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1、TABLE OF CONTENTSUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-K_x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2022ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
2、 ACT OF 1934For the transition period from _ to _Commission file number:001-39727_SCIENCE 37 HOLDINGS,INC._(Exact name of registrant as specified in its charter)Delaware84-4278203(State or other jurisdiction ofincorporation or organization)(I.R.S.Employer Identification No.)800 Park Offices Drive,Su
3、ite 3606Research Triangle Park,North Carolina27709(Address of Principal Executive Offices)(Zip Code)Registrants telephone number,including area code:(984)377-3737Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredSha
4、res of Common Stock,$0.0001 par value pershareSNCEThe Nasdaq Stock Market LLCSecurities registered pursuant to section 12(g)of the Act:None.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes o No xIndicate by check mark if the re
5、gistrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes o NoxIndicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such short
6、er period that the registrant was required to file such reports);and(2)has been subject to such filing requirements for the past 90 days.Yes x No oIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedpursuant to Rule 405 of Re
7、gulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that theregistrant was required to submit and post such files).Yes x No oIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smallerrep
8、orting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer”,“smallerreporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated fileroAccelerated fileroNon-accelerated filerxSmaller reporting companyxEmerging
9、growth companyx2025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm1/109If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financi
10、al accounting standards provided pursuant to Section 13(a)of the Exchange Act.oIndicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectivenessof its internal control over financial reporting under Section 404(b)of the Sarbanes-Ox
11、ley Act(15 U.S.C.7262(b)by the registeredpublic accounting firm that prepared or issued its audit report.oIf securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of theregistrant included in the filing reflect the correction of an erro
12、r to previously issued financial statements.oIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-basedcompensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1
13、(b).oIndicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes o No xThe aggregate market value of the registrants common stock held by non-affiliates of the registrant was$140,180,984 based on theclosing sales price on the Nasdaq Stock Market LLC as o
14、f June 30,2022,the last business day of the registrants most recentlycompleted second fiscal quarter.As of March 1,2023,there were 116,729,430 shares of common stock,par value$0.0001 per share,issued and outstanding.DOCUMENTS INCORPORATED BY REFERENCENone.2025/1/17 18:53snce-20221231https:/www.sec.g
15、ov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm2/109TABLE OF CONTENTSTable of ContentsPageCautionary Note Regarding Forward-Looking Statements3PART IItem 1.Business5Item 1A.Risk Factors14Item 1B.Unresolved Staff Comments38Item 2.Properties38Item 3.Legal Proceedings38Item 4.Mine S
16、afety Disclosures38PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of EquitySecurities39Item 6.Reserved.39Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations39Item 7A.Quantitative and Qualitative Disclosures
17、About Market Risk48Item 8.Financial Statements and Supplementary Data50Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosures81Item 9A.Controls and Procedures81Item 9B.Other Information82Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
18、82PART IIIItem 10.Directors,Executive Officers and Corporate Governance83Item 11.Executive Compensation86Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters95Item 13.Certain Relationships and Related Transactions,and Director Independence98Item 14.P
19、rincipal Accounting Fees and Services102PART IVItem 15.Exhibits,Financial Statement Schedules104Item 16.Form 10-K Summary105SIGNATURES10622025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm3/109TABLE OF CONTENTSCAUTIONARY NOTE REGARDING FOR
20、WARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements.We intend such forward-looking statements to becovered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933,asamended(the“Securities Act”),and Sec
21、tion 21E of the Securities Exchange Act of 1934,as amended(the“Exchange Act”).Allstatements other than statements of historical facts contained in this Annual Report on Form 10-K,including,but not limited to,statements regarding our future results of operations and financial position,business strate
22、gy,plans and prospects,existing andprospective products,research and development costs,timing and likelihood of success,and plans and objectives of management forfuture operations and results,are forward-looking statements.These forward-looking statements can generally be identified by the useof for
23、ward-looking terminology,including the terms“believes,”“can,”“could,”“estimates,”“anticipates,”“expects,”“seeks,”“projects,”“intends,”“plans,”“may,”“might,”“should,”“will,”or“would”or,in each case,their negative or other variations orcomparable terminology,although not all forward-looking statements
24、 contain these identifying words.These statements involveknown and unknown risks,uncertainties and other important factors that may cause our actual results,performance or achievements tobe materially different from any future results,performance or achievements expressed or implied by the forward-l
25、ooking statements.Factors that may impact such forward-looking statements include:expectations regarding the Companys strategies and future financial performance,including its future business plans orobjectives,prospective performance and opportunities and competitors,revenues,backlog conversion,pro
26、ducts and services,pricing,operating expenses,market trends,liquidity,cash flows and uses of cash,capital expenditures,and ability to invest ingrowth initiatives and pursue acquisition opportunities;risks related to the Companys technology,intellectual property,data privacy and cybersecurity practic
27、es;risks related to the Companys reliance on third parties;risks related to general economic and financial market conditions,including the impact of ongoing supply chain disruptionsand inflationary cost pressures and the possibility of an economic recession;political,legal and regulatory environment
28、;andthe industries in which the Company operates;the risk that the Company will need to raise additional capital to execute its business plan,which may not be available onacceptable terms or at all;limited liquidity and trading of the Companys securities;volatility in the price of Science 37s securi
29、ties due to a variety of factors,including changes in the competitive and highlyregulated industries in which Science 37 operates,variations in performance across competitors and changes in laws andregulations affecting Science 37s business;geopolitical risk and changes in applicable laws or regulat
30、ions;the possibility that the Company may be adversely affected by other economic,business,and/or competitive factors;operational risks;andlitigation and regulatory enforcement risks,including the diversion of management time and attention and the additionalcosts and demands resulting therefrom on t
31、he Companys resources.The forward-looking statements contained in this Annual Report on Form 10-K are based on the Companys current expectationsand beliefs and are based upon information available to us as of the date of this Annual Report on Form 10-K,and while we believesuch information forms a re
32、asonable basis for such statements,that information may be limited or incomplete.Our forward-lookingstatements should not be read to indicate that we have conducted an exhaustive inquiry into,or review of,all relevant information.These forward-looking statements involve a number of risks,uncertainti
33、es(some of which are beyond the Companys control)orother assumptions that may cause actual results or performance to be materially different from those expressed or implied by theseforward-looking statements.Forward-looking statements are inherently uncertain,and investors are cautioned not to undul
34、y rely uponthese statements.These risks and uncertainties include,but are not limited to,those factors described or incorporated by reference under theheading Part I,Item 1A.“Risk Factors”in this Annual Report on Form 10-K.Should one or more of these risks or uncertaintiesmaterialize,or should any o
35、f the assumptions prove incorrect,actual results may vary in material respects from those projected inthese forward-looking statements.Furthermore,we operate in an evolving environment.New risk factors and uncertainties mayemerge from time to time,and it is not possible for management to predict all
36、 risk factors and uncertainties.32025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm4/109TABLE OF CONTENTSWe qualify all of our forward-looking statements by these cautionary statements.The forward-looking statements contained inthis Annual
37、 Report on Form 10-K relate only to events as of the date on which the statements are made.The Company will not anddoes not undertake any obligation to update or revise any forward-looking statements,whether as a result of new information,futureevents or otherwise,except as required by law.Risk Fact
38、or SummaryOur business is subject to a number of risks,including those described in Part I,Item 1A.of this Annual Report on Form 10-K.You should carefully consider these risks and uncertainties when investing in our common stock.The principal risks and uncertaintiesaffecting our business include the
39、 following:Science 37 has a limited operating history on which to assess the prospects for Science 37s business,Science 37 hasgenerated limited revenue from sales of Science 37s products and related services,and Science 37 has incurred losses sinceinception.As such,you cannot rely upon its historica
40、l operating performance to make an investment decision regardingScience 37.Science 37 anticipates that it will continue to incur significant losses as it continues to commercialize its existingproducts and services and seeks to develop and commercialize new products and services.Science 37 may need
41、to raise additional funding to strengthen its core business,expand into additional markets,and extendthe reach of its operating system.This additional financing may not be available on acceptable terms,or at all.Failure toobtain this necessary capital when needed may force Science 37 to delay,limit
42、or terminate Science 37s productcommercialization or development efforts or other operations.The potential loss or non-renewal of Science 37s contracts,any delay in its customers clinical trials or non-payment by itscustomers for services that Science 37 has performed,could negatively affect its bus
43、iness,results of operations and financialresults.Science 37 depends entirely on the clinical trial market,and a downturn in this market could cause its revenues to decrease.Science 37 may face political,legal and compliance,operational,regulatory,economic and other risks associated with theinternati
44、onal expansion of its operations that Science 37 does not currently face or that are more significant than in itsdomestic operations.Science 37s business depends on the continued effectiveness and availability of its information systems,including theinformation systems Science 37 uses to provide its
45、 services to its customers,and failures or breaches of these systems maymaterially limit or harm its operations.Science 37 relies on third parties for important products,services and licenses to certain technology and intellectual propertyrights,and there might be problems with such products or serv
46、ices or it might not be able to continue to obtain such products,services and licenses.Failure to comply with data privacy and security laws,regulations,and industry standards could have a material adverseeffect on our reputation,results of operations or financial condition,or have other adverse con
47、sequences.Science 37 incurs significant costs and obligations as a result of being a recently public company.The market price of our common stock has been and may continue to be highly volatile,and you may lose some or all of yourinvestment.In addition,we may be unable to regain compliance with Nasd
48、aqs continued listing requirements and could bedelisted from Nasdaq.Volatility in our share price could subject us to securities class action litigation.42025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm5/109TABLE OF CONTENTSPart IItem 1.
49、BusinessCorporate History and BackgroundOn October 6,2021(the“Closing Date”),Science 37 Holdings,Inc.,a Delaware corporation(formerly named LifeSciAcquisition II Corp.or“LSAQ”,a publicly traded special purpose acquisition company)consummated a merger pursuant to theAgreement and Plan of Merger(the“M
50、erger Agreement”),dated May 6,2021,by and among LifeSci Acquisition II Corp.,LifeSciAcquisition II Merger Sub,Inc.,a Delaware corporation and a wholly owned subsidiary of LifeSci Acquisition II Corp.(“MergerSub”),and Science 37,Inc.,a Delaware corporation(“Legacy Science 37”).Pursuant to the terms o
51、f the Merger Agreement,a business combination between LifeSci Acquisition II Corp.and Legacy Science37 was effected through the merger of Merger Sub with and into Legacy Science 37,with Legacy Science 37 remaining as thesurviving company and a wholly-owned subsidiary of LifeSci Acquisition II Corp.(
52、the“Merger”and collectively with the othertransactions described in the Merger Agreement,the“Business Combination”).On the Closing Date,LifeSci Acquisition II Corp.changed its name to Science 37 Holdings,Inc.(the“Company”or“Science 37”).Unless the context otherwise requires,references to“we,”“us,”“o
53、ur,”and“the Company”are intended to mean the business andoperations of Legacy Science 37 prior to the Business Combination and to Science 37 Holdings,Inc.following the closing of theBusiness Combination.Our common stock is listed on the Nasdaq Stock Market under the symbol“SNCE.”OverviewFounded in 2
54、014,Science 37 pioneered the concept of patient-centric clinical trials with a very simple premise:that clinical trialsshould begin with the patient.Through its patient-centric approach,Science 37 reduces the impact of the geographic barriers associated with conventionalphysical clinical trial sites
55、,enabling recruitment of virtually any patient.Science 37 believes that centering the clinical trial around thepatient with personalized support addresses current industry needs around patient recruitment,retention,representation,andengagement.To expand clinical trial access Science 37 offers a uniq
56、ue model to existing non-research focused healthcare networks toseamlessly participate without the traditional site infrastructure costs.Science 37s patient-centric model is powered by a proprietary end-to-end unified technology platform and its team ofapproximately 460 employees with significant th
57、erapeutic and subject matter expertise.As the backbone of Science 37s offering,theproprietary unified technology platform standardizes and orchestrates the process for clinical trials across Science 37s specializednetwork of patient communities,telemedicine investigators,flexible mobile nurse networ
58、ks,remote coordinators,and robust networkof technology integrations.Our MarketScience 37 is addressing a market that it believes is ripe for disruption,with the clinical trial model having been largelyunchanged over the past 60 to 90 years.The traditional clinical trial model relies on a network of
59、physical clinical research sites fortrial execution,requiring patients to travel to a site for each visit.Due to geographical limitations of centralized sites,only anestimated 8%of patients are approached to join a clinical trial because most do not live near a participating research site.About 30%o
60、f the patients recruited do not complete the full study.In addition to increased patient burden,the site-centric traditional clinical trialhas given rise to a myriad of operational challenges,including slow start up,poor enrollment,high patient drop-out rates,and lack ofdiversity,all of which negati
61、vely impact timelines to launch life-saving drug treatments for patients.In the end,approximately 80%oftrials experience delays,94%of them greater than one month,resulting in prolonged timelines of up to 13 years to launch drugtreatments globally.Global annual research and development spending has i
62、ncreased from$52.1 billion in 2000 to current annual spending ofapproximately$252 billion,growing at a 7.1%compounded annual growth rate(“CAGR”).Based on its management teamsexperience and knowledge of this market,Science 37 estimates that approximately 52%of this spending will be outsourced,resulti
63、ngin a serviceable available market of approximately$131 billion.Science 37 expects this serviceable available market(“SAM”)togrow at an approximate 6%CAGR over the next five years.See“Risk Factors Risks Related to the General Economic andFinancial Market Conditions and the Industries in which Scien
64、ce 37 Operates Science 37s estimate of the market size for itsproducts and services may prove to be inaccurate,and even if the market size is accurate,there can be no assurance that its businesswill serve a significant portion of the market.”52025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/e
65、dgar/data/1819113/000181911323000009/snce-20221231.htm6/1092025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm7/109TABLE OF CONTENTSOur Competitive StrengthsScience 37 continues to be a leader in patient-centric clinical trials and in suppo
66、rting novel approaches to decentralized clinicaltrial(“DCT”)designs.Science 37 is uniquely positioned with its proprietary end-to-end technologies and services to orchestratepatient centric trial execution.We also believe that Science 37 has more scale and experience in managing patient centric clin
67、ical trialsthan any other company,having executed more than 135 clinical trials with approximately 650,000 patients engaged to date.Bybringing research to patients and providers more directly,Science 37 unlocks access to patients previously left out of trialopportunities,resulting in faster patient
68、enrollment,improved patient retention,and increased representation of diversity in trialpatient populations,all of which enables sponsors to accelerate the development of potentially life-saving treatments through fasterstudy timelines.Compared to the traditional site-centric model,Science 37 has be
69、en able to initiate clinical trials up to 2.5 times faster,recruit patients up to 21 times faster and demonstrate patient retention at up to 26%higher rates.Additionally,enrollment through Science 37 has resulted in up to three times more diverse participant pools,better representingthe real world p
70、opulation.As the commercial value of a drug is highest prior to its patent expiry date,these efficiency gains are criticalto maximizing the commercial value of a sponsors clinical pipeline.The strengths of Science 37s offerings lie in its highly configurable unified technology platform combined with
71、 its centralizedpatient recruitment capabilities and specialized network of patient communities.Unified Technology Platform:Science 37s full-stack technology platform is purpose-built for patient-centric clinical trialexecution and is designed to provide an end-to-end,single stop solution.The platfo
72、rm enables modern,digital clinicalresearch workflows by unifying the experience for all stakeholders,including the patients,investigators,nurses,studycoordinators and sponsors,resulting in a standardized approach to evidence generation and harmonized clinical trial data.The configurable,pre-defined
73、workflows ensure that patients and remote clinical trial teams remain in sync,empoweringstandard operating processes that facilitate compliance and consistency.Science 37s powerful data capture tools aredesigned to provide flexibility to support complex evidence generation.Virtually any assessment t
74、hat is performed on papercan be digitized into Science 37s platform.Once captured,data is automatically loaded into the platform with compliantaudit trails and reporting for close monitoring throughout the study.Science 37 believes that its technology platform providesa common data infrastructure th
75、at enables the harmonization of data,both for internal monitoring and management as well asexternal data flows.Open Application Programming Interface allows for the structured exchange of data in nearly real-time,including Electronic Data Capture and Electronic Health Record integrations.Architectur
76、ally,Science 37s platform is cloud-based and multi-tenant with appropriate data segregation.Availability,scalability,and security are fundamentalcharacteristics of the architecture.Centralized Patient Recruitment:Science 37 uses diversified,multi-channel programs to identify patients who fit the pro
77、filefor each of its projects.This includes Science 37s database of opted-in individuals interested in clinical research.Digitalmedia supports the targeting of the right messages for the right audience at the right time and Science 37 uses artificialintelligence and machine learning to target its out
78、reach to attract individuals who are the most likely to participate in thestudy.Additionally,Science 37 partners with its global network of healthcare providers to identify and recruit participantsbased on medical criteria.Through Science 37s network it identifies specific providers who are best sui
79、ted to bring onpotentially eligible participants,and works hand in hand through the recruitment process.Finally,Science 37 has a series ofpartnerships that help ensure that it targets patients through trusted channels.This includes partnerships with large nationalpharmacies,labs and health plans who
80、 have well-established processes to refer highly qualified participants to clinicalresearch studies,as well as large digital health portals with access to broad audiences.Identifying patients is only thebeginning of the journey.Science 37s team of patient engagement coordinators strives for 100%foll
81、ow-up across allchannels to maximize the capture rate of its recruitment efforts.Specialized Networks:Science 37s networks of patient communities,telemedicine investigators,mobile nurses,and remotecoordinators are designed for the purpose of orchestrating patient-centric clinical trials.Science 37 b
82、elieves that thesenetworks are unique in the patient-centric clinical trial delivery space,and Science 37 has developed Standard OperatingProcedures(“SOPs”)and comprehensive training on its proprietary methods of trial conduct.The power of Science 37snetworks is unlocked by its technology platform,w
83、hich is designed to enable a unified clinical trial experience.Science 37snetworks continue to grow globally and across therapeutic areas to enable increasingly complex patient-centric clinical trialdesigns.62025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/00018191132300000
84、9/snce-20221231.htm8/109TABLE OF CONTENTSExtensive Configuration:Science 37s unified technology platform is highly configurable to support virtually any phase ofclinical study and any therapeutic area.Science 37s deep experience in executing patient-centric clinical trials enables it toquickly confi
85、gure its technology to meet the specific needs of each customer.Our Growth StrategyScience 37s growth strategy is focused on leveraging our strengths to capture opportunities in the rapidly evolving clinical trialindustry.By continuing to innovate our unified technology platform,we aim to enhance ou
86、r competitive advantage and deliver valueto our clients through shorter clinical research timelines.Our goal is to expand our customer base and therapeutic portfolio whileestablishing a strong presence in key international markets.Also,we also plan to expand our strategic partnerships with ClinicalR
87、esearch Organizations(“CROs”)and tap into their therapeutic expertise,customer base,and distribution channels to reach newcustomers.Furthermore,we plan to enter the real-world evidence(“RWE”)vertical,leveraging our expertise in novel approaches to datacollection and analysis to provide actionable in
88、sights and support decision making for our customers.Our offerings are versatile andcan be applied to a range of customer sizes and therapeutic areas,making them accessible to a wide range of organizations globally.Science 37s focused growth strategy is centered around the aforementioned ideas,with
89、patient accessibility to research serving as thefoundation:1.Expanding our Innovative Unified Technology Solution to Revolutionize Clinical Trial Execution:We are committed topushing the boundaries in the speed and efficiency of clinical trial execution.To achieve this,we have developed a cutting-ed
90、ge,unified technology solution to power the decentralization of clinical research.The unified technology platform hasalready demonstrated its ability to streamline clinical workflows and simplify the capture of clinical data,while also reducingthe time and costs associated with traditional processes
91、.Given the significant impact that unified technology has had on theindustry,we will continue investing in our unified technology platform.Our focus on innovation will enable us to furtheroptimize our platform and deliver even greater value to our clients.Through continued investment,we expect to ac
92、hieve anumber of key benefits,including:a.Accelerated recruitment:Our unified technology solution leverages data to support more efficient and effectivepatient recruitment.This will help us to reduce the time and costs associated with clinical trial execution,while alsoincreasing the reach and impac
93、t of our trials.b.Streamlined clinical workflows:By removing redundant processes and simplifying clinical workflows,our unifiedtechnology solution will help to reduce the time and effort required to complete clinical trials.This will result infaster and more accurate data capture,as well as a more s
94、eamless experience for trial participants.c.Increased enterprise value:Our investment in our unified technology platform will help to drive the growth andefficiency of delivery.As we continue to deliver our unique value proposition to clients,we expect to attract newbusiness and retain existing clie
95、nts,driving increased revenue and profitability over time.Our focus on innovation and our commitment to expanding our unified technology solution is a key part of our strategy todrive growth.We believe that this investment will position us well for future growth.2.Deepen Existing Client Relationship
96、s:The COVID-19 pandemic has significantly impacted the clinical research industryas traditional sites and site management organizations(“SMOs”)are struggling to recruit and enroll patients to the sameextent as pre-pandemic levels.This has led trial sponsors to seek innovative solutions to bring thei
97、r innovative therapies to awider patient population.We intend to capitalize on this opportunity by expanding relationships with our existing clients.Wewill do this by increasing the scope of patient enrollment in our existing study portfolio and working collaboratively withsponsors to identify areas
98、 where we can support their recruitment and enrollment efforts.Our approach to patient-centricclinical trials sets us apart from our competitors and enables us to deliver best-in-class execution.We believe that byconsistently delivering on our promise,we can meaningfully increase the scope of enroll
99、ment in existing studies and generaterepeat business for new studies with existing clients.3.Expand Our Client Base:The clinical research industry is facing a significant challenge as a large number of clinical trialsare unable to meet their recruitment timelines.To address this issue,sponsors are e
100、xploring alternative methodologies toexpand patient access to clinical trials.We aim to capitalize on this demand by targeting new customers who have portfoliosthat can benefit from our innovative offerings.Our offerings have been specifically designed to address the recruitmentchallenges faced by t
101、rial sponsors,specifically,our delivery track record demonstrates that we have consistentlyoutperformed recruitment benchmarks in comparison to72025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm9/109TABLE OF CONTENTStraditional clinical tr
102、ials.Our offerings are versatile and can be applied to a range of customer sizes and therapeutic areas,making them accessible to a wide range of organizations.While our offerings are suitable for early stage biopharmaceuticalcompanies and large pharmaceuticals,we will continue to concentrate on larg
103、er pharmaceutical companies who have thepurchasing power to drive repeat bookings.This focus will help us to maximize our revenue potential,drive long-termgrowth and provide significant repeatable value to our customers.4.Expand Strategic Partnerships with Contract Research Organizations(CROs):CROs
104、play a crucial role in the clinicalresearch industry as they are heavily relied on by industry sponsors as key outsourcing partners.CROs witness a substantialvolume of deal flow each year,making them a valuable resource in the clinical research space.We offer a unique solution toCROs,which enables t
105、hem to broaden patient access and either meet or surpass enrollment timelines for trial sponsors.Webelieve that CRO strategic partnerships are a crucial aspect of our growth strategy as they provide us with access to theirtherapeutic expertise,customer base,and distribution channels.CRO strategic pa
106、rtnerships will enable us to reach newcustomers and benefit to our company and serve as a foundation for continued growth.5.Continue International Expansion:As regulations permit,we believe there is an opportunity to further penetrate the globalclinical trial ecosystem with our unique patient-centri
107、c offering.Our goal is to expand our reach into key internationalmarkets and increase our customer base.Our offering is versatile and can be adapted to meet the needs of a diverse range oforganizations and therapeutic areas.We have carefully evaluated the international market and are confident in ou
108、r ability toestablish a strong presence and build long-lasting global relationships with customers.This expansion will not only provideus with new growth opportunities,but it will also increase our brand recognition and help us to reach new customers.We arecommitted to delivering value to our custom
109、ers and believe that international expansion will play a crucial role in achievingthis goal.6.Further Expansion into Adjacent Verticals:RWE is becoming increasingly important in the clinical research landscape,providing valuable insights into the real-world effectiveness and safety of treatments.As
110、a clinical trial company,we have awealth of experience and expertise in the collection and analysis of clinical data.Our expansion into RWE will allow us tocomplement our clinical trial offerings and provide a more comprehensive solution for our customers.We will leverage ourexisting capabilities an
111、d build upon our existing relationships to bring real-world data to life and deliver actionable insightsto our customers.The RWE market is growing rapidly and presents a significant opportunity for our company.Our expansioninto this vertical will allow us to tap into new customer segments and therap
112、eutic areas,increase our revenue streams anddrive growth.Our goal is to become a leading provider of RWE decentralized technology and services,delivering high-quality data to our customers that enables informed decision-making.We believe that our expansion into the RWE verticalwill position us well
113、for future growth and success.Our experienced team,combined with our innovative approach to datacollection and analysis,will allow us to deliver exceptional results for our customers.Our OfferingsScience 37 derives its revenue primarily from two sources:(i)contractual arrangements to enable and enha
114、nce clinical trialsthrough technology and/or services(Full DCT and Metasite),and(ii)licensing of its proprietary Technology Platform to a variety oflife science institutions.Science 37 focuses on four offerings,all with Science 37s unified technology platform serving as thefoundation:1.Full Decentra
115、lized Clinical Trial.In this offering,Science 37 is the sole provider delivering for a sponsor.Science 37 isperforming the entire clinical trial on its technology platform,including orchestrating all the visits and activities.2.Metasite.In this case,Science 37 acts as a virtual site to supplement a
116、network of traditional sites.Science 37 leverages itstechnology platform and orchestrates the clinical trial but is responsible for only a portion of the total patients associated witha clinical trial.3.Hybrid Clinical Trials.In this offering,Science 37 leverages its virtual site technology and serv
117、ices to digitize a portion ofthe visits conducted on a trial,enabling sponsors and CROs to conduct hybrid trials with portions of the trial visits beingconducted virtually.4.Technology.Science 37 is not conducting the trial,nor is it a Metasite,but configures the technology to support patientengagem
118、ent,remote eConsent,eSource(eCOA,eCRF),telemedicine and/or third party integrations as part of a broader trialsolution.Science 37 has a Software-as-a-Service(“SaaS”)option should the sponsor or CRO wish to deploy the technologythemselves.82025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar
119、/data/1819113/000181911323000009/snce-20221231.htm10/109TABLE OF CONTENTSCustomersThe configurability of the Science 37 offerings allows Science 37 to meet the needs of each customer in a customized manner.Science 37s platform accounts for the trial design,number of participants,therapeutic area,stu
120、dy complexity and use of home visitsand electronic assessments for remote data capture.Science 37 is recognized as the leader in patient-centric clinical trial solutionsamong its customers,providing a leading offering,rooted in strong experience,and an architect of the future clinical trial design.S
121、cience 37s customers consist of large and mid-sized pharmaceutical companies,biotech customers,CROs as well as academicinstitutions.For the year ended December 31,2022,one customer individually represented greater than 10%of revenue.For the yearended December 31,2021,three customerseach individually
122、 represented greater than 10%of revenue.The majority of Science 37s contracts with its customers range in duration from a few months to several years.Science 37generally receives compensation based on measuring progress toward completion using anticipated project budgets and direct laborand prices f
123、or each service offering.In addition,in certain instances,a customer contract may include forms of variable considerationsuch as incentive fees,volume rebates or other provisions that can increase or decrease the transaction price.This variableconsideration is generally awarded upon achievement of c
124、ertain performance metrics,program milestones or cost targets.Most ofScience 37s contracts can be terminated by the customer without cause with a 30-day notice.In the event of termination,Science 37scontracts generally provide that the customer pay Science 37 for:(i)fees earned through the terminati
125、on date;(ii)fees and expensesfor winding down the project,which include both fees incurred and actual expenses;(iii)non-cancellable expenditures;and(iv)insome cases,a fee to cover a portion of the remaining professional fees on the project.CompetitionScience 37 competes at the intersection of compan
126、ies that orchestrate clinical trials and companies with technology to support theorchestration of clinical trials.Along the clinical trial orchestration dimension,the primary market participants are CROs,Sites,and site network commonlyreferred to as Site Management Organizations or SMOs.CROs are typ
127、ically engaged by trial sponsors to manage and facilitate the full trial.CROs then contract with Sites and SMOs toenroll and manage patients along the trials schedule of assessments.To ensure quality and compliance CROs send monitors sitemonitors called Clinical Research Associates to the Sites or S
128、MOs physical locations to ensure quality and compliance in accordancewith good clinical practices(“GCP”).While some CROs refer to Science 37 as a competitor,Science 37 views CROs as partners and asales channel.Sites and SMOs predominantly execute traditional clinical trials where a patient is requir
129、ed to come to the physical location forall the visits outlined on the schedule of assessments.The current method of executing at a traditional site or SMOs requires a set ofSOPs that are custom fit for each sites operations and are largely heterogeneous from other sites.Due to the heterogeneous natu
130、re ofthese SOPs sponsors require CROs to monitor traditional Site and SMOs operations for quality and compliance.Alternatively,Science37s approach to patient-centric clinical trials requires a significantly different set SOPs than those that are utilized at a traditional siteor SMOs.The set of propr
131、ietary SOPs outline processes for conducting patient-centric clinical trials utilizing Science 37s proprietarytechnology platform to execute clinical trials in compliance with GCP.Science 37s SOPs enables CROs to leverage Science 37sofferings to help manage the shift in the industry to more patient-
132、centric,remote,and decentralized trials.Alternatively,eClinical companies are focused on making the traditional site model more efficient.Many of these companieshave unique capabilities that can plug into Science 37s technology stack and,as such,have become partners,including physIQ Inc,Signant Heal
133、th,ERT and Ai Cure.There are emerging players that have less developed orchestration and technology capabilities that are trying to emulate theScience 37 model;however,they are several years behind Science 37 and do not possess the same scale.Social ResponsibilitySocial responsibility is core to Sci
134、ence 37s mission-oriented corporate culture.Science 37 was founded to address structuralhurdles in todays clinical landscape that drive low patient and provider participation and result in slow timelines in getting life-changing therapies to market.Science 37s model is designed to empower the patien
135、t while deeply engaging the clinical trial team ofinvestigators,nurses,and coordinators,in order to disrupt the traditional trial delivery system and ultimately drive better outcomes.92025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm11/10
136、9TABLE OF CONTENTSScience 37 is committed to a culture that embraces the diversity and privacy of our patients and the communities we serve,aswell as our employees and directors,and committed to act as a good corporate citizen in the governance of our company.Science 37empowers diversity in clinical
137、 trials.We make clinical research more accessible to underserved populations to enable representation ofreal-world populations.Diverse audiences want to participate in clinical trials but so often,are not asked,overlooked,or unable toaccess because of geographic barriers.Science 37s proprietary end-
138、to-end unified technology platform enables universal access topatients and providers,leading to a more diverse patient population.Leveraging such technology platform,Science 37s Diversity inClinical Trials business units mission is to collaborate with patients,employees,sponsors,and community organi
139、zations who shareour vision of eliminating health disparities in underrepresented communities through our patient-centered hybrid and decentralizedclinical trial approach.Science 37 is further committed to a culture that embraces the diversity and privacy of our patients and the communities we serve
140、,as well as our employees and directors,and is committed to act as a good corporate citizen in the governance of our company.Culture and EmployeesAs of December 31,2022,Science 37 had approximately 460 full-time employees.Science 37 also maintains flexibility instaffing through use of contractors an
141、d consultants.Science 37s employees are integral to the success of the Company.With theirsupport,Science 37 has built a work environment based on mutual trust,high collaboration and inclusion,which providesopportunities for continued growth and exceptional performance.Science 37 believes that its co
142、mmitment to building a great companycentered around its people has accelerated its path in disrupting the status quo.Science 37 recruits new employees that wish to pursue its mission to democratize clinical research,enabling it as a care option foreveryone,everywhere.Equally,Science 37 looks for emp
143、loyees who are passionate in the pursuit of its vision to democratize clinicalresearch by enabling universal access for patients.Science 37 holds itself to four core values to guide its actions:Intentional Focus:Science 37 has a clear North Star in its mission and vision.Science 37 is explicit regar
144、ding the market itis pursuing and in its value proposition to address that market.Science 37s employees are given SMART(Specific,Measurable,Attainable,Relevant and Time-Bound)goals on which to base their activities,and are intentional about focusingon ways to deliver efficiently.Breaking Barriers:Sc
145、ience 37s commitment to breaking barriers every day has resulted in creative thinking and a persistentpursuit of new,robust solutions across process,technology,partnerships and organizational design that enable Science 37 topush the boundaries of the status quo.Science 37s employees think differentl
146、y,are empowered to make decisions andachieve transformational results.Making a Difference:Making a difference captures the action-mindedness of Science 37s culture.It embodies the constantpursuit of better outcomes through commitment,sweating the details,ensuring clear lines of accountability,and ad
147、ding apersonal touch that builds better relationships.It is a pursuit of excellence,not only by each individual themselves,but alsosupporting colleagues to help everyone reach higher standards,all of which creates a virtuous cycle toward better outcomes.Gratitude and Respect:Most importantly,Science
148、 37s leaders,managers,and individual contributorstake the time to say“thank you”for a job well done,for bold decision making and for supporting each other in the pursuit of its common goals.Science 37 treats others how it would like to be treated,and promotes gratitude and respect in all its interac
149、tions with itscustomers,its patients,and one another.Science 37 has built its culture by recruiting and developing employees who are passionate about the Science 37 mission and itsvalues.Science 37 strongly supports diversity efforts through its hiring process,employee training and awareness,and con
150、tinues tofoster professional growth opportunities within its diverse employee base.Science 37 has a collaborative and supportive remote workenvironment that encourages retention and engagement.Science 37 is a performance-driven environment,and provides employees with goals and objectives aligned wit
151、h drivingcustomer success and shareholder value.Science 37 has a competitive pay practice,including performance-based awards for thepurpose of attracting,retaining and motivating employees,executive officers and directors.None of Science 37s employees arerepresented by a labor union,and it has never
152、 experienced a work stoppage.102025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm12/109TABLE OF CONTENTSQualityScience 37 is profoundly dedicated to providing the highest level of clinical and operational quality.In Science 37s culture ofq
153、uality,every employee is dedicated to protecting and improving the experience of all stakeholders(patients,providers,CROs,sponsors and more)in clinical research.Quality is woven into every step-what Science 37 calls the Science 37 Way-to ensure thattrial planning and conduct meet Science 37s commitm
154、ents to all stakeholders from initial contact of a prospective sponsor to the finalcloseout of a study.Contact to Kickoff:From the moment of first contact with a prospective sponsor through the deal process,and project initiation,Science 37s team of subject matter experts,including medical directors
155、,therapeutic heads,technologists,clinical operations andprocurement,undertake in-depth and detailed solutioning for each project.To minimize risk and ensure confidence and quality,Science 37 accounts for its previous learnings,leveraging its knowledge base around best practices by phase,therapeutic
156、area andprotocol construct.Science 37 conducts risk planning from the onset,outlining assumptions,potential risks,and detailed mitigationplans,which Science 37 corroborates with its customers during a highly formalized kickoff meeting to ensure alignment,minimizeambiguity and forge a partnership in
157、support of quality.Kickoff to Conduct:After a formal kickoff meeting,as Science 37 prepares for project initiation,its cross-functional team worksin lockstep to ensure they plan across every dimension.Science 37 develops project-specific execution plans to ensure alignment andproper escalation paths
158、,and tracks progress against predefined operational and quality metrics.Science 37 leverages tools that reflectits experience in delivery,such as its detailed RACIs responsibility assignment matrices and step-by-step operational flows,whichenable it to startup trials efficiently,in compliance and in
159、 accordance with its customer kickoff discussions.As part of conductreadiness,Science 37 Study Teams undergo training on all its SOPs,International Conference on Council for Harmonization(“ICH”)GCP guidelines,U.S.Food and Drug Administration(“FDA”)regulations,data privacy,diversity and any other app
160、licable topicsrelated to both broader trial conduct and study-specific conduct.Additional periodic training is conducted to ensure comprehension.Science 37 investigators are board-certified in their chosen therapeutic specialties and have appropriate medical licensure andcertifications.All Science 3
161、7 investigators go through rigorous investigator onboarding and training on company SOPs,GCP/ICHguidelines,FDA and other applicable regulations.Similar certification is required of Science 37s nursing network,and similartraining is required across all other trial team roles.Conduct to Closeout:In th
162、e third and final stage,Science 37 follows its detailed SOPs to ensure it stays compliant and can pivotas the trial progresses.Patient safety remains Science 37s top priority.Science 37s policies govern how it operates in all patient-centric touchpoints,particularly in the development of its technol
163、ogy platform and conduct of research;regular training for itsemployees ensures compliance with these processes.Science 37 is governed by a holistic Quality Management System(“QMS”)thatmeets the requirements of 21 CFR 820 Subpart B-Quality System Requirements.As independent oversight,the Science 37 Q
164、ualityand Compliance function develops and executes an Internal Clinical Quality Audit Plan for each study.At the cornerstone of the QMSis the Quality Management Review,during which executive management reviews and discusses the overall health of the QMS.TheQMS is designed to ensure,and seeks to dem
165、onstrate,that any issues encountered are addressed with an appropriate solution.Intellectual PropertyIn the course of conducting its business,Science 37 develops and uses proprietary software,systems,processes,databases andother intellectual property.It seeks to protect its proprietary and confident
166、ial information and trade secrets through confidentialityagreements with employees,customers and other third parties,as well as implementing administrative and technical safeguards toprotect the security of such information and trade secrets.Science 37 also relies on trademark laws to protect its br
167、and,names,andlogos.For example,Science 37 has applied for and/or obtained and maintains registration in the United States and other countries fornumerous trademarks.Science 37 also enters into agreements with third parties for the license and use of their intellectual property,although no one such l
168、icense is considered to be material to the business as a whole.Science 37 does not have any material patents orcopyright;however,in the future,Science 37 may rely on patent and copyright laws,as may be appropriate and applicable,to protectits intellectual property rights.Government RegulationRegulat
169、ion of Clinical TrialsThe biopharmaceutical industry is subject to a high degree of governmental regulation in both domestic and international markets.Regardless of the country or region in which approval is sought,before a marketing application for a product candidate is ready forsubmission to regu
170、latory authorities,the product candidate must undergo rigorous testing in112025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm13/109TABLE OF CONTENTSpre-clinical studies and clinical trials.The clinical trial process must be conducted in ac
171、cordance with the Federal Food,Drug andCosmetic Act in the United States and similar laws and regulations in the relevant foreign jurisdictions.These laws and regulationsrequire the product candidate to be tested and studied in certain ways prior to submission for approval.In the United States,the F
172、DA regulates the conduct of clinical trials of drug products in human subjects,and the form and contentof regulatory applications.The FDA also regulates the development,approval,manufacture,safety,labeling,storage,record keeping,import,export,distribution,advertising,sale,and marketing of drug produ
173、cts.The FDA has similar authority and similar requirementswith respect to the clinical testing of biological products and medical devices.Within the European Union(“EU”),clinical trialrequirements are enforced by the EU Clinical Trial Regulation 536/2014 harmonizing the processes for assessment and
174、supervision ofclinical trials throughout the EU.The evaluation,authorization and supervision of clinical trials are the responsibility of the EUMember States and the European Economic Area(“EEA”).In the United Kingdom(“UK”),clinical trial requirements are enforced bythe Medicines and Healthcare prod
175、ucts Regulatory Agency(the“MHRA”)under the Medicines for Human Use(Clinical Trials)Regulations 2004.Similar requirements also apply in other jurisdictions where Science 37 operates or where its customers intend toapply for marketing authorization.Some of these regulations apply directly to Science 3
176、7,as a clinical trial operator;others apply to Science 37s customers,aspharmaceutical companies,and contractually to Science 37 as their service provider.Clinical trials conducted outside the United States are subject to the laws and regulations of the country where the trials areconducted.These law
177、s and regulations might differ from the laws and regulations administered by the FDA and other laws andregulations regarding the protection of patient safety and privacy and the control of study pharmaceuticals,medical devices or othermaterials.FDA laws and regulations may apply to clinical studies
178、conducted outside the United States if,for example,such studies areconducted under an Investigational New Drug Application(“IND”).It is the responsibility of the study sponsor or the partiesconducting the studies to ensure that all applicable legal and regulatory requirements are fulfilled.Science 3
179、7s services are subject to various regulatory requirements designed to ensure the quality and integrity of the clinicaltrial process.In the United States,Science 37 must perform its clinical development services in compliance with applicable laws,rulesand regulations,including GCP and Good Pharmacov
180、igilance Practice.The industry standard for the conduct of clinical trials isembodied in the FDAs regulations for an Institutional Review Board(“IRB”),investigators and sponsor/monitors,regulationscollectively termed GCP by industry,and the GCP guidelines issued by the ICH of Technical Requirements
181、for Pharmaceuticals forHuman Use,which have been agreed upon by industry and regulatory representatives from the United States,the European Union,and Japan.GCP requirements address,among other things,IRBs,qualified investigators,informed consent,recordkeeping andreporting.Regulatory authorities enfo
182、rce GCP requirements through periodic inspections.Violations of GCP requirements could resultin enforcement actions including the issuance of warning letters,civil penalties,product recalls,criminal prosecutions or debarment,suspension or exclusion from involvement in future clinical trials or the s
183、ubmission of pre-market approval applications.Science 37monitors its clinical trials to test for compliance with applicable laws and regulations in the United States and the foreign jurisdictionsin which it operates.Science 37 has adopted SOPs that are designed to satisfy regulatory requirements and
184、 serve as a mechanism forcontrolling and enhancing the quality of its clinical trials.We have adopted SOPs that are designed to satisfy regulatory requirementsand serve as a mechanism for controlling and enhancing the quality of our clinical trials.In the United States,our procedures weredeveloped t
185、o ensure compliance with GCP and associated requirements.Science 37 must also maintain reports in compliance withapplicable regulatory requirements for each study for auditing or inspection by the customer and regulatory authorities.Prior to commencing human clinical trials,a company developing a ne
186、w drug must file an IND with the FDA or,in the case ofcertain new devices,an Investigational Device Exemption(“IDE”).The IND or IDE must include information about pre-clinical tests,chemistry,manufacturing and control data,and a study protocol for the proposed clinical trial of the drug or device in
187、 humans.If theFDA does not object in writing within 30 days after filing,the IND or IDE becomes effective and the clinical trial may begin.If theFDA determines that there are deficiencies or other concerns with an IND or IDE for which modification is required,the FDA maypermit a clinical trial to pr
188、oceed under a conditional approval.Clinical holds may also be imposed by the FDA at any time before orduring trials due to safety concerns or non-compliance.Submission of an IND or IDE therefore may or may not result in FDAauthorization to begin or continue a clinical trial.A separate submission to
189、an existing IND or IDE must also be made for eachsuccessive clinical trial conducted during product development.Each clinical trial must be conducted in accordance with an effectiveIND or IDE.Clinical studies must be approved by,and conducted under the oversight of an IRB,for each clinical site.The
190、IRB is responsiblefor the initial and continuing review,approval,and monitoring,and may impose additional requirements for the conduct of the study.In some cases,an IND or IDE supplement must be submitted to,and approved by,the FDA before a122025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/ed
191、gar/data/1819113/000181911323000009/snce-20221231.htm14/109TABLE OF CONTENTSsponsor or investigator may make a change to the investigational plan that may affect its scientific soundness,study plan or the rights,safety or welfare of human subjects.The FDA,the IRB,or the sponsor may suspend or termin
192、ate a clinical trial at any time on variousgrounds,including a finding that the study subjects are being exposed to an unacceptable health risk.During a study,the sponsor is required to comply with the applicable FDA requirements,including,for example,trial monitoring,selecting clinical investigator
193、s and providing them with the investigational plan,ensuring IRB review,adverse event reporting,recordkeeping and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them.Theclinical investigators in the clinical study are also subject to FDAs regu
194、lations and must obtain patient informed consent,rigorouslyfollow the investigational plan and study protocol,control the disposition of the investigational device,and comply with all reportingand recordkeeping requirements.In order to comply with GCP and other regulations,sponsors of clinical trial
195、s must,among other things:comply with specific requirements governing the selection of qualified principal investigators and clinical research sites;obtain specific written commitments from the investigators;obtain review,approval and supervision of clinical trials by an IRB or ethics committee;obta
196、in favorable opinion from regulatory agencies to commence a clinical trial;verify that appropriate patient informed consent is obtained before the patient participates in a clinical trial;ensure adverse drug reactions resulting from the administration of a drug or biologic during a clinical trial ar
197、e medicallyevaluated and reported in a timely manner;monitor the quality,validity and accuracy of data;maintain records regarding drug or biologic dispensing and disposition;verify that principal investigators and study staff maintain records and reports;andpermit appropriate governmental authoritie
198、s access to data for review.In operating clinical trials on behalf of sponsors,Science 37 is required,either by contract or direct regulation,to comply withthese requirements as well.Science 37 may be subject to regulatory action if it fails to comply with applicable rules and regulations.Failure to
199、 comply with certain regulations can also result in the termination of ongoing research and disqualification of data collectedduring the clinical trials.If a clinical trial is not conducted in accordance with regulatory requirements,the applicable regulatoryagency may require that a clinical trial b
200、e modified,suspended or terminated,and Science 37 or its customers may be subject to avariety of enforcement actions.For example,violations could result,depending on the nature of the violation and the type of productinvolved,in the issuance of a warning letter;suspension or termination of a clinica
201、l study;refusal of the FDA to authorize a sponsor toproceed under an IND or IDE for a clinical trial;refusal of the FDA to approve marketing applications,or withdrawal of suchmarketing applications;injunction,seizure of investigational products;civil penalties;criminal prosecutions;or debarment from
202、assisting in the submission of new drug applications.IRBs may also suspend or terminate research not conducted in accordance withIRB requirements or that has been associated with unexpected serious harm to subjects.Regulation of Personal InformationScience 37 holds confidential personal health and o
203、ther information relating to persons who have been,are and may in the futurebe involved in clinical trials or otherwise.The collection,possession,retention,use,transmission and disclosure of such information ishighly regulated,both in the United States and the other jurisdictions where Science 37 op
204、erates,and Science 37 is subject to Section5(a)of the Federal Trade Commission Act,the Telephone Consumer Protection Act of 1991 and all regulations promulgatedthereunder,and the Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003,among others.Additionally,Science 37 may b
205、e subject to State-level privacy,security and breach notification and healthcare information laws,including,but notlimited to,the California Consumer Privacy Act of 2018,the California Privacy Rights Act of 2020 and the California Online PrivacyProtection Act.Depending on the services provided,Scien
206、ce 37s operations outside the United States may be subject to privacyregulations and laws such as the EU General Data Protection Regulation(“GDPR”)in the European Union,the UKs data protectionregime consisting primarily of the UK General Data Protection Regulation(the“UK GDPR”)and the UK Data Protec
207、tion Act 2018 orthe Personal Information Protection and Electronic Documents Act(“PIPEDA”)in Canada.Such laws and regulations may placerestrictions or conditions on the export of personal data outside their applicable geographies,and/or impose additional requirements onservice providers.In particula
208、r,the GDPR and UK GDPR include obligations and restrictions concerning the consent and rights of theindividuals to whom the personal data relates,the transfer of personal data out of132025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm15/10
209、9TABLE OF CONTENTSthe EEA or UK(respectively),security breach notifications and the security and confidentiality of personal data.The GDPRauthorizes fines for certain violations of up to 4%of global annual revenue or 20 million,whichever is greater.Additionally,the UKGDPR authorizes fines for certai
210、n violations of up to 4%of global annual revenue or GBP 17.5 million,whichever is greater.European and UK data protection authorities may interpret the GDPR and national laws(including the UK GDPR)differently andimpose additional requirements,which contributes to the complexity of processing persona
211、l data in or from the EEA and/or UK.Guidance on implementation and compliance practices is often updated or otherwise revised.Other RegulationsThe foregoing descriptions do not include an exhaustive list of the laws and regulations governing or impacting our business.Science 37 also must comply with
212、 other related international,federal,state and local regulations that govern the practice of medicine(by trial investigators)and nursing(by mobile research nurses),as well as regulations that apply to employers and businessesgenerally,including,but not limited to,labor and employment and tax laws.An
213、y failure on Science 37s part to comply with applicable regulations could result in the termination of ongoing research,thedisqualification of data for submission to regulatory authorities,fines and other sanctions,as well as liability to Science 37scustomers.Furthermore,any issuance of a notice of
214、finding by a governmental authority against either Science 37 or its customers,based upon a material violation by Science 37 of any applicable regulation,could materially and adversely affect Science 37sreputation and business.See Part I,Item 1A.“Risk Factors”for information regarding how actions by
215、 regulatory authorities orchanges in legislation and regulation in the jurisdictions in which we operate or failure to comply with such legislation and regulationsmay have a material adverse effect on our business.Available InformationOur principal executive offices are located at 800 Park Offices D
216、rive,Suite 3606 Research Triangle Park,North Carolina 27709and our phone number is(984)377-3737.Our website is .We file annual,quarterly and current reports,proxystatements and other information with the Securities and Exchange Commission(the“SEC”).Our SEC filings are available to thepublic over the
217、 internet at the SECs website at www.sec.gov.Our SEC filings are also available free of charge on the InvestorRelations portion of our website at as soon as reasonably practicable after they are filed with or furnished tothe SEC.Our website and the information contained on or through that site is no
218、t,and will not be deemed to be,a part of this AnnualReport on Form 10-K and is not incorporated into any of our filings with the SEC,except where we expressly incorporate suchinformation.All website addresses in this report are intended to be inactive textual references only.Item 1A.Risk FactorsYou
219、should consider carefully the following risk factors,as well as the other information set forth in this report,including ourconsolidated financial statements and the notes thereto.The following discussion of risk factors includes forward-looking statementsand our actual results may differ substantia
220、lly from those discussed in such forward-looking statements.See“Cautionary NoteRegarding Forward-Looking Statements.”The disclosures of a risk should not be interpreted to imply that such risk has not alreadymaterialized.Additional risks not currently known to us or that we currently believe are imm
221、aterial may also impair our business,financial condition,results of operations and cash flows.Risks Related to Science 37s Limited Operating History and Early Stage of GrowthScience 37 has a limited operating history on which to assess the prospects for Science 37s business,Science 37 has generatedl
222、imited revenue from sales of Science 37s products and related services and Science 37 has incurred losses since inception.Science 37 anticipates that it will continue to incur significant losses as it continues to commercialize its existing products andservices and seeks to develop and commercialize
223、 new products and services.Since inception,Science 37 has devoted substantially all of its financial resources to develop its products and related services.Science 37 has financed its operations primarily through the issuance of equity securities.Science 37 has generated limited revenuefrom the sale
224、 of its products and services to date and has incurred significant losses.Science 37 has incurred net losses for each of theyears ended December 31,2022 and 2021,respectively.Science 37s accumulated deficit as of December 31,2022 was$253.1million.These losses and accumulated deficit reflect the subs
225、tantial investments Science 37 made to acquire new clients and partnersand to develop its proprietary unified technology platform.Science 37s ability to generate revenue and achieve profitability andsustain or increase profitability depends upon its ability to accelerate and expand the commercializa
226、tion of its products and serviceofferings in line with the demand from new partnerships and its business strategy.Science 37 may be unable to achieve any or all ofthese goals.142025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm16/109TABLE
227、OF CONTENTSThe amount of Science 37s future net losses will depend,in part,on sales and on-going development of its products and relatedservices,the rate of its future expenditures and its ability to obtain funding through the issuance of the Companys securities,strategiccollaborations or grants.Sci
228、ence 37 expects to continue to incur significant losses as it continues to commercialize its existingproducts and services and seeks to develop and commercialize new products and services.Science 37 anticipates that its expenses willincrease substantially if and as Science 37 continues to develop it
229、s products and services;continues to build its sales,marketing anddistribution infrastructure to commercialize its products and services;seeks to identify,assess,acquire,license and/or develop otherproducts and services and subsequent generations of its current products and services;seeks to maintai
230、n,protect and expand itsintellectual property portfolio;seeks to attract and retain skilled personnel;and supports its operations as a public company.If Science 37 fails to manage its growth effectively,its business,operating results and financial condition would be adverselyaffected.Science 37 expe
231、cts its revenues,customer count,employee count,product and service offerings,geographies of operation,andcomputing infrastructure needs to all continue to increase in the future.As Science 37 continues to grow,both organically and throughacquisitions,Science 37 must effectively integrate,develop,and
232、 motivate an increasing number of employees,while executing itsgrowth plan and maintaining the beneficial aspects of its culture.Any failure to preserve Science 37s culture could negatively affectits future success,including its ability to attract and retain highly qualified employees and to achieve
233、 its business objectives.Science 37s anticipated future growth may place a significant strain on its management capabilities,administrative andoperational infrastructure,facilities,information technology(sometimes referred to as“IT”)and other resources.Science 37anticipates that additional investmen
234、ts in its computing infrastructure and facilities will be required to scale its operations.Toeffectively manage growth,Science 37 must continue to improve its key business applications,processes and computinginfrastructure,enhance information and communication systems,and ensure that its policies an
235、d procedures evolve to reflect itscurrent operations and are appropriately communicated to and observed by employees.These enhancements and improvements willrequire additional investments and allocation of valuable time,effort and expense.Failure to effectively manage growth could result indifficult
236、y or delays in deploying Science 37s solutions,declines in quality or customer satisfaction,increases in costs,difficulties inintroducing new features or other operational difficulties,and any of these difficulties could adversely impact its business performanceand results of operations.Risks Relate
237、d to Science 37s Business and OperationsScience 37 may experience significant quarterly and annual fluctuations in its results of operations due to a number of factors.Science 37s quarterly and annual results of operations may fluctuate significantly due to a variety of factors,many of which areouts
238、ide of its control.This variability may lead to volatility in Science 37s stock price as investors and research analysts respond toquarterly fluctuations.In addition,comparing Science 37s results of operations on a period-to-period basis,particularly on asequential quarterly basis,may not be meaning
239、ful.You should not rely on Science 37s past results as an indication of its futureperformance.Factors that may affect Science 37s results of operations include,but are not limited to,fluctuations in its quarterly volume ofbookings,fluctuations in its backlog conversion rate,cancellation,scope reduct
240、ions and non-renewals of contracts by its customers,and variability in the types of clinical trials for which Science 37 is awarded contracts.For example,certain clinical trials requiresignificant upfront expenditures by Science 37 for patient recruitment.These expenditures may not always be recoupe
241、d from Science37s customers,which could adversely affect Science 37s revenue and gross margins.The revenue Science 37 derives from thecontracts for such clinical trials could therefore be heavily concentrated in one quarterly period.Booking one or more trials withrevenue heavily concentrated in one
242、quarter could cause a temporary spike in Science 37s quarterly results,which would not berepeated if Science 37 booked fewer or no such trials in subsequent quarters.The foregoing factors are difficult to forecast,and these,as well as other factors,could materially adversely affect Science 37s quart
243、erly and annual results of operations.Science 37 may need to raise additional capital,and such additional capital may not be available on acceptable terms,or at all.Failure to obtain this necessary capital when needed may force Science 37 to delay,limit or terminate Science 37s productcommercializat
244、ion or development efforts or other operations.Science 37s operations have consumed substantial amounts of cash since inception.Science 37 expects to expend substantialadditional amounts to strengthen its core business,expand into additional markets,and extend the reach of its operating system.Scien
245、ce 37 may require additional capital to expand the commercialization of Science 37s existing152025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm17/109TABLE OF CONTENTSproducts and services and to develop new products and services.In additi
246、on,Science 37s operating plans may change as a result ofmany factors that may currently be unknown to Science 37,and Science 37 may need to seek additional funds sooner than planned.Science 37 cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to it
247、,if at all.Moreover,the terms of any future financing may adversely affect the holdings or the rights of Science 37s stockholders and theissuance of additional securities,whether equity or debt,by Science 37,or the possibility of such issuance may cause the market priceof its common stock to decline
248、.Incurring indebtedness could result in increased fixed payment obligations.The terms of a capitalraising transaction could require Science 37 to agree to stringent financial and operating covenants that could limit its flexibility inoperating its business.Science 37 could also be required to seek f
249、unds through arrangements with collaborative partners or otherwiseat an earlier stage than otherwise would be desirable,and Science 37 may be required to relinquish rights to some of its technologiesor products or otherwise agree to terms that are unfavorable to Science 37,any of which may have a ma
250、terial adverse effect on itsbusiness,operating results and prospects.In addition,raising additional capital through the issuance of equity or convertible debtsecurities would cause dilution to holders of Science 37s equity securities.Science 37s actual operating results may differ significantly from
251、 guidance provided by its management.From time to time,Science 37 may release guidance in its earnings releases,earnings conference calls,or otherwise,regarding itsfuture performance that represent its managements estimates as of the date of release.This guidance,if released,would includeforward-loo
252、king statements and would be based on projections prepared by Science 37s management.Science 37s guidance will notbe prepared with a view toward compliance with published accounting and reporting guidelines,and neither its registered publicaccountants nor any other independent expert or outside part
253、y will compile or examine the projections and,accordingly,no suchperson will express any opinion or any other form of assurance with respect thereto.Guidance will be based upon a number ofassumptions and estimates that,while presented with numerical specificity,are inherently subject to significant
254、business,economic,and competitive uncertainties and contingencies,many of which are beyond Science 37s control and are based upon specificassumptions with respect to future business decisions,some of which will change.Science 37 will generally state possible outcomesas high and low ranges which are
255、intended to provide a sensitivity analysis as variables are changed,but are not intended to representthat actual results could not fall outside of the suggested ranges.The principal reason that Science 37 would release guidance wouldbe to provide a basis for Science 37s management to discuss its bus
256、iness outlook with analysts and investors.Science 37 will notaccept any responsibility for any projections or reports published by analysts.Guidance is necessarily speculative in nature,and it canbe expected that some or all of the assumptions of the guidance furnished by Science 37 will not materia
257、lize or will vary significantlyfrom actual results.Accordingly,Science 37s guidance will only be an estimate of what management believes is realizable as of thedate of release.Actual results will vary from Science 37s guidance and the variations may be material.In light of the foregoing,investors ar
258、e urged to put the guidance in context and not to place undue reliance on any such guidance.Any failure to successfullyimplement Science 37s operating strategy or the occurrence of any of the events or circumstances discussed therein could result in theactual operating results being different from i
259、ts guidance,and such differences may be adverse and material.The potential loss or non-renewal of Science 37s contracts,any delay or halt in its customers clinical trials or non-payment by itscustomers for services that Science 37 has performed,could negatively affect its business and financial resu
260、lts.Science 37 from time to time experiences termination,cancellation and non-renewals of contracts by its customers in the ordinarycourse of business,and the number of cancellations can vary significantly from year to year and could increase in the future.Most ofScience 37s customers for project-ba
261、sed clinical trial services can terminate their contracts without cause upon 30 to 90 days notice.For example,Science 37s cancellation percentage for project-based Phase I through IV trials for the years ended December 31,2022and 2021 was 36.9%and 9.2%,respectively.Science 37s project-based customer
262、s may delay,terminate,or reduce the scope of theircontracts for a variety of reasons beyond Science 37s control,including but not limited to:decisions to forgo or terminate a particular clinical trial,such as the cancellation of a clinical trial related to Covid-19 in lightof the resolution of the p
263、andemic;amendments to a clinical trial protocol and/or the procedures required to support it;lack of available financing,budgetary limits,or changing priorities;actions by regulatory authorities;162025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-2022
264、1231.htm18/109TABLE OF CONTENTSproduction problems resulting in shortages of the drug being tested or other supplies required for the operation of the trial;failure of the drug being tested to satisfy safety requirements or efficacy criteria;unexpected or undesired clinical results,including adverse
265、 side effects caused by our customers product candidates;insufficient patient enrollment in a trial;insufficient investigator recruitment;patient safety concerns;decisions to downsize product development portfolios;dissatisfaction with Science 37s performance,including the quality of services provid
266、ed and its ability to meet agreed uponschedules;shift of business to another life sciences technology provider or to a CRO;decisions to shift from a DCT model to a traditional clinical trial model;product withdrawal following market launch in conjunction with late-phase research;orshut down of Scien
267、ce 37s customers manufacturing facilities.In the event of termination,Science 37s contracts often provide for fees for winding down the study,but these fees may not besufficient for Science 37 to maintain its profit margins,and termination or non-renewal may result in lower resource utilization rate
268、s,including with respect to personnel who Science 37 is not able to place on another customer engagement.Clinical trials can be costly and a material portion of Science 37s revenue is derived from emerging biotechnology and small tomid-sized pharmaceutical companies,which may have limited access to
269、capital.In addition,Science 37 provides services to suchcompanies before they pay Science 37 for some of its services.There is a risk that Science 37 may initiate a clinical trial for acustomer,and the customer subsequently becomes unwilling or unable to fund the completion of the trial.There is als
270、o a risk thatScience 37 could miscalculate the expenses of executing a trial and agree with a customer to execute such trial at a price that provesinsufficient to cover its expenses.In either situation,notwithstanding the customers ability or willingness to pay for or otherwisefacilitate the complet
271、ion of the trial,Science 37 may be legally or ethically bound to complete or wind down the trial at its ownexpense.Because the contracts included in Science 37s backlog can generally be terminated without cause,Science 37 does not believethat its backlog as of any date is necessarily a meaningful pr
272、edictor of future results.In addition,Science 37 may not realize the fullbenefits of its backlog of contractually committed services if its customers cancel,delay,or reduce their commitments under itscontracts with them.In addition,the terminability of Science 37s contracts puts increased pressure o
273、n its quality control efforts,sincenot only can its contracts be terminated by customers as a result of poor performance,but any such termination may also affect itsability to obtain future contracts from the customer involved and others.Science 37 believes the risk of loss or delay of multiplecontr
274、acts is even greater in those cases where Science 37 is party to broader partnering arrangements with global biopharmaceuticalcompanies.Science 37s backlog may not convert to revenue at a predictable rate,or at all.Backlog represents anticipated revenue from contracted new business awards that eithe
275、r have not started or are in process buthave not been completed.Backlog varies from period to period depending upon new business awards and contract modifications,cancellations,and the amount of revenue recognized under existing contracts.Science 37s backlog was$172.9 million and$163.9million at Dec
276、ember 31,2022 and 2021,respectively.Science 37s revenue conversion rate is based on a financial and operationalanalysis performed by its project management teams and represents the level of effort expected to be expended at a specific point intime.Once work begins on a project,revenue is recognized
277、over the duration of the project.Projects may be terminated,reduced inscope or delayed by the customer or delayed by regulatory authorities for reasons beyond Science 37s control.To the extent projectsare delayed,the timing of Science 37s revenue could be affected.In the event that a customer cancel
278、s a contract or reduces the scopeof a contract,Science 37 has no contractual right to the full amount of the revenue reflected in its backlog.The duration of the projectsincluded in its backlog and the related revenue recognition range from a few months to many years.Science 37s backlog may not be17
279、2025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm19/109TABLE OF CONTENTSindicative of its future results,and Science 37 may not realize all the anticipated future revenue reflected in its backlog.A number offactors may affect the realizat
280、ion of its revenue from backlog,including:the size,complexity,and duration of the projects;the cancellation or delay of projects;andchanges in the scope of work during the course of a project.Fluctuations in Science 37s reported backlog levels also result from the fact that it may receive a small nu
281、mber of relatively largeorders in any given reporting period that may be included in its backlog.Revenue recognition on larger,more global projects could beslower than on smaller,less global projects for a variety of reasons including,but not limited to,an extended period of negotiationbetween the t
282、ime the project is awarded to Science 37 and the actual execution of the contract,as well as an increased time frame forobtaining the necessary regulatory approvals.Fluctuations in Science 37s reported backlog levels could also result from a number offactors including,but not limited to,differences
283、in recruiting rates for trials,its entry into new markets or geographies,evolution ofboth its and its competitors technologies,and varying rates of adoption of Science 37s services by clinical sites or investigators,or asa result of its reliance on third parties for various products and services.The
284、 relationship of backlog to realized revenues is indirect and may vary over time.As Science 37 increasingly competes for andenters into large contracts that are more complex in nature,there can be no assurance about the rate at which its backlog will convertinto revenue.A decrease in this conversion
285、 rate would mean that the rate of revenue recognized on contracts may be slower than whatScience 37 has experienced in the past,which could materially and adversely impact its revenue and results of operations on aquarterly and annual basis.Additionally,delayed projects will remain in backlog and wi
286、ll not generate revenue at the rate originallyexpected,which could impair Science 37s cash flows and results of operations in the short-term.Because of these large orders,Science 37s backlog in that reporting period may reach levels that may not be sustained in subsequent reporting periods.If Scienc
287、e 37 is unable to successfully develop and market new services or enter new markets,Science 37s growth,results ofoperations or financial condition could be adversely affected.A key element of Science 37s growth strategy is the successful development and marketing of new services or entering newmarke
288、ts that complement or expand its existing business.As Science 37 develops new services or enters new markets,Science 37 maynot have or may not adequately build the competencies necessary to perform such services satisfactorily,may not receive marketacceptance for such services or may face increased
289、competition.If Science 37 is unable to succeed in developing new services,entering new markets or attracting a customer base for its new services or in new markets,Science 37 will be unable to implement thiselement of its growth strategy,and its future business,reputation and results of operations c
290、ould be adversely impacted.Science 37 may be unsuccessful in achieving broad market education and changing potential customers habits.Science 37s success and future growth largely depend on its ability to increase awareness of the potential benefits of the DCTmodel and of Science 37s operating syste
291、m,and on the willingness of current and potential customers to utilize its operating system.To effectively market Science 37s operating system,Science 37 must educate potential customers,as well as healthcare providers andother participants that interact with potential customers,about the benefits o
292、f using its operating system in lieu of conducting a clinicaltrial through traditional methods.However,Science 37 cannot assure that it will be successful in changing potential customers habitsor that it will achieve broad market education or awareness.Even if Science 37 is able to raise awareness a
293、mong potential customers,they may be slow in changing their habits and may be hesitant to use Science 37s operating system for a variety of reasons,including:lack of experience with Science 37 and its operating system,and concerns that Science 37 is relatively new to the industry;perceived health,sa
294、fety or quality risks associated with the use of a new operating system and applications for clinical trials;existing relationships with clinical investigators;concerns about the privacy and security of the data that patients share with or through its operating system;competition and negative sellin
295、g efforts from competitors,including competing platforms and price matching programs;andperception regarding the time and complexity of using its operating system.182025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm20/109TABLE OF CONTENTSI
296、f Science 37 fails to achieve broad market education of its operating system,or if Science 37 is unsuccessful in changingpotential customers habits,its business,financial condition and results of operations would be adversely affected.Science 37s relationships with existing or potential customers wh
297、o are in competition with each other may adversely impact thedegree to which other customers or potential customers use its services,which may adversely affect its results of operations.The biopharmaceutical industry is highly competitive.Science 37 regularly provides services to biopharmaceutical c
298、ompanieswho compete with each other,and sometimes provides services to such customers regarding competing drugs in development.Science37s existing or future relationships with its biopharmaceutical customers may therefore deter other biopharmaceutical customers fromusing Science 37s products or serv
299、ices,or may result in its customers reducing the scope of services that Science 37 provides to themor seeking to place limits on Science 37s ability to serve other biopharmaceutical industry participants in connection with drugdevelopment activities.If Science 37 is unable to attract suitable patien
300、ts,investigators and mobile nurses for its clinical trials,its clinical developmentbusiness may suffer.The recruitment of patients,investigators and mobile nurses for clinical trials is essential to Science 37s business.Science 37sclinical development business could be adversely affected if Science
301、37 is unable to attract suitable and willing investigators,mobilenurses or patients for clinical trials on a consistent basis.For example,Science 37 has in the past used,and may in the future use,social media as part of its omnichannel approach to marketing and outreach to patients.Changes to these
302、social networking servicesterms of use or terms of service that limit promotional communications,restrictions that would limit Science 37s ability orScience 37s customers ability to send communications through their services,disruptions or downtime experienced by these socialnetworking services or r
303、eductions in the use of or engagement with social networking services by current and potential investigatorsand patients could also harm its business.Even in the absence of such changes or restrictions,it is possible that the marketing methodsScience 37 has chosen to employ may prove ineffective due
304、 to patient preferences or other factors.If Science 37 is unable to engageand enroll sufficient patients or engage investigators and nurses in clinical trials,Science 37 may need to expend additional funds toobtain access to resources or else be compelled to delay or modify the clinical trial plans,
305、which may result in additional costs toScience 37,or to consider termination of ongoing clinical trials,which would result in its failure to convert the related portion of itsbacklog.These considerations might result in Science 37 being unable to successfully achieve its projected development timeli
306、nes,orpotentially even lead Science 37 to consider the termination of development of a product.If Science 37 loses the services of key personnel or is unable to recruit and retain experienced personnel,its business could beadversely affected.Science 37s success substantially depends on the collectiv
307、e performance,contributions and expertise of its personnel,includingsenior management and key personnel,qualified professional,scientific and technical operating staff and qualified salesrepresentatives for its contract sales services.There is significant and increasing competition for qualified per
308、sonnel,particularly thosewith higher educational degrees,such as a medical degree,a Ph.D.or an equivalent degree,or relevant experience in the industry.Inaddition,the departure of Science 37s key employees,or its inability to continue to identify,attract and retain qualified personnel orreplace any
309、departed personnel in a timely fashion,may impact its ability to grow its business and compete effectively in its industryand may negatively affect Science 37s ability to meet financial and operational goals.In addition,ineffective succession planningcould result in unexpected costs,reduced producti
310、vity and/or difficulties with respect to internal processes and controls.We face risks arising from the restructuring of our operations.We have adopted,and may adopt in the future,restructuring plans to improve our operating efficiency and reduce operating costs.Restructuring presents significant po
311、tential risks of events occurring that could adversely affect us,including:actual or perceived disruption of service or reduction in service standards to clients;the failure to preserve supplier relationships and distribution,sales and other important relationships and to resolve conflictsthat may a
312、rise;loss of sales as we reduce or eliminate staffing on non-core services;diversion of management attention from ongoing business activities;and192025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm21/109TABLE OF CONTENTSthe failure to main
313、tain employee morale and retain key employees.Further,any such restructuring would result in charges that,if material,could harm our results of operations and significantlyreduce our cash position.In addition,we may incur certain unforeseen costs once any restructuring activities are implemented,and
314、 wecan give no assurance that any projected cost reductions resulting from our restructuring activities will be achieved within theexpected timeframe,or at all.Because of these and other factors,we cannot predict whether we will realize the purpose andanticipated benefits of these measures and,if we
315、 do not,our business and results of operations may be adversely affected.Additionally,there may be delays in implementing planned restructuring activities or a failure to achieve the anticipated levels ofcost savings and efficiency as a result of the restructuring activities,each of which could mate
316、rially and adversely impact our businessand results of operations.Further restructuring or reorganization activities may also be required in the future beyond what is currentlyplanned,which could further enhance the risks associated with these activities.Science 37s insurance may not cover all of it
317、s indemnification obligations and other liabilities associated with its operations.Science 37 maintains insurance designed to provide coverage for ordinary risks associated with its operations and its ordinaryindemnification obligations.The coverage provided by such insurance may not be adequate for
318、 all claims Science 37 may make ormay be contested by Science 37s insurance carriers.If Science 37s insurance is not adequate or available to pay liabilities associatedwith its operations,or if Science 37 is unable to purchase adequate insurance at reasonable rates in the future,Science 37s business
319、,results of operations,and financial condition may be adversely impacted.Science 37 derives a significant percentage of its revenues from a concentrated group of customers and the loss of one or moremajor customers could materially and adversely affect its business,results of operations or financial
320、 condition.For the year ended December 31,2022,one customer individually accounted for greater than 10%,or$10.6 million,of annualrevenue.The loss of any of Science 37s major customers could have a material adverse effect on its results of operations and financialcondition.Science 37 may not be able
321、to maintain its customer relationships,and its customers may delay payment under,or fail torenew,their agreements with it,and any resulting reduction in the amounts of revenue that Science 37 derives from these customerscould adversely affect Science 37s business,results of operations,or financial c
322、ondition.A significant change in the liquidity orfinancial position of Science 37s customers could also have a material adverse effect on the collectability of its accounts receivable,its liquidity,and its future operating results.Additionally,conducting multiple clinical trials for different custom
323、ers in a single therapeutic class involving drugs with the sameor similar chemical method of action may in the future adversely affect Science 37s business if some or all of the clinical trials arecanceled because of new scientific information or regulatory judgments that affect the drugs as a class
324、,or if industry consolidationresults in the rationalization of drug development pipelines.Similarly,some or all of the clinical trials could be canceled as a result of successful development of other competing drugs;forexample,further clinical development of vaccines to treat COVID-19 or another fut
325、ure pandemic disease could be slowed or canceledif the outbreak of such pandemic is deemed to have been adequately brought under control,such that further clinical development ofvaccines is no longer necessary or desirable.Science 37 has incurred impairment charges for its long-lived assets and may
326、incur further impairment charges,which wouldnegatively impact its operating results.In connection with the preparation of our financial statements for the year ended December 31,2022,we performed a long-livedasset impairment assessment due to sustained declines in the Companys stock price during the
327、 period,and to a lesser extent thedeteriorating market conditions and macroeconomic conditions,such as increasing inflationary pressures and rising interest rates.As aresult of the assessment,we recognized$44.1 million of long-lived asset impairment as of December 31,2022.We review long-lived assets
328、 for impairment if indicators of impairment arise,and should market conditions or macroeconomicconditions stay the same or continue to deteriorate,including further increases in inflationary pressures and interest rates,or a declinein our results of operations,the result of such review may indicate
329、a decline in our long-lived assets requiring additional impairmentcharges.In the event we are required to record an additional non-cash impairment charge to our long-lived assets,such non-cashcharge could have a material adverse effect on our consolidated statements of operations and balance sheets
330、in the reporting period inwhich we record the charge.202025/1/17 18:53snce-20221231https:/www.sec.gov/Archives/edgar/data/1819113/000181911323000009/snce-20221231.htm22/109TABLE OF CONTENTSLitigation and other legal proceedings against Science 37,which may arise in the ordinary course of Science 37s
331、 business,couldbe costly and time consuming to defend.Science 37 is from time to time subject to legal proceedings and claims that arise in the ordinary course of business,such asclaims brought by its customers in connection with commercial disputes and employment claims made by its current or forme
332、remployees.From time to time,third parties have asserted and may in the future assert intellectual property rights to technologies thatare important to Science 37s business and have demanded and may in the future demand that we license their technology.Litigationmay result in substantial costs and m
333、ay divert managements attention and resources,which may seriously harm Science 37sbusiness,overall financial condition and operating results.Risks Related to the General Economic and Financial Market Conditions and the Industries in which Science 37 OperatesScience 37s operations might be affected by the occurrence of natural disasters,pandemics,or other catastrophic events.Science 37 depends on i
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