Nant Capital Note Purchase Agreement On April 13, 2021, the Company entered into a Note Purchase Agreement with Nant Capital to issue and sell $62,500 in aggregate principal amount of its 2021 Notes (see Note 11). The accrued and unpaid interest on the 2021 Notes held by Nant Capital was $586 at December 31, 2021, and was included as part of current related party payables, net in the Consolidated Balance Sheets. Related Party Receivables and Payables As of December 31, 2021 and 2020, the Company had related party receivables, net of related party payables, of $1,518 and $1,854, respectively, primarily consisting of a receivable from Ziosoft KK of $1,144 and $1,477, respectively, which was related to the sale of Qi Imaging. As of December 31, 2021 and 2020, the Company had related party payables, net of related party receivables, and related party liabilities of $43,439 and $35,329, respectively, which primarily relate to interest payable on the $112,666 promissory note in favor of Nant Capital and amounts owed to NantWorks pursuant to the Shared Services Agreement. The balance of the related party receivables and payables represent amounts paid by affiliates on behalf of the Company or vice versa. Assignment of The OpenNMS Group, Inc. On July 22, 2020, the Company entered into an assignment agreement (the “Assignment Agreement”) with Cambridge to acquire approximately 91% of The OpenNMS Group, Inc. for $5,577 in cash. Contemporaneously with the closing of the Assignment Agreement, OpenNMS issued call options to the Company consisting of, when exercised, cash payment of $278 and issuance of 56,769 shares of the Company's common stock in exchange for the 9% of the shares of OpenNMS common stock held by the remaining shareholders. These call options expired unexercised on September 30, 2020. As the Company and Cambridge are controlled by the Company's Chairman and CEO, the acquisition was treated as a transaction between entities under common control. The Company recognized the assets and liabilities transferred under the Assignment Agreement at their carrying amounts on July 22, 2020 based on Cambridge's historical cost, including the effects of purchase accounting from the November 1, 2019 acquisition of OpenNMS by Cambridge. The transaction did not cause a material change in the reporting entity, and the Company has not retrospectively adjusted its previously issued financial statements. The consolidation of OpenNMS at July 22, 2020 increased the Company's revenue by $763 and net loss by $1,311 for the year ended December 31, 2020. The intangible assets acquired are amortized over the weighted-average useful life of 5.9 years. These definite-lived intangible assets include developed technology of $2,500 (6-year useful life), installed user base of $1,400 (6-year useful life), customer relationship of $1,000 (6-year useful life), and trade name of $300 (4-year useful life). The table below shows the asset and liabilities recorded from the consolidation of the acquisition of OpenNMS. Amounts Total cash consideration $ 5,577 Assets and liabilities of OpenNMS at assignment: Cash and cash equivalents 102 Goodwill 1,026 Intangible asset, net 4,553 Other assets 1,097 Other liabilities assumed (1,227) Net assets acquired at assignment 5,551 Noncontrolling interests (503) Recorded as distribution from additional paid-in capital $ 529 In August 2021, the Company purchased the remaining 9%, or 241,485 shares of outstanding OpenNMS common stock held by the remaining shareholders for $556 in cash. The Company recognized the difference between the $556 purchase price and the $100 carrying value of the non-controlling interest acquired as a reduction to additional paid in capital of $456. As of August 24, 2021, the Company owns 100% of the outstanding common stock of OpenNMS. NantHealth, Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except per share amounts) - 135 -
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