Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 26, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | NantHealth, Inc. | ||
Entity Central Index Key | 0001566469 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Common Stock, Shares Outstanding | 109,921,647 | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 128.9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 18,305 | $ 61,660 |
Accounts receivable, net | 15,286 | 11,491 |
Inventories | 496 | 839 |
Deferred implementation costs | 1,960 | |
Related party receivables, net | 1,007 | 585 |
Prepaid expenses and other current assets | 4,350 | 5,358 |
Total current assets | 39,444 | 81,893 |
Property, plant, and equipment, net | 22,978 | 18,517 |
Deferred implementation costs, net of current | 3,951 | |
Goodwill | 115,930 | 114,625 |
Intangible assets, net | 64,703 | 69,424 |
Investment in related party | 40,000 | 156,863 |
Related party receivable, net of current | 1,611 | 1,727 |
Other assets | 1,671 | 2,195 |
Total assets | 286,337 | 449,195 |
Current liabilities | ||
Accounts payable | 1,650 | 3,164 |
Accrued and other current liabilities | 13,832 | 18,134 |
Deferred revenue | 16,263 | 10,057 |
Related party payables, net | 4,791 | 4,504 |
Total current liabilities | 36,536 | 35,859 |
Deferred revenue, net of current | 6,704 | 7,126 |
Related party liabilities | 17,708 | 11,500 |
Related party promissory note | 112,666 | 112,666 |
Related party convertible note, net | 8,378 | 7,947 |
Convertible notes, net | 79,433 | 74,845 |
Deferred income taxes, net | 2,437 | 5,838 |
Other liabilities | 19,644 | 112 |
Total liabilities | 283,506 | 255,893 |
Stockholders' equity | ||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 109,491,277 and 108,383,602 shares issued and outstanding at December 31, 2018 (including 1 share of restricted stock) and 2017 (including 3,490 shares of restricted stock), respectively | 11 | 10 |
Additional paid-in capital | 887,289 | 886,669 |
Accumulated deficit | (884,122) | (693,233) |
Accumulated other comprehensive loss | (347) | (144) |
Total stockholders' equity | 2,831 | 193,302 |
Total liabilities and stockholders' equity | $ 286,337 | $ 449,195 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 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) | 109,491,277 | 108,383,602 |
Common stock outstanding (shares) | 109,491,277 | 108,383,602 |
Restricted stock | ||
Number of restricted stock shares not vested | 1 | 3,490 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenue: | |||
Net revenue | $ 89,464 | $ 86,676 | |
Cost of Revenue: | |||
Total cost of revenue | 44,269 | 41,522 | |
Gross profit | 45,195 | 45,154 | |
Operating Expenses: | |||
Selling, general and administrative | 70,763 | 74,976 | |
Research and development | 20,916 | 33,862 | |
Amortization of acquisition-related assets | 4,217 | 4,216 | |
Total operating expenses | 95,896 | 113,054 | |
Loss from operations | (50,701) | (67,900) | |
Interest expense, net | (17,120) | (16,168) | |
Other (loss) income, net | (17,876) | 800 | |
Loss from related party equity method investment, including impairment | (108,409) | (50,334) | [1] |
Loss from continuing operations before income taxes | (194,106) | (133,602) | |
Benefit from income taxes | (3,673) | (2,203) | |
Net loss from continuing operations | (190,433) | (131,399) | |
Loss from discontinued operations, net of tax | (1,719) | (43,812) | |
Net loss | $ (192,152) | $ (175,211) | [1] |
Common Stock | |||
Basic and diluted net loss per share: | |||
Continued operations - common stock (usd per share) | $ (1.74) | $ (1.12) | |
Discontinued operations - common stock (usd per share) | (0.02) | (0.37) | |
Total net loss per common stock (usd per share) | $ (1.76) | $ (1.49) | |
Weighted average shares outstanding: | |||
Basic and diluted (shares) | 109,168,798 | 116,737,860 | |
Software-as-a-service related | |||
Revenue: | |||
Net revenue | $ 65,646 | $ 60,730 | |
Cost of Revenue: | |||
Total cost of revenue | 23,691 | 21,939 | |
Software and hardware related | |||
Revenue: | |||
Net revenue | 4,534 | 7,648 | |
Cost of Revenue: | |||
Total cost of revenue | 3,335 | 4,749 | |
Maintenance | |||
Revenue: | |||
Net revenue | 9,834 | 10,421 | |
Cost of Revenue: | |||
Total cost of revenue | 924 | 749 | |
Total software-related revenue | |||
Revenue: | |||
Net revenue | 80,014 | 78,799 | |
Cost of Revenue: | |||
Total cost of revenue | 32,883 | 32,609 | |
Sequencing and molecular analysis | |||
Revenue: | |||
Net revenue | 3,129 | 2,554 | |
Cost of Revenue: | |||
Total cost of revenue | 8,055 | 6,084 | |
Home health care services | |||
Revenue: | |||
Net revenue | 6,321 | 5,323 | |
Cost of Revenue: | |||
Total cost of revenue | 3,331 | 2,829 | |
Amortization of developed technologies | |||
Cost of Revenue: | |||
Total cost of revenue | $ 4,933 | $ 5,172 | |
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (192,152) | $ (175,211) | [1] | |
Other comprehensive loss, net of reclassification adjustments and taxes: | ||||
Amounts reclassified from accumulated other comprehensive income | [2] | 0 | (977) | |
Other comprehensive (loss) income from foreign currency translation | (203) | 312 | ||
Comprehensive loss | $ (192,355) | $ (175,876) | ||
[1] | The statement for 2017 includes provider/patient engagement solutions business. | |||
[2] | See Note 3 for a discussion of this reclassification of foreign currency translation adjustment. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockhoders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | |
Beginning balance, shares at Dec. 31, 2016 | 121,250,437 | |||||
Beginning balance at Dec. 31, 2016 | $ 411,594 | $ 12 | $ 886,334 | $ (475,273) | $ 521 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 5,670 | 5,670 | ||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes, shares | 2,133,165 | |||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | (5,335) | (5,335) | ||||
Retirement of stock, shares | (15,000,000) | |||||
Retirement of stock | (42,751) | $ (2) | 0 | (42,749) | ||
Other comprehensive (loss) income from foreign currency translation | 312 | |||||
Other comprehensive loss | (665) | (665) | ||||
Net loss | (175,211) | [1] | (175,211) | |||
Ending balance, shares at Dec. 31, 2017 | 108,383,602 | |||||
Ending balance at Dec. 31, 2017 | 193,302 | $ 10 | 886,669 | (693,233) | (144) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 5,936 | 5,936 | ||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes, shares | 1,107,675 | |||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | (2,066) | $ 1 | (2,067) | |||
Assignment of NantHealth Labs, Inc. | (3,249) | (3,249) | ||||
Other comprehensive (loss) income from foreign currency translation | (203) | |||||
Other comprehensive loss | (203) | |||||
Net loss | (192,152) | (192,152) | ||||
Ending balance, shares at Dec. 31, 2018 | 109,491,277 | |||||
Ending balance at Dec. 31, 2018 | $ 2,831 | $ 11 | $ 887,289 | $ (884,122) | $ (347) | |
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Cash flows from operating activities: | ||||
Net loss | $ (192,152) | $ (175,211) | [1] | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Loss on sale of business and dissolution of a business component | 0 | 9,648 | [1] | |
Provision for bad debt expense | 7 | 220 | [1] | |
Inventory provision | 0 | 692 | [1] | |
Depreciation and amortization | 22,355 | 28,055 | [1] | |
Loss from related party equity method investment including impairment loss | 108,409 | 50,334 | [1] | |
Amortization of debt discounts and deferred financing offering cost | 5,018 | 4,417 | [1] | |
Change in fair value of derivatives liability | (7) | (264) | [1] | |
Change in fair value of Bookings Commitment | 16,947 | 0 | [1] | |
Impairment of equity securities | 1,750 | 0 | [1] | |
Deferred income taxes, net | (3,769) | 5,059 | [1] | |
Stock-based compensation | 5,657 | 4,511 | [1] | |
Other noncash expense | 219 | 0 | [1] | |
Changes in operating assets and liabilities, net of business combinations: | ||||
Accounts receivable, net | 406 | 4 | [1] | |
Inventories | 343 | 196 | [1] | |
Related party receivables, net | (306) | 623 | [1] | |
Prepaid expenses and other current assets | 2,270 | (588) | [1] | |
Deferred implementation costs | 48 | (2,214) | [1] | |
Accounts payable | (1,667) | (1,852) | [1] | |
Accrued and other current liabilities | (4,822) | (6,321) | [1] | |
Deferred revenue | 570 | (999) | [1] | |
Related party payables, net | 6,026 | 2,832 | [1] | |
Other assets and liabilities | 3,066 | (290) | [1] | |
Net cash used in operating activities | (29,632) | (81,148) | [1] | |
Cash flows from investing activities: | ||||
Proceeds from sale of business, net of cash disposed | 0 | 1,721 | [1] | |
Assignment of NantHealth Labs, Inc., net of cash acquired (see Note 18) | 68 | 0 | [1] | |
Purchase of property and equipment including internal use software | (10,546) | (13,636) | [1] | |
Purchases of marketable securities | 0 | (360) | [1] | |
Net cash used in investing activities | (10,478) | (12,275) | [1] | |
Cash flows from financing activities: | ||||
Capital lease obligation payment | (93) | 0 | [1] | |
Tax payments related to stock issued, net of stock withheld, for vested phantom units | (2,066) | (5,335) | [1] | |
Net cash used in financing activities | (2,159) | (5,335) | [1] | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (300) | 65 | [1] | |
Net decrease in cash, cash equivalents and restricted cash | (42,569) | (98,693) | [1] | |
Cash, cash equivalents and restricted cash, beginning of period | [1],[2] | 62,010 | 160,703 | |
Cash, cash equivalents and restricted cash, end of period | [2] | 19,441 | 62,010 | [1] |
Supplemental disclosure of cash flow information: | ||||
Interest paid | (5,885) | (5,778) | [1] | |
Interest received | 13 | 63 | [1] | |
Noncash investing and financing activities: | ||||
Noncash consideration (common stock) from sale of Business (Note 3) and subsequent retirement of stock | 0 | 42,749 | [1] | |
Purchases of property and equipment (including internal use software) | (529) | (759) | [1] | |
Assignment of NantHealth Labs, Inc. (see Note 18) | (8,956) | 0 | [1] | |
Restricted Cash | $ 1,136 | $ 350 | ||
[1] | The statement for 2017 includes provider/patient engagement solutions business. | |||
[2] | Cash and cash equivalents included restricted cash of $350 and $1,136 at December 31, 2017 and December 31, 2018, respectively, and $350 at December 31, 2016. |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 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. The Company markets certain of its solutions as a comprehensive integrated solution that includes our molecular sequencing and analysis services, clinical decision support, and payer engagement solutions. The Company also markets molecular sequencing and analysis services, clinical decision support, payer engagement and connected care solutions. 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. The sale enabled the Company to focus on its core competencies of genomic sequencing, clinical decision support, connected care, and payer engagement. As of December 31, 2018 , the Company conducted the majority of its operations in the United States, the United Kingdom, Singapore and Canada. Basis of Presentation and Principles of Consolidation The accompanying Consolidated Financial Statements include the financial statements of NantHealth and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Certain reclassifications have been made to prior period amounts to conform to the current year presentation. The results of operations of the entities disposed of are included in the Consolidated Financial Statements up to the date of disposal and, where appropriate, these operations have been reflected as discontinued operations. The Consolidated Financial Statements for the year ended December 31, 2017 have been derived from the audited Consolidated Financial Statements at that date, without retrospective application of ASC 606, Revenue from Contracts with Customers . The adoption of ASC 606 led to the treatment of certain products and services being accounted for as a single performance obligation. As a result, the Company changed the names of several of its reported revenue 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. Classification in prior periods has been conformed to the current period presentation. The accompanying Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty. 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 | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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 Consolidated and Combined Financial Statements and accompanying notes. Actual results may differ from those estimates. The estimates and assumptions used in the accompanying Consolidated and Combined Financial Statements are based upon management’s evaluation of the relevant facts and circumstances at the balance sheet date. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, accounts receivable allowance, inventory provisions, useful lives of long-lived assets and intangible assets, income taxes, stock-based compensation, impairment of long-lived assets and intangible assets, expected performance against minimum reseller commitments and the fair value of its investments and derivatives liability. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Variable Interest Entities The Company evaluates its ownership interests, contractual rights and other interests in entities to determine if the entities are variable interest entities (“VIEs”), if it has a variable interest in those entities, and the nature and extent of those interests. These evaluations are highly complex and involve judgment, the use of estimates and assumptions based on available historical information. In order for the Company to be the primary beneficiary of a VIE, it must have both (1) the power to direct the activities of a VIE that most significantly affect the VIE’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that, in either case, could potentially be significant to the VIE. The Company consolidates entities of which it is the primary beneficiary. The Company determines whether it is the primary beneficiary of a VIE upon its initial involvement with the VIE and reassesses whether it is the primary beneficiary on an ongoing basis. This determination is based upon an analysis of the design of the VIE, including the VIE’s structure and activities, the power to make significant economic decisions held by the Company and by other parties, and the variable interests owned by the Company and other parties. Revenue from Contracts with Customers Transition to FASB ASC 606 On January 1, 2018, the Company adopted ASC 606 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 and ASC 985-605, which are described below. 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 Software-as-a-Service ("SaaS") contracts, previously treated as deferred implementation costs in current and long-term assets, being treated as software developed for internal use. This resulted 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. On implementing ASC 606, the Company concluded that its accounts receivable should be reported separately from deferred revenue. Therefore, the outstanding and unpaid invoices for undelivered services are not excluded from accounts receivable. This led to an increase of $5,247 in accounts receivable and a corresponding increase in deferred revenue at January 1, 2018. This table summarizes the impact on the Company’s consolidated 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 The impact of the adoption of ASC 606 as of December 31, 2018 is presented here: As of December 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Balance Sheet Accounts receivable, net $ 15,286 $ (5,659 ) $ 9,627 Deferred implementation costs, current — 2,830 2,830 Prepaid expenses and other current assets 4,350 (666 ) 3,684 Property, plant, and equipment, net 22,978 (5,961 ) 17,017 Deferred Implementation costs, net of current — 3,322 3,322 Other assets 1,671 (498 ) 1,173 Deferred revenue, current 16,263 (2,404 ) 13,859 Deferred revenue, net of current 6,704 (529 ) 6,175 Deferred income taxes 2,437 (72 ) 2,365 The impact of the adoption of ASC 606 during the year ended December 31, 2018 is presented here: Year Ended December 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Statement of Operations Total net revenue $ 89,464 $ (2,255 ) $ 87,209 Cost of revenue 44,269 (108 ) 44,161 Operating expenses 95,896 302 96,198 Benefit from income taxes (3,673 ) 225 (3,448 ) The Company's accounting policies under the new standard are applied prospectively and are noted below. Revenue Recognition under ASC 605 Revenue represents the consideration received or receivable from clients for solutions and services provided by the Company. The Company’s revenue is generated from the following sources: • Software-as-a-service (“SaaS”) related - SaaS revenue is generated from clients’ access to and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term, which is usually monthly. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period. • Software and hardware related - Software and hardware revenue is generated from the sale of the Company’s software, on either a perpetual or term license basis, and the sale of hardware. The software is installed on the client’s site or the client’s designated vendor’s site and is not hosted by the Company or by a vendor contracted by the Company. The Company also sells third-party software and hardware to its clients. Software and hardware related revenue also includes revenue from professional services provided that are generally complementary to the software and may or may not be required for the software to function as desired by the client. The services are generally provided in the form of training and implementation services during the software license period and do not include post contract client support. • Maintenance - Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance during the paid PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when and if available basis. • Sequencing and molecular analysis - Sequencing and molecular analysis revenue is generated by the process of performing sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA and proteomic results under the Company's reseller agreement with NantOmics, LLC ("NantOmics") (see Note 18). • 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 and any other services not included in the preceding revenue sources. Revenue is recognized when persuasive evidence of an arrangement exists, services or products have been provided to the client, fees are fixed or determinable, and collectibility is reasonably assured. While most of the Company’s arrangements include short-term payment terms, the Company on occasion provides payment terms to clients in excess of one year from the date of contract signing. The Company does not recognize revenue for arrangements containing these extended payment terms until such payments become due. Certain of the Company’s customer arrangements allow for termination for convenience with advanced notice. 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 also has certain arrangements which allow for termination and refunds of fees in the event that software acceptance by the customer has not occurred. In these instances, the Company will defer all revenue until software acceptance has occurred. The Company's clinical 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 605-45, Principal Agent Considerations . The Company recognizes revenue from these arrangements when all revenue recognition criteria have been met or on a cash basis when it cannot conclude that the fees are fixed or determinable and collectibility is reasonably assured. The Company uses judgment in its assessment of whether the fees are fixed or determinable and whether collectibility is reasonably assured in determining when to recognize revenue in the future as it continues to gain payment experience with its customers. Accordingly, the Company expects to recognize revenue on a cash basis when it cannot conclude that the fees from a particular customer are fixed or determinable and collectibility is reasonably assured until it has a sufficient history to reliably estimate payment patterns from such customer. The Company engages in various multiple-element arrangements, which may generate revenue across any of the sources noted above. For multiple-element software arrangements that involve the sale of the Company’s proprietary software, PCS and other software-related services, vendor-specific objective evidence (“VSOE”) of fair value is required to allocate and recognize revenue for each element. VSOE of fair value is determined based on the price charged in which each deliverable is sold separately. The Company has established VSOE for PCS on certain of its software solutions using the Stated Renewal Method. In this instance, the Company has determined that its stated renewals are substantive and appropriate for use in the Stated Renewal Method. The Company has not yet established VSOE of fair value for any element other than PCS for a portion of its arrangements. In situations where VSOE of fair value exists for PCS but not a delivered element (typically the software license and services elements), the residual method is used to allocate revenue to the undelivered element equal to its VSOE value with the remainder allocated to the delivered elements. In situations in which VSOE of fair value does not exist for all of the undelivered software-related elements, revenue is deferred until only one undelivered element remains (typically the PCS element) and then recognized following the pattern of delivery of the final undelivered element. The Company’s multiple element arrangements typically provide for renewal of PCS terms upon expiration of the original term. The amounts of these PCS renewals are recognized as revenue ratably over the specified PCS renewal period. For non-software arrangements that include multiple-elements, primarily consisting of the Company’s SaaS agreements and research sequencing and molecular analysis agreements, revenue recognition involves the identification of separate units of accounting after consideration of combining and/or segmenting contracts and allocation of the arrangement consideration to the units of accounting on the basis of their relative selling price. The selling price used for each deliverable is based on VSOE of fair value, if available, third party evidence (“TPE”) of fair value if VSOE is not available, or the Company’s best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. In determining the units of accounting for these arrangements, the Company evaluates whether each deliverable has stand-alone value as defined in the FASB’s guidance. The Company’s SaaS arrangements are treated as a single unit of accounting as the professional services do not have standalone value. As a result, the Company recognizes initial system implementation and deployment fees ratably over a period of time from when the system implementation or deployment services are completed and accepted by the customer over the longer of the life of the agreement or the estimated customer life. If an arrangement to deliver software requires significant production, modification or customization of the licensed software, the Company accounts for the arrangement as a construction-type contract. The Company currently recognizes revenue for these arrangements using the completed-contract method as it does not currently have sufficient information to reliably estimate the percentage of completion for these projects. The Company considers these arrangements to be substantially complete upon the clients’ acceptance of the software and related professional services and consistently applies this policy to all contract accounting arrangements. Transaction processing fees are recognized on a monthly basis based on the number of transactions processed and the fee per transaction. Revenue derived from reseller arrangements is recognized when the resellers, in turn, sell the software solution to their clients and installation of the software solution has occurred, provided all other revenue recognition criteria are met. This is commonly referred to as the sell-through method and the Company defers recognition until there is a sell-through by the reseller to an actual end user clients and acceptance by the end user has occurred. The Company expense as incurred incremental direct costs incurred related to the acquisition or origination of customer contracts. Cost of Revenue under ASC 605 Cost of revenue includes associate salaries, bonuses and 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 clients. System support includes ongoing client assistance for software updates and upgrades, installation, training and functionality. All service costs except 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 costs and other direct costs associated with the delivery and hosting of the Company's subscription services. • Software and hardware related - Software and hardware cost of revenue includes third-party software and hardware costs directly associated with solutions, including purchasing and receiving costs. It also includes personnel-related, amortization of deferred implementation costs and other direct costs associated with the Company’s software training and implementation services provided to our clients. • 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 clients. • Sequencing and molecular analysis - Sequencing and molecular analysis cost of revenue includes (a) personnel-related costs associated with these services and (b) amounts due to NantOmics under the reseller agreement (see Note 19) for the sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA, and proteomic results. • Home health care services - Home health care services cost of revenue includes personnel and direct expenses relating to the Company’s nursing and therapy services provided to patients in a home care setting. Revenue Recognition under ASC 606 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 customer 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 customer. 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 this category. • Maintenance - Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance during the paid PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when and if available basis. Revenue is recognized over the maintenance term. • Sequencing and molecular analysis - Sequencing and molecular analysis revenue is generated by providing customers with reports of the results of performing sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA, and/or proteomic testing under the Company's reseller agreement with NantOmics, and from blood samples via its liquid/blood-based tumor profiling platform through the Company’s subsidiary, NantHealth Labs, Inc. ("NantHealth Labs", formerly Liquid Genomics, Inc.) (see Note 18 ). Revenue is recognized at a point in time, when reports of results are transferred to the ordering physician or institution, or when cash is received as described below; or ratably over time for the period of a stand-ready obligation to provide blood-based tumor profiling services. 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 ordering physician or institution, 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 noncancelable 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. Management assesses whether contracts entered into at, or near, the same time, should be combined, based on evaluation of the commercial objectives of the contracts. As of December 31, 2018 , the Company has allocated a total transaction price of $15,666 to unfulfilled performance obligations that 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 of 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 certain 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 be allocated and revenue recognized 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 customers' 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 required 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, transferring 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 its fulfillment of performance obligations. There were revenues of $13,518 recognized during the year ended December 31, 2018 , that were included in the deferred revenue balance at the beginning of the year. 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 reduced to $434 at December 31, 2018 from $796 at January 1, 2018, due to payments from customers. 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 $1,163 at December 31, 2018 and $866 at January 1, 2018, and amortization during the year ended December 31, 2018 was $605 . 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 goods and services delivered as a series and accounted for as a single performance obligation. Cost of Revenue under ASC 606 Cost of revenue includes associate salaries, bonuses and 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 clients. System support includes ongoing client assistance for software updates and upgrades, installation, training and functionality. All service costs except 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 related cost of revenue includes personnel-related costs, amortization of deferred implementation costs, depreciation of internal use software, 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, including costs of design and compliance for proprietary hardware products. • 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 clients. • Sequencing and molecular analysis - Sequencing and molecular analysis cost of revenue includes (a) personnel-related costs associated with these services, (b) amounts due to NantOmics under the reseller agreement (see Note 18 ) for the sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA, and proteomic results, and (c) lab supply and equipment costs from processing blood samples via its liquid/blood-based tumor profiling platform. 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. Selling, General and Administrative Expenses Selling, general and administrative expense consists primarily of shared service fees from NantWorks, personnel-related expenses for our sales and marketing, finance, legal, human resources, and administrative associates, stock-based compensation, and advertising and marketing promotions of NantHealth solutions. This includes amortization of deferred commission costs. It also includes trade show and event costs, sponsorship costs, as well as legal costs, consulting and professional fees, insurance and other corporate and administrative costs. Advertising costs are e |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 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. As of December 31, 2018 , the Company accrued $1,372 in accrued and other current liabilities for these obligations, which includes estimates for certain unresolved items. 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 December 31, 2018, the estimated fair value was $16,947 . The fair value was estimated not to be material as of December 31, 2017 (see Note 12). During the years ended December 31, 2018 and December 31, 2017 , the Company recorded other income of $465 and $348 , respectively, 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 discontinued operations 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: Year Ended 2018 2017 Major line items constituting loss from discontinued operations Net revenue — 7,619 Cost of revenue — 16,318 Selling, general and administrative 1,719 8,891 Research and development — 7,571 Amortization of software license and acquisition-related assets — 1,978 Other expense (income) — 134 Loss from sale of Business — 10,508 Gain from dissolution of a business component — (860 ) Loss from discontinued operations, before income taxes (1,719 ) (36,921 ) Provision for income taxes — 6,891 Loss from discontinued operations, net of income taxes (1,719 ) (43,812 ) 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 the Business. The significant operating and investing cash and noncash items of the discontinued operations included in the Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 were as follows: Year Ended 2018 2017 Depreciation and amortization from discontinued operations $ — $ 8,829 Loss from sale of Business — 10,508 Proceeds from sale of Business — 1,721 Capital expenditures — 4,673 Concurrent with the sale to Allscripts, the Company performed a reorganization of its operations intended to improve efficiency and better align the Company's costs and employment structure with its strategic plans. The reorganization includes a workforce reduction. Upon signing release agreements, impacted employees were eligible to receive severance payments in specified amounts and general benefits for specified periods in accordance with our policies and local requirements. In the year ended December 31, 2017 , the Company recorded restructuring charges of approximately $2,422 associated with the termination of the employees. In connection with the termination, the Company reversed previously estimated bonus accrual of $533 and stock-based compensation of $1,549 as a result of the forfeiture of unvested awards. The Company recorded these charges in cost of revenue, general and administrative, and research and development from continuing operations expenses based on responsibilities of the impacted employees. 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 | 12 Months Ended |
Dec. 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 were also excluded from the deferred revenue balances on the accompanying 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 . Due to the implementation of ASC 606, outstanding and unpaid invoices for undelivered services are included in accounts receivable at December 31, 2018 . Accounts receivable are included on the Consolidated Balance Sheets net of the allowance for doubtful accounts. A summary of activity in the allowance for doubtful accounts for the years ended December 31, 2018 and 2017 is as follows: Balance at beginning of the period Additions to expense (Write offs) / Recoveries Balance at end of the period Year ended December 31, 2018 $ 149 37 (23 ) $ 163 Year ended December 31, 2017 $ 70 79 — $ 149 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Finished goods $ 496 $ 839 Inventories $ 496 $ 839 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities | 12 Months Ended |
Dec. 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 December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Prepaid expenses $ 1,485 $ 2,791 Restricted cash (1) — 350 Other current assets 2,865 2,217 Prepaid expenses and other current assets $ 4,350 $ 5,358 (1) Additional $1,136 of non-current restricted cash as of December 31, 2018 is included in the Company’s Consolidated Balance Sheets as part of Other assets. Restricted cash relates to compensating balances against letters of credit, with an equal maximum credit availability, provided to lessors under operating lease agreements. Accrued and other current liabilities of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Payroll and related costs $ 5,803 $ 7,051 NaviNet acquisition accrued earnout 1,700 5,408 Other accrued and other current liabilities 6,329 5,675 Accrued and other current liabilities $ 13,832 $ 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 December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Prepaid expenses $ 1,485 $ 2,791 Restricted cash (1) — 350 Other current assets 2,865 2,217 Prepaid expenses and other current assets $ 4,350 $ 5,358 (1) Additional $1,136 of non-current restricted cash as of December 31, 2018 is included in the Company’s Consolidated Balance Sheets as part of Other assets. Restricted cash relates to compensating balances against letters of credit, with an equal maximum credit availability, provided to lessors under operating lease agreements. Accrued and other current liabilities of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Payroll and related costs $ 5,803 $ 7,051 NaviNet acquisition accrued earnout 1,700 5,408 Other accrued and other current liabilities 6,329 5,675 Accrued and other current liabilities $ 13,832 $ 18,134 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment, net as of December 31, 2018 and 2017 consisted of the following: December 31, Useful life (in years) 2018 2017 Computer equipment and software 3-5 $ 14,058 $ 13,998 Furniture and equipment 5-7 3,732 3,211 Leasehold and building improvements (1) 7,450 4,233 Property, plant, and equipment, excluding internal use software 25,240 21,442 Less: Accumulated depreciation and amortization (17,884 ) (15,248 ) Property, plant and equipment, excluding internal use software, net 7,356 6,194 Construction in progress, internal use software 903 629 Internal use software 3 31,565 17,690 Less: Accumulated depreciation and amortization, internal use software (16,846 ) (5,996 ) Internal use software, net 15,622 12,323 Property, plant and equipment, net $ 22,978 $ 18,517 (1) Useful lives for leasehold and building improvements represent the term of the lease or the estimated life of the related improvements, whichever is shorter. Depreciation expense from continuing and discontinued operations was $12,643 and $12,363 for the years ended December 31, 2018 and 2017 , respectively, of which $9,189 and $5,792 , respectively, related to internal use capitalized software development costs. Amounts capitalized to internal use software related to continuing operations for the years ended December 31, 2018 and 2017 were $6,690 and $7,333 , respectively. |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Intangible Assets, net The Company’s definite-lived intangible assets as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 Customer Developed Technologies Trade Name Total Gross carrying amount $ 52,000 $ 36,700 $ 3,000 $ 91,700 Accumulated amortization (10,400 ) (14,347 ) (2,250 ) (26,997 ) Intangible assets, net $ 41,600 $ 22,353 $ 750 $ 64,703 December 31, 2017 Customer Developed Technologies Trade Name Total Gross carrying amount $ 52,000 $ 32,000 $ 3,000 $ 87,000 Accumulated amortization (6,933 ) (9,143 ) (1,500 ) (17,576 ) Intangible assets, net $ 45,067 $ 22,857 $ 1,500 $ 69,424 Amortization of definite-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 and discontinued operations was $9,150 and $15,692 for the years ended December 31, 2018 and 2017 , respectively. The estimated future intangibles amortization expense over the next five years and thereafter for the intangible assets that exist as of December 31, 2018 is as follows: Amounts 2019 $ 9,150 2020 8,400 2021 8,400 2022 8,400 2023 3,828 Thereafter 26,525 Total future intangibles amortization expense $ 64,703 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill as of December 31, 2018 and 2017 was $115,930 and $114,625 , respectively, net of goodwill allocated to discontinued operations of $16,444 . The value of goodwill associated with the discontinued operations was 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 NantHealth Labs (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 | 12 Months Ended |
Dec. 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. 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 December 31, 2018, September 30, 2018 and June 30, 2017, the Company determined that other-than-temporary-impairments of $14,768 , $80,444 and $35,991 , respectively, in the value of the investment in NantOmics had occurred, predominantly attributed to declines in the value of goodwill and intangible assets. The decline in fair value at December 31, 2018 was primarily caused by altered pricing assumptions for the reseller agreement between the Company and NantOmics. The declines in fair value at September 30, 2018 and June 30, 2017 were primarily caused by changes in projected GPS Cancer revenue, due to delays in the Company’s GPS Cancer 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 was 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' 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. On February 28, 2018, the Company transferred 9,088,362 of the Series A-2 units to NantOmics as consideration for the assignment of NantHealth Labs, Inc. (see Note 18). An additional 564,779 units were transferred from the Company to NantOmics by May 31, 2018. This reduced NantHealth's ownership of NantOmics to approximately 13.58% . The Company reports its share of NantOmics’ income or loss and the amortization of basis differences using a one quarter lag. For the years ended December 31, 2018 and 2017 , the Company recognized losses of $108,409 and $50,334 , respectively, related to this investment. The Company used the following summarized financial information for NantOmics for the trailing twelve months ended September 30, 2018 and September 30, 2017 to record its equity investment method losses for the years ended December 31, 2018 and 2017 , respectively: Trailing Twelve Months Ended September 30, 2018 September 30, 2017 Sales 5,817 7,103 Gross loss (8,528 ) (7,167 ) Loss from operations (45,481 ) (48,989 ) Impairments on equity (19,976 ) — Net loss (61,031 ) (57,958 ) Net loss attributable to NantOmics (59,622 ) (54,784 ) Other comprehensive loss (4,291 ) — Other investments 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’s 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 December 31, 2018 and 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. During July 2018, the management of IOBS informed their board of directors that a transition plan had been agreed to migrate all current customers of the company to a business partner, as IOBS was unable to profitably serve those customers. The management of IOBS continues to seek ways to monetize the intellectual property held by the company, but future cash flows are uncertain. Therefore, the Company concluded that the investment in IOBS was impaired as of June 30, 2018. Given the level of uncertainty on future cash flows and the limited assets of IOBS available for distribution, the Company concluded the fair value of the investment was zero as of June 30, 2018 and recognized an impairment charge of $1,750 in other expenses, net. 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 | 12 Months Ended |
Dec. 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. (“Cambridge”), an entity affiliated with Dr. Patrick Soon-Shiong, the Company’s Chairman and Chief Executive Officer, 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 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 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 19). 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 Consolidated Balance Sheet. Offering costs of $4,286 related to the issuance of the Convertible Notes are 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 have been 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 December 31, 2018 , the remaining life of the Convertible Notes is approximately 36 months . The following table summarizes how the issuance of the Convertible Notes is reflected in the Company's Consolidated Balance Sheets as of December 31, 2018 and 2017 : Related party Others Total Balance as of December 31, 2018 Gross proceeds $ 10,000 $ 97,000 $ 107,000 Unamortized debt discounts and deferred financing offering costs (1,622 ) (17,567 ) (19,189 ) Net carrying amount $ 8,378 $ 79,433 $ 87,811 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 incurred for the years ended December 31, 2018 and 2017 : Year Ended December 31, 2018 2017 Related party Others Total Related party Others Total Coupon interest expense $ 550 $ 5,335 $ 5,885 $ 550 $ 5,335 $ 5,885 Amortization of debt discounts 420 4,020 4,440 373 3,536 3,909 Amortization of deferred financing offering costs 11 568 579 10 499 509 Total convertible notes interest expense $ 981 $ 9,923 $ 10,904 $ 933 $ 9,370 $ 10,303 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 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 December 31, 2018 and 2017 consisted of the following: December 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 $ 18,306 $ 18,306 $ — $ — Assets - Held-to-maturity securities 1,136 — 1,136 — Liabilities - Bookings Commitment 16,947 — — 16,947 Liabilities - Interest make-whole derivative — — — — 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 securities 361 — 361 — Liabilities - Interest make-whole derivative 7 — — 7 Liabilities - Bookings Commitment — — — — 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 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 December 31, 2018, and 2017 include certificates of deposit. The fair value of these investments approximate carrying values, and the Company has classified these instruments as Level 2 in the fair value hierarchy. Level 3 Inputs Convertible Note derivative liability 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 Consolidated Balance Sheet, with subsequent changes to fair value recorded through earnings at each reporting period on the Company's Consolidated Statements of Operations as change in fair value of derivative liability. The fair value of the derivative liability includes the estimated volatility and risk free rate. The higher/lower the estimated volatility, the higher/lower the value of the liability. The higher/lower the risk free interest rate, the higher/lower the value of the liability. Bookings Commitment The Company values the Bookings Commitment, assumed upon the disposal of the provider/patient engagement solutions business (see Note 3 ), using a Monte Simulation model to calculate average payments due under the Bookings Commitment, based on management's estimate of its performance in securing bookings and resulting annual payments, discounted at the cost of debt in a range of 17% to 20% based on a yield curve, to calculate the fair value of the liability. The change in fair value is recorded as an unrealized gain or loss through earnings within other (loss) income, net, in the Company's Consolidated Statements of Operations. The fair value of the Bookings Commitment is dependent on management's estimate of the probability of success on individual opportunities and the cost of debt applied in discounting the liability. The higher the probability of success on each opportunity, the lower the fair value of the Bookings Commitment liability. The lower the cost of debt applied, the higher the value of the liability. The fair market value for level 3 securities may be highly sensitive to the use of unobservable inputs and subjective assumptions. Generally, changes in significant unobservable inputs may result in significantly lower or higher fair value measurements. The following tables set forth a summary of changes in the fair value of Level 3 liabilities for the years ended December 31, 2018 and 2017 : December 31, 2017 Additions Change in fair value December 31, 2018 Interest make-whole derivative - related party and others 7 — (7 ) — Bookings Commitment — — 16,947 16,947 $ 7 $ — $ 16,940 $ 16,947 December 31, 2016 Additions Change in fair value December 31, 2017 Interest make-whole derivative liability: Related party $ 25 $ — $ (25 ) $ — Others 246 — (239 ) 7 $ 271 $ — $ (264 ) $ 7 As of December 31, 2018 , the estimated 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 December 31, 2018 Related party $ 5,879 $ 8,378 $ 10,000 Others 57,031 79,433 97,000 $ 62,910 $ 87,811 $ 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. The fair value of the convertible notes is determined by unobservable inputs that are supported by minimal non-active market activity and that are significant to determining the fair value of the debt instrument. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 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, noncancelable 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 December 31, 2018 and 2017 , the Company had no material capital leases and the remaining lives of its operating leases ranged from one to six years , certain operating leases include extension options at then current market rates. Rental expense associated with operating leases is charged to expense on a straight-line basis and is included in the Consolidated Statements of Operations. For the years ended December 31, 2018 and 2017 , the rental expense from continuing and discontinued operations was charged to selling, general and administrative expense in the amount of $3,930 and $4,513 respectively. As of December 31, 2018 , the Company’s future minimum rental commitments under its noncancelable operating leases are as follows: Amounts 2019 $ 3,201 2020 3,292 2021 3,143 2022 3,184 2023 2,775 Thereafter 4,933 Total minimum rental commitments $ 20,528 Related Party Promissory Note On January 4, 2016, the Company executed a $112,666 demand promissory note in favor of NantCapital to fund the acquisition of NaviNet, On May 9, 2016 and December 15, 2016, the promissory note with NantCapital was amended to provide that all outstanding principal and accrued interest is due and payable on June 30, 2022, and not on demand and the Company subordinated the Promissory Note in right of payment to the Convertible Notes (see Note 11 ). Indenture Obligations Under Convertible Notes On December 21, 2016, the Company entered into the Indenture relating to the issuance of the $107,000 Convertible Notes, by and between the Company and U.S. Bank National Association 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 (see Note 11 ). Purchase Obligations Under License Agreements and Reseller Agreements In September 2016, the Company entered into a Second Amended and Restated Reseller Agreement for genomic and proteomic sequencing services and related bioinformatics and analysis services with NantOmics, with an effective date of June 19, 2015 (see Note 18). 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. 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 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 initial public offering 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. In September 2018, the lead plaintiffs filed a motion for certification of two plaintiff classes. The Company believes that the claims lack merit and intend 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 have agreed to stay the case until the next case management conference, scheduled for September 17, 2019. 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 July 2018, the court issued an order consolidating the Engleman and Petersen actions as In re NantHealth, Inc. Stockholder Litigation, Lead C.A. No. 2018-0302-AGB, appointing Petersen as lead plaintiff, and designating the Petersen complaint as the operative complaint. On September 20, 2018, the defendants moved to dismiss the complaint. In October 2018, in response to the motion to dismiss, Petersen filed an amended complaint. In November 2018, the defendants moved to dismiss the amended complaint. In January 2019, the defendants filed their opening brief in support of the motion to dismiss the amended complaint. The Company believes that the claims lack merit and intends to vigorously defend the litigation. 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. The parties have agreed to stay the case pending a decision on defendants’ motion to dismiss in the derivative action in the Delaware Court of Chancery. 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. The Company cannot provide assurance that it will prevail in these lawsuits. If the Company is ultimately unsuccessful in these matters, the Company could be required to pay substantial amounts which might materially adversely affect its business, operating results and financial condition. 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 was originally captioned PayPal, Inc. v. NantHealth, Inc., Civil Action No. 18-0780-E. On April 10, 2018, the Superior Court transferred the case to its Business Litigation Section, where it is currently pending and captioned as PayPal, Inc. v. NantHealth, Inc., Civil Action No. 18-0780-BLS1. 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 we were electing to terminate the Sublease Agreement. In its Verified Complaint, and a contemporaneous notice of default that the Company disputed, 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. On August 2, 2018, PayPal requested a status conference with the court in order to discuss PayPal’s potential filing of a motion for partial judgment on the pleadings pursuant to Mass. R. Civ. P. 12(c). A Rule 16 Litigation Control Conference (“Rule 16 Conference”) was held on August 22, 2018. During the Rule 16 Conference, the court denied PayPal’s request for leave to file a motion for partial judgment on the pleadings. Following the Rule 16 Conference, the court issued a tracking order setting deadlines and other procedures that would apply to this action. On September 26, 2018, the Company filed its Assented to Motion for Leave to Amend Its Answer. The court granted the Company's motion on October 3, 2018. On October 9, 2018, the Company filed and served its amended answer and jury demand. On January 8, 2019, the parties filed a joint motion to extend certain of the tracking order deadlines, which motion the court granted by endorsed order dated January 9, 2019. The parties are currently engaged in discovery, including non-party discovery. The Company denies any liability to PayPal and intend to vigorously defend the action. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the provision for income taxes are presented in the following table: Year Ended December 31, 2018 2017 Current: Federal $ 2 $ (498 ) State 42 17 Foreign 52 100 Total current provision 96 (381 ) Deferred: Federal (3,418 ) (3,001 ) State (418 ) 1,179 Foreign 67 — Total deferred benefit (3,769 ) (1,822 ) Provision for (benefit from) income taxes, net $ (3,673 ) $ (2,203 ) The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax loss as a result of the following differences: Year Ended December 31, 2018 2017 United States federal tax at statutory rate 21.00 % 34.00 % Items affecting federal income tax rate: State tax rate, net of federal benefit 3.85 % 3.53 % Valuation allowance (22.00 )% 1.41 % Stock compensation (0.62 )% (1.95 )% "Tax Act" 2017 impact — % (34.83 )% Other adjustments (0.33 )% (0.51 )% Effective income tax rate 1.90 % 1.65 % On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Act") was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the income tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting relating to the TCJA under Accounting Standards Codification Topic 740, “Income Taxes” (“ASC 740”). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for TCJA-related income tax effects is incomplete, but the company is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has completed its evaluation of the potential impacts of the Act of 2017 on its December 31, 2018 financial statements under the one year measurement period provided under SAB 118. No adjustment has been recorded as there were no material changes between the provisional estimate and the final accounting for the Act. The Act subjects a US shareholder to current tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5 Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. We have elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. As of December 31, 2018 and December 31, 2017, the Company had an immaterial amount of unremitted earnings related to certain foreign subsidiaries. The Company intends to continue to reinvest its foreign earnings indefinitely and do not expect to incur any significant taxes related to such amounts. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows: December 31, 2018 2017 Deferred income tax assets: Accounts payable and accrued expenses $ 8,090 $ 1,520 Inventory impairment 495 466 Deferred revenue 5,438 3,458 Allowance for doubtful accounts 546 178 Property, plant and equipment, net 691 1,098 Intangibles 3,409 4,865 Investments 48,836 22,404 Stock compensation 2,159 3,487 Other 1,321 32 Net operating loss carryforwards 104,404 93,689 Less: Valuation allowance (140,788 ) (97,324 ) Total deferred income tax assets 34,601 33,873 Deferred income tax liabilities: State taxes (5,339 ) (3,397 ) Intangible assets, net (25,630 ) (28,768 ) Convertible notes (4,241 ) (5,437 ) Deferred implementation cost (1,633 ) (1,960 ) Other (195 ) (149 ) Total deferred income tax liabilities (37,038 ) (39,711 ) Deferred income taxes, net $ (2,437 ) $ (5,838 ) The realization of deferred income tax assets may be dependent on the Company’s ability to generate sufficient income in future years in the associated jurisdiction to which the deferred tax assets relate. The Company considers all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based on the review of all positive and negative evidence, including a three year cumulative pre-tax loss, the Company concluded that except for the deferred tax liability recorded on amortization of certain goodwill due to its indefinite life and deferred tax liability in excess of deferred tax asset for certain separate state and city jurisdictions, it should record a full valuation allowance against all other net deferred income tax assets at December 31, 2018 and 2017 as none of these deferred income tax assets were more likely than not to be realized as of the balance sheet dates. However, the amount of the deferred income tax assets considered realizable may be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present. In addition, at December 31, 2018 , the position of the valuation allowance for deferred tax assets for which subsequently recognized tax benefits will be credited directly to contributed capital is $350 . A summary of activity in the valuation reserve deducted from deferred tax assets for the years ended December 31, 2018 2017 is as follows: Balance at beginning of the period Additions (Adjustments) Deductions Balance at the end of the period Year to Date December 31, 2018 $ 97,323 43,464 — $ 140,787 Year to Date December 31, 2017 $ 88,291 9,032 — $ 97,323 The Company records a tax benefit from uncertain tax positions only if it is more likely than not the tax position will be sustained with the taxing authority having full knowledge of all relevant information. The Company records a liability for unrecognized tax benefits from uncertain tax positions as discrete tax adjustments in the first period that the more-likely-than-not threshold is not met. As of December 31, 2018 and 2017 , the Company had no unrecognized tax benefits. Unrecognized tax benefits are recorded consistent with ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) , in two parts. In 2017, the Company filed the accounting method change on the account receivable, account payable and other liabilities; therefore, the Company more likely than not did not have any uncertain tax positions in at December 31, 2017. Therefore, the Company reversed the ASC 740 reserve on these items as well as any net operating loss associated with them. December 31, 2018 2017 Balance as of January 1 $ — $ 977 Increases/(decreases) related to tax positions taken during the current year — (977 ) Balance as of December 31 $ — $ — The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018 and 2017 , there are no material interest and penalties associated with unrecognized tax benefits recorded in the Company's Consolidated Statements of Operations or Consolidated Balance Sheets. Any changes to unrecognized tax benefits recorded as of December 31, 2018 that are reasonably possible to occur within the next 12 months are not expected to be material. 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 Company is currently under an IRS audit for the tax year ended December 31, 2016. As of December 31, 2018 , the Company had federal, state and foreign NOL carryforwards of $395,368 , $288,901 and $0 , respectively, expiring at various dates through 2038. Utilization of the NOL carryforwards is subject to annual limitations due to ownership change limitations that occurred or could occur in the future as provided by Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state and foreign provisions. These ownership changes may limit the amount of the NOL carryforwards that can be utilized annually to offset future taxable income. The total NOL amounts above do not include the NOLs expected to expire. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Amended Certificate of Incorporation 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 December 31, 2018 and 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 December 31, 2018 and 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 Consolidated Balance Sheets or Consolidated Statements of Operations as of or for the years ended December 31, 2018 and 2017. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 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 Consolidated Statements of Operations: Year Ended December 31, 2018 2017 Series C / Restricted Stock: Research and development $ 86 $ 111 Phantom units: Cost of revenue 367 186 Selling, general and administrative 4 (341 ) Research and development 347 144 Discontinued operations — (3,591 ) Total phantom units stock-based compensation expense 718 (3,602 ) Stock options: Selling, general and administrative — (49 ) Restricted Stock Units: Cost of revenue 27 26 Selling, general and administrative 4,664 5,223 Research and development 162 2,802 Total restricted stock units stock-based compensation expense 4,853 8,051 Total stock-based compensation expense 5,657 4,511 Amount capitalized to internal-use software and deferred implementation costs 530 784 Total stock-based compensation cost $ 6,187 $ 5,295 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 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 Unit Plan is equal to 11,590,909 minus the number of issued and outstanding Series C units of the Company. As of December 31, 2018 , there were 588,852 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, and the majority of grants are subject to completion of a liquidity event. The Company’s IPO satisfied the liquidity event condition and the phantom units subject to completion of a liquidity event now entitle their holders to cash or noncash 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 at the Company's option 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 Consolidated Balance Sheets. Awards held by participants who are based outside of the United States are estimated to be settled in cash and are classified within accrued and other current liabilities on the Consolidated Balance Sheet as of December 31, 2018 . The following table summarizes the activity related to the unvested phantom units during the years ended December 31, 2018 and 2017 : Number of Units Weighted Unvested phantom units outstanding - December 31, 2016 4,322,081 $ 14.95 Granted 113,656 $ 4.75 Vested (1,440,822 ) $ 14.14 Forfeited (1,702,130 ) $ 15.31 Unvested phantom units outstanding - December 31, 2017 1,292,785 $ 15.01 Vested (518,373 ) $ 15.20 Forfeited (185,560 ) $ 14.63 Unvested phantom units outstanding - December 31, 2018 588,852 $ 14.95 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 during the years ended December 31, 2018 or 2017. Stock-based 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 phantom units with vesting that was subject to the completion of a liquidity event and the straight-line method for other phantom unit awards. 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 December 31, 2018 , the Company had $687 of unrecognized stock-based compensation expense related to phantom units which will be recognized over a weighted-average period of 1.1 years . Of that amount, $680 of unrecognized expense is related to employee grants with a weighted-average period of 1.1 years and $7 of unrecognized expense is related to non-employee grants with a weighted-average period of 1.1 years . During the years ended December 31, 2018 and 2017 , the Company issued 325,312 and 888,569 shares, respectively, of common stock to participants of the Phantom Unit Plan based in the United States, after withholding approximately 177,343 and 492,974 shares, respectively, to satisfy tax withholding obligations. The Company made a cash payment of $569 and $3,059 to cover employee withholding taxes upon the settlement of these vested phantom units during the years ended December 31, 2018 and 2017 , respectively. During the years ended December 31, 2018 and 2017 , the Company also paid $55 and $300 to cash-settle 15,717 and 59,279 vested phantom units, respectively, 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. In April 2018, the Company’s Board of Directors adopted and, in June 2018, the Company’s stockholders approved an amendment to the 2016 Plan, to reserve a further 6,800,000 shares of common stock for issuance pursuant to the 2016 Plan. Following the approval of the amendment, a total of 12,800,000 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 during the year ended December 31, 2016 in connection with the conversion of the Series C units, of which 3,490 and 3,486 were vested and converted into unrestricted common stock during 2018 and 2017 , respectively, and as of December 31, 2018 , there were no shares of restricted stock remaining to be vested and converted. 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 Plan to Mark Burnett, who was a non-employee member of the Company’s Board of Directors, with an exercise price of $14.00 . The award is being accounted for pursuant to ASC 505-50. Stock compensation expense issued to the non-employee 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. Mark Burnett did not seek nomination for re-election at the Annual Meeting of Stockholders on June 8, 2018. As a result, 125,000 unvested options were terminated, and as of December 31, 2018, all previously vested options had expired unexercised. Restricted Stock Units The Company intends to settle all vested restricted stock unit payments held by United States-based participants, except for certain awards to the Chief Operating Officer, in shares of the Company’s common stock and classifies these awards as equity awards in its Consolidated Balance Sheets. Awards held by participants who are based outside of the United States, and those awards agreed with participants to be settled in cash, will be settled in cash and are classified within accrued and other current liabilities on the Consolidated Balance Sheets as of December 31, 2018 and 2017. The following table summarizes the activity related to the unvested restricted stock units during the years ended December 31, 2018 and 2017 : Number of Units Weighted-Average Grant-Date Fair Value Unvested restricted stock units outstanding - December 31, 2016 — $ — Granted 5,147,190 $ 3.43 Vested (1,975,448 ) $ 3.43 Forfeited (65,718 ) $ 3.39 Unvested restricted stock units outstanding - December 31, 2017 3,106,024 $ 3.43 Granted 853,736 $ 1.46 Vested (1,583,399 ) $ 3.18 Forfeited (563,400 ) $ 3.39 Unvested restricted stock units outstanding - December 31, 2018 1,812,961 $ 2.74 Unrecognized compensation expense related to unvested restricted stock units was $3,562 at December 31, 2018 , which is expected to be recognized as expense over the weighted-average period of 1.5 years . During the year ended December 31, 2018, the Company issued 782,364 shares of common stock to participants of the 2016 Plan based in the United States, after withholding approximately 472,965 shares to satisfy tax withholding obligations. During the year ended December 31, 2018, the Company made cash payments of $1,495 to cover employee withholding taxes upon the settlement of these vested restricted stock units. During the year ended December 31, 2018, the Company also paid $300 to cash-settle 100,025 vested restricted stock units by agreement with the Chief Operating Officer in relation to certain grants made to him and to pay cash in lieu of fractional shares for vested units held by participants based in the United States. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income (loss) per share of common stock and redeemable common stock for the years ended December 31, 2018 and 2017 : Year ended December 31, 2018 2017 Common Stock Common Stock Income (loss) per share numerator: Net loss from continuing operations $ (190,433 ) $ (131,399 ) Net loss from discontinued operations (1,719 ) (43,812 ) Net loss for basic and diluted net loss per share $ (192,152 ) $ (175,211 ) Income (loss) per share denominator: Weighted-average shares for basic net income (loss) per share 109,168,798 116,737,860 Effect of dilutive securities — — Weighted-average shares for dilutive net income (loss) per share 109,168,798 116,737,860 Basic and diluted net loss per share from continuing operations $ (1.74 ) $ (1.12 ) Basic and diluted net loss per share from discontinued operations $ (0.02 ) $ (0.37 ) Basic and diluted net loss per share $ (1.76 ) $ (1.49 ) 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: Year Ended December 31, 2018 2017 Unvested restricted stock — 3,490 Unvested phantom units 588,852 1,292,785 Unexercised stock options — 500,000 Unvested restricted stock units 1,812,961 3,106,024 Convertible notes 8,815,655 8,815,655 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 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 was 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. The Company incurred $2,214 and $5,174 of expenses during the years ended December 31, 2018 and 2017 , respectively, related to selling, general and administrative services provided to the Company by NantWorks and affiliates, net of services provided to NantWorks and affiliates. Additionally, the Company incurred $356 and $239 of expenses during the years ended December 31, 2018 and 2017 , respectively, related to research and development services provided by NantWorks and its subsidiaries. Related Party Receivables and Payables As of December 31, 2018 and 2017 , the Company had related party receivables, net of payables of $2,618 and $2,312 , respectively. The related party receivables, net as of December 31, 2018 and 2017 primarily consisted of a receivable from Ziosoft KK of $1,915 and $2,082 , respectively, which was related to the sale of Qi Imaging. As of December 31, 2018 and 2017 , the Company had related party payables, net of receivables balances including related party liabilities of $22,499 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 noncancelable 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 December 31, 2018 and 2017 , the Company had $394 and $419 , respectively, of outstanding related party payables under the Second Amended Reseller Agreement. During the years ended December 31, 2018 and 2017 , direct costs of $5,238 and $4,891 , respectively, 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 12). The accrued and unpaid interest on the Convertible Notes was $24 at both December 31, 2018 and 2017 , as part of current related party liabilities on the Consolidated Balance Sheets. Assignment of NantHealth Labs, Inc. (formerly Liquid Genomics, Inc.) On July 5, 2018 Liquid Genomics, Inc. filed a certificate of amendment to its certificate of incorporation with the secretary of state for Delaware to change its name to NantHealth Labs, Inc. ("NantHealth Labs"). On February 28, 2018, the Company acquired 100% of the equity of NantHealth Labs, a company that provides liquid biopsy analysis of gene expressions and mutations using cell-free 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 were transferred to NantOmics during May 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 NantHealth Labs at February 28, 2018 added $808 to the Company's sequencing and molecular analysis revenue for the year ended December 31, 2018. This revenue was substantially all earned from agreements with affiliates, described below. As a result of consolidating NantHealth Labs at February 28, 2018, the net loss of the Company increased by $2,223 during the year ended December 31, 2018. The intangible assets acquired are amortized over the estimated useful life of 13 years. Amounts NantOmics Series A-2 shares transferred, or to be transferred, to NantOmics $ 8,956 Assets and liabilities of NantHealth Labs 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 Agreements In March 2018, NantHealth Labs, a wholly-owned subsidiary of the Company, and NantKwest, Inc. ("NantKwest"), an affiliate, entered into agreements whereby NantHealth Labs is providing liquid tumor profiling services to NantKwest for clinical trials, on an annual, stand-ready, basis from the date of the first test of each participant, with revenues recognized ratably over time for the period of the stand-ready obligation. In June 2018, NantHealth Labs entered into similar agreements to provide liquid tumor profiling services to Altor BioScience ("Altor"), NantCell, Inc. ("NantCell"), and NantBioScience, Inc. ("NantBio"), all affiliates of the Company. Under these agreements, the Company recorded $590 of revenue during the year ended December 31, 2018. As of December 31, 2018, the Company has $540 of accounts receivable from related parties and $375 of deferred revenue due to these agreements. 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 December 31, 2018 and 2017 , the total principal and interest outstanding on the note amounted to $130,374 and $124,166 , respectively. The accrued and unpaid interest on the note was $17,708 and $11,500 at December 31, 2018 and 2017 , respectively, as part of noncurrent related party liabilities on the Consolidated Balance Sheet. 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 December 31, 2018 and 2017 , there was no outstanding balance on the promissory note. On August 8, 2018, the Company executed a promissory note in favor of NantCapital, with a maturity date of June 15, 2022. The note bears interest at a per annum rate of 9.75% and is compounded annually, with interest payments on outstanding amounts due on June 15 and December 15 of each calendar year. No advances have currently been made under the note. The note allows the Company to request advances, up to a maximum commitment of $100,000 . Advances can be requested of up to $10,000 per calendar quarter until March 31, 2019 and, following that, up to $20,000 per calendar quarter until December 31, 2020, after which no further advances can be requested. The promissory note is subordinated to the Convertible Notes (see Note 11). The promissory note includes customary negative covenants and a Performance to Plan - Adjusted EBITDA covenant that stipulates, in order for the Company to draw on the promissory note, the profit measure, as defined in the agreement, may not negatively deviate from board approved financial plans by more than 25% . At December 31, 2018 , the Company was in compliance with the covenants. |
Employee Retirement Plan
Employee Retirement Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plan | Employee Retirement Plan The Company has a qualified defined contribution plan (the “NantHealth 401(k) Plan”) under Section 401(k) of the Internal Revenue Code covering eligible associates, including associates at certain of its subsidiaries. Associate contributions to the NantHealth 401(k) Plan are voluntary. The Company contributes a 100% match up to 3.0% of the participant’s eligible annual compensation, which contribution fully vests after three years of service. Participants’ contributions are limited to their annual tax deferred contribution limit as allowed by the Internal Revenue Service. For the years ended December 31, 2018 and 2017 , the Company’s total matching contributions to the NantHealth 401(k) Plan were $1,328 and $2,050 , respectively. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (Unaudited) | Selected Quarterly Financial Information (Unaudited) The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of the years ended December 31, 2018 and 2017 (Unaudited): Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net revenue $ 22,263 $ 22,047 $ 22,292 $ 22,862 Cost of revenue 11,068 10,582 11,226 11,393 Gross profit 11,195 11,465 11,066 11,469 Operating expenses 26,942 25,331 22,890 20,733 Loss from operations (15,747 ) (13,866 ) (11,824 ) (9,264 ) Net loss from continuing operations (21,975 ) (21,806 ) (97,432 ) (49,220 ) (Loss) gain from discontinued operations, net of tax (193 ) (1,591 ) (32 ) 97 Net loss (22,168 ) (23,397 ) (97,464 ) (49,123 ) Basic and diluted net loss per share: Continued operations - common stock $ (0.20 ) $ (0.20 ) $ (0.89 ) $ (0.45 ) Discontinued operations - common stock $ — $ (0.01 ) $ — $ — Total net loss per common stock $ (0.20 ) $ (0.21 ) $ (0.89 ) $ (0.45 ) Basic and diluted net income per redeemable common stock N/A N/A N/A N/A Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Net revenue $ 19,104 $ 23,514 $ 21,760 $ 22,298 Cost of revenue 11,518 9,652 11,472 8,880 Gross profit 7,586 13,862 10,288 13,418 Operating expenses 27,415 28,655 26,324 30,660 Loss from operations (19,829 ) (14,793 ) (16,036 ) (17,242 ) Net loss from continuing operations (28,126 ) (57,696 ) (23,015 ) (22,562 ) (Loss) income from discontinued operations, net of tax (12,989 ) (12,368 ) (19,383 ) 928 Net loss (41,115 ) (70,064 ) (42,398 ) (21,634 ) Basic and diluted net income (loss) per share: Continued operations - common stock $ (0.23 ) $ (0.48 ) $ (0.20 ) $ (0.21 ) Discontinued operations - common stock $ (0.11 ) $ (0.10 ) $ (0.17 ) $ 0.01 Total net loss per common stock $ (0.34 ) $ (0.58 ) $ (0.37 ) $ (0.20 ) Basic and diluted net income per redeemable common stock N/A N/A N/A N/A |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 21, 2019, we received a notice from Nasdaq stating that we had regained compliance with Nasdaq Listing Rule 5450(a) (1) (the “Minimum Bid Price Rule”) because our common stock maintained a minimum closing bid price of $1.00 for 10 consecutive business days. This followed the notice of January 16, 2019, stating that we were not in compliance the Minimum Bid Price Rule, because our common stock failed to maintain a minimum closing bid price of $1.00 for 30 consecutive business days. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
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 Consolidated and Combined Financial Statements and accompanying notes. Actual results may differ from those estimates. The estimates and assumptions used in the accompanying Consolidated and Combined Financial Statements are based upon management’s evaluation of the relevant facts and circumstances at the balance sheet date. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, accounts receivable allowance, inventory provisions, useful lives of long-lived assets and intangible assets, income taxes, stock-based compensation, impairment of long-lived assets and intangible assets, expected performance against minimum reseller commitments and the fair value of its investments and derivatives liability. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. |
Variable Interest Entities | Variable Interest Entities The Company evaluates its ownership interests, contractual rights and other interests in entities to determine if the entities are variable interest entities (“VIEs”), if it has a variable interest in those entities, and the nature and extent of those interests. These evaluations are highly complex and involve judgment, the use of estimates and assumptions based on available historical information. In order for the Company to be the primary beneficiary of a VIE, it must have both (1) the power to direct the activities of a VIE that most significantly affect the VIE’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that, in either case, could potentially be significant to the VIE. The Company consolidates entities of which it is the primary beneficiary. The Company determines whether it is the primary beneficiary of a VIE upon its initial involvement with the VIE and reassesses whether it is the primary beneficiary on an ongoing basis. This determination is based upon an analysis of the design of the VIE, including the VIE’s structure and activities, the power to make significant economic decisions held by the Company and by other parties, and the variable interests owned by the Company and other parties. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Transition to FASB ASC 606 On January 1, 2018, the Company adopted ASC 606 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 and ASC 985-605, which are described below. 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 Software-as-a-Service ("SaaS") contracts, previously treated as deferred implementation costs in current and long-term assets, being treated as software developed for internal use. This resulted 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. On implementing ASC 606, the Company concluded that its accounts receivable should be reported separately from deferred revenue. Therefore, the outstanding and unpaid invoices for undelivered services are not excluded from accounts receivable. This led to an increase of $5,247 in accounts receivable and a corresponding increase in deferred revenue at January 1, 2018. This table summarizes the impact on the Company’s consolidated 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 The impact of the adoption of ASC 606 as of December 31, 2018 is presented here: As of December 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Balance Sheet Accounts receivable, net $ 15,286 $ (5,659 ) $ 9,627 Deferred implementation costs, current — 2,830 2,830 Prepaid expenses and other current assets 4,350 (666 ) 3,684 Property, plant, and equipment, net 22,978 (5,961 ) 17,017 Deferred Implementation costs, net of current — 3,322 3,322 Other assets 1,671 (498 ) 1,173 Deferred revenue, current 16,263 (2,404 ) 13,859 Deferred revenue, net of current 6,704 (529 ) 6,175 Deferred income taxes 2,437 (72 ) 2,365 The impact of the adoption of ASC 606 during the year ended December 31, 2018 is presented here: Year Ended December 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Statement of Operations Total net revenue $ 89,464 $ (2,255 ) $ 87,209 Cost of revenue 44,269 (108 ) 44,161 Operating expenses 95,896 302 96,198 Benefit from income taxes (3,673 ) 225 (3,448 ) The Company's accounting policies under the new standard are applied prospectively and are noted below. Revenue Recognition under ASC 605 Revenue represents the consideration received or receivable from clients for solutions and services provided by the Company. The Company’s revenue is generated from the following sources: • Software-as-a-service (“SaaS”) related - SaaS revenue is generated from clients’ access to and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term, which is usually monthly. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period. • Software and hardware related - Software and hardware revenue is generated from the sale of the Company’s software, on either a perpetual or term license basis, and the sale of hardware. The software is installed on the client’s site or the client’s designated vendor’s site and is not hosted by the Company or by a vendor contracted by the Company. The Company also sells third-party software and hardware to its clients. Software and hardware related revenue also includes revenue from professional services provided that are generally complementary to the software and may or may not be required for the software to function as desired by the client. The services are generally provided in the form of training and implementation services during the software license period and do not include post contract client support. • Maintenance - Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance during the paid PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when and if available basis. • Sequencing and molecular analysis - Sequencing and molecular analysis revenue is generated by the process of performing sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA and proteomic results under the Company's reseller agreement with NantOmics, LLC ("NantOmics") (see Note 18). • 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 and any other services not included in the preceding revenue sources. Revenue is recognized when persuasive evidence of an arrangement exists, services or products have been provided to the client, fees are fixed or determinable, and collectibility is reasonably assured. While most of the Company’s arrangements include short-term payment terms, the Company on occasion provides payment terms to clients in excess of one year from the date of contract signing. The Company does not recognize revenue for arrangements containing these extended payment terms until such payments become due. Certain of the Company’s customer arrangements allow for termination for convenience with advanced notice. 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 also has certain arrangements which allow for termination and refunds of fees in the event that software acceptance by the customer has not occurred. In these instances, the Company will defer all revenue until software acceptance has occurred. The Company's clinical 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 605-45, Principal Agent Considerations . The Company recognizes revenue from these arrangements when all revenue recognition criteria have been met or on a cash basis when it cannot conclude that the fees are fixed or determinable and collectibility is reasonably assured. The Company uses judgment in its assessment of whether the fees are fixed or determinable and whether collectibility is reasonably assured in determining when to recognize revenue in the future as it continues to gain payment experience with its customers. Accordingly, the Company expects to recognize revenue on a cash basis when it cannot conclude that the fees from a particular customer are fixed or determinable and collectibility is reasonably assured until it has a sufficient history to reliably estimate payment patterns from such customer. The Company engages in various multiple-element arrangements, which may generate revenue across any of the sources noted above. For multiple-element software arrangements that involve the sale of the Company’s proprietary software, PCS and other software-related services, vendor-specific objective evidence (“VSOE”) of fair value is required to allocate and recognize revenue for each element. VSOE of fair value is determined based on the price charged in which each deliverable is sold separately. The Company has established VSOE for PCS on certain of its software solutions using the Stated Renewal Method. In this instance, the Company has determined that its stated renewals are substantive and appropriate for use in the Stated Renewal Method. The Company has not yet established VSOE of fair value for any element other than PCS for a portion of its arrangements. In situations where VSOE of fair value exists for PCS but not a delivered element (typically the software license and services elements), the residual method is used to allocate revenue to the undelivered element equal to its VSOE value with the remainder allocated to the delivered elements. In situations in which VSOE of fair value does not exist for all of the undelivered software-related elements, revenue is deferred until only one undelivered element remains (typically the PCS element) and then recognized following the pattern of delivery of the final undelivered element. The Company’s multiple element arrangements typically provide for renewal of PCS terms upon expiration of the original term. The amounts of these PCS renewals are recognized as revenue ratably over the specified PCS renewal period. For non-software arrangements that include multiple-elements, primarily consisting of the Company’s SaaS agreements and research sequencing and molecular analysis agreements, revenue recognition involves the identification of separate units of accounting after consideration of combining and/or segmenting contracts and allocation of the arrangement consideration to the units of accounting on the basis of their relative selling price. The selling price used for each deliverable is based on VSOE of fair value, if available, third party evidence (“TPE”) of fair value if VSOE is not available, or the Company’s best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. In determining the units of accounting for these arrangements, the Company evaluates whether each deliverable has stand-alone value as defined in the FASB’s guidance. The Company’s SaaS arrangements are treated as a single unit of accounting as the professional services do not have standalone value. As a result, the Company recognizes initial system implementation and deployment fees ratably over a period of time from when the system implementation or deployment services are completed and accepted by the customer over the longer of the life of the agreement or the estimated customer life. If an arrangement to deliver software requires significant production, modification or customization of the licensed software, the Company accounts for the arrangement as a construction-type contract. The Company currently recognizes revenue for these arrangements using the completed-contract method as it does not currently have sufficient information to reliably estimate the percentage of completion for these projects. The Company considers these arrangements to be substantially complete upon the clients’ acceptance of the software and related professional services and consistently applies this policy to all contract accounting arrangements. Transaction processing fees are recognized on a monthly basis based on the number of transactions processed and the fee per transaction. Revenue derived from reseller arrangements is recognized when the resellers, in turn, sell the software solution to their clients and installation of the software solution has occurred, provided all other revenue recognition criteria are met. This is commonly referred to as the sell-through method and the Company defers recognition until there is a sell-through by the reseller to an actual end user clients and acceptance by the end user has occurred. The Company expense as incurred incremental direct costs incurred related to the acquisition or origination of customer contracts. Cost of Revenue under ASC 605 Cost of revenue includes associate salaries, bonuses and 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 clients. System support includes ongoing client assistance for software updates and upgrades, installation, training and functionality. All service costs except 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 costs and other direct costs associated with the delivery and hosting of the Company's subscription services. • Software and hardware related - Software and hardware cost of revenue includes third-party software and hardware costs directly associated with solutions, including purchasing and receiving costs. It also includes personnel-related, amortization of deferred implementation costs and other direct costs associated with the Company’s software training and implementation services provided to our clients. • 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 clients. • Sequencing and molecular analysis - Sequencing and molecular analysis cost of revenue includes (a) personnel-related costs associated with these services and (b) amounts due to NantOmics under the reseller agreement (see Note 19) for the sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA, and proteomic results. • Home health care services - Home health care services cost of revenue includes personnel and direct expenses relating to the Company’s nursing and therapy services provided to patients in a home care setting. Revenue Recognition under ASC 606 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 customer 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 customer. 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 this category. • Maintenance - Maintenance revenue includes ongoing post contract client support (“PCS”) or maintenance during the paid PCS term. Additionally, PCS includes ongoing development of software updates and upgrades provided to the client on a when and if available basis. Revenue is recognized over the maintenance term. • Sequencing and molecular analysis - Sequencing and molecular analysis revenue is generated by providing customers with reports of the results of performing sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA, and/or proteomic testing under the Company's reseller agreement with NantOmics, and from blood samples via its liquid/blood-based tumor profiling platform through the Company’s subsidiary, NantHealth Labs, Inc. ("NantHealth Labs", formerly Liquid Genomics, Inc.) (see Note 18 ). Revenue is recognized at a point in time, when reports of results are transferred to the ordering physician or institution, or when cash is received as described below; or ratably over time for the period of a stand-ready obligation to provide blood-based tumor profiling services. 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 ordering physician or institution, 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 noncancelable 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. Management assesses whether contracts entered into at, or near, the same time, should be combined, based on evaluation of the commercial objectives of the contracts. As of December 31, 2018 , the Company has allocated a total transaction price of $15,666 to unfulfilled performance obligations that 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 of 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 certain 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 be allocated and revenue recognized 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 customers' 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 required 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, transferring 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 its fulfillment of performance obligations. There were revenues of $13,518 recognized during the year ended December 31, 2018 , that were included in the deferred revenue balance at the beginning of the year. 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 reduced to $434 at December 31, 2018 from $796 at January 1, 2018, due to payments from customers. 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 $1,163 at December 31, 2018 and $866 at January 1, 2018, and amortization during the year ended December 31, 2018 was $605 . 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 goods and services delivered as a series and accounted for as a single performance obligation. |
Cost of Revenue under ASC 606 | Cost of Revenue under ASC 606 Cost of revenue includes associate salaries, bonuses and 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 clients. System support includes ongoing client assistance for software updates and upgrades, installation, training and functionality. All service costs except 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 related cost of revenue includes personnel-related costs, amortization of deferred implementation costs, depreciation of internal use software, 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, including costs of design and compliance for proprietary hardware products. • 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 clients. • Sequencing and molecular analysis - Sequencing and molecular analysis cost of revenue includes (a) personnel-related costs associated with these services, (b) amounts due to NantOmics under the reseller agreement (see Note 18 ) for the sequencing and analysis of whole genome DNA (or whole exome DNA based on tissue quantity and quality), RNA, and proteomic results, and (c) lab supply and equipment costs from processing blood samples via its liquid/blood-based tumor profiling platform. 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. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expense consists primarily of shared service fees from NantWorks, personnel-related expenses for our sales and marketing, finance, legal, human resources, and administrative associates, stock-based compensation, and advertising and marketing promotions of NantHealth solutions. This includes amortization of deferred commission costs. It also includes trade show and event costs, sponsorship costs, as well as legal costs, consulting and professional fees, insurance and other corporate and administrative costs. Advertising costs are expensed as incurred. |
Research and Development Expenses | Research and Development Expenses Research and development (“R&D”) costs incurred to establish the technological feasibility of software to be sold are expensed as incurred. These expenses include the costs of the Company’s proprietary R&D efforts, as well as costs incurred in connection with certain licensing arrangements. Development costs, consisting primarily of employee salaries and benefits (including stock-based compensation), incurred in the research and development of new software products and maintenance to existing software products are expensed as incurred. These costs are associated with both the preliminary project stage and post-implementation stage of internally developed software. Costs associated with the application development stage are capitalized. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation arrangements granted to employees in accordance with ASC 718, Compensation–Stock Compensation, by measuring the grant date fair value of the award and recognizing the resulting expense over the period during which the employee is required to perform service in exchange for the award. The Company accounts for stock-based compensation arrangements issued to non-employees using the fair value approach prescribed by ASC 505-50, Equity-Based Payments to Non-Employees. The value of non-employee stock-based compensation is re-measured at the end of each reporting period until the award vests and is recognized as stock-based compensation expense over the period during which the non-employee provides the services. Stock-based compensation expense for both employee and non-employee awards is recognized on a straight-line basis over the appropriate service period for awards that are only subject to service conditions and is recognized using the accelerated attribution method for awards that are subject to performance conditions. Stock-based compensation expense is only recognized for awards subject to performance conditions if it is probable that the performance condition will be achieved. All excess tax benefits and tax deficiencies are recognized as income tax benefit or expense in the income statement as discrete items in the reporting period in which they occur, and such tax benefits and tax deficiencies are not included in the estimate of an entity’s annual effective tax rate, applied on a prospective basis. The recognition of excess tax benefits is not deferred until the benefit is realized through a reduction to taxes payable. When the Company applies the treasury stock method, in calculating diluted earnings per share, excess tax benefits, if applicable, are excluded and deficiencies from the calculation of assumed proceeds since such amounts are recognized in the income statement. Excess tax benefits if applicable, are classified as operating activities in the same manner as other cash flows related to income taxes on the statement of cash flows. The Company has elected to account for forfeitures when they occur. Cash paid by the Company when directly withholding shares for tax withholding purposes is classified as a financing activity in the Consolidated Statements of Cash Flows (see Note 14 and Note 16). |
Change in Fair Value of Derivative Liability | Change in Fair Value of Derivative Liability The Company has classified the interest make-whole provision of its convertible notes and related party convertible note due June 2021 and issued in December 2016 as a derivative liability as part of other liabilities and related party liabilities, respectively, in the Consolidated Balance Sheets and is recorded at fair value. This derivative liability is subject to re-measurement at each balance sheet date, and the Company recognizes any change in fair value in the Company's Consolidated Statements of Operations as a change in fair value of the derivative liability. The change in the fair value of this derivative liability is primarily due to the change in the value of the Company's common stock (see Note 13). |
Change In Fair Value Of Bookings Commitment | Change in Fair Value of Bookings Commitment The Company has classified the Bookings Commitment assumed on the disposal of the provider/patient engagement solutions business described in Note 3 as part of other liabilities in the Consolidated Balance Sheets. This liability is subject to re-measurement at each balance sheet date, and the Company recognizes any changes in fair value within other expenses. The change in the fair value of this liability is primarily due to changes in management's estimates of performance against the Bookings Commitment. |
Income Taxes | Income Taxes The Company records the federal and state tax provision of the consolidated group and foreign tax provision of its foreign subsidiaries. ASC 740, Income Taxes , provides the accounting treatment for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognizing, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As part of the process of preparing our Consolidated Financial Statements, the Company is required to estimate its provision for income taxes in each of the tax jurisdictions in which the Company conducts business. This process involves estimating our actual current tax expense in conjunction with the evaluation and measurement of temporary differences resulting from differing treatment of certain items for tax and accounting purposes. These temporary differences result in the establishment of deferred tax assets and liabilities, which are recorded on a net basis and included in the Company's Consolidated Balance Sheets. The Company then evaluates on a periodic basis the probability that the net deferred tax assets will be recovered and therefore realized from future taxable income and to the extent the Company believes that recovery is not more likely than not, a valuation allowance is established to address such risk resulting in an additional related provision for income taxes during the period. Significant management judgment is required in determining its provision for income taxes, its deferred tax assets and liabilities, tax contingencies, unrecognized tax benefits, and any required valuation allowance, including taking into consideration the probability of the tax contingencies being incurred. Management assesses this probability based upon information provided by its tax advisers, its legal advisers and similar tax cases. If at a later time its assessment of the probability of these tax contingencies changes, its accrual for such tax uncertainties may increase or decrease. The Company has a valuation allowance due to management’s overall assessment of risks and uncertainties related to its future ability to realize and, hence, utilize certain deferred tax assets, primarily consisting of net operating losses, carry forward temporary differences and future tax deductions. The effective tax rate for annual and interim reporting periods could be impacted if uncertain tax positions that are not recognized are settled at an amount which differs from the Company's estimate. Finally, if the Company is impacted by a change in the valuation allowance resulting from a change in judgment regarding the realizability of deferred tax assets, such effect will be recognized in the interim period in which the change occurs. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period, adjusted to give effect to potentially dilutive securities. However, potentially dilutive securities are excluded from the computation of diluted net income (loss) per share to the extent that their effect is anti-dilutive. The Company applies treasury method in calculating weighted average dilutive number of shares for its stock plans. |
Foreign Currency Translation | Foreign Currency Translation The Company has operations and holds assets in various foreign countries. The local currency is the functional currency for the Company’s subsidiaries in the United Kingdom, Canada and Singapore. Assets and liabilities are translated at end-of-period exchange rates while revenues and expenses are translated at the average exchange rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income until the translation adjustments are realized. |
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 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 consolidated unit level. Accordingly, management has determined that the Company operates in one reportable segment. |
Business Combinations | Business Combinations Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Management routinely monitors the factors impacting the acquired assets and liabilities. Transaction related costs are expensed as incurred. The operating results of the acquired business are reflected in the Company’s Consolidated Financial Statements as of the acquisition date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1—Quoted prices for identical assets or liabilities in active markets; • Level 2—Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable; and • Level 3—Unobservable inputs that reflect estimates and assumptions. The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable, notes payable, deferred revenue, and other current monetary assets and liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments. In accordance with this guidance, the Company measures its cash equivalents and marketable securities at fair value. The Company’s cash equivalents are classified within Level 1. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. The Company's investment securities as of December 31, 2018 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 Company's fair value estimate of the Bookings Commitment and convertibles notes and interest make-whole provision of the convertible notes are based on Level 3 inputs. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. These amounts are stated at cost, which approximates fair value. At December 31, 2018 and 2017 , cash equivalents were deposited in financial institutions and consisted of immediately available fund balances. Cash and cash equivalents are maintained at stable financial institutions, generally at amounts in excess of federally insured limits, which represents a concentration of credit risk. The Company has not experienced any losses on deposits of cash and cash equivalents to date. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectibility of accounts. The Company regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice and the collection history of each client to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectible are charged against bad debt expense when identified. Prior to the adoption of ASC 606, the Company reported accounts receivable net of amounts related to post contract client support (“PCS”) and other services that were billed but not yet delivered at each period end. |
Concentrations of Risk | Concentrations of Risk The following table summarizes the number of customers that individually comprise greater than 10% of revenues and/or 10% of accounts receivable, and their aggregate percentages of total revenues and total billed and unbilled accounts receivable: Period Significant Customers Percentage of Total Revenues Percentage of Total Accounts Receivable A B C D E A B C D E Year Ended December 31, 2018 4 15.2 % 12.4 % 11.6 % — % — % — % — % 11.6 % 10.8 % — % Year Ended December 31, 2017 5 14.1 % 11.0 % — % — % — % — % 15.7 % 18.1 % 11.3 % 10.1 % |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first out basis) and net realizable value at December 31, 2018 and 2017. |
Insurance Recoveries | Insurance Recoveries The Company records probable insurance recoveries gross of related liabilities. The income and expense related to these amounts are recorded net in selling, general and administrative expenses. If the recoveries exceed the loss recognized in the financial statements, such recoveries are recorded in other income, net once any contingencies relating to the insurance claim have been resolved. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment received in connection with business combinations are recorded at fair value. Property, plant and equipment acquired in the normal course of business are recorded at cost. Depreciation is computed on a straight line basis over the estimated useful lives of the related assets (see Note 7). Maintenance and repairs are charged to expense as incurred while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. The Company accounts for the costs of computer software obtained or developed for internal use in accordance with ASC 350, Intangibles—Goodwill and Other . Computer software development costs are expensed as incurred, except for internal use software costs that qualify for capitalization as described below, and include employee related expenses, including salaries, benefits and stock-based compensation expenses; costs of computer hardware and software; and costs incurred in developing features and functionality. These capitalized costs are included in property and equipment on the Consolidated Balance Sheets. The Company expenses costs incurred in the preliminary project and post implementation stages of software development and capitalizes costs incurred in the application development stage and costs associated with significant enhancements to existing internal use software applications. Software costs are amortized using the straight-line method commencing when the software project is ready for its intended use. |
Deferred Implementation Costs | Deferred Implementation Costs The Company provides SaaS and information technology management services under long-term arrangements which require the Company to perform system implementation activities. In some cases, the arrangements either contain provisions requiring customer acceptance of the setup activities prior to commencement of the ongoing services arrangement or the system implementation services do not have separate value from the service revenue. Up-front fees billed during the setup phase for these arrangements are deferred and setup costs that are direct and incremental to the contract are capitalized. The costs deferred consist of employee compensation (including stock-based compensation) and benefits for those employees directly involved with performing system implementation or deployment services, as well as other direct and incremental costs. The Company defers costs estimated to be realizable based on contracted implementation revenue and estimated margin from the service contract. The Company periodically reviews the deferred implementation contracts for recoverability. The costs are amortized to cost of revenue ratably over a period of time from when the system implementation or deployment services are completed and accepted to the end of the contract term or the expected customer life, whichever is longer. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets 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. In the event there is a change in reporting units or segments, the Company will test for impairment at the reporting unit. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. As part of the annual impairment test, the Company may conduct an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In a qualitative assessment, the Company would consider the macroeconomic conditions, including any deterioration of general conditions, industry and market conditions, including any deterioration in the environment where the reporting unit operates, increased competition, changes in the products/services and regulator and political developments; cost of doing business; overall financial performance, including any declining cash flows and performance in relation to planned revenues and earnings in past periods; other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation, and events affecting the reporting unit, including changes in the carrying value of net assets. If an optional qualitative goodwill impairment assessment is not performed, the Company is required to determine the fair value of each reporting unit. If a reporting unit’s fair value is lower than its carrying value, the Company must determine the amount of implied goodwill that would be established if the reporting unit was hypothetically acquired on the impairment test date. If the carrying amount of a reporting unit’s goodwill exceeds the amount of implied goodwill, the Company would record an impairment loss equal to the excess (see Note 9). The determination of fair value of a reporting unit is based on a combination of a market approach that considers the Company's market capitalization and an income approach that uses discounted cash flows for the Company's single reporting unit utilizing Level 3 inputs. Under the income approach, the Company determines the fair value based on the present value of the most recent income projections for its single reporting unit and calculates a terminal value utilizing a terminal growth rate. The significant assumptions under this approach include, among others: income projections, which are dependent on sales to new and existing clients, new solution introductions, client behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions based on historical experience, expectations of future performance, and the expected economic environment. Estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on judgment of the rates that would be utilized by a hypothetical market participant. Accounting guidance requires that definite-lived intangible assets be amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. 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. If the estimates of the useful lives change, the Company amortizes the remaining book value over the remaining useful lives or, if an asset is deemed to be impaired, a write-down of the value of the asset to its fair value may be required at such time. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Investment in Related Party | Investment in Related Party Investment in and advances to related party in which the Company has a substantial ownership interest of approximately 20% to 50% , or for which the Company exercises significant influence but not control over policy decisions, are accounted for by the equity method. Investment in a limited liability company that is similar to a partnership is also accounted for under the equity method if more than minor influence over the operation of the investee exists (generally through more than 3 - 5% ownership). As part of that accounting, the Company recognizes gains and losses that arise from the issuance of stock by a related party that results in changes in the Company’s proportionate share of the dollar amount of the related party’s equity. Investment in related party is assessed for possible impairment when events indicate that the fair value of the investment may be below the Company’s 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 its 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 investments in these equity investees is not changed for subsequent recoveries in fair value. The fair value of the related party equity method investment would be 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 Company’s 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 the Company’s 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. |
Deferred Revenue | Deferred Revenue The Company records deferred revenue when it receives cash from clients prior to meeting the applicable revenue recognition criteria. The Company uses judgment in determining the period over which the deliverables are recognized as revenue. As of December 31, 2018 and 2017 , current and non-current deferred revenue are comprised of deferrals for fees related to software licenses, SaaS arrangements, PCS services, non-PCS services and other revenue. Non-current deferred revenue as of December 31, 2018 is expected to be recognized in a period more than 12 months after that date. |
Recently Adopted Accounting Pronouncements | Recently Adopted 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 adopted ASU No. 2018-03 and 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 these ASUs 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 explains 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 Consolidated Statements of Cash Flows on adoption of these ASUs. 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 ASU No. 2017-09, 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 became effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption was permitted, including adoption in any interim period for which financial statements had 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. The Company adopted ASU No. 2017-09 in the beginning in the first quarter of 2018. If the Company encounters a change to the terms or conditions of any of its share-based payment awards, the Company 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 ASU did not result in a significant impact to the Company's 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, nor are believed by management to have, a material impact on the Company's present or future Consolidated Financial Statements. Upcoming Accounting Standard Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles, Goodwill and Other, Internal-Use Software, to provide guidance on customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The standard provides guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor, i.e. a service contract. Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This updated will become effective for annual periods beginning January 1, 2020, early adoption is permitted and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is still evaluating the impact of this ASU. In June 2018, the FASB issued ASU No. 2018-07, Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting, to simplify accounting for non-employee stock-based compensation. Upon adoption of ASU No. 2018-07, in most cases expense recognition for non-employee stock compensation will be in line with employee stock compensation, using a grant date fair value, without periodic revaluation. This update will become effective beginning in the first quarter of 2019, and early adoption is permitted. The Company is still evaluating the impact of this ASU. 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 ASU No. 2017-04, 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 ASU will become effective for the Company'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 ASU. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments , which changes how companies measure credit losses on most financial instruments measured at amortized cost, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. ASU No. 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. The Company is evaluating the potential effects of the adoption of this guidance on the Company's Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which 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 expects that this guidance will have a material impact on the Consolidated Balance Sheets when adopted at January 1, 2019. However, it is not expected to have a material impact on the Consolidated Statements of Operations. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , to provide a new transition method. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to use this transition method. On adoption, the Company will elect the package of transition practical expedients and therefore will not: reassess whether expired or existing contracts are or contain leases; reassess the lease classification of expired or existing leases; reassess initial direct costs for any existing leases. On adoption, the Company expects to make an accounting policy election to treat colocation facilities with lease terms of less than one year as short-term leases. The Company is implementing new business processes and controls around the review of lease agreements, including processes to track information relevant to new disclosures. The Company has analyzed its lease portfolio and prepared calculations of the modified retrospective impact to its Consolidated Financial Statements. The most significant impact of adoption will relate the recognition of right of use assets and lease liabilities, in relation to operating leases of office space, the Company expects to recognize material right of use assets and lease liabilities. There will be no impact on retained earnings or the Consolidated Statement of Operations upon adoption. The Company will update its accounting policies to comply with Topic 842 in the first quarter of 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Impact of the adoption of ASC 606 | This table summarizes the impact on the Company’s consolidated 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 The impact of the adoption of ASC 606 as of December 31, 2018 is presented here: As of December 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Balance Sheet Accounts receivable, net $ 15,286 $ (5,659 ) $ 9,627 Deferred implementation costs, current — 2,830 2,830 Prepaid expenses and other current assets 4,350 (666 ) 3,684 Property, plant, and equipment, net 22,978 (5,961 ) 17,017 Deferred Implementation costs, net of current — 3,322 3,322 Other assets 1,671 (498 ) 1,173 Deferred revenue, current 16,263 (2,404 ) 13,859 Deferred revenue, net of current 6,704 (529 ) 6,175 Deferred income taxes 2,437 (72 ) 2,365 The impact of the adoption of ASC 606 during the year ended December 31, 2018 is presented here: Year Ended December 31, 2018 As Reported Adjustments due to ASC 606 Without new Revenue Standard Statement of Operations Total net revenue $ 89,464 $ (2,255 ) $ 87,209 Cost of revenue 44,269 (108 ) 44,161 Operating expenses 95,896 302 96,198 Benefit from income taxes (3,673 ) 225 (3,448 ) |
Schedules of Concentration of Risk | The following table summarizes the number of customers that individually comprise greater than 10% of revenues and/or 10% of accounts receivable, and their aggregate percentages of total revenues and total billed and unbilled accounts receivable: Period Significant Customers Percentage of Total Revenues Percentage of Total Accounts Receivable A B C D E A B C D E Year Ended December 31, 2018 4 15.2 % 12.4 % 11.6 % — % — % — % — % 11.6 % 10.8 % — % Year Ended December 31, 2017 5 14.1 % 11.0 % — % — % — % — % 15.7 % 18.1 % 11.3 % 10.1 % |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The operating results of the Company's discontinued operations are as follows: Year Ended 2018 2017 Major line items constituting loss from discontinued operations Net revenue — 7,619 Cost of revenue — 16,318 Selling, general and administrative 1,719 8,891 Research and development — 7,571 Amortization of software license and acquisition-related assets — 1,978 Other expense (income) — 134 Loss from sale of Business — 10,508 Gain from dissolution of a business component — (860 ) Loss from discontinued operations, before income taxes (1,719 ) (36,921 ) Provision for income taxes — 6,891 Loss from discontinued operations, net of income taxes (1,719 ) (43,812 ) 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 significant operating and investing cash and noncash items of the discontinued operations included in the Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 were as follows: Year Ended 2018 2017 Depreciation and amortization from discontinued operations $ — $ 8,829 Loss from sale of Business — 10,508 Proceeds from sale of Business — 1,721 Capital expenditures — 4,673 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule Of Activity In The Allowance For Doubtful Accounts | allowance for doubtful accounts for the years ended December 31, 2018 and 2017 is as follows: Balance at beginning of the period Additions to expense (Write offs) / Recoveries Balance at end of the period Year ended December 31, 2018 $ 149 37 (23 ) $ 163 Year ended December 31, 2017 $ 70 79 — $ 149 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, net | Inventories as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Finished goods $ 496 $ 839 Inventories $ 496 $ 839 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Prepaid expenses $ 1,485 $ 2,791 Restricted cash (1) — 350 Other current assets 2,865 2,217 Prepaid expenses and other current assets $ 4,350 $ 5,358 (1) Additional $1,136 of non-current restricted cash as of December 31, 2018 is included in the Company’s Consolidated Balance Sheets as part of Other assets. Restricted cash relates to compensating balances against letters of credit, with an equal maximum credit availability, provided to lessors under operating lease agreements. |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Payroll and related costs $ 5,803 $ 7,051 NaviNet acquisition accrued earnout 1,700 5,408 Other accrued and other current liabilities 6,329 5,675 Accrued and other current liabilities $ 13,832 $ 18,134 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, plant and equipment, net as of December 31, 2018 and 2017 consisted of the following: December 31, Useful life (in years) 2018 2017 Computer equipment and software 3-5 $ 14,058 $ 13,998 Furniture and equipment 5-7 3,732 3,211 Leasehold and building improvements (1) 7,450 4,233 Property, plant, and equipment, excluding internal use software 25,240 21,442 Less: Accumulated depreciation and amortization (17,884 ) (15,248 ) Property, plant and equipment, excluding internal use software, net 7,356 6,194 Construction in progress, internal use software 903 629 Internal use software 3 31,565 17,690 Less: Accumulated depreciation and amortization, internal use software (16,846 ) (5,996 ) Internal use software, net 15,622 12,323 Property, plant and equipment, net $ 22,978 $ 18,517 (1) Useful lives for leasehold and building improvements represent the term of the lease or the estimated life of the related improvements, whichever is shorter. |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The Company’s definite-lived intangible assets as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 Customer Developed Technologies Trade Name Total Gross carrying amount $ 52,000 $ 36,700 $ 3,000 $ 91,700 Accumulated amortization (10,400 ) (14,347 ) (2,250 ) (26,997 ) Intangible assets, net $ 41,600 $ 22,353 $ 750 $ 64,703 December 31, 2017 Customer Developed Technologies Trade Name Total Gross carrying amount $ 52,000 $ 32,000 $ 3,000 $ 87,000 Accumulated amortization (6,933 ) (9,143 ) (1,500 ) (17,576 ) Intangible assets, net $ 45,067 $ 22,857 $ 1,500 $ 69,424 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future intangibles amortization expense over the next five years and thereafter for the intangible assets that exist as of December 31, 2018 is as follows: Amounts 2019 $ 9,150 2020 8,400 2021 8,400 2022 8,400 2023 3,828 Thereafter 26,525 Total future intangibles amortization expense $ 64,703 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The Company used the following summarized financial information for NantOmics for the trailing twelve months ended September 30, 2018 and September 30, 2017 to record its equity investment method losses for the years ended December 31, 2018 and 2017 , respectively: Trailing Twelve Months Ended September 30, 2018 September 30, 2017 Sales 5,817 7,103 Gross loss (8,528 ) (7,167 ) Loss from operations (45,481 ) (48,989 ) Impairments on equity (19,976 ) — Net loss (61,031 ) (57,958 ) Net loss attributable to NantOmics (59,622 ) (54,784 ) Other comprehensive loss (4,291 ) — |
Convertible Notes (Tables)
Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The following table summarizes how the issuance of the Convertible Notes is reflected in the Company's Consolidated Balance Sheets as of December 31, 2018 and 2017 : Related party Others Total Balance as of December 31, 2018 Gross proceeds $ 10,000 $ 97,000 $ 107,000 Unamortized debt discounts and deferred financing offering costs (1,622 ) (17,567 ) (19,189 ) Net carrying amount $ 8,378 $ 79,433 $ 87,811 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 incurred for the years ended December 31, 2018 and 2017 : Year Ended December 31, 2018 2017 Related party Others Total Related party Others Total Coupon interest expense $ 550 $ 5,335 $ 5,885 $ 550 $ 5,335 $ 5,885 Amortization of debt discounts 420 4,020 4,440 373 3,536 3,909 Amortization of deferred financing offering costs 11 568 579 10 499 509 Total convertible notes interest expense $ 981 $ 9,923 $ 10,904 $ 933 $ 9,370 $ 10,303 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018 and 2017 consisted of the following: December 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 $ 18,306 $ 18,306 $ — $ — Assets - Held-to-maturity securities 1,136 — 1,136 — Liabilities - Bookings Commitment 16,947 — — 16,947 Liabilities - Interest make-whole derivative — — — — 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 securities 361 — 361 — Liabilities - Interest make-whole derivative 7 — — 7 Liabilities - Bookings Commitment — — — — |
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 years ended December 31, 2018 and 2017 : December 31, 2017 Additions Change in fair value December 31, 2018 Interest make-whole derivative - related party and others 7 — (7 ) — Bookings Commitment — — 16,947 16,947 $ 7 $ — $ 16,940 $ 16,947 December 31, 2016 Additions Change in fair value December 31, 2017 Interest make-whole derivative liability: Related party $ 25 $ — $ (25 ) $ — Others 246 — (239 ) 7 $ 271 $ — $ (264 ) $ 7 |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | As of December 31, 2018 , the estimated 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 December 31, 2018 Related party $ 5,879 $ 8,378 $ 10,000 Others 57,031 79,433 97,000 $ 62,910 $ 87,811 $ 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 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2018 , the Company’s future minimum rental commitments under its noncancelable operating leases are as follows: Amounts 2019 $ 3,201 2020 3,292 2021 3,143 2022 3,184 2023 2,775 Thereafter 4,933 Total minimum rental commitments $ 20,528 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The components of the provision for income taxes are presented in the following table: Year Ended December 31, 2018 2017 Current: Federal $ 2 $ (498 ) State 42 17 Foreign 52 100 Total current provision 96 (381 ) Deferred: Federal (3,418 ) (3,001 ) State (418 ) 1,179 Foreign 67 — Total deferred benefit (3,769 ) (1,822 ) Provision for (benefit from) income taxes, net $ (3,673 ) $ (2,203 ) |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax loss as a result of the following differences: Year Ended December 31, 2018 2017 United States federal tax at statutory rate 21.00 % 34.00 % Items affecting federal income tax rate: State tax rate, net of federal benefit 3.85 % 3.53 % Valuation allowance (22.00 )% 1.41 % Stock compensation (0.62 )% (1.95 )% "Tax Act" 2017 impact — % (34.83 )% Other adjustments (0.33 )% (0.51 )% Effective income tax rate 1.90 % 1.65 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows: December 31, 2018 2017 Deferred income tax assets: Accounts payable and accrued expenses $ 8,090 $ 1,520 Inventory impairment 495 466 Deferred revenue 5,438 3,458 Allowance for doubtful accounts 546 178 Property, plant and equipment, net 691 1,098 Intangibles 3,409 4,865 Investments 48,836 22,404 Stock compensation 2,159 3,487 Other 1,321 32 Net operating loss carryforwards 104,404 93,689 Less: Valuation allowance (140,788 ) (97,324 ) Total deferred income tax assets 34,601 33,873 Deferred income tax liabilities: State taxes (5,339 ) (3,397 ) Intangible assets, net (25,630 ) (28,768 ) Convertible notes (4,241 ) (5,437 ) Deferred implementation cost (1,633 ) (1,960 ) Other (195 ) (149 ) Total deferred income tax liabilities (37,038 ) (39,711 ) Deferred income taxes, net $ (2,437 ) $ (5,838 ) |
Summary of Valuation Allowance | A summary of activity in the valuation reserve deducted from deferred tax assets for the years ended December 31, 2018 2017 is as follows: Balance at beginning of the period Additions (Adjustments) Deductions Balance at the end of the period Year to Date December 31, 2018 $ 97,323 43,464 — $ 140,787 Year to Date December 31, 2017 $ 88,291 9,032 — $ 97,323 |
Schedule of Unrecognized Tax Benefits Roll Forward | December 31, 2018 2017 Balance as of January 1 $ — $ 977 Increases/(decreases) related to tax positions taken during the current year — (977 ) Balance as of December 31 $ — $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 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 Consolidated Statements of Operations: Year Ended December 31, 2018 2017 Series C / Restricted Stock: Research and development $ 86 $ 111 Phantom units: Cost of revenue 367 186 Selling, general and administrative 4 (341 ) Research and development 347 144 Discontinued operations — (3,591 ) Total phantom units stock-based compensation expense 718 (3,602 ) Stock options: Selling, general and administrative — (49 ) Restricted Stock Units: Cost of revenue 27 26 Selling, general and administrative 4,664 5,223 Research and development 162 2,802 Total restricted stock units stock-based compensation expense 4,853 8,051 Total stock-based compensation expense 5,657 4,511 Amount capitalized to internal-use software and deferred implementation costs 530 784 Total stock-based compensation cost $ 6,187 $ 5,295 |
Schedule of Share-based Compensation, Activity | The following table summarizes the activity related to the unvested phantom units during the years ended December 31, 2018 and 2017 : Number of Units Weighted Unvested phantom units outstanding - December 31, 2016 4,322,081 $ 14.95 Granted 113,656 $ 4.75 Vested (1,440,822 ) $ 14.14 Forfeited (1,702,130 ) $ 15.31 Unvested phantom units outstanding - December 31, 2017 1,292,785 $ 15.01 Vested (518,373 ) $ 15.20 Forfeited (185,560 ) $ 14.63 Unvested phantom units outstanding - December 31, 2018 588,852 $ 14.95 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity related to the unvested restricted stock units during the years ended December 31, 2018 and 2017 : Number of Units Weighted-Average Grant-Date Fair Value Unvested restricted stock units outstanding - December 31, 2016 — $ — Granted 5,147,190 $ 3.43 Vested (1,975,448 ) $ 3.43 Forfeited (65,718 ) $ 3.39 Unvested restricted stock units outstanding - December 31, 2017 3,106,024 $ 3.43 Granted 853,736 $ 1.46 Vested (1,583,399 ) $ 3.18 Forfeited (563,400 ) $ 3.39 Unvested restricted stock units outstanding - December 31, 2018 1,812,961 $ 2.74 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 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 income (loss) per share of common stock and redeemable common stock for the years ended December 31, 2018 and 2017 : Year ended December 31, 2018 2017 Common Stock Common Stock Income (loss) per share numerator: Net loss from continuing operations $ (190,433 ) $ (131,399 ) Net loss from discontinued operations (1,719 ) (43,812 ) Net loss for basic and diluted net loss per share $ (192,152 ) $ (175,211 ) Income (loss) per share denominator: Weighted-average shares for basic net income (loss) per share 109,168,798 116,737,860 Effect of dilutive securities — — Weighted-average shares for dilutive net income (loss) per share 109,168,798 116,737,860 Basic and diluted net loss per share from continuing operations $ (1.74 ) $ (1.12 ) Basic and diluted net loss per share from discontinued operations $ (0.02 ) $ (0.37 ) Basic and diluted net loss per share $ (1.76 ) $ (1.49 ) |
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: Year Ended December 31, 2018 2017 Unvested restricted stock — 3,490 Unvested phantom units 588,852 1,292,785 Unexercised stock options — 500,000 Unvested restricted stock units 1,812,961 3,106,024 Convertible notes 8,815,655 8,815,655 |
Related Party Transactions Sche
Related Party Transactions Schedule of Income (Loss) from Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | As a result of consolidating NantHealth Labs at February 28, 2018, the net loss of the Company increased by $2,223 during the year ended December 31, 2018. The intangible assets acquired are amortized over the estimated useful life of 13 years. Amounts NantOmics Series A-2 shares transferred, or to be transferred, to NantOmics $ 8,956 Assets and liabilities of NantHealth Labs 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 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of the years ended December 31, 2018 and 2017 (Unaudited): Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net revenue $ 22,263 $ 22,047 $ 22,292 $ 22,862 Cost of revenue 11,068 10,582 11,226 11,393 Gross profit 11,195 11,465 11,066 11,469 Operating expenses 26,942 25,331 22,890 20,733 Loss from operations (15,747 ) (13,866 ) (11,824 ) (9,264 ) Net loss from continuing operations (21,975 ) (21,806 ) (97,432 ) (49,220 ) (Loss) gain from discontinued operations, net of tax (193 ) (1,591 ) (32 ) 97 Net loss (22,168 ) (23,397 ) (97,464 ) (49,123 ) Basic and diluted net loss per share: Continued operations - common stock $ (0.20 ) $ (0.20 ) $ (0.89 ) $ (0.45 ) Discontinued operations - common stock $ — $ (0.01 ) $ — $ — Total net loss per common stock $ (0.20 ) $ (0.21 ) $ (0.89 ) $ (0.45 ) Basic and diluted net income per redeemable common stock N/A N/A N/A N/A Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Net revenue $ 19,104 $ 23,514 $ 21,760 $ 22,298 Cost of revenue 11,518 9,652 11,472 8,880 Gross profit 7,586 13,862 10,288 13,418 Operating expenses 27,415 28,655 26,324 30,660 Loss from operations (19,829 ) (14,793 ) (16,036 ) (17,242 ) Net loss from continuing operations (28,126 ) (57,696 ) (23,015 ) (22,562 ) (Loss) income from discontinued operations, net of tax (12,989 ) (12,368 ) (19,383 ) 928 Net loss (41,115 ) (70,064 ) (42,398 ) (21,634 ) Basic and diluted net income (loss) per share: Continued operations - common stock $ (0.23 ) $ (0.48 ) $ (0.20 ) $ (0.21 ) Discontinued operations - common stock $ (0.11 ) $ (0.10 ) $ (0.17 ) $ 0.01 Total net loss per common stock $ (0.34 ) $ (0.58 ) $ (0.37 ) $ (0.20 ) Basic and diluted net income per redeemable common stock N/A N/A N/A N/A |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)segment | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative impact of adopting ASC 606 | $ (1,263) | |||
Increase in software development for internal use | $ 22,978 | $ 24,344 | $ 18,517 | |
Increase in accounts receivable | 15,286 | 16,738 | $ 11,491 | |
Unfulfilled performance obligations | $ 15,666 | |||
Expected timing of performance obligation fulfillment | expected to be fulfilled within three years | |||
Deferred revenue recognized | $ 13,518 | |||
Contract assets | 434 | 796 | ||
Capitalized contract cost | 1,163 | 866 | ||
Amortization of capitalized contract cost | $ 605 | |||
Number of reportable segments | segment | 1 | |||
Adjustments due to ASC 606 | Adjustments due to ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase in software development for internal use | $ (5,961) | 5,827 | ||
Increase in accounts receivable | $ (5,659) | 5,247 | ||
Deferred costs | 5,827 | |||
Contract liability | 5,247 | |||
Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative impact of adopting ASC 606 | $ (1,263) | |||
Accumulated Deficit | Adjustments due to ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative impact of adopting ASC 606 | $ 1,263 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Accounts receivable, net | $ 15,286 | $ 11,491 | $ 15,286 | $ 11,491 | $ 16,738 | ||||||
Deferred implementation costs, current | 0 | 1,960 | 0 | 1,960 | 0 | ||||||
Prepaid expenses and other current assets | 4,350 | 5,358 | 4,350 | 5,358 | 6,475 | ||||||
Property, plant, and equipment, net | 22,978 | 18,517 | 22,978 | 18,517 | 24,344 | ||||||
Deferred implementation costs, net of current | 0 | 3,951 | 0 | 3,951 | 2 | ||||||
Other assets | 1,671 | 2,195 | 1,671 | 2,195 | 2,757 | ||||||
Deferred revenue, current | 16,263 | 10,057 | 16,263 | 10,057 | 13,241 | ||||||
Deferred revenue, net of current | 6,704 | 7,126 | 6,704 | 7,126 | 9,156 | ||||||
Deferred income taxes, net | 2,437 | 5,838 | 2,437 | 5,838 | 6,205 | ||||||
Revenue from Contract with Customer [Abstract] | |||||||||||
Total net revenue | 22,862 | $ 22,292 | $ 22,047 | $ 22,263 | 22,298 | $ 21,760 | $ 23,514 | $ 19,104 | 89,464 | 86,676 | |
Cost of revenue | 11,393 | 11,226 | 10,582 | 11,068 | 8,880 | 11,472 | 9,652 | 11,518 | 44,269 | ||
Operating expenses | 20,733 | $ 22,890 | $ 25,331 | $ 26,942 | $ 30,660 | $ 26,324 | $ 28,655 | $ 27,415 | 95,896 | 113,054 | |
Benefit from income taxes | (3,673) | $ (2,203) | |||||||||
Without new Revenue Standard | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Accounts receivable, net | 9,627 | 9,627 | |||||||||
Deferred implementation costs, current | 2,830 | 2,830 | |||||||||
Prepaid expenses and other current assets | 3,684 | 3,684 | |||||||||
Property, plant, and equipment, net | 17,017 | 17,017 | |||||||||
Deferred implementation costs, net of current | 3,322 | 3,322 | |||||||||
Other assets | 1,173 | 1,173 | |||||||||
Deferred revenue, current | 13,859 | 13,859 | |||||||||
Deferred revenue, net of current | 6,175 | 6,175 | |||||||||
Deferred income taxes, net | 2,365 | 2,365 | |||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||
Total net revenue | 87,209 | ||||||||||
Cost of revenue | 44,161 | ||||||||||
Operating expenses | 96,198 | ||||||||||
Benefit from income taxes | (3,448) | ||||||||||
Adjustments due to ASC 606 | Adjustments due to ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Accounts receivable, net | (5,659) | (5,659) | 5,247 | ||||||||
Deferred implementation costs, current | 2,830 | 2,830 | (1,960) | ||||||||
Prepaid expenses and other current assets | (666) | (666) | 1,117 | ||||||||
Property, plant, and equipment, net | (5,961) | (5,961) | 5,827 | ||||||||
Deferred implementation costs, net of current | 3,322 | 3,322 | (3,949) | ||||||||
Other assets | (498) | (498) | 562 | ||||||||
Deferred revenue, current | (2,404) | (2,404) | 3,184 | ||||||||
Deferred revenue, net of current | (529) | (529) | 2,030 | ||||||||
Deferred income taxes, net | $ (72) | (72) | $ 367 | ||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||
Total net revenue | (2,255) | ||||||||||
Cost of revenue | (108) | ||||||||||
Operating expenses | 302 | ||||||||||
Benefit from income taxes | $ 225 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Concentration of Risk (Details) - Customer | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | ||
Significant Customers | 4 | 5 |
Customer Concentration Risk | Percentage of Total Revenues | Customer A | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 15.20% | 14.10% |
Customer Concentration Risk | Percentage of Total Revenues | Customer B | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 12.40% | 11.00% |
Customer Concentration Risk | Percentage of Total Revenues | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 11.60% | 0.00% |
Customer Concentration Risk | Percentage of Total Revenues | Customer D | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 0.00% | 0.00% |
Customer Concentration Risk | Percentage of Total Revenues | Customer E | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 0.00% | 0.00% |
Customer Concentration Risk | Percentage of Total Accounts Receivable | Customer A | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 0.00% | 0.00% |
Customer Concentration Risk | Percentage of Total Accounts Receivable | Customer B | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 0.00% | 15.70% |
Customer Concentration Risk | Percentage of Total Accounts Receivable | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 11.60% | 18.10% |
Customer Concentration Risk | Percentage of Total Accounts Receivable | Customer D | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 10.80% | 11.30% |
Customer Concentration Risk | Percentage of Total Accounts Receivable | Customer E | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 0.00% | 10.10% |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 29, 2017 | Aug. 25, 2017 | Aug. 03, 2017 | Dec. 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 | ||||
Increase in fair value of Booking commitments | $ 16,947 | $ 0 | [1] | |||
Reclassification of cumulative translation adjustments of foreign subsidiaries | 117 | |||||
Restructuring charges | 2,422 | |||||
Employee severance, share-based compensation | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring noncash charges | 1,549 | |||||
Employee severance, reveral of bonus accrual | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring noncash charges | 533 | |||||
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 | |||||
Common stock, par value (usd per share) | $ 0.0001 | |||||
Cash consideration as an estimated working capital payment | $ 1,742 | |||||
Deferred consideration related to working capital adjustments | 1,021 | |||||
Accrued Liabilities | 1,372 | |||||
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 | 465 | $ 348 | ||||
Reclassification of cumulative translation adjustments of foreign subsidiaries | $ 117 | |||||
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 | |||||
Bookings Commitment | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Increase in fair value of Booking commitments | $ 16,947 | |||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Discontinued Operations - Loss
Discontinued Operations - Loss on Sale (Details) - USD ($) $ in Thousands | Aug. 03, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | [1] |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Plus: Reclassification of cumulative translation adjustments of foreign subsidiaries | $ 117 | |||
Loss from sale of Business | $ 0 | $ (9,648) | ||
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] | ||||
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 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) | |||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Discontinued Operations - Opera
Discontinued Operations - Operating Results of Discontinued Operations (Details) - Disposed of by Sale - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net revenue | $ 0 | $ 7,619 |
Cost of revenue | 0 | 16,318 |
Selling, general and administrative | 1,719 | 8,891 |
Research and development | 0 | 7,571 |
Amortization of software license and acquisition-related assets | 0 | 1,978 |
Other expense (income) | 0 | 134 |
Loss from sale of Business | 0 | 10,508 |
Gain from dissolution of a business component | 0 | (860) |
Loss from discontinued operations, before income taxes | (1,719) | (36,921) |
Provision for income taxes | 0 | 6,891 |
Loss from discontinued operations, net of income taxes | $ (1,719) | $ (43,812) |
Discontinued Operations - Signi
Discontinued Operations - Significant Cash Flow Items from Discontinued Operations (Details) - Disposed of by Sale - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization from discontinued operations | $ 0 | $ 8,829 |
Loss from sale of Business | 0 | 10,508 |
Proceeds from sale of Business | 0 | 1,721 |
Capital expenditures | $ 0 | $ 4,673 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Outstanding and unpaid invoices excluded from accounts receivable and deferred revenue | $ 6,198 | |
Allowance for doubtful accounts | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of the period | $ 149 | 70 |
Additions to expense | 37 | 79 |
(Write offs) / Recoveries | (23) | 0 |
Balance at the end of the period | $ 163 | $ 149 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 496 | $ 839 |
Inventories | $ 496 | $ 839 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid expenses | $ 1,485 | $ 2,791 | |
Restricted cash | 0 | 350 | |
Other current assets | 2,865 | 2,217 | |
Prepaid expenses and other current assets | $ 4,350 | $ 6,475 | 5,358 |
Non-current restricted cash | $ 1,136 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Current Assets And Other Current Liabilities [Abstract] | ||
Payroll and related costs | $ 5,803 | $ 7,051 |
NaviNet acquisition accrued earnout | 1,700 | 5,408 |
Other accrued and other current liabilities | 6,329 | 5,675 |
Accrued and other current liabilities | $ 13,832 | $ 18,134 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant, and equipment, net | $ 22,978 | $ 18,517 | $ 24,344 |
Depreciation expense | 12,643 | 12,363 | |
Amount capitalized to internal use software | 6,690 | 7,333 | |
Computer equipment and software | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | $ 14,058 | 13,998 | |
Computer equipment and software | Minimum | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Useful life (in years) | 3 years | ||
Computer equipment and software | Maximum | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Useful life (in years) | 5 years | ||
Furniture and equipment | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | $ 3,732 | 3,211 | |
Furniture and equipment | Minimum | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Useful life (in years) | 5 years | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Useful life (in years) | 7 years | ||
Leasehold and building improvements | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | $ 7,450 | 4,233 | |
Property, plant, and equipment, excluding internal use software | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | 25,240 | 21,442 | |
Less: Accumulated depreciation and amortization | (17,884) | (15,248) | |
Property, plant, and equipment, net | 7,356 | 6,194 | |
Construction in progress, internal use software | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | 31,565 | 17,690 | |
Less: Accumulated depreciation and amortization | (16,846) | (5,996) | |
Construction in Progress, Gross | 903 | 629 | |
Property, plant, and equipment, net | 15,622 | 12,323 | |
Depreciation expense | $ 9,189 | $ 5,792 | |
Useful life (in years) | 3 years |
Intangible Assets, net - Narrat
Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 9,150 | $ 15,692 |
Intangible Assets, net - Schedu
Intangible Assets, net - Schedule of Definite-Lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 91,700 | $ 87,000 |
Accumulated amortization | (26,997) | (17,576) |
Intangible assets, net | 64,703 | 69,424 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 52,000 | 52,000 |
Accumulated amortization | (10,400) | (6,933) |
Intangible assets, net | 41,600 | 45,067 |
Developed Technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 36,700 | 32,000 |
Accumulated amortization | (14,347) | (9,143) |
Intangible assets, net | 22,353 | 22,857 |
Trade Name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 3,000 | 3,000 |
Accumulated amortization | (2,250) | (1,500) |
Intangible assets, net | $ 750 | $ 1,500 |
Intangible Assets, net - Sche_2
Intangible Assets, net - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2019 | $ 9,150 | |
2020 | 8,400 | |
2021 | 8,400 | |
2022 | 8,400 | |
2023 | 3,828 | |
Thereafter | 26,525 | |
Intangible assets, net | $ 64,703 | $ 69,424 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill [Line Items] | |||
Goodwill | $ 115,930 | $ 114,625 | |
Goodwill associated with discontinued operations | $ 16,444 | ||
Liquid Genomics, Inc. | |||
Goodwill [Line Items] | |||
Goodwill | $ 1,305 | ||
Goodwill added during period | $ 1,305 |
Investments - Narrative (Detail
Investments - Narrative (Details) | Feb. 28, 2018shares | Jun. 16, 2015USD ($)shares | May 31, 2018shares | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)director | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2015USD ($)shares | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Loss from related party equity method investment including impairment loss | $ 108,409,000 | $ 50,334,000 | [1] | |||||||||
Impairment of equity securities | 1,750,000 | 0 | [1] | |||||||||
NantOmics | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Number of Series A-2 units (shares) | shares | 9,088,362 | 564,779 | 169,074,539 | |||||||||
Aggregate purchase price | $ 250,774,000 | |||||||||||
Ownership percentage in equity method investee | 13.58% | 14.28% | ||||||||||
Difference between carrying amount and underlying equity, developed technologies | $ 28,195,000 | |||||||||||
Difference between carrying amount and underlying equity, reseller agreement | $ 14,382,000 | |||||||||||
Impairments on equity | $ 35,991,000 | $ 80,444,000 | 14,768,000 | $ 19,976,000 | $ 0 | |||||||
Loss from related party equity method investment including impairment loss | $ 108,409,000 | $ 50,334,000 | ||||||||||
IOBS | Variable Interest Entity, Not Primary Beneficiary | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
IOBS investment | $ 1,750,000 | |||||||||||
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 | |||||||||||
Estimate of Fair Value Measurement | IOBS | Variable Interest Entity, Not Primary Beneficiary | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
IOBS investment | $ 0 | |||||||||||
Impairment of equity securities | $ 1,750,000 | |||||||||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Investments - Summarized Financ
Investments - Summarized Financial Information (Details) - NantOmics - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||
Sales | $ 5,817 | $ 7,103 | |||
Gross loss | (8,528) | (7,167) | |||
Loss from operations | (45,481) | (48,989) | |||
Impairments on equity | $ (35,991) | $ (80,444) | $ (14,768) | (19,976) | 0 |
Net loss | (61,031) | (57,958) | |||
Net loss attributable to NantOmics | (59,622) | (54,784) | |||
Equity Method Investments, Summarized Financial Information, Other Comprehensive Gain (Loss) | $ (4,291) | $ 0 |
Convertible Notes - Narrative (
Convertible Notes - Narrative (Details) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($)Day | Dec. 31, 2017USD ($) | Dec. 21, 2016USD ($)$ / shares | Dec. 15, 2016USD ($) | |
Debt Instrument [Line Items] | |||||
Initial purchasers' discount and debt issuance costs | $ 4,286,000 | ||||
Number of consecutive trading days trading price evaluated | 5 days | ||||
Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Face value of debt | $ 107,000,000 | $ 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 | ||||
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% | ||||
Threshold period used to compute interest payment | 3 years | ||||
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 | $ 87,811,000 | $ 82,792,000 | $ 81,580,000 | ||
Conversion option reported in equity as additional paid-in capital | $ 23,921,000 | ||||
Business day period trading price evaluated | 5 days | ||||
Threshold percentage of principal amount | 98.00% | ||||
Period that must lapse prior to conversion for noteholder to receive interest make-whole payment | 1 year | ||||
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 | ||||
Measurement Input, Discount Rate | Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Discount rate on converted debt | 2.00% |
Convertible Notes - Summary of
Convertible Notes - Summary of Issuance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 15, 2016 | |
Debt Disclosure [Abstract] | |||
Remaining life of convertible notes | 36 months | ||
Convertible debt | |||
Debt Instrument [Line Items] | |||
Gross proceeds | $ 107,000 | $ 107,000 | |
Unamortized debt discounts and deferred financing offering costs | (19,189) | (24,208) | |
Net carrying amount | 87,811 | 82,792 | $ 81,580 |
Convertible debt | Related Party | |||
Debt Instrument [Line Items] | |||
Gross proceeds | 10,000 | 10,000 | |
Unamortized debt discounts and deferred financing offering costs | (1,622) | (2,053) | |
Net carrying amount | 8,378 | 7,947 | |
Convertible debt | Others | |||
Debt Instrument [Line Items] | |||
Gross proceeds | 97,000 | 97,000 | |
Unamortized debt discounts and deferred financing offering costs | (17,567) | (22,155) | |
Net carrying amount | $ 79,433 | $ 74,845 |
Convertible Notes - Interest Ex
Convertible Notes - Interest Expense Incurred (Details) - Convertible debt - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Coupon interest expense | $ 5,885 | $ 5,885 |
Amortization of debt discounts | 4,440 | 3,909 |
Amortization of deferred financing offering costs | 579 | 509 |
Interest expense on debt | 10,904 | 10,303 |
Related Party | ||
Debt Instrument [Line Items] | ||
Coupon interest expense | 550 | 550 |
Amortization of debt discounts | 420 | 373 |
Amortization of deferred financing offering costs | 11 | 10 |
Interest expense on debt | 981 | 933 |
Others | ||
Debt Instrument [Line Items] | ||
Coupon interest expense | 5,335 | 5,335 |
Amortization of debt discounts | 4,020 | 3,536 |
Amortization of deferred financing offering costs | 568 | 499 |
Interest expense on debt | $ 9,923 | $ 9,370 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2016 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Change in fair value of Bookings Commitment | $ 16,947,000 | $ 0 | [1] | ||
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 | $ 107,000,000 | |
Period that must lapse prior to conversion for noteholder to receive interest make-whole payment | 1 year | ||||
Threshold period used to compute interest payment | 3 years | ||||
Convertible debt | Measurement Input, Discount Rate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Discount rate on converted debt | 2.00% | ||||
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 | ||
Derivative liability | Measurement Input, Discount Rate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Discount rate on converted debt | 2.00% | ||||
Minimum | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Bookings Commitment, Discounted Liabilities, Discount Rate | 17.00% | ||||
Maximum | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Bookings Commitment, Discounted Liabilities, Discount Rate | 20.00% | ||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities on a Recurring Basis (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash equivalents | $ 18,306 | $ 57,683 |
Held-to-maturity securities | 1,136 | 361 |
Liabilities | ||
Bookings Commitment Liability | 16,947 | 0 |
Interest make-whole derivative | 0 | 7 |
Quoted price in active markets for identical assets (Level 1) | ||
Assets | ||
Cash equivalents | 18,306 | 57,683 |
Held-to-maturity securities | 0 | 0 |
Liabilities | ||
Bookings Commitment Liability | 0 | 0 |
Interest make-whole derivative | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Cash equivalents | 0 | 0 |
Held-to-maturity securities | 1,136 | 361 |
Liabilities | ||
Bookings Commitment Liability | 0 | 0 |
Interest make-whole derivative | 0 | 0 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Cash equivalents | 0 | 0 |
Held-to-maturity securities | 0 | 0 |
Liabilities | ||
Bookings Commitment Liability | 16,947 | 0 |
Interest make-whole derivative | $ 0 | $ 7 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in the Fair Value of Level 3 Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Change in fair value of Bookings Commitment | $ 16,947 | $ 0 | [1] |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 7 | 271 | |
Additions | 0 | 0 | |
Change in fair value | 16,940 | (264) | |
Ending Balance | 16,947 | 7 | |
Derivative liability | Related Party | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 0 | 25 | |
Additions | 0 | ||
Change in fair value | (25) | ||
Ending Balance | 0 | ||
Derivative liability | Interest make-whole derivative - related party and others | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 7 | ||
Additions | 0 | ||
Change in fair value | (7) | ||
Ending Balance | 0 | 7 | |
Derivative liability | Others | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 7 | 246 | |
Additions | 0 | ||
Change in fair value | (239) | ||
Ending Balance | 7 | ||
Bookings Commitment | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 0 | ||
Additions | 0 | ||
Change in fair value | 16,947 | ||
Ending Balance | 16,947 | $ 0 | |
Bookings Commitment | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Change in fair value of Bookings Commitment | $ 16,947 | ||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Debt (Details) - Convertible debt - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 21, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Face value of debt | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 |
Interest rate on debt | 5.50% | 5.50% | ||
Related Party | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Face value of debt | 10,000,000 | 10,000,000 | $ 10,000,000 | |
Others | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Face value of debt | 97,000,000 | 97,000,000 | ||
Fair value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value and carrying value | 62,910,000 | 78,403,000 | ||
Fair value | Related Party | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value and carrying value | 5,879,000 | 7,327,000 | ||
Fair value | Others | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value and carrying value | 57,031,000 | 71,076,000 | ||
Carrying value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value and carrying value | 87,811,000 | 82,792,000 | ||
Carrying value | Related Party | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value and carrying value | 8,378,000 | 7,947,000 | ||
Carrying value | Others | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value and carrying value | $ 79,433,000 | $ 74,845,000 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Leased Assets [Line Items] | ||
Rental expense charged to selling, general and administrative expense | $ 3,930 | $ 4,513 |
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 | 6 years | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Rental Commitments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 3,201 |
2020 | 3,292 |
2021 | 3,143 |
2022 | 3,184 |
2023 | 2,775 |
Thereafter | 4,933 |
Total minimum rental commitments | $ 20,528 |
Commitments and Contingencies_3
Commitments and Contingencies - Related Party Promissory Note (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 04, 2016 |
Related Party Transaction [Line Items] | |||
Related party promissory note | $ 112,666 | $ 112,666 | |
Affiliated Entity | Promissory Notes With NantCapital | |||
Related Party Transaction [Line Items] | |||
Related party promissory note | $ 130,374 | $ 124,166 | $ 112,666 |
Commitments and Contingencies_4
Commitments and Contingencies - Indenture Obligations Under Convertible Notes (Details) - Convertible debt - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 21, 2016 |
Debt Instrument [Line Items] | ||||
Face value of debt | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 | $ 107,000,000 |
Interest rate on debt | 5.50% | 5.50% |
Commitments and Contingencies_5
Commitments and Contingencies - Purchase Obligations Under License Agreements and Reseller Agreements (Details) - NantHealth, Inc.'s Provider/Patient Engagement Solutions Business - Disposed of by Sale $ in Thousands | Aug. 25, 2017USD ($) |
Related Party Transaction [Line Items] | |
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% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||
Federal | $ 2 | $ (498) |
State | 42 | 17 |
Foreign | 52 | 100 |
Total current provision | 96 | (381) |
Deferred: | ||
Federal | (3,418) | (3,001) |
State | (418) | 1,179 |
Foreign | 67 | 0 |
Total deferred benefit | (3,769) | (1,822) |
Provision for (benefit from) income taxes, net | $ (3,673) | $ (2,203) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
United States federal tax at statutory rate | 21.00% | 34.00% |
Items affecting federal income tax rate: | ||
State tax rate, net of federal benefit | 3.85% | 3.53% |
Valuation allowance | (22.00%) | 1.41% |
Stock compensation | (0.62%) | (1.95%) |
Tax Act 2017 impact | 0.00% | (34.83%) |
Other adjustments | (0.33%) | (0.51%) |
Effective income tax rate | 1.90% | 1.65% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred income tax assets: | ||
Accounts payable and accrued expenses | $ 8,090 | $ 1,520 |
Inventory impairment | 495 | 466 |
Deferred revenue | 5,438 | 3,458 |
Allowance for doubtful accounts | 546 | 178 |
Property, plant and equipment, net | 691 | 1,098 |
Intangibles | 3,409 | 4,865 |
Investments | 48,836 | 22,404 |
Stock compensation | 2,159 | 3,487 |
Other | 1,321 | 32 |
Net operating loss carryforwards | 104,404 | 93,689 |
Less: Valuation allowance | (140,788) | (97,324) |
Total deferred income tax assets | 34,601 | 33,873 |
Deferred income tax liabilities: | ||
State taxes | (5,339) | (3,397) |
Intangible assets, net | (25,630) | (28,768) |
Convertible notes | (4,241) | (5,437) |
Deferred implementation cost | (1,633) | (1,960) |
Other | (195) | (149) |
Total deferred income tax liabilities | (37,038) | (39,711) |
Deferred income taxes, net | $ (2,437) | $ (5,838) |
Income Taxes - Valuation Reserv
Income Taxes - Valuation Reserve (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of the period | $ 97,323 | $ 88,291 |
Additions (Adjustments) | 43,464 | 9,032 |
Deductions | 0 | 0 |
Balance at the end of the period | $ 140,787 | $ 97,323 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance as of January 1 | $ 0 | $ 977,000 |
Increases/(decreases) related to tax positions taken during the current year | 0 | (977,000) |
Balance as of December 31 | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax benefit | $ 3,673,000 | $ 2,203,000 | |
Valuation allowance for deferred tax assets credited to contributed capital | 350,000 | ||
Unrecognized tax benefits | 0 | $ 0 | $ 977,000 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 395,368,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 288,901,000 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 0 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2018vote$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Equity [Abstract] | ||
Common stock authorized (shares) | shares | 750,000,000 | 750,000,000 |
Common stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (shares) | shares | 20,000,000 | |
Preferred stock, par value (usd per share) | $ / shares | $ 0.0001 | |
Number of votes per unit held | vote | 1 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Components of Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 5,657 | $ 4,511 |
Amount capitalized to internal-use software and deferred implementation costs | 530 | 784 |
Stock-based compensation cost | 6,187 | 5,295 |
Series C / Restricted Stock | Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 86 | 111 |
Phantom units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 718 | (3,602) |
Phantom units | Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 367 | 186 |
Phantom units | Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 4 | (341) |
Phantom units | Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 347 | 144 |
Phantom units | Discontinued operations | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 0 | (3,591) |
Stock options | Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 0 | (49) |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 4,853 | 8,051 |
Restricted Stock Units (RSUs) | Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 27 | 26 |
Restricted Stock Units (RSUs) | Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 4,664 | 5,223 |
Restricted Stock Units (RSUs) | Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 162 | $ 2,802 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | Jun. 08, 2018shares | Jun. 01, 2016shares | Jun. 30, 2018shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016shares | 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 | |||||||||
Tax payments related to stock issued | $ | $ 2,066,000 | $ 5,335,000 | [1] | |||||||
Stock compensation plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares as a result of conversion of units, shares | 28,973 | |||||||||
Restricted stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares as a result of conversion of units, shares | 10,462 | |||||||||
Number of restricted stock shares not vested | 1 | 3,490 | ||||||||
Phantom units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Units granted to employees of related companies for providing services | 0 | 0 | ||||||||
Stock-based compensation expense expected to be recognized | $ | $ 687,000 | |||||||||
Period for recognition of compensation cost not yet recognized | 1 year 1 month 6 days | |||||||||
Number of restricted stock units vested and converted to common stock | 518,373 | 1,440,822 | ||||||||
Number of restricted stock shares not vested | 588,852 | 1,292,785 | 4,322,081 | |||||||
Phantom units | Employee | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense expected to be recognized | $ | $ 680,000 | |||||||||
Period for recognition of compensation cost not yet recognized | 1 year 1 month 6 days | |||||||||
Phantom units | Nonemployee | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense expected to be recognized | $ | $ 7,000 | |||||||||
Period for recognition of compensation cost not yet recognized | 1 year 1 month 6 days | |||||||||
Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense expected to be recognized | $ | $ 3,562,000 | |||||||||
Period for recognition of compensation cost not yet recognized | 1 year 6 months | |||||||||
Number of restricted stock units vested and converted to common stock | 1,583,399 | 1,975,448 | ||||||||
Number of restricted stock shares not vested | 1,812,961 | 3,106,024 | 0 | |||||||
Series C units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Units outstanding | 3,470,254 | 3,470,254 | ||||||||
Profits Interests Plan | Series C units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Aggregate units authorized for issuance | 63,750,000 | |||||||||
Phantom Unit Plan | Phantom units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Aggregate units authorized for issuance | 11,590,909 | |||||||||
Number of shares available for grant | 588,852 | |||||||||
Phantom Unit Plan in United States | Phantom units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares of common stock issued for vested phantom units | 325,312 | 888,569 | ||||||||
Shares withheld to satisfy tax withholding obligations | 177,343 | 492,974 | ||||||||
Tax payments related to stock issued | $ | $ 569,000 | $ 3,059,000 | ||||||||
Phantom Unit Plan Outside United States | Phantom units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares of common stock issued for vested phantom units | 15,717 | 59,279 | ||||||||
Amount of cash paid to settle vested phantom units | $ | $ 55,000 | $ 300,000 | ||||||||
The 2016 Equity Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Aggregate units authorized for issuance | 6,000,000 | |||||||||
Additional share issuance authorized under 2016 Plan | 6,800,000 | |||||||||
The 2016 Equity Incentive Plan | Board of Director | Nonemployee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of stock options issued | 500,000 | |||||||||
Exercise price for stock options issued (usd per share) | $ / shares | $ 14 | |||||||||
Unvested options terminated | 125,000 | |||||||||
The 2016 Equity Incentive Plan | Series C units | Restricted stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares as a result of conversion of units, shares | 10,462 | |||||||||
Number of restricted stock units vested and converted to common stock | 3,490 | 3,486 | ||||||||
Number of restricted stock shares not vested | 0 | |||||||||
The 2016 Equity Incentive Plan Amendment [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Aggregate units authorized for issuance | 12,800,000 | |||||||||
UNITED STATES | Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares of common stock issued for vested phantom units | 782,364 | |||||||||
Shares withheld to satisfy tax withholding obligations | 472,965 | |||||||||
Tax payments related to stock issued | $ | $ 1,495,000 | |||||||||
Non-US | Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares of common stock issued for vested phantom units | 100,025 | |||||||||
Amount of cash paid to settle vested phantom units | $ | $ 300,000 | |||||||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity of Phantom Units (Details) - Phantom units - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Units | ||
Unvested phantom units outstanding, beginning balance (in units) | 1,292,785 | 4,322,081 |
Granted (in units) | 113,656 | |
Vested (in units) | (518,373) | (1,440,822) |
Forfeited (in units) | (185,560) | (1,702,130) |
Unvested phantom units outstanding, ending balance (in units) | 588,852 | 1,292,785 |
Weighted-Average Grant-Date Value per Phantom Unit | ||
Unvested phantom units outstanding, beginning balance (usd per unit) | $ 15.01 | $ 14.95 |
Granted (usd per unit) | 4.75 | |
Vested (usd per unit) | 15.20 | 14.14 |
Forfeited (usd per unit) | 14.63 | 15.31 |
Unvested phantom units outstanding, ending balance (usd per unit) | $ 14.95 | $ 15.01 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Units | ||
Unvested phantom units outstanding, beginning balance (in units) | 3,106,024 | 0 |
Granted (in units) | 853,736 | 5,147,190 |
Vested (in units) | (1,583,399) | (1,975,448) |
Forfeited (in units) | (563,400) | (65,718) |
Unvested phantom units outstanding, ending balance (in units) | 1,812,961 | 3,106,024 |
Weighted-Average Grant-Date Fair Value | ||
Unvested phantom units outstanding, beginning balance (usd per unit) | $ 3.43 | $ 0 |
Granted (usd per unit) | 1.46 | 3.43 |
Vested (usd per unit) | 3.18 | 3.43 |
Forfeited (usd per unit) | 3.39 | 3.39 |
Unvested phantom units outstanding, ending balance (usd per unit) | $ 2.74 | $ 3.43 |
Net Income (Loss) Per Share - R
Net Income (Loss) Per Share - Reconciliations of the Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income (loss) per share numerator: | |||||||||||
Net loss from continuing operations | $ (190,433) | $ (131,399) | |||||||||
Net loss from discontinued operations | $ 97 | $ (32) | $ (1,591) | $ (193) | $ 928 | $ (19,383) | $ (12,368) | $ (12,989) | (1,719) | (43,812) | |
Net loss | $ (49,123) | $ (97,464) | $ (23,397) | $ (22,168) | $ (21,634) | $ (42,398) | $ (70,064) | $ (41,115) | (192,152) | (175,211) | [1] |
Net loss for basic and diluted net loss per share | (192,152) | (175,211) | |||||||||
Class of Stock [Line Items] | |||||||||||
Basic and diluted net loss per share from continuing operations (usd per share) | $ (0.45) | $ (0.89) | $ (0.20) | $ (0.20) | $ (0.21) | $ (0.20) | $ (0.48) | $ (0.23) | |||
Basic and diluted net loss per share from discontinued operations (usd per share) | 0 | 0 | (0.01) | 0 | 0.01 | (0.17) | (0.10) | (0.11) | |||
Total net loss per common stock (usd per share) | $ (0.45) | $ (0.89) | $ (0.21) | $ (0.20) | $ (0.20) | $ (0.37) | $ (0.58) | $ (0.34) | |||
Accumulated Deficit | |||||||||||
Income (loss) per share numerator: | |||||||||||
Net loss | $ (192,152) | $ (175,211) | |||||||||
Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Basic and diluted (shares) | 109,168,798 | 116,737,860 | |||||||||
Effect of dilutive securities (shares) | 0 | 0 | |||||||||
Weighted-average shares for dilutive net loss per share (shares) | 109,168,798 | 116,737,860 | |||||||||
Basic and diluted net loss per share from continuing operations (usd per share) | $ (1.74) | $ (1.12) | |||||||||
Basic and diluted net loss per share from discontinued operations (usd per share) | (0.02) | (0.37) | |||||||||
Total net loss per common stock (usd per share) | $ (1.76) | $ (1.49) | |||||||||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Narrative (Details) | Jun. 01, 2016 |
Earnings Per Share [Abstract] | |
Reverse stock split, conversion ratio | 0.1818 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 0 | 3,490 |
Phantom units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 588,852 | 1,292,785 |
Nonemployee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 0 | 500,000 |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 1,812,961 | 3,106,024 |
Interest make-whole derivative - related party and others | ||
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) | Aug. 08, 2018USD ($) | Feb. 28, 2018shares | Jun. 01, 2016USD ($)shares | Mar. 08, 2016USD ($) | Jan. 22, 2016USD ($) | Jan. 04, 2016USD ($)$ / shares | Jun. 19, 2015USD ($)testterm | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | May 31, 2018shares | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 21, 2016USD ($) | Dec. 15, 2016USD ($) |
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party receivables | $ 2,618,000 | $ 2,312,000 | $ 2,618,000 | $ 2,312,000 | |||||||||||||||||
Related party payables, net of receivables | 22,499,000 | 16,004,000 | 22,499,000 | 16,004,000 | |||||||||||||||||
Cost of revenue | 11,393,000 | $ 11,226,000 | $ 10,582,000 | $ 11,068,000 | 8,880,000 | $ 11,472,000 | $ 9,652,000 | $ 11,518,000 | 44,269,000 | ||||||||||||
Sequencing and molecular analysis revenue | 808,000 | ||||||||||||||||||||
Increase in net loss attributable to business acquisition | 2,223,000 | ||||||||||||||||||||
Related party promissory note | 112,666,000 | 112,666,000 | 112,666,000 | 112,666,000 | |||||||||||||||||
Reseller agreement | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Term of agreement with related party | 5 years 6 months | ||||||||||||||||||||
Liquid Tumor Profiling Services Agreement | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party receivables | 540,000 | 540,000 | |||||||||||||||||||
Related party payables | 375,000 | 375,000 | |||||||||||||||||||
Revenue from related parties | 590,000 | ||||||||||||||||||||
Affiliated Entity | Shared services agreement | NantWorks | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Net selling, general, and administrative service expenses incurred related to services provided by related parties | 2,214,000 | 5,174,000 | |||||||||||||||||||
Affiliated Entity | Research and development services | NantWorks | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Net expenses incurred related to services provided by related parties | 356,000 | 239,000 | |||||||||||||||||||
Affiliated Entity | Receivable from Ziosoft KK related to sale of Qi Imaging | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party receivables | 1,915,000 | 2,082,000 | 1,915,000 | 2,082,000 | |||||||||||||||||
Affiliated Entity | Promissory Notes With NantCapital | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Interest bearing on related promissory note | 17,708,000 | 11,500,000 | 17,708,000 | 11,500,000 | |||||||||||||||||
Related party promissory note | $ 112,666,000 | $ 130,374,000 | 124,166,000 | $ 130,374,000 | 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 | ||||||||||||||||||||
Note interest rate | 5.00% | 5.00% | |||||||||||||||||||
Affiliated Entity | Promissory Note 9.75% | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party promissory note | $ 100,000,000 | ||||||||||||||||||||
Interest bearing on related promissory note | 9.75% | ||||||||||||||||||||
Maximum advances per quarter during initial year | $ 10,000,000 | ||||||||||||||||||||
Maximum advances per quarter after initial year | $ 20,000,000 | ||||||||||||||||||||
Maximum deviation from board approved financial plans | 25.00% | ||||||||||||||||||||
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 third renewal option | test | 760,000 | ||||||||||||||||||||
Number of tests to qualify for second renewal option | test | 570,000 | ||||||||||||||||||||
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 | $ 394,000 | 419,000 | $ 394,000 | 419,000 | |||||||||||||||||
Cost of revenue | 5,238,000 | 4,891,000 | |||||||||||||||||||
Equity Method Investee | Promissory Notes With NantOmics | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party promissory note | $ 20,000,000 | 0 | 0 | 0 | 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 | ||||||||||||||||||||
Convertible debt | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party debt | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | $ 107,000,000 | $ 107,000,000 | |||||||||||||||
Note interest rate | 5.50% | 5.50% | |||||||||||||||||||
Convertible debt | Affiliated Entity | Cambridge Purchase Agreement | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Related party debt | $ 10,000,000 | ||||||||||||||||||||
Interest bearing on related promissory note | $ 24,000 | $ 24,000 | $ 24,000 | $ 24,000 | |||||||||||||||||
Liquid Genomics, Inc. | |||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||
Percentage of voting interest acquired | 100.00% | ||||||||||||||||||||
Number of shares issued in acquisition (in shares) | shares | 9,088,362 | 564,779 | |||||||||||||||||||
Estimated useful life of intangible assets acquired | 13 years |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions Business Combination (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets and liabilities of NantHealth Labs at assignment: | |||
Goodwill | $ 115,930 | $ 114,625 | |
Recorded as distribution from additional paid-in capital | $ (3,249) | ||
Liquid Genomics, Inc. | |||
Related Party Transaction [Line Items] | |||
NantOmics Series A-2 shares transferred, or to be transferred, to NantOmics | $ 8,956 | ||
Assets and liabilities of NantHealth Labs 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) |
Employee Retirement Plan (Detai
Employee Retirement Plan (Details) - Other Postretirement Benefit Plan - NantHealth 401k Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Company's matching contribution of employee's percentage contribution, percentage | 100.00% | |
Percentage of participant's pay which Company contributes matching percentage | 3.00% | |
Vesting period of matching contribution | 3 years | |
Company's total matching contributions | $ 1,328 | $ 2,050 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenue | $ 22,862 | $ 22,292 | $ 22,047 | $ 22,263 | $ 22,298 | $ 21,760 | $ 23,514 | $ 19,104 | $ 89,464 | $ 86,676 | |
Cost of revenue | 11,393 | 11,226 | 10,582 | 11,068 | 8,880 | 11,472 | 9,652 | 11,518 | 44,269 | ||
Gross profit | 11,469 | 11,066 | 11,465 | 11,195 | 13,418 | 10,288 | 13,862 | 7,586 | 45,195 | 45,154 | |
Operating expenses | 20,733 | 22,890 | 25,331 | 26,942 | 30,660 | 26,324 | 28,655 | 27,415 | 95,896 | 113,054 | |
Loss from operations | (9,264) | (11,824) | (13,866) | (15,747) | (17,242) | (16,036) | (14,793) | (19,829) | (50,701) | (67,900) | |
Net loss from continuing operations | (49,220) | (97,432) | (21,806) | (21,975) | (22,562) | (23,015) | (57,696) | (28,126) | (194,106) | (133,602) | |
Net loss from discontinued operations | 97 | (32) | (1,591) | (193) | 928 | (19,383) | (12,368) | (12,989) | (1,719) | (43,812) | |
Net loss | $ (49,123) | $ (97,464) | $ (23,397) | $ (22,168) | $ (21,634) | $ (42,398) | $ (70,064) | $ (41,115) | $ (192,152) | $ (175,211) | [1] |
Basic and diluted net loss per share: | |||||||||||
Continued operations - common stock (usd per share) | $ (0.45) | $ (0.89) | $ (0.20) | $ (0.20) | $ (0.21) | $ (0.20) | $ (0.48) | $ (0.23) | |||
Discontinued operations - common stock (usd per share) | 0 | 0 | (0.01) | 0 | 0.01 | (0.17) | (0.10) | (0.11) | |||
Total net loss per common stock (usd per share) | $ (0.45) | $ (0.89) | $ (0.21) | $ (0.20) | $ (0.20) | $ (0.37) | $ (0.58) | $ (0.34) | |||
[1] | The statement for 2017 includes provider/patient engagement solutions business. |
Uncategorized Items - nh-201812
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 350,000 |