Science 37 (SNCE) - 2022 Q4 - Annual Report

Revenue and Bookings - Revenue increased by $10.6 million, or 17.7%, to $70.1 million for the year ended December 31, 2022, compared to $59.6 million in 2021, primarily driven by higher opening backlog[236] - Backlog as of December 31, 2022, was $172.9 million, an increase of $9.1 million, or 5.5%, from $163.9 million in 2021[225] - Net bookings decreased by $84.7 million, or 51.7%, to $79.2 million for the year ended December 31, 2022, compared to $163.9 million in 2021, primarily due to elongated sales cycles and COVID-related cancellations[225] - The company’s revenue primarily comes from enabling clinical trials through technology and services, and licensing its proprietary technology platform[307] Expenses and Losses - Cost of revenue increased by $11.9 million, or 28.0%, to $54.3 million for the year ended December 31, 2022, compared to $42.4 million in 2021, mainly due to increased compensation-related expenses and consulting fees[237] - Selling, general and administrative expenses rose by $30.1 million, or 41.2%, to $103.3 million for the year ended December 31, 2022, compared to $73.1 million in 2021, representing 147.2% of revenue[238] - Loss from operations for the year ended December 31, 2022, was $152.0 million, compared to a loss of $63.7 million in 2021[235] - Total operating expenses increased to $222.2 million for the year ended December 31, 2022, from $123.3 million in 2021[235] - The net loss for 2022 was $50,988,000, compared to a net loss of $94,331,000 in 2021, indicating an improvement of 46%[285] - The company reported a basic and diluted net loss per share of $0.44 for 2022, compared to $2.89 for 2021[285] Cash Flow and Financial Position - As of December 31, 2022, the company had cash and cash equivalents of $108.1 million and recorded a net loss of $51.0 million for the year[244] - Net cash used in operating activities for the year ended December 31, 2022 was $75.4 million, compared to $36.5 million for the year ended December 31, 2021[249] - Net cash used in investing activities for the year ended December 31, 2022 was $31.9 million, consisting of $31.7 million in capitalized software development costs[252] - Net cash provided by financing activities for the year ended December 31, 2022 was $0.6 million, a significant decrease from $238.2 million in 2021[255] - Cash and cash equivalents decreased to $108,091,000 as of December 31, 2022, down from $214,601,000 in 2021, a decline of 49.6%[283] - The total assets of the company were $126,448,000 as of December 31, 2022, significantly lower than $260,798,000 in 2021, a decrease of 51.5%[283] Technology and Operations - The company operates under one reporting segment, focusing on patient-centric clinical trials and decentralized clinical trial designs[216] - The proprietary technology platform supports the company's unique model, enabling recruitment of patients without traditional site infrastructure costs[215] - The company recognizes revenue based on the transfer of control of services to customers, primarily through service contracts that can last from a few months to several years[310] - The company utilizes a cost-based input method for revenue recognition, measuring progress based on actual costs incurred relative to total expected costs[311] Impairments and Restructuring - Impairment of long-lived assets for the year ended December 31, 2022 was $44.1 million, due to the carrying value of the asset group being greater than the fair value[240] - Restructuring costs for the year ended December 31, 2022 were $2.6 million, related to a plan that included one-time termination benefits for 81 employees, approximately 15% of the workforce[242] - The company recognized a long-lived asset impairment expense of $43.0 million for the year ended December 31, 2022, due to the carrying value of the asset group exceeding its fair value[334] Shareholder and Stock Information - The company raised $233.5 million through a PIPE financing as part of the merger, net of fees and expenses[298] - Total shares outstanding upon consummation of the Business Combination amounted to 114,707,150 shares[370] - The Company incurred total transaction costs of $23.8 million associated with the Merger and PIPE, with $3.1 million included in selling, general and administrative expenses for the year ended December 31, 2021[369] - The company had 116,432,029 shares of common stock issued and outstanding as of December 31, 2022, compared to 114,991,026 shares in 2021[400] Deferred Revenue and Accounts Receivable - Deferred revenue, classified as a contract liability, consists of customer payments received in advance of performance, and is reduced as performance obligations are satisfied[328] - The aggregate amount of transaction price allocated to unsatisfied performance obligations as of December 31, 2022, was $168.0 million, expected to be recognized over remaining contract terms ranging from 0.1 to 8.6 years[371] - The total accounts receivable and unbilled services increased to $11.79 million in 2022 from $10.97 million in 2021, reflecting a year-over-year growth of 7.43%[375] - Deferred revenue as of December 31, 2022, was $8.3 million, up from $7.6 million in 2021, representing an increase of 9.21%[376]