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NantHealth Q1 Revenues Decline 11 Percent

This story has been updated with information from NantHealth's 10-Q filing.

NEW YORK – NantHealth said Thursday after market close that its revenues for the first quarter of 2021 decreased 11 percent to $16.2 million from $18.2 million in Q1 2020.

For the quarter ended March 31, the El Segundo, California-based company had total software-related revenues of $16.2 million, down 11 percent from $18.1 million in the same period a year earlier.

The Q1 2021 software revenue total includes $15.8 million from software-as-a-service offerings, $383,000 from maintenance, and $27,000 from professional services. Maintenance and services sales came from the firm's July 2020 acquisition of the OpenNMS Group, an open-source network management company, for about $6.1 million. NantHealth reported no revenues from either business segment in the year-earlier period. 

Revenue from sequencing and molecular analysis tumbled 95 percent to just $3,000 from $276,000 a year earlier. NantHealth has previously said that it expects soft sequencing revenues until the firm receives a positive coverage determination from the US Centers for Medicare and Medicaid Services for its Omics Core technology, a whole-exome tumor-normal in vitro diagnostic that measures overall tumor mutational burden in cancer tissue and reports somatic mutations in 468 cancer-relevant genes.

NantHealth posted a net loss during the recently completed quarter of $15.4 million, or $.14 per share, compared to a profit of $23.1 million, or $.21 per share, in the same period a year earlier. The first quarter of 2020 was the only profitable quarter in the company's history.

The firm's R&D costs grew 41 percent to $5 million from the previous year's $3.6 million. Its SG&A expenses increased by less than 1 percent to $12.5 million from $12.4 million a year earlier.

NantHealth had $10.8 million in cash and equivalents as of March 31.

The company said last month that it had reached agreements for $137.5 million in new financing that will extend the maturity date of existing debt instruments to 2026. 

NantHealth issued new senior unsecured convertible notes with a 2026 maturity to existing investors Highbridge Capital Management and Nant Capital. The latter is an investment vehicle of NantHealth's founder and CEO, Patrick Soon-Shiong, who is also the firm's largest shareholder.

Management plans to use the proceeds of the new 2026 notes to retire existing convertible notes that are due in December, as well as for operating capital.

The company has not drawn on a $100 million line of credit offered by Nant Capital in 2018.

In its 10-Q quarterly report filed with the US Securities and Exchange Commission on Friday, NantHealth disclosed that a customer representing 15 percent of the company's Q1 revenues did not renew a contract that expired in January. That customer will still use NantHealth's NaviNet SaaS offerings and "transition assistance" until at least June 30, according to the filing.

"We continue to engage in discussions with the customer regarding supplemental services and business opportunities that may extend beyond the service termination date," NantHealth said. 

NantHealth stock was at $2.56 in Friday morning trading on the Nasdaq, up about 2 percent.