of net loss per share for common stock and redeemable common stock for the three months and six months ended June 30, 2016.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(54,132
|
)
|
|
$
|
(17,236
|
)
|
|
$
|
(87,277
|
)
|
|
$
|
(31,201
|
)
|
Other comprehensive income (loss), net of reclassification adjustments and taxes -
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gains (losses)
|
90
|
|
|
(73
|
)
|
|
393
|
|
|
(2
|
)
|
||||
Comprehensive loss
|
$
|
(54,042
|
)
|
|
$
|
(17,309
|
)
|
|
$
|
(86,884
|
)
|
|
$
|
(31,203
|
)
|
|
Members' Equity
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated
Other
Comprehensive Income (loss)
|
|
Total Equity
|
||||||||||||||||||
|
Units
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2015
|
541,228,171
|
|
|
$
|
476,263
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(291,171
|
)
|
|
$
|
(87
|
)
|
|
$
|
185,005
|
|
Issuance of membership interests
|
15,513,726
|
|
|
52,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,500
|
|
||||||
Stock-based compensation expense (pre LLC conversion)
|
—
|
|
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170
|
|
||||||
Deemed capital contribution from chairman and CEO (pre LLC conversion
|
—
|
|
|
830
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
830
|
|
||||||
Series F put right accretion (pre LLC conversion)
|
—
|
|
|
(4,375
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,375
|
)
|
||||||
Conversion of members' interests
|
(556,741,897
|
)
|
|
(525,388
|
)
|
|
99,651,444
|
|
|
10
|
|
|
525,378
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock upon conversion of related party promissory note
|
—
|
|
|
—
|
|
|
2,899,297
|
|
|
—
|
|
|
40,590
|
|
|
—
|
|
|
—
|
|
|
40,590
|
|
||||||
Issuance of common stock in initial public offering, net of $13,370 in offering costs
|
—
|
|
|
—
|
|
|
6,900,000
|
|
|
1
|
|
|
83,229
|
|
|
—
|
|
|
—
|
|
|
83,230
|
|
||||||
Series F put right accretion (post LLC conversion)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
||||||
Redeemable common stock put right expiration
|
—
|
|
|
—
|
|
|
10,714,285
|
|
|
1
|
|
|
170,999
|
|
|
—
|
|
|
—
|
|
|
171,000
|
|
||||||
Stock-based compensation expense (post LLC conversion)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,846
|
|
|
—
|
|
|
—
|
|
|
42,846
|
|
||||||
Deemed capital contribution from Chairman and CEO (post LLC conversion)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
790
|
|
|
—
|
|
|
—
|
|
|
790
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
393
|
|
|
393
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,277
|
)
|
|
—
|
|
|
(87,277
|
)
|
||||||
Balance at June 30, 2016
|
—
|
|
|
$
|
—
|
|
|
120,165,026
|
|
|
$
|
12
|
|
|
$
|
863,249
|
|
|
$
|
(378,448
|
)
|
|
$
|
306
|
|
|
$
|
485,119
|
|
|
Six Months Ended
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(87,277
|
)
|
|
$
|
(31,201
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
15,475
|
|
|
6,242
|
|
||
Unrealized changes in fair value of marketable securities
|
(49
|
)
|
|
(3,194
|
)
|
||
Realized changes in fair value of marketable securities
|
49
|
|
|
3,242
|
|
||
Stock-based compensation
|
43,788
|
|
|
1,031
|
|
||
Deferred income taxes, net
|
(19,043
|
)
|
|
—
|
|
||
Provision for bad debt expense
|
552
|
|
|
20
|
|
||
Loss on equity method investments
|
5,289
|
|
|
145
|
|
||
Changes in operating assets and liabilities, net of business combinations:
|
|
|
|
||||
Accounts receivable, net
|
3,752
|
|
|
(523
|
)
|
||
Inventories, net
|
(196
|
)
|
|
648
|
|
||
Related party receivables, net
|
(339
|
)
|
|
356
|
|
||
Prepaid expenses and other current assets
|
2,036
|
|
|
(244
|
)
|
||
Deferred implementation costs
|
(6,115
|
)
|
|
—
|
|
||
Accounts payable
|
(4,814
|
)
|
|
(1,085
|
)
|
||
Accrued expenses
|
1,677
|
|
|
1,157
|
|
||
Deferred revenue
|
3,440
|
|
|
(4,255
|
)
|
||
Related party payables
|
1,851
|
|
|
(2,891
|
)
|
||
Other assets and liabilities
|
(876
|
)
|
|
(13
|
)
|
||
Net cash used in operating activities
|
(40,800
|
)
|
|
(30,565
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(8,231
|
)
|
|
(5,147
|
)
|
||
Investments in unconsolidated related parties
|
—
|
|
|
(150,816
|
)
|
||
Purchases of marketable securities
|
(31
|
)
|
|
—
|
|
||
Proceeds from sales of marketable securities
|
1,204
|
|
|
93,581
|
|
||
Purchase of cost method investment
|
—
|
|
|
(1,750
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
(79,423
|
)
|
|
(50,548
|
)
|
||
Deferred consideration for acquisition
|
1,949
|
|
|
—
|
|
||
Net cash used in investing activities
|
(84,532
|
)
|
|
(114,680
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of membership interests
|
—
|
|
|
200,000
|
|
||
Deemed capital contribution from Chairman and CEO
|
1,620
|
|
|
490
|
|
||
Payment of short-term notes payable
|
(23,324
|
)
|
|
—
|
|
||
Proceeds from (payment of) related party promissory notes
|
152,666
|
|
|
(34,502
|
)
|
||
Proceeds from initial public offering, net of offering costs
|
83,230
|
|
|
—
|
|
||
Net cash provided by financing activities
|
214,192
|
|
|
165,988
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
393
|
|
|
(2
|
)
|
||
Net increase in cash and cash equivalents
|
89,253
|
|
|
20,740
|
|
||
Cash and cash equivalents, beginning of period
|
5,989
|
|
|
3,699
|
|
||
Cash and cash equivalents, end of period
|
$
|
95,242
|
|
|
$
|
24,439
|
|
|
Six Months Ended
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
(178
|
)
|
|
$
|
(2,215
|
)
|
Interest received
|
392
|
|
|
296
|
|
||
Non-cash transactions:
|
|
|
|
||||
Transfer of marketable securities as investment in unconsolidated related party
|
—
|
|
|
99,184
|
|
||
NaviNet escrow receivable
|
1,678
|
|
|
—
|
|
||
Accretion to redemption value of Series F / redeemable common stock
|
4,958
|
|
|
—
|
|
||
Conversion of related party promissory note and interest payable to common stock
|
40,590
|
|
|
—
|
|
||
Reclassification of redeemable common stock to common stock (former Series F units)
|
$
|
171,000
|
|
|
$
|
—
|
|
•
|
Level 1—Quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2—Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable; and
|
•
|
Level 3—Unobservable inputs that reflect estimates and assumptions.
|
•
|
Software and hardware— Software and hardware revenue is generated from the sale of the Company’s software, on either a perpetual or term license basis, and the sale of hardware. The software is installed on the client’s site or the client’s designated vendor’s site and is not hosted by the Company or by a vendor contracted by the Company. The Company also sells third-party software and hardware to its clients. Solutions sold are grouped together under the NantOS Interoperability platform (formerly known as cOS) and FusionFX, NantOS, DeviceConX and HBox.
|
•
|
Software-as-a-service (“SaaS”)— SaaS revenue is generated from clients’ access to and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term, which is usually monthly. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period. Solutions sold under a SaaS model include the NantOS Interoperability cancer decision support solution (formerly known as eviti) NantOS Interoperability and Navinet.
|
•
|
Maintenance— Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance during the paid PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when and if available basis.
|
•
|
Sequencing and molecular analysis— Sequencing and molecular analysis revenue is generated by the process of performing sequencing and analysis of whole genome DNA, RNA and proteomic results. Revenue is recognized when services have been performed.
|
•
|
Other services— Other services includes revenue from professional services provided that are generally complementary to the software and may or may not be required for the software to function as desired by the client. The services are generally provided in the form of training and implementation services during the software license period and do not include PCS. Other services revenue also includes the sale of nursing and therapy services provided to patients in a home care setting and any other services not included in the preceding revenue sources.
|
|
Amounts
|
||
Cash paid to seller at closing
|
$
|
74,823
|
|
Cash paid to option holders after closing
|
2,580
|
|
|
Cash paid to escrow account
|
6,126
|
|
|
Working capital settlement payment
|
455
|
|
|
Fair value of Series H units
|
52,500
|
|
|
Total consideration
|
$
|
136,484
|
|
|
Amounts
|
||
Cash and restricted cash
|
$
|
4,804
|
|
Accounts receivable, net
|
9,996
|
|
|
Property, plant and equipment, net
|
7,953
|
|
|
Other assets, net
|
3,830
|
|
|
Accounts payable
|
(4,585
|
)
|
|
Accrued expenses
|
(3,488
|
)
|
|
Deferred revenue
|
(2,603
|
)
|
|
Deferred tax liability
|
(19,533
|
)
|
|
Assumed indebtedness
|
(23,324
|
)
|
|
Trade names
|
3,000
|
|
|
Developed technology
|
32,000
|
|
|
Customer relationships
|
52,000
|
|
|
Goodwill
|
76,434
|
|
|
Total fair value of net assets acquired
|
$
|
136,484
|
|
|
Amounts
|
||
Cash paid to Harris at closing
|
$
|
43,056
|
|
Cash paid to escrow account
|
7,500
|
|
|
Working capital released from escrow
|
(2,494
|
)
|
|
Total consideration
|
$
|
48,062
|
|
|
Amounts
|
||
Accounts receivable, net
|
$
|
13,119
|
|
Other liabilities, net
|
(2,205
|
)
|
|
Deferred revenue
|
(16,076
|
)
|
|
Trademarks
|
2,400
|
|
|
Developed technology
|
14,400
|
|
|
Customer relationships
|
8,900
|
|
|
Backlog
|
3,900
|
|
|
Goodwill
|
23,624
|
|
|
Total fair value of net assets acquired
|
$
|
48,062
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
||||
|
2015
|
|
2015
|
||||
Revenue
|
$
|
33,768
|
|
|
$
|
66,115
|
|
Net loss
|
$
|
(22,461
|
)
|
|
$
|
(41,317
|
)
|
|
June 30,
2016
|
|
December 31,
2015
|
||||
|
(Unaudited)
|
|
|
||||
|
|
|
|
||||
Finished goods
|
$
|
1,946
|
|
|
$
|
2,005
|
|
Raw Materials
|
396
|
|
|
141
|
|
||
Inventories, net
|
$
|
2,342
|
|
|
$
|
2,146
|
|
|
June 30,
2016
|
|
December 31,
2015
|
||||
|
(Unaudited)
|
|
|
||||
|
|
|
|
||||
Prepaid expenses
|
$
|
6,692
|
|
|
$
|
2,161
|
|
Restricted cash (1)
|
100
|
|
|
—
|
|
||
Deferred offering costs
|
—
|
|
|
3,902
|
|
||
Escrow receivable
|
1,678
|
|
|
2,494
|
|
||
Other current assets
|
238
|
|
|
150
|
|
||
|
$
|
8,708
|
|
|
$
|
8,707
|
|
(1)
|
Additional $250 of non-current restricted cash is included in the Company’s Condensed Consolidated and Combined balance sheets as part of Other assets.
|
|
June 30,
2016
|
|
December 31,
2015
|
||||
|
(Unaudited)
|
|
|
||||
|
|
|
|
||||
Computer equipment and software
|
$
|
27,281
|
|
|
$
|
9,865
|
|
Furniture and equipment
|
8,216
|
|
|
6,772
|
|
||
Leasehold and building improvements
|
3,285
|
|
|
1,433
|
|
||
Internal use software
|
7,170
|
|
|
1,018
|
|
||
Construction in progress
|
2,529
|
|
|
1,462
|
|
||
|
48,481
|
|
|
20,550
|
|
||
Less: accumulated depreciation and amortization
|
(22,068
|
)
|
|
(6,651
|
)
|
||
Property, plant and equipment, net
|
$
|
26,413
|
|
|
$
|
13,899
|
|
|
June 30, 2016 (Unaudited)
|
||||||||||||||||||||||
|
Customer
Relationships
|
|
Developed Technologies
|
|
Software
License
|
|
Intellectual Property
|
|
Trade Name
|
|
Total
|
||||||||||||
Gross carrying amount
|
$
|
65,200
|
|
|
$
|
98,930
|
|
|
$
|
5,000
|
|
|
$
|
2,400
|
|
|
$
|
3,000
|
|
|
$
|
174,530
|
|
Accumulated amortization
|
(4,693
|
)
|
|
(37,879
|
)
|
|
(938
|
)
|
|
(480
|
)
|
|
(375
|
)
|
|
(44,365
|
)
|
||||||
Intangible assets, net
|
$
|
60,507
|
|
|
$
|
61,051
|
|
|
$
|
4,062
|
|
|
$
|
1,920
|
|
|
$
|
2,625
|
|
|
$
|
130,165
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
Customer
Relationships
|
|
Developed Technologies
|
|
Software
License
|
|
Intellectual Property
|
|
Trade Name
|
|
Total
|
||||||||||||
Gross carrying amount
|
$
|
13,200
|
|
|
$
|
66,930
|
|
|
$
|
5,000
|
|
|
$
|
2,400
|
|
|
$
|
—
|
|
|
$
|
87,530
|
|
Accumulated amortization
|
(1,680
|
)
|
|
(30,326
|
)
|
|
(313
|
)
|
|
(240
|
)
|
|
—
|
|
|
(32,559
|
)
|
||||||
Intangible assets, net
|
$
|
11,520
|
|
|
$
|
36,604
|
|
|
$
|
4,687
|
|
|
$
|
2,160
|
|
|
$
|
—
|
|
|
$
|
54,971
|
|
|
Amounts
|
||
2016
|
$
|
11,039
|
|
2017
|
19,078
|
|
|
2018
|
18,478
|
|
|
2019
|
18,166
|
|
|
2020
|
14,958
|
|
|
Thereafter
|
48,446
|
|
|
Total
|
$
|
130,165
|
|
|
Amounts
|
||
Balance at December 31, 2015
|
|
||
Goodwill
|
$
|
63,668
|
|
Accumulated impairment losses
|
(6,950
|
)
|
|
Net balance
|
56,718
|
|
|
|
|
||
Activity during the year (Unaudited):
|
|
||
Acquisitions (See Note 3)
|
74,376
|
|
|
Measurement period adjustments (See Note 3)
|
2,332
|
|
|
Net activity during the period
|
76,708
|
|
|
|
|
||
Balance at June 30, 2016 (Unaudited):
|
|
||
Goodwill
|
140,376
|
|
|
Accumulated impairment losses
|
(6,950
|
)
|
|
Net balance
|
$
|
133,426
|
|
|
Trailing Six Months Ended March 31, 2016
|
||
Sales
|
$
|
1,935
|
|
Gross loss
|
(1,738
|
)
|
|
Loss from operations
|
(16,049
|
)
|
|
Net loss
|
(14,703
|
)
|
|
Net loss attributable to NantOmics
|
$
|
(13,561
|
)
|
|
June 30, 2016 (Unaudited)
|
||||||||||||||
|
Total
fair value
|
|
Quoted price in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
84,119
|
|
|
$
|
84,119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities
|
71
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
December 31, 2015
|
||||||||||||||
|
Total
fair value
|
|
Quoted price in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
630
|
|
|
$
|
630
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities
|
1,243
|
|
|
1,243
|
|
|
—
|
|
|
—
|
|
|
Amounts
|
||
2016
|
$
|
2,262
|
|
2017
|
4,132
|
|
|
2018
|
2,139
|
|
|
2019
|
468
|
|
|
2020
|
271
|
|
|
Total minimum rental commitments
|
$
|
9,272
|
|
|
Redeemable Series F Units
|
|
Redeemable Common Stock
|
|
Common Stock and Additional-Paid-in-Capital
|
||||||
Balance at December 31, 2015
|
$
|
166,042
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accretion to redemption value
|
4,375
|
|
|
—
|
|
|
—
|
|
|||
Balance at June 1, 2016 pre-LLC Conversion
|
170,417
|
|
|
—
|
|
|
—
|
|
|||
LLC Conversion
|
(170,417
|
)
|
|
170,417
|
|
|
—
|
|
|||
Balance at June 1, 2016 post-LLC Conversion
|
—
|
|
|
170,417
|
|
|
—
|
|
|||
Accretion to redemption value
|
—
|
|
|
583
|
|
|
—
|
|
|||
Balance at June 20, 2016 pre expiration of Put Right
|
—
|
|
|
171,000
|
|
|
—
|
|
|||
Expiration of Put Right at June 20, 2016
|
—
|
|
|
(171,000
|
)
|
|
171,000
|
|
|||
Balance at June 20, 2016 post expiration of Put Right and at June 30, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
171,000
|
|
|
Pre Conversion
(Units)
|
|
Former Series A Unit Holders
|
420,255,676
|
|
Former Series B Unit Holders
|
19,109,603
|
|
Former Series C Unit Holders
|
3,470,254
|
|
Former Series D Unit Holders
|
3,572,066
|
|
Former Series E Unit Holders
|
35,720,664
|
|
Former Series G Unit Holders
|
59,099,908
|
|
Former Series H Unit Holders
|
15,513,726
|
|
Total Member Units
|
556,741,897
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of revenue
|
$
|
7,032
|
|
|
$
|
—
|
|
|
$
|
7,032
|
|
|
$
|
—
|
|
Selling, general and administrative
|
23,577
|
|
|
—
|
|
|
23,577
|
|
|
—
|
|
||||
Research and development
|
13,449
|
|
|
—
|
|
|
13,449
|
|
|
—
|
|
||||
Total
|
$
|
44,058
|
|
|
$
|
—
|
|
|
$
|
44,058
|
|
|
$
|
—
|
|
|
Number of Units
|
|
Weighted
Average Grant
date value per
phantom unit
|
|
Unvested phantom units outstanding - December 31, 2015
|
3,653,008
|
|
|
$15.78
|
Granted
|
108,995
|
|
|
$14.45
|
Vested
|
—
|
|
|
$—
|
Forfeited
|
(447,076
|
)
|
|
$15.80
|
Unvested phantom units outstanding - March 31, 2016
|
3,314,927
|
|
|
$15.74
|
Granted
|
2,985,340
|
|
|
$14.58
|
Vested
|
(1,612,421
|
)
|
|
$15.21
|
Forfeited
|
(126,591
|
)
|
|
$15.40
|
Unvested phantom units outstanding - June 30, 2016
|
4,561,255
|
|
|
$15.18
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
|
Common Stock
|
|
Redeemable Common Stock
|
|
Common Stock
|
|
Common Stock
|
|
Redeemable Common Stock
|
|
Common Stock
|
||||||||||||
Loss per share numerator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
$
|
(54,132
|
)
|
|
$
|
—
|
|
|
$
|
(17,236
|
)
|
|
$
|
(87,277
|
)
|
|
$
|
—
|
|
|
$
|
(31,201
|
)
|
Accretion to redemption value of series F/redeemable common stock
|
(2,333
|
)
|
|
2,333
|
|
|
—
|
|
|
(4,958
|
)
|
|
4,958
|
|
|
—
|
|
||||||
Net (loss)/income for basic/diluted loss per share
|
$
|
(56,465
|
)
|
|
$
|
2,333
|
|
|
$
|
(17,236
|
)
|
|
$
|
(92,235
|
)
|
|
$
|
4,958
|
|
|
$
|
(31,201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss per share denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average shares for basic net loss per share
|
104,072,198
|
|
|
9,419,152
|
|
|
82,406,012
|
|
|
101,846,445
|
|
|
10,066,719
|
|
|
82,014,695
|
|
||||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Weighted-average shares for dilutive net loss per share
|
104,072,198
|
|
|
9,419,152
|
|
|
82,406,012
|
|
|
101,846,445
|
|
|
10,066,719
|
|
|
82,014,695
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic & Diluted net loss per share
|
$
|
(0.54
|
)
|
|
$
|
0.25
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
0.49
|
|
|
$
|
(0.38
|
)
|
•
|
introduce new marketing, education and engagement efforts and foster relationships across the oncology community to drive adoption of GPS Cancer;
|
•
|
pursue reimbursement of GPS Cancer from regional and national third-party payors and government payors;
|
•
|
publish scientific and medical advances;
|
•
|
strengthen our commercial organization to increase our CLINICS and GPS Cancer client base and to broaden usage of our solutions by existing clients who currently use only NantOS, specific NantOS apps or suites of NantOS apps; and
|
•
|
develop new features and functionality for CLINICS to address the needs of current and future healthcare provider and payor, self-insured employer and biopharmaceutical company clients.
|
•
|
NantOmics
In June 2015, we invested a substantial portion of our available capital in NantOmics, a majority owned subsidiary of NantWorks. Our investment represents approximately 14.3% of the issued and outstanding membership interests of NantOmics. Our relationship with NantOmics provides us with access to what we believe is the nation’s only CAP- and CLIA-certified whole genome and quantitative proteomics laboratory.
|
•
|
Healthcare Solutions (“HCS”)
In July 2015, we acquired certain assets related to HCS business from Harris Corporation. Once integrated with our systems, we believe the acquired assets will help complex healthcare delivery organizations achieve better patient outcomes, clinical and administrative workflow efficiency and stronger collaboration across the continuum of care.
|
•
|
NaviNet
In January 2016, we acquired NaviNet, which provides a secure collaboration network connecting approximately 36 health plans and which is estimated to be utilized in more than 60% of the nation’s physicians’ offices as of the first quarter of 2016. NaviNet Open will serve as a nationwide scalable and secure web-based portal for patients and providers.
|
(In thousands except share and per share amounts)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Loss before Income taxes
|
$
|
(68,343
|
)
|
|
$
|
(17,236
|
)
|
|
$
|
(105,886
|
)
|
|
$
|
(31,200
|
)
|
|
|
|
|
|
|
|
|
||||||||
Loss from equity method investments
|
2,375
|
|
|
145
|
|
|
5,289
|
|
|
145
|
|
||||
Stock-based compensation expense
|
43,691
|
|
|
126
|
|
|
43,788
|
|
|
1,031
|
|
||||
Corporate restructuring
|
179
|
|
|
458
|
|
|
2,145
|
|
|
986
|
|
||||
Acquisition related compensation expense
|
—
|
|
|
—
|
|
|
4,814
|
|
|
—
|
|
||||
Sales incentive
|
40
|
|
|
—
|
|
|
1,461
|
|
|
—
|
|
||||
Intangible amortization
|
5,710
|
|
|
2,235
|
|
|
11,806
|
|
|
4,579
|
|
||||
Total adjustments to GAAP net loss before provision for income taxes
|
51,995
|
|
|
2,964
|
|
|
69,303
|
|
|
6,741
|
|
||||
Provision from income taxes
|
175
|
|
|
—
|
|
|
305
|
|
|
1
|
|
||||
Net loss - Non-GAAP
|
$
|
(16,523
|
)
|
|
$
|
14,272
|
|
|
$
|
(36,888
|
)
|
|
$
|
(24,460
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (1)
|
104,072,198
|
|
|
82,406,012
|
|
|
101,846,445
|
|
|
82,014,695
|
|
||||
Weighted average Series F/redeemable stock (1)(2)
|
9,419,152
|
|
|
10,714,285
|
|
|
10,066,719
|
|
|
10,714,285
|
|
||||
Shares Outstanding - Non-GAAP (1)
|
113,491,350
|
|
|
93,120,297
|
|
|
111,913,164
|
|
|
92,728,980
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share - Non-GAAP (1)
|
$
|
(0.15
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.26
|
)
|
(1)
|
The net loss per share - 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 the 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 June 30, 2016. The weighted-average shares are adjusted to include the redeemable common stock in the weighted-average shares outstanding for the entire period.
|
▪
|
Software, middleware and hardware—
Software and hardware cost of revenue includes third-party software and hardware costs directly associated with our solutions.
|
▪
|
Software-as-a-service—
SaaS cost of revenue includes personnel-related and other direct costs associated with the delivery and hosting of NantOS and NantOS apps, including eviti, our cancer-decision support solution, and NaviNet on a subscription basis.
|
▪
|
Maintenance
—Maintenance cost of revenue includes personnel-related and other direct costs associated with the ongoing support or maintenance we provide for our clients.
|
▪
|
Sequencing and molecular analysis
—Sequencing and molecular analysis cost of revenue includes internal costs associated with these services and amounts due to NantOmics under our Reseller Agreement for the sequencing and analysis of whole genome, DNA, RNA and proteomic results.
|
▪
|
Other services
—Other services cost of revenue includes personnel-related and other direct costs associated with software training and implementation services provided to our clients as well as direct expenses relating to our nursing and therapy services provided to patients in a home care setting.
|
(In thousands except share and per share amount)
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
4,149
|
|
|
$
|
3,942
|
|
|
$
|
4,823
|
|
|
$
|
7,703
|
|
Software–as-a-service
|
15,181
|
|
|
3,412
|
|
|
28,882
|
|
|
7,218
|
|
||||
Total software-related revenue
|
19,330
|
|
|
7,354
|
|
|
33,705
|
|
|
14,921
|
|
||||
Maintenance
|
4,512
|
|
|
2,545
|
|
|
7,650
|
|
|
5,040
|
|
||||
Sequencing and molecular analysis
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
||||
Other services
|
7,603
|
|
|
1,853
|
|
|
9,541
|
|
|
3,533
|
|
||||
Total net revenue
|
31,490
|
|
|
11,752
|
|
|
50,941
|
|
|
23,494
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
435
|
|
|
91
|
|
|
674
|
|
|
(371
|
)
|
||||
Software-as-a-service
|
9,314
|
|
|
1,830
|
|
|
13,737
|
|
|
3,790
|
|
||||
Total software-related cost of revenue
|
9,749
|
|
|
1,921
|
|
|
14,411
|
|
|
3,419
|
|
||||
Maintenance
|
743
|
|
|
102
|
|
|
1,273
|
|
|
212
|
|
||||
Sequencing and molecular analysis
|
359
|
|
|
—
|
|
|
359
|
|
|
—
|
|
||||
Other services
|
7,492
|
|
|
2,030
|
|
|
11,057
|
|
|
3,677
|
|
||||
Amortization of developed technologies
|
3,897
|
|
|
2,246
|
|
|
8,178
|
|
|
4,557
|
|
||||
Total cost of revenue
|
22,240
|
|
|
6,299
|
|
|
35,278
|
|
|
11,865
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
9,250
|
|
|
5,453
|
|
|
15,663
|
|
|
11,629
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
47,248
|
|
|
17,847
|
|
|
74,621
|
|
|
34,239
|
|
||||
Research and development
|
24,322
|
|
|
4,960
|
|
|
35,016
|
|
|
9,650
|
|
||||
Amortization of software license and acquisition-related assets
|
1,813
|
|
|
(11
|
)
|
|
3,628
|
|
|
22
|
|
||||
Total operating expenses
|
73,383
|
|
|
22,796
|
|
|
113,265
|
|
|
43,911
|
|
||||
Loss from operations
|
(64,133
|
)
|
|
(17,343
|
)
|
|
(97,602
|
)
|
|
(32,282
|
)
|
||||
Interest expense, net
|
(1,758
|
)
|
|
(303
|
)
|
|
(3,256
|
)
|
|
(628
|
)
|
||||
Other income (expense), net
|
(77
|
)
|
|
555
|
|
|
261
|
|
|
1,855
|
|
||||
Loss from equity method investments
|
(2,375
|
)
|
|
(145
|
)
|
|
(5,289
|
)
|
|
(145
|
)
|
||||
Loss before income taxes
|
(68,343
|
)
|
|
(17,236
|
)
|
|
(105,886
|
)
|
|
(31,200
|
)
|
||||
Provision for (benefit from) income taxes
|
(14,211
|
)
|
|
—
|
|
|
(18,609
|
)
|
|
1
|
|
||||
Net loss
|
$
|
(54,132
|
)
|
|
$
|
(17,236
|
)
|
|
$
|
(87,277
|
)
|
|
$
|
(31,201
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (1)
|
$
|
(0.52
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
(0.38
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (1)
|
104,072,198
|
|
|
82,406,012
|
|
|
101,846,445
|
|
|
82,014,695
|
|
(1)
|
The net loss per share and weighted-average shares outstanding 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 the 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.
|
(In thousands)
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
|
|
|
|
||||
Software and hardware
|
13.2
|
%
|
|
33.5
|
%
|
|
9.5
|
%
|
|
32.8
|
%
|
Software–as-a-service
|
48.2
|
%
|
|
29.0
|
%
|
|
56.7
|
%
|
|
30.7
|
%
|
Total software-related revenues
|
61.4
|
%
|
|
62.5
|
%
|
|
66.2
|
%
|
|
63.5
|
%
|
Maintenance
|
14.3
|
%
|
|
21.7
|
%
|
|
15.0
|
%
|
|
21.5
|
%
|
Sequencing and molecular analysis
|
0.1
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
Other services
|
24.2
|
%
|
|
15.8
|
%
|
|
18.7
|
%
|
|
15.0
|
%
|
Total net revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||
Software and hardware
|
1.4
|
%
|
|
0.8
|
%
|
|
1.3
|
%
|
|
-1.6
|
%
|
Software-as-a-service
|
29.6
|
%
|
|
15.6
|
%
|
|
27.0
|
%
|
|
16.1
|
%
|
Total software-related cost of revenue
|
31.0
|
%
|
|
16.4
|
%
|
|
28.3
|
%
|
|
14.5
|
%
|
Maintenance
|
2.4
|
%
|
|
0.9
|
%
|
|
2.5
|
%
|
|
0.9
|
%
|
Sequencing and molecular analysis
|
1.1
|
%
|
|
0.0
|
%
|
|
0.7
|
%
|
|
0.0
|
%
|
Other services
|
23.8
|
%
|
|
17.3
|
%
|
|
21.7
|
%
|
|
15.7
|
%
|
Amortization of developed technologies
|
12.3
|
%
|
|
19.0
|
%
|
|
16.1
|
%
|
|
19.4
|
%
|
Total cost of revenue
|
70.6
|
%
|
|
53.6
|
%
|
|
69.3
|
%
|
|
50.5
|
%
|
|
|
|
|
|
|
|
|
||||
Gross profit
|
29.4
|
%
|
|
46.4
|
%
|
|
30.7
|
%
|
|
49.5
|
%
|
|
|
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
150.0
|
%
|
|
151.9
|
%
|
|
146.5
|
%
|
|
145.7
|
%
|
Research and development
|
77.2
|
%
|
|
42.2
|
%
|
|
68.7
|
%
|
|
41.1
|
%
|
Amortization of software license and acquisition-related assets
|
5.8
|
%
|
|
-0.1
|
%
|
|
7.1
|
%
|
|
0.1
|
%
|
Total operating expenses
|
233.0
|
%
|
|
194.0
|
%
|
|
222.3
|
%
|
|
186.9
|
%
|
Loss from operations
|
-203.7
|
%
|
|
-147.6
|
%
|
|
-191.6
|
%
|
|
-137.4
|
%
|
Interest expense, net
|
-5.6
|
%
|
|
-2.6
|
%
|
|
-6.4
|
%
|
|
-2.7
|
%
|
Other income (expense), net
|
-0.2
|
%
|
|
4.7
|
%
|
|
0.5
|
%
|
|
7.9
|
%
|
Loss from equity method investments
|
-7.5
|
%
|
|
-1.2
|
%
|
|
-10.4
|
%
|
|
-0.6
|
%
|
Loss before income taxes
|
-217.0
|
%
|
|
-146.7
|
%
|
|
-207.9
|
%
|
|
-132.8
|
%
|
Provision for (benefit from) income taxes
|
-45.1
|
%
|
|
0.0
|
%
|
|
-36.5
|
%
|
|
0.0
|
%
|
Net loss
|
-171.9
|
%
|
|
-146.7
|
%
|
|
-171.4
|
%
|
|
-132.8
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Software and hardware
|
$
|
4,149
|
|
|
$
|
3,942
|
|
|
$
|
4,823
|
|
|
$
|
7,703
|
|
|
$
|
207
|
|
|
5.3
|
%
|
|
$
|
(2,880
|
)
|
|
-37.4
|
%
|
Software–as-a-service
|
15,181
|
|
|
3,412
|
|
|
28,882
|
|
|
7,218
|
|
|
11,769
|
|
|
344.9
|
%
|
|
21,664
|
|
|
300.1
|
%
|
||||||
Total software-related revenues
|
19,330
|
|
|
7,354
|
|
|
33,705
|
|
|
14,921
|
|
|
11,976
|
|
|
162.9
|
%
|
|
18,784
|
|
|
125.9
|
%
|
||||||
Maintenance
|
4,512
|
|
|
2,545
|
|
|
7,650
|
|
|
5,040
|
|
|
1,967
|
|
|
77.3
|
%
|
|
2,610
|
|
|
51.8
|
%
|
||||||
Sequencing and molecular analysis
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
45
|
|
|
0.0
|
%
|
|
45
|
|
|
0.0
|
%
|
||||||
Other services
|
7,603
|
|
|
1,853
|
|
|
9,541
|
|
|
3,533
|
|
|
5,750
|
|
|
310.3
|
%
|
|
6,008
|
|
|
170.1
|
%
|
||||||
Total net revenue
|
$
|
31,490
|
|
|
$
|
11,752
|
|
|
$
|
50,941
|
|
|
$
|
23,494
|
|
|
$
|
19,738
|
|
|
168.0
|
%
|
|
$
|
27,447
|
|
|
116.8
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Software and hardware
|
$
|
435
|
|
|
$
|
91
|
|
|
$
|
674
|
|
|
$
|
(371
|
)
|
|
$
|
344
|
|
|
378.0
|
%
|
|
$
|
1,045
|
|
|
-281.7
|
%
|
Software–as-a-service
|
9,314
|
|
|
1,830
|
|
|
13,737
|
|
|
3,790
|
|
|
7,484
|
|
|
409.0
|
%
|
|
9,947
|
|
|
262.5
|
%
|
||||||
Total software-related cost of revenue
|
9,749
|
|
|
1,921
|
|
|
14,411
|
|
|
3,419
|
|
|
7,828
|
|
|
407.5
|
%
|
|
10,992
|
|
|
321.5
|
%
|
||||||
Maintenance
|
743
|
|
|
102
|
|
|
1,273
|
|
|
212
|
|
|
641
|
|
|
628.4
|
%
|
|
1,061
|
|
|
500.5
|
%
|
||||||
Sequencing and molecular analysis
|
359
|
|
|
—
|
|
|
359
|
|
|
—
|
|
|
359
|
|
|
0.0
|
%
|
|
359
|
|
|
0.0
|
%
|
||||||
Other services
|
7,492
|
|
|
2,030
|
|
|
11,057
|
|
|
3,677
|
|
|
5,462
|
|
|
269.1
|
%
|
|
7,380
|
|
|
200.7
|
%
|
||||||
Amortization of developed technologies
|
3,897
|
|
|
2,246
|
|
|
8,178
|
|
|
4,557
|
|
|
1,651
|
|
|
73.5
|
%
|
|
3,621
|
|
|
79.5
|
%
|
||||||
Total cost of revenue
|
$
|
22,240
|
|
|
$
|
6,299
|
|
|
$
|
35,278
|
|
|
$
|
11,865
|
|
|
$
|
15,941
|
|
|
253.1
|
%
|
|
$
|
23,413
|
|
|
197.3
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Selling, general and administrative
|
$
|
47,248
|
|
|
$
|
17,847
|
|
|
$
|
74,621
|
|
|
$
|
34,239
|
|
|
$
|
29,401
|
|
|
164.7
|
%
|
|
$
|
40,382
|
|
|
117.9
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Research and development
|
$
|
24,322
|
|
|
$
|
4,960
|
|
|
$
|
35,016
|
|
|
$
|
9,650
|
|
|
$
|
19,362
|
|
|
390.4
|
%
|
|
$
|
25,366
|
|
|
262.9
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Interest expense, net
|
$
|
(1,758
|
)
|
|
$
|
(303
|
)
|
|
$
|
(3,256
|
)
|
|
$
|
(628
|
)
|
|
$
|
(1,455
|
)
|
|
480.2
|
%
|
|
$
|
(2,628
|
)
|
|
418.5
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Other income (expense), net
|
$
|
(77
|
)
|
|
$
|
555
|
|
|
$
|
261
|
|
|
$
|
1,855
|
|
|
$
|
(632
|
)
|
|
-113.9
|
%
|
|
$
|
(1,594
|
)
|
|
-85.9
|
%
|
|
|
|
|
|
|
|
|
|
Period-To-Period Change
|
||||||||||||||||||||
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
||||||||||||||||||
|
Amount
|
|
Amount
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||||||||||
Loss from equity method Investments
|
$
|
(2,375
|
)
|
|
$
|
(145
|
)
|
|
$
|
(5,289
|
)
|
|
$
|
(145
|
)
|
|
$
|
(2,230
|
)
|
|
1,537.9
|
%
|
|
$
|
(5,144
|
)
|
|
3,547.6
|
%
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cash provided by:
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
(9,302
|
)
|
|
$
|
(15,634
|
)
|
|
$
|
(40,800
|
)
|
|
$
|
(30,565
|
)
|
Investing activities
|
(4,516
|
)
|
|
(130,050
|
)
|
|
(84,532
|
)
|
|
(114,681
|
)
|
||||
Financing activities
|
84,410
|
|
|
165,988
|
|
|
214,192
|
|
|
165,988
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
90
|
|
|
(73
|
)
|
|
393
|
|
|
(2
|
)
|
||||
Net increase in cash and cash equivalents
|
$
|
70,682
|
|
|
$
|
20,231
|
|
|
$
|
89,253
|
|
|
$
|
20,740
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Purchasing obligations
|
|
$
|
388,000
|
|
|
$
|
2,750
|
|
|
$
|
5,500
|
|
|
$
|
4,750
|
|
|
$
|
375,000
|
|
Related party promissory note
|
|
147,321
|
|
|
—
|
|
|
—
|
|
|
147,321
|
|
|
—
|
|
|||||
Operating leases and capital leases obligations
|
|
9,434
|
|
|
4,428
|
|
|
4,431
|
|
|
552
|
|
|
23
|
|
|||||
Total Obligations
|
|
$
|
544,755
|
|
|
$
|
7,178
|
|
|
$
|
9,931
|
|
|
$
|
152,623
|
|
|
$
|
375,023
|
|
•
|
increase our sales and marketing efforts to drive market adoption of CLINICS, GPS Cancer, NantOS and NantOS apps;
|
•
|
address competitive developments;
|
•
|
fund development and marketing efforts of any future platforms and solutions;
|
•
|
expand adoption of GPS Cancer and eviti platform solutions into critical illnesses outside of oncology;
|
•
|
acquire, license or invest in complimentary businesses, technologies or service offerings; and
|
•
|
finance capital expenditures and general and administrative expenses.
|
•
|
our success in driving adoption and reimbursement of GPS Cancer;
|
•
|
our ability to achieve revenue growth;
|
•
|
the cost of expanding our products and service offerings, including our sales and marketing efforts;
|
•
|
our ability to achieve interoperability across all of our acquired businesses, technologies and service offerings to deliver networking effects to our clients;
|
•
|
the effect of competing technological and market developments;
|
•
|
costs related to international expansion; and
|
•
|
the potential cost of and delays in product development as a result of any regulatory oversight applicable to our products.
|
•
|
our ability to convince key thought lenders, physicians and caregivers and other key oncology stakeholders of the clinical utility of our entire product offering and its potential advantages over existing sequencing tests, specifically, the advantages of our RNA sequencing, mapping oncology disease pathways versus a patient’s own germline and our quantitative proteomic analysis;
|
•
|
the willingness of physicians, self-insured employers, payors and healthcare providers to utilize GPS Cancer; and
|
•
|
the willingness of commercial third-party payors and government payors to reimburse GPS Cancer, the scope and amount of which will affect patients’ willingness or ability to pay for GPS Cancer and likely heavily influence our customers’ decisions to recommend GPS Cancer.
|
•
|
the price, performance and functionality of our offerings;
|
•
|
the availability, price, performance and functionality of competing solutions;
|
•
|
our ability to develop complementary applications and services;
|
•
|
our continued ability to access the pricing and claims data necessary to enable us to deliver reliable data in our cost estimation and price transparency offering to customers;
|
•
|
the stability, performance and security of our hosting infrastructure and hosting services;
|
•
|
changes in healthcare laws, regulations or trends; and
|
•
|
the business environment of our clients, in particular, headcount reductions by our clients.
|
•
|
damage from fire, power loss and other natural disasters;
|
•
|
communications failures;
|
•
|
software and hardware errors, failures and crashes;
|
•
|
security breaches, computer viruses and similar disruptive problems; and
|
•
|
other potential interruptions.
|
•
|
Electronic Health Record, or EHR, vendors such as Allscripts Healthcare Solutions, Inc., or Allscripts, athenahealth, Inc., or athenahealth, Cerner Corporation, or Cerner, Epic Systems Corporation, or Epic, Flatiron Health Inc., or Flatiron, GE Healthcare, Inc., or GE Healthcare, McKesson Corporation, or McKesson, Medical Information Technology, Inc., or Meditech, and Quality Systems, Inc., or Quality Systems;
|
•
|
Health Information Exchange, or HIE, and integration vendors such as Allscripts, Intersystems Corporation, or Intersystems, and Orion Health Group Limited, or Orion; and
|
•
|
Healthcare information technology decision support vendors such as The Advisory Board Company, Castlight Health, Inc., or Castlight Health, HealthCatalyst, Inc., or HealthCatalyst, International Business Machines Corporation, or IBM, Inovalon Holdings, Inc., or Inovalon, and Truven Health Analytics, or Truven (acquired by IBM).
|
•
|
we or any collaborative partner will make timely filings with the FDA;
|
•
|
the FDA will act favorably or quickly on these submissions;
|
•
|
we or any collaborative partner will not be required to submit additional information;
|
•
|
we or any collaborative partner will not be required to submit an application for premarket approval, rather than a 510(k) premarket notification submission as described below; or
|
•
|
other significant difficulties and costs related to obtaining FDA clearance or approval will not be encountered.
|
•
|
acquiring appropriate and cost-efficient supplies to produce our sequencing and molecular analysis solutions;
|
•
|
delivering our sequencing and molecular analysis solutions in a timely manner to us;
|
•
|
continuing to keep our sequencing and molecular analysis solutions up to date and on pace with current clinical and market developments;
|
•
|
filing, prosecuting and maintaining patents that cover our sequencing and molecular analysis solutions;
|
•
|
complying with CLIA regulations and maintaining a CLIA license and all other applicable state laboratory licenses, including through periodic inspections; and
|
•
|
hiring qualified personnel experienced in completing highly complex laboratory tests.
|
•
|
inability to integrate or benefit from acquired technologies or services in a profitable manner;
|
•
|
unanticipated costs or liabilities associated with the acquisition;
|
•
|
difficulty integrating the accounting systems, operations and personnel of the acquired business;
|
•
|
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
|
•
|
difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;
|
•
|
difficulty in cross-selling our existing solutions and offerings to the acquired business’ customers;
|
•
|
diversion of management’s attention from other business concerns;
|
•
|
adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
|
•
|
the potential loss of key employees;
|
•
|
use of resources that are needed in other parts of our business; and
|
•
|
use of substantial portions of our available cash to consummate the acquisition.
|
•
|
breach of our contractual obligations to clients, which may cause our clients to terminate their relationship with us and may result in potentially significant financial obligations to our clients;
|
•
|
investigation by the federal and state regulatory authorities empowered to enforce HIPAA and other data privacy and security laws, which include the U.S. Department of Health and Human Services, or HHS, the Federal Trade Commission and state attorneys general, and the possible imposition of civil and criminal penalties;
|
•
|
private litigation by individuals adversely affected by any misuse of their personal health information for which we are responsible; and
|
•
|
negative publicity, which may decrease the willingness of current and potential future customers to work with us and negatively affect our sales and operating results.
|
•
|
not experimental or investigational;
|
•
|
medically necessary;
|
•
|
appropriate for the specific patient;
|
•
|
cost-effective;
|
•
|
supported by peer-reviewed publications;
|
•
|
included in clinical practice guidelines; and
|
•
|
supported by clinical utility studies.
|
•
|
requires each medical device manufacturer to pay an excise tax equal to 2.3% of the price for which such manufacturer sells its medical devices. This tax may apply to GPS Cancer and some or all of our products which are in development. The excise tax has been temporarily suspended for calendar years 2016 and 2017, but will be reinstated in 2018 without additional Congressional action.
|
•
|
mandates a reduction in payments for clinical laboratory services paid under the Medicare Clinical Laboratory Fee Schedule of 1.75% for the years 2011 through 2015. In addition, a productivity adjustment is made to the fee schedule payment amount.
|
•
|
creates initiatives to promote quality indicators in payment methodologies and the coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Number
|
|
Exhibit Title
|
|
Form
|
|
File No.
|
|
Filing
|
|
Filed
|
Date
|
Herewith
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
10.1+
|
|
Amended and Restated NantOmics Exclusive Reseller Agreement, dated as of May 9, 2016, by and between the Registrant and NantOmics, LLC.
|
|
S-1/A
|
|
333-211196
|
|
June 1, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2+
|
|
NantHealth License Agreement, dated June 19, 2015, by and between the Registrant and NantOmics, LLC, as amended.
|
|
S-1/A
|
|
333-211196
|
|
June 1, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3#
|
|
2016 Equity Incentive Plan and form of agreement thereunder.
|
|
S-1
|
|
333-211196
|
|
May 6, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4#
|
|
2016 Executive Incentive Compensation Plan.
|
|
S-1
|
|
333-211196
|
|
May 6, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5
|
|
Amended and Restated Promissory Note, between Registrant and NantCapital LLC, dated May 9, 2016.
|
|
S-1/A
|
|
333-211196
|
|
May 11, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6
|
|
Amended and Restated Promissory Note, between Registrant and NantOmics, LLC, dated May 23, 2016.
|
|
S-1/A
|
|
333-211196
|
|
May 24, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
|
Side Letter Agreement, between Registrant and NantWorks, LLC, dated May 22, 2016.
|
|
S-1/A
|
|
333-211196
|
|
May 23, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
101.INS**
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
Date: August 15, 2016
|
|
/s/ Paul Holt
|
|
|
Paul Holt
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
A.
|
The Corporation was first formed on July 7, 2010 as “About Advanced Health, LLC” in Delaware as a Limited Liability Company and was converted into NantHealth, Inc. on June 1, 2016.
|
B.
|
The name of the Corporation is NantHealth, Inc.
|
C.
|
This Amended and Restated Certificate of Incorporation (this “
Amended and Restated Certificate of Incorporation
”) was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware.
|
D.
|
The text of the Amended and Restated Certificate of Incorporation is amended and restated to read as set forth in
Exhibit A
attached hereto.
|
|
|
|
Page
|
|
ARTICLE I — CORPORATE OFFICES
|
1
|
|
||
1.1
|
|
REGISTERED OFFICE
|
1
|
|
1.2
|
|
OTHER OFFICES
|
1
|
|
ARTICLE II — MEETINGS OF STOCKHOLDERS
|
1
|
|
||
2.1
|
|
PLACE OF MEETINGS
|
1
|
|
2.2
|
|
ANNUAL MEETING
|
1
|
|
2.3
|
|
SPECIAL MEETING
|
1
|
|
2.4
|
|
ADVANCE NOTICE PROCEDURES
|
2
|
|
2.5
|
|
NOTICE OF STOCKHOLDERS’ MEETINGS
|
6
|
|
2.6
|
|
QUORUM
|
6
|
|
2.7
|
|
ADJOURNED MEETING; NOTICE
|
6
|
|
2.8
|
|
CONDUCT OF BUSINESS
|
7
|
|
2.9
|
|
VOTING
|
7
|
|
2.10
|
|
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
7
|
|
2.11
|
|
RECORD DATES
|
7
|
|
2.12
|
|
PROXIES
|
8
|
|
2.13
|
|
LIST OF STOCKHOLDERS ENTITLED TO VOTE
|
8
|
|
2.14
|
|
INSPECTORS OF ELECTION
|
9
|
|
ARTICLE III — DIRECTORS
|
9
|
|
||
3.1
|
|
POWERS
|
9
|
|
3.2
|
|
NUMBER OF DIRECTORS
|
9
|
|
3.3
|
|
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
|
10
|
|
3.4
|
|
RESIGNATION AND VACANCIES
|
10
|
|
3.5
|
|
PLACE OF MEETINGS; MEETINGS BY TELEPHONE
|
10
|
|
3.6
|
|
REGULAR MEETINGS
|
11
|
|
3.7
|
|
SPECIAL MEETINGS; NOTICE
|
11
|
|
3.8
|
|
QUORUM; VOTING
|
11
|
|
3.9
|
|
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
12
|
|
3.10
|
|
FEES AND COMPENSATION OF DIRECTORS
|
12
|
|
3.11
|
|
REMOVAL OF DIRECTORS
|
12
|
|
ARTICLE IV — COMMITTEES
|
12
|
|
||
4.1
|
|
COMMITTEES OF DIRECTORS
|
12
|
|
4.2
|
|
COMMITTEE MINUTES
|
12
|
|
4.3
|
|
MEETINGS AND ACTION OF COMMITTEES
|
13
|
|
4.4
|
|
SUBCOMMITTEES
|
13
|
|
ARTICLE V — OFFICERS
|
14
|
|
||
5.1
|
|
OFFICERS
|
14
|
|
5.2
|
|
APPOINTMENT OF OFFICERS
|
14
|
|
5.3
|
|
SUBORDINATE OFFICERS
|
14
|
|
|
|
|
Page
|
|
5.4
|
|
REMOVAL AND RESIGNATION OF OFFICERS
|
14
|
|
5.5
|
|
VACANCIES IN OFFICES
|
14
|
|
5.6
|
|
REPRESENTATION OF SHARES OR INTERESTS OF OTHER CORPORATIONS OR ENTITIES
|
14
|
|
5.7
|
|
AUTHORITY AND DUTIES OF OFFICERS
|
15
|
|
ARTICLE VI — STOCK
|
15
|
|
||
6.1
|
|
STOCK CERTIFICATES; PARTLY PAID SHARES
|
15
|
|
6.2
|
|
SPECIAL DESIGNATION ON CERTIFICATES
|
15
|
|
6.3
|
|
LOST, STOLEN OR DESTROYED CERTIFICATES
|
16
|
|
6.4
|
|
DIVIDENDS
|
16
|
|
6.5
|
|
TRANSFER OF STOCK
|
16
|
|
6.6
|
|
STOCK TRANSFER AGREEMENTS
|
16
|
|
6.7
|
|
REGISTERED STOCKHOLDERS
|
17
|
|
ARTICLE VII — MANNER OF GIVING NOTICE AND WAIVER
|
17
|
|
||
7.1
|
|
NOTICE OF STOCKHOLDERS’ MEETINGS
|
17
|
|
7.2
|
|
NOTICE BY ELECTRONIC TRANSMISSION
|
17
|
|
7.3
|
|
NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
|
18
|
|
7.4
|
|
NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
|
18
|
|
7.5
|
|
WAIVER OF NOTICE
|
18
|
|
ARTICLE VIII — INDEMNIFICATION
|
19
|
|
||
8.1
|
|
INDEMNIGICATION OF DIRECTORS AND OFFICERS IN THIRD PARY PTOCEEDINGS
|
19
|
|
8.2
|
|
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTIONS BY OR IN THE RIGHT OF THE CORPORATOIN
|
19
|
|
8.3
|
|
SUCCESSFUL DEFENSE
|
19
|
|
8.4
|
|
INDEMNIFICATION OF OTHERS; ADVANCE PAYMENT TO OTHERS
|
20
|
|
8.5
|
|
ADVANCE PAYMENT OF EXPENSES
|
20
|
|
8.6
|
|
LIMITATION ON INDEMNIFICATION
|
20
|
|
8.7
|
|
DETERMINATION; CLAIM
|
21
|
|
8.8
|
|
NON-EXCLUSIVITY OF RIGHTS
|
21
|
|
8.9
|
|
INSURANCE
|
21
|
|
8.10
|
|
SURVIVAL
|
21
|
|
8.11
|
|
EFFECT OF REPEAL OR MODIFICATION
|
22
|
|
8.12
|
|
CERTAIN DEFINITIONS
|
22
|
|
ARTICLE IX — GENERAL MATTERS
|
22
|
|
||
9.1
|
|
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
|
22
|
|
9.2
|
|
FISCAL YEAR
|
22
|
|
9.3
|
|
SEAL
|
22
|
|
9.4
|
|
CONSTRUCTION; DEFINITIONS
|
23
|
|
ARTICLE X — AMENDMENTS
|
23
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 15, 2016
|
By:
|
/s/ Patrick Soon-Shiong
|
|
|
Dr. Patrick Soon-Shiong
|
|
|
Chief Executive Officer and Chairman
|
|
|
(Principal Executive Officer)
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 15, 2016
|
By:
|
/s/ Paul Holt
|
|
|
Paul Holt
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
(i)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 to which this Certification is attached as Exhibit 32.1 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act, and
|
(ii)
|
that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NantHealth, Inc.
|
By:
|
/s/ Patrick Soon-Shiong
|
|
Dr. Patrick Soon-Shiong
|
|
Chief Executive Officer and Chairman
|
|
(Principal Executive Officer)
|
(i)
|
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 to which this Certification is attached as Exhibit 32.2 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act, and
|
(ii)
|
that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NantHealth, Inc.
|
By:
|
/s/ Paul Holt
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|