Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 01, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39727 | ||
Entity Registrant Name | SCIENCE 37 HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-4278203 | ||
Entity Address, Address Line One | 800 Park Offices Drive | ||
Entity Address, Address Line Two | Suite 3606 | ||
Entity Address, City or Town | Research Triangle Park | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27709 | ||
City Area Code | 984 | ||
Local Phone Number | 377-3737 | ||
Title of 12(b) Security | Shares of Common Stock, $0.0001 par value per share | ||
Trading Symbol | SNCE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 140,180,984 | ||
Entity Common Stock, Shares Outstanding | 116,729,430 | ||
Documents Incorporated by Reference | None. | ||
Entity Central Index Key | 0001819113 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 42 |
Consolidated Balance Sheets (St
Consolidated Balance Sheets (Statement) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 108,091 | $ 214,601 | |
Accounts receivable and unbilled services, net | 10,992 | 10,699 | |
Prepaid expenses and other current assets | 7,121 | 7,403 | |
Total current assets | 126,204 | 232,703 | |
Property and equipment, net | 0 | 1,393 | |
Operating lease right-of-use assets | 0 | 2,086 | |
Capitalized software, net | 0 | 24,290 | |
Other assets | 244 | 326 | |
Total assets | 126,448 | 260,798 | |
Current liabilities: | |||
Accounts payable | 7,206 | 12,819 | |
Accrued expenses and other liabilities | 11,364 | 17,073 | |
Deferred revenue | 4,606 | 5,130 | |
Total current liabilities | 23,176 | 35,022 | |
Non-current liabilities: | |||
Deferred revenue | 3,654 | 2,478 | |
Operating lease liabilities | 716 | 1,322 | |
Other long-term liabilities | 1,346 | 1,477 | |
Long-term earn-out liability | 170 | 98,900 | |
Total liabilities | 29,062 | 139,199 | |
Commitments and contingencies (Note 16) | |||
Redeemable convertible preferred stock: | |||
Redeemable convertible preferred stock, $0.0001 par value; 100,000,000 shares authorized, 0 issued and outstanding at December 31, 2022 and 2021 | [1] | 0 | 0 |
Stockholders’ equity: | |||
Common stock, $0.0001 par value; 400,000,000 shares authorized, 116,432,029 and 114,991,026 issued and outstanding at December 31, 2022 and 2021, respectively | 12 | 11 | |
Additional paid-in capital | 350,247 | 323,666 | |
Accumulated other comprehensive income | 193 | 0 | |
Accumulated deficit | (253,066) | (202,078) | |
Total stockholders’ equity | [1] | 97,386 | 121,599 |
Total liabilities, preferred stock and stockholders’ equity | $ 126,448 | $ 260,798 | |
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 06, 2021 | Dec. 31, 2020 | |
Redeemable convertible preferred stock: | |||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | [1] | 0 | 0 | 75,495,000 | |
Stockholders’ equity: | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | ||
Common stock, shares issued (in shares) | 116,432,029 | 114,991,026 | 5,019,582 | ||
Common stock, shares outstanding (in shares) | 116,432,029 | 114,991,026 | 114,707,150 | ||
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | |||
Statement of Comprehensive Income [Abstract] | ||||
Revenue | $ 70,147,000 | $ 59,597,000 | ||
Operating expenses: | ||||
Cost of revenue (exclusive of depreciation and amortization) | 54,278,000 | 42,394,000 | ||
Selling, general and administrative | 103,254,000 | 73,122,000 | ||
Impairment of long-lived assets | 44,079,000 | 0 | ||
Depreciation and amortization | 17,942,000 | 7,799,000 | ||
Restructuring costs | 2,628,000 | 0 | ||
Total operating expenses | 222,181,000 | 123,315,000 | ||
Loss from operations | (152,034,000) | (63,718,000) | ||
Other income (expense): | ||||
Interest income | 1,695,000 | 3,000 | ||
Sublease income | 820,000 | 685,000 | ||
Change in fair value of earn-out liability | 98,730,000 | (31,300,000) | ||
Other expense, net | (289,000) | 0 | ||
Total other income (expense), net | 100,956,000 | (30,612,000) | ||
Loss before income taxes | (51,078,000) | (94,330,000) | ||
Income tax (benefit) expense | (90,000) | 1,000 | ||
Net loss | [1] | $ (50,988,000) | $ (94,331,000) | |
Net loss per share: | ||||
Basic (in dollars per share) | $ (0.44) | $ (2.89) | ||
Diluted (in dollars per share) | $ (0.44) | $ (2.89) | ||
Weighted average common shares outstanding: | ||||
Basic weighted average common shares outstanding (in shares) | 115,875,505 | 32,679,105 | ||
Diluted weighted average common shares outstanding (in shares) | 115,876,000 | 32,679,000 | ||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Net loss | [1] | $ (50,988,000) | $ (94,331,000) | |
Foreign currency translation | 193,000 | [1] | 0 | |
Total comprehensive loss | $ (50,795,000) | $ (94,331,000) | ||
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Statement) - USD ($) $ in Thousands | Total | Conversion of Convertible Preferred Stock | Warrant | Common Stock | Common Stock Conversion of Convertible Preferred Stock | Common Stock Warrant | [1] | Additional Paid-In Capital | Additional Paid-In Capital Conversion of Convertible Preferred Stock | Additional Paid-In Capital Warrant | Accumulated Other Comprehensive Income | Accumulated Deficit | |||
Beginning balance, temporary equity (in shares) at Dec. 31, 2020 | [1] | 75,495,000 | |||||||||||||
Beginning balance, temporary equity at Dec. 31, 2020 | [1] | $ 143,086 | |||||||||||||
Redeemable Convertible Preferred Stock | |||||||||||||||
Conversion of redeemable convertible preferred shares into common shares (refer to Note 11) (in shares) | [1] | (75,495,266) | |||||||||||||
Conversion of redeemable convertible preferred shares into common shares (refer to Note 11) | [1] | $ (143,086) | |||||||||||||
Ending balance, temporary equity (in shares) at Dec. 31, 2021 | [1] | 0 | |||||||||||||
Ending balance, temporary equity at Dec. 31, 2021 | [1] | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | [1] | 5,020,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | [1] | (106,135) | $ 1 | $ 1,611 | $ 0 | $ (107,747) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Proceeds from option exercises | [1] | $ 8,407 | 8,407 | ||||||||||||
Proceeds from option exercises (in shares) | 3,606,121 | 3,606,000 | [1] | ||||||||||||
Proceeds from warrant exercises | [1] | $ 1,432 | 1,432 | ||||||||||||
Conversion of convertible securities (in shares) | 75,495,266 | 75,495,000 | [1] | 12,000 | |||||||||||
Conversion of convertible securities | [1] | $ 143,086 | $ 10 | $ 7 | $ 143,079 | $ 10 | |||||||||
Merger share issuance, net of transaction costs (in shares) | [1] | 10,858,000 | |||||||||||||
Merger shares issuance, net of transaction costs | [1] | $ 52,200 | $ 1 | 52,199 | |||||||||||
PIPE shares issuance, net of transaction costs (in shares) | [1] | 20,000,000 | |||||||||||||
PIPE shares issuance, net of transaction costs | [1] | 184,530 | $ 2 | 184,528 | |||||||||||
Contingently issuable earn-out shares (refer to Note 17) | [1] | (67,600) | (67,600) | ||||||||||||
Net loss | [1] | $ (94,331) | (94,331) | ||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 114,991,026 | 114,991,000 | [1] | ||||||||||||
Ending balance at Dec. 31, 2021 | [1] | $ 121,599 | $ 11 | 323,666 | 0 | (202,078) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Foreign currency translation | 0 | ||||||||||||||
Foreign currency translation | $ 0 | ||||||||||||||
Ending balance, temporary equity (in shares) at Dec. 31, 2022 | [1] | 0 | |||||||||||||
Ending balance, temporary equity at Dec. 31, 2022 | [1] | $ 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Proceeds from option exercises | [1] | $ 25,972 | 25,972 | ||||||||||||
Proceeds from option exercises (in shares) | 1,441,003 | 1,441,000 | [1] | ||||||||||||
Proceeds from warrant exercises | [1] | $ 610 | $ 1 | 609 | |||||||||||
Conversion of convertible securities (in shares) | 0 | ||||||||||||||
Net loss | [1] | $ (50,988) | (50,988) | ||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 116,432,029 | 116,432,000 | [1] | ||||||||||||
Ending balance at Dec. 31, 2022 | [1] | $ 97,386 | $ 12 | $ 350,247 | 193 | $ (253,066) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Foreign currency translation | [1] | 193 | 193 | ||||||||||||
Foreign currency translation | [1] | $ 193 | $ 193 | ||||||||||||
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Statement) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Cash flows from operating activities: | |||
Net loss | [1] | $ (50,988,000) | $ (94,331,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 17,942,000 | 7,799,000 | |
Non-cash lease expense related to operating lease right-of-use assets | 1,034,000 | 1,429,000 | |
Stock-based compensation | 24,562,000 | 8,407,000 | |
(Gain) loss on change in fair value of earn-out liability | (98,730,000) | 31,300,000 | |
Loss on long-lived asset impairment | 44,079,000 | 0 | |
Gain on foreign currency exchange rates | (372,000) | 0 | |
Provision for doubtful accounts | 529,000 | 269,000 | |
Loss on disposal of fixed assets | 0 | 10,000 | |
Changes in operating assets and liabilities: | |||
Accounts receivable and unbilled services | (821,000) | 232,000 | |
Prepaid expenses and other current assets | 282,000 | (6,026,000) | |
Other assets | 449,000 | (142,000) | |
Accounts payable | (6,778,000) | 5,243,000 | |
Accrued expenses and other current liabilities | (6,545,000) | 7,158,000 | |
Deferred revenue | 652,000 | 2,044,000 | |
Operating lease liabilities | (606,000) | (1,112,000) | |
Other, net | (132,000) | 1,242,000 | |
Net cash used in operating activities | (75,443,000) | (36,478,000) | |
Cash flows from investing activities: | |||
Payments related to capitalized software development costs | (31,707,000) | (19,345,000) | |
Purchases of property and equipment | (167,000) | (1,231,000) | |
Net cash used in investing activities | (31,874,000) | (20,576,000) | |
Cash flows from financing activities: | |||
Proceeds from warrant exercises | 0 | 10,000 | |
PIPE shares issuance, net of transaction costs | 0 | 184,530,000 | |
Merger shares issuance, net of transaction costs | 0 | 52,200,000 | |
Proceeds from stock option exercises | 610,000 | 1,432,000 | |
Net cash provided by financing activities | 610,000 | 238,172,000 | |
Effect of exchange rate changes on cash and cash equivalents | 197,000 | 0 | |
Net (decrease) increase in cash and cash equivalents | (106,510,000) | 181,118,000 | |
Cash and cash equivalents, beginning of period | 214,601,000 | 33,483,000 | |
Cash and cash equivalents, end of period | 108,091,000 | 214,601,000 | |
Supplemental disclosures of non-cash activities | |||
Balance in accounts payable and accrued expenses and other current liabilities, and capitalized stock-based compensation related to capitalized software and fixed asset additions | (3,412,000) | (4,325,000) | |
Right-of-use asset obtained in exchange for operating lease liabilities | 0 | (1,305,000) | |
Conversion of preferred stock into common stock | 0 | (143,086,000) | |
Earn-out shares | $ 0 | $ 67,600,000 | |
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Company Background and Basis of
Company Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Background and Basis of Presentation | Company Background and Basis of Presentation Description of Business Science 37 Holdings, Inc. and its subsidiaries (the “Company” or “Science 37”) is a leader in patient-centric clinical trials and in supporting novel approaches to DCT designs. Science 37 pioneered the concept of patient-centric clinical trials with a very simple premise: that clinical trials should begin with the patient. Through its patient-centric approach, Science 37 reduces the impact of the geographic barriers associated with conventional physical clinical trial sites, enabling recruitment of virtually any patient. Science 37 believes that centering the clinical trial around the patient with personalized support addresses current industry needs around patient recruitment, retention, representation, and engagement. To expand clinical trial access Science 37 offers a unique model to existing non-research focused healthcare networks to seamlessly participate without the traditional site infrastructure costs. Science 37’s patient-centric model is powered by a proprietary end-to-end unified technology platform and its team of approximately 460 employees with significant therapeutic and subject matter expertise. As the backbone of Science 37’s offering, the proprietary unified technology platform standardizes and orchestrates the process for clinical trials across Science 37’s specialized network of patient communities, telemedicine investigators, flexible mobile nurse networks, remote coordinators, and robust network of technology integrations. The Company operates under one reporting segment. Liquidity Under Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. Pursuant to subscription agreements entered into in connection with the Merger Agreement (collectively, the “Subscription Agreements”), certain investors agreed to subscribe for an aggregate of 20,000,000 newly-issued shares of Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $200.0 million (the “PIPE”). As a result of the Business Combination and inclusive of the PIPE financing, the Company received $233.5 million, net of fees and expenses paid in connection with the closing of the Business Combination. As of December 31, 2022, the Company had approximately $108.1 million of unrestricted cash. The Company believes that its current cash level will be adequate to support its ongoing operations, capital expenditures and working capital for at least the next twelve months. As such, the Company’s consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Basis of Presentation The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of Science 37 Holdings, Inc. and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated. On October 6, 2021 (the “Closing Date”), Science 37 Holdings, Inc., a Delaware corporation (formerly named LifeSci Acquisition II Corp. or “LSAQ”, a publicly traded special purpose acquisition company) consummated a merger pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated May 6, 2021, by and among LifeSci Acquisition II Corp., LifeSci Acquisition II Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of LifeSci Acquisition II Corp. (“Merger Sub”), and Science 37, Inc., a Delaware corporation (“Legacy Science 37”). Pursuant to the terms of the Merger Agreement, a business combination between LifeSci Acquisition II Corp. and Legacy Science 37 was effected through the merger of Merger Sub with and into Legacy Science 37, with Legacy Science 37 remaining as the surviving company and a wholly-owned subsidiary of LifeSci Acquisition II Corp. (the “Merger” and collectively with the other transactions described in the Merger Agreement, the “Business Combination”). Pursuant to the Merger Agreement, the merger between Merger Sub and Legacy Science 37 was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, LifeSci Acquisition II Corp. was treated as the “acquired” company and Legacy Science 37 is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Science 37 issuing stock for the net assets of LifeSci Acquisition II Corp., accompanied by a recapitalization. The net assets of LifeSci Acquisition II Corp. are stated at historical cost, with no goodwill or other intangible assets recorded in conjunction with the Reverse Recapitalization. Legacy Science 37 was determined to be the accounting acquirer based on the following predominant factors: • Legacy Science 37’s existing stockholders have the greatest voting interest in the Company; • The largest individual stockholder in the Company was an existing stockholder of Legacy Science 37; • Legacy Science 37’s directors represent the majority of the new Board of Directors of the Company; • Legacy Science 37’s senior management is the senior management of the Company; and • Legacy Science 37 is the larger entity based on historical revenue and has the larger employee base. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Science 37. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of approximately 1.815 established in the Business Combination. Concentration Risks Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, deposits of up to $250,000 at Federal Deposit Insurance Corporation (“FDIC”) insured institutions are covered by FDIC insurance. At times, deposits at the Company’s financial institutions may exceed federally insured limits. Management periodically assesses the financial condition of the institutions and believes that any possible credit risk is minimal. The Company has not experienced any loss from such risk. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates and Judgments The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions about future events that affect the amounts reported in its consolidated financial statements and the accompanying notes. Future events and their effects cannot be determined with certainty. On an ongoing basis, management evaluates these estimates, judgments, and assumptions. Significant estimates and assumptions include but are not limited to: (1) revenue recognition, (2) accounts receivable and allowance for doubtful accounts, (3) long-lived asset recoverability, (4) useful lives of long-lived assets, (5) stock-based compensation, and (6) fair value measurements, including the fair value of the Earn-Out Shares (as defined below). The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates, and any such differences may be material to the Company’s consolidated financial statements. Revenue Recognition The Company derives its revenue primarily from two sources: (i) contractual arrangements to enable and enhance clinical trials through technology and services, and (ii) licensing of its proprietary hosted technology platform to a variety of life science institutions. Revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation A performance obligation is a promise (or a combination of promises) in a contract to transfer distinct goods or services to a customer and is the unit of accounting under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for purposes of revenue recognition. A contract’s transaction price is allocated to each separate performance obligation based on the standalone selling price and is recognized as revenue, when, or as, the performance obligation is satisfied. All of the Company’s contracts have a single performance obligation because the promise to transfer individual services is not separately identifiable from other promises in the contracts, and therefore, is not distinct. The majority of the Company’s revenue arrangements are service contracts that range in duration from a few months to several years. Substantially all of the Company’s performance obligations, and associated revenue, are transferred to the customer over time. The performance obligation is satisfied over time and the Company generally recognizes revenue based on a cost-based input method, due to costs being incurred consistently throughout the life of the contract, as there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation. Progress on the performance obligation is measured by the proportion of actual costs incurred to the total costs expected to complete the contract. Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other pass-through expenses for the Company’s clinical monitors). This cost-to-cost input method of revenue recognition requires the Company to make estimates of costs to complete its projects on an ongoing basis. Contract estimates are based on various assumptions to project future outcomes of events that often span several years and require significant judgment. These estimates are reviewed periodically, and any adjustments are recognized on a cumulative catch-up basis in the period they become known. The Company generally receives compensation based on measuring progress toward completion using anticipated project budgets and direct labor and prices for each service offering. The Company is also reimbursed for certain third party pass-through and out-of-pocket costs. The pass-through costs are included in total operating expenses on the consolidated statements of operations and comprehensive loss. The pass-through costs are also recognized as revenue on a gross basis as the Company is the principal in the relationship (i.e., the Company is primarily responsible for the services provided by third parties, and significantly integrates the services of third parties with its own services in delivering a combined output to the customer). In addition, in certain instances, a customer contract may include forms of variable consideration such as incentive fees, volume rebates or other provisions that can increase or decrease the transaction price. This variable consideration is generally awarded upon achievement of certain performance metrics, program milestones or cost targets. For the purpose of revenue recognition, variable consideration is assessed on a contract-by-contract basis and the amount included in the transaction price is estimated based on the Company’s anticipated performance and in consideration of all information that is reasonably available. Variable consideration is recognized as revenue if and when it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future. The Company has one performance-based contract, which is unique in that the Company’s obligation to the customer is solely for the recruitment of successfully processed patients or “completers”. The successful recruitment of completers constitutes a single performance obligation to our customer. Completer revenue is recognized at a point in time, as completers are processed. For contracts where the Company licenses its proprietary hosted software independently, value transfers to the customer over time as the customer has access to the system once it is live and continues to benefit over the life of the arrangement. Revenue is recorded straight line over the term of the hosting and maintenance period as there is no better measure of the transfer of value for these services. Most of the Company’s contracts can be terminated by the customer without cause with a 30-day notice. In the event of termination, the Company’s contracts generally provide that the customer pay the Company for (i) fees earned through the termination date, (ii) fees and expenses for winding down the project, which include both fees incurred and actual expenses, (iii) non-cancellable expenditures, and (iv) in some cases, a fee to cover a portion of the remaining professional fees on the project. Changes in the scope of work are common, especially under long-term contracts, and generally result in a change in the total contract transaction price. If the customer does not agree to a contract modification, the Company could bear the risk of cost overruns. Most of the Company’s contract modifications are for services that are not distinct from the services under the existing contract due to the significant integration service provided in the context of the contract and therefore result in a cumulative catch-up adjustment to revenue at the date of contract modification. Capitalized Costs The Company capitalizes certain costs associated with commissions paid to its employees because these costs are incurred in obtaining contracts that have a term greater than one year and are expected to be recovered. Capitalized costs are included in prepaid expenses and other current assets on the consolidated balance sheets and are amortized to selling, general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company amortizes these costs in a manner that is consistent with the pattern of revenue recognition described above. The Company expenses costs to obtain contracts that have a term of one year or less when incurred. Cost of Revenue Cost of revenue includes the direct cost to conduct the Company’s trials remotely and make available the Company’s unified technology platform. Cost of revenue consists primarily of compensation, benefits, and other employee-related costs, including expenses for stock-based compensation, contract labor, trial advertising and marketing, investigator payments, and reimbursable out-of-pocket expenses directly related to delivering on the Company’s contracts. Cost of revenue is driven primarily by the number of clinical trials in which the Company is contracted, and it typically increases or decreases with changes in revenue but may fluctuate from period to period as a percentage of revenue due to project labor utilization and experience level mix of personnel assigned to projects, the type of services, changes to the timing of work performed and project inefficiencies, among other factors. Our business and operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities. Clinical trial marketing costs totaled $4.2 million and $3.4 million for the years ended December 31, 2022 and 2021, respectively. Selling, General and Administrative Expenses Selling, general and administrative expenses include costs related to sales, marketing, and administrative functions (including human resources, legal, finance, information technology and general management) such as compensation expense and benefits, including stock-based compensation, travel, professional services, facilities, recruiting and relocation, training, and sales commissions. Corporate branding and other marketing costs totaled $1.4 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively. Restructuring Costs Restructuring costs consist of one-time employee termination benefits. The Company accounts for restructuring costs in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. This guidance requires that liabilities related to one-time employee termination benefits be measured and recognized at the date the entity notifies employees of termination, unless employees are required to render services beyond a minimum retention period, in which case the liability is recognized ratably over the future service period. Restructuring liabilities are included in accrued expenses and other liabilities on the consolidated balance sheets. Foreign Currency We translate revenue and expenses of our foreign subsidiaries into U.S. dollars at average exchange rates for the periods presented, and we translate assets and liabilities at current exchange rates. The net effect of foreign currency translation adjustments is included in shareholders’ equity as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Foreign currency transaction gains and losses are the result of exchange rate changes during the period of time between the consummation and cash settlement of transactions denominated in currencies other than the functional currency. Foreign currency transaction gains and losses are recognized in earnings as incurred and are included in other (income) expense, net in the accompanying consolidated statements of operations and comprehensive loss. Cash and Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents, which consist of cash on deposit with banks, are stated at cost, which approximates fair value. Accounts Receivable, Unbilled Services, and Deferred Revenue The Company establishes prerequisites for billings based on contractual terms, including payment schedules and the completion of milestones. In general, the Company’s intention in its invoicing and related payment terms is to maintain cash neutrality over the life of the contract. Generally, the payment terms are 30 to 90 days. Upfront payments, when they occur, are intended to cover certain expenses the Company incurs at the beginning of the contract. Neither the Company nor its customers view such upfront payments and contracted payment schedules as a means of financing. Unbilled services represent revenue earned and recognized for services performed for which amounts have not yet been billed to the customer in accordance with contractual terms. Contractual provisions and payment schedules may or may not correspond to the timing of the performance of services under the contract. Unbilled services include contract assets, under which the right to bill the customer is subject to factors other than the passage of time, such as the satisfaction of milestones. Accounts receivable and unbilled services are recorded, net, on the balance sheet. Deferred revenue is a contract liability that consists of customer payments received in advance of performance. The Company reduces deferred revenue and recognizes revenue as the related performance obligations for services are performed. Deferred revenue is classified as a current liability on the balance sheet when the Company expects to recognize the associated revenue in less than one year, and a long-term liability when the Company expects to recognize the associated revenue in excess of one year. Allowance for Doubtful Accounts The Company carries its accounts receivable at net realizable value. The Company maintains a credit approval process and makes judgments to assess its customers’ ability to pay for contracted services. The Company monitors its customers’ credit worthiness and applies judgment in establishing a provision for estimated credit losses based on historical experience, the aging of receivables and customer and industry specific circumstances. The Company continuously monitors collections and payments from its customers and has a policy to write off uncollectible invoices once appropriate collection efforts have been exhausted. The allowance for doubtful accounts is included in accounts receivable and unbilled services, net on the consolidated balance sheets. Long-Lived Assets Property and equipment are recorded at cost less accumulated depreciation. Maintenance and repairs are expensed as incurred. Depreciation expense is computed using the straight-line method over the estimated useful lives of the related assets as follows: Furniture and fixtures 5 years Computer equipment 3 years Leasehold improvements Shorter of remaining lease term or estimated useful life Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation or amortization are removed from the Company’s consolidated financial statements with the resulting gain or loss reflected in the Company’s results of operations. The Company’s internal use proprietary hosted software organizes workflows, captures real-time evidence, and harmonizes data during clinical trial support or enhancement for its customers. Capitalized software is recorded at cost less accumulated amortization. The Company capitalizes software development cost related to the development of the Company’s proprietary platform in accordance with ASC Topic 350, Intangibles—Goodwill and Other. Internal and external costs incurred during the preliminary stage are expensed as incurred. Costs incurred during the development stage are capitalized and consist of payroll labor, and benefits to the extent of time spent directly on the project and external direct costs of materials and labor. Training and maintenance costs are expensed as incurred. The Company commences amortization once the respective assets are placed into service. The estimated useful life for capitalized software is 3 years. Software cloud computing arrangements that do not contain software licenses are accounted for as service contracts. Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the expected undiscounted future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. Assets are reported at the lower of the carrying amount or the fair value less costs to sell. As of the year-ended December 31, 2022 we recognized a $43.0 million long-lived asset impairment expense (excluding the ROU asset impairment discussed under Leases below). The impairment was due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. The Company remains confident in the utility of the long-lived assets and there has been no change as to their intended use. No long-lived asset impairment expense was recognized for the year-ended December 31, 2021. Leases The Company has operating leases for corporate offices. Additionally, the Company is the sublessor for certain office space. The Company determines if an arrangement is a lease at inception of the contract. A contract contains a lease if the Company controls the use of an identified asset. Control exists if the Company can direct the use of and obtain substantially all the economic benefit of the asset. Operating lease right-of-use (“ROU”) assets and lease liabilities are recorded on our balance sheet and are measured based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses its incremental borrowing rate at lease commencement in determining the present value of future payments. In addition, the operating lease ROU asset includes any prepaid lease payments and initial direct costs and excludes lease incentives. If the Company has an option to extend or terminate a lease and is reasonably certain to exercise that option, the extension or termination is included in the lease term used to measure the lease liability and related ROU asset. Lease expense for minimum lease payments is recognized on a straight-line basis over the term of the lease. The Company has elected to account for lease components and non-lease components in a contract as a single lease component. For short-term leases (those with a term of one year or less), the Company has elected not to recognize ROU assets and lease liabilities. Lease payments on short-term leases are recognized as lease expense on a straight-line basis over the lease term. As of the year-ended December 31, 2022 we recognized $1.1 million of ROU asset impairment expense due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. No asset impairment expense for leases was recognized for the year-ended December 31, 2021. Stock-Based Compensation The Company measures stock-based compensation cost based on the fair value of the award at the grant date, and recognizes it as expense, net of actual forfeitures as they occur, over the requisite service period of the employee. The Company accounts for stock options and shares issued under the employee stock purchase plan (ESPP) under the fair value method and uses the Black-Scholes model to estimate the value of such awards granted or shares purchased. Within this model, expected volatility is based upon the historical volatility of a peer group for a period equal to the expected term, as the Company does not have adequate history to calculate its own volatility. The Company believes the expected volatility will approximate the historical volatility of the peer group. The Company does not currently anticipate paying dividends. The expected term represents the period in which the grants are expected to be outstanding or in which the ESPP shares are expected to vest. The risk-free interest rate is based on the United States Treasury yield curve at the time of the grant. The fair value of restricted stock units is measured on the grant date based on the closing market price of the Company’s common stock. The Company accounts for Earn-Out Shares issued to Legacy Science 37 option holders at fair value and uses a Monte Carlo simulation to estimate the value of such Earn-Out Shares on the grant date. Within this model, expected volatility is based upon the historical volatility of a peer group for a period equal to the expected term, as the Company does not have adequate history to calculate its own volatility. The expected term represents the derived service period as determined in the Monte Carlo simulation valuation model. The risk-free interest rate is based on the United States Treasury yield curve at the time of the grant. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or the most advantageous market when no principal market exists. Market participants are assumed to be independent, knowledgeable, able, and willing to transact an exchange and not under duress. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value are not necessarily indicative of the amounts that could be realized in a current or future market exchange. Fair values for substantially all of the Company’s financial and nonfinancial instruments were measured using market, income, or cost approaches. The three levels of input are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments, including cash and cash equivalents, are recorded at cost, which approximates fair value. Former holders of shares of Science 37 common stock were allocated Earn-Out Shares in connection with the completion of the Merger. These Earn-Out Shares are accounted for as a liability and require fair value measurement on a recurring basis. Due to the significant unobservable inputs that are required to value these shares, they are classified as Level 3 in the fair value hierarchy. Please refer to Note 17 for additional details surrounding the valuation methodology for the Earn-Out Shares. Other than the Earn-Out Shares, the Company has no assets or liabilities measured at Level 2 or Level 3. Income Taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes, which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records valuation allowances to reduce deferred tax assets to the amount the Company believes is more likely than not to be realized. The Company recognizes uncertain tax positions when the positions will more likely than not be upheld on examination by the taxing authorities based solely upon the technical merits of the positions. The Company recognizes interest and penalties, if any, related to unrecognized income tax uncertainties in income tax expense. Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted earnings (loss) per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted earnings (loss) per share calculation, preferred stock, stock options and warrants are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. As a result of the Merger, the Company retrospectively adjusted the weighted-average number of shares of common stock outstanding prior to October 6, 2021 by multiplying them by the exchange ratio of approximately 1.815 used to determine the number of shares of common stock into which they converted. Segments Operating segments are defined as components of an entity for which separate financial information is available and that are regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that its Senior Executive Committee, which includes the Chief Executive Officer, together with the Board of Directors is the CODM. The Company operates in a single operating segment as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance. As of and for the years ended December 31, 2022 and 2021, the Company did not have material revenue earned or assets located outside of the United States. Subsequent Events The Company evaluates events that occurred subsequent to December 31, 2022 for recognition or disclosure in its consolidated financial statements. Emerging Growth and Smaller Reporting Company As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use the extended transition period under the JOBS Act until such time the Company is not considered to be an EGC. The adoption dates are discussed in the section below to reflect this election. The Company is also a smaller reporting company as defined in Item 10(f) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure requirements, including, among other things, providing only two years of audited financial statements. To the extent the Company takes advantage of such reduced disclosure requirements, it may make the comparison of its financial statements with other public companies difficult or impossible. Accounting Pronouncements Recently Adopted In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which eliminates certain exceptions to the guidance in Income Taxes (Topic 740) related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 effective January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. Accounting Pronouncements Issued but Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). This guidance introduces a new model for recognizing credit losses on |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination On October 6, 2021, the Company consummated the Merger Agreement dated May 6, 2021 with Legacy Science 37 surviving the merger as a wholly owned subsidiary of the Company. Legacy Science 37 preferred stock and common stock were converted into the right to receive approximately 1.815 shares (the “Exchange Ratio”) of the Company’s Common Stock, par value $0.0001 per share (“Common Stock”). Unless otherwise stated, the Exchange Ratio was applied to the number of shares of Legacy Science 37 throughout these consolidated financial statements. At the effective time of the Merger (the “Effective Time”), 100% of the issued and outstanding shares of preferred and common stock of Legacy Science 37 were converted into an aggregate of 83,848,889 shares (the “Merger Shares”) of Common Stock. Former holders of shares of Legacy Science 37 common stock (including shares received as a result of the conversion of Legacy Science 37 preferred stock) and former holders of options to purchase shares of Legacy Science 37 common stock are entitled to receive their respective pro rata shares of up to 12,500,000 additional shares of the Company’s Common Stock (the “Earn-Out Shares”) if, during the period beginning on the Closing Date and ending on October 6, 2024, the share price equal to the volume weighted average price of Science 37’s Common Stock for a period of at least 20 days out of 30 consecutive trading days (each, a “Triggering Event”): i. is equal to or greater than $15.00, a one-time aggregate issuance of 5,000,000 Earn-Out Shares will be made; and ii. is equal to or greater than $20.00, a one-time aggregate issuance of 7,500,000 Earn-Out Shares will be made. In respect of former holders of Legacy Science 37 options, receipt of the Earn-Out Shares is subject to continued services to the Company or one of its subsidiaries at the time of the applicable Triggering Event. If there is a change of control of Science 37 within the three-year period following the closing of the Business Combination, that will result in the holders of Science 37 Common Stock receiving a per share price equal to or in excess of any Triggering Event threshold, then immediately prior to such change of control, any Triggering Event that has not previously occurred shall be deemed to have occurred and Science 37 shall issue the Earn-Out Shares to the former holders of shares of Legacy Science 37 Common Stock and former holders of Legacy Science 37 options in accordance with their respective pro rata shares. Pursuant to subscription agreements entered into in connection with the Merger Agreement (collectively, the “Subscription Agreements”), certain investors agreed to subscribe for an aggregate of 20,000,000 newly issued shares of Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $200.0 million (the “PIPE”). The shares of Common Stock issued by the Company pursuant to the PIPE financing were issued concurrently with the closing of the Merger on the Closing Date. A total of 30,858,261 additional shares of common stock were issued in connection with the close of the Business Combination, inclusive of the PIPE shares and shares held by LSAQ sponsor and public investors. In summary, upon the closing of the Merger: • 2,299,493 shares of LSAQ common stock held by shareholders prior to the Merger were redeemed with cash from LSAQ’s trust account, leaving 7,711,808 shares of pre-existing LSAQ common stock outstanding after redemption. • 3,146,453 Private Placement Warrants held by the Sponsor were converted to common shares of LSAQ common stock immediately prior to the Effective Time. • all issued and outstanding shares of Legacy Science 37 capital stock converted into an aggregate of 83,848,889 shares of Common Stock. • the Company issued an aggregate of 20,000,000 shares of Common Stock to the PIPE Investors pursuant to the closing of the PIPE. • all of the outstanding options to acquire Legacy Science 37 common stock were converted into options to acquire an aggregate of 15,910,595 shares of Common Stock. The Company received $35.0 million in cash from the LSAQ trust and operating accounts, net of redemptions of LSAQ common stock and transaction costs paid at closing of $22.3 million. In addition, the Company also received $200.0 million from the PIPE investors related to the issuance of 20,000,000 shares of Common Stock. The Company paid a total of $1.5 million additional transaction costs related to the Business Combination in addition to the $22.3 million transaction costs paid at closing totaling $23.8 million in transaction costs. These transaction costs were associated with the Merger, PIPE and shareholder Earn-Out Shares. Transaction costs associated with the Merger and PIPE shares were deducted from the merger proceeds and included in additional paid-in capital on the consolidated balance sheets and consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit) at December 31, 2021. The transaction costs associated with the shareholder Earn-Out Shares were expensed as incurred and the amount of $3.1 million for the year ended December 31, 2021 is included in selling, general and administrative expenses on the consolidated statements of operations and comprehensive loss. Accordingly, shares outstanding upon consummation of the Business Combination consisted of the following: LSAQ Initial Stockholders 2,002,260 Shares from Conversion of LSAQ Private Warrants 3,146,453 LSAQ Public Stockholders 5,709,548 Science 37 Rollover Shares 83,848,889 PIPE Shares 20,000,000 Total 114,707,150 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue by Geography Substantially all of the Company’s revenue for the years ending December 31, 2022 and 2021 was derived from services performed within the United States. No other country represented more than 10% of total revenue for either year. Unsatisfied Performance Obligations As of December 31, 2022, the aggregate amount of transaction price allocated to the unsatisfied performance obligations was $168.0 million. The Company expects to recognize this revenue over the remaining contract term of the individual projects, with remaining contract terms generally ranging from 0.1 to 8.6 years. The amount of unsatisfied performance obligations is lower than the potential contractual revenue since it excludes revenue that is constrained. Revenue amounts excluded due to constraints include those amounts under contracts that (i) are wholly unperformed in which the customer has a unilateral right to cancel the arrangement, or (ii) require the Company to undertake numerous activities to fulfill the performance obligations, including various activities that are outside of the Company’s control. Timing of Billing and Performance During the years ended December 31, 2022, and 2021, the Company recognized approximately $4.8 million and $4.9 million of revenue that was included in the deferred revenue balance at the beginning of the years, respectively. During the years ended December 31, 2022, and 2021 revenue recognized from performance obligations partially satisfied in previous periods was $5.6 million and $2.0 million, respectively. These cumulative catch-up adjustments primarily related to contract modifications, executed in the current period, which resulted in changes to the transaction price and changes in estimates such as estimated total costs. Accounts Receivable, Unbilled Services, and Deferred Revenue Accounts receivable and unbilled services (including contract assets) consisted of the following as of December 31: (In thousands) 2022 2021 Accounts receivable $ 8,235 $ 8,143 Unbilled services 3,555 2,825 Total accounts receivable and unbilled services 11,790 10,968 Allowance for doubtful accounts (798) (269) Total accounts receivable and unbilled services, net $ 10,992 $ 10,699 As of December 31, 2022, and 2021, contract assets of $3.6 million and $2.8 million, respectively, were included in unbilled services. Year over year changes in the Company’s accounts receivable and unbilled services was impacted by timing differences between the Company’s satisfaction of performance obligations under its contracts, achievement of billing milestones, and customer payments. Deferred revenue for the years ended December 31, 2022 and 2021 was $8.3 million and $7.6 million, respectively. Financial assets that subject the Company to credit risk primarily consist of cash and cash equivalents, accounts receivable and unbilled services. Based on the short-term nature and historical realization of the financial assets as well as the reputable credit ratings of the financial institutions holding the deposits, the Company believes it bears minimal credit risk. For the years ended December 31, 2022 and 2021, one and three customers individually (totaling 15.2% and 57.0%, respectively) accounted for greater than 10% of revenue, respectively. As of December 31, 2022 and 2021, two and three customers individually (totaling 39.1% and 78.4%, respectively) accounted for greater than 10% of accounts receivable, net, respectively. Capitalized Commission Cost Capitalized commission costs are incremental costs incurred to obtain a contract. The Company incurs incremental costs to obtain contracts through payment of sales commissions on contracts signed. The Company capitalizes commission costs when incurred and amortizes to expense over the term of the related contract, in line with revenue recognized. Capitalized commission costs and related amortization consisted of the following as of December 31: (In thousands) 2022 2021 Capitalized commission cost, net $ 3,945 $ 2,956 (In thousands) 2022 2021 Amortization of capitalized commission cost $ (2,280) $ (1,267) For the years ended December 31, 2022 and 2021, $0.7 million and $0 in contract costs were impaired related to canceled projects, respectively. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, Net Property and equipment are summarized as follows at December 31, 2022 and 2021: (In thousands) 2022 2021 Furniture and fixtures $ — $ 318 Computer equipment — 1,714 Leasehold improvements — 90 — 2,122 Less accumulated depreciation — (729) Property and equipment, net $ — $ 1,393 Depreciation on property and equipment was $0.6 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively. The net book value of the Company’s property and equipment totaling $0.9 million was impaired during the year ended December 31, 2022 due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. |
Capitalized Software, net
Capitalized Software, net | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Capitalized Software, net | Capitalized Software, Net For the years ended December 31, 2022 and 2021 the Company capitalized $35.1 million and $23.6 million, respectively, of internal use software and recognized amortization expense of $17.3 million and $7.3 million, respectively. The net book value of the Company’s internal use software totaling $42.1 million was impaired due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. The Company remains confident in the utility of the long-lived assets and there has been no change as to their intended use. Estimated amortization expense can be affected by various factors, including new software releases, acquisitions or divestitures of software and/or impairments. The following represents capitalized software balances as of December 31, 2022 and 2021: 2022 2021 (In thousands) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Capitalized software $ — $ — $ — $ 42,192 $ (17,902) $ 24,290 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for office facilities. These operating leases expire at various dates through 2026 with options to renew at the Company’s discretion. The Company does not currently plan to exercise renewal options. The components of lease expense were as follows: Year Ended December 31, (In thousands) Classification 2022 2021 Operating fixed lease cost Selling, general and administrative expenses $ 1,156 $ 1,596 Operating variable lease cost Selling, general and administrative expenses 95 164 Total lease cost $ 1,251 $ 1,760 Lease expense for the years ended December 31, 2022 and 2021 contained a nominal amount of expense related to short-term leases. Variable lease expense for both years includes excess common area maintenance, electricity, and taxes. Other information related to leases was as follows: (In thousands) 2022 2021 Supplemental cash flow Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,242 $ 1,467 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 1,305 Weighted average remaining lease term (years): Operating leases 2.19 2.54 Weighted average discount rate: Operating leases 6.50 % 6.50 % Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows: (In thousands) Operating Leases 2023 $ 674 2024 599 2025 138 2026 12 2027 — Thereafter — Total future minimum lease payments 1,423 Less imputed interest (101) Total $ 1,322 Reported as of December 31, 2022: Accrued expenses and other liabilities $ 606 Operating lease liabilities 716 Total $ 1,322 The net book value of the Company’s ROU asset of $1.1 million was impaired during the year ended December 31, 2022 due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. The Company subleases two of its office facilities to third parties under the same terms and conditions as the original lease agreements and has elected the practical expedient to combine lease and non-lease components as a single lease component under ASC Topic 842 guidance. For the year ended December 31, 2021, the Company wrote-off sublease receivables totaling $0.2 million against sublease income due to the Subtenant’s inability to pay. There were no write-offs for the year ended December 31, 2022. The undiscounted cash flows for contractual subleases as of December 31, 2022 were as follows (in thousands): 2023 $ 130 2024 134 2025 138 2026 12 2027 — Thereafter — Total $ 414 |
Leases | Leases The Company has operating leases for office facilities. These operating leases expire at various dates through 2026 with options to renew at the Company’s discretion. The Company does not currently plan to exercise renewal options. The components of lease expense were as follows: Year Ended December 31, (In thousands) Classification 2022 2021 Operating fixed lease cost Selling, general and administrative expenses $ 1,156 $ 1,596 Operating variable lease cost Selling, general and administrative expenses 95 164 Total lease cost $ 1,251 $ 1,760 Lease expense for the years ended December 31, 2022 and 2021 contained a nominal amount of expense related to short-term leases. Variable lease expense for both years includes excess common area maintenance, electricity, and taxes. Other information related to leases was as follows: (In thousands) 2022 2021 Supplemental cash flow Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,242 $ 1,467 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 1,305 Weighted average remaining lease term (years): Operating leases 2.19 2.54 Weighted average discount rate: Operating leases 6.50 % 6.50 % Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows: (In thousands) Operating Leases 2023 $ 674 2024 599 2025 138 2026 12 2027 — Thereafter — Total future minimum lease payments 1,423 Less imputed interest (101) Total $ 1,322 Reported as of December 31, 2022: Accrued expenses and other liabilities $ 606 Operating lease liabilities 716 Total $ 1,322 The net book value of the Company’s ROU asset of $1.1 million was impaired during the year ended December 31, 2022 due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. The Company subleases two of its office facilities to third parties under the same terms and conditions as the original lease agreements and has elected the practical expedient to combine lease and non-lease components as a single lease component under ASC Topic 842 guidance. For the year ended December 31, 2021, the Company wrote-off sublease receivables totaling $0.2 million against sublease income due to the Subtenant’s inability to pay. There were no write-offs for the year ended December 31, 2022. The undiscounted cash flows for contractual subleases as of December 31, 2022 were as follows (in thousands): 2023 $ 130 2024 134 2025 138 2026 12 2027 — Thereafter — Total $ 414 |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs On November 10, 2022, the Company committed to and commenced a cost reduction program (the “Plan”) to materially change the Company’s management structure and better align resources with our then-current business needs and going forward financial objectives. The cost reduction program included one-time termination benefits for 81 employees (approximately 15% of the Company’s workforce). The Company’s Board of Directors approved the program on November 9, 2022, and the majority of the affected employees were informed of the Plan beginning on November 10, 2022. The Plan is expected to be substantially completed by the second quarter of 2023. During the twelve months ended December 31, 2022, the Company recognized $2.6 million of restructuring costs. There were no restructuring costs for the year ended December 31, 2021. Total costs and cash expenditures for the cost reduction program are estimated at $3.0 million to $3.3 million, substantially all of which are related to one-time employee severance and benefits costs. The Company may continue to incur additional restructuring costs during and beyond 2023 related to its cost reduction program. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the cost reduction program. Restructuring liabilities are included in accrued expenses and other liabilities on the consolidated balance sheets. Activity related to the restructuring liabilities is as follows: (In thousands) 2022 Balance at beginning of period $ — Restructuring costs 2,628 Payments (1,856) Balance at end of period $ 772 The Company expects the majority of the restructuring accruals as of December 31, 2022 will be paid in 2023, pursuant to the terms of one-time benefits. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of December 31, 2022 and 2021: (In thousands) 2022 2021 Prepaid expenses $ 2,834 $ 4,347 Capitalized commission cost, net 3,945 2,956 Other 342 100 Total prepaid expenses and other current assets $ 7,121 $ 7,403 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses consisted of the following as of December 31, 2022 and 2021: (In thousands) 2022 2021 Compensation, including bonuses, fringe benefits, and payroll taxes $ 5,750 $ 11,611 Professional fees, investigator fees, and pass-through expenses 2,527 3,174 Commissions payable 1,529 1,168 Restructuring costs 772 — Current portion of operating lease liabilities 606 1,120 Other 180 — Total accrued expenses and other liabilities $ 11,364 $ 17,073 |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock The Company had 75,495,266 shares of redeemable convertible preferred stock (as adjusted for the Exchange Ratio) outstanding during the fiscal year ended December 31, 2021, which were converted into common stock in connection with the closing of the Business Combination on October 6, 2021, as described in Note 3. Upon closing of the Business Combination transaction, pursuant to the terms of the Second Amended and Restated Certificate of Incorporation, the Company authorized 100,000,000 shares of preferred stock with a par value $0.0001 per share. Science 37's board of directors has the authority, without further action by the stockholders, to issue such shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the dividend, voting, and other rights, preferences and privileges of the shares. There were no issued and outstanding shares of preferred stock as of December 31, 2022 or 2021. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders’ Equity (Deficit) Pursuant to the Company’s Second Amended and Restated Certificate of Incorporation, the Company authorized the issuance of 400,000,000 shares of common stock and 100,000,000 shares of preferred stock, each with par value of $0.0001 per share. The Company had 116,432,029 and 114,991,026 shares issued and outstanding at December 31, 2022 and 2021, respectively. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors. The Company’s Board of Directors has not declared common stock dividends since inception. As outlined in Note 3, in connection with the closing of the Business Combination on October 6, 2021 and following the Science 37 Preferred Stock Conversion, all Legacy Science 37 Common Stock was converted into Common Stock of Science 37 Holdings, Inc., at an Exchange Ratio of approximately 1.815. Also in connection with the Business Combination, pursuant to the Subscription Agreements, certain investors agreed to subscribe for an aggregate of 20,000,000 newly-issued shares of Common Stock. The following is a summary of common share activity for the years ended December 31, 2022 and 2021 (as adjusted for the Exchange Ratio): 2022 2021 Common stock shares, beginning balance 114,991,026 5,019,582 Conversion of preferred stock into common stock — 75,495,266 Issuance of common stock 1,441,003 34,476,178 Common stock shares, ending balance 116,432,029 114,991,026 The Company had one common stock warrant outstanding with available shares to be issued of 6,439 and an exercise price of $1.61 per share during the fiscal year ended December 31, 2021, which was exercised in October 2021 immediately preceding consummation of the Merger with LSAQ. The Company had no common stock warrants outstanding as of December 31, 2022 or 2021. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial instruments, including cash and cash equivalents, are recorded at cost, which approximates fair value. Former holders of shares of Legacy Science 37 common stock were allocated Earn-Out Shares in connection with the completion of the Merger. These Earn-Out Shares are accounted for as a liability and require fair value measurement on a recurring basis. Due to the significant unobservable inputs that are required to value these shares, they are classified as Level 3 in the fair value hierarchy. Please refer to Note 17 for additional details surrounding the valuation methodology for the Earn-Out Shares. None of the Company’s non-financial assets or liabilities are subject to fair value measurement on a non-recurring basis. There were no transfers between fair value measurement levels during the year ended December 31, 2022. The following table summarizes the fair values of the Company’s assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2022: (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds $ 104,138 $ — $ — $ 104,138 Total $ 104,138 $ — $ — $ 104,138 Liabilities: Earn-out liability related to shareholders $ — $ — $ 170 $ 170 Total $ — $ — $ 170 $ 170 The following table summarizes the fair values of the Company’s assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2021: (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds $ 19,033 $ — $ — $ 19,033 Total $ 19,033 $ — $ — $ 19,033 Liabilities: Earn-out liability related to shareholders $ — $ — $ 98,900 $ 98,900 Total $ — $ — $ 98,900 $ 98,900 |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per ShareBasic earnings (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted earnings (loss) per share is computed by giving effect to all potential shares of common stock of the Company, including outstanding stock options, restricted stock units, shares issued under the employee stock purchase plan, warrants and contingently issuable preferred stock, to the extent dilutive, and Earn-Out Shares. Basic and diluted earnings (loss) per share was the same for each period presented as the inclusion of all potential shares of common stock of the Company outstanding would have been anti-dilutive. As a result of the Merger, the Company has retrospectively adjusted the weighted-average number of shares of common stock outstanding prior to October 6, 2021 by multiplying them by the exchange ratio of approximately 1.815 used to determine the number of shares of common stock into which they converted. The following table presents the calculation of basic and diluted net earnings (loss) per share for the Company’s common stock (as adjusted for the Merger Exchange Ratio as described in Note 3 ) for the years ended December 31, 2022 and 2021: (In thousands, except shares and per share amounts) 2022 2021 Numerator: Net loss $ (50,988) $ (94,331) Denominator: Basic weighted average common shares outstanding 115,875,505 32,679,105 Loss per share: Basic and diluted $ (0.44) $ (2.89) As noted above, potential common shares outstanding that are considered anti-dilutive are excluded from the computation of diluted earnings per share. As the Company has incurred losses inception to date, due to its start-up nature, potential common shares are anti-dilutive due to this net loss. The number of potential shares outstanding that were anti-dilutive and therefore excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, were as follows for the years ended December 31, 2022 and 2021, respectively. 2022 2021 Redeemable convertible preferred stock — 57,500,504 Stock options 26,840,283 17,697,264 Restricted stock units 3,798,542 — ESPP 104,589 — Earn-out shares 12,500,000 1,986,301 Warrants — 8,838 Total 43,243,414 77,192,907 |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions For the years ended December 31, 2022 and 2021, the Company had related-party revenue of $6.9 million and $13.7 million, respectively, and as of December 31, 2022 and 2021, related-party receivables of $0.7 million and $2.0 million, respectively, from Pharmaceutical Products Development, LLC (“PPD”), a wholly-owned subsidiary of Thermo Fisher Scientific, Inc. and a shareholder who beneficially owns 5 percent or more of the Company’s shares. For the year ended December 31, 2021, the Company had related-party revenue of $1.4 million from Novartis Pharma AG who had a 50% ownership in dRx Capital AG, a shareholder who, until July 2021, had a minority interest in the Company and a seat on the Company’s Board of Directors. In July 2021, dRx Capital AG was dissolved and their interest in the Company was distributed to their owners, one of which was Novartis Pharma AG. This dissolution and distribution did not cause any other shareholder of the Company to obtain a minority interest in the Company. For the year ended and as of December 31, 2021, the Company had $0.3 million related-party revenue and an immaterial receivable balance, respectively, from AlloVir, a Company in which Redmile Group, LLC has a minority interest. Entities affiliated with Redmile Group, LLC collectively own 5 percent or more of the Company’s shares. For the year ended and as of December 31, 2022, the Company had no related party balances with AlloVir. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe Company is subject to proceedings incidental to its business. The Company records accruals for claims, suits, investigations, and proceedings when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews these contingencies regularly and records or adjusts accruals related to such matters to reflect the impact and status of any settlements, rulings, advice of counsel or other information pertinent to a particular matter. Gain contingencies are not recognized. Legal costs associated with contingencies are expensed as incurred. Since these matters are inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. As of December 31, 2022, the Company had no material contingent losses recorded. |
Earn-Out Shares
Earn-Out Shares | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Earn-Out Shares | Earn-Out Shares In accordance with the Merger Agreement, former holders of shares of Legacy Science 37 common stock (including shares received as a result of the conversion of Legacy Science 37 preferred stock) and former holders of options to purchase shares of Legacy Science 37 are entitled to receive their respective pro rata shares of up to 12,500,000 Earn-Out Shares if, during the three years following the consummation of the Merger, the volume weighted average price of Science 37’s Common Stock for a period of at least 20 days out of 30 consecutive trading days: i. is equal to or greater than $15.00, a one-time aggregate issuance of 5,000,000 Earn-Out Shares will be made (“Trigger 1”); and ii. is equal to or greater than $20.00, a one-time aggregate issuance of 7,500,000 Earn-Out Shares will be made (“Trigger 2”). As of December 31, 2021, the stockholders and option holders were estimated to receive approximately 10,914,422 and 1,585,579 Earn-Out Shares, respectively, based on the fully diluted capitalization table of Legacy Science 37. The fair value of the Earn-Out Shares was approximately $10.35 (Trigger 1) and approximately $8.20 (Trigger 2) per share as of December 31, 2021. As of December 31, 2022, the stockholders and option holders are estimated to receive approximately 11,131,713 and 1,368,287 Earn-Out Shares, respectively. The fair value of the Earn-Out Shares is approximately $0.02 (Trigger 1) and approximately $0.01 (Trigger 2) per share as of December 31, 2022. Through the third quarter of 2022, the estimated fair value of the Earn-Out Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earn-Out Period using the most reliable information available. This valuation method falls into Level 3 fair value hierarchy for inputs used in measuring fair value and is based on inputs that are unobservable and significant to the overall fair value measurement. Unobservable inputs are inputs that reflect the Company's judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. To the extent that the valuation is based on models or inputs that are unobservable in the market, the determination of fair value requires management to exercise a high degree of judgment. Change in significant unobservable inputs could result in a higher or lower fair value measurement of the liability associated with of the Earn-Out Shares. Based on the previous year’s Monte Carlo simulation valuation model results, the change in the Company’s stock price and the relative immaterial nature of the earn-out liability, the fair value of the Earn-Out Shares for the fourth quarter of 2022 was determined using a valuation methodology that the Company believes approximates the fair value of the Earn-Out Shares that would be determined using the Monte Carlo simulation valuation model. Assumptions used in the Monte Carlo simulation valuation at December 31, 2021 were as follows: Stock price $ 12.47 Expected volatility 55.0 % Risk-free interest rate 0.91 % Forecast period (in years) 2.8 Former Science 37 Shareholders The Company has determined that the contingent obligation to issue Earn-Out Shares to former Science 37 shareholders is not indexed to the Company's stock under ASC Topic 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity, and therefore equity treatment is precluded. The Triggering Event that determines the issuance of the Earn-Out Shares includes terms that are not solely indexed to the common stock of the Company and, as such, liability classification is required. For the year ended December 31, 2022, there was a decrease in the earn-out liability of $98.7 million, which was recorded as a gain in “Change in fair value of earn-out liability” within the consolidated statements of operations and comprehensive loss. In accordance with the Merger Agreement, Earn-Out Shares attributable to former Science 37 option holders who discontinue providing service before the occurrence of the Triggering Event are reallocated to the remaining eligible former stockholders and former option holders. The earn-out liability is recorded on the balance sheet as a non-current liability because potential payment of the liability will be settled in the Company’s common shares. The following table presents a reconciliation of changes in the carrying amount of the contingent earn-out liability classified as Level 3 fair value hierarchy using significant unobservable inputs: (In thousands) Earn-Out Liability Balance at October 6, 2021 $ 67,600 Change in fair value related to option holder forfeitures 627 Change in fair value related to share valuation inputs 30,673 Total change in fair value recognized in earnings $ 31,300 Balance at December 31, 2021 $ 98,900 Change in fair value related to option holder forfeitures 182 Change in fair value related to share valuation inputs (98,912) Total change in fair value recognized in earnings $ (98,730) Balance at December 31, 2022 $ 170 Former Science 37 Option Holders The contingent obligation to issue Earn-Out Shares to former Science 37 option holders falls within the scope of ASC 718, Compensation - Stock Compensation, because the option holders are required to continue providing service until the occurrence of the Triggering Event(s). For the year ended December 31, 2022, the Company recorded approximately $5.9 million in stock-based compensation expense related to the Earn-Out Shares. Approximately $0.5 million of unrecognized compensation expense was remaining at December 31, 2022, which is expected to be recognized over the remaining derived service period of 0 years (Trigger 1) and 0.2 years (Trigger 2). |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Overview The Company has two equity-based compensation plans, the Science 37 Holdings, Inc. 2021 Incentive Award Plan (“2021 Plan”) and the 2022 Employment Inducement Incentive Award Plan (“2022 Plan”, together with the 2021 Plan, the “Plans”). From the 2021 Plan, stock-based compensation awards can be granted to employees, consultants, and non-executive directors. From the 2022 Plan, inducement stock-based awards can be granted to newly hired employees in accordance with Nasdaq Listing Rules. Prior to the consummation of the Merger in the fourth quarter of 2021, the Company granted stock options to employees under the Science 37, Inc. 2015 Stock Option Plan (the “2015 Plan”). No further awards have been or will be made under the 2015 Plan following the effectiveness of the 2021 Plan. The 2021 Plan allows for the grant of awards in the form of: (i) incentive stock options; (ii) non-qualified stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock units (“RSUs”); (vi) dividend equivalents; and (vii) other stock and cash-based awards. The 2022 Plan allows for the grant of awards in the form of: (i) non-qualified stock options; (ii) stock appreciation rights; (iii) restricted stock; (iv) restricted stock units (“RSUs”); (v) dividend equivalents; and (vi) other stock and cash-based awards. The Compensation Committee of the Board is responsible for the administration of both plans. In addition, in connection with the closing of the Merger, the Company adopted an Employee Stock Purchase Plan (the “ESPP”). The terms of stock-based instruments granted are determined at the time of grant and are typically subject to such conditions as continued employment and the passage of time. The Company has granted 1) stock options, which typically vest at 25% per year and become exercisable after one year of service after the date of issuance, with equal and successive vesting for the next 36 months, as long as the employee provides service to the Company, as defined and 2) RSUs, which are contingent upon continued service and vest over time in annual or bi-annual installments over the vesting period, which is typically 1 to 3 years. In addition, employees, consultants, and directors owning stock options immediately prior to the Merger were granted the right to receive a number of Earn-Out Shares as described in Note 17. Prior to the Merger, due to the absence of an active market for Legacy Science 37’s common stock, the fair value of the common stock for purposes of determining the common stock price for stock option grants was determined by Science 37’s Board of Directors, the members of which have extensive business, financial and investment experience. The Company’s Board of Directors set the exercise price of stock options at least equal to the fair value of the Company’s common stock on the date of grant. The Company’s Board of Directors exercised judgment while considering numerous objective and subjective factors in order to determine the fair market value on each date of grant in accordance with the guidance in the American Institute of Certified Public Accountants Technical Practice Aid entitled, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the AICPA Practice Aid, including the receipt of a valuation prepared by an independent third party with extensive experience valuing common stock of privately held companies. The shares of common stock underlying any awards that are forfeited, canceled, reacquired by the Company prior to vesting, or otherwise terminated other than by exercise are added back to the shares of common stock available for issuance. The units available for issuance may be authorized but unissued or reacquired by the Company. No award may be granted under the Plans upon the earlier of the tenth anniversary of the date the plan is adopted by the Board, the date on which all units available for issuance under the Plans shall have been issued as vested units, or the termination of all outstanding awards under the Plans in connection with a change in control. As of December 31, 2022, the maximum number of shares reserved for issuance under the Company’s stock-based compensation plans was 47,826,613, of which 5,262,166 shares were available for future grants. Stock Options As of December 31, 2022 and 2021, the Company had issued 30,930,263 and 30,424,325 options to purchase shares of common stock of which 6,440,039 and 4,999,036 had been exercised and 24,490,224 and 25,425,289 remained outstanding, respectively. The following table summarizes the stock option activity for the years ended December 31, 2022 and 2021: (Aggregate intrinsic value in thousands) Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Outstanding as of January 1, 2021 13,594,702 $ 0.38 8.35 Granted 16,891,718 7.88 0 Exercised (3,606,121) 0.40 0 Forfeited (1,455,010) 1.39 0 Outstanding as of January 1, 2022 25,425,289 $ 5.30 8.91 Granted 4,369,239 10.45 0 Exercised (1,441,003) 0.58 0 Forfeited (3,863,301) 7.60 0 Outstanding at December 31, 2022 24,490,224 $ 6.16 6.43 $ 646,417 Exercisable at December 31, 2022 10,682,240 $ 3.81 6.01 $ 458,705 The total intrinsic value of options exercised was approximately $0.1 million and $43.5 million in 2022 and 2021, respectively. As of December 31, 2022 and 2021, total unrecognized compensation cost related to unvested stock options was approximately $38.8 million and $60.0 million, respectively, which is expected to be recognized over a weighted average period of 2.41 and 3.14 years, based on the original date of service of each specific grant holder. The Company received cash of approximately $0.6 million and $1.4 million in 2022 and 2021, respectively, from options exercised. Other information about the Company’s stock options for the years ending December 31, 2022 and 2021 was as follows: (In thousands) 2022 2021 Total grant date fair value of stock options vested $ 14,718 $ 776 The stock options granted during the years ended December 31, 2022 and 2021 had a weighted-average fair value of $6.89 and $3.71 per share, respectively at the grant date. The following table summarizes the assumptions used in valuing the stock options for the years ended December 31, 2022 and 2021: 2022 2021 Expected term 0.13 - 6.25 years 5.50 - 6.25 years Risk-free interest rate 0.8% – 4.1% 0.6% – 1.4% Expected volatility 69.8% – 98.7% 46.3% – 47.7% Dividend yield 0% 0% The expected term of the stock options represents the average period the stock options are expected to remain outstanding. The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Therefore, the expected term of options granted is derived from the average midpoint between the weighted-average vesting and the contractual term, also known as the simplified method. The risk-free interest rate was the rate at the date of grant for a zero-coupon U.S. Treasury bond with a term that approximated the expected term of the stock option. As the Company does not have sufficient historical data to calculate the historical volatility of its stock, the expected volatility is derived from the historical volatility of a selected peer group for a period that is equal to the expected term. The Company does not have a history of paying regular dividends and does not expect to pay regular cash dividends for the foreseeable future. Restricted Stock Units In May 2022, the Company began granting RSUs to certain officers and employees, and to the Board of Directors. The following table summarizes the RSU award activity for the year ended December 31, 2022: (Aggregate fair value in thousands) Number of Weighted Average Aggregate Fair Value Outstanding at December 31, 2021 — $ — Granted 10,152,824 $ 2.08 Vested — $ — Forfeited (415,518) $ 2.70 Outstanding at December 31, 2022 9,737,306 $ 2.06 $ 20,021 As of December 31, 2022, total unrecognized compensation cost related to unvested RSUs was approximately $15.1 million, which is expected to be recognized over a weighted average period of 2.53 years. As of December 31, 2022, there are 9,737,306 RSUs outstanding with an intrinsic value of approximately $3.7 million. Employee Stock Purchase Plan The ESPP is a shareholder-approved plan under which substantially all employees may voluntarily enroll to purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock as of the beginning or end of the six-month offering periods. Employees may not purchase more than 5,000 shares annually under the plan. The first six-month ESPP offering period began on September 1, 2022. As of December 31, 2022, there were no shares issued and 6,236,302 shares reserved for future issuance under the ESPP. The fair value of the shares under the ESPP is calculated on the first day of the offering period (the grant date) using the Black-Scholes valuation model and the following assumptions: 2022 Expected term 0.50 years Risk-free interest rate 3.3% Expected volatility 90.2% The fair value of the shares under the ESPP is amortized straight-line over the six-month offering period. As of December 31, 2022, there are 250,325 ESPP shares outstanding with a de minimis intrinsic value. Earn-Out Shares As outlined in Note 17, the contingent obligation to issue Earn-Out Shares to former Science 37 option holders falls within the scope of ASC 718, Compensation - Stock Compensation, because the option holders are required to continue providing service until the occurrence of the Triggering Event(s). Refer to Note 17 for additional information regarding the Earn-Out Shares. Stock-based Compensation Expense Total stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021 as follows: (In thousands) 2022 2021 Cost of revenue (stock options, RSUs and ESPP) $ 1,743 $ 846 Selling, general and administrative (stock options, RSUs and ESPP) 16,896 5,481 Selling, general and administrative (earn-out shares) 5,923 2,080 Total stock-based compensation expense $ 24,562 $ 8,407 For the year ended December 31, 2022, stock-based compensation expense recognized in the statements of operations differs from the impact of stock-based compensation to additional paid in capital due to $1.4 million of stock-based compensation capitalized as part of software development activities. There was no income tax benefit recognized in the consolidated statements of income for Stock-based compensation arrangements for the years ended December 31, 2022 and 2021, respectively. Modification to Outstanding Equity Awards nine |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company sponsors a defined contribution plan, the Science 37, Inc. Profit Sharing Plan (the “401(k) Plan”) which is a tax-qualified retirement and savings plan covering all full-time employees of the Company, subject to certain eligibility requirements. The Company matches employees’ contributions at 50% up to a maximum of the first 6% of an employee’s eligible compensation. For the years ended December 31, 2022 and 2021, the Company made matching contributions of $1.7 million and $1.0 million, respectively. The Company’s contributions associated with its defined contribution retirement plan are recorded in cost of revenue and selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the years ended December 31, 2022 and 2021, the amount of loss before taxes was: (In thousands) 2022 2021 U.S. loss before taxes $ (50,722) $ (94,330) Foreign loss before taxes (356) — Total loss before taxes $ (51,078) $ (94,330) Current income tax expense for the years ended December 31, 2022 and 2021 was nominal. Deferred income tax expense for the years ended December 31, 2022 and 2021 was $(0.1) million and $— million, respectively. The effective tax rates for the years ended December 31, 2022 and 2021 are different from the federal statutory rate primarily due to a full valuation allowance against net deferred tax assets, in both years, as a result of insufficient sources of income. The reconciliation of tax expense at the U.S. Federal Statutory tax rate versus the recorded income tax expense is as follows for the years ended December 31, 2022 and 2021: (In thousands) 2022 2021 U.S. federal statutory rate $ (10,726) $ (19,809) State income tax, net of federal benefit (6,856) (2,353) (Gain) loss on earn-out (20,733) 6,573 Transaction costs (2,599) 669 Stock-based compensation 1,107 31 Permanent items 104 20 Section 162(m) 2,905 667 Other adjustments 17 (216) Rate adjustment 204 (44) Return to provision 194 2 Valuation allowance 36,293 14,461 Total income tax expense (benefit) $ (90) $ 1 Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The principal components of the Company’s deferred tax assets for the years ended December 31, 2022 and 2021 consisted of the following: (In thousands) 2022 2021 Net operating loss carryforwards $ 62,854 $ 43,087 Amortizable assets 7,929 180 Equity compensation 3,011 841 Salaries and wages 983 1,277 Deferred revenue 658 101 Operating lease liability 341 613 Fixed assets 156 — Other 229 69 Total deferred tax assets 76,161 46,168 Less: valuation allowance (76,070) (39,777) Net deferred tax asset 91 6,391 Operating lease ROU — (524) Fixed assets — (5,867) Total deferred tax liabilities — (6,391) Net deferred tax assets (liabilities) $ 91 $ — The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of the deferred taxes can be realized as of December 31, 2022 and 2021; accordingly, the Company has recorded a full valuation allowance on its US deferred tax assets. The valuation allowance increased $36.3 million and $14.5 million during the years ended December 31, 2022 and 2021, respectively. The foreign subsidiaries are cost-plus entities and are not expected to have any material DTAs or NOLs outside the start-up phase. As such, no valuation allowance has been applied. At December 31, 2022, the Company has federal net operating loss (“NOL”) carryforwards of approximately $253.7 million, state NOL carryforwards of $179.1 million, and foreign NOL carryforwards of $0.2 million. As a result of Tax Cuts and Jobs Act, for U.S. income tax purposes, the NOL generated in tax years beginning before January 1, 2018 can be carried forward for 20 years, but NOL generated for tax years beginning after December 31, 2017 are carried forward indefinitely and are limited to 80% utilization against taxable income. Of the total federal NOL, $30.2 million will begin to expire in 2034 and $223.4 million will not expire but can only offset 80% of future taxable income in any given year. Of the total state NOL carryforwards, $8.7 million can be carried forward indefinitely, with the remainder first beginning to expire in 2029. Of the total foreign NOL carryforwards, $0.2 million can be carried forward indefinitely. Pursuant to Code Sections 382 and 383, annual use of our NOLs may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has not completed a formal study in accordance with sections 382 and 383 to determine the limitations if a change in ownership occurs or if there are any limitations on the utilization of NOL carryforwards. If NOL carryforwards are eliminated, the related tax assets would be removed from the deferred tax assets schedule with a corresponding reduction in the valuation allowance. The Company files US. federal and various state and local income tax returns and is not under examination by any of the taxing authorities. Tax years 2019 and forward remain open for examination for federal tax purpose and tax years 2018 and forward remain open for examination for state tax purposes. Carryforward attributes that were generated in years where the statute of limitation is closed may still be adjusted upon examination by the Internal Revenue Service or other respective tax authority. The Inflation Reduction Act (IRA) was signed into law on August 16, 2022. The IRA introduces a 15% corporate alternative minimum tax (CAMT) for corporations whose average annual adjusted financial statement income (AFSI) for any consecutive three-tax-year period ending after December 31, 2021 and preceding the tax year exceeds $1 billion and a 1% excise tax on stock repurchases made by publicly traded US corporations. Since the Company does not meet the book income threshold to be subject to CAMT, the excise tax is not an ASC 740 tax, they are not expected to have any impact. The other tax law updates are not expected to have any material impact to the Company's financial statements and related disclosures. The Company will continue to evaluate the impact and will monitor in future quarters. The CHIPS and Science Act was signed into law on August 9, 2022. The Act introduces the advanced manufacturing investment tax credit, a 25% tax credit for investments in semiconductor manufacturing. It also includes incentives for manufacturing semiconductors, as well as specialized tooling equipment required in the semiconductor manufacturing process. The Company is not currently claiming any such tax credits, as such the tax law updates are not expected to have any material impact to the Company's financial statements and related disclosures. The following table summarizes the reconciliation of the unrecognized tax benefits activity during the years ended December 31, 2022 and 2021 (in thousands): (In thousands) 2022 2021 Unrecognized tax benefits – beginning $ 240 $ 240 Gross increases – tax positions in prior period — — Gross decreases – tax positions in prior period — — Gross increase – current-period tax positions — — Gross decrease – current-period tax positions — — Settlements — — Lapse of statute of limitations — — Unrecognized tax benefits – ending $ 240 $ 240 The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. Included in the balance of unrecognized tax benefits is $0.2 million that, if recognized, would not impact the Company’s effective tax rate since it would be offset by an equal corresponding adjustment in the deferred tax asset valuation allowance. The Company does not foresee material changes to its liability for uncertain tax benefits within the next twelve months. The Tax Cuts and Jobs Act subjects a U.S. shareholder to tax on Global Intangible Low-taxes Income (“GILTI”) earned by certain foreign subsidiaries. Pursuant to the FASB Staff Q&A, Topic 740 No.5. Accounting for Global Intangible Low-taxed Income, the Company is allowed to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as period expense only. The Company has elected to account for GILTI in the year the tax is incurred. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). |
Consolidation | The consolidated financial statements include the accounts of Science 37 Holdings, Inc. and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated. |
Reverse Recapitalization | Pursuant to the Merger Agreement, the merger between Merger Sub and Legacy Science 37 was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, LifeSci Acquisition II Corp. was treated as the “acquired” company and Legacy Science 37 is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Science 37 issuing stock for the net assets of LifeSci Acquisition II Corp., accompanied by a recapitalization. The net assets of LifeSci Acquisition II Corp. are stated at historical cost, with no goodwill or other intangible assets recorded in conjunction with the Reverse Recapitalization. Legacy Science 37 was determined to be the accounting acquirer based on the following predominant factors: • Legacy Science 37’s existing stockholders have the greatest voting interest in the Company; • The largest individual stockholder in the Company was an existing stockholder of Legacy Science 37; • Legacy Science 37’s directors represent the majority of the new Board of Directors of the Company; • Legacy Science 37’s senior management is the senior management of the Company; and • Legacy Science 37 is the larger entity based on historical revenue and has the larger employee base. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Science 37. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of approximately 1.815 established in the Business Combination. |
Concentration Risks | Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, deposits of up to $250,000 at Federal Deposit Insurance Corporation (“FDIC”) insured institutions are covered by FDIC insurance. At times, deposits at the Company’s financial institutions may exceed federally insured limits. Management periodically assesses the financial condition of the institutions and believes that any possible credit risk is minimal. The Company has not experienced any loss from such risk. |
Use of Estimates and Judgements | The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions about future events that affect the amounts reported in its consolidated financial statements and the accompanying notes. Future events and their effects cannot be determined with certainty. On an ongoing basis, management evaluates these estimates, judgments, and assumptions. Significant estimates and assumptions include but are not limited to: (1) revenue recognition, (2) accounts receivable and allowance for doubtful accounts, (3) long-lived asset recoverability, (4) useful lives of long-lived assets, (5) stock-based compensation, and (6) fair value measurements, including the fair value of the Earn-Out Shares (as defined below). The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates, and any such differences may be material to the Company’s consolidated financial statements. |
Revenue Recognition, Capitalized Costs, and Deferred Revenue | The Company derives its revenue primarily from two sources: (i) contractual arrangements to enable and enhance clinical trials through technology and services, and (ii) licensing of its proprietary hosted technology platform to a variety of life science institutions. Revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation A performance obligation is a promise (or a combination of promises) in a contract to transfer distinct goods or services to a customer and is the unit of accounting under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for purposes of revenue recognition. A contract’s transaction price is allocated to each separate performance obligation based on the standalone selling price and is recognized as revenue, when, or as, the performance obligation is satisfied. All of the Company’s contracts have a single performance obligation because the promise to transfer individual services is not separately identifiable from other promises in the contracts, and therefore, is not distinct. The majority of the Company’s revenue arrangements are service contracts that range in duration from a few months to several years. Substantially all of the Company’s performance obligations, and associated revenue, are transferred to the customer over time. The performance obligation is satisfied over time and the Company generally recognizes revenue based on a cost-based input method, due to costs being incurred consistently throughout the life of the contract, as there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation. Progress on the performance obligation is measured by the proportion of actual costs incurred to the total costs expected to complete the contract. Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other pass-through expenses for the Company’s clinical monitors). This cost-to-cost input method of revenue recognition requires the Company to make estimates of costs to complete its projects on an ongoing basis. Contract estimates are based on various assumptions to project future outcomes of events that often span several years and require significant judgment. These estimates are reviewed periodically, and any adjustments are recognized on a cumulative catch-up basis in the period they become known. The Company generally receives compensation based on measuring progress toward completion using anticipated project budgets and direct labor and prices for each service offering. The Company is also reimbursed for certain third party pass-through and out-of-pocket costs. The pass-through costs are included in total operating expenses on the consolidated statements of operations and comprehensive loss. The pass-through costs are also recognized as revenue on a gross basis as the Company is the principal in the relationship (i.e., the Company is primarily responsible for the services provided by third parties, and significantly integrates the services of third parties with its own services in delivering a combined output to the customer). In addition, in certain instances, a customer contract may include forms of variable consideration such as incentive fees, volume rebates or other provisions that can increase or decrease the transaction price. This variable consideration is generally awarded upon achievement of certain performance metrics, program milestones or cost targets. For the purpose of revenue recognition, variable consideration is assessed on a contract-by-contract basis and the amount included in the transaction price is estimated based on the Company’s anticipated performance and in consideration of all information that is reasonably available. Variable consideration is recognized as revenue if and when it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future. The Company has one performance-based contract, which is unique in that the Company’s obligation to the customer is solely for the recruitment of successfully processed patients or “completers”. The successful recruitment of completers constitutes a single performance obligation to our customer. Completer revenue is recognized at a point in time, as completers are processed. For contracts where the Company licenses its proprietary hosted software independently, value transfers to the customer over time as the customer has access to the system once it is live and continues to benefit over the life of the arrangement. Revenue is recorded straight line over the term of the hosting and maintenance period as there is no better measure of the transfer of value for these services. Most of the Company’s contracts can be terminated by the customer without cause with a 30-day notice. In the event of termination, the Company’s contracts generally provide that the customer pay the Company for (i) fees earned through the termination date, (ii) fees and expenses for winding down the project, which include both fees incurred and actual expenses, (iii) non-cancellable expenditures, and (iv) in some cases, a fee to cover a portion of the remaining professional fees on the project. |
Cost of Revenue | Cost of revenue includes the direct cost to conduct the Company’s trials remotely and make available the Company’s unified technology platform. Cost of revenue consists primarily of compensation, benefits, and other employee-related costs, including expenses for stock-based compensation, contract labor, trial advertising and marketing, investigator payments, and reimbursable out-of-pocket expenses directly related to delivering on the Company’s contracts. Cost of revenue is driven primarily by the number of clinical trials in which the Company is contracted, and it typically increases or decreases with changes in revenue but may fluctuate from period to period as a percentage of revenue due to project labor utilization and experience level mix of personnel assigned to projects, the type of services, changes to the timing of work performed and project inefficiencies, among other factors. Our business and operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities. |
Selling, General and Administrative | Selling, general and administrative expenses include costs related to sales, marketing, and administrative functions (including human resources, legal, finance, information technology and general management) such as compensation expense and benefits, including stock-based compensation, travel, professional services, facilities, recruiting and relocation, training, and sales commissions. |
Restructuring Costs | Restructuring costs consist of one-time employee termination benefits. The Company accounts for restructuring costs in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. This guidance requires that liabilities related to one-time employee termination benefits be measured and recognized at the date the entity notifies employees of termination, unless employees are required to render services beyond a minimum retention period, in which case the liability is recognized ratably over the future service period. Restructuring liabilities are included in accrued expenses and other liabilities on the consolidated balance sheets. |
Foreign Currency | We translate revenue and expenses of our foreign subsidiaries into U.S. dollars at average exchange rates for the periods presented, and we translate assets and liabilities at current exchange rates. The net effect of foreign currency translation adjustments is included in shareholders’ equity as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Foreign currency transaction gains and losses are the result of exchange rate changes during the period of time between the consummation and cash settlement of transactions denominated in currencies other than the functional currency. Foreign currency transaction gains and losses are recognized in earnings as incurred and are included in other (income) expense, net in the accompanying consolidated statements of operations and comprehensive loss. |
Cash and Cash Equivalents | The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents, which consist of cash on deposit with banks, are stated at cost, which approximates fair value. |
Accounts Receivable | The Company establishes prerequisites for billings based on contractual terms, including payment schedules and the completion of milestones. In general, the Company’s intention in its invoicing and related payment terms is to maintain cash neutrality over the life of the contract. Generally, the payment terms are 30 to 90 days. Upfront payments, when they occur, are intended to cover certain expenses the Company incurs at the beginning of the contract. Neither the Company nor its customers view such upfront payments and contracted payment schedules as a means of financing. |
Unbilled Services | Unbilled services represent revenue earned and recognized for services performed for which amounts have not yet been billed to the customer in accordance with contractual terms. Contractual provisions and payment schedules may or may not correspond to the timing of the performance of services under the contract. Unbilled services include contract assets, under which the right to bill the customer is subject to factors other than the passage of time, such as the satisfaction of milestones. Accounts receivable and unbilled services are recorded, net, on the balance sheet. |
Allowance for Doubtful Accounts | The Company carries its accounts receivable at net realizable value. The Company maintains a credit approval process and makes judgments to assess its customers’ ability to pay for contracted services. The Company monitors its customers’ credit worthiness and applies judgment in establishing a provision for estimated credit losses based on historical experience, the aging of receivables and customer and industry specific circumstances. The Company continuously monitors collections and payments from its customers and has a policy to write off uncollectible invoices once appropriate collection efforts have been exhausted. The allowance for doubtful accounts is included in accounts receivable and unbilled services, net on the consolidated balance sheets. |
Long-Lived Assets | Property and equipment are recorded at cost less accumulated depreciation. Maintenance and repairs are expensed as incurred. Depreciation expense is computed using the straight-line method over the estimated useful lives of the related assets as follows: Furniture and fixtures 5 years Computer equipment 3 years Leasehold improvements Shorter of remaining lease term or estimated useful life Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation or amortization are removed from the Company’s consolidated financial statements with the resulting gain or loss reflected in the Company’s results of operations. |
Internal Use Software | The Company’s internal use proprietary hosted software organizes workflows, captures real-time evidence, and harmonizes data during clinical trial support or enhancement for its customers. Capitalized software is recorded at cost less accumulated amortization. The Company capitalizes software development cost related to the development of the Company’s proprietary platform in accordance with ASC Topic 350, Intangibles—Goodwill and Other. Internal and external costs incurred during the preliminary stage are expensed as incurred. Costs incurred during the development stage are capitalized and consist of payroll labor, and benefits to the extent of time spent directly on the project and external direct costs of materials and labor. Training and maintenance costs are expensed as incurred. The Company commences amortization once the respective assets are placed into service. The estimated useful life for capitalized software is 3 years. Software cloud computing arrangements that do not contain software licenses are accounted for as service contracts. |
Impairment of Long-Lived Assets | Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the expected undiscounted future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. |
Leases | The Company has operating leases for corporate offices. Additionally, the Company is the sublessor for certain office space. The Company determines if an arrangement is a lease at inception of the contract. A contract contains a lease if the Company controls the use of an identified asset. Control exists if the Company can direct the use of and obtain substantially all the economic benefit of the asset. Operating lease right-of-use (“ROU”) assets and lease liabilities are recorded on our balance sheet and are measured based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses its incremental borrowing rate at lease commencement in determining the present value of future payments. In addition, the operating lease ROU asset includes any prepaid lease payments and initial direct costs and excludes lease incentives. If the Company has an option to extend or terminate a lease and is reasonably certain to exercise that option, the extension or termination is included in the lease term used to measure the lease liability and related ROU asset. Lease expense for minimum lease payments is recognized on a straight-line basis over the term of the lease. The Company has elected to account for lease components and non-lease components in a contract as a single lease component. For short-term leases (those with a term of one year or less), the Company has elected not to recognize ROU assets and lease liabilities. Lease payments on short-term leases are recognized as lease expense on a straight-line basis over the lease term. As of the year-ended December 31, 2022 we recognized $1.1 million of ROU asset impairment expense due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. No asset impairment expense for leases was recognized for the year-ended December 31, 2021. |
Leases | The Company has operating leases for corporate offices. Additionally, the Company is the sublessor for certain office space. The Company determines if an arrangement is a lease at inception of the contract. A contract contains a lease if the Company controls the use of an identified asset. Control exists if the Company can direct the use of and obtain substantially all the economic benefit of the asset. Operating lease right-of-use (“ROU”) assets and lease liabilities are recorded on our balance sheet and are measured based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses its incremental borrowing rate at lease commencement in determining the present value of future payments. In addition, the operating lease ROU asset includes any prepaid lease payments and initial direct costs and excludes lease incentives. If the Company has an option to extend or terminate a lease and is reasonably certain to exercise that option, the extension or termination is included in the lease term used to measure the lease liability and related ROU asset. Lease expense for minimum lease payments is recognized on a straight-line basis over the term of the lease. The Company has elected to account for lease components and non-lease components in a contract as a single lease component. For short-term leases (those with a term of one year or less), the Company has elected not to recognize ROU assets and lease liabilities. Lease payments on short-term leases are recognized as lease expense on a straight-line basis over the lease term. As of the year-ended December 31, 2022 we recognized $1.1 million of ROU asset impairment expense due to the carrying value of the asset group being greater than the fair value. The Company considered the market capitalization valuation as of December 31, 2022, which was adversely impacted by sustained declines in the Company’s stock price during 2022, in determining the fair value of the asset group. The market capitalization was trading below cash and cash equivalents and stockholders' equity at December 31, 2022, which required the Company to recognize the long-lived asset impairment. No asset impairment expense for leases was recognized for the year-ended December 31, 2021. |
Stock-Based Compensation | The Company measures stock-based compensation cost based on the fair value of the award at the grant date, and recognizes it as expense, net of actual forfeitures as they occur, over the requisite service period of the employee. The Company accounts for stock options and shares issued under the employee stock purchase plan (ESPP) under the fair value method and uses the Black-Scholes model to estimate the value of such awards granted or shares purchased. Within this model, expected volatility is based upon the historical volatility of a peer group for a period equal to the expected term, as the Company does not have adequate history to calculate its own volatility. The Company believes the expected volatility will approximate the historical volatility of the peer group. The Company does not currently anticipate paying dividends. The expected term represents the period in which the grants are expected to be outstanding or in which the ESPP shares are expected to vest. The risk-free interest rate is based on the United States Treasury yield curve at the time of the grant. The fair value of restricted stock units is measured on the grant date based on the closing market price of the Company’s common stock. The Company accounts for Earn-Out Shares issued to Legacy Science 37 option holders at fair value and uses a Monte Carlo simulation to estimate the value of such Earn-Out Shares on the grant date. Within this model, expected volatility is based upon the historical volatility of a peer group for a period equal to the expected term, as the Company does not have adequate history to calculate its own volatility. The expected term represents the derived service period as determined in the Monte Carlo simulation valuation model. The risk-free interest rate is based on the United States Treasury yield curve at the time of the grant. |
Fair Value Measurements | Fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or the most advantageous market when no principal market exists. Market participants are assumed to be independent, knowledgeable, able, and willing to transact an exchange and not under duress. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value are not necessarily indicative of the amounts that could be realized in a current or future market exchange. Fair values for substantially all of the Company’s financial and nonfinancial instruments were measured using market, income, or cost approaches. The three levels of input are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments, including cash and cash equivalents, are recorded at cost, which approximates fair value. Former holders of shares of Science 37 common stock were allocated Earn-Out Shares in connection with the completion of the Merger. These Earn-Out Shares are accounted for as a liability and require fair value measurement on a recurring basis. Due to the significant unobservable inputs that are required to value these shares, they are classified as Level 3 in the fair value hierarchy. Please refer to Note 17 for additional details surrounding the valuation methodology for the Earn-Out Shares. |
Income Taxes | Income taxes are recorded in accordance with ASC Topic 740, Income Taxes, which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records valuation allowances to reduce deferred tax assets to the amount the Company believes is more likely than not to be realized. The Company recognizes uncertain tax positions when the positions will more likely than not be upheld on examination by the taxing authorities based solely upon the technical merits of the positions. The Company recognizes interest and penalties, if any, related to unrecognized income tax uncertainties in income tax expense. |
Earnings (Loss) Per Share | Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted earnings (loss) per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted earnings (loss) per share calculation, preferred stock, stock options and warrants are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. |
Segments | Operating segments are defined as components of an entity for which separate financial information is available and that are regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that its Senior Executive Committee, which includes the Chief Executive Officer, together with the Board of Directors is the CODM. The Company operates in a single operating segment as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance. |
Subsequent Events | The Company evaluates events that occurred subsequent to December 31, 2022 for recognition or disclosure in its consolidated financial statements. |
Accounting Pronouncements Recently Adopted and Accounting Pronouncements Issued but Not Yet Adopted | In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which eliminates certain exceptions to the guidance in Income Taxes (Topic 740) related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 effective January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). This guidance introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The standard replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company’s cash and cash equivalents, accounts receivable, and unbilled services are in scope of CECL. The standard will be effective for the Company on January 1, 2023. By applying the CECL guidance to the December 31, 2022 balances, the Company determined the adoption of the guidance will not have a material effect on the Company’s consolidated financial statements. This is based on factors including the Company’s assessment of historical losses, customers’ creditworthiness, and the fact that the Company’s trade receivables are short term in duration. |
Commitments and Contingencies | The Company records accruals for claims, suits, investigations, and proceedings when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews these contingencies regularly and records or adjusts accruals related to such matters to reflect the impact and status of any settlements, rulings, advice of counsel or other information pertinent to a particular matter. Gain contingencies are not recognized. Legal costs associated with contingencies are expensed as incurred. Since these matters are inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | Depreciation expense is computed using the straight-line method over the estimated useful lives of the related assets as follows: Furniture and fixtures 5 years Computer equipment 3 years Leasehold improvements Shorter of remaining lease term or estimated useful life Property and equipment are summarized as follows at December 31, 2022 and 2021: (In thousands) 2022 2021 Furniture and fixtures $ — $ 318 Computer equipment — 1,714 Leasehold improvements — 90 — 2,122 Less accumulated depreciation — (729) Property and equipment, net $ — $ 1,393 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Reverse Recapitalization | Accordingly, shares outstanding upon consummation of the Business Combination consisted of the following: LSAQ Initial Stockholders 2,002,260 Shares from Conversion of LSAQ Private Warrants 3,146,453 LSAQ Public Stockholders 5,709,548 Science 37 Rollover Shares 83,848,889 PIPE Shares 20,000,000 Total 114,707,150 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable and unbilled services (including contract assets) consisted of the following as of December 31: (In thousands) 2022 2021 Accounts receivable $ 8,235 $ 8,143 Unbilled services 3,555 2,825 Total accounts receivable and unbilled services 11,790 10,968 Allowance for doubtful accounts (798) (269) Total accounts receivable and unbilled services, net $ 10,992 $ 10,699 |
Capitalized Contract Cost | Capitalized commission costs and related amortization consisted of the following as of December 31: (In thousands) 2022 2021 Capitalized commission cost, net $ 3,945 $ 2,956 (In thousands) 2022 2021 Amortization of capitalized commission cost $ (2,280) $ (1,267) |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Depreciation expense is computed using the straight-line method over the estimated useful lives of the related assets as follows: Furniture and fixtures 5 years Computer equipment 3 years Leasehold improvements Shorter of remaining lease term or estimated useful life Property and equipment are summarized as follows at December 31, 2022 and 2021: (In thousands) 2022 2021 Furniture and fixtures $ — $ 318 Computer equipment — 1,714 Leasehold improvements — 90 — 2,122 Less accumulated depreciation — (729) Property and equipment, net $ — $ 1,393 |
Capitalized Software, net (Tabl
Capitalized Software, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule Of Capitalized Software, Future Amortization Expense | |
Capitalized Software | The following represents capitalized software balances as of December 31, 2022 and 2021: 2022 2021 (In thousands) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Capitalized software $ — $ — $ — $ 42,192 $ (17,902) $ 24,290 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Year Ended December 31, (In thousands) Classification 2022 2021 Operating fixed lease cost Selling, general and administrative expenses $ 1,156 $ 1,596 Operating variable lease cost Selling, general and administrative expenses 95 164 Total lease cost $ 1,251 $ 1,760 Other information related to leases was as follows: (In thousands) 2022 2021 Supplemental cash flow Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,242 $ 1,467 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 1,305 Weighted average remaining lease term (years): Operating leases 2.19 2.54 Weighted average discount rate: Operating leases 6.50 % 6.50 % |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows: (In thousands) Operating Leases 2023 $ 674 2024 599 2025 138 2026 12 2027 — Thereafter — Total future minimum lease payments 1,423 Less imputed interest (101) Total $ 1,322 Reported as of December 31, 2022: Accrued expenses and other liabilities $ 606 Operating lease liabilities 716 Total $ 1,322 |
Operating Lease, Lease Income | |
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | The undiscounted cash flows for contractual subleases as of December 31, 2022 were as follows (in thousands): 2023 $ 130 2024 134 2025 138 2026 12 2027 — Thereafter — Total $ 414 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liabilities | Activity related to the restructuring liabilities is as follows: (In thousands) 2022 Balance at beginning of period $ — Restructuring costs 2,628 Payments (1,856) Balance at end of period $ 772 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Prepaid expenses and other current assets consisted of the following as of December 31, 2022 and 2021: (In thousands) 2022 2021 Prepaid expenses $ 2,834 $ 4,347 Capitalized commission cost, net 3,945 2,956 Other 342 100 Total prepaid expenses and other current assets $ 7,121 $ 7,403 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Other Current Liabilities | Accrued expenses consisted of the following as of December 31, 2022 and 2021: (In thousands) 2022 2021 Compensation, including bonuses, fringe benefits, and payroll taxes $ 5,750 $ 11,611 Professional fees, investigator fees, and pass-through expenses 2,527 3,174 Commissions payable 1,529 1,168 Restructuring costs 772 — Current portion of operating lease liabilities 606 1,120 Other 180 — Total accrued expenses and other liabilities $ 11,364 $ 17,073 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding Roll Forward | The following is a summary of common share activity for the years ended December 31, 2022 and 2021 (as adjusted for the Exchange Ratio): 2022 2021 Common stock shares, beginning balance 114,991,026 5,019,582 Conversion of preferred stock into common stock — 75,495,266 Issuance of common stock 1,441,003 34,476,178 Common stock shares, ending balance 116,432,029 114,991,026 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the fair values of the Company’s assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2022: (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds $ 104,138 $ — $ — $ 104,138 Total $ 104,138 $ — $ — $ 104,138 Liabilities: Earn-out liability related to shareholders $ — $ — $ 170 $ 170 Total $ — $ — $ 170 $ 170 The following table summarizes the fair values of the Company’s assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2021: (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds $ 19,033 $ — $ — $ 19,033 Total $ 19,033 $ — $ — $ 19,033 Liabilities: Earn-out liability related to shareholders $ — $ — $ 98,900 $ 98,900 Total $ — $ — $ 98,900 $ 98,900 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted net earnings (loss) per share for the Company’s common stock (as adjusted for the Merger Exchange Ratio as described in Note 3 ) for the years ended December 31, 2022 and 2021: (In thousands, except shares and per share amounts) 2022 2021 Numerator: Net loss $ (50,988) $ (94,331) Denominator: Basic weighted average common shares outstanding 115,875,505 32,679,105 Loss per share: Basic and diluted $ (0.44) $ (2.89) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potential shares outstanding that were anti-dilutive and therefore excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, were as follows for the years ended December 31, 2022 and 2021, respectively. 2022 2021 Redeemable convertible preferred stock — 57,500,504 Stock options 26,840,283 17,697,264 Restricted stock units 3,798,542 — ESPP 104,589 — Earn-out shares 12,500,000 1,986,301 Warrants — 8,838 Total 43,243,414 77,192,907 |
Earn-Out Shares (Tables)
Earn-Out Shares (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | Assumptions used in the Monte Carlo simulation valuation at December 31, 2021 were as follows: Stock price $ 12.47 Expected volatility 55.0 % Risk-free interest rate 0.91 % Forecast period (in years) 2.8 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents a reconciliation of changes in the carrying amount of the contingent earn-out liability classified as Level 3 fair value hierarchy using significant unobservable inputs: (In thousands) Earn-Out Liability Balance at October 6, 2021 $ 67,600 Change in fair value related to option holder forfeitures 627 Change in fair value related to share valuation inputs 30,673 Total change in fair value recognized in earnings $ 31,300 Balance at December 31, 2021 $ 98,900 Change in fair value related to option holder forfeitures 182 Change in fair value related to share valuation inputs (98,912) Total change in fair value recognized in earnings $ (98,730) Balance at December 31, 2022 $ 170 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Option, Activity | The following table summarizes the stock option activity for the years ended December 31, 2022 and 2021: (Aggregate intrinsic value in thousands) Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Outstanding as of January 1, 2021 13,594,702 $ 0.38 8.35 Granted 16,891,718 7.88 0 Exercised (3,606,121) 0.40 0 Forfeited (1,455,010) 1.39 0 Outstanding as of January 1, 2022 25,425,289 $ 5.30 8.91 Granted 4,369,239 10.45 0 Exercised (1,441,003) 0.58 0 Forfeited (3,863,301) 7.60 0 Outstanding at December 31, 2022 24,490,224 $ 6.16 6.43 $ 646,417 Exercisable at December 31, 2022 10,682,240 $ 3.81 6.01 $ 458,705 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | Other information about the Company’s stock options for the years ending December 31, 2022 and 2021 was as follows: (In thousands) 2022 2021 Total grant date fair value of stock options vested $ 14,718 $ 776 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table summarizes the assumptions used in valuing the stock options for the years ended December 31, 2022 and 2021: 2022 2021 Expected term 0.13 - 6.25 years 5.50 - 6.25 years Risk-free interest rate 0.8% – 4.1% 0.6% – 1.4% Expected volatility 69.8% – 98.7% 46.3% – 47.7% Dividend yield 0% 0% 2022 Expected term 0.50 years Risk-free interest rate 3.3% Expected volatility 90.2% |
Nonvested Restricted Stock Shares Activity | The following table summarizes the RSU award activity for the year ended December 31, 2022: (Aggregate fair value in thousands) Number of Weighted Average Aggregate Fair Value Outstanding at December 31, 2021 — $ — Granted 10,152,824 $ 2.08 Vested — $ — Forfeited (415,518) $ 2.70 Outstanding at December 31, 2022 9,737,306 $ 2.06 $ 20,021 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Total stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021 as follows: (In thousands) 2022 2021 Cost of revenue (stock options, RSUs and ESPP) $ 1,743 $ 846 Selling, general and administrative (stock options, RSUs and ESPP) 16,896 5,481 Selling, general and administrative (earn-out shares) 5,923 2,080 Total stock-based compensation expense $ 24,562 $ 8,407 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | For the years ended December 31, 2022 and 2021, the amount of loss before taxes was: (In thousands) 2022 2021 U.S. loss before taxes $ (50,722) $ (94,330) Foreign loss before taxes (356) — Total loss before taxes $ (51,078) $ (94,330) |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of tax expense at the U.S. Federal Statutory tax rate versus the recorded income tax expense is as follows for the years ended December 31, 2022 and 2021: (In thousands) 2022 2021 U.S. federal statutory rate $ (10,726) $ (19,809) State income tax, net of federal benefit (6,856) (2,353) (Gain) loss on earn-out (20,733) 6,573 Transaction costs (2,599) 669 Stock-based compensation 1,107 31 Permanent items 104 20 Section 162(m) 2,905 667 Other adjustments 17 (216) Rate adjustment 204 (44) Return to provision 194 2 Valuation allowance 36,293 14,461 Total income tax expense (benefit) $ (90) $ 1 |
Schedule of Deferred Tax Assets and Liabilities | The principal components of the Company’s deferred tax assets for the years ended December 31, 2022 and 2021 consisted of the following: (In thousands) 2022 2021 Net operating loss carryforwards $ 62,854 $ 43,087 Amortizable assets 7,929 180 Equity compensation 3,011 841 Salaries and wages 983 1,277 Deferred revenue 658 101 Operating lease liability 341 613 Fixed assets 156 — Other 229 69 Total deferred tax assets 76,161 46,168 Less: valuation allowance (76,070) (39,777) Net deferred tax asset 91 6,391 Operating lease ROU — (524) Fixed assets — (5,867) Total deferred tax liabilities — (6,391) Net deferred tax assets (liabilities) $ 91 $ — |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the reconciliation of the unrecognized tax benefits activity during the years ended December 31, 2022 and 2021 (in thousands): (In thousands) 2022 2021 Unrecognized tax benefits – beginning $ 240 $ 240 Gross increases – tax positions in prior period — — Gross decreases – tax positions in prior period — — Gross increase – current-period tax positions — — Gross decrease – current-period tax positions — — Settlements — — Lapse of statute of limitations — — Unrecognized tax benefits – ending $ 240 $ 240 |
Company Background and Basis _2
Company Background and Basis of Presentation (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 06, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) employee segment | Dec. 31, 2021 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Entity number of employees | employee | 460 | ||
Number of reportable segments | segment | 1 | ||
Sale of stock, number of shares issued in transaction (in shares) | shares | 20,000,000 | ||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10 | ||
Sale of stock, consideration received on transaction | $ 200,000 | ||
Reverse recapitalization, net | $ 233,500 | ||
Cash and cash equivalents | $ 108,091 | $ 214,601 | |
Recapitalization exchange ratio | 1.815 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment source | Dec. 31, 2021 USD ($) | Oct. 06, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Number of sources of revenue | source | 2 | ||
Notice period for contract termination | 30 days | ||
Cost of revenue (exclusive of depreciation and amortization) | $ 54,278,000 | $ 42,394,000 | |
Marketing expense | 1,400,000 | 1,300,000 | |
Impairment, excluding lessor asset under operating lease | 43,000,000 | ||
Loss on long-lived asset impairment | 44,079,000 | 0 | |
Operating lease, impairment loss | $ 1,100,000 | 0 | |
Recapitalization exchange ratio | 1.815 | ||
Number of operating segments | segment | 1 | ||
Computer Software, Intangible Asset | |||
Disaggregation of Revenue [Line Items] | |||
Finite-lived intangible asset, useful life | 3 years | ||
Clinical Trials | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenue (exclusive of depreciation and amortization) | $ 4,200,000 | $ 3,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Business Combination - Narrativ
Business Combination - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Oct. 06, 2021 USD ($) day $ / shares shares | Oct. 05, 2021 shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 shares | |
Reverse Recapitalization [Line Items] | |||||
Recapitalization exchange ratio | 1.815 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Percentage of issued and outstanding shares converted | 100% | ||||
Science 37 Rollover Shares (in shares) | 83,848,889 | ||||
Earn-out shares (in shares) | 12,500,000 | ||||
Earnout period, threshold trading days | day | 20 | ||||
Earnout period, threshold trading day period | day | 30 | ||||
Earnout period | 3 years | ||||
PIPE Shares (in shares) | 20,000,000 | 1,441,003 | 34,476,178 | ||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10 | ||||
Sale of stock, consideration received on transaction | $ | $ 200 | ||||
Stock issued during period, shares, acquisition and reverse recapitalization (in shares) | 30,858,261 | ||||
Common stock, shares outstanding (in shares) | 114,707,150 | 116,432,029 | 114,991,026 | ||
Warrant outstanding (in shares) | 1 | ||||
Options outstanding (in shares) | 15,910,595 | 24,490,224 | 25,425,289 | 13,594,702 | |
Cash acquired through reverse recapitalization | $ | $ 35 | ||||
Payments of reverse recapitalization transaction costs at closing | $ | 22.3 | ||||
Payments of additional reverse recapitalization transaction costs | $ | 1.5 | ||||
Total payments of reverse recapitalization transaction costs | $ | $ 23.8 | ||||
Earn-Out Shares | |||||
Reverse Recapitalization [Line Items] | |||||
Total payments of reverse recapitalization transaction costs | $ | $ 3.1 | ||||
LSAQ | |||||
Reverse Recapitalization [Line Items] | |||||
Stock redeemed during period (in shares) | 2,299,493 | ||||
Common stock, shares outstanding (in shares) | 7,711,808 | ||||
Derivative Instrument, Trigger, One | |||||
Reverse Recapitalization [Line Items] | |||||
Earn-out shares (in shares) | 5,000,000 | ||||
Earnout period, stock price trigger (in dollars per share) | $ / shares | $ 15 | ||||
Derivative Instrument, Trigger, Two | |||||
Reverse Recapitalization [Line Items] | |||||
Earn-out shares (in shares) | 7,500,000 | ||||
Earnout period, stock price trigger (in dollars per share) | $ / shares | $ 20 | ||||
LSAQ Private Warrants | |||||
Reverse Recapitalization [Line Items] | |||||
Warrant outstanding (in shares) | 3,146,453 |
Business Combination - Schedule
Business Combination - Schedule of Reverse Recapitalization (Details) - shares | 12 Months Ended | ||
Oct. 06, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reverse Recapitalization [Line Items] | |||
Shares from Conversion of LSAQ Private Warrants (in shares) | 0 | 75,495,266 | |
Science 37 Rollover Shares (in shares) | 83,848,889 | ||
PIPE Shares (in shares) | 20,000,000 | 1,441,003 | 34,476,178 |
Common stock, shares outstanding (in shares) | 114,707,150 | 116,432,029 | 114,991,026 |
LSAQ Private Warrants | |||
Reverse Recapitalization [Line Items] | |||
Shares from Conversion of LSAQ Private Warrants (in shares) | 3,146,453 | ||
LSAQ Initial Stockholders | |||
Reverse Recapitalization [Line Items] | |||
LSAQ Stockholders (in shares) | 2,002,260 | ||
LSAQ Public Stockholders | |||
Reverse Recapitalization [Line Items] | |||
LSAQ Stockholders (in shares) | 5,709,548 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 168,000 | |
Contract with customer, liability, revenue recognized | 4,800 | $ 4,900 |
Contract with customer, performance obligation satisfied in previous period | 5,600 | 2,000 |
Contract assets | 3,555 | 2,825 |
Deferred revenue | 8,300 | 7,600 |
Capitalized contract cost, impairment loss | $ 700 | $ 0 |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | One Customer | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Concentration risk, percentage | 15.20% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Three Customers | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Concentration risk, percentage | 57% | |
Customer Concentration Risk | Accounts Receivable | Two Customers | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Concentration risk, percentage | 39.10% | |
Customer Concentration Risk | Accounts Receivable | Three Customers | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Concentration risk, percentage | 78.40% | |
Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 month 6 days | |
Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 8 years 7 months 6 days |
Revenue - Schedule of Accounts,
Revenue - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 8,235 | $ 8,143 |
Unbilled services | 3,555 | 2,825 |
Total accounts receivable and unbilled services | 11,790 | 10,968 |
Allowance for doubtful accounts | (798) | (269) |
Total accounts receivable and unbilled services, net | $ 10,992 | $ 10,699 |
Revenue - Capitalized Contract
Revenue - Capitalized Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Capitalized commission cost, net | $ 3,945 | $ 2,956 |
Amortization of capitalized commission cost | $ (2,280) | $ (1,267) |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 0 | $ 2,122 |
Less accumulated depreciation | 0 | (729) |
Property and equipment, net | 0 | 1,393 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 0 | 318 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 0 | 1,714 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 0 | $ 90 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 0.6 | $ 0.5 |
Impaired property and equipment | $ 0.9 |
Capitalized Software, net - Nar
Capitalized Software, net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Capitalized software, additions | $ 35.1 | $ 23.6 |
Capitalized software, amortization | 17.3 | $ 7.3 |
Capitalized software, impairments | $ 42.1 |
Capitalized Software, net - Sch
Capitalized Software, net - Schedule of Capitalized Software (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Gross Amount | $ 0 | $ 42,192 |
Accumulated Amortization | 0 | (17,902) |
Net Amount | $ 0 | $ 24,290 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating fixed lease cost | $ 1,156 | $ 1,596 |
Operating variable lease cost | 95 | 164 |
Total lease cost | $ 1,251 | $ 1,760 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) office | Dec. 31, 2021 USD ($) | |
Leases [Abstract] | ||
Number of office facilities subleased | office | 2 | |
Sublease receivable write-offs | $ 0 | $ 0.2 |
Operating lease, impairment loss | $ 1.1 | $ 0 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 1,242 | $ 1,467 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 0 | $ 1,305 |
Weighted average remaining lease term (years): | ||
Operating leases | 2 years 2 months 8 days | 2 years 6 months 14 days |
Weighted average discount rate: | ||
Operating leases | 6.50% | 6.50% |
Leases - Operating Lease Liabil
Leases - Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 674 | |
2024 | 599 | |
2025 | 138 | |
2026 | 12 | |
2027 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 1,423 | |
Less imputed interest | (101) | |
Total | 1,322 | |
Accrued expenses and other liabilities | 606 | $ 1,120 |
Operating lease liabilities | 716 | $ 1,322 |
Total | $ 1,322 |
Leases - Lease Payments to be R
Leases - Lease Payments to be Received by Fiscal Year Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 130 |
2024 | 134 |
2025 | 138 |
2026 | 12 |
2027 | 0 |
Thereafter | 0 |
Total | $ 414 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Thousands | 12 Months Ended | ||
Nov. 10, 2022 employee | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 2,628 | $ 0 | |
Cost Reduction Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Cost reduction program, number of employees eliminated | employee | 81 | ||
Cost reduction program, number of employees eliminated, period percent | 15% | ||
Minimum | Cost Reduction Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected cost | 3,000 | ||
Maximum | Cost Reduction Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected cost | $ 3,300 |
Restructuring Costs - Schedule
Restructuring Costs - Schedule of Restructuring Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 0 | |
Restructuring costs | 2,628 | $ 0 |
Payments | (1,856) | |
Balance at end of period | $ 772 | $ 0 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 2,834 | $ 4,347 |
Capitalized commission cost, net | 3,945 | 2,956 |
Other | 342 | 100 |
Total prepaid expenses and other current assets | $ 7,121 | $ 7,403 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Compensation, including bonuses, fringe benefits, and payroll taxes | $ 5,750 | $ 11,611 |
Professional fees, investigator fees, and pass-through expenses | 2,527 | 3,174 |
Current portion of operating lease liabilities | 606 | 1,120 |
Commissions payable | 1,529 | 1,168 |
Restructuring costs | 772 | 0 |
Other | $ 180 | $ 0 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total accrued expenses and other liabilities | Total accrued expenses and other liabilities |
Total accrued expenses and other liabilities | $ 11,364 | $ 17,073 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Narrative (Details) - $ / shares | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2022 | Oct. 06, 2021 | Dec. 31, 2020 | ||
Temporary Equity Disclosure [Abstract] | |||||
Conversion of redeemable convertible preferred shares into common shares (refer to Note 11) (in shares) | [1] | 75,495,266 | |||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | [1] | 0 | 0 | 75,495,000 | |
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Narrative (Details) | 12 Months Ended | |||
Oct. 06, 2021 $ / shares shares | Dec. 31, 2022 vote $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 shares | |
Equity [Abstract] | ||||
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares issued (in shares) | 116,432,029 | 114,991,026 | 5,019,582 | |
Common stock, shares outstanding (in shares) | 114,707,150 | 116,432,029 | 114,991,026 | |
Common stock, vote per common share | vote | 1 | |||
Recapitalization exchange ratio | 1.815 | |||
PIPE Shares (in shares) | 20,000,000 | 1,441,003 | 34,476,178 | |
Warrant outstanding (in shares) | 1 | |||
Securities called by warrant (in shares) | 6,439 | |||
Exercise price of warrant (in dollars per share) | $ / shares | $ 1.61 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Common Stock Outstanding Roll Forward (Details) - shares | 12 Months Ended | ||
Oct. 06, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Common Stock Activities | |||
Common stock shares, beginning balance (in shares) | 114,991,026 | 5,019,582 | |
Conversion of convertible securities (in shares) | 0 | 75,495,266 | |
Issuance of common stock (in shares) | 20,000,000 | 1,441,003 | 34,476,178 |
Common stock shares, ending balance (in shares) | 116,432,029 | 114,991,026 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Earn-out liability related to shareholders | $ 170 | $ 98,900 |
Fair Value, Recurring | ||
Assets: | ||
Total | 104,138 | 19,033 |
Liabilities: | ||
Earn-out liability related to shareholders | 170 | 98,900 |
Total | 170 | 98,900 |
Fair Value, Recurring | Money Market Funds | ||
Assets: | ||
Money market funds | 104,138 | 19,033 |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Total | 104,138 | 19,033 |
Liabilities: | ||
Earn-out liability related to shareholders | 0 | 0 |
Total | 0 | 0 |
Fair Value, Recurring | Level 1 | Money Market Funds | ||
Assets: | ||
Money market funds | 104,138 | 19,033 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Total | 0 | 0 |
Liabilities: | ||
Earn-out liability related to shareholders | 0 | 0 |
Total | 0 | 0 |
Fair Value, Recurring | Level 2 | Money Market Funds | ||
Assets: | ||
Money market funds | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Total | 0 | 0 |
Liabilities: | ||
Earn-out liability related to shareholders | 170 | 98,900 |
Total | 170 | 98,900 |
Fair Value, Recurring | Level 3 | Money Market Funds | ||
Assets: | ||
Money market funds | $ 0 | $ 0 |
Loss Per Share - Narrative (Det
Loss Per Share - Narrative (Details) | Oct. 06, 2021 |
Earnings Per Share [Abstract] | |
Recapitalization exchange ratio | 1.815 |
Loss Per Share - Schedule of Ea
Loss Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Numerator: | |||
Net loss | [1] | $ (50,988) | $ (94,331) |
Denominator: | |||
Basic weighted average common shares outstanding (in shares) | 115,875,505 | 32,679,105 | |
Loss per share: | |||
Basic (in dollars per share) | $ (0.44) | $ (2.89) | |
Diluted (in dollars per share) | $ (0.44) | $ (2.89) | |
[1]Historical shares and capital amounts have been retroactively restated for reverse recapitalization as described in Note 1. |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 43,243,414 | 77,192,907 |
Redeemable convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 57,500,504 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 26,840,283 | 17,697,264 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 3,798,542 | 0 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 104,589 | 0 |
Earn-out shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 12,500,000 | 1,986,301 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 8,838 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Novartis Pharma AG | dRX Capital AG | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 50% | |
Investor | Pharmaceutical Products Development, LLC | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 6.9 | $ 13.7 |
Accounts receivable, related parties | 0.7 | 2 |
Investor | AlloVir | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 0 | 0.3 |
Affiliated Entity | Novartis Pharma AG | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 1.4 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency accrual | $ 0 |
Earn-Out Shares - Narrative (De
Earn-Out Shares - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Oct. 06, 2021 day $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Derivative [Line Items] | ||||
Earn-out shares (in shares) | shares | 12,500,000 | |||
Earnout period | 3 years | |||
Earnout period, threshold trading days | day | 20 | |||
Earnout period, threshold trading day period | day | 30 | |||
Change in fair value of earn-out liability | $ | $ (31,300) | $ (98,730) | $ 31,300 | |
Stock-based compensation expense | $ | 24,562 | 8,407 | ||
Unrecognized compensation cost related to option holder earn-out shares | $ | $ 60,000 | $ 38,800 | $ 60,000 | |
Stockholders | ||||
Derivative [Line Items] | ||||
Earn-out shares to be received (in shares) | shares | 10,914,422 | 11,131,713 | 10,914,422 | |
Option Holders | ||||
Derivative [Line Items] | ||||
Earn-out shares to be received (in shares) | shares | 1,585,579 | 1,368,287 | 1,585,579 | |
Earn-Out Shares | ||||
Derivative [Line Items] | ||||
Stock-based compensation expense | $ | $ 5,900 | |||
Unrecognized compensation cost related to option holder earn-out shares | $ | $ 500 | |||
Derivative Instrument, Trigger, One | ||||
Derivative [Line Items] | ||||
Earn-out shares (in shares) | shares | 5,000,000 | |||
Earnout period, stock price trigger (in dollars per share) | $ / shares | $ 15 | |||
Fair value of earn-out shares (in dollars per share) | $ / shares | $ 10.35 | $ 0.02 | $ 10.35 | |
Derivative Instrument, Trigger, One | Earn-Out Shares | ||||
Derivative [Line Items] | ||||
Unrecognized compensation cost related to option holder earn-out shares, period for recognition | 0 years | |||
Derivative Instrument, Trigger, Two | ||||
Derivative [Line Items] | ||||
Earn-out shares (in shares) | shares | 7,500,000 | |||
Earnout period, stock price trigger (in dollars per share) | $ / shares | $ 20 | |||
Fair value of earn-out shares (in dollars per share) | $ / shares | $ 8.20 | $ 0.01 | $ 8.20 | |
Derivative Instrument, Trigger, Two | Earn-Out Shares | ||||
Derivative [Line Items] | ||||
Unrecognized compensation cost related to option holder earn-out shares, period for recognition | 2 months 12 days |
Earn-Out Shares - Fair Value Me
Earn-Out Shares - Fair Value Measurement Inputs and Valuation Techniques (Details) - Earn-Out Shares - Valuation Technique, Option Pricing Model | Dec. 31, 2021 $ / shares yr |
Stock price | |
Derivative [Line Items] | |
Derivative liability, measurement input | $ / shares | 12.47 |
Expected volatility | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.550 |
Risk-free interest rate | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0091 |
Forecast period (in years) | |
Derivative [Line Items] | |
Derivative liability, measurement input | yr | 2.8 |
Earn-Out Shares - Fair Value, L
Earn-Out Shares - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value, beginning balance | $ 67,600 | $ 98,900 | |
Change in fair value related to option holder forfeitures | 627 | 182 | |
Change in fair value related to share valuation inputs | 30,673 | (98,912) | |
Change in fair value of earn-out liability | (31,300) | (98,730) | $ 31,300 |
Fair value, ending balance | $ 98,900 | $ 170 | $ 98,900 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 06, 2021 shares | May 31, 2022 | Dec. 31, 2022 USD ($) plan employee $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Sep. 01, 2022 | Dec. 31, 2020 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of equity-based compensation plans | plan | 2 | |||||
Recapitalization exchange ratio | 1.815 | |||||
Share-based payment award, number of shares available for grant (in shares) | 5,262,166 | |||||
Granted (in shares) | 4,369,239 | 16,891,718 | ||||
Exercised (in shares) | 1,441,003 | 3,606,121 | ||||
Options outstanding (in shares) | 15,910,595 | 24,490,224 | 25,425,289 | 13,594,702 | ||
Requisite service period | 36 months | |||||
Intrinsic value of options exercised | $ | $ 100 | $ 43,500 | ||||
Stock-based compensation expense | $ | 24,562 | 8,407 | ||||
Unrecognized compensation cost related to unvested stock options | $ | $ 38,800 | $ 60,000 | ||||
Options granted in period, weighted average grant date fair value (in dollars per share) | $ / shares | $ 6.89 | $ 3.71 | ||||
Proceeds from stock option exercises | $ | $ 610 | $ 1,432 | ||||
Common stock, shares outstanding (in shares) | 114,707,150 | 116,432,029 | 114,991,026 | |||
Number of terminated employees with stock continuing to vest | employee | 5 | |||||
Stock-based compensation expense (reversal), vesting modifications | $ | $ (1,900) | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 47,826,613 | |||||
Vesting period | 3 years | |||||
Share-based compensation modified vesting period until employment contracts expires | 12 months | |||||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Share-based compensation modified vesting period until employment contracts expires | 9 months | |||||
Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ | $ 1,400 | |||||
Unrecognized compensation cost related to unvested stock options, period for recognition | 2 years 4 months 28 days | 3 years 1 month 20 days | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, amount | $ | $ 15,100 | |||||
Share-based compensation modified to continue to vest until employment contracts expires (in shares) | 1,737,263 | |||||
Stock Option | Share-based Payment Arrangement, Tranche One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Stock Option | Share-based Payment Arrangement, Tranche Two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Stock Option | Share-based Payment Arrangement, Tranche Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Stock Option | Share-based Payment Arrangement, Tranche Four | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 10,152,824 | |||||
Exercised (in shares) | 0 | |||||
Options outstanding (in shares) | 9,737,306 | 0 | ||||
Unrecognized compensation cost related to unvested stock options, period for recognition | 2 years 6 months 10 days | |||||
Common stock, shares outstanding (in shares) | 9,737,306 | |||||
Aggregate intrinsic value, outstanding | $ | $ 3,700 | |||||
Share-based compensation modified to continue to vest until employment contracts expires (in shares) | 570,159 | |||||
ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 6,236,302 | |||||
Common stock, shares outstanding (in shares) | 250,325 | |||||
Share-based compensation arrangement, purchase price of common stock, percent | 85% | |||||
Share-based compensation arrangement, offering period | 6 months | 6 months | ||||
Share-based compensation arrangement, maximum number of shares per employee | 5,000 | |||||
Science 37 Stock Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 30,930,263 | 30,424,325 | ||||
Exercised (in shares) | 6,440,039 | 4,999,036 | ||||
Options outstanding (in shares) | 24,490,224 | 25,425,289 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-based Payment Arrangement, Option, Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Units | |||
Outstanding beginning balance (in shares) | 25,425,289 | 13,594,702 | |
Granted (in shares) | 4,369,239 | 16,891,718 | |
Exercised (in shares) | (1,441,003) | (3,606,121) | |
Forfeited (in shares) | (3,863,301) | (1,455,010) | |
Outstanding ending balance (in shares) | 24,490,224 | 25,425,289 | 13,594,702 |
Exercisable (in shares) | 10,682,240 | ||
Weighted Average Exercise Price | |||
Outstanding beginning balance (in dollars per share) | $ 5.30 | $ 0.38 | |
Granted (in dollars per share) | 10.45 | 7.88 | |
Exercised (in dollars per share) | 0.58 | 0.40 | |
Exercised (in dollars per share) | 7.60 | 1.39 | |
Outstanding ending balance (in dollars per share) | 6.16 | $ 5.30 | $ 0.38 |
Exercisable (in dollars per share) | $ 3.81 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Outstanding balance | 6 years 5 months 4 days | 8 years 10 months 28 days | 8 years 4 months 6 days |
Exercisable | 6 years 3 days | ||
Aggregate Intrinsic Value | |||
Outstanding balance | $ 646,417 | ||
Exercisable | $ 458,705 |
Stock-Based Compensation - Sh_2
Stock-Based Compensation - Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Total grant date fair value of stock options vested | $ 14,718 | $ 776 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - Stock Option | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.80% | 0.60% |
Risk-free interest rate, maximum | 4.10% | 1.40% |
Expected volatility, minimum | 69.80% | 46.30% |
Expected volatility, maximum | 98.70% | 47.70% |
Dividend yield | 0% | 0% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 1 month 17 days | 5 years 6 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 6 years 3 months | 6 years 3 months |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock, Option, Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Units | ||
Outstanding beginning balance (in shares) | 25,425,289 | 13,594,702 |
Granted (in shares) | 4,369,239 | 16,891,718 |
Exercised (in shares) | (1,441,003) | (3,606,121) |
Forfeited (in shares) | (3,863,301) | (1,455,010) |
Outstanding ending balance (in shares) | 24,490,224 | 25,425,289 |
Weighted Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 5.30 | $ 0.38 |
Granted (in dollars per share) | 10.45 | 7.88 |
Exercised (in dollars per share) | 0.58 | 0.40 |
Exercised (in dollars per share) | 7.60 | 1.39 |
Outstanding ending balance (in dollars per share) | $ 6.16 | $ 5.30 |
Restricted stock units | ||
Number of Units | ||
Outstanding beginning balance (in shares) | 0 | |
Granted (in shares) | 10,152,824 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (415,518) | |
Outstanding ending balance (in shares) | 9,737,306 | 0 |
Weighted Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 2.08 | |
Exercised (in dollars per share) | 0 | |
Exercised (in dollars per share) | 2.70 | |
Outstanding ending balance (in dollars per share) | $ 2.06 | $ 0 |
Aggregate Intrinsic Value | ||
Outstanding balance | $ 20,021 |
Stock-Based Compensation- Sched
Stock-Based Compensation- Schedule of Share-based Payment Award, ESPP, Valuation Assumptions (Details) - ESPP | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term | 6 months |
Risk-free interest rate | 3.30% |
Expected volatility | 90.20% |
Stock-Based Compensation - Sh_3
Stock-Based Compensation - Share-based Payment Arrangement, Expensed and Capitalized, Amount (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 24,562 | $ 8,407 |
Stock Option | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 1,400 | |
Earn-Out Shares | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 5,900 | |
Cost of revenues | Stock Option | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 1,743 | 846 |
Selling, general and administrative expenses | Stock Option | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 16,896 | 5,481 |
Selling, general and administrative expenses | Earn-Out Shares | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 5,923 | $ 2,080 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, employer matching contribution, percent of match | 50% | |
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 6% | |
Defined contribution plan, cost | $ 1.7 | $ 1 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. loss before taxes | $ (50,722) | $ (94,330) |
Foreign loss before taxes | (356) | 0 |
Loss before income taxes | $ (51,078) | $ (94,330) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Tax Credit Carryforward [Line Items] | |||
Current income tax expense (benefit) | $ 0 | $ 0 | |
Deferred income tax expense (benefit) | (100,000) | 0 | |
Increase in valuation allowance | 36,293,000 | 14,461,000 | |
Unrecognized tax benefits | 240,000 | $ 240,000 | $ 240,000 |
Domestic Tax Authority | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 253,700,000 | ||
Operating loss carryforwards, subject to expiration | 30,200,000 | ||
Operating loss carryforwards, not subject to expiration | 223,400,000 | ||
State and Local Jurisdiction | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 179,100,000 | ||
Operating loss carryforwards, not subject to expiration | 8,700,000 | ||
Foreign Tax Authority | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 200,000 | ||
Operating loss carryforwards, not subject to expiration | $ 200,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | $ (10,726) | $ (19,809) |
State income tax, net of federal benefit | (6,856) | (2,353) |
(Gain) loss on earn-out | (20,733) | 6,573 |
Transaction costs | (2,599) | 669 |
Stock-based compensation | 1,107 | 31 |
Permanent items | 104 | 20 |
Section 162(m) | 2,905 | 667 |
Other adjustments | 17 | (216) |
Rate adjustment | 204 | (44) |
Return to provision | 194 | 2 |
Valuation allowance | 36,293 | 14,461 |
Total income tax expense (benefit) | $ (90) | $ 1 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 62,854 | $ 43,087 |
Amortizable assets | 7,929 | 180 |
Equity compensation | 3,011 | 841 |
Salaries and wages | 983 | 1,277 |
Deferred revenue | 658 | 101 |
Operating lease liability | 341 | 613 |
Fixed assets | 156 | 0 |
Other | 229 | 69 |
Total deferred tax assets | 76,161 | 46,168 |
Less: valuation allowance | (76,070) | (39,777) |
Net deferred tax asset | 91 | 6,391 |
Operating lease ROU | 0 | (524) |
Fixed assets | 0 | (5,867) |
Total deferred tax liabilities | 0 | (6,391) |
Net deferred tax assets (liabilities) | $ 91 | $ 0 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits – beginning | $ 240 | $ 240 |
Gross increases – tax positions in prior period | 0 | 0 |
Gross decreases – tax positions in prior period | 0 | 0 |
Gross increase – current-period tax positions | 0 | 0 |
Gross decrease – current-period tax positions | 0 | 0 |
Settlements | 0 | 0 |
Lapse of statute of limitations | 0 | 0 |
Unrecognized tax benefits – ending | $ 240 | $ 240 |