Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 07, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NantHealth, Inc. | |
Entity Central Index Key | 1,566,469 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 108,591,946 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 46,390 | $ 61,660 |
Accounts receivable, net | 14,701 | 11,491 |
Inventories | 805 | 839 |
Deferred implementation costs | 11 | 1,960 |
Related party receivables, net | 643 | 585 |
Prepaid expenses and other current assets | 6,995 | 5,358 |
Total current assets | 69,545 | 81,893 |
Property, plant, and equipment, net | 23,570 | 18,517 |
Deferred implementation costs, net of current | 2 | 3,951 |
Goodwill | 115,930 | 114,625 |
Intangible assets, net | 71,626 | 69,424 |
Investment in related party | 145,169 | 156,863 |
Related party receivable, net of current | 1,706 | 1,727 |
Other assets | 3,777 | 2,195 |
Total assets | 431,325 | 449,195 |
Current liabilities | ||
Accounts payable | 5,149 | 3,164 |
Accrued and other current liabilities | 12,413 | 18,134 |
Deferred revenue | 13,080 | 10,057 |
Related party payables, net | 5,973 | 4,504 |
Total current liabilities | 36,615 | 35,859 |
Deferred revenue, net of current | 8,729 | 7,126 |
Related party liabilities | 13,029 | 11,500 |
Related party promissory note | 112,666 | 112,666 |
Related party convertible note, net | 8,049 | 7,947 |
Convertible notes, net | 75,937 | 74,845 |
Deferred income taxes, net | 5,025 | 5,838 |
Other liabilities | 237 | 112 |
Total liabilities | 260,287 | 255,893 |
Stockholders' equity | ||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 108,591,946 and 108,383,602 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively (including 3,490 shares of restricted stock) | 10 | 10 |
Additional paid-in capital | 885,200 | 886,669 |
Accumulated deficit | (714,138) | (693,233) |
Accumulated other comprehensive loss | (34) | (144) |
Total stockholders' equity | 171,038 | 193,302 |
Total liabilities and stockholders' equity | $ 431,325 | $ 449,195 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (shares) | 750,000,000 | 750,000,000 |
Common stock issued (shares) | 108,591,946 | 108,383,602 |
Common stock outstanding (shares) | 108,591,946 | 108,383,602 |
Unvested restricted stock | ||
Restricted stock (shares) | 3,490 | 3,490 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Revenue: | |||
Software-as-a-service related | $ 1,455 | $ 598 | |
Software and hardware related | 16,166 | 14,797 | |
Maintenance | 2,446 | 2,019 | |
Total software-related revenue | 20,067 | 17,414 | |
Sequencing and molecular analysis | 840 | 510 | |
Home health care services | 1,356 | 1,180 | |
Total net revenue | 22,263 | 19,104 | |
Cost of Revenue: | |||
Software-as-a-service related | 6,602 | 6,233 | |
Software and hardware related | 885 | 1,004 | |
Maintenance | 215 | 161 | |
Amortization of developed technologies | 1,173 | 1,743 | |
Total software-related cost of revenue | 8,875 | 9,141 | |
Sequencing and molecular analysis | 1,431 | 1,593 | |
Home health care services | 762 | 784 | |
Total cost of revenue | 11,068 | 11,518 | |
Gross profit | 11,195 | 7,586 | |
Operating Expenses: | |||
Selling, general and administrative | 20,737 | 17,435 | |
Research and development | 5,151 | 8,926 | |
Amortization of acquisition-related assets | 1,054 | 1,054 | |
Total operating expenses | 26,942 | 27,415 | |
Loss from operations | (15,747) | (19,829) | |
Interest expense, net | (4,197) | (3,969) | |
Other income, net | 180 | 235 | |
Loss from related party equity method investment | (3,261) | (4,526) | [1] |
Loss from continuing operations before income taxes | (23,025) | (28,089) | |
(Benefit from) provision for income taxes | (1,050) | 37 | |
Net loss from continuing operations | (21,975) | (28,126) | |
Loss from discontinued operations, net of tax | (193) | (12,989) | |
Net loss | $ (22,168) | $ (41,115) | [1] |
Continuing operations | |||
Basic and diluted - common stock (usd per share) | $ (0.20) | $ (0.23) | |
Discontinued operations | |||
Basic and diluted - common stock (usd per share) | 0 | (0.11) | |
Total net income (loss) per share | |||
Basic and diluted - common stock (usd per share) | $ (0.20) | $ (0.34) | |
Weighted average shares outstanding: | |||
Basic and diluted - common stock (shares) | 108,579,271 | 121,618,039 | |
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (22,168) | $ (41,115) | [1] |
Other comprehensive income from foreign currency translation gain | 110 | 19 | |
Total other comprehensive income (loss) | 110 | 19 | |
Comprehensive loss | $ (22,058) | $ (41,096) | |
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Condensed Consolidated Stockhol
Condensed Consolidated Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Modified retrospective adjustment on adoption of ASC 606 | $ 1,263 | $ 1,263 | |||
Beginning balance at Dec. 31, 2017 | 193,302 | $ 10 | $ 886,669 | (693,233) | $ (144) |
Beginning balance (in shares) at Dec. 31, 2017 | 108,383,602 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 2,655 | 2,655 | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | (339) | (339) | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 208,344 | ||||
Assignment of Liquid Genomics (see Note 18) | (3,785) | (3,785) | |||
Other comprehensive income | 110 | 110 | |||
Net loss | (22,168) | (22,168) | |||
Ending balance (in shares) at Mar. 31, 2018 | 108,591,946 | ||||
Ending balance at Mar. 31, 2018 | $ 171,038 | $ 10 | $ 885,200 | $ (714,138) | $ (34) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | ||
Cash flows from operating activities: | ||||
Net loss | $ (22,168) | $ (41,115) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 5,297 | 8,331 | ||
Amortization of debt discounts and deferred financing offering cost | 1,194 | 1,051 | ||
Change in fair value of derivatives liability | (1) | (215) | ||
Stock-based compensation | 2,718 | 250 | ||
Deferred income taxes, net | (1,177) | 233 | ||
Provision for bad debt expense | 36 | 187 | ||
Loss from related party equity method investment | 3,261 | 4,526 | ||
Changes in operating assets and liabilities, net of business combinations and divestitures: | ||||
Accounts receivable, net | 928 | 4,626 | ||
Inventories | 34 | 42 | ||
Related party receivables, net | (37) | (4) | ||
Prepaid expenses and other current assets | 538 | (708) | ||
Deferred implementation costs | (13) | (478) | ||
Accounts payable | 495 | (2,352) | ||
Accrued and other current liabilities | (6,769) | (3,631) | ||
Deferred revenue | (588) | 354 | ||
Related party payables, net | 2,720 | 2,823 | ||
Other assets and liabilities | 239 | 58 | ||
Net cash used in operating activities | (13,293) | (26,022) | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment including internal use software | (460) | (7,370) | ||
Assignment of Liquid Genomics, net of cash acquired (see Note 18) | 68 | 0 | ||
Net cash used in investing activities | (392) | (7,370) | ||
Cash flows from financing activities: | ||||
Tax payments related to stock issued, net of stock withheld, for vested phantom units | (339) | (2,106) | ||
Net cash used in financing activities | (339) | (2,106) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (110) | 39 | ||
Net decrease in cash, cash equivalents and restricted cash | (14,134) | (35,459) | ||
Cash, cash equivalents and restricted cash, beginning of period | [2] | 62,010 | 160,453 | |
Cash, cash equivalents and restricted cash, end of period | [2] | 47,876 | 124,994 | |
Supplemental disclosure of cash flow information: | ||||
Interest paid | 0 | (1) | ||
Interest received | 1 | 9 | ||
Non-cash investing and financing activities: | ||||
Purchase of property and equipment (including internal use software) | $ 1,570 | $ 1,642 | ||
[1] | The statement for 2017 includes provider/patient engagement solutions business. | |||
[2] | Cash and cash equivalents included restricted cash of $350 and $1,486 at January 1, 2018 and March 31, 2018, respectively, and $350 at January 1, 2017 and March 31, 2017. |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | ||||
Restricted cash | $ 1,486 | $ 350 | $ 350 | $ 350 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Nature of Business Nant Health, LLC was formed on July 7, 2010, as a Delaware limited liability company. On June 1, 2016, Nant Health, LLC converted into a Delaware corporation (the “LLC Conversion”) and changed its name to NantHealth, Inc. (“NantHealth”). NantHealth, together with its subsidiaries (the “Company”), is a healthcare IT company converging science and technology. The Company works to transform clinical delivery with actionable clinical intelligence at the moment of decision, enabling clinical discovery through real-time machine learning systems. We market certain of our solutions as a comprehensive integrated solution that includes our molecular sequencing and analysis services, clinical decision support, and payer engagement solutions. We also market our molecular sequencing and analysis services, Clinical Decision Support, Payer Engagement and Connected Care solutions on a stand-alone basis. NantHealth is a majority-owned subsidiary of NantWorks, LLC (“NantWorks”), which is a subsidiary of California Capital Equity, LLC (“Cal Cap”). The three companies were founded by and are led by Dr. Patrick Soon-Shiong. On August 25, 2017, the Company sold substantially all of the assets of the Company’s provider/patient engagement solutions business (See Note 3). The sale will enable the Company to focus on its core competencies of genomic sequencing, clinical decision support, connected care and payer engagement. As of March 31, 2018 , the Company conducted the majority of its operations in the United States, Canada, the United Kingdom, and Singapore. Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of NantHealth and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and, in the opinion of management, include all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the Company's financial position and results of operation. These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2017 . The results of operations of the entities disposed of are included in the unaudited condensed consolidated financial statements up to the date of disposal and, where appropriate, these operations have been reflected as discontinued operations. The accompanying Condensed Consolidated Balance Sheet as of December 31, 2017 has been derived from the audited Consolidated Financial Statements at that date, without retrospective application of ASC 606, Revenue from Contracts with Customers . The balance sheets do not include all of the disclosures required by GAAP. Assets and liabilities of the discontinued operations are presented separately in the asset and liability sections of the prior period balance sheet. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year. The adoption of ASC 606 led to the treatment of costs to fulfill certain software and hardware related implementation services being accounted for as single performance obligations with the software and hardware products and services provided. Classification in prior periods has been conformed to the current period presentation. As a result of the reclassification, we have changed the names of several of our reported product categories. Software and hardware has become Software and hardware related, Software-as-a-service has become Software-as-a-service related, and Other services has become Home health care services. The Company believes its existing cash, cash equivalents and ability to borrow from affiliated entities will be sufficient to fund operations through at least 12 months following the issuance date of the financial statements based upon the Company’s Chairman and CEO’s intent and ability to support the Company’s operations with additional funds as required. The Company may also seek to sell additional equity, through one or more follow-on public offerings or in separate financings, or sell additional debt securities or obtain a credit facility. However, the Company may not be able to secure such financing in a timely manner or on favorable terms. Without additional funds, the Company may choose to delay or reduce its operating or investment expenditures. Further, because of the risk and uncertainties associated with the commercialization of the Company's existing products as well as products in development, the Company may need additional funds to meet its needs sooner than planned. To date, the Company's primary sources of capital were private placement of membership interests prior to its IPO, debt financing agreements, including the promissory note with Nant Capital, LLC (“NantCapital”), convertible notes, and its IPO. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no significant changes to the accounting policies as disclosed in the Company's Annual Report on Form 10-K, apart from the application of ASC 606, described below. The other accounting policies, including the accounting policy for revenue recognition under ASC 605, Revenue Recognition , and ASC 985, Software , applied to periods before January 1, 2018, are described in the Company’s Annual Report on Form 10-K. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. Segment Reporting The chief operating decision maker for the Company is its Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a Condensed Consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results, or plans for levels or components below the Condensed Consolidated unit level. Accordingly, management has determined that the Company operates in one reportable segment. Revenue from Contracts with Customers Transition to FASB ASC 606 On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers , using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606, while prior period amounts continue to be reported in accordance with the Company’s historic accounting under ASC 605, which are included in Note 2, Summary of Significant Accounting Policies, to the Consolidated and Combined Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company recorded a decrease of $ 1,263 , net of tax, to the opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The most significant changes were to begin recognizing revenues from certain software and hardware implementation projects based on an estimate of percentage of completion, rather than at completion of the contract; to recognize estimated revenues from nursing and therapy services as the services are performed, rather than on final determination of contractual billable amounts; and to capitalize commissions as assets for contracts with performance obligations of more than one year. The adoption also led to certain costs, in relation to SaaS contracts, and previously treated as deferred implementation costs in current and long-term assets, being treated as software developed for internal use, resulting in an increase of $5,827 of software developed for internal use, being recorded at January 1, 2018 with a corresponding decrease in deferred implementation costs. The Company concluded that it was inappropriate to net down contract liabilities, referred to as deferred revenue below, with accounts receivable. This led to an increase of $5,247 in accounts receivable and a corresponding increase in deferred revenue. This table summarizes the impact on the Company’s financial statements due to the adoption of ASC 606: As Reported December 31, 2017 Adjustments due to ASC 606 Balance as at January 1, 2018 Balance Sheet Accounts receivable, net $ 11,491 $ 5,247 $ 16,738 Deferred implementation costs, current 1,960 (1,960 ) — Prepaid expenses and other current assets 5,358 1,117 6,475 Property, plant, and equipment, net 18,517 5,827 24,344 Deferred implementation costs, net of current 3,951 (3,949 ) 2 Other assets 2,195 562 2,757 Deferred revenue, current 10,057 3,184 13,241 Deferred revenue, net of current 7,126 2,030 9,156 Deferred income taxes 5,838 367 6,205 This impact of the adoption of ASC 606 during the period ended March 31, 2018 is presented here: Three Months Ended March 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Statement of Operations Total net revenue $ 22,263 $ (533 ) $ 21,730 Cost of revenue 11,068 (37 ) 11,031 Operating expenses 26,942 470 27,412 (Benefit from) provision for income taxes (1,050 ) (119 ) (1,169 ) Balance Sheet Accounts receivable, net 14,701 (3,386 ) 11,315 Deferred implementation costs, current 11 2,288 2,299 Prepaid expenses and other current assets 6,995 (1,611 ) 5,384 Property, plant, and equipment, net 23,570 (5,884 ) 17,686 Deferred implementation costs, net of current 2 3,716 3,718 Other assets 3,777 (800 ) 2,977 Deferred revenue, current 13,080 (2,551 ) 10,529 Deferred revenue, net of current 8,729 (530 ) 8,199 Deferred income taxes 5,025 (459 ) 4,566 The Company's accounting policies under the new standard are applied prospectively and are noted below. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of sales taxes collected from customers, which are subsequently remitted to governmental authorities. The Company’s revenue is generated from the following sources: • Software-as-a-service (“SaaS”) related - SaaS related revenue is generated from customers’ access to and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term. 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. SaaS contracts are accounted for as a single performance obligation, as implementation and hosting services are not distinct. As a result, the Company recognizes all fees, including any up front initial system implementation service fees, or other fees, ratably over time from when the system implementation or deployment services are completed, and where necessary accepted by the customer, over the contract term as stated or with consideration of termination for convenience clauses as discussed below . • Software and hardware related - Software and hardware related revenue is generated from the license of the Company’s software, on a perpetual basis, the sale of hardware and professional services that are 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 implementation and training services and do not include maintenance revenue. The software is installed on the customer’s site or the customer’s designated vendor’s site and is not hosted by the Company or by a vendor contracted by the Company. See the section below “ Contracts with Software, Hardware, and Implementation Services” for details of management’s judgments and recognition of revenue relating to the category. • Maintenance - Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance on software and hardware during the PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when-and-if-available basis. Revenue is recognized over the maintenance term. • Sequencing and molecular analysis - Sequencing and molecular analysis revenue is generated by providing customers with reports by performing the process of sequencing and analysis of whole genome DNA, RNA, and proteomic results under the Company's reseller agreement with NantOmics, LLC ("NantOmics"), and from blood samples via our liquid/blood-based tumor profiling platform through the Company’s subsidiary, Liquid Genomics, Inc. (See Note 18). Revenue is recognized at a point in time, when reports of results are transferred to the client, or when cash is received as described below. The Company's sequencing and molecular analysis revenue is primarily generated from payments received from commercial third-party payers, hospitals and other provider networks and patients. The Company reports revenue from arrangements with these customers on a gross basis in accordance with ASC 606. When reports are transferred to the customer but the Company cannot conclude whether there is a contract with a customer based on the assessment of collectibility, revenue recognition is deferred until non-refundable payment is received or payment is considered probable. • Home health care services - Home health care services revenue includes the sale of nursing and therapy services provided to patients in a home care setting. These revenues are recognized at a point in time or over time, as services are provided. Certain of the Company’s customer contracts allow for termination for convenience, with advanced notice, without substantive termination penalty. In these cases, the Company has concluded the contract term is equal to the remaining, noncancellable period. Such termination rights do not allow for refunds other than prepaid PCS or other services. These provisions do not affect when the Company commences revenue recognition. The Company has allocated transaction price of $ 17,856 to unfulfilled performance obligations, these are expected to be fulfilled within three years, excluded from this amount are contracts of less than one year and variable consideration that relates to the value services provided. Contracts with Multiple Promises for Goods and Services The Company engages in various contracts with promises for multiple goods and services, which may generate revenue across any of the sources noted above. In various contracts, the Company recognizes its proprietary software, hardware, PCS, results of sequencing and molecular analysis, certain professional services, and other software-related services as distinct performance obligations. Standalone selling prices (“SSP”) are required to allocate and recognize revenue for each distinct performance obligation within each contract. The SSP for each performance obligation is determined by considering contracts in which the good or service is sold separately, and other factors including market conditions and the Company’s experience selling similar goods and services, as well as costs and margins achieved. In some cases, to estimate the SSP, the Company first estimates the selling price of each performance obligation for which an SSP is observable and then estimates the SSP of the remaining performance obligation as the residual contractual amount. Contracts with Software, Hardware, and Implementation Services The Company has some contracts where it provides implementation services involving significant integration of its licensed software and hardware, with customer networks that maintain patient electronic health records. These contracts represent a single performance obligation to the customer for a combined output due to the significant service of integrating the hardware, software and professional services. Revenue for the single performance obligation is recognized over time based on actual, or estimated, direct implementation labor hours as a measure of progress. In certain of those contracts, the Company’s performance also requires significant customization of its licensed software. For such contracts, the Company will also record revenue over time using the percentage of completion method to estimate the satisfaction of its performance obligations. However, where the Company lacks history and experience with certain projects involving the development of software according to customer specified criteria, the Company may be initially unable to reasonably estimate total direct software development labor hours to be expected under the project. As a result, the Company would not be able to reasonably measure its progress toward complete satisfaction of its single performance obligation. As a result, in these contracts, the Company will commence recognizing revenue when it concludes that it can reasonably measure its progress and determine that costs will be recoverable, which is typically at or near the time of the clients' acceptance of the software and the related professional services. At that point, substantially all of the uncertainty related to its ability to reasonably estimate direct labor hours to satisfy its performance obligations will have been resolved, and the Company will be able to reasonably measure the remaining progress toward complete satisfaction of its remaining professional services obligations. In such cases, the Company will commence recording revenue, at the date of meeting the customer acceptance criteria, with a cumulative catch up for the work performed to date using direct labor hours as a measure of progress consistent with other contracts involving software, hardware and implementation services. Recognition will continue for its performance obligation over the remaining performance period using the same measure of progress. A provision for the entire loss, from such a contract, will be recognized in any period it becomes evident that the contract will not be profitable. Other contracts for perpetual software licenses, hardware, and implementation services, do not include a service of software development or significant integration. Therefore, the perpetual software licenses, hardware, and implementation services are considered separate, distinct performance obligations. Software revenue is recognized upon the later of the license term commencement or the date the software is provided to the customer, hardware revenue is recognized upon delivery, and implementation revenue is recognized over time based on actual, or estimated, direct implementation labor hours as a measure of progress. The Company delineates between contracts with, or without, a service of significant integration by considering the complexity of the integration services and whether such services can be performed by the customer or another third party. The Company has both reseller arrangements with gross revenue presentation due to the Company’s control of goods and services before transfer to the customer, and others with net revenue presentation due to the reseller’s control of goods and services before transfer to the customer. The Company assesses control in terms of relevant indicators of performance, inventory, and pricing risk, such as which party negotiates pricing with the end customer and which party is ultimately responsible for fulfilling services, transfer of goods and services, and ensuring support. Contract Balances The Company records deferred revenue when cash payments are received, or payment is due, in advance of our fulfillment of performance obligations. There were $ 4,070 in revenues recognized during the three months ended March 31, 2018 that were included in the deferred revenue balance at the beginning of the period. Contract assets are recognized when a contractual performance obligation has been satisfied, but payment is not due until the completion of additional performance obligations, or the right to receive payment becomes unconditional. Contract assets were $ 1,074 at March 31, 2018 and $ 796 at January 1, 2018. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs to obtain a contract with a customer, where the stated contract term, with expected renewals, is longer than one year. The Company amortizes these assets over the expected period of benefit. These costs are generally employee sales commissions, with amortization of the balance recorded in selling, general and administrative expenses. The value of these assets was $ 1,336 at March 31, 2018 and $ 866 at January 1, 2018, and amortization during the three months ended March 31, 2018 was $ 35 . Where management is not able to conclude that the costs of a contract will be recovered, costs to obtain the contract are expensed as incurred. Practical Expedients The Company does not disclose the value of unsatisfied performance obligations for: contracts with an original expected length of one year or less; or where variable consideration, related to the company’s performance, is allocated to good and services delivered as a series and accounted for as a single performance obligation. Cost of Revenue Cost of revenue includes associated salaries and fringe benefits, stock-based compensation, consultant costs, direct reimbursable travel expenses, depreciation related to software developed for internal use and other direct engagement costs associated with the design, development, sale and installation of systems, including system support and maintenance services for customers. System support includes ongoing client assistance for software updates and upgrades, installation, training and functionality. All service costs, except development of internal use software and deferred implementation costs, are expensed when incurred. Amortization of deferred implementation costs are also included in cost of revenue. Cost of revenue associated with each of the Company’s revenue sources consists of the following types of costs: • Software-as-a-service related - SaaS cost of revenue includes personnel-related costs, amortization of deferred implementation, and depreciation of internal use software, costs and other direct costs associated with the delivery and hosting of the Company's subscription services. • Software and Hardware related - Software and hardware related cost of revenue includes third-party software and hardware costs directly associated with solutions, including purchasing and receiving costs and includes direct costs associated with the Company’s software implementation services provided to our customers. Software and hardware related cost of revenue also includes hardware costs directly related to bringing manufactured products to their final selling destination. • Maintenance - Maintenance cost of revenue includes personnel-related costs and other direct costs associated with the ongoing support or maintenance provided to the Company’s customers. • Sequencing and molecular analysis - Sequencing and molecular analysis cost of revenue includes personnel-related costs associated with fulfillment of these services, including those of the Company's subsidiary, Liquid Genomics, Inc., and amounts due to NantOmics under the reseller agreement (See Note 18) for the sequencing and analysis of whole genome, DNA, RNA, and proteomic results. It also includes depreciation of internal use software. • Home health care services - Home health care services cost of revenue includes personnel-related, as well as direct expenses relating to the Company’s nursing and therapy services provided to patients in a home care setting. Recent Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standard Update ("ASU") No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , associated with the recognition and measurement of financial assets and liabilities. During the first quarter of 2018, the FASB issued further clarifications with the issuance of ASU No. 2018-03, effective for fiscal years beginning after December 15, 2017 and interim periods beginning after June 15, 2018, and ASU No. 2018-04, effective upon issuance. The Company has early adopted ASU No. 2018-03 and adopted ASU No. 2018-04 effective January 1, 2018 concurrently with ASU No. 2016-01. ASU No. 2016-01 requires that equity investments, except those accounted for under the equity method of accounting, be measured at fair value and changes in fair value are recognized in net income. ASU No. 2016-01 also provides a new measurement alternative for equity investments that do not have a readily determinable fair value (cost method investments). These investments are measured at cost, less any impairment, adjusted for observable price changes. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) are applied prospectively to equity investments that exist as of the date of adoption. Effective January 1, 2018, the Company elected to record its preferred stock equity investment in Innovative Oncology Business Solutions, Inc. (“IOBS”), which does not have a readily determinable fair value using the alternative method. Adoption of the Updates did not have a material effect on the Company’s accounting for equity investments, fair value disclosures and other disclosure requirements. The Company owns non-marketable equity securities that are accounted for as an equity investment at cost minus impairment and plus or minus changes resulting from observable price changes because the preferred stock held by the Company is not considered in-substance common stock and such preferred stock does not have a readily determinable fair value. All investments are reviewed on a regular basis for possible impairment. If an investment's fair value is determined to be less than its net carrying value, the investment is written down to its fair value. Such an evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether an impairment indicator is present include: the investees’ earning performance, change in the investees’ industry and geographic area in which it operates, offers to purchase or sell the security for a price less than the cost of the investment, issues that raise concerns about the investee's ability to continue as a going concern and any other information that the Company may be aware of related to the investment. Factors considered in determining whether an observable price change has occurred include: the price at which the investee issues equity instruments similar to those of the Company’s investment and the rights and preferences of those equity instruments compared to the Company’s. Effective January 1, 2018, the Company adopted ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments . ASU No. 2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. Also, effective January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force . ASU No. 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities are required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. Prior periods were retrospectively adjusted to conform to the current period’s presentation. There was no material impact on the Company’s statement of cash flows on adoption of either update. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . The amendments in ASU No. 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Pursuant to this ASU, an entity should account for the effects of a modification unless all of the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award date is modified. ASU No. 2017-09 is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance. The amendments of this ASU should be applied prospectively to an award modified on or after the adoption date. We adopted the standard beginning in the first quarter of 2018. If we encounter a change to the terms or conditions of any of our share-based payment awards we will evaluate the need to apply modification accounting based on the new guidance. The general treatment for modifications of share-based payment awards is to record the incremental value arising from the change as additional compensation cost. The adoption of this standard did not result in a significant impact to our financial statements during the quarterly reporting period ended March 31, 2018. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) to simplify the accounting for goodwill impairment. This guidance, among other things, removes step 2 of the goodwill impairment test thus eliminating the need to determine the fair value of individual assets and liabilities of the reporting unit. Upon adoption of this ASU, goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This may result in more or less impairment being recognized than under current guidance. This update will become effective for the Corporation’s annual and interim goodwill impairment tests beginning in the first quarter of 2020, and early adoption is permitted. The Company is still evaluating the impact of this standard update. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The update is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This guidance will become effective for interim and annual reporting periods beginning with the year ending December 31, 2019. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its Condensed Consolidated Financial Statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission ("SEC") did not have, or are not believed by management to have, a material impact on the Company's present or future Condensed Consolidated Financial Statements. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Sale to Allscripts On August 3, 2017, the Company entered into an asset purchase agreement (the “APA”) with Allscripts Healthcare Solutions, Inc. (“Allscripts”), pursuant to which the Company agreed to sell to Allscripts substantially all of the assets of the Company’s provider/patient engagement solutions business, including the Company’s FusionFX solution and components of its NantOS software connectivity solutions (the “Business”). On August 25, 2017, the Company and Allscripts completed the sale of the Business (the "Disposition") pursuant to the APA. Allscripts conveyed to the Company 15,000,000 shares of Company's common stock at par value of $0.0001 per share that were previously owned by Allscripts as consideration for the acquired Business upon Disposition. Allscripts paid the Company $1,742 of cash consideration as an estimated working capital payment, and the Company recorded a receivable of $1,021 related to final working capital adjustments. The Company is also responsible for paying Allscripts for fulfilling certain customer service obligations of the Business post-closing. Concurrent with the closing of the Disposition and as contemplated by the APA, (a) the Company and Allscripts modified the amended and restated mutual license and reseller agreement dated June 26, 2015, which was further amended on December 30, 2017, such that, among other things, the Company committed to deliver a minimum of $95,000 of total bookings over a ten -year period (“Bookings Commitment”) from referral transactions and sales of certain Allscripts products; (b) the Company and Allscripts each licensed certain intellectual property to the other party pursuant to a cross license agreement; (c) the Company agreed to provide certain transition services to Allscripts pursuant to a transition services agreement; and (d) the Company licensed certain software and agreed to sell certain hardware to Allscripts pursuant to a software license and supply agreement. In the event of a Bookings Commitment shortfall at the end of the ten -year period, the Company may be obligated to pay 70% of the shortfall, subject to certain credits. The Company will earn 30% commission from Allscripts on each software referral transaction that results in a booking with Allscripts. The Company accounts for the Bookings Commitment at its estimated fair value over the life of the agreement and, as of March 31, 2018 and December 31, 2017 , the estimated fair value was not material. During the three months ended March 31, 2018 , the Company recorded other income of $197 associated with the services under the transition services agreement. The total loss on sale to Allscripts consisted of the following: Cash received as consideration $ 1,742 Deferred consideration related to working capital adjustments 1,021 Estimated costs to be incurred by the Company to fulfill certain customer service obligations of (883 ) Fair value of common stock 42,750 Net consideration received 44,630 Less: Carrying value of net assets sold (55,255 ) Plus: Reclassification of cumulative translation adjustments of foreign subsidiaries 117 Loss from sale of Business $ (10,508 ) The sale of the Business qualified as a discontinued operation because it comprised operations and cash flows that could be distinguished, operationally and for financial reporting purposes, from the rest of the Company. The disposal of the Business represented a strategic shift in the Company’s operations as the sale enables the Company to focus on genomic sequencing, clinical decision support, connected care and payer engagement. The operating results of the Company's discontinued operations are as follows: Three Months Ended 2018 2017 Major line items constituting loss from discontinued operations Net revenue $ — $ 3,405 Cost of revenue — 7,511 Selling, general and administrative 193 3,443 Research and development — 4,473 Amortization of software license and acquisition-related assets — 760 Other (income) expense — (38 ) Loss from sale of Business — — Gain from dissolution of a business component — — Loss from discontinued operations, before income taxes (193 ) (12,744 ) Provision for income taxes — 245 Loss from discontinued operations, net of income taxes $ (193 ) $ (12,989 ) Cumulative translation adjustment gains or losses of foreign subsidiaries related to divested Business are reclassified into income once the liquidation of the respective foreign subsidiaries is substantially complete. At the completion of the sale of the Business, the Company reclassified $ 117 of cumulative translation adjustment gains from accumulated comprehensive loss to the Company's loss from sale of Business. The significant operating and investing cash and non-cash items of the discontinued operations included in the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended 2018 2017 Depreciation and amortization from discontinued operations $ — $ 3,905 Dissolution of Net.Orange Ltd On August 29, 2017, the Company dissolved its wholly-owned U.K. subsidiary, Net.Orange Ltd. The Company reclassified $ 860 of cumulative translation adjustment gains from accumulated comprehensive loss to the Company's results of discontinued operations. |
Accounts Receivable, net
Accounts Receivable, net | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net Previously, accounts receivable, net excluded amounts related to post contract client support (“PCS”) and other services that were billed but not yet delivered at each period end. These undelivered services are also excluded from the deferred revenue balances on the accompanying Condensed Consolidated Balance Sheets. The amount of outstanding and unpaid invoices excluded from both the accounts receivable and deferred revenue balances as of December 31, 2017 was $6,198 . On implementing ASC 606 the Company has concluded that its receivables should be reported separately from deferred revenue and therefore the outstanding and unpaid invoices for undelivered services, are not excluded from accounts receivable at March 31, 2018 . Accounts receivable are included on the Condensed Consolidated Balance Sheets, net of the allowance for doubtful accounts. The allowance for doubtful accounts at March 31, 2018 and December 31, 2017 was $149 and $149 , respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of March 31, 2018 and December 31, 2017 consisted of $805 and $839 of finished goods, respectively. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Other Current Assets And Other Current Liabilities [Abstract] | |
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities | Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities Prepaid expenses and other current assets as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Prepaid expenses $ 2,809 $ 2,791 Restricted cash (1) 350 350 Other current assets 3,836 2,217 Prepaid expenses and other current assets $ 6,995 $ 5,358 (1) Additional $1,136 of noncurrent restricted cash as of March 31, 2018 is included in the Company’s Consolidated Balance Sheets as part of Other assets. Current and noncurrent restricted cash consists of funds that are contractually restricted as to usage or withdrawal related to the Company's security deposits in the form of standby letters of credit for leased facilities. No amounts have been drawn upon the letters of credit as of March 31, 2018. Accrued and other current liabilities of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Payroll and related costs $ 4,974 $ 7,051 NaviNet acquisition accrued earnout 559 5,408 Units of NantOmics to be transferred for assignment of Liquid Genomics 524 — Other accrued and other current liabilities 6,356 5,675 Accrued and other current liabilities $ 12,413 $ 18,134 |
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities | Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities Prepaid expenses and other current assets as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Prepaid expenses $ 2,809 $ 2,791 Restricted cash (1) 350 350 Other current assets 3,836 2,217 Prepaid expenses and other current assets $ 6,995 $ 5,358 (1) Additional $1,136 of noncurrent restricted cash as of March 31, 2018 is included in the Company’s Consolidated Balance Sheets as part of Other assets. Current and noncurrent restricted cash consists of funds that are contractually restricted as to usage or withdrawal related to the Company's security deposits in the form of standby letters of credit for leased facilities. No amounts have been drawn upon the letters of credit as of March 31, 2018. Accrued and other current liabilities of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Payroll and related costs $ 4,974 $ 7,051 NaviNet acquisition accrued earnout 559 5,408 Units of NantOmics to be transferred for assignment of Liquid Genomics 524 — Other accrued and other current liabilities 6,356 5,675 Accrued and other current liabilities $ 12,413 $ 18,134 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant, and Equipment, net Property, plant and equipment, net as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Computer equipment and software $ 14,005 $ 13,998 Furniture and equipment 3,980 3,211 Leasehold and building improvements 4,240 4,233 Construction in progress 1,216 629 Property, plant, and equipment, excluding internal use software 23,441 22,071 Less: Accumulated depreciation and amortization (18,613 ) (15,248 ) Property, plant and equipment, excluding internal use software, net 4,828 6,823 Internal use software 26,252 17,690 Less: Accumulated depreciation and amortization, internal use software (7,510 ) (5,996 ) Internal use software, net 18,742 11,694 Property, plant, and equipment, net $ 23,570 $ 18,517 Depreciation and amortization expense from continuing operations was $3,070 for the three months ended March 31, 2018 , of which $2,126 related to internal use software costs. Depreciation and amortization expense from continuing and discontinued operations was $3,111 for the three months ended March 31, 2017 , of which $1,330 related to internal use software costs. Amounts capitalized to internal use software for the three months ended March 31, 2018 and 2017 were $2,735 and $1,038 , respectively. |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Intangible Assets, net The Company’s definite-lived intangible assets as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Customer relationships $ 52,000 $ 52,000 Developed technologies 36,700 32,000 Trade name 3,000 3,000 91,700 87,000 Less: accumulated amortization (20,074 ) (17,576 ) Intangible assets, net $ 71,626 $ 69,424 Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis or the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews its definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Amortization expense from continuing operations was $2,227 for the three months ended March 31, 2018 and amortization expense from continuing and discontinued operations was $5,220 for the three months ended March 31, 2017 . At February 28, 2018, the Company recorded $4,700 of definite-lived intangible assets and accumulated amortization of $271 related to the assignment of Liquid Genomics (See Note 18). These intangibles are amortized over a period of thirteen years. The estimated future amortization expense over the next five years and thereafter for the intangible assets that exist as of March 31, 2018 is as follows: Amounts Remainder of 2018 $ 6,832 2019 9,150 2020 8,400 2021 8,400 2022 8,400 Thereafter 30,444 Total future intangible amortization expense $ 71,626 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill as of March 31, 2018 and December 31, 2017 was $115,930 and $ 114,625 , respectively. Goodwill as of December 31, 2017 excluded $16,444 associated with discontinued operations based on the relative fair value of the Business disposed to the total reporting unit as of August 25, 2017 (See Note 3). On February 28, 2018, the Company recognized $1,305 of goodwill related to the assignment of Liquid Genomics, Inc. (See Note 18). Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized but is tested for impairment annually as of October 1 or between annual tests when an impairment indicator exists. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments Equity method investment Investment in NantOmics In 2015, the Company purchased a total of 169,074,539 Series A-2 units of NantOmics, LLC (“NantOmics”), a related party of the Company, for an aggregate purchase price of $250,774 . The Series A-2 units do not have any voting rights and represent approximately 14.28% of NantOmics’ issued and outstanding membership interests. NantOmics is majority owned by NantWorks and delivers molecular diagnostic capabilities with the intent of providing actionable intelligence and molecularly driven decision support for cancer patients and their providers at the point of care. At February 28, 2018, the Company transferred 9,088,362 of the Series A-2 units to NantOmics as consideration for the assignment of Liquid Genomics. An additional 564,779 units will be transferred by May 31, 2018. This will reduce NantHealth's ownership of NantOmics to approximately 13.6% . The Company applies the equity method to account for its investment in NantOmics as the interest in the equity is similar to a partnership interest. Further, the Company has the ability to exert significant influence over the operating and financial policies of the entity since NantWorks controls both NantHealth and NantOmics. The difference between the carrying amount of the investment in NantOmics and the Company’s underlying equity in NantOmics’ net assets relate to both definite and indefinite-lived intangible assets. The Company attributed $28,195 and $14,382 of these differences to NantOmics’ developed technologies and its reseller agreement with the Company, respectively, prior to the application of developed technology intangibles included in NantOmics net assets, and the remaining basis differences were attributed to goodwill. The Company amortizes the basis differences related to the definite-lived intangible assets over the assets’ estimated useful lives and records these amounts as a reduction in the carrying amount of its investment and an increase in its equity method loss. The investment in related party is assessed for possible impairment when events indicate that the fair value of the investment may be below the carrying value. When such a condition is deemed to be other than temporary, the carrying value of the investment is written down to its fair value, and the amount of the write-down is included in net loss. In making the determination as to whether a decline is other than temporary, the Company considers such factors as the duration and extent of the decline, the investee’s financial performance, and the Company's ability and intention to retain the investment for a period that will be sufficient to allow for any anticipated recovery in the investment’s market value. The new cost basis of the investment is not changed for subsequent recoveries in fair value. The fair value of the Company's equity method investment is determined using the income approach. The income approach utilizes a discounted cash flow model incorporating management’s expectations for future revenue, operating expenses, and earnings before interest, taxes, depreciation and amortization, capital expenditures and an anticipated tax rate. The related cash flow forecasts are discounted using an estimated weighted-average cost of capital at the date of valuation. Differences between the carrying value of an equity investment and its underlying equity in the net assets of the related party are assigned to the extent practicable to specific assets and liabilities based on our analysis of the various factors giving rise to the difference. When appropriate, the Company's share of the related party’s reported earnings is adjusted quarterly to reflect the difference between these allocated values and the related party’s historical book values. At June 30, 2017 and at December 31, 2016, the Company determined that other than temporary impairments of $35,991 and $29,816 , respectively, in the value of the investment in NantOmics had occurred, predominantly attributed to declines in the value of goodwill. The declines in the fair value were primarily caused by delays in the Company’s GPS revenue growth and changes in the risk profile of the financial projections for NantOmics. The Company based its financial projections on information that the Company believed were reasonable; however, actual results may differ materially from those projections. The other than temporary impairments were based on judgments and estimates that were forward looking in nature and it is reasonably possible that the estimate of the impairments of the equity method investment in NantOmics will change in the near term due to the following: actual NantOmics cash distribution is materially lower than expected, significant adverse changes in NantOmics's operating environment, increase in the discount rate, and changes in other key assumptions. Risks and uncertainties are related to assumptions regarding future financial performance, commercial acceptance of product and service offerings, risk of reimbursement for the Company’s sequencing and molecular analysis solution, developments in the healthcare and molecular diagnostics industry, NantOmics' ability to integrate its business acquisitions, regulatory risks, and other general business risks including unanticipated adverse changes in NantOmics' operating environment. The Company reports its share of NantOmics’ income or loss and the amortization of basis differences using a one quarter lag. For the three months ended March 31, 2018 and 2017 , the Company recognized equity losses of $3,261 and $4,526 , respectively. The Company used the following summarized financial information for NantOmics for the three months ended December 31, 2017 and 2016 to record its equity method losses for the three months ended March 31, 2018 and 2017 , respectively: Three Months ended December 31 2017 2016 Sales $ 1,385 $ 2,415 Gross loss (4,269 ) (2,217 ) Loss from operations (13,454 ) (7,770 ) Net loss (31,959 ) (21,766 ) Net loss attributable to NantOmics (31,420 ) (20,513 ) Cost method Investment Investment in IOBS On June 16, 2015, the Company invested $1,750 in Innovative Oncology Business Solutions, Inc. (“IOBS”) in exchange for 1,750,000 shares of IOBS’ Series A preferred stock. IOBS offers community oncology practices an alternative medical home model for oncology patients that improves health outcomes, enhances patient care experiences and significantly reduces costs of care. The shares of preferred stock represent 35.0% of the outstanding equity of IOBS on an as-converted basis. The Company applied the cost method to account for its investment because the preferred stock is not considered in-substance common stock, is not considered a debt instrument as the Company cannot unilaterally demand redemption of the preferred stock and the preferred stock does not have a readily determinable fair value. As of March 31, 2018 and December 31, 2017 , IOBS was considered a variable interest entity. The Company is not the primary beneficiary of IOBS because it only has the right to elect two of five directors. All major decisions of IOBS require the majority vote by the members of the board of directors, including decisions made to manage the business including hiring and firing of officers and other critical management functions. Therefore, the Company does not consolidate IOBS. The Company’s maximum exposure to loss as a result of its involvement with IOBS is approximately $1,750 , which is primarily composed of the original cost of the investment in IOBS’ Series A preferred stock. No other arrangements exist that could require the Company to provide additional financial support or otherwise expose the Company to a loss. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Convertible Notes In December 2016, the Company entered into the Purchase Agreement with J.P. Morgan Securities LLC and Jefferies LLC, as representatives of the several initial purchasers named therein (collectively, the “Initial Purchasers”), to issue and sell $90,000 in aggregate principal amount of its 5.50% senior convertible notes due 2021 ("Convertible Notes") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons pursuant to Regulation S under the Securities Act. In December 2016, the Company entered into a purchase agreement (the “Cambridge Purchase Agreement”) with Cambridge Equities, L.P., an entity affiliated with Dr. Patrick Soon-Shiong, the Company’s Chairman and Chief Executive Officer (“Cambridge”), to issue and sell $10,000 in aggregate principal amount of the Convertible Notes in a private placement pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. In December 2016, pursuant to the exercise of the overallotment by the Initial Purchasers, the Company issued an additional $7,000 principal amount of the Convertible Notes. The total net proceeds from this offering were approximately $102,714 , $9,917 from Cambridge and $92,797 from the Initial Purchasers, after deducting the Initial Purchasers’ discount and debt issuance costs of $4,286 in connection with the Convertible Notes offering. On December 21, 2016, the Company entered into an Indenture, relating to the issuance of the Convertible Notes (the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The interest rates are fixed at 5.50% per year, payable semi-annually on June 15 and December 15 of each year, beginning on June 15, 2017. The Convertible Notes will mature on December 15, 2021, unless earlier repurchased by the Company or converted pursuant to their terms. In connection with the offering of the Convertible Notes, on December 15, 2016, the Company entered into a Second Amended and Restated Promissory Note which amended and restated the Amended and Restated Promissory Note, dated May 9, 2016, between the Company and NantCapital, to, among other things, extend the maturity date of the promissory note to June 30, 2022 and to subordinate such promissory note in right of payment to the Convertible Notes (See Note 18). The initial conversion rate of the Convertible Notes is 82.3893 shares of common stock per $1 principal amount of Convertible Notes (which is equivalent to an initial conversion price of approximately $12.14 per share). Prior to the close of business on the business day immediately preceding September 15, 2021, the Convertible Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2017 (and only during such calendar quarter), if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Company’s common stock on such trading day is greater than or equal to 120% of the conversion price on such trading day; (2) during the five -business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1 principal amount of the Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions as described in the Indenture agreement. Upon conversion, the Convertible Notes will be settled in cash, shares of the Company’s common stock or any combination thereof at the Company’s option. Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to purchase all or a portion of the Convertible Notes in principal amounts of $1 or an integral multiple thereof, for cash at a price equal to 100% of the principal amount of the Convertible Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date. The conversion rate will be subject to adjustment upon the occurrence of certain specified events. On or after the date that is one year after the last date of original issuance of the Convertible Notes, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to 120% of the conversion price on each applicable trading day, the Company will make an interest make-whole payment to a converting holder (other than a conversion in connection with a make-whole fundamental change in which the conversion rate is adjusted) equal to the sum of the present values of the scheduled payments of interest that would have been made on the Convertible Notes to be converted had such Convertible Notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date if the Convertible Notes had not been so converted. The present values of the remaining interest payments will be computed using a discount rate equal to 2.0% . The Company may pay any interest make-whole payment either in cash or in shares of its common stock, at the Company’s election as described in the Indenture. The Company accounts for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) by recording the liability and equity components of the convertible debt separately. The liability component is computed based on the fair value of a similar liability that does not include the conversion option. The liability component includes both the value of the embedded interest make-whole derivative and the carrying value of the Convertible Notes. The equity component is computed based on the total debt proceeds less the fair value of the liability component. The equity component is also recorded as debt discount and amortized as interest expense over the expected term of the Convertible Notes. The liability component of the Convertible Notes on the date of issuance was computed as $83,079 , consisting of the value of the embedded interest make-whole derivative of $1,499 and the carrying value of the Convertible Notes of $81,580 . Accordingly, the equity component on the date of issuance was $23,921 . If the debt will be considered current at the balance sheet date, the liability component of the convertible notes will be classified as current liabilities and presented in current portion of convertible notes debt and the equity component of the convertible debt will be considered a redeemable security and presented as redeemable equity on the Company's Condensed Consolidated Balance Sheet. Offering costs of $4,286 related to the issuance of the Convertible Notes were allocated to the liability and equity components in proportion to the allocation of the proceeds and accounted for as deferred financing offering costs and equity issuance costs, respectively. Approximately $972 of this amount was allocated to equity and the remaining $3,314 were capitalized as deferred financing offering costs. The debt discounts and deferred financing offering costs on the Convertible Notes are being amortized to interest expense over the contractual terms of the Convertible Notes, using the effective interest method at an effective interest rate of 12.82% . As of March 31, 2018 , the remaining life of the Convertible Notes is approximately 45 months . The following table summarizes how the issuance of the Convertible Notes is reflected in the Company's Condensed Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017 . Related party Others Total Balance as of March 31, 2018 Gross proceeds $ 10,000 $ 97,000 $ 107,000 Unamortized debt discounts and deferred financing offering costs (1,951 ) (21,063 ) (23,014 ) Net carrying amount $ 8,049 $ 75,937 $ 83,986 Balance as of December 31, 2017 Gross proceeds $ 10,000 $ 97,000 $ 107,000 Unamortized debt discounts and deferred financing offering costs (2,053 ) (22,155 ) (24,208 ) Net carrying amount $ 7,947 $ 74,845 $ 82,792 The following table sets forth the Company's interest expense recognized in the Company's Condensed Consolidated Statements of Operations: Three Months Ended March 31, 2018 Related party Others Total Accrued coupon interest expense $ 137 $ 1,334 $ 1,471 Amortization of debt discounts 100 957 1,057 Amortization of deferred financing offering costs 3 135 138 Total convertible notes interest expense $ 240 $ 2,426 $ 2,666 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, 2018 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 $ 29,430 $ 29,430 $ — $ — Assets - Held-to-maturity 1,136 — 1,136 — Liabilities - Interest make-whole derivative 5 — — 5 December 31, 2017 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 $ 57,683 $ 57,683 $ — $ — Assets - Held-to-maturity 361 — 361 — Liabilities - Interest make-whole derivative 7 — — 7 The Company’s intangible assets and goodwill are initially measured at fair value and any subsequent adjustment to the initial fair value occurs only if an impairment charge is recognized. The fair values of the Company’s marketable securities and cash equivalents (consisting of mainly money market accounts) are based on quoted market prices in active markets with no valuation adjustment. The Company's investment securities as of March 31, 2018 and December 31, 2017 include certificates of deposit that are classified by management as held-to-maturity since the Company has the positive intent and ability to hold to maturity. The fair value of these investments approximate carrying values, and the Company has classified these instruments as Level 2 in the fair value hierarchy. The securities have maturity dates of one to three years. Level 3 Inputs In December 2016, the Company issued $107,000 in aggregate principal amount of Convertible Notes due December 15, 2021, of which $10,000 issued to a related party (See Note 11). The Convertible Notes include an interest make-whole feature whereby if a noteholder converts any of the Convertible Notes one year after the last date of original issuance of the Convertible Notes, they are entitled, in addition to the other consideration payable or deliverable in connection with such conversion, to an interest make-whole payment equal to the sum of the present values of the scheduled payments, computed using a discount rate equal to 2.0% , of interest that would have been made on the Convertible Notes to be converted had such Convertible Notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date if the Convertible Notes had not been so converted. The Company may pay any interest make-whole payment either in cash or in shares of its common stock, at the Company’s election as described in the Indenture. The Company has determined that this feature is an embedded derivative and have recognized the fair value of this derivative as a liability in the Company's Condensed Consolidated Balance Sheets, with subsequent changes to fair value recorded through earnings at each reporting period as part of other income, net on the Company's Condensed Consolidated Statements of Operations as change in fair value of derivative liability. The following tables set forth a summary of changes in the fair value of Level 3 liabilities for the three months ended March 31, 2018 : December 31, 2017 Additions Change in fair value March 31, 2018 Interest make-whole derivative liability: Others $ 7 $ — $ (2 ) $ 5 As of March 31, 2018 and December 31, 2017 , the fair value and carrying value of the Company's Convertible Notes were: Fair value Carrying value Face value 5.5% convertible senior notes due December 15, 2021: Balance as of March 31, 2018 Related party $ 7,443 $ 8,049 $ 10,000 Others 72,199 75,937 97,000 $ 79,642 $ 83,986 $ 107,000 Balance as of December 31, 2017 Related party $ 7,327 $ 7,947 $ 10,000 Others 71,076 74,845 97,000 $ 78,403 $ 82,792 $ 107,000 The fair value shown above represents the fair value of the debt instrument, inclusive of both the debt and equity components, but excluding the derivative liability. The carrying value represents only the carrying value of the debt component. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company's principal commitments consist of obligations under its outstanding debt obligations, non-cancelable leases for its office space and certain equipment and vendor contracts to provide research services, and purchase obligations under license agreements and reseller agreements. Lease Arrangements The Company leases both real estate and equipment used in its operations and classifies those leases as either operating or capital leases for accounting purposes. As of March 31, 2018 and December 31, 2017 , the Company had no material capital leases and the remaining lives of its operating leases ranged from one to five years . Rental expense associated with operating leases is charged to expense in the year incurred and is included in the Condensed Consolidated Statements of Operations. For the three months ended March 31, 2018 and 2017 , the rental expense was charged to selling, general and administrative expense in the amount of $964 and $1,254 , respectively. As of the date of this filing, the Company had entered into two new real estate leases in Philadelphia and Boston, which increased the Company's future minimum rental commitments. As of March 31, 2018 , the Company’s future minimum rental commitments under its noncancelable operating leases are as follows: Amounts 2018 $ 3,270 2019 2,595 2020 2,584 2021 2,472 2022 2,383 Thereafter 4,543 Total minimum rental commitments $ 17,847 Regulatory Matters The Company is subject to regulatory oversight by the U.S. Food and Drug Administration and other regulatory authorities with respect to the development, manufacturing, and sale of some of the solutions. In addition, the Company is subject to the Health Insurance Portability and Accountability Act (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act and related patient confidentiality laws and regulations with respect to patient information. The Company reviews the applicable laws and regulations regarding effects of such laws and regulations on its operations on an on-going basis and modifies operations as appropriate. The Company believes it is in substantial compliance with all applicable laws and regulations. Failure to comply with regulatory requirements could have a significant adverse effect on the Company’s business and operations. Legal Matters The Company is, from time to time, subject to claims and litigation that arise in the ordinary course of its business. The Company intends to defend vigorously any such litigation that may arise under all defenses that would be available. Except as discussed below, in the opinion of management, the ultimate outcome of proceedings of which management is aware, even if adverse to them, would not have a material adverse effect on the Company’s Condensed Consolidated Financial Condition or Results of Operations. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Securities Litigation In March 2017, a number of putative class action securities complaints were filed in U.S. District Court for the Central District of California, naming as defendants the Company and certain of our current or former executive officers and directors. These complaints have been consolidated with the lead case captioned Deora v. NantHealth, Inc., 2:17-cv-01825. In June 2017, the lead plaintiffs filed an amended consolidated complaint, which generally alleges that defendants violated federal securities laws by making material misrepresentations in NantHealth’s IPO registration statement and in subsequent public statements. In particular, the complaint refers to various third-party articles in alleging that defendants misrepresented NantHealth’s business with the University of Utah, donations to the university by non-profit entities associated with our founder Dr. Soon-Shiong, and orders for GPS Cancer. The lead plaintiffs seek unspecified damages and other relief on behalf of putative classes of persons who purchased or acquired NantHealth securities in the IPO or on the open market from June 1, 2016 through May 1, 2017. In March 2018, the court largely denied Defendants’ motion to dismiss the consolidated amended complaint. A trial date has been set for August 2019. The Company believes that the claims lack merit and intends to vigorously defend the litigation. In May 2017, a putative class action complaint was filed in California Superior Court, Los Angeles County, asserting claims for violations of the Securities Act based on allegations similar to those in Deora. That case is captioned Bucks County Employees Retirement Fund v. NantHealth, Inc., BC 662330. The parties agreed to a stay of the case pending resolution of the motion to dismiss in in the federal Deora case. The Company believes that the claims lack merit and intends to vigorously defend the litigation. In April 2018, two putative shareholder derivative actions-captioned Engleman v. Soon-Shiong, Case No. 2018-0282-AGB, and Petersen v. Soon-Shiong, Case No. 2018-0302-AGB-were filed in the Delaware Court of Chancery. The plaintiff in the Engleman action previously filed a similar complaint in California Superior Court, Los Angeles County, which was dismissed based on a provision in the Company’s charter requiring derivative actions to be brought in Delaware. The Engleman and Petersen complaints contain allegations similar to those in Deora, but assert causes of action on behalf of NantHealth against various of the Company’s current or former executive officers and directors for alleged breaches of fiduciary duty, abuse of control, gross mismanagement, and unjust enrichment. The Company is named solely as a nominal defendant. In April 2018, a putative shareholder derivative action captioned Shen v. Soon-Shiong was filed in U.S. District Court for the District of Delaware. The complaint contains allegations similar to those in Deora, but asserts causes of action on behalf of NantHealth against various of the Company’s current or former executive offers and directors for alleged breaches of fiduciary duty and unjust enrichment, as well as alleged violations of the federal securities laws based on alleged misstatements or omissions in the Company’s 2017 proxy statement. Real Estate Litigation On March 9, 2018, PayPal, Inc. (“PayPal”) commenced an action against the Company in the Superior Court Department of the Trial Court of the Commonwealth of Massachusetts, for Suffolk County. The action is captioned PayPal, Inc. v. NantHealth, Inc., Civil Action No. 18-0780-E. This action arises out of a Sublease Agreement that PayPal and the Company entered into on or about November 30, 2017. The Sublease Agreement pertained to commercial real estate that PayPal leased at One International Place in Boston, Massachusetts. On January 25, 2018, the Company notified PayPal that it was electing to terminate the Sublease Agreement. In its Verified Complaint, PayPal alleges that the Company breached the Sublease Agreement. In addition, PayPal asserts claims for breach of the covenant of good faith and fair dealing, and violations of Massachusetts General Laws, Chapter 93A, sections 2 and 11, and seeks a declaratory judgment recognizing and enforcing the terms of the Sublease Agreement. Among other relief, PayPal seeks damages, treble damages, interest, costs, and attorneys’ fees. On April 12, 2018, the Company filed its answer and jury demand in the action. The Company denies any liability to PayPal and intends to vigorously defend the action. The monetary and other impact of these actions may remain unknown for substantial periods of time. The cost to defend, settle or otherwise resolve these matters may be significant and divert management's attention. We cannot assure you that we will prevail in these lawsuits. If we are ultimately unsuccessful in these matters, we could be required to pay substantial amounts which might materially adversely affect our business, operating results and financial condition. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three months ended March 31, 2018 and 2017 in continuing operations was a benefit of $ 1,050 and expense of $ 37 , respectively. The tax provision for income taxes for the three and three months ended March 31, 2018 and March 31, 2017 in continuing operations included an income tax provision for the consolidated group based on an estimated annual effective tax rate. Prior to June 1, 2016 the provision for income taxes consisted of income tax provision for the corporate subsidiaries of NantHealth. The effective tax rates for the three months ended March 31, 2018 and 2017 were a provision of 4.56% and 0.13% in continuing operations, respectively. The effective tax rates for the three months ended March 31, 2018 and March 31, 2017 respectively differed from the U.S. federal statutory rates of 21% in 2018 and 34% in 2017 primarily as a result of a reduction to the deferred tax liability related to an indefinite lived intangible, nondeductible expenses, state income taxes, foreign income tax rate differential and the impact of valuation allowance on its deferred tax assets. The Company has evaluated all available evidences supporting the realization of its deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that its net deferred tax assets will not be realized in the U.S. and certain foreign jurisdictions. Due to uncertainties surrounding the realization of the deferred tax assets, the Company maintains a full valuation allowance against substantially all deferred tax assets. If/when the Company determines that it will be able to realize some portion or all of its deferred tax assets, an adjustment to its valuation allowance on its deferred tax assets would have the effect of increasing net income in the period(s) such determination is made. The Company files income tax returns in the U.S. Federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. The Company is no longer subject to income tax examination by the U.S. federal, state or local tax authorities for years ended December 31, 2012 or prior, however, its tax attributes, such as net operating loss (“NOL”) carryforwards and tax credits, are still subject to examination in the year they are used. The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the US federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, modifies the rules with respect to the deductibility of certain executive compensation, and creates new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. At March 31. 2018, we have not completed our accounting for the tax effects of the Act. We have made a reasonable estimate of certain effects of the act as of December 31, 2017. In other cases, we have not been able to make a reasonable estimate and continue to account for those items based on our existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to enactment. Our estimates may also be affected as we gain a more thorough understanding of the tax law. These changes would likely not be material to income tax expense given the companies valuation allowance against the U.S. net deferred tax assets. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Allscripts Stock As discussed in Note 3, Allscripts conveyed to the Company 15,000,000 shares of Company's common stock at par value of $0.0001 per share that were previously owned by Allscripts as consideration for the acquired Business upon Disposition. LLC Agreement and Amended Certificate of Incorporation Prior to the LLC Conversion, the Company’s operations were governed by its LLC Agreement. Upon the consummation of the LLC Conversion, the Company converted into a corporation, and the LLC Agreement no longer governs the Company's operations or the rights of its equityholders. The LLC Agreement provided that the board of directors had the power and discretion to manage and control the business, property and affairs of the company, but that certain actions required the consent of certain of the Company's former members. Under the LLC Agreement, the Company had units authorized, including Series A through H units. Each equityholder holding Series A, B, D, E, F, G or H units had one vote for each unit held. Profits interests units awarded under the Nant Health, LLC Profits Interests Plan (the "Profits Interests Plan") took the form of Series C units of the Company. Holders of Series C units did not have the right to vote. The LLC Agreement also set forth the rights of and restrictions on unitholders, including certain rights of first refusal and preemptive and co-sale rights. The LLC Agreement also provided that, upon the LLC Conversion, the allocation of shares of the Company's common stock among the pre-IPO equityholders was dependent upon the IPO price of its common stock, based on the relative rights of the pre-IPO equityholders as set forth in the LLC Agreement. As a result, as part of the LLC Conversion, the Company set the actual allocation of shares among its pre-IPO equityholders based upon the IPO price of its common stock. Concurrently with the consummation of the LLC Conversion, the LLC Agreement was terminated, other than certain provisions relating to certain pre-termination tax matters and certain liabilities. In accordance with the Company’s amended and restated certificate of incorporation, which was filed immediately following the closing of its IPO, the Company is authorized to issue 750,000,000 shares of common stock, with a par value of $0.0001 per share, and 20,000,000 shares of undesignated preferred stock, with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share held on all matters submitted to a vote of its stockholders. Holders of the Company’s common stock have no cumulative voting rights. Further, as of March 31, 2018 and December 31, 2017 , holders of the Company’s common stock have no preemptive, conversion, redemption or subscription rights and there are no sinking fund provisions applicable to the Company’s common stock. Upon liquidation, dissolution or winding-up of the Company, holders of the Company’s common stock are entitled to share ratably in all assets remaining after payment of all liabilities and the liquidation preferences of any outstanding shares of preferred stock. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of the Company’s common stock are entitled to receive dividends, if any, as may be declared from time to time by the Company’s board of directors. As of March 31, 2018 and December 31, 2017 , there were no outstanding shares of preferred stock. Other Equity Contributions In December 2016, the Company entered into an agreement to provide genomic and proteomic sequencing and related bioinformatics services to an institution related to cancer research. The agreement provides that the institution pay the Company a fixed per-test fee in exchange for the services to be provided by the Company. A private charitable 501(c)(3) non-profit organization controlled by the Company’s Chairman and CEO also made a charitable gift to the institution in December 2016. The gift does not contractually or otherwise require the institution to use the Company’s molecular profiling solutions or any of the Company’s other products or services. No amounts related to this arrangement have been recognized in the Company’s Condensed Consolidated Balance Sheets or Statements of Operations as of or for the three months ended March 31, 2018 or March 31, 2017. During July 2017, the agreement with the institution was canceled. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following table reflects the components of stock-based compensation expense recognized in the Company's Condensed Consolidated Statements of Operations: Three Months Ended 2018 2017 Series C / Restricted Stock: Research and development $ 33 $ 15 Phantom units: Cost of revenue 153 284 Selling, general and administrative 253 (1,432 ) Research and development 209 512 Discontinued operations 0 906 Total phantom units stock-based compensation expense 615 270 Stock options: Selling, general and administrative — (35 ) Restricted Stock Units: Cost of revenue 12 — Selling, general and administrative 1,954 — Research and development 104 — Total restricted stock units stock-based compensation expense 2,070 — Total stock-based compensation expense 2,718 250 Amount capitalized to internal-use software 50 524 Total stock-based compensation cost $ 2,768 $ 774 Retired Profits Interests Plan On December 3, 2013, the Company adopted the Profits Interests Plan under which it had reserved an aggregate of 63,750,000 Series C units for issuance to associates, consultants and contractors of the Company in consideration for bona fide services provided to the Company. The Series C units were considered profits interests of the Company and did not entitle their holders (the “Series C Members”) to receive distributions if the Company were liquidated immediately after the grant. Instead, the Series C Members were entitled to receive an allocation of a portion of the profit and loss of the Company arising after the date of the grant and, subject to vesting conditions, distributions made out of a portion of the profits of the Company arising after the grant date of the Series C units. Grants of the Series C units were either fully vested, partially vested, or entirely unvested at the time of the grant as determined by the Board. Series C Members were not entitled to receive any distributions until the aggregate distributions made by the Company exceeded a hurdle amount applicable to those Series C units. The hurdle amount for each grant was determined by the Board at the date of issuance of such units. After all other members received their applicable hurdle amount, the Series C Members were entitled to receive their percentage interest of such excess distributions. As of December 31, 2015 and through the date of the LLC Conversion, the Company had 3,470,254 Series C units outstanding. Upon the LLC Conversion (See Note 15) on June 1, 2016, the Company issued 28,973 shares of common stock to holders of vested Series C units and 10,462 shares of restricted stock to holders of unvested Series C units. The shares of restricted stock issued to holders of unvested profits interests are subject to forfeiture until becoming fully vested in accordance with the terms of the original Series C unit grant agreements (See Restricted Stock below). Phantom Unit Plan On March 31, 2015, the Company approved the Nant Health, LLC Phantom Unit Plan (the “Phantom Unit Plan”). The maximum number of phantom units that may be issued under the Phantom Plan is equal to 11,590,909 minus the number of issued and outstanding Series C units of the Company. As of March 31, 2018 , there were 938,066 phantom units outstanding under the Phantom Unit Plan, after giving effect to the 1 -for- 5.5 reverse stock split. Each grant of phantom units made to a participant under the Phantom Unit Plan vests over a defined service period, subject to completion of a liquidity event. The Company’s IPO satisfied the liquidity event condition and the phantom units now entitle their holders to cash or non-cash payments in an amount equal to the number of vested units held by that participant multiplied by the fair market value of one share of the Company’s common stock on the date each phantom unit vests. After the Company’s IPO, the Company will no longer issue any units under the Phantom Unit Plan. The Company intends to settle all vested phantom unit payments held by United States-based participants in shares of the Company’s common stock and classifies these awards as equity awards in its Condensed Consolidated Balance Sheet. Awards held by participants who are based outside of the United States will be settled in cash and are classified within accrued and other current liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2018 and December 31, 2017 . The following table summarizes the activity related to the unvested phantom units during the three months ended March 31, 2018 : Number of Units Weighted Average Grant date value per phantom unit Unvested phantom units outstanding - December 31, 2017 1,292,784 $ 15.01 Granted — Vested (320,856 ) $ 15.75 Forfeited (33,863 ) $ 14.61 Unvested phantom units outstanding - March 31, 2018 938,065 $ 14.76 The Company has previously granted phantom units to employees of related companies who are providing services to the Company under the shared services agreement with NantWorks (See Note 18) as well as certain consultants of the Company. No phantom units were granted in the periods ending March 31, 2018 or 2017 . Stock compensation expense for the phantom units issued to these participants is re-measured at the end of each reporting period until the awards vest. All other grants of phantom units have been made to employees of the Company. The Company uses the accelerated attribution method to recognize expense for all phantom units since the awards’ vesting was subject to the completion of a liquidity event. The grant date fair value of the phantom units granted prior to LLC Conversion was estimated using both an option pricing method and a probability weighted expected return method. As of March 31, 2018 , the Company had $3,152 of unrecognized stock based compensation expense related to phantom units which will be recognized over a weighted-average period of 1.2 years . Of that amount, $3,015 of unrecognized expense is related to employee grants with a weighted-average period of 1.2 years and $137 of unrecognized expense is related to non-employee grants with a weighted-average period of 1.4 years . During the three months ended March 31, 2018 , the Company issued 208,344 shares of common stock to participants of the Phantom Unit Plan based in the United States, after withholding approximately 111,128 shares to satisfy tax withholding obligations. The Company made a cash payment of $339 to cover employee withholding taxes upon the settlement of these vested phantom units during the three months ended March 31, 2018 . During the three months ended March 31, 2018 the Company also paid $101 to cash-settle 40,063 vested phantom units, held by participants of the Phantom Unit Plan based outside of the United States, and to pay cash in lieu of fractional shares for vested units held by participants based in the United States. 2016 Equity Incentive Plan In May and June of 2016, the Company’s Board of Directors adopted and the Company’s stockholders approved the 2016 Equity Incentive Plan (“the 2016 Plan”) in connection with the Company’s IPO. The 2016 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to employees, directors and consultants. A total of 6,000,000 shares of common stock were reserved for issuance pursuant to the 2016 Plan. Restricted Stock The Company issued 10,462 shares of restricted stock under the 2016 Plan on June 1, 2016, in connection with the conversion of the Series C units, of which 3,486 and 3,486 were vested and converted into unrestricted common stock during 2017 and 2016, respectively. As of March 31, 2018 , and December 31, 2017 , there were 3,490 shares of restricted stock. Total stock-based compensation expense of $76 is expected to be recognized on a straight-line basis over approximately the next 0.6 years for the unvested restricted stock outstanding as of March 31, 2018 . The unrecognized stock compensation relates to nonemployees and the awards are being accounted for pursuant to ASC 505-50. Stock compensation expense for the Series C units/restricted stock issued to the nonemployees is calculated based on the fair value of the award on each balance sheet date and the attribution of that cost is being recognized ratably over the vesting period. Stock Options During the year ended December 31, 2016, the Company issued 500,000 stock options under the 2016 equity incentive plan to Mark Burnett, who is a non-employee member of the Company’s Board of Directors, with exercise price of $14.00 . The award is being accounted for pursuant to ASC 505-50. Stock compensation expense issued to the nonemployees is calculated based on the fair value of the award on each balance sheet date and the attribution of that cost is being recognized ratably over the vesting period. The Company has utilized the Black-Scholes option-pricing model to determine the fair value of the stock options. As of March 31, 2018 , the Company had $1 of unrecognized stock based compensation expense related to the stock options. This cost is expected to be recognized over a weighted-average period of 2.15 years. Restricted Stock Units The following table summarizes the activity related to the unvested restricted stock units during the three months ended March 31, 2018 : Number of Units Weighted-Average Grant-Date Fair Value Unvested restricted stock units outstanding - December 31, 2017 3,106,024 $ 3.43 Granted — — Vested (42,717 ) 4.33 Forfeited (147,186 ) 3.39 Unvested restricted stock units outstanding - March 31, 2018 2,916,121 $ 3.42 The Company recognized compensation expense related to restricted stock units of $2,070 , and $0 for the three months ended March 31, 2018 and 2017 respectively. Unrecognized compensation expense related to unvested restricted stock units was $6,484 at March 31, 2018 , which is expected to be recognized as expense over the weighted-average period of 2.0 years . |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of common stock and redeemable common stock for the three months ended March 31, 2018 and 2017 : Three Months Ended 2018 2017 Common Stock Common Stock Net loss per share numerator: Net loss from continuing operations $ (21,975 ) $ (28,126 ) Net loss from discontinued operations (193 ) (12,989 ) Net loss for basic and diluted net loss per share $ (22,168 ) $ (41,115 ) Weighted-average shares for basic net loss per share 108,579,271 121,618,039 Effect of dilutive securities — — Weighted-average shares for dilutive net loss per share 108,579,271 121,618,039 Basic and diluted net loss per share from continuing operations $ (0.20 ) $ (0.23 ) Basic and diluted net loss per share from discontinued operations $ — $ (0.11 ) Basic and diluted total net loss per share $ (0.20 ) $ (0.34 ) The following number of potential common shares at the end of each period were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Three Months Ended 2018 2017 Unvested restricted stock 3,490 6,976 Unvested phantom units 938,065 3,515,718 Unvested restricted stock units 2,916,121 — Unexercised Stock options 500,000 500,000 Convertible notes 8,815,655 8,815,655 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions NantWorks Shared Services Agreement In October 2012, the Company entered into a shared services agreement with NantWorks that provides for ongoing services from NantWorks in areas such as public relations, information technology and cloud services, human resources and administration management, finance and risk management, environmental health and safety, sales and marketing services, facilities, procurement and travel, and corporate development and strategy (the "Shared Services Agreement"). The Company is billed quarterly for such services at cost, without mark-up or profit for NantWorks, but including reasonable allocations of employee benefits, facilities and other direct or fairly allocated indirect costs that relate to the associates providing the services. During the three months ended March 31, 2018 , the Company incurred $1,043 of expenses, related to selling, general and administrative services provided to the Company by NantWorks and affiliates, net of services provided to NantWorks and affiliates. During the three months ended March 31, 2017 , the Company incurred $1,385 of expenses, related to selling, general and administrative services provided to the Company by NantWorks and affiliates, net of services provided to NantWorks and affiliates. Related Party Receivables and Payables As of March 31, 2018 and December 31, 2017 , the Company had related party receivables, net of related party payables of $2,349 and $2,312 , respectively, primarily consisting of a receivable from Ziosoft KK of $2,082 and $2,082 , respectively, which was related to the sale of Qi Imaging. As of March 31, 2018 and December 31, 2017 the Company had related party payables, net of receivables balances, and related party liabilities of $19,002 and $16,004 , respectively, which primarily relate to amounts owed to NantWorks pursuant to the Shared Services Agreement, amounts owed to NantOmics under the Second Amended Reseller Agreement (defined below) and interest payable. The balance of the related party receivables and payables represent amounts paid by affiliates on behalf of the Company or vice versa. Amended Reseller Agreement On June 19, 2015, the Company entered into a five and a half year exclusive Reseller Agreement with NantOmics for sequencing and bioinformatics services (the "Original Reseller Agreement"). NantOmics is a majority owned subsidiary of NantWorks and is controlled by the Company's Chairman and CEO. On May 9, 2016, the Company and NantOmics executed an Amended and Restated Reseller Agreement (the “Amended Reseller Agreement”), pursuant to which the Company received the worldwide, exclusive right to resell NantOmics’ quantitative proteomic analysis services, as well as related consulting and other professional services, to institutional customers (including insurers and self-insured healthcare providers) throughout the world. The Company retained its existing rights to resell NantOmics’ genomic sequencing and bioinformatics services. Under the Amended Reseller Agreement, the Company is responsible for various aspects of delivering its sequencing and molecular analysis solutions, including patient engagement and communications with providers such as providing interpretations of the reports delivered to the physicians and resolving any disputes, ensuring customer satisfaction, and managing billing and collections. On September 20, 2016, the Company and NantOmics further amended the Reseller Agreement (the "Second Amended Reseller Agreement"). The Second Amended Reseller Agreement permits the Company to use vendors other than NantOmics to provide any or all of the services that are currently being provided by NantOmics and clarifies that the Company is responsible for order fulfillment and branding. The Second Amended Reseller Agreement grants to the Company the right to renew the agreement (with exclusivity) for up to three renewal terms, each lasting three years , if the Company achieves projected volume thresholds, as follows: (i) the first renewal option can be exercised if the Company completes at least 300,000 tests between June 19, 2015 and June 30, 2020; (ii) the second renewal option can be exercised if the Company completes at least 570,000 tests between July 1, 2020 and June 30, 2023; and (iii) the third renewal option can be exercised if the Company completes at least 760,000 tests between July 1, 2023 and June 30, 2026. If the Company does not meet the applicable volume threshold during the initial term or the first or second exclusive renewal terms, the Company can renew for a single additional three year term, but only on a non-exclusive basis. The Company agreed to pay NantOmics non-cancellable annual minimum fees of $2,000 per year for each of the calendar years from 2016 through 2020 and, subject to the Company exercising at least one of its renewal options described above, the Company is required to pay annual minimum fees to NantOmics of at least $25,000 per year for each of the calendar years from 2021 through 2023 and $50,000 per year for each of the calendar years from 2024 through 2029. On December 18, 2017, the Company and NantOmics executed Amendment No. 1 to the Second Amended Reseller Agreement. The Second Amended Reseller Agreement is amended to allow fee adjustments with respect to services completed by NantOmics between the amendment effective date of October 1, 2017 to June 30, 2018. As of March 31, 2018 and December 31, 2017 , the Company has $1,284 and $419 , respectively, of outstanding related party payables under the Second Amended Reseller Agreement. During the three months ended March 31, 2018 , $1,176 of direct costs were recorded as cost of revenue related to the Second Amended Reseller Agreement. During the three months ended March 31, 2017 , $1,226 of direct costs were recorded as cost of revenue related to the Second Amended Reseller Agreement. Cambridge Purchase Agreement On December 15, 2016, the Company entered into a purchase agreement (the “Cambridge Purchase Agreement”) with Cambridge Equities, L.P., an entity affiliated with the Company's Chairman and CEO Dr. Patrick Soon-Shiong (“Cambridge”), to issue and sell $10,000 in aggregate principal amount of the Convertible Notes in a private placement pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. The Cambridge Purchase Agreement includes customary representations, warranties and covenants by the Company and customary closing conditions (See Note 11). The accrued and unpaid interest on the convertible notes was $162 and $24 at March 31, 2018 and December 31, 2017 , respectively, as part of current related party liabilities on the Condensed Consolidated Balance Sheet. Assignment of Liquid Genomics On February 28, 2018, the Company acquired 100% of the equity of Liquid Genomics, Inc. (“Liquid Genomics”), a company that provides liquid biopsy analysis of gene expressions and mutations using circulating tumor RNA and DNA, pursuant to an assignment agreement dated February 1, 2018 between the Company and NantOmics, a related party. The purchase price for the acquisition consisted of 9,088,362 Series A-2 units of NantOmics previously owned by the Company that were transferred at the closing plus 564,779 of Series A-2 units of NantOmics owned by the Company that will be transferred to NantOmics by May 31, 2018. The Company and NantOmics are controlled by the Company's Chairman and CEO, therefore no gain or loss was recognized on the transaction. The difference in the purchase price and the historical cost of the assets and liabilities acquired was recorded as a distribution from equity at the assignment date. The transaction did not cause a material change in the reporting entity, and the Company has not retrospectively adjusted its previously issued financial statements. The consolidation of Liquid Genomics at February 28, 2018 added $48 to the Company's sequencing and molecular analysis revenue for the period ending March 31, 2018. This revenue was substantially all earned from an agreement with an affiliate, described below. As a result of consolidating Liquid Genomics at February 28, 2018, net loss of the Company increased by $97 during the three months ended March 31, 2018. Amounts NantOmics Series A-2 shares transferred, or to be transferred, to NantOmics $ 8,956 Assets and liabilities of Liquid Genomics at assignment: Goodwill 1,305 Intangible asset 4,429 Other assets 251 Liabilities assumed (814 ) Net assets acquired at assignment 5,171 Recorded as distribution from additional paid-in capital $ 3,785 Liquid Tumor Profiling Services Agreement In March 2018, Liquid Genomics, a wholly-owned subsidiary of the Company, and NantKwest, Inc. ("NantKwest"), an affiliate, entered into agreements whereby Liquid Genomics is providing liquid tumor profiling services to NantKwest. Under this agreement, Liquid Genomics recorded $45 of revenue during the three months ended March 31, 2018. Related Party Promissory Notes On January 4, 2016, the Company executed a $112,666 demand promissory note in favor of NantCapital to fund the acquisition of NaviNet. The note bears interest at a per annum rate of 5.0% , compounded annually and computed on the basis of the actual number of days elapsed and a year of 365 or 366 days, as the case may be. The unpaid principal and any accrued and unpaid interest on the note was originally due and payable on demand in either (i) cash, (ii) shares of the Company's common stock based on per share price of $18.6126 , (iii) Series A-2 units of NantOmics based on a per unit price of $1.484 to the extent such equity is owned by the Company or (iv) any combination of the foregoing, all at the option of NantCapital. Subject to the preceding sentence, the Company may prepay the outstanding amount at any time, either in whole or in part, without premium or penalty and without the prior consent of NantCapital. On May 9, 2016, the promissory note with NantCapital was amended to provide that all outstanding principal and accrued interest is due and payable on June 30, 2021, and not on demand. On December 15, 2016, in connection with the offering of the Convertible Notes, the Company entered into a Second Amended and Restated Promissory Note which amends and restates the Amended and Restated Promissory Note, dated May 9, 2016, between the Company and NantCapital, to, among other things, extend the maturity date of the Promissory Note to June 30, 2022 and to subordinate the Promissory Note in right of payment to the Convertible Notes (See Note 11 ). No other terms of the promissory note were changed. As of March 31, 2018 and December 31, 2017 , the total principal and interest outstanding on the note amounted to $125,694 and $124,166 , respectively. The accrued and unpaid interest on the note was $13,028 and $11,500 , respectively as of March 31, 2018 and December 31, 2017 , as part of non current related party liabilities on the Condensed Consolidated Balance Sheets. The Company can request additional advances subject to NantCapital approval. The NantCapital Note bears interest at a per annum rate of 5.0% compounded annually and computed on the basis of the actual number of days in the year. NantCapital has the option, but not the obligation, to require us to repay any such amount in cash, Series A-2 units of NantOmics (based on a per unit price of $1.484 ) held by us, shares of the Company's common stock based on a per share price of $18.6126 (if such equity exists at the time of repayment), or any combination of the foregoing at the sole discretion of NantCapital. On January 22, 2016, the Company executed a demand promissory note in favor of NantOmics. The principal amount of the initial advance totaled $20,000 . On March 8, 2016, NantOmics made a second advance to the Company for $20,000 . The note bears interest at a per annum rate is 5.0% and is compounded annually. In May and June of 2016, the Company executed amendments to the demand promissory note with NantOmics, which provide that all unpaid principal of each advance owed to NantOmics and any accrued and unpaid interest would convert automatically into shares of the Company’s common stock after pricing of the Company’s IPO and immediately after conversion of the Company from a limited liability company to a corporation. On June 1, 2016, approximately $40,590 of principal and accrued interest under the promissory note with NantOmics was converted into 2,899,297 shares of the Company’s common stock in connection with the IPO. The Company can request additional advances subject to NantOmics approval, and as of March 31, 2018 , there was no outstanding balance on the promissory note. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of NantHealth and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and, in the opinion of management, include all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the Company's financial position and results of operation. These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2017 . The results of operations of the entities disposed of are included in the unaudited condensed consolidated financial statements up to the date of disposal and, where appropriate, these operations have been reflected as discontinued operations. The accompanying Condensed Consolidated Balance Sheet as of December 31, 2017 has been derived from the audited Consolidated Financial Statements at that date, without retrospective application of ASC 606, Revenue from Contracts with Customers . The balance sheets do not include all of the disclosures required by GAAP. Assets and liabilities of the discontinued operations are presented separately in the asset and liability sections of the prior period balance sheet. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year. The adoption of ASC 606 led to the treatment of costs to fulfill certain software and hardware related implementation services being accounted for as single performance obligations with the software and hardware products and services provided. Classification in prior periods has been conformed to the current period presentation. As a result of the reclassification, we have changed the names of several of our reported product categories. Software and hardware has become Software and hardware related, Software-as-a-service has become Software-as-a-service related, and Other services has become Home health care services. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. |
Segment Reporting | Segment Reporting The chief operating decision maker for the Company is its Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a Condensed Consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results, or plans for levels or components below the Condensed Consolidated unit level. Accordingly, management has determined that the Company operates in one reportable segment. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Transition to FASB ASC 606 On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers , using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606, while prior period amounts continue to be reported in accordance with the Company’s historic accounting under ASC 605, which are included in Note 2, Summary of Significant Accounting Policies, to the Consolidated and Combined Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company recorded a decrease of $ 1,263 , net of tax, to the opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The most significant changes were to begin recognizing revenues from certain software and hardware implementation projects based on an estimate of percentage of completion, rather than at completion of the contract; to recognize estimated revenues from nursing and therapy services as the services are performed, rather than on final determination of contractual billable amounts; and to capitalize commissions as assets for contracts with performance obligations of more than one year. The adoption also led to certain costs, in relation to SaaS contracts, and previously treated as deferred implementation costs in current and long-term assets, being treated as software developed for internal use, resulting in an increase of $5,827 of software developed for internal use, being recorded at January 1, 2018 with a corresponding decrease in deferred implementation costs. The Company concluded that it was inappropriate to net down contract liabilities, referred to as deferred revenue below, with accounts receivable. This led to an increase of $5,247 in accounts receivable and a corresponding increase in deferred revenue. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of sales taxes collected from customers, which are subsequently remitted to governmental authorities. The Company’s revenue is generated from the following sources: • Software-as-a-service (“SaaS”) related - SaaS related revenue is generated from customers’ access to and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term. 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. SaaS contracts are accounted for as a single performance obligation, as implementation and hosting services are not distinct. As a result, the Company recognizes all fees, including any up front initial system implementation service fees, or other fees, ratably over time from when the system implementation or deployment services are completed, and where necessary accepted by the customer, over the contract term as stated or with consideration of termination for convenience clauses as discussed below . • Software and hardware related - Software and hardware related revenue is generated from the license of the Company’s software, on a perpetual basis, the sale of hardware and professional services that are 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 implementation and training services and do not include maintenance revenue. The software is installed on the customer’s site or the customer’s designated vendor’s site and is not hosted by the Company or by a vendor contracted by the Company. See the section below “ Contracts with Software, Hardware, and Implementation Services” for details of management’s judgments and recognition of revenue relating to the category. • Maintenance - Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance on software and hardware during the PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when-and-if-available basis. Revenue is recognized over the maintenance term. • Sequencing and molecular analysis - Sequencing and molecular analysis revenue is generated by providing customers with reports by performing the process of sequencing and analysis of whole genome DNA, RNA, and proteomic results under the Company's reseller agreement with NantOmics, LLC ("NantOmics"), and from blood samples via our liquid/blood-based tumor profiling platform through the Company’s subsidiary, Liquid Genomics, Inc. (See Note 18). Revenue is recognized at a point in time, when reports of results are transferred to the client, or when cash is received as described below. The Company's sequencing and molecular analysis revenue is primarily generated from payments received from commercial third-party payers, hospitals and other provider networks and patients. The Company reports revenue from arrangements with these customers on a gross basis in accordance with ASC 606. When reports are transferred to the customer but the Company cannot conclude whether there is a contract with a customer based on the assessment of collectibility, revenue recognition is deferred until non-refundable payment is received or payment is considered probable. • Home health care services - Home health care services revenue includes the sale of nursing and therapy services provided to patients in a home care setting. These revenues are recognized at a point in time or over time, as services are provided. Certain of the Company’s customer contracts allow for termination for convenience, with advanced notice, without substantive termination penalty. In these cases, the Company has concluded the contract term is equal to the remaining, noncancellable period. Such termination rights do not allow for refunds other than prepaid PCS or other services. These provisions do not affect when the Company commences revenue recognition. The Company has allocated transaction price of $ 17,856 to unfulfilled performance obligations, these are expected to be fulfilled within three years, excluded from this amount are contracts of less than one year and variable consideration that relates to the value services provided. Contracts with Multiple Promises for Goods and Services The Company engages in various contracts with promises for multiple goods and services, which may generate revenue across any of the sources noted above. In various contracts, the Company recognizes its proprietary software, hardware, PCS, results of sequencing and molecular analysis, certain professional services, and other software-related services as distinct performance obligations. Standalone selling prices (“SSP”) are required to allocate and recognize revenue for each distinct performance obligation within each contract. The SSP for each performance obligation is determined by considering contracts in which the good or service is sold separately, and other factors including market conditions and the Company’s experience selling similar goods and services, as well as costs and margins achieved. In some cases, to estimate the SSP, the Company first estimates the selling price of each performance obligation for which an SSP is observable and then estimates the SSP of the remaining performance obligation as the residual contractual amount. Contracts with Software, Hardware, and Implementation Services The Company has some contracts where it provides implementation services involving significant integration of its licensed software and hardware, with customer networks that maintain patient electronic health records. These contracts represent a single performance obligation to the customer for a combined output due to the significant service of integrating the hardware, software and professional services. Revenue for the single performance obligation is recognized over time based on actual, or estimated, direct implementation labor hours as a measure of progress. In certain of those contracts, the Company’s performance also requires significant customization of its licensed software. For such contracts, the Company will also record revenue over time using the percentage of completion method to estimate the satisfaction of its performance obligations. However, where the Company lacks history and experience with certain projects involving the development of software according to customer specified criteria, the Company may be initially unable to reasonably estimate total direct software development labor hours to be expected under the project. As a result, the Company would not be able to reasonably measure its progress toward complete satisfaction of its single performance obligation. As a result, in these contracts, the Company will commence recognizing revenue when it concludes that it can reasonably measure its progress and determine that costs will be recoverable, which is typically at or near the time of the clients' acceptance of the software and the related professional services. At that point, substantially all of the uncertainty related to its ability to reasonably estimate direct labor hours to satisfy its performance obligations will have been resolved, and the Company will be able to reasonably measure the remaining progress toward complete satisfaction of its remaining professional services obligations. In such cases, the Company will commence recording revenue, at the date of meeting the customer acceptance criteria, with a cumulative catch up for the work performed to date using direct labor hours as a measure of progress consistent with other contracts involving software, hardware and implementation services. Recognition will continue for its performance obligation over the remaining performance period using the same measure of progress. A provision for the entire loss, from such a contract, will be recognized in any period it becomes evident that the contract will not be profitable. Other contracts for perpetual software licenses, hardware, and implementation services, do not include a service of software development or significant integration. Therefore, the perpetual software licenses, hardware, and implementation services are considered separate, distinct performance obligations. Software revenue is recognized upon the later of the license term commencement or the date the software is provided to the customer, hardware revenue is recognized upon delivery, and implementation revenue is recognized over time based on actual, or estimated, direct implementation labor hours as a measure of progress. The Company delineates between contracts with, or without, a service of significant integration by considering the complexity of the integration services and whether such services can be performed by the customer or another third party. The Company has both reseller arrangements with gross revenue presentation due to the Company’s control of goods and services before transfer to the customer, and others with net revenue presentation due to the reseller’s control of goods and services before transfer to the customer. The Company assesses control in terms of relevant indicators of performance, inventory, and pricing risk, such as which party negotiates pricing with the end customer and which party is ultimately responsible for fulfilling services, transfer of goods and services, and ensuring support. Contract Balances The Company records deferred revenue when cash payments are received, or payment is due, in advance of our fulfillment of performance obligations. There were $ 4,070 in revenues recognized during the three months ended March 31, 2018 that were included in the deferred revenue balance at the beginning of the period. Contract assets are recognized when a contractual performance obligation has been satisfied, but payment is not due until the completion of additional performance obligations, or the right to receive payment becomes unconditional. Contract assets were $ 1,074 at March 31, 2018 and $ 796 at January 1, 2018. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs to obtain a contract with a customer, where the stated contract term, with expected renewals, is longer than one year. The Company amortizes these assets over the expected period of benefit. These costs are generally employee sales commissions, with amortization of the balance recorded in selling, general and administrative expenses. The value of these assets was $ 1,336 at March 31, 2018 and $ 866 at January 1, 2018, and amortization during the three months ended March 31, 2018 was $ 35 . Where management is not able to conclude that the costs of a contract will be recovered, costs to obtain the contract are expensed as incurred. Practical Expedients The Company does not disclose the value of unsatisfied performance obligations for: contracts with an original expected length of one year or less; or where variable consideration, related to the company’s performance, is allocated to good and services delivered as a series and accounted for as a single performance obligation. |
Cost of Revenue | Cost of Revenue Cost of revenue includes associated salaries and fringe benefits, stock-based compensation, consultant costs, direct reimbursable travel expenses, depreciation related to software developed for internal use and other direct engagement costs associated with the design, development, sale and installation of systems, including system support and maintenance services for customers. System support includes ongoing client assistance for software updates and upgrades, installation, training and functionality. All service costs, except development of internal use software and deferred implementation costs, are expensed when incurred. Amortization of deferred implementation costs are also included in cost of revenue. Cost of revenue associated with each of the Company’s revenue sources consists of the following types of costs: • Software-as-a-service related - SaaS cost of revenue includes personnel-related costs, amortization of deferred implementation, and depreciation of internal use software, costs and other direct costs associated with the delivery and hosting of the Company's subscription services. • Software and Hardware related - Software and hardware related cost of revenue includes third-party software and hardware costs directly associated with solutions, including purchasing and receiving costs and includes direct costs associated with the Company’s software implementation services provided to our customers. Software and hardware related cost of revenue also includes hardware costs directly related to bringing manufactured products to their final selling destination. • Maintenance - Maintenance cost of revenue includes personnel-related costs and other direct costs associated with the ongoing support or maintenance provided to the Company’s customers. • Sequencing and molecular analysis - Sequencing and molecular analysis cost of revenue includes personnel-related costs associated with fulfillment of these services, including those of the Company's subsidiary, Liquid Genomics, Inc., and amounts due to NantOmics under the reseller agreement (See Note 18) for the sequencing and analysis of whole genome, DNA, RNA, and proteomic results. It also includes depreciation of internal use software. • Home health care services - Home health care services cost of revenue includes personnel-related, as well as direct expenses relating to the Company’s nursing and therapy services provided to patients in a home care setting. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standard Update ("ASU") No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , associated with the recognition and measurement of financial assets and liabilities. During the first quarter of 2018, the FASB issued further clarifications with the issuance of ASU No. 2018-03, effective for fiscal years beginning after December 15, 2017 and interim periods beginning after June 15, 2018, and ASU No. 2018-04, effective upon issuance. The Company has early adopted ASU No. 2018-03 and adopted ASU No. 2018-04 effective January 1, 2018 concurrently with ASU No. 2016-01. ASU No. 2016-01 requires that equity investments, except those accounted for under the equity method of accounting, be measured at fair value and changes in fair value are recognized in net income. ASU No. 2016-01 also provides a new measurement alternative for equity investments that do not have a readily determinable fair value (cost method investments). These investments are measured at cost, less any impairment, adjusted for observable price changes. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) are applied prospectively to equity investments that exist as of the date of adoption. Effective January 1, 2018, the Company elected to record its preferred stock equity investment in Innovative Oncology Business Solutions, Inc. (“IOBS”), which does not have a readily determinable fair value using the alternative method. Adoption of the Updates did not have a material effect on the Company’s accounting for equity investments, fair value disclosures and other disclosure requirements. The Company owns non-marketable equity securities that are accounted for as an equity investment at cost minus impairment and plus or minus changes resulting from observable price changes because the preferred stock held by the Company is not considered in-substance common stock and such preferred stock does not have a readily determinable fair value. All investments are reviewed on a regular basis for possible impairment. If an investment's fair value is determined to be less than its net carrying value, the investment is written down to its fair value. Such an evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether an impairment indicator is present include: the investees’ earning performance, change in the investees’ industry and geographic area in which it operates, offers to purchase or sell the security for a price less than the cost of the investment, issues that raise concerns about the investee's ability to continue as a going concern and any other information that the Company may be aware of related to the investment. Factors considered in determining whether an observable price change has occurred include: the price at which the investee issues equity instruments similar to those of the Company’s investment and the rights and preferences of those equity instruments compared to the Company’s. Effective January 1, 2018, the Company adopted ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments . ASU No. 2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. Also, effective January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force . ASU No. 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities are required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. Prior periods were retrospectively adjusted to conform to the current period’s presentation. There was no material impact on the Company’s statement of cash flows on adoption of either update. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . The amendments in ASU No. 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Pursuant to this ASU, an entity should account for the effects of a modification unless all of the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award date is modified. ASU No. 2017-09 is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance. The amendments of this ASU should be applied prospectively to an award modified on or after the adoption date. We adopted the standard beginning in the first quarter of 2018. If we encounter a change to the terms or conditions of any of our share-based payment awards we will evaluate the need to apply modification accounting based on the new guidance. The general treatment for modifications of share-based payment awards is to record the incremental value arising from the change as additional compensation cost. The adoption of this standard did not result in a significant impact to our financial statements during the quarterly reporting period ended March 31, 2018. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) to simplify the accounting for goodwill impairment. This guidance, among other things, removes step 2 of the goodwill impairment test thus eliminating the need to determine the fair value of individual assets and liabilities of the reporting unit. Upon adoption of this ASU, goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This may result in more or less impairment being recognized than under current guidance. This update will become effective for the Corporation’s annual and interim goodwill impairment tests beginning in the first quarter of 2020, and early adoption is permitted. The Company is still evaluating the impact of this standard update. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The update is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This guidance will become effective for interim and annual reporting periods beginning with the year ending December 31, 2019. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its Condensed Consolidated Financial Statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission ("SEC") did not have, or are not believed by management to have, a material impact on the Company's present or future Condensed Consolidated Financial Statements. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of ASC 606 impacts | This table summarizes the impact on the Company’s financial statements due to the adoption of ASC 606: As Reported December 31, 2017 Adjustments due to ASC 606 Balance as at January 1, 2018 Balance Sheet Accounts receivable, net $ 11,491 $ 5,247 $ 16,738 Deferred implementation costs, current 1,960 (1,960 ) — Prepaid expenses and other current assets 5,358 1,117 6,475 Property, plant, and equipment, net 18,517 5,827 24,344 Deferred implementation costs, net of current 3,951 (3,949 ) 2 Other assets 2,195 562 2,757 Deferred revenue, current 10,057 3,184 13,241 Deferred revenue, net of current 7,126 2,030 9,156 Deferred income taxes 5,838 367 6,205 This impact of the adoption of ASC 606 during the period ended March 31, 2018 is presented here: Three Months Ended March 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Statement of Operations Total net revenue $ 22,263 $ (533 ) $ 21,730 Cost of revenue 11,068 (37 ) 11,031 Operating expenses 26,942 470 27,412 (Benefit from) provision for income taxes (1,050 ) (119 ) (1,169 ) Balance Sheet Accounts receivable, net 14,701 (3,386 ) 11,315 Deferred implementation costs, current 11 2,288 2,299 Prepaid expenses and other current assets 6,995 (1,611 ) 5,384 Property, plant, and equipment, net 23,570 (5,884 ) 17,686 Deferred implementation costs, net of current 2 3,716 3,718 Other assets 3,777 (800 ) 2,977 Deferred revenue, current 13,080 (2,551 ) 10,529 Deferred revenue, net of current 8,729 (530 ) 8,199 Deferred income taxes 5,025 (459 ) 4,566 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The significant operating and investing cash and non-cash items of the discontinued operations included in the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended 2018 2017 Depreciation and amortization from discontinued operations $ — $ 3,905 The total loss on sale to Allscripts consisted of the following: Cash received as consideration $ 1,742 Deferred consideration related to working capital adjustments 1,021 Estimated costs to be incurred by the Company to fulfill certain customer service obligations of (883 ) Fair value of common stock 42,750 Net consideration received 44,630 Less: Carrying value of net assets sold (55,255 ) Plus: Reclassification of cumulative translation adjustments of foreign subsidiaries 117 Loss from sale of Business $ (10,508 ) The sale of the Business qualified as a discontinued operation because it comprised operations and cash flows that could be distinguished, operationally and for financial reporting purposes, from the rest of the Company. The disposal of the Business represented a strategic shift in the Company’s operations as the sale enables the Company to focus on genomic sequencing, clinical decision support, connected care and payer engagement. The operating results of the Company's discontinued operations are as follows: Three Months Ended 2018 2017 Major line items constituting loss from discontinued operations Net revenue $ — $ 3,405 Cost of revenue — 7,511 Selling, general and administrative 193 3,443 Research and development — 4,473 Amortization of software license and acquisition-related assets — 760 Other (income) expense — (38 ) Loss from sale of Business — — Gain from dissolution of a business component — — Loss from discontinued operations, before income taxes (193 ) (12,744 ) Provision for income taxes — 245 Loss from discontinued operations, net of income taxes $ (193 ) $ (12,989 ) |
Prepaid Expenses and Other Cu30
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Current Assets And Other Current Liabilities [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Prepaid expenses $ 2,809 $ 2,791 Restricted cash (1) 350 350 Other current assets 3,836 2,217 Prepaid expenses and other current assets $ 6,995 $ 5,358 (1) Additional $1,136 of noncurrent restricted cash as of March 31, 2018 is included in the Company’s Consolidated Balance Sheets as part of Other assets. Current and noncurrent restricted cash consists of funds that are contractually restricted as to usage or withdrawal related to the Company's security deposits in the form of standby letters of credit for leased facilities. No amounts have been drawn upon the letters of credit as of March 31, 2018. |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Payroll and related costs $ 4,974 $ 7,051 NaviNet acquisition accrued earnout 559 5,408 Units of NantOmics to be transferred for assignment of Liquid Genomics 524 — Other accrued and other current liabilities 6,356 5,675 Accrued and other current liabilities $ 12,413 $ 18,134 |
Property, Plant and Equipment31
Property, Plant and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, plant and equipment, net as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Computer equipment and software $ 14,005 $ 13,998 Furniture and equipment 3,980 3,211 Leasehold and building improvements 4,240 4,233 Construction in progress 1,216 629 Property, plant, and equipment, excluding internal use software 23,441 22,071 Less: Accumulated depreciation and amortization (18,613 ) (15,248 ) Property, plant and equipment, excluding internal use software, net 4,828 6,823 Internal use software 26,252 17,690 Less: Accumulated depreciation and amortization, internal use software (7,510 ) (5,996 ) Internal use software, net 18,742 11,694 Property, plant, and equipment, net $ 23,570 $ 18,517 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The Company’s definite-lived intangible assets as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Customer relationships $ 52,000 $ 52,000 Developed technologies 36,700 32,000 Trade name 3,000 3,000 91,700 87,000 Less: accumulated amortization (20,074 ) (17,576 ) Intangible assets, net $ 71,626 $ 69,424 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense over the next five years and thereafter for the intangible assets that exist as of March 31, 2018 is as follows: Amounts Remainder of 2018 $ 6,832 2019 9,150 2020 8,400 2021 8,400 2022 8,400 Thereafter 30,444 Total future intangible amortization expense $ 71,626 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The Company used the following summarized financial information for NantOmics for the three months ended December 31, 2017 and 2016 to record its equity method losses for the three months ended March 31, 2018 and 2017 , respectively: Three Months ended December 31 2017 2016 Sales $ 1,385 $ 2,415 Gross loss (4,269 ) (2,217 ) Loss from operations (13,454 ) (7,770 ) Net loss (31,959 ) (21,766 ) Net loss attributable to NantOmics (31,420 ) (20,513 ) |
Convertible Notes (Tables)
Convertible Notes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The following table summarizes how the issuance of the Convertible Notes is reflected in the Company's Condensed Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017 . Related party Others Total Balance as of March 31, 2018 Gross proceeds $ 10,000 $ 97,000 $ 107,000 Unamortized debt discounts and deferred financing offering costs (1,951 ) (21,063 ) (23,014 ) Net carrying amount $ 8,049 $ 75,937 $ 83,986 Balance as of December 31, 2017 Gross proceeds $ 10,000 $ 97,000 $ 107,000 Unamortized debt discounts and deferred financing offering costs (2,053 ) (22,155 ) (24,208 ) Net carrying amount $ 7,947 $ 74,845 $ 82,792 |
Schedule of Interest Expense | The following table sets forth the Company's interest expense recognized in the Company's Condensed Consolidated Statements of Operations: Three Months Ended March 31, 2018 Related party Others Total Accrued coupon interest expense $ 137 $ 1,334 $ 1,471 Amortization of debt discounts 100 957 1,057 Amortization of deferred financing offering costs 3 135 138 Total convertible notes interest expense $ 240 $ 2,426 $ 2,666 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 consisted of the following: March 31, 2018 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 $ 29,430 $ 29,430 $ — $ — Assets - Held-to-maturity 1,136 — 1,136 — Liabilities - Interest make-whole derivative 5 — — 5 December 31, 2017 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 $ 57,683 $ 57,683 $ — $ — Assets - Held-to-maturity 361 — 361 — Liabilities - Interest make-whole derivative 7 — — 7 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables set forth a summary of changes in the fair value of Level 3 liabilities for the three months ended March 31, 2018 : December 31, 2017 Additions Change in fair value March 31, 2018 Interest make-whole derivative liability: Others $ 7 $ — $ (2 ) $ 5 As of March 31, 2018 and December 31, 2017 , the fair value and carrying value of the Company's Convertible Notes were: Fair value Carrying value Face value 5.5% convertible senior notes due December 15, 2021: Balance as of March 31, 2018 Related party $ 7,443 $ 8,049 $ 10,000 Others 72,199 75,937 97,000 $ 79,642 $ 83,986 $ 107,000 Balance as of December 31, 2017 Related party $ 7,327 $ 7,947 $ 10,000 Others 71,076 74,845 97,000 $ 78,403 $ 82,792 $ 107,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table reflects the components of stock-based compensation expense recognized in the Company's Condensed Consolidated Statements of Operations: Three Months Ended 2018 2017 Series C / Restricted Stock: Research and development $ 33 $ 15 Phantom units: Cost of revenue 153 284 Selling, general and administrative 253 (1,432 ) Research and development 209 512 Discontinued operations 0 906 Total phantom units stock-based compensation expense 615 270 Stock options: Selling, general and administrative — (35 ) Restricted Stock Units: Cost of revenue 12 — Selling, general and administrative 1,954 — Research and development 104 — Total restricted stock units stock-based compensation expense 2,070 — Total stock-based compensation expense 2,718 250 Amount capitalized to internal-use software 50 524 Total stock-based compensation cost $ 2,768 $ 774 |
Schedule of Share-based Compensation, Activity | The following table summarizes the activity related to the unvested phantom units during the three months ended March 31, 2018 : Number of Units Weighted Average Grant date value per phantom unit Unvested phantom units outstanding - December 31, 2017 1,292,784 $ 15.01 Granted — Vested (320,856 ) $ 15.75 Forfeited (33,863 ) $ 14.61 Unvested phantom units outstanding - March 31, 2018 938,065 $ 14.76 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity related to the unvested restricted stock units during the three months ended March 31, 2018 : Number of Units Weighted-Average Grant-Date Fair Value Unvested restricted stock units outstanding - December 31, 2017 3,106,024 $ 3.43 Granted — — Vested (42,717 ) 4.33 Forfeited (147,186 ) 3.39 Unvested restricted stock units outstanding - March 31, 2018 2,916,121 $ 3.42 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of common stock and redeemable common stock for the three months ended March 31, 2018 and 2017 : Three Months Ended 2018 2017 Common Stock Common Stock Net loss per share numerator: Net loss from continuing operations $ (21,975 ) $ (28,126 ) Net loss from discontinued operations (193 ) (12,989 ) Net loss for basic and diluted net loss per share $ (22,168 ) $ (41,115 ) Weighted-average shares for basic net loss per share 108,579,271 121,618,039 Effect of dilutive securities — — Weighted-average shares for dilutive net loss per share 108,579,271 121,618,039 Basic and diluted net loss per share from continuing operations $ (0.20 ) $ (0.23 ) Basic and diluted net loss per share from discontinued operations $ — $ (0.11 ) Basic and diluted total net loss per share $ (0.20 ) $ (0.34 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following number of potential common shares at the end of each period were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Three Months Ended 2018 2017 Unvested restricted stock 3,490 6,976 Unvested phantom units 938,065 3,515,718 Unvested restricted stock units 2,916,121 — Unexercised Stock options 500,000 500,000 Convertible notes 8,815,655 8,815,655 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Business Acquisitions | Amounts NantOmics Series A-2 shares transferred, or to be transferred, to NantOmics $ 8,956 Assets and liabilities of Liquid Genomics at assignment: Goodwill 1,305 Intangible asset 4,429 Other assets 251 Liabilities assumed (814 ) Net assets acquired at assignment 5,171 Recorded as distribution from additional paid-in capital $ 3,785 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Modified retrospective adjustment on adoption of ASC 606 | $ 1,263 | ||
Increase (decrease) to property plant and equipment | $ 23,570 | $ 24,344 | 18,517 |
Increase (decrease) in accounts receivable | 14,701 | 16,738 | 11,491 |
Transaction price of unfulfilled performance obligations | $ 17,856 | ||
Performance obligation fulfilled timing | 3 years | ||
Deferred revenues recognized | $ 4,070 | ||
Contract assets | 1,074 | 796 | |
Capitalized contract cost | 1,336 | 866 | |
Amortization of contract costs | 35 | ||
Accounting Standards Update 2014-09 | Adjustments due to ASC 606 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Increase (decrease) to property plant and equipment | (5,884) | 5,827 | |
Increase (decrease) in accounts receivable | $ (3,386) | $ 5,247 | |
Accumulated Deficit | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Modified retrospective adjustment on adoption of ASC 606 | 1,263 | ||
Accumulated Deficit | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Modified retrospective adjustment on adoption of ASC 606 | $ 1,263 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Impact on Financial Statements from ASC 606 Adoption (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | $ 14,701 | $ 16,738 | $ 11,491 |
Deferred implementation costs | 11 | 0 | 1,960 |
Prepaid expenses and other current assets | 6,995 | 6,475 | 5,358 |
Property, plant, and equipment, net | 23,570 | 24,344 | 18,517 |
Deferred implementation costs, net of current | 2 | 2 | 3,951 |
Other assets | 3,777 | 2,757 | 2,195 |
Deferred revenue | 13,080 | 13,241 | 10,057 |
Deferred revenue, net of current | 8,729 | 9,156 | 7,126 |
Deferred income taxes, net | 5,025 | 6,205 | $ 5,838 |
Adjustments due to ASC 606 | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | (3,386) | 5,247 | |
Deferred implementation costs | 2,288 | (1,960) | |
Prepaid expenses and other current assets | (1,611) | 1,117 | |
Property, plant, and equipment, net | (5,884) | 5,827 | |
Deferred implementation costs, net of current | 3,716 | (3,949) | |
Other assets | (800) | 562 | |
Deferred revenue | (2,551) | 3,184 | |
Deferred revenue, net of current | (530) | 2,030 | |
Deferred income taxes, net | $ (459) | $ 367 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Impact of Adoption of ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total net revenue | $ 22,263 | $ 19,104 | ||
Cost of revenue | 11,068 | 11,518 | ||
Operating expenses | 26,942 | 27,415 | ||
(Benefit from) provision for income taxes | (1,050) | $ 37 | ||
Accounts receivable, net | 14,701 | $ 16,738 | $ 11,491 | |
Deferred implementation costs | 11 | 0 | 1,960 | |
Prepaid expenses and other current assets | 6,995 | 6,475 | 5,358 | |
Property, plant, and equipment, net | 23,570 | 24,344 | 18,517 | |
Deferred implementation costs, net of current | 2 | 2 | 3,951 | |
Other assets | 3,777 | 2,757 | 2,195 | |
Deferred revenue | 13,080 | 13,241 | 10,057 | |
Deferred revenue, net of current | 8,729 | 9,156 | 7,126 | |
Deferred income taxes, net | 5,025 | 6,205 | $ 5,838 | |
Adjustments due to ASC 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total net revenue | (533) | |||
Cost of revenue | (37) | |||
Operating expenses | 470 | |||
(Benefit from) provision for income taxes | (119) | |||
Accounts receivable, net | (3,386) | 5,247 | ||
Deferred implementation costs | 2,288 | (1,960) | ||
Prepaid expenses and other current assets | (1,611) | 1,117 | ||
Property, plant, and equipment, net | (5,884) | 5,827 | ||
Deferred implementation costs, net of current | 3,716 | (3,949) | ||
Other assets | (800) | 562 | ||
Deferred revenue | (2,551) | 3,184 | ||
Deferred revenue, net of current | (530) | 2,030 | ||
Deferred income taxes, net | (459) | $ 367 | ||
Without new Revenue Standard | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total net revenue | 21,730 | |||
Cost of revenue | 11,031 | |||
Operating expenses | 27,412 | |||
(Benefit from) provision for income taxes | (1,169) | |||
Accounts receivable, net | 11,315 | |||
Deferred implementation costs | 2,299 | |||
Prepaid expenses and other current assets | 5,384 | |||
Property, plant, and equipment, net | 17,686 | |||
Deferred implementation costs, net of current | 3,718 | |||
Other assets | 2,977 | |||
Deferred revenue | 10,529 | |||
Deferred revenue, net of current | 8,199 | |||
Deferred income taxes, net | $ 4,566 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) | Dec. 30, 2017 | Aug. 29, 2017 | Aug. 25, 2017 | Aug. 03, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 | ||||
NantHealth, Inc.'s Provider/Patient Engagement Solutions Business | Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Shares received for sale of provider/patient engagement solutions business (shares) | 15,000,000 | 15,000,000 | ||||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 | ||||
Cash consideration as an estimated working capital payment | $ 1,742,000 | |||||
Potential additional cash consideration | 1,021,000 | |||||
Amount committed to deliver of total bookings, minimum | $ 95,000 | |||||
Period minimum dollar bookings to be delivered | 10 years | |||||
Bookings Commitments, percentage of shortfall that may be obligated | 70.00% | |||||
Bookings Commitment, commission percentage earned by NantHealth for each referral to Allscripts | 30.00% | |||||
Other income | $ 197,000 | |||||
Reclassification of cumulative translation adjustments of foreign subsidiaries | $ 117,000 | |||||
Net.Orange Ltd | Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Reclassification of cumulative translation adjustments of foreign subsidiaries | $ 860,000 |
Discontinued Operations - Loss
Discontinued Operations - Loss on Sale (Details) - NantHealth, Inc.'s Provider/Patient Engagement Solutions Business - Disposed of by Sale $ in Thousands | Aug. 25, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash received as consideration | $ 1,742 |
Potential additional cash consideration | 1,021 |
Estimated costs to be incurred by the Company to fulfill certain customer service obligations of the Business post-closing | (883) |
Fair value of common stock | 42,750 |
Net consideration received | 44,630 |
Less: Carrying value of net assets sold | (55,255) |
Plus: Reclassification of cumulative translation adjustments of foreign subsidiaries | 117 |
Loss from sale of Business | $ (10,508) |
Discontinued Operations - Opera
Discontinued Operations - Operating Results of Discontinued Operations (Details) - Disposed of by Sale - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net revenue | $ 0 | $ 3,405 |
Cost of revenue | 0 | 7,511 |
Selling, general and administrative | 193 | 3,443 |
Research and development | 0 | 4,473 |
Amortization of software license and acquisition-related assets | 0 | 760 |
Other (income) expense | 0 | (38) |
Loss from sale of Business | 0 | 0 |
Gain from dissolution of a business component | 0 | 0 |
Loss from discontinued operations, before income taxes | (193) | (12,744) |
Provision for income taxes | 0 | 245 |
Loss from discontinued operations, net of income taxes | $ (193) | $ (12,989) |
Discontinued Operations - Signi
Discontinued Operations - Significant Cash Flow Items from Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization from discontinued operations | $ 0 | $ 3,905 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Outstanding and unpaid invoices excluded from accounts receivable and deferred revenue | $ 6,198 | |
Allowance for doubtful accounts | $ 149 | $ 149 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 805 | $ 839 |
Prepaid Expenses and Other Cu48
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Current Assets And Other Current Liabilities [Abstract] | |||
Prepaid expenses | $ 2,809 | $ 2,791 | |
Restricted cash | 350 | 350 | |
Other current assets | 3,836 | 2,217 | |
Prepaid expenses and other current assets | 6,995 | $ 6,475 | $ 5,358 |
Noncurrent restricted cash | $ 1,136 |
Prepaid Expenses and Other Cu49
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other Current Assets And Other Current Liabilities [Abstract] | ||
Payroll and related costs | $ 4,974 | $ 7,051 |
NaviNet acquisition accrued earnout | 559 | 5,408 |
Units of NantOmics to be transferred for assignment of Liquid Genomics | 524 | 0 |
Other accrued and other current liabilities | 6,356 | 5,675 |
Accrued and other current liabilities | $ 12,413 | $ 18,134 |
Property, Plant and Equipment50
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, net | $ 23,570 | $ 24,344 | $ 18,517 | |
Depreciation expense | 3,070 | $ 3,111 | ||
Amount capitalized to internal use software | 2,735 | 1,038 | ||
Property, plant, and equipment, excluding internal use software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, excluding internal use software | 23,441 | 22,071 | ||
Less: Accumulated depreciation and amortization | (18,613) | (15,248) | ||
Property, plant, and equipment, net | 4,828 | 6,823 | ||
Computer equipment and software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, excluding internal use software | 14,005 | 13,998 | ||
Furniture and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, excluding internal use software | 3,980 | 3,211 | ||
Leasehold and building improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, excluding internal use software | 4,240 | 4,233 | ||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, excluding internal use software | 1,216 | 629 | ||
Internal use software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant, and equipment, excluding internal use software | 26,252 | 17,690 | ||
Less: Accumulated depreciation and amortization | (7,510) | (5,996) | ||
Property, plant, and equipment, net | 18,742 | $ 11,694 | ||
Depreciation expense | $ 2,126 | $ 1,330 |
Intangible Assets, net - Schedu
Intangible Assets, net - Schedule of Definite-Lived Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 91,700 | $ 87,000 |
Less: accumulated amortization | (20,074) | (17,576) |
Intangible assets, net | 71,626 | 69,424 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 52,000 | 52,000 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 36,700 | 32,000 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 3,000 | $ 3,000 |
Intangible Assets, net - Narrat
Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 2,227 | $ 5,220 | ||
Accumulated amortization of definite-lived intangible assets | $ 20,074 | $ 17,576 | ||
Liquid Genomics | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Definite-lived intangible assets related to acquisition | $ 4,700 | |||
Accumulated amortization of definite-lived intangible assets | $ 271 | |||
Estimated lives of definite-lived intangible assets | 13 years |
Intangible Assets, net - Sche53
Intangible Assets, net - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2018 | $ 6,832 | |
2,019 | 9,150 | |
2,020 | 8,400 | |
2,021 | 8,400 | |
2,022 | 8,400 | |
Thereafter | 30,444 | |
Intangible assets, net | $ 71,626 | $ 69,424 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Aug. 25, 2017 |
Goodwill [Line Items] | ||||
Goodwill | $ 115,930 | $ 114,625 | ||
Goodwill associated with discontinued operations | $ 16,444 | |||
Liquid Genomics | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 1,305 | |||
Goodwill added during period | $ 1,305 |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Thousands | Feb. 28, 2018shares | Jun. 16, 2015USD ($)shares | May 31, 2018shares | Mar. 31, 2018USD ($)director | Mar. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)shares | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Loss from related party equity method investment | $ 3,261 | $ 4,526 | [1] | ||||||
NantOmics | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of A-2 units purchased (in shares) | shares | 9,088,362 | 169,074,539 | |||||||
Aggregate purchase price | $ 250,774 | ||||||||
Ownership percentage | 13.60% | 14.28% | |||||||
Difference between the carrying value and equity, intangible assets | 28,195 | ||||||||
Difference between the carrying value and equity, goodwill | $ 14,382 | ||||||||
Other than temporary impairment on equity method investment | $ 35,991 | $ 29,816 | |||||||
Loss from related party equity method investment | $ 3,261 | $ 4,526 | |||||||
NantOmics | Forecast | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of A-2 units purchased (in shares) | shares | 564,779 | ||||||||
Variable Interest Entity, Not Primary Beneficiary | IOBS | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
IOBS investment | $ 1,750 | ||||||||
Number of shares acquired in IOBS | shares | 1,750,000 | ||||||||
Percentage of ownership in variable interest entity | 35.00% | ||||||||
Number of directors NantHealth has right to elect | director | 2 | ||||||||
Number of directors on IOBS board | director | 5 | ||||||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Investments - Summarized Financ
Investments - Summarized Financial Information (Details) - NantOmics - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||
Sales | $ 1,385 | $ 2,415 |
Gross loss | (4,269) | (2,217) |
Loss from operations | (13,454) | (7,770) |
Net loss | (31,959) | (21,766) |
Net loss attributable to NantOmics | $ (31,420) | $ (20,513) |
Convertible Notes - Narrative (
Convertible Notes - Narrative (Details) | Dec. 21, 2016$ / shares | Mar. 31, 2018USD ($)Day | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 15, 2016USD ($) |
Debt Instrument [Line Items] | |||||
Number of consecutive trading days trading price evaluated | 5 days | ||||
Remaining life of convertible notes | 45 months | ||||
Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Face value of debt | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 | ||
Interest rate on debt | 5.50% | 5.50% | |||
Proceeds from issuance of convertible notes, net of offering costs | $ 102,714,000 | ||||
Initial purchasers' discount and debt issuance costs | 4,286,000 | $ 4,286,000 | |||
Conversion rate of convertible debt | 82.3893 | ||||
Conversion price of convertible debt (usd per share) | $ / shares | $ 12.14 | ||||
Threshold of trading days | Day | 20 | ||||
Threshold consecutive trading days | Day | 30 | ||||
Threshold percentage of stock price trigger | 120.00% | ||||
Business day period trading price evaluated | 5 days | ||||
Threshold percentage of principal amount | 98.00% | ||||
Period after conversion date to trigger interest make-whole feature | 3 years | ||||
Discount rate | 2.00% | ||||
Total liability component of convertible notes on date of issuance | 83,079,000 | ||||
Interest make-whole derivative on date of issuance | 1,499,000 | ||||
Carrying value of convertible notes on date of issuance | $ 83,986,000 | $ 82,792,000 | 81,580,000 | ||
Conversion option reported in equity as additional paid-in capital | 23,921,000 | ||||
Purchasers' initial discount | 972,000 | ||||
Deferred financing offering costs | $ 3,314,000 | ||||
Effective interest rate | 12.82% | ||||
Convertible debt | Initial Purchasers Agreement | |||||
Debt Instrument [Line Items] | |||||
Face value of debt | $ 90,000,000 | ||||
Proceeds from issuance of convertible notes, net of offering costs | 92,797,000 | ||||
Convertible debt | Cambridge Purchase Agreement | |||||
Debt Instrument [Line Items] | |||||
Face value of debt | 10,000,000 | ||||
Proceeds from issuance of convertible notes, net of offering costs | 9,917,000 | ||||
Convertible debt | Pursuant to the exercise of the overallotment by the Initial Purchasers | |||||
Debt Instrument [Line Items] | |||||
Face value of debt | $ 7,000,000 |
Convertible Notes - Summary of
Convertible Notes - Summary of Issuance of Convertible Debt (Details) - Convertible debt - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 15, 2016 |
Debt Instrument [Line Items] | |||
Gross proceeds | $ 107,000 | $ 107,000 | |
Unamortized debt discounts and deferred financing offering costs | (23,014) | (24,208) | |
Net carrying amount | 83,986 | 82,792 | $ 81,580 |
Related party | |||
Debt Instrument [Line Items] | |||
Gross proceeds | 10,000 | 10,000 | |
Unamortized debt discounts and deferred financing offering costs | (1,951) | (2,053) | |
Net carrying amount | 8,049 | 7,947 | |
Others | |||
Debt Instrument [Line Items] | |||
Gross proceeds | 97,000 | 97,000 | |
Unamortized debt discounts and deferred financing offering costs | (21,063) | (22,155) | |
Net carrying amount | $ 75,937 | $ 74,845 |
Convertible Notes - Interest Ex
Convertible Notes - Interest Expense Incurred (Details) - Convertible debt $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |
Accrued coupon interest expense | $ 1,471 |
Amortization of debt discounts | 1,057 |
Amortization of deferred financing offering costs | 138 |
Total convertible notes interest expense | 2,666 |
Related party | |
Debt Instrument [Line Items] | |
Accrued coupon interest expense | 137 |
Amortization of debt discounts | 100 |
Amortization of deferred financing offering costs | 3 |
Total convertible notes interest expense | 240 |
Others | |
Debt Instrument [Line Items] | |
Accrued coupon interest expense | 1,334 |
Amortization of debt discounts | 957 |
Amortization of deferred financing offering costs | 135 |
Total convertible notes interest expense | $ 2,426 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash equivalents | $ 29,430 | $ 57,683 |
Held to maturity | 1,136 | 361 |
Liabilities | ||
Interest make-whole derivative | 5 | 7 |
Quoted price in active markets for identical assets (Level 1) | ||
Assets | ||
Cash equivalents | 29,430 | 57,683 |
Held to maturity | 0 | 0 |
Liabilities | ||
Interest make-whole derivative | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Cash equivalents | 0 | 0 |
Held to maturity | 1,136 | 361 |
Liabilities | ||
Interest make-whole derivative | 0 | 0 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Cash equivalents | 0 | 0 |
Held to maturity | 0 | 0 |
Liabilities | ||
Interest make-whole derivative | $ 5 | $ 7 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative liability | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Discount rate | 2.00% | ||
Convertible debt | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Face value of debt | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 |
Period that must lapse prior to conversion for noteholder to receive interest make-whole payment | 1 year | ||
Discount rate | 2.00% | ||
Threshold period used to compute interest payment | 3 years | ||
Convertible debt | Related party | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Face value of debt | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 |
Minimum | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Maturity of deposit securities | 1 year | ||
Maximum | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Maturity of deposit securities | 3 years |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in the Fair Value of Level 3 Liabilities (Details) - Derivative liability - Others $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Interest make-whole derivative | $ 7 |
Additions | 0 |
Change in fair value | (2) |
Interest make-whole derivative | $ 5 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Debt (Details) - Convertible debt - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Face value | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 |
Fair value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value | 79,642,000 | 78,403,000 | |
Carrying value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value | 83,986,000 | 82,792,000 | |
Related party | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Face value | 10,000,000 | 10,000,000 | $ 10,000,000 |
Related party | Fair value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value | 7,443,000 | 7,327,000 | |
Related party | Carrying value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value | 8,049,000 | 7,947,000 | |
Others | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Face value | 97,000,000 | 97,000,000 | |
Others | Fair value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value | 72,199,000 | 71,076,000 | |
Others | Carrying value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value | $ 75,937,000 | $ 74,845,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)lease | Mar. 31, 2017USD ($) | Dec. 31, 2017 | |
Operating Leased Assets [Line Items] | |||
Rental expense charged to selling, general and administrative expense | $ 964 | $ 1,254 | |
Number of leases entered into | lease | 2 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,018 | $ 3,270 | ||
2,019 | 2,595 | ||
2,020 | 2,584 | ||
2,021 | 2,472 | ||
2,022 | 2,383 | ||
Thereafter | 4,543 | ||
Total minimum rental commitments | $ 17,847 | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Remaining lives of operating leases | 1 year | 1 year | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Remaining lives of operating leases | 5 years | 5 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Provision for (benefit from) income taxes | $ (1,050) | $ 37 | |
Effective tax rate | 4.56% | 0.13% | |
U.S. federal statutory rate | 21.00% | 34.00% |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) | Aug. 25, 2017$ / sharesshares | Aug. 03, 2017shares | Mar. 31, 2018vote$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Class of Stock [Line Items] | ||||
Common stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Number of votes per unit held | vote | 1 | |||
Common stock authorized (shares) | 750,000,000 | 750,000,000 | ||
Preferred stock authorized (shares) | 20,000,000 | |||
Preferred stock, par value (usd per share) | $ / shares | $ 0.0001 | |||
Preferred stock outstanding (in shares) | 0 | 0 | ||
Disposed of by Sale | NantHealth, Inc.'s Provider/Patient Engagement Solutions Business | ||||
Class of Stock [Line Items] | ||||
Shares received for sale of provider/patient engagement solutions business (shares) | 15,000,000 | 15,000,000 | ||
Common stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Components of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 2,718 | $ 250 |
Amount capitalized to internal-use software | 50 | 524 |
Total stock-based compensation cost | 2,768 | 774 |
Series C / Restricted Stock | Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 33 | 15 |
Phantom units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 615 | 270 |
Phantom units | Discontinued operations | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 0 | 906 |
Phantom units | Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 153 | 284 |
Phantom units | Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 253 | (1,432) |
Phantom units | Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 209 | 512 |
Stock options | Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 0 | (35) |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 2,070 | 0 |
Restricted Stock Units | Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 12 | 0 |
Restricted Stock Units | Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 1,954 | 0 |
Restricted Stock Units | Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 104 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | Jun. 01, 2016shares | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($)shares | Dec. 31, 2017shares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015shares | Mar. 31, 2015shares | Dec. 03, 2013shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Reverse stock split, conversion ratio | 0.1818 | ||||||||
Units granted to employees of related companies for providing services (in shares) | 0 | 0 | |||||||
Tax payments related to stock issued | $ | $ 339,000 | $ 2,106,000 | [1] | ||||||
Recognized compensation expense | $ | $ 2,718,000 | 250,000 | |||||||
Stock compensation plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares as a result of conversion of units (in shares) | 28,973 | ||||||||
Unvested restricted stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares as a result of conversion of units (in shares) | 10,462 | ||||||||
Number of restricted stock units unvested (in shares) | 3,490 | 3,490 | |||||||
Unvested phantom units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense expected to be recognized | $ | $ 3,152,000 | ||||||||
Period for recognition of compensation cost not yet recognized | 1 year 2 months 12 days | ||||||||
Number of restricted stock units vested and converted to common stock (in shares) | 320,856 | ||||||||
Number of restricted stock units unvested (in shares) | 938,065 | 1,292,784 | |||||||
Recognized compensation expense | $ | $ 615,000 | 270,000 | |||||||
Unvested phantom units | Employee | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense expected to be recognized | $ | $ 3,015,000 | ||||||||
Period for recognition of compensation cost not yet recognized | 1 year 2 months 12 days | ||||||||
Unvested phantom units | Nonemployee | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense expected to be recognized | $ | $ 137,000 | ||||||||
Period for recognition of compensation cost not yet recognized | 1 year 4 months 12 days | ||||||||
Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense expected to be recognized | $ | $ 6,484,000 | ||||||||
Period for recognition of compensation cost not yet recognized | 2 years 12 days | ||||||||
Number of restricted stock units vested and converted to common stock (in shares) | 42,717 | ||||||||
Number of restricted stock units unvested (in shares) | 2,916,121 | 3,106,024 | |||||||
Recognized compensation expense | $ | $ 2,070,000 | $ 0 | |||||||
Series C units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Units outstanding (in shares) | 3,470,254 | 3,470,254 | |||||||
Series C units | Unvested restricted stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense expected to be recognized | $ | $ 76,000 | ||||||||
Period for recognition of compensation cost not yet recognized | 7 months 6 days | ||||||||
Profits Interests Plan | Series C units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Aggregate units authorized for issuance (in shares) | 63,750,000 | ||||||||
Phantom Unit Plan | Unvested phantom units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Aggregate units authorized for issuance (in shares) | 11,590,909 | ||||||||
Number of shares available for grant | 938,066 | ||||||||
Phantom Unit Plan in United States | Unvested phantom units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock issued for vested phantom units | 208,344 | ||||||||
Shares withheld to satisfy tax withholding obligations | 111,128 | ||||||||
Tax payments related to stock issued | $ | $ 339,000 | ||||||||
Phantom Unit Plan Outside United States | Unvested phantom units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock issued for vested phantom units | 40,063 | ||||||||
Amount of cash paid to settle vested phantom units | $ | $ 101,000 | ||||||||
The 2016 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Aggregate units authorized for issuance (in shares) | 6,000,000 | ||||||||
The 2016 Equity Incentive Plan | Unvested restricted stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares as a result of conversion of units (in shares) | 10,462 | ||||||||
The 2016 Equity Incentive Plan | Series C units | Unvested restricted stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of restricted stock units vested and converted to common stock (in shares) | 3,486,000 | 3,486 | |||||||
Number of restricted stock units unvested (in shares) | 3,490 | 3,490,000 | |||||||
Board Of Director | The 2016 Equity Incentive Plan | Unexercised Stock options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Period for recognition of compensation cost not yet recognized | 2 years 1 month 24 days | ||||||||
Number of stock options issued (in shares) | 500,000 | ||||||||
Exercise price for stock options issued (usd per share) | $ / shares | $ 14 | ||||||||
Unrecognized stock based compensation expense related to stock options | $ | $ 1,000 | ||||||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity of Phantom Units (Details) - Unvested phantom units | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Units | |
Unvested units outstanding, beginning balance (units) | shares | 1,292,784 |
Granted (in units) | shares | 0 |
Vested (in units) | shares | (320,856) |
Forfeited (in units) | shares | (33,863) |
Unvested units outstanding, ending balance (units) | shares | 938,065 |
Weighted Average Grant date value per phantom unit | |
Unvested units outstanding, beginning balance (usd per unit) | $ / shares | $ 15.01 |
Granted (usd per unit) | $ / shares | |
Vested (usd per unit) | $ / shares | 15.75 |
Forfeited (usd per unit) | $ / shares | 14.61 |
Unvested units outstanding, ending balance (usd per unit) | $ / shares | $ 14.76 |
Stock-Based Compensation - Ac70
Stock-Based Compensation - Activity of Restricted Stock Units (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Units | |
Unvested units outstanding, beginning balance (units) | shares | 3,106,024 |
Granted (in units) | shares | 0 |
Vested (in units) | shares | (42,717) |
Forfeited (in units) | shares | (147,186) |
Unvested units outstanding, ending balance (units) | shares | 2,916,121 |
Weighted Average Grant date value per phantom unit | |
Unvested units outstanding, beginning balance (usd per unit) | $ / shares | $ 3.43 |
Granted (usd per unit) | $ / shares | 0 |
Vested (usd per unit) | $ / shares | 4.33 |
Forfeited (usd per unit) | $ / shares | 3.39 |
Unvested units outstanding, ending balance (usd per unit) | $ / shares | $ 3.42 |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliations of the Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net loss per share numerator: | |||
Net loss from continuing operations | $ (21,975) | $ (28,126) | |
Net loss from discontinued operations | (193) | (12,989) | |
Net loss | $ (22,168) | $ (41,115) | [1] |
Weighted-average shares for basic net loss per share (shares) | 108,579,271 | 121,618,039 | |
Effect of dilutive securities (shares) | 0 | 0 | |
Weighted-average shares for dilutive net loss per share (shares) | 108,579,271 | 121,618,039 | |
Basic and diluted net loss per share from continuing operations (usd per share) | $ (0.20) | $ (0.23) | |
Basic and diluted net loss per share from discontinued operations (usd per share) | 0 | (0.11) | |
Basic and diluted total net loss per share (usd per share) | $ (0.20) | $ (0.34) | |
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Unvested restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 3,490 | 6,976 |
Unvested phantom units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 938,065 | 3,515,718 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 500,000 | 0 |
Unexercised Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 2,916,121 | 500,000 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 8,815,655 | 8,815,655 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | Feb. 28, 2018shares | Jun. 01, 2016USD ($)shares | Mar. 08, 2016USD ($) | Jan. 22, 2016USD ($) | Jan. 04, 2016USD ($)$ / shares | Jun. 19, 2015USD ($)termtest | May 31, 2018shares | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 15, 2016USD ($) |
Related Party Transaction [Line Items] | ||||||||||||
Related party receivables | $ 2,349,000 | $ 2,312,000 | ||||||||||
Related party payables, net of receivables balances including related party liabilities | 19,002,000 | 16,004,000 | ||||||||||
Cost of revenue | 11,068,000 | $ 11,518,000 | ||||||||||
Related party promissory note | 112,666,000 | 112,666,000 | ||||||||||
Liquid Genomics | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of voting interest acquired | 100.00% | |||||||||||
Number of shares issued in acquisition | shares | 9,088,362 | |||||||||||
Revenue from acquisition | 48,000 | |||||||||||
Net income (loss) from acquisition | 97,000 | |||||||||||
Liquid Genomics | Forecast | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of shares issued in acquisition | shares | 564,779 | |||||||||||
Convertible debt | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Face value of debt | 107,000,000 | 107,000,000 | $ 107,000,000 | |||||||||
Reseller agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Term of agreement with related party | 5 years 6 months | |||||||||||
Affiliated Entity | Receivable from Ziosoft KK related to sale of Qi Imaging | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party receivables | 2,082,000 | 2,082,000 | ||||||||||
Affiliated Entity | Cambridge Purchase Agreement | Convertible debt | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Face value of debt | $ 10,000,000 | |||||||||||
Accrued and unpaid interest on convertible notes | 162,000 | 24,000 | ||||||||||
Affiliated Entity | Liquid Tumor Profiling Services Agreement | Liquid Genomics | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Revenue from related parties | 45,000 | |||||||||||
Affiliated Entity | Promissory Notes With NantCapital | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Accrued and unpaid interest on convertible notes | 13,028,000 | 11,500,000 | ||||||||||
Related party promissory note | $ 112,666,000 | 125,694,000 | 124,166,000 | |||||||||
Interest bearing on related promissory note | 5.00% | |||||||||||
Per share price of stock shares to repay debt (usd per share) | $ / shares | $ 18.6126 | |||||||||||
Per share price of shares to settle debt (usd per share) | $ / shares | $ 1.484 | |||||||||||
Equity Method Investee | Reseller agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of renewals | term | 3 | |||||||||||
Renewal term | 3 years | |||||||||||
Number of tests to qualify for first renewal option | test | 300,000 | |||||||||||
Number of tests to qualify for second renewal option | test | 570,000 | |||||||||||
Number of tests to qualify for third renewal option | test | 760,000 | |||||||||||
Renewal option if threshold unmet, nonexclusive, number of years | 3 years | |||||||||||
Annual minimum fees, tier one | $ 2,000,000 | |||||||||||
Annual minimum fees, tier two | 25,000,000 | |||||||||||
Annual minimum fees, tier three | $ 50,000,000 | |||||||||||
Related party payables | 1,284,000 | $ 419,000 | ||||||||||
Cost of revenue | 1,176,000 | 1,226,000 | ||||||||||
Equity Method Investee | Promissory Notes With NantOmics | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party promissory note | $ 20,000,000 | 0 | ||||||||||
Interest bearing on related promissory note | 5.00% | |||||||||||
Additional advance on related party promissory note | $ 20,000,000 | |||||||||||
Amount of principal and interest under promissory note converted to shares | $ 40,590,000 | |||||||||||
Number of shares related party promissory note converted | shares | 2,899,297 | |||||||||||
NantWorks | Affiliated Entity | Shared services agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Net selling, general, and administrative service expenses incurred related to services provided by related parties | $ 1,043,000 | $ 1,385,000 |
Related Party Transactions - Ac
Related Party Transactions - Acquisition of Liquid Genomics (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Assets and liabilities of Liquid Genomics at assignment: | |||
Goodwill | $ 115,930 | $ 114,625 | |
Recorded as distribution from additional paid-in capital | 3,785 | ||
Liquid Genomics | |||
Business Acquisition [Line Items] | |||
NantOmics Series A-2 shares transferred, or to be transferred, to NantOmics | $ 8,956 | ||
Assets and liabilities of Liquid Genomics at assignment: | |||
Goodwill | 1,305 | ||
Intangible asset | 4,429 | ||
Other assets | 251 | ||
Liabilities assumed | (814) | ||
Net assets acquired at assignment | $ 5,171 | ||
Recorded as distribution from additional paid-in capital | $ 3,785 |