Income from Discontinued Operations, Net of Tax, Attributable to NantHealth (Dollars in thousands) Year Ended December 31, Period-To-Period Change 2021 2020 2021 vs. 2020 Amount Amount Amount Percentage Income from discontinued operations, net of tax, attributable to NantHealth $ 23 $ 31,993 $ (31,970) (99.9)% For the year ended December 31, 2020, income from discontinued operations, net of tax, attributable to NantHealth was primarily related to the gain on sale of the Connected Care Business (see Note 4 to the accompanying Consolidated Financial Statements). Liquidity and Capital Resources Sources of Liquidity As of December 31, 2021, we had cash and cash equivalents of $29.1 million, compared to $22.8 million as of December 31, 2020, of which $0.8 million and $0.4 million, respectively, related to foreign subsidiaries. We believe our existing cash and cash equivalents will be sufficient to fund operations through at least 12 months following the issuance date of the financial statements. We also continue to have our Chairman and CEO’s intent and ability to support our operations with additional funds as required, including our ability to borrow on the $125.0 million promissory note with Nant Capital (see Note 19 to the accompanying Consolidated Financial Statements). We 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, we may not be able to secure such financing in a timely manner or on favorable terms. We may also consider selling off components of our business. Without additional funds, we may choose to delay or reduce our operating or investment expenditures. Further, because of the risk and uncertainties associated with the commercialization of our existing products as well as products in development, we may need additional funds to meet our needs sooner than planned. 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 affiliates, convertible notes, the sale of its common stock, and proceeds from the sale of components of its business. Convertible Notes On April 13, 2021, we and our wholly owned subsidiary, NaviNet entered into a Note Purchase Agreement with Highbridge and Nant Capital and issued $137.5 million in aggregate principal amount of our 2021 Notes in a private placement. The 2021 Notes were issued on April 27, 2021. The total net proceeds from this offering were approximately $136.8 million, after deducting Highbridge’s debt issuance costs of $0.1 million and $0.6 million in debt issuance costs paid to third parties in connection with the 2021 Notes offering. The 2021 Notes will mature on April 15, 2026, unless earlier repurchased, redeemed or converted. On April 27, 2021, concurrent with the 2021 Notes issuance, the Company used the proceeds to prepay the remaining $31.9 million of principal amount of the 2016 Notes held by Highbridge and $0.6 million of accrued interest on such 2016 Notes. On April 27, 2021, in connection with the issuance of the 2021 Notes, we provided a notice of a fundamental change (as defined in the indenture governing the 2016 Notes) and an offer to repurchase all our outstanding 2016 Notes. On May 25, 2021, the Company purchased $55.6 million of the outstanding 2016 Notes, including accrued and unpaid interest thereon. On December 15, 2021, the maturity date of the 2016 notes, the Company paid the remaining $9.5 million of the outstanding principal balance on the 2016 Notes, including accrued and unpaid interest thereon. Open Market Sale Agreement On November 12, 2021, we entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (the “Sales Agent”) under which it may offer and sell up to $30.0 million of shares of our common stock, par value $0.0001 per share (the “Shares”), from time to time through the Sales Agent. The sales and issuances of the Shares under the Sale Agreement will be made pursuant to the Company’s effective shelf registration statement on Form S-3 (the “Registration Statement”) that was declared effective on May 6, 2021. - 86 -
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