Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 20, 2023 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37792 | |
Entity Registrant Name | NantHealth, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3019889 | |
Entity Address, Address Line One | 760 W Fire Tower Rd, Suite 107 | |
Entity Address, City or Town | Winterville, | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28590 | |
City Area Code | 855 | |
Local Phone Number | 949-6268 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,471,346 | |
Entity Central Index Key | 0001566469 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Former Address | ||
Entity Addresses [Line Items] | ||
Entity Address, Address Line One | 3000 RDU Drive, Suite 200 | |
Entity Address, City or Town | Morrisville, | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27560 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 5,822 | $ 1,759 |
Prepaid expenses and other current assets | 4,568 | 4,402 |
Total current assets | 15,338 | 12,585 |
Property, plant, and equipment, net | 4,652 | 12,383 |
Goodwill | 98,333 | 98,333 |
Intangible assets, net | 25,133 | 30,110 |
Related party receivable, net of current | 0 | 937 |
Operating lease right-of-use assets | 2,885 | 4,285 |
Other assets | 142 | 918 |
Total assets | 146,483 | 159,551 |
Current liabilities | ||
Accrued and other current liabilities | 18,571 | 20,006 |
Deferred revenue | 2,145 | 2,724 |
Related party convertible note, net | 62,385 | 0 |
Convertible notes, net | 74,351 | 0 |
Total current liabilities | 191,094 | 35,631 |
Deferred revenue, net of current | 516 | 1,050 |
Deferred income taxes, net | 1,222 | 1,206 |
Operating lease liabilities | 2,176 | 4,054 |
Total liabilities | 396,658 | 384,944 |
Commitments and Contingencies (Note 11) | ||
Stockholders' deficit | ||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 27,471,346 and 7,703,306 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 14 | 12 |
Additional paid-in capital | 915,802 | 895,897 |
Accumulated deficit | (1,165,389) | (1,120,676) |
Accumulated other comprehensive loss | (602) | (626) |
Total stockholders' deficit | (250,175) | (225,393) |
Total liabilities and stockholders' deficit | 146,483 | 159,551 |
Nonrelated Party | ||
Current assets | ||
Accounts receivable, net | 4,576 | 5,948 |
Current liabilities | ||
Accounts payable | 6,671 | 10,408 |
Notes payable | 12,161 | 560 |
Convertible notes, net | 0 | 74,683 |
Other liabilities | 35,979 | 36,411 |
Related Party | ||
Current assets | ||
Accounts receivable, net | 372 | 476 |
Current liabilities | ||
Accounts payable | 5,168 | 1,933 |
Notes payable | 9,642 | 0 |
Related party promissory note | 113,666 | 123,666 |
Convertible notes, net | 0 | 62,335 |
Other liabilities | $ 52,005 | $ 45,908 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock issued (in shares) | 27,471,346 | 7,703,306 |
Common stock outstanding (in shares) | 27,471,346 | 7,703,306 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Revenue | $ 12,468 | $ 16,633 | $ 46,775 | $ 49,504 |
Cost of Revenue | ||||
Total cost of revenue | 5,410 | 6,928 | 17,544 | 21,454 |
Gross Profit | 7,058 | 9,705 | 29,231 | 28,050 |
Operating Expenses | ||||
Selling, general and administrative | 8,718 | 16,580 | 38,053 | 45,577 |
Research and development | 2,362 | 6,299 | 14,189 | 17,875 |
Amortization of acquisition-related assets | 985 | 985 | 2,956 | 2,956 |
Impairment of long-lived assets, including intangibles and internal-use software | 5,506 | 0 | 5,506 | 0 |
Total operating expenses | 17,571 | 23,864 | 60,704 | 66,408 |
Gain (loss) from operations | (10,513) | (14,159) | (31,473) | (38,358) |
Interest expense, net | (4,867) | (3,511) | (13,819) | (10,431) |
Other income (expense), net | 447 | 4,003 | 612 | 6,651 |
Income (loss) before income taxes | (14,933) | (13,667) | (44,680) | (42,138) |
Provision for (benefit from) income taxes | 54 | (10) | 34 | (19) |
Net income (loss) | $ (14,987) | $ (13,657) | $ (44,714) | $ (42,119) |
Basic and diluted net income (loss) per share: | ||||
Total net income (loss) per share - common stock, basic (usd per share) | $ (1) | $ (1.77) | $ (4.40) | $ (5.47) |
Total net income (loss) per share - common stock, diluted (usd per share) | $ (1) | $ (1.77) | $ (4.40) | $ (5.47) |
Weighted average shares outstanding | ||||
Basic - common stock (in shares) | 15,008,883 | 7,703,349 | 10,165,256 | 7,702,712 |
Diluted - common stock (in shares) | 15,008,883 | 7,703,349 | 10,165,256 | 7,702,712 |
Software-Related | ||||
Revenue | ||||
Revenue | $ 12,468 | $ 16,632 | $ 46,773 | $ 49,502 |
Cost of Revenue | ||||
Total cost of revenue | 5,410 | 6,928 | 17,544 | 21,453 |
Software-as-a-service related | ||||
Revenue | ||||
Revenue | 11,971 | 16,161 | 45,099 | 47,793 |
Cost of Revenue | ||||
Total cost of revenue | 4,797 | 5,172 | 15,361 | 16,356 |
Maintenance | ||||
Revenue | ||||
Revenue | 492 | 398 | 1,603 | 1,290 |
Cost of Revenue | ||||
Total cost of revenue | 509 | 509 | 1,870 | 1,347 |
Professional services | ||||
Revenue | ||||
Revenue | 5 | 73 | 71 | 419 |
Cost of Revenue | ||||
Total cost of revenue | 0 | 0 | 0 | 9 |
Amortization of developed technologies | ||||
Cost of Revenue | ||||
Total cost of revenue | 104 | 1,247 | 313 | 3,741 |
Other | ||||
Revenue | ||||
Revenue | 0 | 1 | 2 | 2 |
Cost of Revenue | ||||
Total cost of revenue | $ 0 | $ 0 | $ 0 | $ 1 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (14,987) | $ (13,657) | $ (44,714) | $ (42,119) |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | (156) | (322) | 24 | (696) |
Total other comprehensive income (loss) | (156) | (322) | 24 | (696) |
Comprehensive income (loss) | $ (15,143) | $ (13,979) | $ (44,690) | $ (42,815) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2021 | 7,700,349 | ||||
Beginning balance at Dec. 31, 2021 | $ (161,992) | $ 12 | $ 891,105 | $ (1,052,897) | $ (212) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation cost | 1,417 | 1,417 | |||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes (in shares) | 3,000 | ||||
Shares issued in connection with employee stock plans, net of shares withheld for employee taxes | 24 | 24 | |||
Other comprehensive income (loss) | (96) | (96) | |||
Net income (loss) | (15,950) | (15,950) | |||
Ending balance (in shares) at Mar. 31, 2022 | 7,703,349 | ||||
Ending balance at Mar. 31, 2022 | (176,597) | $ 12 | 892,546 | (1,068,847) | (308) |
Beginning balance (in shares) at Dec. 31, 2021 | 7,700,349 | ||||
Beginning balance at Dec. 31, 2021 | (161,992) | $ 12 | 891,105 | (1,052,897) | (212) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (42,119) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 7,703,349 | ||||
Ending balance at Sep. 30, 2022 | (201,162) | $ 12 | 894,750 | (1,095,016) | (908) |
Beginning balance (in shares) at Mar. 31, 2022 | 7,703,349 | ||||
Beginning balance at Mar. 31, 2022 | (176,597) | $ 12 | 892,546 | (1,068,847) | (308) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation cost | 1,289 | 1,289 | |||
Other comprehensive income (loss) | (278) | (278) | |||
Net income (loss) | (12,512) | (12,512) | |||
Ending balance (in shares) at Jun. 30, 2022 | 7,703,349 | ||||
Ending balance at Jun. 30, 2022 | (188,098) | $ 12 | 893,835 | (1,081,359) | (586) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation cost | 915 | 915 | |||
Other comprehensive income (loss) | (322) | (322) | |||
Net income (loss) | (13,657) | (13,657) | |||
Ending balance (in shares) at Sep. 30, 2022 | 7,703,349 | ||||
Ending balance at Sep. 30, 2022 | $ (201,162) | $ 12 | 894,750 | (1,095,016) | (908) |
Beginning balance (in shares) at Dec. 31, 2022 | 7,703,306 | 7,703,306 | |||
Beginning balance at Dec. 31, 2022 | $ (225,393) | $ 12 | 895,897 | (1,120,676) | (626) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation cost | 908 | 908 | |||
Share repurchase (in shares) | (2) | ||||
Other comprehensive income (loss) | 81 | 81 | |||
Net income (loss) | (12,241) | (12,241) | |||
Ending balance (in shares) at Mar. 31, 2023 | 7,703,304 | ||||
Ending balance at Mar. 31, 2023 | $ (236,645) | $ 12 | 896,805 | (1,132,917) | (545) |
Beginning balance (in shares) at Dec. 31, 2022 | 7,703,306 | 7,703,306 | |||
Beginning balance at Dec. 31, 2022 | $ (225,393) | $ 12 | 895,897 | (1,120,676) | (626) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | $ (44,714) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 27,471,346 | 27,471,346 | |||
Ending balance at Sep. 30, 2023 | $ (250,175) | $ 14 | 915,802 | (1,165,389) | (602) |
Beginning balance (in shares) at Mar. 31, 2023 | 7,703,304 | ||||
Beginning balance at Mar. 31, 2023 | (236,645) | $ 12 | 896,805 | (1,132,917) | (545) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation cost | 796 | 796 | |||
Other comprehensive income (loss) | 99 | 99 | |||
Net income (loss) | (17,485) | (17,485) | |||
Ending balance (in shares) at Jun. 30, 2023 | 7,703,304 | ||||
Ending balance at Jun. 30, 2023 | (253,235) | $ 12 | 897,601 | (1,150,402) | (446) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation cost | 702 | 702 | |||
Shares issued in connection with stock purchase agreement (in shares) | 19,768,042 | ||||
Shares issued in connection with stock purchase agreement | 17,501 | $ 2 | 17,499 | ||
Other comprehensive income (loss) | (156) | (156) | |||
Net income (loss) | $ (14,987) | (14,987) | |||
Ending balance (in shares) at Sep. 30, 2023 | 27,471,346 | 27,471,346 | |||
Ending balance at Sep. 30, 2023 | $ (250,175) | $ 14 | $ 915,802 | $ (1,165,389) | $ (602) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ (44,714) | $ (42,119) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 9,766 | 11,911 | |
Impairment of intangible assets, including internal-use software | 5,506 | 0 | |
Amortization of debt discounts and deferred financing offering cost | 786 | 110 | |
Change in fair value of Bookings Commitment | (456) | (6,156) | |
Stock-based compensation | 2,310 | 3,542 | |
Deferred income taxes, net | 38 | (282) | |
Provision for bad debt expense | 69 | 26 | |
Gain on partial lease termination | (2) | 0 | |
Impairment of ROU asset | 23 | 208 | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 1,300 | 480 | |
Related party receivables, net | 1,041 | 105 | |
Prepaid expenses and other current assets | (884) | (1,995) | |
Accounts payable | (3,741) | 3,026 | |
Accrued and other current liabilities | (2,297) | 1,878 | |
Deferred revenue | (1,110) | (400) | |
Related party payables, net | 10,391 | 4,647 | |
Change in operating lease right-of-use assets and liabilities | (355) | (370) | |
Other assets and liabilities | 1,735 | 171 | |
Net cash provided by (used in) operating activities | (20,594) | (25,218) | |
Cash flows from investing activities: | |||
Purchases of property and equipment, including internal-use software | (2,062) | (4,156) | |
Net cash provided by (used in) investing activities | (2,062) | (4,156) | |
Cash flows from financing activities: | |||
Proceeds from insurance promissory note | 0 | 1,657 | |
Repayments of insurance promissory note and notes payable | (560) | (1,327) | |
Proceeds from related party notes | 10,125 | 0 | |
Proceeds from promissory notes | 12,375 | 0 | |
Proceeds from the issuance of common stock | 7,500 | 0 | |
Proceeds from exercises of stock options | 0 | 24 | |
Payment of deferred financing costs, related party | (767) | 0 | |
Payment of deferred financing costs | (997) | 0 | |
Net cash provided by (used in) financing activities | 27,676 | 354 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (903) | 53 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 4,117 | (28,967) | |
Cash, cash equivalents and restricted cash, beginning of period | [1] | 3,559 | 31,402 |
Cash, cash equivalents and restricted cash, end of period | [1] | 7,676 | 2,435 |
Other current assets | 1,854 | 1,180 | |
Other assets | 0 | 620 | |
Total restricted cash | $ 1,854 | $ 1,800 | |
[1]Cash and cash equivalents included restricted cash of $1,854 and $1,800 at September 30, 2023 and December 31, 2022, respectively. |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
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 its clinical decision support, payer engagement solutions, data analysis and network monitoring and management. The Company also markets its clinical decision support, payer engagement solutions, data analysis and network monitoring and management on a stand-alone basis. NantHealth is a majority-owned subsidiary of NantWorks, LLC (“NantWorks”), which is a subsidiary of California Capital Equity, LLC (“Cal Cap”). The three companies were founded by and are led by Dr. Patrick Soon-Shiong. The Company’s product portfolio comprises the latest technology in payer/provider collaboration platforms for real-time coverage decision support (Eviti and NaviNet) and data solutions that include multi-data analysis, reporting and professional services offerings (Quadris). In addition, The OpenNMS Group, Inc. ("OpenNMS"), the Company’s wholly-owned subsidiary, helps businesses monitor and manage network health and performance. Altogether, we generally derive revenue from software as a service ("SaaS') subscription fees, support services, professional services, and revenue sharing through collaborations with complementary businesses. The Company believes it is uniquely positioned to benefit from multiple significant market opportunities as healthcare providers and payers transition from fee-for-service to value-based reimbursement models. They need solutions that increase operational efficiency, manage costs, improve care collaboration and accelerate their pursuit of evidence-based clinical practice. The Company also believes that its core business lines enable opportunities to create data analytics services and assets which further drive value and efficiency for its customers. The Company is investing to further integrate big data and automated intelligence technologies within our core business lines and to create new product and service offerings. As of September 30, 2023, the Company conducted the majority of its operations in the United States, Canada, and the United Kingdom. Nasdaq Delisting and OTCQB Quotation and Subsequent Transfer to OTC Pink On October 31, 2022, the Company received a notice (the “Notice”) from Nasdaq informing it that the Company was not in compliance with the minimum $15,000,000 market value of publicly held shares requirement for continued listing on the Nasdaq Global Select Market pursuant to Listing Rule 5450(b)(2)(C) (the “Public Float Requirement”). The Notice had no immediate effect on the Company's Nasdaq listing or trading of its common stock. In accordance with Listing Rule 5810(c)(3)(D), the Company had a period of 180 calendar days, or until May 1, 2023, to regain compliance with the Public Float Requirement (the "Compliance Period"). On May 2, 2023, the Company received written notice from Nasdaq stating that it had not complied with the Public Float Requirement prior to the expiration of the Compliance Period (the “Delisting Notice”). The Delisting Notice indicated that the Company's common stock would be suspended from trading on Nasdaq on May 11, 2023 unless the Company requested a hearing pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series, by requesting a hearing before the Nasdaq Hearings Panel (the “Panel”) by 4:00 p.m. Eastern Time on May 9, 2023. On May 8, 2023, the Company timely requested a hearing before the Panel, which temporarily stayed the suspension of trading and delisting of the Company’s common stock from Nasdaq. The hearing was scheduled for June 8, 2023. After additional consideration, the Company determined that it was no longer in its best interest to pursue continued listing of its common stock on the Nasdaq Global Select Market and withdrew its request for a hearing on May 19, 2023. On May 22, 2023, the Company received notice from Nasdaq that its shares would be suspended at the open of business on May 24, 2023, and the Company’s common stock began trading on the OTC Pink under a new symbol “NHIQ” on May 24, 2023. On May 30, 2023, the Company’s common stock began trading on the OTCQB Venture Market (the “OTCQB”), and Nasdaq filed a Form 25 Notification of Delisting with the Securities Exchange Commission (“SEC”) on July 27, 2023. After consummation of the August 2023 Stock Purchase Agreement (as defined below), the Company received notice on September 6, 2023 from the OTC Markets Group, Inc. that the Company no longer met the public float requirement to remain quoted on the OTCQB and had until October 6, 2023 to regain compliance. The Company was unable to cure the public float deficiency and was automatically transferred to the OTC Pink in October 2023, where it remains quoted under the symbol “NHIQ.” Basis of Presentation and Principles of Consolidation The accompanying unaudited Consolidated Financial Statements include the accounts of NantHealth and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and, in the opinion of management, include all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the Company's financial position and results of operations. In accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as issued by the Securities and Exchange Commission ("SEC"), these unaudited Consolidated Financial Statements do not include all of the information and disclosures required by GAAP for complete financial statements. These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2022. The accompanying Consolidated Balance Sheet as of December 31, 2022 has been derived from the audited Consolidated Financial Statements at that date. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year. The Company has incurred significant losses and negative cash flows from operations. As of September 30, 2023, the Company had cash and cash equivalents of $5,822 and an accumulated deficit of $1,165,389. The Company had a net loss of $44,714 and used cash of $20,594 for operating activities for the nine month period ended September 30, 2023. In accordance with Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date the financial statements are issued. If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt. As a result of continuing anticipated operating cash outflows the Company believes that substantial doubt exists regarding its ability to continue as a going concern without additional funding or financing. The Company’s ability to continue as a going concern is dependent upon its success in obtaining additional equity or debt financing, attaining further operating efficiencies, reducing expenditures and ultimately, generating significant revenue growth. The Company is evaluating strategies to obtain the required additional funding for future operations. 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. The Company may also consider delaying its business activities and strategic initiatives, or selling off components of its business. Additionally, the Company continues to consider all strategic alternatives. The Company is undertaking a number of actions in order to improve its financial position and stabilize its results of operations including but not limited to, cost cutting, lowering capital expenditures, and implementing hiring freezes. To date, the Company's primary sources of capital have been the private placement of membership interests prior to its IPO, debt financing agreements, including promissory notes with Nant Capital and its affiliates, convertible notes, the sale of its common stock, and proceeds from the sale of components of its business. The accompanying financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. The estimates and assumptions used in the accompanying unaudited Consolidated 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, useful lives of long-lived assets and intangible assets, income taxes, stock-based compensation, impairment of long-lived assets and intangible assets, and the expected performance against minimum reseller commitments. 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. 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. Ac cordingly, management has determined that the Company operates in one reportable segment. Upcoming Accounting Standard Pronouncements 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, 2022 for smaller reporting companies and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. We adopted this standard effective January 1, 2023. The impact of adoption on our unaudited Consolidated Financial Statements was not material. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not have, nor are believed by management to have, a material impact on the Company's present or future Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Contract Balances The Company records deferred revenue when cash payments are received, or payment is due, in advance of its fulfillment of performance obligations. During the three months ended September 30, 2023 and 2022 there were $583 and $543, recognized, respectively, that were included in the deferred revenue balance at the beginning of the period. During the nine months ended September 30, 2023 and 2022, there were revenues of $2,121 and $2,065 recognized, respectively. 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 $289 at September 30, 2023 and $686 at December 31, 2022. During the three months ended September 30, 2023 and 2022 the Company recorded amortization of $93 and $163, respectively. During the nine months ended September 30, 2023 and 2022, the Company recorded amortization of $333 and $398, respectively. 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. Performance Obligations As of September 30, 2023, the Company has allocated a total transaction price of $2,725 to unfulfilled performance obligations that are expected to be fulfilled within 8 years. Excluded from this amount are contracts of less than one year and variable consideration that relates to the value of services provided. |
Accounts Receivable, net
Accounts Receivable, net | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are included in the Consolidated Balance Sheets, net of the allowance for doubtful accounts. The allowance for doubtful accounts at September 30, 2023 and December 31, 2022 was $70 and $15, respectively. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Other Current Assets And Other Current Liabilities [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities Prepaid expenses and other current assets as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Prepaid expenses $ 2,555 $ 1,574 Restricted cash 1,854 1,180 Securities litigation insurance receivable — 1,250 Other current assets 159 398 Prepaid expenses and other current assets $ 4,568 $ 4,402 Accrued and other current liabilities as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Payroll and related costs $ 1,108 $ 7,949 Accrued liabilities 6,234 4,279 Bookings Commitment (see Note 9) 2,629 2,153 Interest payable 2,368 703 Operating lease liabilities 2,249 2,105 Securities litigation and cyber estimated liability 220 1,470 Other accrued and other current liabilities 3,763 1,347 Accrued and other current liabilities $ 18,571 $ 20,006 |
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 September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Prepaid expenses $ 2,555 $ 1,574 Restricted cash 1,854 1,180 Securities litigation insurance receivable — 1,250 Other current assets 159 398 Prepaid expenses and other current assets $ 4,568 $ 4,402 Accrued and other current liabilities as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Payroll and related costs $ 1,108 $ 7,949 Accrued liabilities 6,234 4,279 Bookings Commitment (see Note 9) 2,629 2,153 Interest payable 2,368 703 Operating lease liabilities 2,249 2,105 Securities litigation and cyber estimated liability 220 1,470 Other accrued and other current liabilities 3,763 1,347 Accrued and other current liabilities $ 18,571 $ 20,006 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment, net as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Computer equipment and software $ 7,538 $ 7,592 Furniture and equipment 1,037 1,054 Leasehold improvements 3,780 3,776 Property, plant, and equipment, excluding internal-use software, gross 12,355 12,422 Less: Accumulated depreciation and amortization (12,092) (11,073) Property, plant and equipment, excluding internal-use software, net 263 1,349 Internal-use software 52,080 49,479 Construction in progress - Internal-use software 1,088 1,464 Less: Accumulated depreciation and amortization, internal-use software (48,779) (39,909) Internal-use software, net 4,389 11,034 Property, plant and equipment, net $ 4,652 $ 12,383 Depreciation expense was $3,820 and $9,766 for the three and nine months ended September 30, 2023 , of which $2,393 and $5,092, related to internal-use software costs, respectively. Depreciation expense was $1,620 and $4,817 for the three and nine months ended September 30, 2022 , respectively, of which $1,134 and $3,340 related to internal-use software costs. Amounts capitalized to internal-use software related to continuing operations for the three and nine months ended September 30, 2023 and 2022 we re $1,389 and $1,392 and $3,910 and $4,311, respectively. |
Intangible Assets, net
Intangible Assets, net | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Intangible Assets, net The Company’s definite-lived intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Customer relationships $ 53,000 $ 53,000 Developed technologies 34,500 34,500 Trade name 3,300 3,300 Installed user base 1,400 1,400 Intangible assets, gross 92,200 92,200 Less: Accumulated amortization (67,067) (62,090) Intangible assets, net $ 25,133 $ 30,110 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 operations for the three and nine months ended September 30, 2023 and 2022 was $1,089 and $2,232 and $3,269 and $6,697, respectively. The estimated future amortization expense over the next five years and thereafter for the intangible assets that exist as of September 30, 2023 is as follows: Amounts Remainder of 2023 $ 865 2024 3,467 2025 3,467 2026 3,467 2027 3,467 Thereafter 10,400 Total future intangible amortization expense $ 25,133 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2021 4.5% Convertible Senior Notes ("2021 Convertible Notes") On April 13, 2021, the Company and its wholly owned subsidiary, NaviNet, Inc. (the "NaviNet") entered into a note purchase agreement with Highbridge Capital Management, LLC and one of its affiliates (“Highbridge”) and certain other buyers, including Nant Capital, to issue and sell $137,500 in aggregate principal amount of its 4.5% convertible senior 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 2021 Convertible Notes were issued on April 27, 2021. The total net proceeds from this offering were approximately $136,772, comprised of $62,223 from Nant Capital and $74,549 from Highbridge, after deducting Highbridge’s debt issuance costs of $118 and $610 in debt issuance costs paid to third parties in connection with the 2021 Convertible Notes offering. The Company used part of the proceeds from the 2021 Convertible Notes issuance to repurchase the remaining $31,945 of principal amount of the 2016 5.5% Convertible Senior Notes ("2016 Notes") held by Highbridge (“Repurchased Notes”) and pay $644 of accrued and unpaid interest. On April 27, 2021, in connection with the issuance of the 2021 Convertible Notes, the Company provided a notice of a "Fundamental Change" (as defined in the indenture governing the Company's 2016 Notes) and an offer to repurchase all the outstanding 2016 Notes. On May 25, 2021, the Company purchased $55,555 of the outstanding 2016 Notes via a Fundamental Change repurchase and paid $1,358 of accrued and unpaid interest thereon. On April 27, 2021, the 2021 Convertible Notes were issued to the investors under an indenture (as amended and restated, the “2021 Indenture”) dated April 27, 2021 entered into between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) (the “Trustee”). Interest rates on the 2021 Convertible Notes are fixed at 4.5% per year, payable semi-annually on October 15th and April 15th of each year, beginning on October 15, 2021. The 2021 Convertible Notes will mature on April 15, 2026, unless earlier repurchased by the Company or converted pursuant to their terms. The deferred financing offering costs on the 2021 Convertible Notes are being amortized to interest expense over the contractual terms of the 2021 Convertible Notes, using the effective interest method at an effective interest rate of 4.61%. The initial conversion rate of the 2021 Convertible Notes is 17.3250 shares of common stock per $1 principal amount of 2021 Convertible Notes (which is equivalent to an initial conversion price of approximately $57.72 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events in accordance with the terms of the 2021 Indenture but will not be adjusted for accrued and unpaid interest. Holders of the 2021 Convertible Notes may convert all or a portion of their 2021 Convertible Notes, in multiples of $1 principal amount, at any time prior to the close of business on the business day immediately preceding the maturity date. Upon conversion, the 2021 Convertible Notes will be settled in cash, shares of the Company's common stock or any combination thereof at the Company's option. As of September 30, 2023, the remaining life of the Convertible Notes is approximately 2.5 years . Prior to May 17, 2023, the 2021 Convertible Notes were the Company’s general unsecured obligations and were initially guaranteed on a senior unsecured basis by NaviNet. The Company may not redeem the 2021 Convertible Notes prior to April 20, 2024. The Company may redeem for cash all or any portion of the 2021 Convertible Notes, at its option, on or after April 20, 2024, if the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2021 Convertible Notes to be redeemed, plus any accrued and unpaid special interest up to, but excluding, the redemption date. No sinking fund is provided for the 2021 Convertible Notes, which means that the Company is not required to redeem or retire the 2021 Convertible Notes periodically. If the Company exercises this option to redeem the 2021 Convertible Notes owned by Highbridge and Highbridge is unable to convert such 2021 Convertible Notes as a result of the application of the beneficial ownership limitations, at the request of Highbridge, the Company shall convert such 2021 Convertible Notes into the number of shares of the Company’s Series 1 Preferred Stock equal to the number of shares that the 2021 Convertible Notes are convertible into pursuant to the Conversion Option (as defined in the 2021 Indenture) into common stock. Upon the occurrence of a fundamental change (as defined in the 2021 Indenture), holders may require the Company to purchase all or a portion of the 2021 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 2021 Convertible Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date. A fundamental change has occurred as a result of the Company's delisting from Nasdaq resulting in current classification of the 2021 Convertible Notes as of September 30, 2023. For so long as at least $25,000 principal amount of the 2021 Convertible Notes are outstanding, the 2021 Indenture restricts the Company or any of its subsidiaries from creating, assuming, or incurring any indebtedness owing to any of the Company's affiliates (other than intercompany indebtedness between the Company and its subsidiaries and other than any of the Company's 2021 Convertible Notes), or prepaying any such indebtedness, subject to certain exceptions, unless certain conditions described in the 2021 Indenture have been satisfied. Under the 2021 Indenture, the Company may incur affiliate debt if there is (i) no default or event of default at the time of such incurrence or would occur as a consequence of such incurrence; (ii) such affiliate debt is unsecured and subordinated to the 2021 Convertible Notes; and (iii) no principal of such affiliate debt is scheduled to mature earlier than the date that is 181 days after April 15, 2026, the maturity date of the 2021 Convertible Notes. See Note 11 Commitments and Contingencies for default provisions. On May 17, 2023, pursuant to the terms of the Credit Agreement (as defined below), the Company amended and restated the 2021 Indenture to, among other things, cause the 2021 Convertible Notes to be (i) guaranteed by the Company’s subsidiaries that provided guarantees under the Credit Agreement, (ii) secured by second priority liens on the assets that secure borrowings made pursuant to the Credit Agreement, and (iii) governed by covenants that are substantially similar to the covenants in Articles VI and VII of the Credit Agreement. In connection with this post-closing covenant, the 2021 Indenture was also amended to add certain related events of default consistent with Article VIII of the Credit Agreement. On September 29, 2023, the Company received notice from the Trustee that, pursuant to the terms of 2021 Indenture that Highbridge, as holders of approximately $75.0 million in aggregate principal amount of the 2021 Convertible Notes, have exercised their right under the 2021 Indenture to require the Company to repurchase their 2021 Convertible Notes (the “Repurchase Right”), and the repurchase of Highbridge’s 2021 Convertible Notes was due on October 18, 2023. As of the date of this Quarterly Report on Form 10-Q, the Company has not repurchased the 2021 Convertible Notes held by Highbridge and therefore is in technical default. However, the Company is currently in discussions with Highbridge regarding the exercise of its Repurchase Right, and amendments and/or waivers of certain covenants in the 2021 Indenture and under the Credit Agreement, including the Repurchase Right. The following table summarizes how the issuance of the 2021 Convertible Notes is reflected in the Company's Consolidated Balance Sheets. 2021 Convertible Notes - Nant Capital September 30, 2023 December 31, 2022 Gross proceeds $ 62,500 $ 62,500 Unamortized debt discounts and deferred financing offering costs (115) (165) Net carrying amount - related party convertible note $ 62,385 $ 62,335 2021 Convertible Notes - Highbridge Gross proceeds $ 75,000 $ 75,000 Unamortized debt discounts and deferred financing offering costs (649) (317) Net carrying amount - convertible note $ 74,351 $ 74,683 Promissory Notes On March 2, 2023, the Company entered into a credit agreement (the “Credit Agreement”) with Nant Capital and Highbridge as lenders. The Credit Agreement provides for a senior secured term loan facility in an aggregate principal amount of $22,500 in a single drawdown made by the Company at closing (the “Senior Secured Term Loan Facility”). The maturity date of the Credit Agreement was originally December 15, 2023 (the “Maturity Date”) and accrues interest at an annual rate of 13% per annum with a 1% original issue discount. The proceeds from the Senior Secured Term Loan Facility will be used by the Company to fund working capital needs, expenditures and general corporate purposes of the Company. The holders have agreed to amend the Credit Agreement (a) to extend the Maturity Date to May 17, 2024 and (b) to defer cash interest payments that would otherwise have been payable pursuant to the Credit Agreement and the 2021 Notes until May 17, 2024. Concurrently with the execution of, and pursuant to, the Credit Agreement, the Company also entered into (1) a subordination agreement (the “Subordination Agreement”) with Nant Capital and Airstrip (collectively, the “Affiliated Lenders”), who are holders of certain affiliated debt of the Company, and (2) a letter agreement (the “Letter Agreement”) with certain entities affiliated with Highbridge and Nant Capital, who are holders of the 2021 Convertible Notes issued pursuant to the 2021 Indenture. The Subordination Agreement provides, among other things, that any payment of principal of, premium, if any, or interest on certain subordinated debt held by the Affiliated Lenders shall be subordinated and subject in right of payment to the prior payment of the full Senior Secured Term Loan Facility so long as such Senior Secured Term Loan Facility is outstanding. The Letter Agreement provides that, among other things, (1) the holders of the 2021 Convertible Notes shall waive compliance with certain provisions of the 2021 Indenture, including, but not limited to, restrictions on borrowings from an affiliate lender of the Company and any current or future Default or Event of Default (as each term is defined in the 2021 Indenture) pursuant to any breach of Section 4.10 of the 2021 Indenture arising from any borrowing made by the affiliated lender to the Company, each such waiver is solely in connection with the Senior Secured Term Loan Facility, (2) prohibit the holders of the 2021 Convertible Notes from exercising any right to require the Company to repurchase any or all of the 2021 Convertible Notes upon the occurrence of a Fundamental Change (as defined in the 2021 Indenture) solely in connection with the Company’s common stock being delisted from the Nasdaq Global Select Market or similar securities exchange for a period beginning on the Closing Date (as defined in the Credit Agreement) and ending on the date that is five (5) months after the Closing Date, and (3) restricting the holders of the 2021 Convertible Notes from disposing of or otherwise transferring the 2021 Convertible Notes to any person other than an affiliate of such holder, until the approval of the Indenture Consent (as defined in the Letter Agreement). On November 21, 2022, the Company entered into an unsecured subordinated promissory note (the “2022 Nant Capital Note”) with Nant Capital, whereby Nant Capital loaned $7,000 to the Company. Nant Capital is an entity affiliated with Dr. Patrick Soon-Shiong, our Chairman of the Board of Directors and former Chief Executive Officer. The 2022 Nant Capital Note contains an interest rate equal to the Term Secured Overnight Financing Rate (“SOFR”) plus 8.5% per annum, compounded annually and a maturity date of October 31, 2026. The Nant Capital Note also contains semiannual interest payments due on April 15th and October 15th of each year. The payment of the 2022 Nant Capital Note shall be subordinated and subject in right of payment to the prior payment in full of the 2021 Convertible Notes, and, as disclosed above, is subordinated and subject in right of payment to the prior payment of the full Senior Secured Term Loan Facility so long as such Senior Secured Term Loan Facility is outstanding pursuant to the Subordination Agreement. On October 3, 2022, the Company entered into an unsecured subordinated promissory note (the “Airstrip Note”) with Airstrip Technologies, Inc., a Delaware corporation (“Airstrip”), whereby AirStrip loaned $4,000 to the Company. AirStrip is an entity affiliated with Dr. Patrick Soon-Shiong, our Chairman of the Board of Directors (the "Board") and former CEO. The Airstrip Note contains an 8.5% interest rate compounded annually and a maturity date of October 31, 2026. The payment of the Airstrip Note shall be subordinated and subject in right of payment to the prior payment in full of the 2021 Convertible Notes, and, as disclosed above, is subordinated and subject in right of payment to the prior payment of the full Senior Secured Term Loan Facility so long as such Senior Secured Term Loan Facility is outstanding pursuant to the Subordination Agreement . In January 2016, the Company executed the Subordinated Nant Capital Note with Nant Capital (the "Nant Capital Note"), a personal investment vehicle for Dr. Soon-Shiong, our Chairman and former CEO. As of September 30, 2023, the total advances made by Nant Capital to us pursuant to the note was approximately $112,666. On May 9, 2016, the Nant Capital Note was amended and restated to provide that all outstanding principal and accrued and unpaid interest is due and payable on June 30, 2021, and not on demand. On December 15, 2016, in connection with the offering of the 2016 Notes, the Company entered into a Second Amended and Restated Promissory Note which amended and restated the Amended and Restated Promissory Note, dated May 9, 2016, between us and Nant Capital, to, among other things, extend the maturity date of the Nant Capital Note to June 15, 2022 and to subordinate the Nant Capital Note in right of payment to the 2016 Notes. The Nant Capital 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. When a repayment is made, Nant Capital 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 our 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 Nant Capital. On April 27, 2021, in connection with the issuance of the 2021 Convertible Notes, the Company entered into a Third Amended and Restated Promissory Note which amends and restates its promissory note, dated January 4, 2016, as amended on May 9, 2016, and on December 16, 2016, between the Company and Nant Capital, to, among other things, extend the maturity date of the promissory note to October 1, 2026 and to subordinate the promissory note in right of payment to the 2021 Convertible Notes. On August 28, 2023, pursuant to the August 2023 Stock Purchase Agreement, Nant Capital converted $10.0 million aggregate principal amount for shares of Common Stock in accordance with the terms and conditions of the Nant Capital Note. See Note 13 for further information on the August 2023 Stock Purchase Agreement. The following tables summarize how the issuances of the Credit Agreement, Nant Capital Note, 2022 Nant Capital Note, Airstrip Note, and insurance promissory note are reflected in the Company's Consolidated Balance Sheets. September 30, 2023 December 31, 2022 Credit Agreement - Nant Capital Gross proceeds, related party promissory note $ 10,125 $ — Unamortized debt discounts and deferred financing offering costs (483) — Total net carrying amount, related party notes payable $ 9,642 $ — Credit Agreement - Highbridge Gross proceeds, note payable $ 12,375 $ — Unamortized debt discounts and deferred financing offering costs (214) — Total net carrying amount, Highbridge $ 12,161 $ — Insurance promissory note $ — $ 560 Total net carrying amount, notes payable current $ 12,161 $ 560 September 30, 2023 December 31, 2022 Nant Capital Note Gross proceeds, related party promissory note $ 102,666 $ 112,666 2022 Nant Capital Note Gross proceeds, related party promissory note 7,000 7,000 Airstrip Note Gross proceeds, related party promissory note 4,000 4,000 Total net carrying amount, related party promissory note $ 113,666 $ 123,666 The accrued and unpaid interest on the Nant Capital Note and Airstrip Note was included as part of non-current related party liabilities in the Consolidated Balance Sheets. September 30, 2023 December 31, 2022 Nant Capital Note Accrued Interest $ 51,668 $ 45,825 Airstrip Note Accrued Interest 337 83 Total related party liabilities $ 52,005 $ 45,908 The accrued and unpaid interest on the 2021 Convertible Notes, 2022 Nant Capital Note, and Credit Agreement Note are included as part of related party payables in the Consolidated Balance Sheets. September 30, 2023 December 31, 2022 2021 Convertible Notes - Nant Capital Accrued interest $ 2,695 $ 586 2022 Nant Capital Note Accrued interest 789 103 Credit Agreement - Nant Capital Accrued interest 666 — Total accrued interest $ 4,150 $ 689 The accrued and unpaid interest on the 2021 Convertible Notes and Credit Agreement Note are included as part of accrued and other current liabilities in the Consolidated Balance Sheets. September 30, 2023 December 31, 2022 2021 Convertible Notes - Highbridge Accrued interest $ 1,547 $ 703 Credit Agreement - Highbridge Accrued interest 821 — Total accrued interest $ 2,368 $ 703 The following tables set forth the Company's interest expense recognized in the Company's Consolidated Statements of Operations for the three months ended September 30, 2023 and 2022 and for the nine months ended September 30, 2023 and 2022. The amounts below are gross interest expense and do not reflect interest income which is also included in the interest expense, net amount in the Company's Consolidated Statements of Operations. Related-Party Other Total Three Months Ended September 30, 2023 Nant Capital Note Accrued coupon interest $ 1,957 $ — $ 1,957 Amortization of deferred financing offering costs — — — Total notes interest expense $ 1,957 $ — $ 1,957 2021 Convertible Notes Accrued coupon interest $ 703 $ 844 $ 1,547 Amortization of deferred financing offering costs 53 17 70 Total notes interest expense $ 756 $ 861 $ 1,617 Credit Agreement Accrued coupon interest $ 338 $ 413 $ 751 Amortization of deferred financing offering costs 123 155 278 Total notes interest expense $ 461 $ 568 $ 1,029 2022 Nant Capital Note Accrued coupon interest $ 232 $ — $ 232 Amortization of deferred financing offering costs — — — Total notes interest expense $ 232 $ — $ 232 Airstrip Note Accrued coupon interest $ 86 $ — $ 86 Amortization of deferred financing offering costs — — — Total notes interest expense $ 86 $ — $ 86 Total interest expense $ 3,492 $ 1,429 $ 4,921 Related-Party Other Total Three Months Ended September 30, 2022 Nant Capital Note Accrued coupon interest $ 1,903 $ — $ 1,903 Amortization of deferred financing offering costs — — — Total notes interest expense $ 1,903 $ — $ 1,903 2021 Convertible Notes Accrued coupon interest $ 703 $ 844 $ 1,547 Amortization of deferred financing offering costs 20 17 37 Total notes interest expense $ 723 $ 861 $ 1,584 Total interest expense $ 2,626 $ 861 $ 3,487 Nine Months Ended September 30, 2023 Related-Party Other Total Nant Capital Note Accrued coupon interest $ 5,885 $ — $ 5,885 Amortization of deferred financing offering costs — — — Total notes interest expense $ 5,885 $ — $ 5,885 2021 Convertible Notes Accrued coupon interest $ 2,109 $ 2,531 $ 4,640 Amortization of deferred financing offering costs 93 50 143 Total notes interest expense $ 2,202 $ 2,581 $ 4,783 Credit Agreement Accrued coupon interest $ 767 $ 937 $ 1,704 Amortization of deferred financing offering costs 284 359 643 Total notes interest expense $ 1,051 $ 1,296 $ 2,347 2022 Nant Capital Note Accrued coupon interest $ 685 $ — $ 685 Amortization of deferred financing offering costs — — — Total notes interest expense $ 685 $ — $ 685 Airstrip Note Accrued coupon interest $ 254 $ — $ 254 Amortization of deferred financing offering costs — — — Total notes interest expense $ 254 $ — $ 254 Total interest expense $ 10,077 $ 3,877 $ 13,954 Nine Months Ended September 30, 2022 Related-Party Other Total Nant Capital Note Accrued coupon interest $ 5,644 $ — $ 5,644 Amortization of deferred financing offering costs — — — Total notes interest expense $ 5,644 $ — $ 5,644 2021 Convertible Notes Accrued coupon interest $ 2,109 $ 2,531 $ 4,640 Amortization of deferred financing offering costs 60 50 110 Total notes interest expense $ 2,169 $ 2,581 $ 4,750 Total interest expense $ 7,813 $ 2,581 $ 10,394 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, 2023 Total fair value Quoted price in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities Bookings Commitment $ 36,407 $ — $ — $ 36,407 December 31, 2022 Total fair value Quoted price in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities Bookings Commitment $ 36,863 $ — $ — $ 36,863 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. Level 3 Inputs Bookings Commitment 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. 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 C ompany licensed certain software and agreed to sell certain hardware to Allscripts pursuant to a software license and supply agreement. The Company also agreed that Allscripts shall receive at least $500 per year in payments from bookings (the “Annual Minimum Commitment”). If the total payments received by Allscripts from bookings during such period are less than the Annual Minimum Commitment, the Company shall pay to Allscripts the difference between the Annual Minimum Commitment and the total amount received by Allscripts from bookings during such period. A s of both September 30, 2023 and December 31, 2022, the accrued Annual Minimum Commitment was $1,700. 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. The Company values the Bookings Commitment, assumed upon the disposal of the provider/patient engagement solutions business, using a Monte Carlo 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 based on a yield curve. The cost of debt used for discounting was between 14% and 15% at September 30, 2023 and between 12% and 13% at December 31, 2022. The change in fair value is recorded within other income (expense), 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. Management believes the assumptions used on projected financial information is reasonable, but those assumptions require judgment and are forward looking in nature. However, actual results may differ materially from those projections. The fair value of the Bookings Commitment is most sensitive to management's estimate of the discount rate applied to present value the liability. If the discount rate applied was 2% lower at September 30, 2023, the fair value of the liability would increase by $2,819. 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 nine months ended September 30, 2023: December 31, 2022 Transfers in (out) (1) Change in fair value recognized in earnings September 30, 2023 Liabilities Bookings Commitment 36,863 — (456) 36,407 $ 36,863 $ — $ (456) $ 36,407 (1) Transfers out of the Bookings Commitment fair value liability relates to the Annual Minimum Commitment, which was recorded in accrued and other current liabilities. Fair Value of Convertible Notes held at amortized cost As of September 30, 2023 and December 31, 2022, the fair value and carrying value of the Company's 2021 Convertible Notes were: Fair value Carrying value Face value 2021 Convertible Notes Balance as of September 30, 2023 Related party $ 47,920 $ 62,385 $ 62,500 Others 57,504 74,351 75,000 $ 105,424 $ 136,736 $ 137,500 Balance as of December 31, 2022 Related party $ 48,125 $ 62,335 $ 62,500 Others 57,750 74,683 75,000 $ 105,875 $ 137,018 $ 137,500 The fair value of the 2021 Convertible Notes was determined by using unobservable inputs that are supported by minimal non-active market activity and that are significant to determining the fair value of the debt instrument. The fair value is level 3 in the fair value hierarchy. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for corporate offices, data centers, and certain equipment. The Company's leases have lease terms of 1 year to 11 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. Options to extend are included in the lease term where the Company is reasonably certain to exercise the options. Variable payments on the Company's leases are expensed as incurred, as they do not depend on an index or rate. The Company concluded certain leases for data centers had a term of less than 1 year at inception, as arrangements are only renewed following marketplace assessments and negotiations with vendors. Future minimum lease payments under the Company's operating leases at September 30, 2023 were: Maturity Analysis Amounts Remainder of 2023 $ 658 2024 2,436 2025 573 2026 541 2027 427 2028 438 Thereafter 222 Total future minimum lease payments 5,295 Less: imputed interest (870) Total $ 4,425 As reported in the Consolidated Balance Sheet Accrued and other current liabilities $ 2,249 Operating lease liabilities 2,176 $ 4,425 On March 14, 2023, the Company reduced the size of its leased office space in the UK beginning in September 2023 for the remainder of the lease term. The Company recorded an ROU asset write down charge in the three months ended March 31, 2023 of $160 and a reduction of the lease liability of $162 which resulted in a gain on partial lease termination of $2. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company's principal commitments consist of obligations under its outstanding debt obligations, non-cancelable leases for its office space and certain equipment and vendor contracts to provide research services, and purchase obligations under license agreements and reseller agreements. Related Party Promissory Note On January 4, 2016, the Company executed a $112,666 demand promissory note in favor of Nant Capital to fund the acquisition of NaviNet ( see Note 15). On May 9, 2016 and December 15, 2016, the promissory note with Nant Capital was amended to provide that all outstanding principal and accrued interest is due and payable on June 15, 2022, and not on demand. On April 27, 2021, in connection with the issuance of the 2021 Convertible Notes, the Company entered into a Third Amended and Restated Promissory Note which amends and restates its promissory note, dated January 4, 2016, as amended on May 9, 2016, and on December 16, 2016, between the Company and Nant Capital, to, among other things, extend the maturity date of the promissory note to October 1, 2026 and to subordinate the promissory note in right of payment to the 2021 Convertible Notes (see Note 8). Indenture Obligations Under Convertible Notes On April 27, 2021, the Company and NaviNet entered into the 2021 Indenture by and among NantHealth, NaviNet, as guarantor, and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”), pursuant to which the Company issued the 2021 Convertible Notes. The 2021 Convertible Notes will bear interest at a rate of 4.5% per year, payable semi-annually on April 15 and October 15 of each year, beginning on October 15, 2021. The 2021 Convertible Notes will mature on April 15, 2026, unless earlier repurchased, redeemed or converted. The following events are considered “events of default” with respect to the 2021 Convertible Notes, which may result in the acceleration of the maturity of the 2021 Convertible Notes: (1) the Company defaults in any payment of interest on the 2021 Convertible Notes when due and payable and the default continues for a period of 30 days; (2) the Company defaults in the payment of principal on the 2021 Convertible Notes when due and payable at the stated maturity, upon redemption, upon any required repurchase, upon declaration of acceleration or otherwise; (3) failure by the Company to comply with its obligation to convert the 2021 Convertible Notes in accordance with the 2021 Indenture upon exercise of a holder’s conversion right and such failure continues for a period of five business days; (4) failure by the Company to give a fundamental change notice or notice of a specified corporate transaction when due with respect to the 2021 Convertible Notes; (5) failure by the Company to comply with its obligations under the 2021 Indenture with respect to consolidation, merger and sale of assets of the Company; (6) failure by the Company to comply with any of its other agreements contained in the 2021 Convertible Notes or the 2021 Indenture, for a period 60 days after written notice from the Trustee or the holders of at least 25% in principal amount of the 2021 Convertible Notes then outstanding has been received; (7) default by the Company or any of its significant subsidiaries (as defined in the 2021 Indenture) with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $17,500 (or its foreign currency equivalent) in the aggregate of the Company and/or any such subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal of any such indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and, in the case of clauses (i) and (ii), such default is not rescinded or annulled or such failure to pay or default shall not have been cured or waived, such acceleration is not rescinded or such indebtedness is not discharged, as the case may be, within 30 days after notice to the Company by the Trustee or to the Company and the Trustee by holders of at least 25% in aggregate principal amount of 2021 Convertible Notes then outstanding in accordance with the 2021 Indenture; or (8) certain events of bankruptcy, insolvency, or reorganization of the Company or any of its significant subsidiaries (as defined in the 2021 Indenture). If such an event of default, other than an event of default described in clause (8) above with respect to the Company, occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2021 Convertible Notes by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2021 Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal of and accrued and unpaid interest on the 2021 Convertible Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest on the 2021 Convertible Notes, if any, will be due and payable immediately. On May 17, 2023, pursuant to the terms of the Credit Agreement (as defined below), the Company amended and restated the 2021 Indenture to, among other things, cause the 2021 Convertible Notes to be (i) guaranteed by the Company’s subsidiaries that provided guarantees under the Credit Agreement, (ii) secured by second priority liens on the assets that secure borrowings made pursuant to the Credit Agreement and (iii) governed by covenants that are substantially similar to the covenants in Articles VI and VII of the Credit Agreement. In connection with this post-closing covenant, the 2021 Indenture was also amended to add certain related events of default consistent with Article VIII of the Credit Agreement. Regulatory Matter The Company is subject to the Health Insurance Portability and Accountability Act (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act and related patient confidentiality laws and regulations with respect to patient information. The Company reviews the applicable laws and regulations regarding effects of such laws and regulations on its operations on an on-going basis and modifies operations as appropriate. The Company believes it is in substantial compliance with all applicable laws and regulations. Failure to comply with regulatory requirements could have a significant adverse effect on the Company’s business and operations. Legal Matters The Company is, from time to time, subject to claims and litigation that arise in the ordinary course of its business. Based on existing facts and historical patterns, the Company accrues for litigation losses in instances where an adverse outcome is probable and the Company is able to reasonably estimate the probable loss in accordance with ASC 450-20. In the opinion of management, the ultimate outcome of proceedings of which management is aware, even if adverse to the Company, would not have a material adverse effect on the Company’s consolidated financial condition, results of operations, or consolidated cash flows in a particular quarter or annual period. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Securities and Derivative 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 the Deora action but asserted 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, waste of corporate assets, 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, 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, which asserts claims for breach of fiduciary duty, waste of corporate assets (which Petersen subsequently withdrew), and unjust enrichment. On January 14, 2020, the court issued an order granting in part and denying in part the defendants’ motion to dismiss. The court dismissed all claims except one claim against Dr. Patrick Soon-Shiong for breach of fiduciary duty. Dr. Soon-Shiong and the Company filed answers to the amended complaint on March 30, 2020. On June 29, 2021, the Court granted the Unopposed Motion to Substitute Lead Plaintiff, following Plaintiff Petersen’s sale of his NantHealth stock, and appointed Engleman as Lead Plaintiff. On September 26, 2022, the parties filed with the Court a Stipulation for Compromise and Settlement to resolve the consolidated action in exchange for (i) the payment of $400, to be funded by the Company's insurance carriers, to offset the Company’s contribution to the settlement of the Deora action, and (ii) agreeing to implement certain corporate governance reforms. Additionally, the Company agreed to pay an award of attorneys’ fees and expenses to counsel for Lead Plaintiff in an amount of $1,250, to be funded by the Company's insurance carriers which was included in accrued and other current liabilities on the Consolidated Balance Sheets at December 31, 2022 but paid by our insurance in January 2023. The Court approved the settlement on January 10, 2023 and, as a result, the consolidated derivative action was dismissed. The Company has implemented, as required, the settlement’s corporate governance reforms within 60 days following the approval. The insurance company paid the securities litigation claims in January 2023, and settlement payment was received in January 2023. Insurance We purchase property, business interruption and related insurance coverage to mitigate the financial impact of catastrophic events or perils that is subject to deductible provisions based on the terms of the policies. These policies are on an occurrence basis. The Company has reflected its right to insurance recoveries, limited to the extent of incurred or probable losses, as a receivable when such recoveries have been agreed to with the Company’s third-party insurers and receipt is deemed probable. This includes instances where the Company’s third-party insurers have agreed to pay, on the Company’s behalf, certain legal defense costs and settlement amounts directly to applicable law firms and a settlement fund. The amount of such receivable related to the securities litigation recorded at September 30, 2023 and December 31, 2022 was $0 and $1,250, respectively, and is included in prepaid expenses and other current assets on the Consolidated Balance Sheets. Cyber matters In addition, we also purchase cyber liability insurance and crime insurance from third parties. In August 2022, the Company became aware of unauthorized activity in a customer’s account. In January 2023, the Company became aware of unauthorized activity in another customer's account. Both of these incidents involved payments issued to fraudulent accounts, unauthorized access to certain protected health information, and caused us to incur costs to respond to the incident. Approximately $242 and $100 in legal and professional fees, respectively, have been incurred as part of our response and investigation into this incident and these costs are included in accrued and other current liabilities as of September 30, 2023 and December 31, 2022, respectively on the Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three and nine months ended September 30, 2023 was a provision of $54 and $34. The provision for income taxes for the three and nine months ended September 30, 2022 was a benefit of $10 and $19. The provision for income taxes for the three and nine months ended September 30, 2023 and 2022 included an income tax provision for the consolidated group based on an estimated annual effective tax rate. The effective tax rates for the three and nine months ended September 30, 2023 was 0.36% and 0.08%. The effective tax rates for the three and nine months ended September 30, 2022 was 0.07% and 0.05%. The effective tax rates for the three and nine months ended September 30, 2023 and 2022 differed from the U.S. federal statutory rates of 21% primarily as a result of a valuation allowance on the Company's deferred tax assets. The Company has evaluated all available evidence supporting the realization of its deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that its net deferred tax assets will not be realized in the U.S. Due to uncertainties surrounding the realization of the deferred tax assets, the Company maintains a valuation allowance on substantially all deferred tax assets in excess of deferred tax liabilities. If / when the Company determines that it will be able to realize some portion or all of its deferred tax assets, an adjustment to its valuation allowance on its deferred tax assets would have the effect of increasing net income in the period(s) such determination is made. The Company files income tax returns in the U.S. Federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. The Company has recently completed an IRS audit for the tax year 2016 with no adjustments. 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, 2016 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. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022, 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 (the "Board"). As of September 30, 2023, and December 31, 2022, there were no outstanding shares of preferred stock. On November 12, 2021, the Company entered into a certain Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (“Jefferies”) relating to shares of our common stock, $0.0001 par value per share, offered pursuant to an effective shelf registration statement on Form S-3 that was declared effective on May 6, 2021. In accordance with the terms of the Sale Agreement, the company may offer and sell shares of our common stock having an aggregate offering price of up to $30,000 from time to time through Jefferies acting as our agent. On August 28, 2023, the Company entered into a Stock Purchase Agreement (the “August 2023 Stock Purchase Agreement”) with Summus Holdings, LLC (“Summus”) and Nant Capital (collectively, the “Purchasers”). Summus is an affiliate of Dr. Rao Haris Naseem who was appointed as the Company’s Chief Executive Officer after the closing of the first tranche of the August 2023 Stock Purchase Agreement. Nant Capital is an affiliate of Dr. Patrick Soon-Shiong, the Company’s founder, former Chief Executive Officer, current Chairman of the Board, and the majority stockholder of the Company. Pursuant to the August 2023 Stock Purchase Agreement, the Company agreed to issue and sell up to an aggregate of 24,896,248 shares of the Company’s Common Stock, in a private placement. In the first tranche, which closed concurrently the execution of the August 2023 Stock Purchase Agreement: (1) Nant Capital purchased an aggregate of 15,384,616 shares of Common Stock in exchange for (a) $6.0 million of cash at a price per share of $0.39 (the "August 2023 SPA Purchase Price") and (b) $10.0 million aggregate principal amount of the Nant Capital Note at the Exchange Price (as defined below) and (2) Summus Holdings purchased 3,846,154 shares of Common Stock at the August 2023 SPA Purchase Price. The shares shall be paid through: (1) cash in the amount of up to $9.5 million for shares of Common Stock at a price per share of $0.39, which shall occur in up to two (2) tranches: (i) $7.5 million at the First Tranche Closing (as defined in the August 2023 Stock Purchase Agreement) and (ii) $2.0 million at the Second Tranche Closing (as defined in the August 2023 Stock Purchase Agreement), which such Second Tranche Closing shall occur upon written notice by the Company, acting at the direction of the Special Committee (the “Special Committee”) of the Board of Directors of the Company, to each Purchaser that committed to purchase the shares at the Second Tranche Closing, and such notice must occur on or before December 31, 2023, and (2) exchange, on the First Tranche Closing, of $10.0 million aggregate principal amount of the Nant Capital Note, for shares of Common Stock at an exchange price per share of $18.61255 (the "Exchange Price"), in accordance with the terms and conditions of the Nant Capital Note. Nant Capital obtained 537,272 shares in consideration for the principal debt conversion. Pursuant to the terms of the August 2023 Stock Purchase Agreement, Nant Capital also agreed to provide additional capital to the Company of up to an aggregate amount of $10.0 million (the “Additional Capital Commitment”) prior to December 31, 2023. The Special Committee previously requested that Nant Capital fund the additional $2.0 million in a Second Tranche Closing. In addition, the Special Committee has requested that Nant Capital fund the Additional Capital Commitment on October 9, 2023. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2023 | |
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 loss per share of common stock attributable to NantHealth for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Net income (loss) per share numerator: Net income (loss) for basic and diluted net loss per share $ (14,987) $ (13,657) $ (44,714) $ (42,119) Weighted-average shares for basic and diluted net loss per share 15,008,883 7,703,349 10,165,256 7,702,712 Basic and diluted net income (loss) per share: Total net income (loss) per share - common stock $ (1.00) $ (1.77) $ (4.40) $ (5.47) 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: September 30, 2023 2022 Unvested and vested and unissued restricted stock units 7,980 7,980 Unexercised stock options 1,735,034 957,625 Convertible notes 2,382,190 2,382,190 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
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 " NantWorks Shared Services Agreement"). The Company is billed quarterly for such services at cost, without mark-up or profit for NantWorks, but including reasonable allocations of employee benefits, facilities and other direct or fairly allocated indirect costs that relate to the associates providing the services. NantHealth also bills NantWorks and affiliates for services such as information technology and cloud services, finance and risk management, and facilities management, on the same basis. During the three and nine months ended September 30, 2023, the Company incurred $304 and $1,166 from selling, general and administrative expenses for services provided to the Company by NantWorks and affiliates, net of services provided to NantWorks and affiliates by the Company. During the three and nine months ended September 30, 2022, the Company incurred $644 and $796 from selling, general and administrative expenses for services provided to the Company by NantWorks and affiliates, net of services provided to NantWorks and affiliates by the Company. Airstrip Shared Services Agreement In February 2023, the Company entered into a shared services agreement with Airstrip Technologies, Inc. ("Airstrip") that provides for ongoing services from the Company in areas such as information technology and cloud services, administration management, finance and risk management, environmental health and safety, and corporate development and strategy (the "Airstrip Shared Services Agreement"). During the three and nine months ended September 30, 2023, the Company billed $510 and $1,502 for services provided to Airstrip. As of September 30, 2023 the Company has a related party receivable of $1,502 due from Airstrip. Related Party Notes See Notes 8 and 11 for a description of our related party notes. Related Party Receivables As of September 30, 2023 and December 31, 2022, the Company had related party receivables of $372 and $1,413, respectively, consisting of a receivable from Ziosoft KK of $0 and $1,041, respectively, which was related to the sale of Qi Imaging. During the third quarter of 2023 Ziosoft was sold and the remainder of the receivable was collected. The remaining balance is related to amounts charged to related party entities for services and testing provided in prior years that is no longer part of our core business. August 2023 Stock Purchase Agreement See Note 13 for more information related to the August 28, 2023 Stock Purchase Agreement. 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 former Chief Executive Officer. 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’ molecular analysis 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 Amended 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 noncancellable 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 was also required to pay annual minimum fees to from 2021 through 2029. These annual minimum fees are no longer applicable with the execution of Amendment No. 3 to the Second Amended Reseller Agreement. On December 18, 2017, the Company and NantOmics executed Amendment No. 1 to the Second Amended Reseller Agreement. The Second Amended Reseller Agreement was 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. On April 23, 2019, the Company and NantOmics executed Amendment No. 2 to the Second Amended Reseller Agreement. The Second Amended Reseller Agreement was amended to set a fixed fee with respect to services completed by NantOmics between the amendment effective date and the end of the Initial Term, December 31, 2020. On December 31, 2020, the Company and NantOmics executed Amendment No. 3 to the Second Amended Reseller Agreement to automatically renew at the end of December 2020 for a non-exclusive renewal term and to waive the annual minimum fee for the 2020 calendar year and calendar years 2021 through 2023. As of September 30, 2023 and December 31, 2022, the Company had no outstanding related party payables under the Second Amended Reseller Agreement. During the three and nine months ended September 30, 2023 and September 30, 2022, no direct costs were recorded as cost of revenue related to the Second Amended Reseller Agreement. Related Party Share-based Payments On December 21, 2020, ImmunityBio, Inc. (formerly known as NantKwest, Inc.) ("ImmunityBio"), NantCell, and Nectarine Merger Sub, Inc., a wholly owned subsidiary of ImmunityBio, entered into an Agreement and Plan of Merger, which was completed on March 9, 2021 (the "Merger"). The newly merged entity is majority owned by entities controlled by Dr. Soon-Shiong, Chairman of the Company and former Chief Executive Officer. On March 4, 2021, prior to the Merger, NantCell awarded restricted stock units to its employees, including certain NantHealth employees working on behalf of ImmunityBio, which vest over defined service periods, subject to completion of a liquidity event. At the effective time of the Merger on March 9, 2021, the performance condition was met and each share of common stock of NantCell that was issued and outstanding immediately prior to the Merger was automatically converted into the right to receive as consideration newly issued common shares of ImmunityBio. The Company accounts for these awards as compensation cost at its estimated fair value over the vesting period with a corresponding credit to equity to reflect a capital contribution from, or on behalf of, the common controlling entity, to the extent that those services provided by its employees associated with these awards benefit NantHealth. The fair value is dependent on management's estimate of the benefit to NantHealth. The higher the estimate of benefit to the Company, the higher the fair value of compensation cost. The compensation cost attributed to NantHealth associated with these awards was an expense of $8 and $25 for the three and nine months ended September 30, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited Consolidated Financial Statements include the accounts of NantHealth and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and, in the opinion of management, include all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the Company's financial position and results of operations. In accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as issued by the Securities and Exchange Commission ("SEC"), these unaudited Consolidated Financial Statements do not include all of the information and disclosures required by GAAP for complete financial statements. These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2022. The accompanying Consolidated Balance Sheet as of December 31, 2022 has been derived from the audited Consolidated Financial Statements at that date. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year. |
Use of Estimates | Use of Estimates The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. The estimates and assumptions used in the accompanying unaudited Consolidated 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, useful lives of long-lived assets and intangible assets, income taxes, stock-based compensation, impairment of long-lived assets and intangible assets, and the expected performance against minimum reseller commitments. 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. |
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. Ac cordingly, management has determined that the Company operates in one reportable segment. |
Upcoming Accounting Standard Pronouncements | Upcoming Accounting Standard Pronouncements 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, 2022 for smaller reporting companies and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. We adopted this standard effective January 1, 2023. The impact of adoption on our unaudited Consolidated Financial Statements was not material. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not have, nor are believed by management to have, a material impact on the Company's present or future Consolidated Financial Statements. |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets and Accrued and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Current Assets And Other Current Liabilities [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Prepaid expenses $ 2,555 $ 1,574 Restricted cash 1,854 1,180 Securities litigation insurance receivable — 1,250 Other current assets 159 398 Prepaid expenses and other current assets $ 4,568 $ 4,402 |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Payroll and related costs $ 1,108 $ 7,949 Accrued liabilities 6,234 4,279 Bookings Commitment (see Note 9) 2,629 2,153 Interest payable 2,368 703 Operating lease liabilities 2,249 2,105 Securities litigation and cyber estimated liability 220 1,470 Other accrued and other current liabilities 3,763 1,347 Accrued and other current liabilities $ 18,571 $ 20,006 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Computer equipment and software $ 7,538 $ 7,592 Furniture and equipment 1,037 1,054 Leasehold improvements 3,780 3,776 Property, plant, and equipment, excluding internal-use software, gross 12,355 12,422 Less: Accumulated depreciation and amortization (12,092) (11,073) Property, plant and equipment, excluding internal-use software, net 263 1,349 Internal-use software 52,080 49,479 Construction in progress - Internal-use software 1,088 1,464 Less: Accumulated depreciation and amortization, internal-use software (48,779) (39,909) Internal-use software, net 4,389 11,034 Property, plant and equipment, net $ 4,652 $ 12,383 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The Company’s definite-lived intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, Customer relationships $ 53,000 $ 53,000 Developed technologies 34,500 34,500 Trade name 3,300 3,300 Installed user base 1,400 1,400 Intangible assets, gross 92,200 92,200 Less: Accumulated amortization (67,067) (62,090) Intangible assets, net $ 25,133 $ 30,110 |
Schedule of Future Amortization of Intangible Assets | The estimated future amortization expense over the next five years and thereafter for the intangible assets that exist as of September 30, 2023 is as follows: Amounts Remainder of 2023 $ 865 2024 3,467 2025 3,467 2026 3,467 2027 3,467 Thereafter 10,400 Total future intangible amortization expense $ 25,133 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Related Party Transactions | The following table summarizes how the issuance of the 2021 Convertible Notes is reflected in the Company's Consolidated Balance Sheets. 2021 Convertible Notes - Nant Capital September 30, 2023 December 31, 2022 Gross proceeds $ 62,500 $ 62,500 Unamortized debt discounts and deferred financing offering costs (115) (165) Net carrying amount - related party convertible note $ 62,385 $ 62,335 2021 Convertible Notes - Highbridge Gross proceeds $ 75,000 $ 75,000 Unamortized debt discounts and deferred financing offering costs (649) (317) Net carrying amount - convertible note $ 74,351 $ 74,683 The following tables summarize how the issuances of the Credit Agreement, Nant Capital Note, 2022 Nant Capital Note, Airstrip Note, and insurance promissory note are reflected in the Company's Consolidated Balance Sheets. September 30, 2023 December 31, 2022 Credit Agreement - Nant Capital Gross proceeds, related party promissory note $ 10,125 $ — Unamortized debt discounts and deferred financing offering costs (483) — Total net carrying amount, related party notes payable $ 9,642 $ — Credit Agreement - Highbridge Gross proceeds, note payable $ 12,375 $ — Unamortized debt discounts and deferred financing offering costs (214) — Total net carrying amount, Highbridge $ 12,161 $ — Insurance promissory note $ — $ 560 Total net carrying amount, notes payable current $ 12,161 $ 560 September 30, 2023 December 31, 2022 Nant Capital Note Gross proceeds, related party promissory note $ 102,666 $ 112,666 2022 Nant Capital Note Gross proceeds, related party promissory note 7,000 7,000 Airstrip Note Gross proceeds, related party promissory note 4,000 4,000 Total net carrying amount, related party promissory note $ 113,666 $ 123,666 The accrued and unpaid interest on the Nant Capital Note and Airstrip Note was included as part of non-current related party liabilities in the Consolidated Balance Sheets. September 30, 2023 December 31, 2022 Nant Capital Note Accrued Interest $ 51,668 $ 45,825 Airstrip Note Accrued Interest 337 83 Total related party liabilities $ 52,005 $ 45,908 The accrued and unpaid interest on the 2021 Convertible Notes, 2022 Nant Capital Note, and Credit Agreement Note are included as part of related party payables in the Consolidated Balance Sheets. September 30, 2023 December 31, 2022 2021 Convertible Notes - Nant Capital Accrued interest $ 2,695 $ 586 2022 Nant Capital Note Accrued interest 789 103 Credit Agreement - Nant Capital Accrued interest 666 — Total accrued interest $ 4,150 $ 689 The accrued and unpaid interest on the 2021 Convertible Notes and Credit Agreement Note are included as part of accrued and other current liabilities in the Consolidated Balance Sheets. September 30, 2023 December 31, 2022 2021 Convertible Notes - Highbridge Accrued interest $ 1,547 $ 703 Credit Agreement - Highbridge Accrued interest 821 — Total accrued interest $ 2,368 $ 703 Related-Party Other Total Three Months Ended September 30, 2023 Nant Capital Note Accrued coupon interest $ 1,957 $ — $ 1,957 Amortization of deferred financing offering costs — — — Total notes interest expense $ 1,957 $ — $ 1,957 2021 Convertible Notes Accrued coupon interest $ 703 $ 844 $ 1,547 Amortization of deferred financing offering costs 53 17 70 Total notes interest expense $ 756 $ 861 $ 1,617 Credit Agreement Accrued coupon interest $ 338 $ 413 $ 751 Amortization of deferred financing offering costs 123 155 278 Total notes interest expense $ 461 $ 568 $ 1,029 2022 Nant Capital Note Accrued coupon interest $ 232 $ — $ 232 Amortization of deferred financing offering costs — — — Total notes interest expense $ 232 $ — $ 232 Airstrip Note Accrued coupon interest $ 86 $ — $ 86 Amortization of deferred financing offering costs — — — Total notes interest expense $ 86 $ — $ 86 Total interest expense $ 3,492 $ 1,429 $ 4,921 Related-Party Other Total Three Months Ended September 30, 2022 Nant Capital Note Accrued coupon interest $ 1,903 $ — $ 1,903 Amortization of deferred financing offering costs — — — Total notes interest expense $ 1,903 $ — $ 1,903 2021 Convertible Notes Accrued coupon interest $ 703 $ 844 $ 1,547 Amortization of deferred financing offering costs 20 17 37 Total notes interest expense $ 723 $ 861 $ 1,584 Total interest expense $ 2,626 $ 861 $ 3,487 Nine Months Ended September 30, 2023 Related-Party Other Total Nant Capital Note Accrued coupon interest $ 5,885 $ — $ 5,885 Amortization of deferred financing offering costs — — — Total notes interest expense $ 5,885 $ — $ 5,885 2021 Convertible Notes Accrued coupon interest $ 2,109 $ 2,531 $ 4,640 Amortization of deferred financing offering costs 93 50 143 Total notes interest expense $ 2,202 $ 2,581 $ 4,783 Credit Agreement Accrued coupon interest $ 767 $ 937 $ 1,704 Amortization of deferred financing offering costs 284 359 643 Total notes interest expense $ 1,051 $ 1,296 $ 2,347 2022 Nant Capital Note Accrued coupon interest $ 685 $ — $ 685 Amortization of deferred financing offering costs — — — Total notes interest expense $ 685 $ — $ 685 Airstrip Note Accrued coupon interest $ 254 $ — $ 254 Amortization of deferred financing offering costs — — — Total notes interest expense $ 254 $ — $ 254 Total interest expense $ 10,077 $ 3,877 $ 13,954 Nine Months Ended September 30, 2022 Related-Party Other Total Nant Capital Note Accrued coupon interest $ 5,644 $ — $ 5,644 Amortization of deferred financing offering costs — — — Total notes interest expense $ 5,644 $ — $ 5,644 2021 Convertible Notes Accrued coupon interest $ 2,109 $ 2,531 $ 4,640 Amortization of deferred financing offering costs 60 50 110 Total notes interest expense $ 2,169 $ 2,581 $ 4,750 Total interest expense $ 7,813 $ 2,581 $ 10,394 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, 2023 Total fair value Quoted price in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities Bookings Commitment $ 36,407 $ — $ — $ 36,407 December 31, 2022 Total fair value Quoted price in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities Bookings Commitment $ 36,863 $ — $ — $ 36,863 |
Schedule of Changes in the Fair Value of Level 3 Liabilities and Fair Value of Debt | The following tables set forth a summary of changes in the fair value of Level 3 liabilities for the nine months ended September 30, 2023: December 31, 2022 Transfers in (out) (1) Change in fair value recognized in earnings September 30, 2023 Liabilities Bookings Commitment 36,863 — (456) 36,407 $ 36,863 $ — $ (456) $ 36,407 (1) Transfers out of the Bookings Commitment fair value liability relates to the Annual Minimum Commitment, which was recorded in accrued and other current liabilities. Fair Value of Convertible Notes held at amortized cost As of September 30, 2023 and December 31, 2022, the fair value and carrying value of the Company's 2021 Convertible Notes were: Fair value Carrying value Face value 2021 Convertible Notes Balance as of September 30, 2023 Related party $ 47,920 $ 62,385 $ 62,500 Others 57,504 74,351 75,000 $ 105,424 $ 136,736 $ 137,500 Balance as of December 31, 2022 Related party $ 48,125 $ 62,335 $ 62,500 Others 57,750 74,683 75,000 $ 105,875 $ 137,018 $ 137,500 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Maturities | Future minimum lease payments under the Company's operating leases at September 30, 2023 were: Maturity Analysis Amounts Remainder of 2023 $ 658 2024 2,436 2025 573 2026 541 2027 427 2028 438 Thereafter 222 Total future minimum lease payments 5,295 Less: imputed interest (870) Total $ 4,425 As reported in the Consolidated Balance Sheet Accrued and other current liabilities $ 2,249 Operating lease liabilities 2,176 $ 4,425 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliations of Basic and Diluted Net Loss Per Share | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of common stock attributable to NantHealth for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Net income (loss) per share numerator: Net income (loss) for basic and diluted net loss per share $ (14,987) $ (13,657) $ (44,714) $ (42,119) Weighted-average shares for basic and diluted net loss per share 15,008,883 7,703,349 10,165,256 7,702,712 Basic and diluted net income (loss) per share: Total net income (loss) per share - common stock $ (1.00) $ (1.77) $ (4.40) $ (5.47) |
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: September 30, 2023 2022 Unvested and vested and unissued restricted stock units 7,980 7,980 Unexercised stock options 1,735,034 957,625 Convertible notes 2,382,190 2,382,190 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Cash and cash equivalents | $ 5,822 | $ 5,822 | $ 1,759 | ||
Accumulated deficit | 1,165,389 | 1,165,389 | $ 1,120,676 | ||
Net loss | $ 14,987 | $ 13,657 | 44,714 | $ 42,119 | |
Cash used for operating activities | $ (20,594) | $ (25,218) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue recognized | $ 583 | $ 543 | $ 2,121 | $ 2,065 | |
Capitalized contract cost | 289 | 289 | $ 686 | ||
Amortization of capitalized contract cost | 93 | $ 163 | 333 | $ 398 | |
Unfulfilled performance obligations | $ 2,725 | $ 2,725 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Expected timing of performance obligation fulfillment | 8 years | 8 years |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 70 | $ 15 |
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 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Other Current Assets And Other Current Liabilities [Abstract] | |||
Prepaid expenses | $ 2,555 | $ 1,574 | |
Restricted cash | 1,854 | 1,180 | $ 1,180 |
Securities litigation insurance receivable | 0 | 1,250 | |
Other current assets | 159 | 398 | |
Prepaid expenses and other current assets | $ 4,568 | $ 4,402 |
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 | Sep. 30, 2023 | Dec. 31, 2022 |
Other Current Assets And Other Current Liabilities [Abstract] | ||
Payroll and related costs | $ 1,108 | $ 7,949 |
Accrued liabilities | 6,234 | 4,279 |
Bookings Commitment | 2,629 | 2,153 |
Interest payable | 2,368 | 703 |
Operating lease liabilities | 2,249 | 2,105 |
Securities litigation and cyber estimated liability | 220 | 1,470 |
Other accrued and other current liabilities | 3,763 | 1,347 |
Accrued and other current liabilities | $ 18,571 | $ 20,006 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net - Schedule of Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, net | $ 4,652 | $ 12,383 |
Property, plant, and equipment, excluding internal-use software, gross | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 12,355 | 12,422 |
Less: Accumulated depreciation and amortization | (12,092) | (11,073) |
Property, plant, and equipment, net | 263 | 1,349 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 7,538 | 7,592 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 1,037 | 1,054 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 3,780 | 3,776 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 52,080 | 49,479 |
Construction in progress - Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress - Internal-use software | 1,088 | 1,464 |
Software Development and Construction in Progress Software Development | ||
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation and amortization | (48,779) | (39,909) |
Property, plant, and equipment, net | $ 4,389 | $ 11,034 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 3,820 | $ 1,620 | $ 9,766 | $ 4,817 |
Internal-use software | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | 2,393 | 1,134 | 5,092 | 3,340 |
Amount capitalized to internal use software | 1,389 | $ 3,910 | $ 1,392 | $ 4,311 |
Internal-use software | OpenNMS | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment charge | $ 3,800 |
Intangible Assets, net - Schedu
Intangible Assets, net - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 92,200 | $ 92,200 |
Less: Accumulated amortization | (67,067) | (62,090) |
Intangible assets, net | 25,133 | 30,110 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 53,000 | 53,000 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 34,500 | 34,500 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 3,300 | 3,300 |
Installed user base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,400 | $ 1,400 |
Intangible Assets, net - Narrat
Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,089 | $ 2,232 | $ 3,269 | $ 6,697 |
Impairment charge | $ 5,506 | $ 0 | ||
OpenNMS | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment charge | $ 1,700 |
Intangible Assets, net - Sche_2
Intangible Assets, net - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | $ 865 | |
2024 | 3,467 | |
2025 | 3,467 | |
2026 | 3,467 | |
2027 | 3,467 | |
Thereafter | 10,400 | |
Intangible assets, net | $ 25,133 | $ 30,110 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 9 Months Ended | ||||||||||
Aug. 28, 2023 USD ($) $ / shares | Nov. 21, 2022 USD ($) | Oct. 03, 2022 USD ($) | May 25, 2021 USD ($) | Apr. 27, 2021 USD ($) day $ / shares shares | Apr. 13, 2021 USD ($) | May 09, 2016 $ / shares | Sep. 30, 2023 USD ($) | Sep. 29, 2023 USD ($) | Mar. 02, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Interest payable | $ 2,368,000 | $ 703,000 | |||||||||
Related Party | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes payable | 113,666,000 | 123,666,000 | |||||||||
Nant Capital | Related Party | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes payable | $ 7,000 | ||||||||||
Nant Capital | Related Party | Promissory Note | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes payable | 112,666,000 | ||||||||||
Interest bearing on related promissory note | 5% | ||||||||||
Per share price of shares to settle debt (usd per share) | $ / shares | $ 1.484 | ||||||||||
Per share price of stock shares to repay debt (usd per share) | $ / shares | $ 18.6126 | ||||||||||
Nant Capital | Related Party | Secured Overnight Financing Rate (SOFR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest bearing on related promissory note | 8.50% | ||||||||||
Airstrip | Related Party | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes payable | $ 4,000 | ||||||||||
Interest bearing on related promissory note | 8.50% | ||||||||||
NantWorks | Related Party | Promissory Note | NantHealth Labs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes payable | $ 250,000 | 250,000 | |||||||||
Interest bearing on related promissory note | 5% | ||||||||||
Interest payable | $ 95,000 | 82,000 | |||||||||
Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate on debt | 4.50% | ||||||||||
Face value | $ 137,500,000 | 137,500,000 | |||||||||
Credit Agreement | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate on debt | 13% | ||||||||||
Aggregate principal amount | $ 22,500,000 | ||||||||||
Original issue discount rate | 1% | ||||||||||
4.5% Convertible Senior Notes | Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate on debt | 4.50% | 4.50% | |||||||||
Face value | $ 137,500,000 | ||||||||||
Net proceeds from debt offering | $ 136,772,000 | ||||||||||
Debt issuance costs | $ 610,000 | ||||||||||
Effective interest rate | 4.61% | ||||||||||
Shares converted per dollar (in shares) | shares | 17.3250 | ||||||||||
Conversion price of convertible debt (in usd per share) | $ / shares | $ 57.72 | ||||||||||
Remaining term | 2 years 6 months | ||||||||||
Threshold percentage of stock price trigger | 130% | ||||||||||
Threshold of trading days | day | 20 | ||||||||||
Threshold consecutive trading days | day | 30 | ||||||||||
Redemption price as a percentage of principal | 100% | ||||||||||
Percent of principal | 100% | ||||||||||
Principal outstanding to restrict future indebtedness | $ 25,000,000 | ||||||||||
Maturity period | 181 days | ||||||||||
4.5% Convertible Senior Notes | Convertible Debt | Nant Capital | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Net proceeds from debt offering | $ 62,223,000 | ||||||||||
4.5% Convertible Senior Notes | Convertible Debt | Highbridge Capital Management | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Net proceeds from debt offering | 74,549,000 | ||||||||||
Debt issuance costs | $ 118,000 | ||||||||||
5.5% Convertible Senior Notes | Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate on debt | 5.50% | ||||||||||
Repayment of convertible notes | $ 55,555,000 | $ 31,945,000 | |||||||||
Initial purchasers' discount and debt issuance costs | $ 1,358,000 | $ 644,000 | |||||||||
2021 Convertible Notes | Convertible Debt | Nant Capital | Related Party | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Net carrying amount | $ 62,385,000 | 62,335,000 | |||||||||
2021 Convertible Notes | Convertible Debt | Highbridge Capital Management | Nonrelated Party | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Net carrying amount | 74,351,000 | $ 75,000,000 | $ 74,683,000 | ||||||||
Debt repurchased | $ 0 | ||||||||||
Demand Promissory Note | Convertible Debt | Nant Capital | August 2023 Stock Purchase Agreement | First Tranche Closing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price of convertible debt (in usd per share) | $ / shares | $ 18.61255 | ||||||||||
Amount of convertible debt converted | $ 10,000,000 |
Debt - Convertible Debt (Detail
Debt - Convertible Debt (Details) - 2021 Convertible Notes - Convertible Debt - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 29, 2023 | Dec. 31, 2022 |
Nant Capital | Related Party | |||
Debt Instrument [Line Items] | |||
Gross proceeds | $ 62,500 | $ 62,500 | |
Unamortized debt discounts and deferred financing offering costs | (115) | (165) | |
Net carrying amount | 62,385 | 62,335 | |
Highbridge | Nonrelated Party | |||
Debt Instrument [Line Items] | |||
Gross proceeds | 75,000 | 75,000 | |
Unamortized debt discounts and deferred financing offering costs | (649) | (317) | |
Net carrying amount | $ 74,351 | $ 75,000 | $ 74,683 |
Debt - Schedule of Debt Issuanc
Debt - Schedule of Debt Issuance (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Notes Payable, Other Payables | Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Net carrying amount | $ 12,161 | $ 560 |
Notes Payable, Other Payables | Nant Capital Note | Related Party | ||
Debt Instrument [Line Items] | ||
Gross proceeds for notes payable and related party promissory note | 102,666 | 112,666 |
Notes Payable, Other Payables | Airstrip Note | Related Party | ||
Debt Instrument [Line Items] | ||
Gross proceeds for notes payable and related party promissory note | 4,000 | 4,000 |
Notes Payable, Other Payables | Credit Agreement | Nant Capital Note | Related Party | ||
Debt Instrument [Line Items] | ||
Gross proceeds for notes payable and related party promissory note | 10,125 | 0 |
Unamortized debt discounts and deferred financing offering costs | (483) | 0 |
Net carrying amount | 9,642 | 0 |
Notes Payable, Other Payables | Credit Agreement | Highbridge Capital Management | Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Gross proceeds for notes payable and related party promissory note | 12,375 | 0 |
Unamortized debt discounts and deferred financing offering costs | (214) | 0 |
Net carrying amount | 12,161 | 0 |
2022 Nant Capital Note | Nant Capital Note | Related Party | ||
Debt Instrument [Line Items] | ||
Gross proceeds for notes payable and related party promissory note | 7,000 | 7,000 |
Promissory Note | Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Net carrying amount | 0 | 560 |
Promissory Note | Credit Agreement | Related Party | ||
Debt Instrument [Line Items] | ||
Net carrying amount | $ 113,666 | $ 123,666 |
Debt - Schedule of Related Part
Debt - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Accrued and other current liabilities | $ 18,571 | $ 20,006 |
Related Party | ||
Debt Instrument [Line Items] | ||
Other liabilities | 52,005 | 45,908 |
Related party payables | 5,168 | 1,933 |
Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Other liabilities | 35,979 | 36,411 |
Related party payables | 6,671 | 10,408 |
Highbridge Capital Management | Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Accrued and other current liabilities | 2,368 | 703 |
Notes Payable, Other Payables | Related Party | ||
Debt Instrument [Line Items] | ||
Other liabilities | 52,005 | 45,908 |
Notes Payable, Other Payables | Nant Capital Note | Related Party | ||
Debt Instrument [Line Items] | ||
Other liabilities | 51,668 | 45,825 |
Notes Payable, Other Payables | Airstrip Note | Related Party | ||
Debt Instrument [Line Items] | ||
Other liabilities | 337 | 83 |
2021 Convertible Notes, Nant Capital Note, And Credit Agreement Note | Related Party | ||
Debt Instrument [Line Items] | ||
Related party payables | 4,150 | 689 |
2021 Convertible Notes | Nant Capital Note | Related Party | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Related party payables | 2,695 | 586 |
2021 Convertible Notes | Highbridge Capital Management | Nonrelated Party | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Accrued and other current liabilities | 1,547 | 703 |
2022 Nant Capital Note | Nant Capital Note | Related Party | ||
Debt Instrument [Line Items] | ||
Related party payables | 789 | 103 |
Promissory Note | Nant Capital Note | Related Party | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Related party payables | 666 | 0 |
Promissory Note | Highbridge Capital Management | Nonrelated Party | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Accrued and other current liabilities | $ 821 | $ 0 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Total notes interest expense | $ 4,921 | $ 3,487 | $ 13,954 | $ 10,394 |
Related Party | ||||
Debt Instrument [Line Items] | ||||
Total notes interest expense | 3,492 | 2,626 | 10,077 | 7,813 |
Nonrelated Party | ||||
Debt Instrument [Line Items] | ||||
Total notes interest expense | 1,429 | 861 | 3,877 | 2,581 |
Notes Payable, Other Payables | Nant Capital | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 1,957 | 1,903 | 5,885 | 5,644 |
Amortization of deferred financing offering costs | 0 | 0 | 0 | 0 |
Total notes interest expense | 1,957 | 1,903 | 5,885 | 5,644 |
Notes Payable, Other Payables | Nant Capital | Related Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 1,957 | 1,903 | 5,885 | 5,644 |
Amortization of deferred financing offering costs | 0 | 0 | 0 | 0 |
Total notes interest expense | 1,957 | 1,903 | 5,885 | 5,644 |
Notes Payable, Other Payables | Nant Capital | Nonrelated Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 0 | 0 | 0 | 0 |
Amortization of deferred financing offering costs | 0 | 0 | 0 | 0 |
Total notes interest expense | 0 | 0 | 0 | 0 |
Notes Payable, Other Payables | Airstrip Note | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 86 | 254 | ||
Amortization of deferred financing offering costs | 0 | 0 | ||
Total notes interest expense | 86 | 254 | ||
Notes Payable, Other Payables | Airstrip Note | Related Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 86 | 254 | ||
Amortization of deferred financing offering costs | 0 | 0 | ||
Total notes interest expense | 86 | 254 | ||
Notes Payable, Other Payables | Airstrip Note | Nonrelated Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 0 | 0 | ||
Amortization of deferred financing offering costs | 0 | 0 | ||
Total notes interest expense | 0 | 0 | ||
2021 Convertible Notes | 2021 Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 1,547 | 1,547 | 4,640 | 4,640 |
Amortization of deferred financing offering costs | 70 | 37 | 143 | 110 |
Total notes interest expense | 1,617 | 1,584 | 4,783 | 4,750 |
2021 Convertible Notes | 2021 Convertible Notes | Related Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 703 | 703 | 2,109 | 2,109 |
Amortization of deferred financing offering costs | 53 | 20 | 93 | 60 |
Total notes interest expense | 756 | 723 | 2,202 | 2,169 |
2021 Convertible Notes | 2021 Convertible Notes | Nonrelated Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 844 | 844 | 2,531 | 2,531 |
Amortization of deferred financing offering costs | 17 | 17 | 50 | 50 |
Total notes interest expense | 861 | $ 861 | 2,581 | $ 2,581 |
Promissory Note | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 751 | 1,704 | ||
Amortization of deferred financing offering costs | 278 | 643 | ||
Total notes interest expense | 1,029 | 2,347 | ||
Promissory Note | Credit Agreement | Related Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 338 | 767 | ||
Amortization of deferred financing offering costs | 123 | 284 | ||
Total notes interest expense | 461 | 1,051 | ||
Promissory Note | Credit Agreement | Nonrelated Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 413 | 937 | ||
Amortization of deferred financing offering costs | 155 | 359 | ||
Total notes interest expense | 568 | 1,296 | ||
2022 Nant Capital Note | Nant Capital | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 232 | 685 | ||
Amortization of deferred financing offering costs | 0 | 0 | ||
Total notes interest expense | 232 | 685 | ||
2022 Nant Capital Note | Nant Capital | Related Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 232 | 685 | ||
Amortization of deferred financing offering costs | 0 | 0 | ||
Total notes interest expense | 232 | 685 | ||
2022 Nant Capital Note | Nant Capital | Nonrelated Party | ||||
Debt Instrument [Line Items] | ||||
Accrued coupon interest | 0 | 0 | ||
Amortization of deferred financing offering costs | 0 | 0 | ||
Total notes interest expense | $ 0 | $ 0 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Liabilities | ||
Bookings Commitment | $ 2,629 | $ 2,153 |
Recurring basis | ||
Liabilities | ||
Bookings Commitment | 36,407 | 36,863 |
Recurring basis | Quoted price in active markets for identical assets (Level 1) | ||
Liabilities | ||
Bookings Commitment | 0 | 0 |
Recurring basis | Significant other observable inputs (Level 2) | ||
Liabilities | ||
Bookings Commitment | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Liabilities | ||
Bookings Commitment | $ 36,407 | $ 36,863 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Dec. 30, 2017 | Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Minimum booking commitments | $ 95,000 | ||
Bookings commitment period | 10 years | 10 years | |
Bookings commitment annual minimum | $ 500 | ||
Booking commitments current annual accrual | $ 1,700 | $ 1,700 | |
Percentage of shortfall payable | 70% | ||
Commission percentage | 30% | ||
Sensitivity analysis, adverse change in discount rate | 2% | ||
Impact of adverse change in discount rate | $ 2,819 | ||
Minimum | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Cost of debt range used for discounting | 14% | 12% | |
Maximum | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Cost of debt range used for discounting | 15% | 13% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in the Fair Value of Level 3 Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 36,863 |
Transfers in (out) | 0 |
Change in fair value recognized in earnings | (456) |
Ending balance | 36,407 |
Bookings Commitment | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 36,863 |
Transfers in (out) | 0 |
Change in fair value recognized in earnings | (456) |
Ending balance | $ 36,407 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Debt (Details) - Convertible Debt - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Face value | $ 137,500 | $ 137,500 |
Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value and carrying value | 105,424 | 105,875 |
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value and carrying value | 136,736 | 137,018 |
Related party | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Face value | 62,500 | 62,500 |
Related party | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value and carrying value | 47,920 | 48,125 |
Related party | Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value and carrying value | 62,385 | 62,335 |
Others | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Face value | 75,000 | 75,000 |
Others | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value and carrying value | 57,504 | 57,750 |
Others | Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value and carrying value | $ 74,351 | $ 74,683 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | |||||
Renewal term | 5 years | 5 years | |||
Term for option to terminate leases | 1 year | ||||
ROU asset impairment charge | $ 5,506 | $ 160 | $ 0 | $ 5,506 | $ 0 |
Reduction of the lease liability | 162 | ||||
Gain on partial lease termination | $ 2 | 2 | 0 | ||
Impairment charge | $ 23 | $ 208 | |||
OpenNMS | |||||
Lessee, Lease, Description [Line Items] | |||||
Impairment charge | $ 23 | ||||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Original lease term | 1 year | 1 year | |||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Original lease term | 11 years | 11 years |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity Analysis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Remainder of 2023 | $ 658 | |
2024 | 2,436 | |
2025 | 573 | |
2026 | 541 | |
2027 | 427 | |
2028 | 438 | |
Thereafter | 222 | |
Total future minimum lease payments | 5,295 | |
Less: imputed interest | (870) | |
Total | 4,425 | |
As reported in the Consolidated Balance Sheet | ||
Accrued and other current liabilities | 2,249 | $ 2,105 |
Operating lease liabilities | $ 2,176 | $ 4,054 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | |||||||
Sep. 26, 2022 USD ($) | Apr. 27, 2021 USD ($) day | Apr. 30, 2018 claim | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Nov. 21, 2022 USD ($) | Apr. 13, 2021 | Jan. 04, 2016 USD ($) | |
Related Party Transaction [Line Items] | ||||||||
Claims filed | claim | 2 | |||||||
Litigation settlement | $ 400 | |||||||
Litigation settlement, expense | $ 1,250 | |||||||
Insurance recoveries | $ 0 | $ 1,250 | ||||||
Legal and professional fees | 242 | 100 | ||||||
Accrued potential claim | 220 | 220 | ||||||
Convertible Debt | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate on debt | 4.50% | |||||||
Convertible Debt | 4.5% Convertible Senior Notes | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate on debt | 4.50% | 4.50% | ||||||
Number of days interest payments are in default | day | 30 | |||||||
Period of conversion failure, number of business days | day | 5 | |||||||
Number of days after written notice of failure to comply | day | 60 | |||||||
Percentage of debt holders | 25% | |||||||
Dollar amount of maximum default | $ 17,500 | |||||||
Number of days in which to rescind or annul failure to pay or default | day | 30 | |||||||
Redemption price as a percentage of principal | 100% | |||||||
Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes payable | $ 113,666 | $ 123,666 | ||||||
Related Party | Nant Capital | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes payable | $ 7 | |||||||
Related Party | Nant Capital | Promissory Notes with Nant Capital | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes payable | $ 112,666 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit from) income taxes | $ 54 | $ (10) | $ 34 | $ (19) |
Effective tax rate | (0.36%) | 0.07% | (0.08%) | 0.05% |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |||
Aug. 28, 2023 USD ($) tranche $ / shares shares | Dec. 31, 2023 USD ($) | Sep. 30, 2023 vote $ / shares shares | Dec. 31, 2022 $ / shares shares | Nov. 12, 2021 USD ($) $ / shares | |
Debt Instrument [Line Items] | |||||
Common stock authorized (in shares) | shares | 750,000,000 | 750,000,000 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock authorized (shares) | shares | 20,000,000 | ||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.0001 | ||||
Number of votes per unit held | vote | 1 | ||||
Preferred stock outstanding (in shares) | shares | 0 | 0 | |||
Open Market Sales Agreement | |||||
Debt Instrument [Line Items] | |||||
Aggregate offering price | $ | $ 30 | ||||
August 2023 Stock Purchase Agreement | Nant Capital | First Tranche Closing | Convertible Debt | Demand Promissory Note | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount of debt exchanged | $ | $ 10,000 | ||||
Exchange price of debt exchanged (in usd per share) | $ / shares | $ 18.61255 | ||||
Number of shares issued for debt exchanged (in shares) | shares | 537,272 | ||||
August 2023 Stock Purchase Agreement | Common Stock | |||||
Debt Instrument [Line Items] | |||||
Shares issued in connection with stock purchase agreement (in shares) | shares | 24,896,248 | ||||
Considerations received from shares issued in connection with stock purchase agreement | $ | $ 9,500 | ||||
Price per share of shares issued in connection with stock purchase agreement (in usd per share) | $ / shares | $ 0.39 | ||||
Number of tranches in connection with stock purchase agreement | tranche | 2 | ||||
August 2023 Stock Purchase Agreement | Common Stock | First Tranche Closing | |||||
Debt Instrument [Line Items] | |||||
Considerations received from shares issued in connection with stock purchase agreement | $ | $ 7,500 | ||||
August 2023 Stock Purchase Agreement | Common Stock | Second Tranche Closing | |||||
Debt Instrument [Line Items] | |||||
Considerations received from shares issued in connection with stock purchase agreement | $ | $ 2,000 | ||||
August 2023 Stock Purchase Agreement | Common Stock | Nant Capital | Forecast | |||||
Debt Instrument [Line Items] | |||||
Considerations received from shares issued in connection with stock purchase agreement | $ | $ 10,000 | ||||
August 2023 Stock Purchase Agreement | Common Stock | Nant Capital | First Tranche Closing | |||||
Debt Instrument [Line Items] | |||||
Shares issued in connection with stock purchase agreement (in shares) | shares | 15,384,616 | ||||
Considerations received from shares issued in connection with stock purchase agreement | $ | $ 6,000 | ||||
Price per share of shares issued in connection with stock purchase agreement (in usd per share) | $ / shares | $ 0.39 | ||||
August 2023 Stock Purchase Agreement | Common Stock | Summus Holdings | First Tranche Closing | |||||
Debt Instrument [Line Items] | |||||
Shares issued in connection with stock purchase agreement (in shares) | shares | 3,846,154 |
Net Income (Loss) Per Share - R
Net Income (Loss) Per Share - Reconciliations of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net income (loss) per share numerator: | ||||
Net income (loss) for basic and diluted net loss per share | $ (14,987) | $ (13,657) | $ (44,714) | $ (42,119) |
Weighted Average Number of Shares | ||||
Weighted-average shares for basic net loss per share (in shares) | 15,008,883 | 7,703,349 | 10,165,256 | 7,702,712 |
Weighted - average shares for diluted net loss per share (in shares) | 15,008,883 | 7,703,349 | 10,165,256 | 7,702,712 |
Basic and diluted net income (loss) per share: | ||||
Total net income (loss) per share - common stock, basic (usd per share) | $ (1) | $ (1.77) | $ (4.40) | $ (5.47) |
Total net income (loss) per share - common stock, diluted (usd per share) | $ (1) | $ (1.77) | $ (4.40) | $ (5.47) |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Antidilutive Securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Unvested and vested and unissued restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7,980 | 7,980 |
Unexercised stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,735,034 | 957,625 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,382,190 | 2,382,190 |
Related Party Transactions - Na
Related Party Transactions - Nantworks Shared Services Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Selling, general and administrative | $ 8,718 | $ 16,580 | $ 38,053 | $ 45,577 |
NantWorks | Related Party | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative | $ 304 | $ 644 | $ 1,166 | $ 796 |
Related Party Transactions - Ai
Related Party Transactions - Airstrip Shared Services Agreement (Details) - Airstrip - Shared Services Agreement $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Related Party Transaction [Line Items] | ||
Related party transaction amounts | $ 510 | $ 1,502 |
Receivables | $ 1,502 | $ 1,502 |
Related Party Transactions - Re
Related Party Transactions - Related Party Receivables (Details) - Related Party - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Related party receivables | $ 372 | $ 1,413 |
Receivable from Ziosoft KK related to sale of Qi Imaging | Ziosoft KK | ||
Related Party Transaction [Line Items] | ||
Related party receivables | $ 0 | $ 1,041 |
Related Party Transactions - Am
Related Party Transactions - Amended Reseller Agreement (Details) | 3 Months Ended | 9 Months Ended | ||||
Jun. 19, 2015 USD ($) test term renewal_option | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Related Party Transaction [Line Items] | ||||||
Term of agreement with related party | 5 years 6 months | |||||
Amended Reseller Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Number of renewal options exercised | renewal_option | 1 | |||||
Related Party | Amended Reseller Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Number of renewals | term | 3 | |||||
Renewal term (in years) | 3 years | |||||
Number of tests to qualify for first renewal option | test | 300,000 | |||||
Number of tests to qualify for second renewal option | test | 570,000 | |||||
Number of tests to qualify for third renewal option | test | 760,000 | |||||
Renewal option if threshold unmet, nonexclusive, number of years | 3 years | |||||
Annual minimum fees, tier one | $ | $ 2,000,000 | |||||
Due to related parties | $ | $ 0 | $ 0 | $ 0 | |||
Cost of revenue | $ | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions - _2
Related Party Transactions - Related Party Share-based Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Common Stock | Related Party | Selling, general and administrative | ||
Related Party Transaction [Line Items] | ||
Compensation expense post-acquisition | $ 8 | $ 25 |
Uncategorized Items - nh-202309
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 1,800,000 |