|
Item
2.01.
|
Completion
of Acquisition or Disposition of Assets.
|
As described above in Item 1.01 of this Report, on October 4, 2021,
LSAQ held the Special Meeting, at which the LSAQ stockholders considered and adopted, among other matters, a proposal to approve the Merger
Agreement and the Transactions. On October 6, 2021 (the “Closing Date”), the parties consummated the Business Combination
(the “Closing”). In connection with the Closing, the Company changed its name from LifeSci Acquisition II Corp. to Science
37 Holdings, Inc.
Holders
of 2,299,493 shares of LSAQ’s common stock sold in its initial public offering (the “public shares”) properly
exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from LSAQ’s
initial public offering, calculated as of two business days prior to the consummation of the Business Combination, which was approximately
$10.00 per share, or $23,003,944 in the aggregate.
As
a result of the Business Combination, the following occurred:
Preferred
Stock. Immediately prior to the Effective Time, each issued and outstanding share of Legacy Science 37’s Series A,
Series B, Series C, Series D and Series D-1 redeemable convertible preferred stock, par value $0.0001 per share (collectively, the
“Science 37 Preferred Stock”), was converted into shares of the common stock, par value $0.0001 per share, of Science 37
(the “Science 37 common stock”) at the then-applicable conversion rate (the “Science 37 Preferred Stock
Conversion”).
Common
Stock. At the Effective Time, following the Science 37 Preferred Stock Conversion, each share of Science 37 Common Stock
(including shares of Science 37 Common Stock outstanding as a result of the Science 37 Preferred Stock Conversion, but excluding shares
the holders of which perfect rights of appraisal under Delaware law) converted into the right to receive such number of shares of our
common stock (“Common Stock”) equal to the Exchange Ratio (subject to rounding mechanisms as described in the Merger Agreement)
and a number of Earn-Out Shares (as defined below). The Exchange Ratio is defined in the Merger Agreement to be the quotient of (i) 100,000,000
divided by (ii) the number of shares of Science 37’s Fully Diluted Capital Stock (as defined in the Merger Agreement). The Exchange
Ratio was equal to approximately 1.815.
Stock
Options. At the Effective Time, each outstanding option to purchase shares of Science 37 Common Stock granted under the
Science 37, Inc. 2015 Stock Plan (each, a “Science 37 Option”), whether or not then vested and exercisable, was converted
automatically (and without any required action on the part of such holder of outstanding Science 37 Option) into an option to purchase
a number of shares of Common Stock equal to the number of shares subject to such Science 37 Option immediately prior to the Effective
Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), with a per share exercise price equal to the exercise
price per share of Science 37 Common Stock of such Science 37 Option immediately prior to the Effective Time divided by the Exchange Ratio
(rounded up to the nearest whole cent).
Earn-Out Shares. Following the Closing,
former holders of shares of Science 37 Common Stock (including shares received as a result of the Science 37 Preferred Stock Conversion)
and former holders of Science 37 Options are entitled to receive their respective pro rata shares of up to 12,500,000 additional shares
of Common Stock (the “Earn-Out Shares”) if, within the three-year period beginning on the Closing Date, the closing share
price of the Common Stock equals or exceeds either of two share price thresholds as set forth in the Merger Agreement over a period of
at least 20 trading days within a 30-day trading period (each, a “Triggering Event”) and, in respect of a former holder of
Science 37 Options, the holder continues to provide services to the Company or one of its subsidiaries at the time of such Triggering
Event. If there is a change of control of the Company or its successor within such three-year period following the Closing that will result
in the holders of Common Stock receiving a per share price equal to or in excess of any Triggering Event threshold(s), then immediately
prior to such change of control, any Triggering Event that has not previously occurred shall be deemed to have occurred and the Company
shall issue the Earn-Out Shares to the former holders of shares of Science 37 Common Stock and former holders of Science 37 Options in
accordance with their respective pro rata shares.
Pursuant to subscription agreements entered into
in connection with the Merger Agreement (collectively, the “Subscription Agreements”), certain investors agreed to subscribe
for an aggregate of 20,000,000 newly-issued shares of Common Stock at a purchase price of $10.00 per share for an aggregate purchase price
of $200,000,000 (the “PIPE Investment”). At the Closing, the Company consummated the PIPE Investment.
After giving effect to the Transactions, the redemption
of public shares as described above, and the consummation of the PIPE Investment there are currently 114,707,150 shares of Common Stock
issued and outstanding.
The Company’s Common Stock commenced trading
on the Nasdaq Global Market (“Nasdaq”) under the symbol “SNCE” on October 7, 2021, subject to ongoing review of
the Company’s satisfaction of all listing criteria following the Business Combination.
As noted above, an aggregate of $23,003,944 was
paid from the Company’s trust account to holders that properly exercised their right to have public shares redeemed, and the remaining
balance immediately prior to the Closing of approximately $57.1 million remained in the trust account. The remaining amount in the trust
account was used to fund the Business Combination.
Form 10
Information
Item
2.01(f) of Form 8-K states that if the registrant was a shell company, as LSAQ was immediately before the
consummation of the Business Combination, then the registrant must disclose the information that would be required if the registrant
were filing a general form for registration of securities on Form 10. Accordingly, the Company is providing below the
information that would be included in a Form 10 if it were to file a Form 10. Please note that the information provided
below relates to the Combined Company after the consummation of the Business Combination, unless otherwise specifically indicated or
the context otherwise requires.
Cautionary Note Regarding Forward-Looking
Statements
This
Report contains forward-looking statements, including statements about the anticipated benefits of the Business Combination, and
the financial condition, results of operations, earnings outlook and prospects of the Company and may include statements for the period
following the consummation of the Business Combination. Any statements that refer to projections, forecasts or other characterizations
of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are
typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,”
“outlook,” “estimate,” “forecast,” “project,” “continue,” “could,”
“may,” “might,” “possible,” “potential,” “predict,” “should,”
“would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements are based on the current expectations of the management of the Company as applicable and are inherently
subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There
can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number
of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed
or implied by these forward-looking statements. Factors that may impact such forward-looking statements include:
|
·
|
expectations regarding the Company’s strategies and future financial
performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, backlog
conversion, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures,
and ability to invest in growth initiatives and pursue acquisition opportunities;
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|
·
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risks
related to the Company’s technology, intellectual property and data privacy practices;
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·
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risks
related to the Company’s reliance on third parties;
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·
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risks
related to the general economic and financial market conditions; political, legal and regulatory environment; and the industries in which
the Company operates;
|
|
·
|
the
ability to recognize the anticipated benefits of the Business Combination;
|
|
·
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the risk that the Company will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all;
|
|
·
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limited liquidity and trading of the Company’s securities;
|
|
·
|
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 plans to operate, variations in performance across competitors and changes in laws and regulations affecting Science 37’s business;
|
|
·
|
geopolitical
risk and changes in applicable laws or regulations;
|
|
·
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the possibility that the Company may be adversely affected by other
economic, business, and/or competitive factors;
|
|
·
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the
risks that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic, may have an adverse effect on our
business operations, as well as our financial condition and results of operations; and
|
|
·
|
litigation
and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands resulting therefrom on the Company’s resources.
|
The
forward-looking statements contained in this Report are based on the Company’s current expectations and beliefs concerning
future developments and their potential effects on the Transactions and the Company. There can be no assurance that future developments
affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties
(some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially
different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited
to, those factors described or incorporated by reference under the heading “Risk Factors” below. Should one or more of these
risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements. The Company will not and does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable
securities laws.
Business
The
business of the Company is described in the Proxy Statement/Prospectus in the section entitled “Information About Science
37” beginning on page 124 thereof and that information is incorporated herein by reference.
Risk Factors
The
risks associated with the Company’s business are described in the Proxy Statement/Prospectus in the section entitled “Risk
Factors” beginning on page 29 thereof and are incorporated herein by reference. A summary of the risks associated with the
Company’s business are also described on page 25 of the Proxy Statement/Prospectus under the heading “Summary Risk Factors”
and are incorporated herein by reference.
Financial Information
The
financial information of the Company is described in the Proxy Statement/Prospectus in the sections entitled “Selected Historical
Consolidated Financial and Operating Data of Science 37” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations of Science 37” beginning on pages 27 and 147 thereof, respectively, and are incorporated
herein by reference.
The
financial information of LSAQ is described in the Proxy Statement/Prospectus in the sections entitled “Selected Historical
Financial Information of LSAQ” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations
of LSAQ” beginning on pages 26 and 120 thereof, respectively, and are incorporated herein by reference.
Reference
is made to the disclosure set forth in Item 9.01 of this Report relating to the financial information of the Company and LSAQ,
and to Exhibit 99.2, which is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information known
to us regarding the beneficial ownership of our Common Stock immediately following consummation of the Transactions by:
|
·
|
each person who is the beneficial owner of more than 5% of the outstanding shares of our Common Stock;
|
|
·
|
each of our named executive officers and directors; and
|
|
·
|
all of our executive officers and directors as a group.
|
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days. Except as described in the footnotes below and subject to applicable community property laws
and similar laws, we believe that each person listed below has sole voting and investment power with respect to such shares. Unless
otherwise noted, the address of each beneficial owner is c/o Science 37, Inc., 600 Corporate Pointe, Suite 320, Culver City, CA 90230.
The
beneficial ownership of our Common Stock is based on 114,707,150 shares of Common Stock issued and outstanding immediately following
consummation of the Transactions, including the redemption of public shares as described above and the consummation of the PIPE Investment.
Beneficial
Ownership Table
Name and Address of Beneficial Owner
|
|
Number of Shares
|
|
|
% of Ownership
|
|
5% Holders
|
|
|
|
|
|
|
|
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Entities affiliated with Redmile Group, LLC(1)
|
|
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19,808,234
|
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|
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17.3
|
|
Pharmaceutical Product Development, LLC(2)
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|
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17,379,797
|
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|
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15.2
|
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Entities affiliated with Lux Capital(3)
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|
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15,164,556
|
|
|
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13.2
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Entities affiliated with LifeSci Holdings, LLC(4)
|
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6,864,384
|
|
|
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6.0
|
|
Directors and Executive Officers
|
|
|
|
|
|
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David Coman(5)
|
|
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2,287,342
|
|
|
|
2.0
|
|
Mike Zaranek(6)
|
|
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362,162
|
|
|
|
*
|
|
Darcy Forman(7)
|
|
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116,295
|
|
|
|
*
|
|
Jonathan Cotliar(8)
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|
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638,456
|
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|
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*
|
|
Steven Geffon(9)
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|
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457,468
|
|
|
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*
|
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Christine Pellizzari
|
|
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0
|
|
|
|
—
|
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John W. Hubbard(10)
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|
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143,048
|
|
|
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*
|
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Neil Tiwari
|
|
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0
|
|
|
|
—
|
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Robert Faulkner
|
|
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0
|
|
|
|
—
|
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Adam Goulburn
|
|
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0
|
|
|
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—
|
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Bhooshitha B. De Silva
|
|
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0
|
|
|
|
—
|
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Emily Rollins
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|
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0
|
|
|
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—
|
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All directors and executive officers as a group (12 individuals)(11)
|
|
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4,004,769
|
|
|
|
3.4
|
|
* Less than 1%.
(1) Consists of: (a) 3,829,013 shares of common stock held by RAF,
L.P., (b) 3,110,595 shares of common stock held by Redmile Capital Offshore II Master Fund, Ltd., (c) 7,252,571 shares of common stock
held by Redmile Private Investments II, L.P., (d) 616,055 shares of common stock held by Redmile Strategic Master Fund, LP, and (e) 5,000,000
shares of common stock held by RedCo II Master Fund, L.P. Redmile Group, LLC is the investment manager/adviser to each of the private
investment vehicles listed in items (a) through (e) (collectively, the “Redmile Funds”) and, in such capacity, exercises voting
and investment power over all of the securities held by the Redmile Funds and may be deemed to be the beneficial owner of these securities.
Jeremy C. Green serves as the managing member of Redmile Group, LLC and also may be deemed to be the beneficial owner of these shares.
Redmile Group, LLC, Mr. Green and Robert Faulkner each disclaim beneficial ownership of these shares, except to the extent of its or his
pecuniary interest in such shares, if any. The address of the Redmile Funds, Mr. Green and Mr. Faulkner is c/o Redmile Group, LLC, One
Letterman Dr., Building D, Suite D3-300, San Francisco, CA 94129.
(2)
Wildcat Acquisition Holdings (UK) Limited (“Wildcat”) is the sole member of Pharmaceutical Product Development, LLC; Jaguar
Holding Company II (“Jaguar II”) is the sole shareholder of Wildcat; Jaguar Holding Company I, LLC (“Jaguar “)
is the sole shareholder of Jaguar II; Eagle Holding Company II, LLC (“Eagle II”) is the sole member of Jaguar I; and PPD,
Inc., a Delaware corporation, is the sole member of Eagle II. By virtue of such relationships, each may be deemed to have beneficial ownership
over such securities, and each disclaim beneficial ownership of such securities, except to the extent of its or their pecuniary interest
therein, if any. The business address of Pharmaceutical Product Development, LLC is 929 North Front Street, Wilmington, NC 28401.
(3) Consists of (a) 3,505,890 shares of common stock held by Lux Co-Invest
Opportunities, L.P. and (b) 11,658,666 shares of common stock held by Lux Ventures IV, L.P. Lux Co-Invest Partners, LLC is the general
partner of Lux Co-Invest Opportunities, L.P. and exercises voting and dispositive power over the shares held by Lux Co-Invest Opportunities,
L.P. Lux Venture Partners IV, LLC is the general partner of Lux Ventures IV, L.P. and exercises voting and dispositive power over the
shares noted herein held by Lux Ventures IV, L.P. Peter Hebert and Josh Wolfe are the individual managing members of Lux Venture Partners
IV, LLC and Lux Co-Invest Partners, LLC (the “Individual Lux Managers”). The Individual Lux Managers, as the sole managers
of Lux Venture Partners IV, LLC and Lux Co-Invest Partners, LLC, may be deemed to share voting and dispositive power for the shares held
by Lux Ventures IV, L.P. and Lux Co-Invest Opportunities, L.P. Each of Lux Venture Partners IV, LLC, Lux Co-Invest Partners, LLC and the
Individual Lux Managers separately disclaim beneficial ownership over the shares noted herein except to the extent of their pecuniary
interest therein. The address for these entities and individuals is c/o Lux Capital Management, 920 Broadway, 11th Floor, New York, NY
10010.
(4) Consists of (a) 4,918,488 shares of common stock owned by LifeSci
Holdings LLC and (b) 1,945,896 shares of common stock owned by LifeSci Ventures Partners II, LP. Michael Rice and Andrew McDonald are
the managing members of LifeSci Holdings LLC and the general partners of LifeSci Ventures Partners II, LP. The address for these entities
and individuals is c/o Science 37 Holdings, Inc., 600 Corporate Pointe, Suite 320, Culver City, CA 90230.
(5) Represents 726,137 shares of Common Stock and 1,561,205 options
to purchase shares of Common Stock.
(6) Represents 362,162 options to purchase shares of Common Stock.
(7) Represents 42,547 shares of Common Stock and 73,748 options to
purchase shares of Common Stock.
(8) Represents 535,341 shares of Common Stock and 103,115 options to
purchase shares of Common Stock.
(9) Represents 457,468 options to purchase shares of Common Stock.
(10) Represents 143,048 options to purchase shares of Common Stock.
(11) Represents 1,304,023 shares of Common Stock and 2,700,746 options
to purchase shares of Common Stock.
Directors and Executive Officers
The
Company’s directors and executive officers upon the Closing are described in the Proxy Statement/Prospectus in the section entitled
“Directors and Officers of the Combined Company After the Business Combination” beginning on page 203 thereof
and that information is incorporated herein by reference.
Directors
Pursuant
to the approval of LSAQ stockholders from the Special Meeting, the following persons will constitute the Board
effective upon the Closing: David Coman, John W. Hubbard, Neil Tiwari, Robert Faulkner, Adam Goulburn, Bhooshitha B. De Silva and Emily
Rollins. Biographical information for these individuals is set forth in the Proxy Statement/Prospectus in the section titled “Directors
and Executive Officers of the Combined Company After the Business Combination” beginning on page 203, which is incorporated
herein by reference.
Committees of the Board of Directors
Effective
as of the Closing, the standing committees of the Board consist of an audit committee (the “Audit Committee”),
a compensation committee (the “Compensation Committee”) and a nominating and corporate governance committee (the “Nominating
and Corporate Governance Committee”). Each of the committees reports to the Board.
Effective as of the Closing, the Board appointed Emily Rollins, Neil
Tiwari and John Hubbard to serve on the Audit Committee. The Board appointed John Hubbard, Neil Tiwari and Bhooshitha B. De Silva to serve
on the Compensation Committee. The Board appointed Robert Faulkner, John Hubbard and Adam Goulburn to serve on the Nominating and Corporate
Governance Committee.
Executive Officers
Effective as of the Closing, each of Andrew McDonald, Michael Rice
and David Dobkin resigned as the Chairman, Chief Executive Officer and member of the board of directors of LSAQ (“LSAQ Board Member”),
Chief Operating Officer and LSAQ Board Member, and Chief Financial Officer and LSAQ Board Member, respectively, and each of Thomas Wynn,
Thomas Mathers, Elizabeth Barrett, Graham Walmsley and Scott Hanssen resigned as Board Members. Effective as of the Closing, the Board
appointed David Coman to serve as Chief Executive Officer, Mike Zaranek to serve as Chief Financial Officer, Darcy Forman to serve as
Chief Delivery Officer, Jonathan Cotliar to serve as Chief Medical Officer, Steven Geffon to serve as Chief Commercial Officer and Christine
Pellizzari to serve as Chief Legal Officer.
Executive Compensation
Option Grants
In connection with the Business Combination, effective as of October
7, 2021, the Board approved the grant of stock options under our 2021 Incentive Award Plan (the “2021 Plan”) to each of David
Coman, our Chief Executive Officer, Steven Geffon, our Chief Commercial Officer, and Jonathan Cotliar, our Chief Medical Officer, covering
981,437, 467,351 and 442,754, respectively, shares of our Common Stock. In addition, effective as of October 7, 2021, the Board approved
the grant of an additional stock option to Mr. Geffon covering 550,000 shares of our Common Stock.
Each stock option will vest and become exercisable as to 25% of the
underlying shares subject to the option on the first anniversary of the vesting start date, and with respect to 1/48th of the shares
subject to the option on each monthly anniversary of the applicable vesting start date thereafter, subject to the applicable executive’s
continued service through the applicable vesting date.
Executive Severance Policy
Effective as of October 7, 2021, the Company adopted the Executive
Severance Policy (the “Severance Policy”) under which the Company’s Chief Executive officer and other members of the
Company’s senior executive team are eligible to receive certain severance payments and benefits upon a termination of employment
without “cause” (as defined in the Severance Policy). The Severance Policy is administered by the Compensation Committee,
which has the authority to (among other things) determine who will be eligible for payments and benefits under the Severance Policy.
The Severance Policy provides that, in the event that an applicable
executive’s employment with the Company is terminated without “cause” more than thirty days before or more than twelve
months after a “change in control” of the Company (as defined in the 2021 Plan), he or she will receive the following severance
payments and benefits: (i) six months’ continued payment of base salary, (ii) any earned, unpaid annual bonus for the calendar year
immediately prior to the year in which the termination occurs, and (iii) Company-subsidized COBRA coverage for up to six months following
termination.
In the event that the applicable executive’s employment is terminated
without “cause” within thirty days before or twelve months after a “change in control” of the Company, he or she
will instead receive the following severance payments and benefits: (i) twelve months’ continued payment of base salary, (ii) any
earned, unpaid annual bonus for the calendar year immediately prior to the year in which the termination occurs, (iii) a pro-rated target
cash performance bonus for the calendar year in which the termination occurs, (iv) Company-subsidized COBRA coverage for up to twelve
months following termination, and (v) full acceleration of all then-outstanding equity awards held by such executive.
All payments and benefits under the Severance Policy are subject to
the applicable executive’s timely execution and non-revocation of a release of claims in favor of the Company and continued
compliance with applicable restrictive covenants.
The Severance Policy contains an Internal Revenue Code Section 280G
“best pay” provision, pursuant to which any payments or benefits under the Severance Policy will be paid in full or reduced
to the extent that such payments and benefits will not be subject to the excise tax under Internal Revenue Code Section 4999, whichever
results in the better after-tax treatment for the applicable executive.
Director Compensation
Director Compensation Program
Effective as of the Closing, the Board adopted
a non-employee director compensation program (the “Director Compensation Program”). Pursuant to the Director Compensation
Program, the non-employee directors of the Board are entitled to cash and equity compensation in such amounts necessary to attract and
retain non-employee directors that have the talent and skills to foster long-term value creation and enhance the sustainable development
of the Company. The compensation payable under the program is intended to be competitive in relation to both the market in which the company
operates and the nature, complexity and size of Company’s business.
Under
the Director Compensation Program, our non-employee directors are entitled to the following amounts for their service on the Board under
the Director Compensation Program: (i) an annual cash retainer of $40,000; and (ii) if the non-employee director serves
as the chairperson/lead independent director or chair of a committee of the Board, an additional annual retainer as follows: (A) $40,000
for the chairperson/lead independent director; (B) $20,000 for the chair of the audit committee; (C) $15,000 for the chair of the compensation
committee; or (D) $10,000 for the chair of the nominating and corporate governance committee. Annual cash retainers will be paid
quarterly in arrears and will be pro-rated for any partial calendar quarter of service.
Under
the Director Compensation Program, each non-employee director who is initially elected or appointed to serve on the Board on or after
the Closing will receive (A) if elected or appointed as chairperson or lead director, an equity award with a grant date fair value
of $187,500 (as determined under the program); or (B) if elected or appointed in in any other position(s) on the board of directors, an
equity award with a grant date fair value of $125,000 (as determined under the program) (in either case, an “Initial Award”).
The Initial Award will be pro-rated based on the director’s length of service during the first year of his or her election or appointment.
Each non-employee director who has served on the Board as of the date of an annual meeting of stockholders that occurs after Closing and
will continue to serve as a non-employee director immediately following such meeting will receive an equity award with a grant-date fair
value of approximately $125,000 (as determined under the program) (the “Annual Award”).
The Board will determine the type(s) of award
to be granted as Initial Awards and Annual Awards (collectively “Director Awards”) on or prior to the applicable grant date.
The number of shares of our Common Stock subject to any Director Award that is a stock option will be determined by dividing the dollar
value of such Director Award by the Black-Scholes value of a share of our Common Stock as of the applicable grant date. The number of
shares of our Common Stock subject to any other type of Director Award (including restricted stock units) granted under the Director Compensation
Program be determined by dividing the dollar value of such Director Award by the closing price of our Common Stock as of the applicable
grant date. Any stock options granted under the Director Compensation Program will have an exercise price equal to the fair market value
of our Common Stock on the date of grant and will expire not later than ten years after the date of grant.
Each Director Award will vest in full on the earlier
of the first anniversary of the applicable grant date and the date of our next annual shareholder meeting following the grant date, subject
to the applicable director’s continued service on the Board through the applicable vesting date. In addition, Director Awards will
vest in full upon a “change in control” of the Company (as defined in the 2021 Plan) if the non-employee will not become a
member of the Board or the board of directors of the Company’s successor (or any parent thereof) following such change in control.
Director Option Grants
In connection with the Business Combination, effective
as of October 7, 2021, the Board approved the grant of stock options under the 2021 Plan to each of Robert Faulkner John Hubbard, Adam
Goulburn, Emily Rollins and Neal Tiwari (each, a non-employee member of our Board) covering 41,363, 27,575, 27,575, 27,575 and 27,575,
respectively, shares of our Common Stock.
Each stock option will vest and become exercisable
with respect to one hundred percent (100%) of the shares subject thereto on the earlier of the first anniversary of the grant date, or
the first annual meeting of the Company’s stockholders to occur following the grant date, in either case, subject to the applicable
non-employee director’s continued service on the Board through each applicable vesting date.
Compensation Committee Interlocks and Insider
Participation
None
of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent
functions) of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Certain Relationships and Related Transactions,
and Director Independence
Certain Relationships and Related Transactions
Certain
relationships and related transactions are described in the Proxy Statement/Prospectus in the section entitled “Certain Relationships
and Related Party Transactions” beginning on page 212 thereof and are incorporated herein by reference.
Director Independence
Nasdaq
listing standards require that a majority of our Board be independent. An “independent director” is defined generally as a
person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the
opinion of the company's board of directors, would interfere with the director's exercise of independent judgment in carrying out the
responsibilities of a director. Our Board has determined that each of the directors, other than Mr. Coman, are “independent directors”
as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings
at which only independent directors are present.
Risk Oversight
Our Board
is responsible for overseeing our risk management process. Our Board focuses on our general risk management strategy, the most significant
risks facing us, and oversees the implementation of risk mitigation strategies by management. Our Audit Committee is also responsible
for discussing our policies with respect to risk assessment and risk management. Our Board believes its administration of its risk oversight
function has not negatively affected our Board’s leadership structure.
Committees of the Board of Directors
The
committees of our Board are described in the Proxy Statement/Prospectus in the section entitled “Directors and Executive
Officers of the Combined Company After the Business Combination—Board of Directors—Committees of the Board of Directors”
beginning on page 206 thereof and that information is incorporated herein by reference.
Legal Proceedings
Reference
is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Information About
Science 37—Legal Proceedings” beginning on page 146, which is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s
Common Equity and Related Stockholder Matters
Price Range of Securities and Dividends
The shares of Common Stock began trading on the
Nasdaq under the symbol “SNCE” on October 7, 2021, in lieu of the shares of common stock of LSAQ. The Company has not paid
any cash dividends on its shares of Common Stock to date. It is the present intention of the Board to retain all earnings, if any, for
use in the Company’s business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable
future. The payment of cash dividends in the future will be dependent upon the Company’s revenues and earnings, if any, capital
requirements and general financial condition. The payment of any cash dividends is within the discretion of the Board. Further, the ability
of the Company to declare dividends may be limited by the terms of financing or other agreements entered into by it or its subsidiaries
from time to time.
Information respecting LSAQ’s common stock
and related stockholder matters are described in the Proxy Statement/Prospectus in the section titled “Trading Market and Dividends”
on page 187 and such information is incorporated herein by reference.
Holders of Record
As
of the Closing and following the completion of the Transactions, including the redemption of public shares as described above and
the consummation of the PIPE Investment, the Company had 114,707,150 shares of Common Stock outstanding and held of record by
205 holders and no shares of preferred stock outstanding. Such amounts do not include DTC participants or beneficial owners holding
shares through nominee names.
Securities Authorized for Issuance Under Equity
Compensation Plans
At the Special Meeting, on October 4, 2021, LSAQ’s
stockholders considered and approved the 2021 Plan and the Science 37 Holdings, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”).
The 2021 Plan and the ESPP were subsequently approved by the Board. The 2021 Plan and ESPP became effective on October 4, 2021.
Reference
is made to the disclosure described in the Proxy Statement/Prospectus in the sections entitled “Proposal 4—The Stock Plan
Proposal” and “Proposal 5—The ESPP Proposal” beginning on pages 99 and 104 thereof, respectively, which are
incorporated herein by reference. The foregoing descriptions of the 2021 Plan and ESPP do not purport to be complete and is qualified
in its entirety by the full text of the 2021 Plan and ESPP, respectively, and the related forms of award agreements under the 2021 Plan,
which are attached hereto as Exhibits 10.13-10.15 (for the 2021 Plan) and Exhibit 10.16 (for the ESPP) and incorporated herein by reference.
Recent Sales of Unregistered Securities
Reference
is made to the disclosure set forth under Item 3.02 of this Report relating to the issuance of the Company’s Common Stock
in connection with the Transactions, which is incorporated herein by reference.
Description of Registrant’s Securities
to be Registered
The Common Stock is described in the Proxy Statement/Prospectus
in the section entitled “Comparison of Stockholders’ Rights” beginning on page 174 thereof and that information
is incorporated herein by reference. As described below, the Company’s A&R Charter (as defined below) was approved by LSAQ’s
stockholders at the Special Meeting and became effective as of the Closing.
Indemnification of Directors and Officers
S37
has entered into indemnification agreements with each of its directors and executive officers. Under the terms of such indemnification
agreements, we are required to indemnify each of our directors and executive officers, to the fullest extent permitted by the laws of
the state of Delaware, if the basis of the indemnitee’s involvement was by reason of the fact that the indemnitee is or was our
director or officer or was serving at our request in an official capacity for another entity. S37 must indemnify its directors and executive
officers against all direct and indirect costs, fees and expenses of any type or nature whatsoever, including all other disbursements,
obligations or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be witness in, settlement or appeal of, or otherwise participating in any threatened, pending or
completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed proceeding. The indemnification agreements also require S37
to advance, to the extent not prohibited by law, all direct and indirect costs, fees and expenses that such director or executive officer
incurred, provided that such person will return any such advance if it is ultimately determined that such person is not entitled to indemnification
by S37. The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by
the terms and conditions of the indemnification agreements, a form of which is attached hereto as Exhibit 10.10 and is incorporated herein
by reference.
Further
information about the indemnification of the Company’s directors and officers is set forth in the Proxy Statement/Prospectus
in the section titled “Comparison of Stockholders’ Rights—Indemnification of Directors, Officers, Employees and Agents”
beginning on page 183 thereof and that information is incorporated herein by reference.
Financial Statements and Supplementary Data
Reference
is made to the disclosure set forth under Item 9.01 of this report relating to the financial information of the Company, and to Exhibit
99.2, which is incorporated herein by reference.
Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
Reference
is made to the disclosure set forth under Item 4.01 of this report relating to the change in LSAQ’s certifying accountant,
which is incorporated herein by reference.