Science 37 Reports Fourth Quarter and Full Year 2022 Financial Results

Research Triangle Park, N.C., March 6, 2023 — Science 37 Holdings, Inc. (Nasdaq: SNCE), (“Science 37”), the industry-leading Direct-to-Patient Site, today reported its financial results for the quarter and full year ended December 31, 2022.

“Fourth quarter results demonstrated a healthy rebound in bookings and continued efficiency and discipline with our cash resources,” stated David Coman, Chief Executive Officer of Science 37. “We remain confident that our strategy positions us well for profitable revenue growth and shareholder value creation ahead.”

Quarterly Financial Highlights

Annual Financial Highlights

(1)Adjusted gross profit, adjusted gross margin, adjusted net income (loss) and adjusted EBITDA are non-GAAP financial measures. For a reconciliation to the most directly comparable GAAP measure, refer "Reconciliation of GAAP to non-GAAP measures" section included in this press release.

Full Year 2023 Financial Outlook

Science 37 is providing revenue guidance of $55.0 million to $60.0 million and adjusted EBITDA guidance of $(50.0) million to $(48.0) million for the fiscal year ending December 31, 2023.

The foregoing 2023 Financial Outlook statements represent management's current estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

Science 37 has not provided a quantitative reconciliation of adjusted EBITDA guidance to net (income) loss on a forward-looking basis within this press release because the Company is unable, without unreasonable efforts, to provide reconciling information with respect to interest income, depreciation, amortization, stock-based compensation, restructuring costs and change in fair value of the Earn-Out liability, all of which are adjustments to adjusted EBITDA. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, some of which are outside of the Science 37’s control.

Webcast and Conference Call Details

Science 37 will host a conference call today, March 6, 2023, at 8:30 a.m. Eastern Time to discuss its quarter and year ended December 31, 2022 financial results. The call can be accessed by dialing 1-877-269-7751 (toll-free domestic) or 1-201-389-0908 (international) using the conference ID 13736111 or by utilizing the Call me™ feature using this link to request a return call for instant telephone access to the event. The live webcast may be accessed via the investor relations section of the Science 37 website. A replay of the webcast will be available for approximately 90 days.

About Science 37

Science 37 Holdings, Inc.’s (Nasdaq: SNCE) mission is to accelerate clinical research by enabling universal trial access for patients. As a single Direct-to-Patient Site, Science 37 reaches an expanded patient population beyond the traditional site and delivers the recruiting power of up to 20 sites in one with greater patient diversity. Patients gain the flexibility to participate from the comfort of their own home, at their local community provider, or at a traditional site when needed.  The Science 37 Direct-to-Patient Site is powered by a proprietary technology platform, in addition to in-house investigators, mobile nurses, and remote coordinators that drive uniform study orchestration, enabling greater compliance and high-quality data. To learn more, visit www.science37.com, or email science37@science37.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding Science 37’s anticipated growth and profitability, the products offered by Science 37 and the markets in which it operates and revenue and adjusted EBITDA guidance for fiscal year 2023. These forward-looking statements generally are identified by the words “believe,” “can,” “could,” “seek,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “might,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to maintain the listing of Science 37’s securities on Nasdaq, (ii) volatility in the price of Science 37’s securities due to a variety of factors, including changes in the competitive and highly regulated industries in which Science 37 operates, variations in performance across competitors, changes in laws and regulations affecting Science 37’s business and changes in its capital structure, and general economic and financial market conditions, including fluctuations in currency exchange rates, economic instability, and inflationary conditions, (iii) the ability to implement business plans, forecasts, and other expectations, and to identify and realize additional opportunities, (iv) the risk that Science 37 may never achieve or sustain profitability, (v) the risk that Science 37 will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all, (vi) failure to realize anticipated cost savings, and (vii) risks related to the general economic and financial market conditions. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 06, 2023 and in our other documents filed by Science 37 from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Science 37 assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Science 37 does not give any assurance that Science 37 will achieve its expectations.

Use of Non-GAAP Financial Measures and Key Performance Measures

In addition to the financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this press release contains certain non-GAAP financial measures, including adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted net income (loss). A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s financial performance that excludes or includes amounts from the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statements of cash flows of the Company. Please refer to the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures included in this press release and the accompanying tables contained at the end of this release.

The Company defines adjusted gross profit as gross profit excluding stock-based compensation expense. The Company defines adjusted gross margin as gross margin excluding stock-based compensation expense.

The Company defines adjusted net income (loss) (including adjusted diluted earnings per share) as net income (loss) (including diluted earnings per share) excluding transactions that the Company believes are not representative of its core operations, namely: restructuring and other costs; transaction and integration-related expenses; stock-based compensation expense; impairment losses; other income (expense), net; and gain or loss on extinguishment of debt.

EBITDA represents earnings before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA, further adjusted to exclude expenses and transactions that the Company believes are not representative of its core operations, namely: restructuring and other costs; transaction and integration-related expenses; stock-based compensation expense; impairment losses; other income (expense), net; and gain or loss on extinguishment of debt.

Each of the non-GAAP measures noted above are used by management and the Board to evaluate the Company's core operating results because they exclude certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the core operations of the business.

Management believes that adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted net income (loss) are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical periods. In addition, these measures are frequently used by analysts, investors, and other interested parties to evaluate and assess performance.

Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Also, other companies might calculate these measures differently.

This press release also contains certain key performance measures which we use to evaluate our business and results, measure performance, identify trends, formulate plans and make strategic decisions. We believe that the presentation of such metrics is useful to the Company’s investors because they are used to measure and model the performance of companies such as ours. Net bookings represent new business awards, net of contract modifications, contract cancellations, and other adjustments. Net bookings represent the minimum contractual value for the initial planned duration of a contract as of the contract execution date. The minimum fixed fees, upfront implementation fees and technology and support fees are included in net bookings. Estimates of variable revenue for utilization in excess of the contracted amounts is not included in the value of net bookings. Net bookings vary from period to period depending on numerous factors, including customer authorization volume, sales performance and the overall health of the life sciences industry, among others.

Contacts:

INVESTOR RELATIONS:

Steve Halper

LifeSci Advisors

shalper@lifesciadvisors.com

MEDIA INQUIRIES:

Grazia Mohren

Science 37

Email: pr@science37.com

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 Three Months EndedDecember 31, Year EndedDecember 31,
(In thousands, except per share data)2022 2021 2022 2021
Revenue$        15,936 $        20,376 $        70,147 $        59,597
        
Operating expenses:       
Cost of revenue (exclusive of depreciation and amortization)          12,293           16,148           54,278           42,394
Selling, general and administrative          20,432           35,646         103,254           73,122
Impairment of long-lived assets          44,079                 —           44,079                 —
Depreciation and amortization            5,373             2,610           17,942             7,799
Restructuring costs            2,628                 —             2,628                 —
Total operating expenses          84,805           54,404         222,181         123,315
        
Loss from operations         (68,869)          (34,028)        (152,034)          (63,718)
        
Other income (expense):       
Interest income              948                   1             1,695                   3
Sublease income              102               241               820               685
Change in fair value of earn-out liability            1,130          (31,300)           98,730          (31,300)
Other income (expense), net                80               (12)              (289)                 —
Total other income (expense), net            2,260          (31,070)         100,956          (30,612)
Loss before income taxes         (66,609)          (65,098)          (51,078)          (94,330)
Income tax (benefit) expense              (88)                   1               (90)                   1
Net loss$       (66,521) $       (65,099) $       (50,988) $       (94,331)
        
Net loss per share       
Basic and diluted$          (0.57) $          (0.60) $          (0.44) $          (2.89)
Weighted average common shares outstanding:       
Weighted average shares used to compute basic and diluted net loss per share116,398 109,101 115,876 32,679
        
Comprehensive loss       
Net loss$       (66,521) $       (65,099) $       (50,988) $       (94,331)
Foreign currency translation                41                 —               193                 —
Total comprehensive loss$       (66,480) $       (65,099) $       (50,795) $       (94,331)

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 December 31,
(In thousands, except share data)2022 2021
Assets   
Current assets:   
Cash and cash equivalents$        108,091 $        214,601
Accounts receivable and unbilled services, net            10,992             10,699
Prepaid expenses and other current assets             7,121              7,403
Total current assets          126,204           232,703
Property and equipment, net                  —              1,393
Operating lease right-of-use assets                  —              2,086
Capitalized software, net                  —             24,290
Other assets                244                 326
Total assets$        126,448 $        260,798
Liabilities, redeemable convertible preferred stock and stockholders’ equity   
Current liabilities:   
Accounts payable$            7,206 $          12,819
Accrued expenses and other liabilities            11,364             17,073
Deferred revenue             4,606              5,130
Total current liabilities            23,176             35,022
Non-current liabilities:​ ​
Deferred revenue             3,654              2,478
Operating lease liabilities                716              1,322
Other long-term liabilities             1,346              1,477
Long-term earn-out liability                170             98,900
Total liabilities            29,062           139,199
    
Redeemable convertible preferred stock:   
Redeemable convertible preferred stock, $0.0001 par value; 100,000,000 shares authorized, 0 issued and outstanding at December 31, 2022 and 2021                  —                   —
Stockholders’ equity:​ ​
Common stock, $0.0001 par value; 400,000,000 shares authorized, 116,432,029 and 114,991,026 issued and outstanding at December 31, 2022 and 2021, respectively                  12                   11
Additional paid-in capital          350,247           323,666
Accumulated other comprehensive income                193                   —
Accumulated deficit         (253,066)          (202,078)
Total stockholders’ equity            97,386           121,599
Total liabilities, preferred stock and stockholders’ equity$        126,448 $        260,798

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 Year EndedDecember 31,
(In thousands)2022 2021
Cash flows from operating activities:​ ​
Net loss$     (50,988) $     (94,331)
Adjustments to reconcile net loss to net cash used in operating activities:​ ​
Depreciation and amortization        17,942          7,799
Non-cash lease expense related to operating lease right-of-use assets         1,034          1,429
Stock-based compensation        24,562          8,407
(Gain) loss on change in fair value of earn-out liability      (98,730)         31,300
Loss on long-lived asset impairment        44,079              —
Gain on foreign currency exchange rates          (372)              —
Provision for doubtful accounts            529             269
Loss on disposal of fixed assets             —              10
Changes in operating assets and liabilities:   
Accounts receivable and unbilled services          (821)             232
Prepaid expenses and other current assets            282         (6,026)
Other assets            449           (142)
Accounts payable        (6,778)          5,243
Accrued expenses and other current liabilities        (6,545)          7,158
Deferred revenue            652          2,044
Operating lease liabilities          (606)         (1,112)
Other, net          (132)          1,242
Net cash used in operating activities      (75,443)       (36,478)
Cash flows from investing activities:​ ​
Payments related to capitalized software development costs      (31,707)       (19,345)
Purchases of property and equipment          (167)         (1,231)
Net cash used in investing activities      (31,874)       (20,576)
Cash flows from financing activities:​ ​
Proceeds from warrant exercises             —              10
PIPE shares issuance, net of transaction costs             —       184,530
Merger shares issuance, net of transaction costs             —         52,200
Proceeds from stock option exercises            610          1,432
Net cash provided by financing activities            610       238,172
Net (decrease) increase in cash and cash equivalents     (106,510)       181,118
Cash and cash equivalents, beginning of period      214,601         33,483
Cash and cash equivalents, end of period$     108,091 $     214,601
Supplemental disclosures of non-cash activities   
Balance in accounts payable and accrued expenses and other current liabilities, and capitalized stock-based compensation related to capitalized software and fixed asset additions$       (3,412) $       (4,325)
Right-of-use asset obtained in exchange for operating lease liabilities$            — $       (1,305)
Conversion of preferred stock into common stock$            — $   (143,086)
Earn-out shares$            — $      67,600

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Measures

(Unaudited)

The following table provides reconciliation of adjusted gross profit and adjusted gross margin to gross profit and gross margin, the most directly comparable GAAP measures, respectively:

 Three Months EndedDecember 31, Year EndedDecember 31,
(In thousands)2022 2021 2022 2021
Revenue$      15,936    $      20,376    $      70,147    $      59,597   
        
Gross profit$        3,643    $        4,228    $      15,869    $      17,203   
Stock-based compensation (1)$          262    $          499    $        1,743    $          846   
Adjusted gross profit$        3,905    $        4,727    $      17,612    $      18,049   
        
Gross margin22.9 % 20.7 % 22.6 % 28.9 %
Adjusted gross margin24.5 % 23.2 % 25.1 % 30.3 %

The following table provides reconciliation of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:

 Three Months EndedDecember 31, Year EndedDecember 31,
(In thousands)2022 2021 2022 2021
Net loss$       (66,521) $       (65,099) $       (50,988) $       (94,331)
Interest income             (948)                  (1)            (1,695)                  (3)
Depreciation and amortization            5,373             2,610           17,942             7,799
Other (income) expense(2)           (1,312)           31,071          (99,261)           30,615
Stock-based compensation expense            5,138             6,494           24,562             8,407
Impairment of long-lived assets          44,079                 —           44,079                 —
Restructuring costs            2,628                 —             2,628                 —
Transaction related expenses                —             3,185                 —             3,185
Franchise taxes                54               241               284               241
Provision for income taxes               (88)                   1                (90)                   1
Adjusted EBITDA$       (11,597) $       (21,498) $       (62,539) $       (44,086)

(1) Represents the portion of total stock-based compensation recorded within cost of revenues.

(2) For the three months and year ended December 31, 2022, other (income) expense includes a gain of $1.1 million and $98.7 million, respectively, associated with the change in the fair value of the earn-out liability and in each of the three months and year ended December 31, 2021, other (income) expense includes a loss of $31.3 million associated with the change in the fair value of the earn-out liability.

The following table provides reconciliation of adjusted net income (loss) to net income (loss), the most directly comparable GAAP measure:

 Three Months EndedDecember 31, Year EndedDecember 31,
(In thousands)2022 2021 2022 2021
Net loss$       (66,521) $       (65,099) $       (50,988) $       (94,331)
Interest income             (948)                  (1)            (1,695)                  (3)
Other (income) expense(1)           (1,312)           31,071          (99,261)           30,615
Stock-based compensation expense            5,138             6,494           24,562             8,407
Impairment of long-lived assets          44,079                 —           44,079                 —
Restructuring costs            2,628                 —             2,628                 —
Transaction related expenses                —             3,185                 —             3,185
Adjusted net loss$       (16,936) $       (24,350) $       (80,675) $       (52,127)

(1) For the three months and year ended December 31, 2022, other (income) expense includes a gain of $1.1 million and $98.7 million, respectively, associated with the change in the fair value of the earn-out liability and in each of the three months and year ended December 31, 2021, other (income) expense includes a loss of $31.3 million associated with the change in the fair value of the earn-out liability.

Science 37 Reports First Quarter 2022 Financial Results

RESEARCH TRIANGLE PARK, N.C., May 09, 2022 (GLOBE NEWSWIRE) -- Science 37 Holdings, Inc. (Nasdaq: SNCE), (“Science 37”) the Agile Clinical Trial Operating System™, today reported its financial results for the quarter ended March 31, 2022.

"The first quarter of 2022 was marked by continued execution across all of our strategic priorities. We started the year with strong demand for our differentiated, end-to-end platform and revenue growth of 50% year over year. Additionally, we remained laser-focused on driving more cost out of the business," said David Coman, Chief Executive Officer of Science 37. "With our sales pipeline at an all-time high, several imminent new product introductions and rigid cost management, we anticipate that our current cash position is sufficient to support our plans to achieve long-term profitability."

Quarterly Financial Highlights

The decreases in adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted net loss for the quarter ended March 31, 2022, as compared to the quarter ended March 31, 2021, were expected and primarily due to the impact of the two large COVID study cancellations that were discussed on the fourth quarter 2021 earnings call, the planned ongoing investments in the operating system and commercialization of the products to support growth, and the additional cost burden as a result of becoming a publicly-traded company in the fourth quarter of 2021.

(1)Adjusted gross profit, adjusted gross margin, adjusted net loss, and adjusted EBITDA are non-GAAP financial measures. For a reconciliation to the most directly comparable GAAP measure, please refer to "Reconciliation of GAAP to non-GAAP measures" section included in this press release.

Full Year 2022 Financial Outlook

Science 37 is reaffirming its revenue guidance of $86 million to $96 million for the fiscal year ending December 31, 2022. Additionally, Science 37 is providing adjusted EBITDA guidance of $(65) million to $(69) million for the fiscal year ending December 31, 2022.

The foregoing 2022 Financial Outlook statement represents management's current estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

Science 37 has not provided a quantitative reconciliation of adjusted EBITDA guidance to net (income) loss on a forward-looking basis within this press release because the Company is unable, without unreasonable efforts, to provide reconciling information with respect to interest income, depreciation, amortization, stock-based compensation expense, restructuring costs and change in fair value of the Earn-Out liability, all of which are adjustments to adjusted EBITDA. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, some of which are outside of Science 37’s control.

Webcast and Conference Call Details

Science 37 will host a conference call today, May 9, 2022, at 8:00 a.m. ET to discuss its first quarter 2022 financial results. The conference call can be accessed live by dialing (844) 467-7754 for domestic callers or (270) 215-9366 for international callers and referring to Conference ID: 1388417. A live webcast of the conference call will be available in listen-only mode on the “Investor Relations” section of the Company's website at https://investors.science37.com/. An archived copy of the webcast will be available on the website after the call.

About Science 37

Science 37’s mission is to enable universal access to clinical research—making it easier for patients and providers to participate from anywhere and helping to accelerate the development of treatments that impact patient lives. As a pioneer of decentralized clinical trials, the Science 37 Agile Clinical Trial Operating System (OS) supports today’s more agile clinical research designs with its full-stack, end-to-end technology platform and specialized networks of patient communities, telemedicine investigators, mobile nursing, remote coordinators, community providers, and data and devices. Configurable to enable almost any study type, the Science 37 OS enables up to 15x faster enrollment, 28% better retention, and 3x more diverse patient population, as compared to the traditional site-centric clinical trial model, with industry-leading workflow orchestration, evidence generation, and data harmonization. For more information, visit https://www.science37.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the products offered by Science 37, its sales pipeline and the markets in which it operates, and Science 37’s anticipated growth and profitability, projected future results, and revenue and adjusted EBITDA guidance for fiscal year 2022. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to maintain the listing of Science 37’s securities on Nasdaq, (ii) volatility in the price of Science 37’s securities due to a variety of factors, including changes in the competitive and highly regulated industries in which Science 37 operates, variations in performance across competitors, changes in laws and regulations affecting Science 37’s business and changes in its capital structure, (iii) the ability to implement business plans, forecasts, and other expectations, and to identify and realize additional opportunities, (iv) the risk that Science 37 may never achieve or sustain profitability, (v) the risk that Science 37 will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all, and (vi) the potential adverse effects of the ongoing global COVID-19 pandemic. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 22, 2022, and in our other documents filed by Science 37 from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Science 37 assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Science 37 does not give any assurance that Science 37 will achieve its expectations.

Use of Non-GAAP Financial Measures and Key Performance Measures

In addition to the financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this press release contains certain non-GAAP financial measures, including adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted net income (loss). A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s financial performance that excludes or includes amounts from the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statements of cash flows of the Company. Please refer to the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures included in this press release and the accompanying tables contained at the end of this release.

The Company defines adjusted gross profit as gross profit excluding share-based compensation expense. The Company defines adjusted gross margin as gross margin excluding share-based compensation expense.

The Company defines adjusted net income (loss) (including adjusted diluted earnings per share) as net income (loss) (including diluted earnings per share) excluding transactions that the Company believes are not representative of its core operations, namely: restructuring and other costs; transaction and integration-related expenses; share-based compensation expense; other income (expense), net; and gain or loss on extinguishment of debt.

EBITDA represents earnings before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA, further adjusted to exclude expenses and transactions that the Company believes are not representative of its core operations, namely: restructuring and other costs; transaction and integration-related expenses; share-based compensation expense; other income (expense), net; and gain or loss on extinguishment of debt.

Each of the non-GAAP measures noted above is used by management and the Board to evaluate the Company's core operating results because they exclude certain items whose fluctuations from period to period do not necessarily correspond to changes in the core operations of the business.

Management believes that adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted net income (loss) are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical periods. In addition, these measures are frequently used by analysts, investors, and other interested parties to evaluate and assess performance.

Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Also, other companies might calculate these measures differently.

This press release also contains certain key performance measures which we use to evaluate our business and results, measure performance, identify trends, formulate plans and make strategic decisions. We believe that the presentation of such metrics is useful to the Company’s investors because they are used to measure and model the performance of companies such as ours. Net bookings represent new business awards, net of contract modifications, contract cancellations, and other adjustments. Net bookings represent the minimum contractual value for the initial planned duration of a contract as of the contract execution date. The minimum fixed fees, upfront implementation fees and technology and support fees are included in net bookings. Estimates of variable revenue for utilization in excess of the contracted amounts is not included in the value of net bookings. Net bookings vary from period to period depending on numerous factors, including customer authorization volume, sales performance, and the overall health of the life sciences industry, among others.

Contacts:

INVESTOR RELATIONS:
Caroline Paul
Gilmartin Group
investors@science37.com

MEDIA INQUIRIES:
Drew Bustos
Science 37
Phone: (984) 377-3737
Email: pr@science37.com

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

 Three Months Ended March 31,
(In thousands, except per share data) 2022 ​ 2021 
Revenues (including amounts with related parties)$18,686 ​$12,438 
    
Operating expenses:   
Cost of revenues (including amounts with related parties) 15,986 ​ 8,638 
Selling, general and administrative 30,153 ​ 9,164 
Depreciation and amortization 3,469 ​ 1,497 
Total operating expenses 49,608   19,299 
    
Loss from operations (30,922)   (6,861) 
    
Other income (expense):   
Interest income 94 ​ 1 
Sublease income 239 ​ 33 
Change in fair value of earn-out liability 75,500   — 
Other income (expense) (18) ​ 1 
Total other income 75,815   35 
Income (loss) before income taxes 44,893   (6,826) 
Income tax (benefit) expense (1)   — 
Net income (loss)$44,894  $(6,826) 
    
Earnings (loss) per share:   
Basic$0.39  $(1.28) 
Diluted$0.35  $(1.28) 
    
Weighted average common shares outstanding:   
Basic 115,387 ​ 5,319 
Diluted 126,462 ​ 5,319 

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 (unaudited)  
(In thousands, except share data)March 31,
2022		​December 31,
2021
Assets   
Current assets:   
Cash and cash equivalents$179,551 ​$214,601 
Restricted cash — ​ — 
Accounts receivable and unbilled services, net (including amounts with related parties) 10,133 ​ 10,699 
Prepaid expenses and other current assets 7,991 ​ 7,403 
Total current assets 197,675   232,703 
Property and equipment, net 1,374 ​ 1,393 
Operating lease right-of-use assets 1,805 ​ 2,086 
Capitalized software, net 32,122 ​ 24,290 
Other assets 325 ​ 326 
Total assets$233,301  $260,798 
Liabilities, redeemable convertible preferred stock and stockholders’ equity   
Current liabilities:   
Accounts payable$10,764 ​$12,819 
Accrued expenses and other liabilities 14,680 ​ 17,073 
Deferred revenue 5,433 ​ 5,130 
Total current liabilities 30,877   35,022 
Long-term liabilities:   
Long-term deferred revenue 2,030 ​ 2,478 
Operating lease liabilities 1,176 ​ 1,322 
Other long-term liabilities 1,637 ​ 1,477 
Long-term earn-out liability 23,400   98,900 
Total liabilities 59,120   139,199 
    
Redeemable convertible preferred stock:   
Redeemable convertible preferred stock, $0.0001 par value; 100,000,000 shares authorized, 0 issued and outstanding at March 31, 2022 and December 31, 2021, respectively — ​ — 
Stockholders’ equity: ​​
Common stock, $0.0001 par value; 400,000,000 shares authorized, 115,713,623 and 114,991,026 issued and outstanding at March 31, 2022 and December 31, 2021, respectively 12 ​ 11 
Additional paid-in capital 331,353 ​ 323,666 
Accumulated deficit (157,184) ​ (202,078) 
Total stockholders’ equity 174,181   121,599 
Total liabilities, redeemable convertible preferred stock and stockholders’ equity$233,301  $260,798 

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

 Three Months Ended March 31,
(In thousands) 2022   2021 
Operating activities   
Net income (loss)$44,894  $(6,826) 
Adjustments to reconcile net loss to net cash used in operating activities:  ​
Depreciation and amortization 3,469   1,497 
Non-cash lease expense related to operating lease right-of-use assets 281   494 
Stock-based compensation 7,557   225 
Gain on change in fair value of earn-out liability (75,500)   — 
Changes in assets and liabilities:  ​
Accounts receivable and unbilled services, net (including amounts with related parties) 566   2,139 
Prepaid expenses and other current assets (571)   (845) 
Other assets 1   (142) 
Accounts payable (5,294)   (1,954) 
Accrued expenses and other current liabilities (3,255)   (2,213) 
Deferred revenue (145)   525) 
Operating lease liabilities (145)   (216) 
Other, net 159   229) 
Net cash used in operating activities (27,983)   (7,087) 
Investing activities   
Capitalization of software development costs (7,035)   (2,298) 
Purchases of fixed assets (146)   (111) 
Net cash used in investing activities (7,181)   (2,409) 
Financing activities   
Cash received from stock option exercises 114   63 
Net cash provided by financing activities 114   63 
Net decrease in cash, cash equivalents, and restricted cash (35,050)   (9,433) 
Cash, cash equivalents, and restricted cash, beginning of period 214,601   33,483 
Cash, cash equivalents, and restricted cash, end of period$179,551  $24,050 
Supplemental disclosures of non-cash activities:   
Balance in accounts payable and accrued expenses and other current liabilities related to capitalized software and fixed asset additions$(4,101)  $(742) 
Balance in prepaid expenses and other current assets related to stock option exercises$17  $269 

SCIENCE 37 HOLDINGS, INC. and SUBSIDIARIES
Reconciliation of GAAP to NON-GAAP Measures
(Unaudited)

The following table provides reconciliation of adjusted gross profit and adjusted gross margin to gross profit and gross margin, the most directly comparable GAAP measures:

 Three Months Ended March 31,
(In thousands) 2022   2021 
Revenues (including amounts with related parties)$18,686 ​$12,438 
    
Gross profit$2,700  $3,800 
Stock-based compensation expense(2) 514   55 
Adjusted gross profit$3,214  $3,855 
    
Gross margin 14.4%   30.6% 
Adjusted gross margin 17.2%  31.0% 

The following table provides a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:

 Three Months Ended March 31,
(In thousands) 2022   2021 
Net income (loss)$44,894  $(6,826) 
Interest income (94)   (1) 
Depreciation and amortization 3,469   1,497 
Other income(1) (75,721)   (34) 
Stock-based compensation expense 7,557   225 
Transaction related expenses 61   — 
Franchise taxes 52   — 
Provision for income taxes (1)   — 
Adjusted EBITDA$(19,783)  $(5,139) 

The following table provides a reconciliation of adjusted net loss to net income (loss), the most directly comparable GAAP measure:

 Three Months Ended March 31,
(In thousands) 2022   2021 
Net income (loss)$44,894  $(6,826) 
Interest income (94)   (1) 
Other income(1) (75,721)   (34) 
Stock-based compensation expense 7,557   225 
Transaction related expenses 61   — 
Adjusted net loss$(23,303)  $(6,636) 


(1)   Includes a gain of $75.5 million recorded for the quarter ended March 31, 2022, associated with the change in the fair value of the earn-out liability.
(2)   Represents the portion of total stock-based compensation expense recorded within the cost of revenues.

Science 37 Reports Fourth Quarter and Full Year 2021 Financial Results

Research Triangle Park, N.C., March 22, 2022 — Science 37 Holdings, Inc. (Nasdaq: SNCE), (“Science 37”) the Agile Clinical Trial Operating SystemTM, today reported its financial results for the quarter and full year ended December 31, 2021.

“Our impressive financial performance in the fourth quarter and for the full year 2021 reflects our team’s continued strong execution and commitment to expanding patient access and reach of our agile clinical trial offerings,” said David Coman, Chief Executive Officer of Science 37. “As we look ahead to 2022, we expect a sustained market shift toward more decentralization and strong demand for our differentiated Operating System. We are on a clear pathway to growth and long-term profitability as we redefine the future of clinical research; and we are confident that we are well positioned to deliver on our objectives.”

Quarterly Financial Highlights

Annual Financial Highlights

(1) Adjusted Gross Profit, Adjusted Net Loss, and Adjusted EBITDA are non-GAAP financial measures. For a reconciliation to the most directly comparable GAAP measure, refer to the tables at the end of this press release.

Full Year 2022 Financial Outlook

Science 37 is providing guidance for the calendar year ending December 31, 2022 for total revenues between $86 and $96 million.

The foregoing 2022 Financial Outlook statements represent management's current estimates as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

Webcast and Conference Call Details

Science 37 will host a conference call today, March 22, 2022, at 8:00 a.m. ET to discuss its quarter and year ended December 31, 2021 financial results. The conference call can be accessed live by dialing (844) 467-7754 for domestic callers or (270) 215-9366 for international callers and referring to Conference ID: 7188650. A live webcast of the conference call will be available on the “Investor Relations” section of the Company's website at https://investors.science37.com/. An archived copy of the webcast will be available on the website after the call.

About Science 37

Science 37’s mission is to enable universal access to clinical research—making it easier for patients and providers to participate from anywhere and helping to accelerate the development of treatments that impact patient lives. As a pioneer of agile clinical trials, the Science 37 Clinical Trial Operating System (OS) supports today’s more agile clinical research designs with its full stack, end-to-end technology platform and specialized networks of patient communities, telemedicine investigators, mobile nurses, remote coordinators and connected devices. Configurable to enable any study type, the Science 37 OS enables up to 15x faster enrollment, 28% better retention and 3x more people of color, as compared to the traditional site-centric clinical trial model, with industry-leading workflow orchestration, evidence generation and data harmonization. For more information, visit https://www.science37.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the services offered by Science 37 and the markets in which it operates, and Science 37’s anticipated growth, projected future results, and revenue guidance for fiscal year 2022. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to maintain the listing of Science 37’s securities on Nasdaq, (ii) volatility in the price of Science 37’s securities due to a variety of factors, including changes in the competitive and highly regulated industries in which Science 37 operates, variations in performance across competitors, changes in laws and regulations affecting Science 37’s business and changes in its capital structure, (iii) the ability to implement business plans, forecasts, and other expectations, and to identify and realize additional opportunities, (iv) the risk that Science 37 may never achieve or sustain profitability, (v) the risk that Science 37 will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all, and (vi) the potential adverse effects of the ongoing global COVID-19 pandemic. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 22, 2022 and other documents filed by Science 37 from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Science 37 assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Science 37 does not give any assurance that Science 37 will achieve its expectations.

Use of Non-GAAP Financial Measures and Key Performance Measures

In addition to the financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this press release contains certain non-GAAP financial measures, including Adjusted Gross Profit, Adjusted EBITDA and Adjusted Net Income (loss). A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s financial performance that excludes or includes amounts from the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statements of cash flows of the Company. Please refer to the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures included in this press release and the accompanying tables contained at the end of this release.

The Company defines Adjusted Gross Profit as Gross Profit excluding share-based compensation expense.

The Company defines Adjusted Net Income (including adjusted diluted earnings per share) as net income (including diluted earnings per share) excluding transactions that the Company believes are not representative of its core operations, namely: restructuring and other costs; transaction and integration-related expenses; share-based compensation expense; other income (expense), net; and gain or loss on extinguishment of debt.

EBITDA represents earnings before interest, taxes, depreciation, and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to exclude expenses and transactions that the Company believes are not representative of its core operations, namely: restructuring and other costs; transaction and integration-related expenses; share-based compensation expense; other income (expense), net; and gain or loss on extinguishment of debt.

Each of the non-GAAP measures noted above are used by management and the Board to evaluate the Company's core operating results because they exclude certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the core operations of the business.

Management believes that Adjusted Gross Profit, Adjusted EBITDA and Adjusted Net Income (Loss) are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical periods. In addition, these measures are frequently used by analysts, investors, and other interested parties to evaluate and assess performance.

Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Also, other companies might calculate these measures differently.

This press release also contains certain key performance measures which we use to evaluate our business and results, measure performance, identify trends, formulate plans and make strategic decisions. We believe that the presentation of such metrics is useful to the Company’s investors because they are used to measure and model the performance of companies such as ours. Net bookings represent new business awards, net of contract modifications, contract cancellations, and other adjustments. Net bookings represent the minimum contractual value for the initial planned duration of a contract as of the contract execution date. The minimum fixed fees, upfront implementation fees and technology and support fees are included in net bookings. Estimates of variable revenue for utilization in excess of the contracted amounts is not included in the value of net bookings. Net bookings vary from period to period depending on numerous factors, including customer authorization volume, sales performance, and the overall health of the life sciences industry, among others.

SCIENCE 37 HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)

 Three Months Ended
December 31,		 Year Ended
December 31,
  2021   2020   2021   2020 
Revenues (including amounts with related parties)            $20,376  $11,163  $59,597  $23,704 
        
Operating expenses:       
Cost of revenues (including amounts with related parties) 16,148   11,668   42,394   22,597 
Selling, general and administrative 35,646   10,481   73,122   28,351 
Depreciation and amortization 2,610   1,284   7,799   4,447 
Restructuring Costs —   72   —   772 
Total operating expenses 54,404   23,505   123,315   56,167 
        
Loss from operations (34,028)  (12,342)  (63,718)  (32,463)
        
Other income (expense):       
Interest income 1   1   3   77 
Sublease income (including amounts with related parties) 241   12   685   709 
Change in fair value of earn-out liability (31,300)  —   (31,300)  — 
Other income (expense) (12)  5   —   3 
Total other income (expense) (31,070)  18   (30,612)  789 
Loss before income taxes (65,098)  (12,324)  (94,330)  (31,674)
Income tax expense 1   —   1   — 
Net loss and comprehensive loss$(65,099) $(12,324) $(94,331) $(31,674)
        
Net loss per share:       
Basic and diluted$        (0.60) $        (0.91) $        (2.89) $        (2.13)
        
Weighted average common shares outstanding:       
Weighted average shares used to compute basic and diluted net loss per share 109,100,582   13,473,103   32,679,105   14,869,184 

SCIENCE 37 HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

 December 31,
  2021   2020 
Assets   
Current assets:   
Cash and cash equivalents$214,601  $32,479 
Restricted cash —   1,004 
Accounts receivable and unbilled services, net (including amounts with related parties) 10,699   11,200 
Prepaid expenses and other current assets 7,403   1,365 
Total current assets 232,703   46,048 
Property and equipment, net 1,393   535 
Operating lease right-of-use assets 2,086   2,210 
Capitalized software, net 24,290   8,054 
Other assets 326   184 
Total assets$260,798  $57,031 
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)   
Current liabilities:   
Accounts payable$12,819  $4,402 
Accrued expenses and other liabilities 17,073   8,763 
Deferred revenue 5,130   5,136 
Total current liabilities 35,022   18,301 
Long-term liabilities:   
Long-term deferred revenue 2,478   428 
Operating lease liabilities 1,322   1,128 
Other long-term liabilities 1,477   223 
Long-term earn-out liability 98,900   — 
Total liabilities 139,199   20,080 
    
Redeemable convertible preferred stock:   
Redeemable convertible preferred stock, $0.0001 par value; 100,000,000 and 75,685,626 shares authorized, 0 and 75,495,266 issued and outstanding at December 31, 2021 and 2020, respectively —   143,086 
Stockholders’ equity (deficit):   
Common stock, $0.0001 par value; 400,000,000 and 114,290,527 shares authorized, 114,991,026 and 5,019,582 issued and outstanding at December 31, 2021 and 2020, respectively 11   1 
Additional paid-in capital 323,666   1,611 
Accumulated deficit (202,078)  (107,747)
Total stockholders’ equity (deficit) 121,599   (106,135)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)$260,798  $57,031 

SCIENCE 37 HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

 Year Ended December 31,
  2021   2020 
Operating activities   
Net loss$(94,331) $(31,674)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 7,799   4,447 
Non-cash lease expense related to operating lease right-of-use assets 1,429   1,885 
Stock-based compensation 8,407   122 
Loss on change in fair value of earn-out liability 31,300   — 
Loss on disposal of fixed assets 10   — 
Changes in assets and liabilities:   
Accounts receivable and unbilled services, net (including amounts with related parties) 501   (7,860)
Prepaid expenses and other current assets (6,026)  (226)
Other assets (142)  363 
Accounts payable 5,243   3,832 
Accrued expenses and other current liabilities 7,158   6,782 
Deferred revenue 2,044   632 
Operating lease liabilities (1,112)  (3,607)
Other, net 1,242   (172)
Net cash used in operating activities (36,478)  (25,476)
Investing activities   
Capitalization of software development costs (19,345)  (5,814)
Purchases of fixed assets (1,231)  (352)
Net cash used in investing activities (20,576)  (6,166)
Financing activities   
Proceeds from Series D-1 financing, net of issuance costs —   39,860 
Repurchase of common stock —   (3,675)
Proceeds from warrant exercises 10   — 
PIPE shares issuance, net of transaction costs 184,530   — 
Merger shares issuance, net of transaction costs 52,200   — 
Cash received from stock option exercises 1,432   132 
Net cash provided by financing activities 238,172   36,317 
Net increase in cash, cash equivalents, and restricted cash 181,118   4,675 
Cash, cash equivalents, and restricted cash, beginning of period 33,483   28,808 
Cash, cash equivalents, and restricted cash, end of period$214,601  $33,483 
Supplemental disclosures of non-cash activities:   
Net change in accounts payable and accrued expenses and other current liabilities related to capitalized software and fixed asset additions$(4,325) $(375)
ROU asset obtained in exchange for operating lease liabilities$(1,305) $(4,096)
Conversion of preferred stock into common stock$(143,086) $— 
Earn-out shares$67,600  $— 

SCIENCE 37 HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES
(Unaudited)

The following table reconciles Gross Profit (loss) to Adjusted Gross Profit (loss):

 Three Months Ended
December 31,		 Year Ended
December 31,
(In thousands) 2021  2020   2021  2020 
Gross profit$4,228 $(505) $17,203 $1,107 
Stock-based compensation expense (direct) 499  5   846  (65)
Adjusted gross profit$4,727 $(500) $18,049 $1,042 

The following table reconciles Net Loss to Adjusted EBITDA:

 Three Months Ended
December 31,		 Year Ended
December 31,
(In thousands) 2021   2020   2021   2020 
Net loss and comprehensive loss$(65,099) $(12,324) $(94,331) $(31,674)
Interest income (1)  (1)  (3)  (77)
Depreciation and amortization 2,610   1,284   7,799   4,447 
Other income(1) 31,071   (18)  30,615   (712)
Stock-based compensation expense 6,494   120   8,407   122 
Restructuring costs —   72   —   772 
Transaction related expenses 3,185   —   3,185   — 
Franchise taxes 241   —   241   78 
Provision for income taxes 1   —   1   — 
Adjusted EBITDA$(21,498) $(10,867) $(44,086) $(27,044)

(1) For the three months and year ended December 31, 2021 and 2020, other income includes $31,300 and $0, respectively, of loss associated with the change in the fair value of the earn-out liability.

The following table reconciles Net Loss to Adjusted Net Loss:

 Three Months Ended
December 31,		 Year Ended
December 31,
(In thousands) 2021   2020   2021   2020 
Net loss and comprehensive loss$(65,099) $(12,324) $(94,331) $(31,674)
Interest income (1)  (1)  (3)  (77)
Other income(1) 31,071   (18)  30,615   (712)
Stock-based compensation expense 6,494   120   8,407   122 
Restructuring costs —   72   —   772 
Transaction related expenses 3,185   —   3,185   — 
Adjusted net loss and comprehensive loss$(24,350) $(12,151) $(52,127) $(31,569)

(1) For the three months and year ended December 31, 2021 and 2020, other income includes $31,300 and $0, respectively, of loss associated with the change in the fair value of the earn-out liability.

Contacts:

INVESTOR RELATIONS:

Caroline Paul

Gilmartin Group

investors@science37.com

MEDIA INQUIRIES:

Drew Bustos

Science 37

Phone: (984) 377-3737

Email: pr@science37.com

SCIENCE 37 HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)