What changed in this filing

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Item 1A. Risk Factors

2022-03-01 compared with 2021-03-15 · 140 added, 162 removed, 564 unchanged (35% of the section changed)

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These risks include, among others, the following key risks:

● Deceleration in, or resistance to, the acceptance of model-informed biopharmaceutical discovery and development by regulatory authorities or academic institutions could damage our reputation or reduce the demand for our products and service.

● We compete in a competitive and highly fragmented market.

● Our business may be subject to risks arising from natural disasters and epidemic diseases, such as the recent COVID-19 pandemic.

● Changes or delays in government regulation relating to the biopharmaceutical industry could decrease the need for some of the services we provide.

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● Our continued revenue growth depends on our ability to successfully enter new markets, increase our customer base and expand our relationship and the products and services we provide to our existing customers.

● Our business may be subject to risks arising from natural disasters and epidemic diseases, such as the recent COVID-19 pandemic.

● Delays or defects in the release of new or enhanced software or other biosimulation tools may result in increased cost to us, delayed market acceptance of our products, diminished demand for our products, delayed or lost revenue, and liability.

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● Our recent growth rates may not be sustainable or indicative of future growth.

● We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results.

● We regularly evaluate potential acquisitions of other companies and technologies, which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results.

● Our estimated addressable market is subject to inherent challenges and uncertainties.

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● We derive a significant percentage of our revenues from a concentrated group of customers and the loss of more than one of our major customers could materially and adversely affect our business, results of operations and/or financial condition.

● We may need additional funding.

If we are unable to raise additional capital on terms acceptable to us or at all or generate cash flows necessary to maintain or expand our operations, we may not be able to compete successfully.

● Our bookings might not accurately predict our future revenue, and we might not realize all or any part of the anticipated revenue reflect in our backlog.

● We rely upon third-party providers of cloud-based infrastructure to host our software solutions.

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● Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

● Provisions in our organizational documents could delay or prevent a change of control.

● EQT Investor (“EQT”) holds a substantial amount of our outstanding common stock, and its interests may be different than the interests of other holders of our common stock.

● Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.

● Failure to comply with requirements to design, implement and maintain effective internal controls, or inability to timely remediate internal controls that are deemed ineffective could have a material adverse effect on our business and stock price.

● Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America will be the sole and exclusive forums for certain stockholder litigation matters, which could limit our stockholder’s ability to obtain a favorable judicial forum for disputes with us or our current and former directors, officers, employees or stockholders.

● Our board of directors are authorized to issue and designate shares of our preferred stock in additional series without stockholder approval.

● We incur substantial costs as a result of operating as a publicly traded company, and our management is required to devote substantial time to compliance initiatives.

Risks Related to Our Industry

Deceleration in, or resistance to, the acceptance of model-informed biopharmaceutical discovery and development by regulatory authorities or academic institutions could damage our reputation or reduce the demand for our products and services.

There has been a steady increase in the recognition by regulatory and academic institutions of the role that modeling and simulation can play in the biopharmaceutical development and approval process, as demonstrated by new regulations and guidance documents describing and encouraging the use of modeling and simulation in the biopharmaceutical discovery, development, testing and approval process, which has directly led to an increase in the demand for our services.

Changes in government or regulatory policy, or a reversal in the trend toward increasing the acceptance of and reliance upon in silico data (trials, studies, or experiments conducted via computer or computer simulation) in the drug approval process, could decrease the demand for our products and services or lead regulatory authorities to cease use of, or to recommend against the use of, our products and services.

This, in turn, could have a material adverse impact on our revenue and future growth.

Our software products are licensed by the FDA, Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”) and 15 other regulatory authorities, who use them in assessing new drug applications.

These licenses, which accounted for 0.1 % of our annual revenue in 2021, are typically renewed on an annual basis, and there is no obligation for these regulatory authorities to renew these licenses at the same or any level.

Although we do not believe that reduction or elimination of the use of any of our software products that are currently licensed by regulatory authorities would have a direct impact on the use of those products by our industry customers, it could diminish our reputation and negatively impact our ability to effectively market and sell our software products, particularly if such move were part of a wider reversal of government or regulatory acceptance of in silico data.

We also work closely with the global academic community on research, publications, and training of the next generation of biopharmaceutical scientists.

Our software products are used in many academic institutions, often free of charge, where students, including PhD candidates, are first exposed to the types of tools and models that we offer.

Upon graduating, these students often become employed by biopharmaceutical companies, where they continue to use our products and advocate for their continued use.

If academic institutions decide to use competitive products, or develop their own biosimulation products, or reduce the exposure to biosimulation tools in general, familiarity with our products by the future generations of pharmacometricians and clinical pharmacologists will be diminished, which could ultimately result in a reduction in demand for our products.

We compete in a competitive and highly fragmented market.

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In biosimulation software, we compete with other scientific software providers, technology companies, in-house development by biopharmaceutical companies, and certain open source solutions.

In the technology-enabled services market, we compete with specialized companies, in-house teams at biopharmaceutical companies, academic and government institutions.

In the technology-driven services market, we compete with specialized companies, in-house teams at biopharmaceutical companies, academic and government institutions.

In some standard biosimulation services, and in regulatory, and market access, we also compete with contract research organizations.

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Some of our competitors offer products and services directed at more specific markets than those we target, enabling these competitors to focus a greater proportion of their efforts and resources on those specific markets.

Some competing products are developed and made available at

lower cost by government organizations and academic institutions, and these entities may be able to devote substantial resources to product development.

Some competing products are developed and made available at lower cost by government organizations and academic institutions, and these entities may be able to devote substantial resources to product development.

Some clinical research organizations or technology companies may decide to enter into or expand their offerings in the biosimulation area, whether through acquisition or internal development.

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There can be no assurance that our current or potential competitors will not develop products, services or technologies that are comparable, or superior to, or will render obsolete, the products, services and technologies we offer.

There can be no assurance that our competitors will not adapt more quickly than we do to technological advances and customer demands, thereby increasing such competitors’ market share relative to ours.

There can be no assurance that our

competitors will not adapt more quickly than we do to technological advances and customer demands, thereby increasing such competitors’ market share relative to ours.

Any material decrease in demand for our technologies or services may have a material adverse effect on our business, financial condition and results of operations.

This, in turn, could have a material adverse impact on our revenue and future growth.

Our software products are licensed by the FDA, the EMA and 15 other regulatory authorities, who use them in assessing new drug applications.

These licenses, which accounted for 0.2% of our annual revenue in 2020, and 0.2% in 2019, are typically renewed on an annual basis, and there is no obligation for these regulatory authorities to renew these licenses at the same or any level.

We also work closely with the global academic community on research, publications, and training of the next generation of biopharmaceutical scientists.

Our software products are used in many academic institutions, often free of charge, where students, including PhD candidates, are first exposed to the types of tools and models that we offer.

Upon graduating, these students often become employed by biopharmaceutical companies, where they continue to use our products and advocate for their continued use.

Changes or delays in government regulation relating to the biopharmaceutical industry could decrease the need for some of the services we provide.

Governmental agencies throughout the world, but particularly in the United States where the majority of our customers are based, strictly regulate the biopharmaceutical development process.

Governmental agencies throughout the world strictly regulate the biopharmaceutical development process.

Our business involves helping biopharmaceutical companies strategically and tactically navigate the regulatory approval process.

New or amended regulations are expected to result in higher regulatory standards and potentially additional revenues for companies that service these industries.

However, some changes in regulations, such as a relaxation in regulatory requirements or the introduction of streamlined or expedited approval procedures, or an increase in regulatory requirements that we have difficulty satisfying or that make our regulatory strategy services less competitive, could eliminate or substantially reduce the

demand for our regulatory services.

Regulatory developments that could potentially increase demand for our services could also be postponed or not fully implemented.

For example, we provide a technology-enabled service for automated redaction of these large, complex documents.

For example, we provide a technology-driven service for automated redaction of these large, complex documents.

The EMA issued proposed rules that would require our customers to publish suitably redacted clinical reports submitted as part of a regulatory application.

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Governments worldwide have increased efforts to expand healthcare coverage while at the same time curtailing and better controlling the increasing costs of healthcare.

If cost-containment efforts or other measures substantially changing existing insurance models limit our customers’ profitability, they may decrease research and development spending, which could decrease the demand for our services and materially adversely affect our growth prospects.

In addition, industry trends, economic factors, regulatory developments, patent protection and political and other events and circumstances that affect the biopharmaceutical industry, such as volatility or declines in securities markets limiting capital and liquidity or decreased government funding of scientific research, or other circumstances that decrease our customers’ research and development spending also affect us.

Delays in the biopharmaceutical development cycle, particularly related to clinical trials being delayed or canceled, such as those caused by the recent COVID-19 pandemic, could also impact the demand for our products and services.

If cost-containment efforts or other measures substantially change existing insurance models and limit our customers’ profitability, our customers may decrease research and development spending, which could decrease the demand for our services and materially adversely affect our growth prospects.

In addition, industry trends, economic factors, regulatory developments, patent protection and political and other events and circumstances that affect the biopharmaceutical industry, such as volatility or declines in securities markets limiting capital and liquidity, decreased government funding of scientific research, or other circumstances that decrease our customers’ research and development spending also affect us.

Furthermore, our financial success depends upon the creditworthiness and ultimate collection of amounts due from our customers.

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A significant portion of our customer base consists of biopharmaceutical companies, and our revenue is dependent upon expenditures by these customers.

Consolidation through mergers or business failures within the biopharmaceutical industry may reduce the number of potential customers, particularly larger customers, for our products and services.

Consolidation through mergers or contraction through business failures within the biopharmaceutical industry may reduce the number of potential customers, particularly larger customers, for our products and services.

Consolidation of major biopharmaceutical companies could result in consolidation of software licenses used by those companies, reduction of the number of individual user licenses, or increased pressure to negotiate price discounts or other terms for service that are less favorable to us, which may have a material adverse effect on our revenue and financial condition.

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Our strategy also includes expanding into new markets, new geographies, and new areas within our existing markets, either organically or by acquiring other companies in these markets.

For example, we recently acquired several QSP models in the field of neurodegenerative diseases and are currently creating a consortium of customers to further develop these models.

If our strategies are not executed successfully, or we cannot integrate acquired models into our platform, our products and services may not achieve market acceptance or penetration in targeted new departments within our existing customers or new customers.

If our strategies are not executed successfully, our products and services may not achieve market acceptance or penetration in targeted new departments within our existing customers

or new customers.

We cannot guarantee that we will be able to identify new biosimulation or regulatory and market access technologies of interest to our customers, or develop or acquire them in a timely fashion.

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Some of our products, such as our QSP models, require significant time and investment to develop to a point where they can achieve market acceptance, and we may not be able to develop them at a rate that matches market demand.

We may also face more significant pricing pressure as we expand

geographically and our customer profile evolves.

We may also face more significant pricing pressure as we expand geographically and our customer profile evolves.

For example, smaller biotechnology companies, or companies based in countries that have less developed economies, may not be able to afford our products and services at our customary rates.

If we are unable to develop or acquire new services and products and/or create demand for those newly developed services and products, accelerate the development of products where there is a market demand, or maintain or increase our historic pricing levels, our future business, results of operations, financial condition and cash flows could be adversely affected.

Our business may be subject to risks arising from natural disasters and epidemic diseases, such as the recent COVID-19 pandemic.

We may be subject to risks related to natural disasters and public health crises, such as the global pandemic associated with COVID-19.

The COVID-19 pandemic has also had a significant and sustained negative impact on the global economy and a negative impact on many of our customers.

Many of our customers have experienced or may in the future be adversely impacted by supply chain interruptions, disruptions to pipeline development and clinical trials, decreased product demand (including due to reduced elective healthcare consumption and as a result of increased unemployment), costs associated with the COVID-19 pandemic and interruptions or delays in regulatory approvals due to the impact of the COVID-19 pandemic on the operations of certain regulatory authorities.

We may also see a reduction in total users of our software due to layoffs resulting from the COVID-19 pandemic in the biopharmaceutical industry.

These and other adverse impacts on our customers and economic conditions related to the COVID-19 pandemic may cause our customers to significantly scale back their operations or research and development spending and limit the use of third parties, which could have a material adverse effect on our business.

We have undertaken several actions to mitigate and/or limit the spread of COVID-19 amongst our employees, including restricting employee travel, closing our offices in compliance with local guidelines and, when reopening offices, implementing a number of safety measures, such as increasing sanitation, mandating social distancing or use of personal protective equipment, and limiting the number of employees at each location.

Furthermore, even if we follow what we believe to be best practices, there can be no assurance that our measures will prevent the transmission of SARS-CoV-2 between employees.

Our business may be subject to risks arising from natural disasters and epidemic diseases, including the ongoing COVID 19 pandemic.

We may be subject to risks related to natural disasters and public health crises, such as the ongoing global COVID 19 pandemic.

The COVID 19 pandemic, and the numerous variants that have emerged in the last year, such as the Delta and Omicron variants, have also had a significant and sustained negative impact on the global economy and a negative impact on many of our customers.

Some of our customers have experienced or may in the future be adversely impacted by supply chain interruptions, disruptions or delays to pipeline development and clinical trials, costs associated with the COVID 19 pandemic and interruptions or delays in regulatory approvals due to the impact of the COVID 19 pandemic on the operations of certain regulatory authorities.

These and other adverse impacts on our customers and economic conditions related to the COVID 19 pandemic may cause our customers to delay or cancel projects or significantly scale back their operations or research and development spending and limit the use of third parties, which could have a material adverse effect on our business.

We have undertaken several actions to mitigate and/or limit the spread of COVID 19 amongst our employees, including restricting employee travel, closing our offices in compliance with local guidelines and, when reopening offices, implementing a number of safety measures, such as requiring U.

employees to be fully vaccinated before returning to the office, increasing sanitation, use of personal protective equipment, and limiting the number of employees at each location.

However, even if we follow what we believe to be best practices, we may not be able to prevent the transmission of SARS-CoV 2 between employees.

Any incidents of actual or perceived transmission may expose us to liability claims, adversely impact employee productivity and morale, and result in negative publicity and reputational harm.

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If our scientists and consultants are not able to effectively communicate and interact with our existing and potential customers remotely, a prolonged period of limited direct contact with customers could translate into reduced bookings and negatively impact our revenue generation.

The extent to which the COVID-19 pandemic may impact our business in the future is highly uncertain and cannot be predicted.

In addition, a recession or a prolonged period of depressed economic activity related to COVID-19 and measures taken to mitigate its spread could have a material adverse effect on our business, financial condition and results of operations.

In addition to the current COVID-19 pandemic, our business could be negatively impacted by other natural disasters, such as new disease epidemics, significant weather events, the outbreak of war or acts of terrorism, or other “acts of God.” The COVID-19 pandemic and such other events may also exacerbate a number of the other risks discussed in this section, any of which could have a material effect on us.

In addition to the current COVID 19 pandemic, our business could be negatively impacted by other natural disasters, such as new disease epidemics, significant weather events, the outbreak of war or acts of terrorism, such as the conflict between Russia and Ukraine, or other “acts of God,” each of which may be exacerbated by the effects of global climate change.

We are a global company with offices in many countries.

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● the effectiveness of our professional services;

● our ability to develop complementary software solutions, applications and services;

● ability to develop complementary software solutions, applications and services;

● the stability, performance and security of our technological infrastructure;

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Any failure to offer high-quality technical support, or a market perception that we do not offer high-quality support, could adversely affect our renewal rates and our ability to sell our additional solutions to existing or to sell to prospective customers.

Factors that are not within our control may also

contribute to a reduction in our software revenues.

Factors that are not within our control may also contribute to a reduction in our software revenues.

For instance, our customers may reduce the number of their employees who are engaged in research and who would have use of our software, which would result in a corresponding reduction in the number of user licenses needed for some of our solutions and thus a lower aggregate renewal fee.

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Our customers may delay or terminate contracts, or reduce the scope of work, for reasons beyond our control, or we may underprice or overrun cost estimates with our fixed-fee contracts, potentially resulting in financial losses.

Many of our technology-enabled service contracts may be terminated by the customer at its discretion immediately or after a short notice period without penalty.

Many of our technology-driven service contracts may be terminated by the customer at its discretion immediately or after a short notice period without penalty.

Customers terminate, delay or reduce the scope of these types of contracts for a variety of reasons, including but not limited to:

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● a change in customer priorities;

● Covid-19 impact on client trial operations;

● delay or termination of a specific product candidate development program;

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If we fail to adequately price our contracts or if we experience significant cost overruns (including direct and indirect costs such as pass-through costs), or if we are delayed in, or fail to, execute contract modifications with customers increasing the scope of activity, our results of operations could be materially adversely affected.

From time to time, we have had to commit unanticipated resources to complete projects, resulting in lower margins and profitability on those projects.

From time to time, we have had to commit unanticipated resources to complete fixed-fee projects, resulting in lower margins and profitability on those projects.

We might experience similar situations in the future, which could have a material adverse impact on our results of operations and cash flows.

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Our success depends to a significant extent on the continued services of our senior management and other key contributors throughout our business.

As of December 31, 2020, approximately 300 of our employees held PhDs, PharmDs, or MDs.

As of December 31, 2021, 352 of our employees held PhDs, PharmDs, or MDs.

It is challenging to attract and retain critical and qualified employees because of the specialized scientific nature of our business and significant competition for qualified personnel in the biopharmaceutical industry.

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Compensation for our employees makes up our most significant fixed cost.

Unexpected revenue shortfalls in the future may make it difficult

for us to retain all of our employees.

Unexpected revenue shortfalls in the future and rapid wage inflation may make it difficult for us to retain all of our employees.

The loss of any key employee, or our inability to continue to recruit, retain and motivate key personnel, replace departed personnel in a timely fashion, or train our scientists to develop new business, may adversely impact our ability to compete effectively and grow our business and negatively affect our ability to meet our short and long-term financial and operational objectives.

We have government customers and have received government grants, which subject us to risks including early termination, audits, investigations, sanctions, or penalties.

We derive limited revenue from contracts with U.S.

We derive limited revenue from contracts with U.

government, including the FDA and the Center for Disease Control and Prevention within the Department of Health and Human Services.

We have also accepted limited grant funds from the U.S.

government, whereby we are reimbursed for certain expenses incurred, subject to our compliance with the specific requirements of the applicable grant, including rigorous documentation requirements.

We have also accepted limited grant funds from governmental entities, whereby we are reimbursed for certain expenses incurred, subject to our compliance with the specific requirements of the applicable grant, including rigorous documentation requirements.

We may enter into further contracts with the U.S.

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If the government terminates a contract for default, the defaulting company may be liable for any extra costs incurred by the government in procuring undelivered items from another source.

Further, the laws and regulations governing the procurement of goods and services by the U.S.

government provide procedures by which other bidders and interested parties may challenge the award of a government contract at the U.S.

Government Accountability Office (“GAO”) or in federal court.

If we are awarded a government contract, such challenges or protests could be filed even if there are not any valid legal grounds on which to base the protest.

If any such protests are filed, the government agency may decide to suspend our performance under the contract while such protests are being considered by the GAO or the applicable federal court, thus potentially delaying delivery of payment.

In addition, government contracts and grants normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions.

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● use of substantial portions of our available cash to consummate the acquisition.

Furthermore, acquired businesses may change or increase the risks to which we are exposed.

For example, in October 2021 we acquired Pinnacle, whose software is used by the FDA and PMDA to validate compliance with the Clinical Data Interchange Standards Consortium (CDISC) standards.

As a result, this acquisition increased our exposure to risks related to changes in the FDA’s or the PMDA’s regulatory standards and risks related to government customers.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually.

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In addition, political and economic changes, including international conflicts and terrorist acts, throughout the world may interfere with our or our customers’ activities in particular locations and result in a material adverse effect on our business, financial condition and operating results.

Although we do not believe the current conflict between Russia and Ukraine poses any immediate material impact to our business, if the conflict intensifies or expands beyond Ukraine, it could have an adverse impact on our business, particularly our operations in Poland and our ability to use consultants in that that region of the world.

We could also experience a delay or cancellation of work orders to the extent they rely on clinical trials being conducted in Ukraine.

Potential trade restrictions, exchange controls, adverse tax consequences and legal restrictions may affect our revenue from customers located outside the United States and the repatriation of funds into the United States.

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Foreign currency exchange rate hedges, transactions, re-measurements, or translations could also materially impact our financial results.

These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial condition.

These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial.

We are subject to the FCPA and the Bribery Act and similar anti-corruption laws and regulations in other countries.

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Violations of anti-corruption laws, or even allegations of such violations, could disrupt our business and result in a material adverse effect on our reputation, business, results of operations, financial condition and/or cash flows.

For example, violations

may result in criminal or civil penalties, disgorgement of profits, related stockholder lawsuits, debarment from government contracting and other remedial measures.

For example, violations may result in criminal or civil penalties, disgorgement of profits, related stockholder lawsuits, debarment from government contracting and other remedial measures.

Our failure to comply with trade compliance and economic sanctions laws and regulations of the United States and applicable international jurisdictions could materially adversely affect our reputation and results of operations.

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Investigations of alleged violations can be expensive and disruptive.

Despite our compliance efforts and activities we cannot assure compliance by our employees or representatives for which we may be held responsible, and any such violation could materially adversely affect our reputation, business, financial condition and results of operations.

Despite our compliance efforts and activities we cannot assure compliance by our employees or

representatives for which we may be held responsible, and any such violation could materially adversely affect our reputation, business, financial condition and results of operations.

Current and future litigation against us, which may arise in the ordinary course of our business, could be costly and time consuming to defend.

We are subject to claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes, employment claims made by our current or former employees, or claims brought by third-parties for failure to adequately protect their personal data.

Third parties may in the future assert intellectual property rights to technologies that are important to our business and demand back royalties or demand that we license their technology.

We are subject to claims that arise in the ordinary course of business, such as claims in connection with commercial disputes, employment claims made by our current or former employees, or claims brought by third-parties for failure to adequately protect their personal data.

Third parties may in the future assert intellectual property rights to technologies that are important to our business and demand back royalties or that we license their technology.

Litigation may result in substantial costs and may divert management’s attention and resources, which may seriously harm our business, overall financial condition and operating results.

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Additionally, we are subject to compliance with FDA’s regulations set forth in part 11 of title 21 of the Code of Federal Regulations, which relates to the creation, modification, maintenance, storage, retrieval, or transmittal of electronic records submitted to the FDA.

FDA may also issue or finalize guidance documents that may have implications for our customers and our products, platforms, and services.

We may be subject to inspection by regulatory authorities in connection with our customers’ marketing applications and other regulatory submissions.

If we fail to perform our services in accordance with regulatory requirements, regulatory authorities may take action against us or our customers for failure to comply with applicable regulations governing the development and testing of therapeutic products.

Regulatory authorities may

also disqualify certain data or analyses from consideration in connection with applications for regulatory approvals, which would result in our customers not being able to rely on our services in connection with their regulatory submissions and may subject our customers to additional or repeat clinical trials and delays in the development and regulatory approval process.

Regulatory authorities may also disqualify certain data or analyses from consideration in connection with applications for regulatory approvals, which would result in our customers not being able to rely on our services in connection with their regulatory submissions and may subject our customers to additional or repeat clinical trials and delays in the development and regulatory approval process.

Mistakes in providing services to our customers, such as dosing models, could affect medical decisions for patients in clinical trials and create liability for personal injury.

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A significant change in the liquidity or financial position of our customers could also have a material adverse effect on the collectability of our accounts receivable, our liquidity, and our future operating results.

government’s determination to award a future contract or contract option may be challenged by an interested party, and, if that challenge is successful, that future contract or option may be terminated.

The laws and regulations governing the procurement of goods and services by the United States government provide procedures by which other bidders and interested parties may challenge the award of a government contract at the U.S.

Government Accountability Office (“GAO”) or in federal court.

If we are awarded a government contract, such challenges or protests could be filed even if there are not any valid legal grounds on which to base the protest.

In addition, we could be forced to expend significant funds to defend any potential award.

If a protest is successful, the government may be ordered to terminate any one or more of our contracts and reselect bids.

The government agencies with which we have contracts could even be directed to award a potential contract to one of the other bidders.

We may need additional funding.

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As of December 31, 2021, we had cash and cash equivalents of $185.8 million.

We believe that our existing cash and cash equivalents will be sufficient to fund our operations and capital expenditure requirements for at least the next 12 months.

We believe that our existing cash and cash equivalents will be sufficient to fund our operations and capital expenditure requirements for an extended period.

However, we have based this estimate on assumptions that may prove to be wrong, and our operating plans may change as a result of many factors currently unknown to us.

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● the growth of our employee base;

● the timing and launch of new products, for example QSP and QSTS consortia;

● the timing and launch of new products;

● the continued expansion of sales and marketing activities;

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Bookings vary from period to period depending on numerous factors, including sales performance and the overall health of the biopharmaceutical industry, among others.

Once work begins, we recognize direct revenue over the life of the contract based on our performance of services under the contract.

Once work begins, we recognize direct revenue

over the life of the contract based on our performance of services under the contract.

Contracts may be terminated or delayed by our customers for reasons beyond our control.

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Our bookings for the year ended December 31, 2021 were $341.7 million compared to bookings of $288.3 million for the year ended December 31, 2020 .

Although an increase in bookings will generally result in an increase in future direct revenue to be recognized over time (depending on future contract modifications, contract cancellations and other adjustments), an increase in bookings at a particular point in time does not necessarily correspond to an increase in direct revenues during a particular period.

Although an increase in bookings will generally result in an increase in future revenue to be recognized over time (depending on future contract modifications, contract cancellations and other adjustments), an increase in bookings at a particular point in time does not necessarily correspond to an increase in revenues during a particular period.

The timing and extent to which bookings will result in direct revenue depends on many factors, including the timing of commencement of work, the rate at which we perform services, scope changes, cancellations, delays, receipt of regulatory approvals and the nature, duration, size, complexity and phase of the studies.

In addition, delayed projects remain in bookings until they are canceled.

As a result of these factors, our bookings are not necessarily a reliable indicator of future direct revenue and we might not realize all or any part of the direct revenue from the authorizations in bookings as of any point in time.

As a result of these factors, our bookings are not necessarily a reliable indicator of future direct revenue and we might not realize all or any part of the revenue from the authorizations in bookings as of any point in time.

Risks Related to Intellectual Property, Information Technology and Data Privacy

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We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the third-party hosting services we use.

In the event that our service agreements with our third-party hosting services are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our hosted software solutions for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations.

in arranging or creating new facilities and services and/or re-architecting our hosted software solutions for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations.

If we are not able to reliably meet our data storage and management requirements, or if we experience any failure or interruption in the delivery of our services over the internet, customer satisfaction and our reputation could be harmed and customer contracts may be terminated.

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Open source software is typically freely accessible, usable and modifiable, and is used by our development team in an effort to reduce development costs and speed up the development process.

Use of open source software also in some respects entails greater risks than use of third party

commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code, including with respect to security vulnerabilities.

Use of open source software also in some respects entails greater risks than use of third party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code, including with respect to security vulnerabilities.

Although we have processes intended to fully comply with all license requirements in our software, certain open source software licenses require, among other things, that a licensor that distributes the open source software as a component of the licensor’s proprietary software, to provide or offer to provide to the customer-licensee part or all of the source code to the licensor’s proprietary software.

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If there is a cybersecurity incident and we know or suspect that certain personal information has been accessed, or used inappropriately, we may need to inform the affected individuals and may be subject to significant fines and penalties.

Further, under certain regulatory schemes, such as the California Consumer Privacy Act (the “CCPA”), individuals may bring private claims and we may be liable for statutory damages.

Further, under certain regulatory schemes, such as the CCPA, individuals may bring private claims and we may be liable for statutory damages.

Further, if the technical and operational solutions we have adopted to maintain data security fail, our existing and potential customers may lose confidence in our ability to maintain the confidentiality of their intellectual property, we may be subject to breach of contract claims by our customers and we may suffer reputational and other harm as a result.

Our insurance may not be adequate to cover losses associated with such events, and in any case, such insurance may not cover all of the types of costs, expenses and losses we could incur to respond to and remediate a security breach.

Defending against investigations, claims or litigation based

on any security breach or incident, regardless of their merit, will be costly and may cause reputation harm.

Defending against investigations, claims or litigation based on any security breach or incident, regardless of their merit, will be costly and may cause reputation harm.

The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium increases or the imposition of large deductible requirements, could have a material adverse effect on our reputation, business, financial condition and results of operations.

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In the normal course of our business, we collect, process, use and disclose information about individuals, including protected health information and other patient data, as well as information relating to health professionals and our employees.

The collection, processing, use, disclosure, disposal and protection of such information is highly regulated both in the United States and other jurisdictions, including but not limited to, under HIPAA, as amended by HITECH;

state privacy, security and breach notification and healthcare information laws;

The collection, processing, use, disclosure, disposal and protection of such information is highly regulated both in the U.

and other jurisdictions, including but not limited to, under HIPAA, as amended by HITECH;

United States state privacy, security and breach notification and healthcare information laws;

the European Union’s GDPR;

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These regulations often govern the use, handling and disclosure of information about individuals, including medical information and require the use of standard contracts, privacy and security standards and other administrative simplification provisions.

In relation to HIPAA, we do not consider our service offerings to generally cause us to be subject as a covered entity;

In relation to HIPAA, we do not consider our service offerings to generally cause us to be subject

as a covered entity;

however, in certain circumstances, we are subject to HIPAA as a business associate and may enter into business associate agreements.

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The GDPR includes sanctions for violations up to the greater of €20 million or 4.0% of worldwide gross annual revenue and applies to services providers such as us.

In addition, following the transitional period following Brexit, must comply with the GDPR and also the UK GDPR, with each regime having the ability to fine up to the greater of €20 million (£17 million) or 4% of global turnover.

In addition, following the transitional period following Brexit, we must comply with the GDPR and also the UK GDPR, with each regime having the ability to fine up to the greater of €20 million (£17 million) or 4% of global turnover.

The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, for example how data transfers between EU member states and the United Kingdom are treated and the role of the Information Commissioner’s Office following the end of the transitional period.

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this has created uncertainty.

In June 2021, the European Commission published revised standard contractual clauses, and shortly thereafter the European Data Protection Board promulgated guidance on implementation of the new clauses.

Even with the additional clarity provided by these developments, the validity of the standard contractual clauses as a transfer mechanism remains uncertain.

The concerns raised by the CJEU relating to the perceived risks of transferring personal data to the United States, and the ability of the standard contractual clauses to address those risks, persist under the new standard contractual clauses framework.

We have previously relied on our own Privacy Shield certification and our relevant customers’ and third parties’ Privacy Shield certification(s) for the purposes of transferring personal data from the EEA to the United States in compliance with the GDPR’s data export conditions.

We also currently rely on the standard contractual clauses to transfer personal data outside the EEA, including to the United States.

If all or some jurisdictions within the European Union or the United Kingdom determine that the new standard contractual clauses also cannot be used to transfer personal data to the United States, we could be left with no reasonable option for the lawful cross-border transfer of personal data.

If left with no reasonable option for the lawful cross-border transfer of personal data, and if we nonetheless continue to transfer personal data from the European Union

to the United States, that could lead to governmental enforcement actions, litigation, fines and penalties or adverse publicity, which could have an adverse effect on our reputation and business or cause us to need to establish systems to maintain certain data in the European Union, which may involve substantial expense and cause us to divert resources from other aspects of our operations, all of which may adversely affect our business.

We believe we maintain adequate processes and systems to ensure our and our customers’ compliance with the requirements of the GDPR, but it is possible that we could fail to comply or that we could incur liability due to the acts or omissions of our customers.

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In the event we are not able to secure indemnification or the indemnification and any insurance coverage is inadequate to cover our losses, we could suffer significant financial, operational, reputational and other harm and our business, results of operations, financial condition and/or cash flows could be materially adversely affected.

Further, as supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

Furthermore, as supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

The United States, the European Union, and other jurisdictions where we operate continue to issue new, and enhance existing, privacy and data security protection regulations related to the collection, use, disclosure, disposal and protection of information about individuals, including medical information.

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In addition, we attempt to protect our intellectual property and proprietary information by enforcing cyber and physical security measures and requiring our employees and certain of our consultants to enter into confidentiality, non-competition and assignment-of-inventions agreements.

take to protect these rights may not be adequate to prevent misappropriation of our technology by third parties or may not be adequate under the laws of some foreign countries, which may not protect our intellectual property rights to the same extent as do the laws of the United States.

The steps we take to protect these rights may not be adequate to prevent misappropriation of our technology by third parties or may not be adequate under the laws of some foreign countries, which may not protect our intellectual property rights to the same extent as do the laws of the United States.

Our attempts to protect our intellectual property may be challenged by others or invalidated through administrative process or litigation, and agreement terms that address non-competition are difficult to enforce in many jurisdictions and may not be enforceable in any particular case.

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Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability to develop, market and sell our products and services, allowing our customers to use our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties.

property and proprietary rights of third parties.

There is considerable patent and other intellectual property litigation in the software, pharmaceutical and biotechnology industries.

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Our indebtedness could materially adversely affect our financial condition and our ability to operate our business, react to changes in the economy or industry or pay our debts and meet our obligations under our debt and could divert our cash flow from operations to debt payments.

As of December 31, 2020, we had $304.1 million in total borrowings under our credit agreement, dated July 15, 2017 (“Credit Agreement”) and no borrowings under our loan agreement, dated July 6, 2017 (“Loan Agreement”), which was paid off during the year and subsequently terminated.

As of December 31, 2020, we had a $20.0 million revolving credit facility under our Credit Agreement under which we had $19.9 million of availability after giving effect to outstanding letters of credit.

As of December 31, 2021, we had $300.5 million in total borrowings under our credit agreement, originally dated July 15, 2017 (“Credit Agreement”) and third modification on June 17, 2021.

As of December 31, 2021, we had a $100.0 million

revolving credit facility under our Credit Agreement under which we had $99.8 million of availability after giving effect to outstanding letters of credit.

In addition, subject to restrictions governing our Credit Agreement, we may incur additional debt.

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Servicing our debt requires a significant amount of cash.

For the years ended December 31, 2020 and December 31, 2019, we used operating cash of $48.7 million and $34.6 million, respectively, to service our debt.

On December 28, 2020, we used $83.0 million of proceeds to pay off our indebtedness on the Loan Agreement.

For the years ended December 31, 2021 and 2020, we used operating cash of $17.9 million and $48.7 million, respectively, to service our debt.

Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations.

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If we incur additional debt above the levels currently in effect, the risks associated with our leverage, including those described above, would increase.

Our Credit Agreement includes a revolving credit facility in an aggregate principal amount of $20.0 million, with a sub-commitment for issuance of letters of credit of $10.0 million, under which we had $19.9 million of availability as of December 31, 2020, after giving effect to outstanding letters of credit.

Our Credit Agreement includes a revolving credit facility in an aggregate principal amount of $100.0 million, with a sub-commitment for issuance of letters of credit.

Under the revolving credit facility we had $99.8 million of availability as of December 31, 2021, after giving effect to outstanding letters of credit.

Risks Related to our Financial Statements and Results

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We have intangible assets, including goodwill and other finite-lived and indefinite-lived intangibles, on our balance sheet due to our acquisitions of businesses.

The initial identification and valuation of these intangible assets and the determination of the estimated useful lives at the time of acquisition involve use of management judgments and estimates.

The initial identification and valuation of these intangible assets and the

determination of the estimated useful lives at the time of acquisition involve use of management judgments and estimates.

These estimates are based on, among other factors, input from accredited valuation consultants, reviews of projected future income cash flows and statutory regulations.

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Such an impairment charge could materially and adversely affect our operating results.

As of December 31, 2020 and 2019, the carrying amount of goodwill and other intangibles was $915.0 million and $943.0 million, respectively, on our consolidated balance sheets.

As of December 31, 2021, and 2020, the carrying amount of goodwill and other intangibles was $1.2 billion and $915.0 million, respectively, on our consolidated balance sheets.

Our ability to use our NOLs and R&D tax credit carryforwards to offset future taxable income may be subject to certain limitations.

As of December 31, 2021, we had federal and state NOLs of approximately $2.4 million and $2.6 million, respectively, which are available to reduce future taxable income and expire between 2024 and 2040 and 2029 and 2039, respectively.

As of December 31, 2020, we had federal and state R&D tax credit carryforwards of approximately $2.3 million and $0.6 million, respectively, to offset future income taxes, which expire between 2024 and 2040.

We had federal R&D tax credit carryforwards of approximately $1.5 million, which expire between 2025 and 2041, and state R&D tax credit carryforwards of approximately $0.4 million with indefinite carryover period, which are available to offset future income taxes.

We also had foreign tax credits of approximately $15.1 million, which will start to expire in 2025.

These carryforwards that may be utilized in a future period may be subject to limitations based upon changes in the ownership of our stock in a future period.

Additionally, we carried forward foreign NOLs of approximately $16.1 million which will start to expire in 2022, foreign research and development credits of $2.5 million which expire between 2029 and 2030, and Canadian investment tax credits of approximately $2.7 million which expire between 2030 and 2039.

Additionally, we carried forward foreign NOLs of approximately $24.5 million which will start to expire in 2022, foreign research and development credits of $0.4 million which will start to expire in 2029, and Canadian investment tax credits of approximately $3.8 million which will expire if unused in years 2030 through 2039.

Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.

In addition, in general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, a corporation that undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three year period, is subject to limitations on its ability to utilize its pre-change NOLs, R&D tax credit carryforwards and disallowed interest expense carryforwards to offset future taxable income.

We have performed an analysis through

August 15, 2017 and determined that an ownership change as of that date occurred.

Additionally, we have performed an analysis for the period August 15, 2017 through December 31, 2020 and determined that an ownership change did not occur during this period.

We have performed an analysis for the period January 1, 2021 through December 31, 2021 and determined that an ownership change did not occur during this period.

We may experience further ownership changes in the future and/or subsequent changes in our stock ownership (which may be outside our control).

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If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected.

The preparation of financial statements in conformity with U.S.

The preparation of financial statements in conformity with U.

generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

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Risks Related to Ownership of Our Common Stock

We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the U.S.

Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).

For so long as we remain an emerging growth company, we are permitted by SEC rules and plan to rely on exemptions from certain disclosure requirements that are applicable to other SEC-registered public companies that are not emerging growth companies.

These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the U.S.

Sarbanes-Oxley Act of 2002, as amended (“SOX”), not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

As a result, the information we provide stockholders will be different than the information that is available with respect to other public companies.

In this filing, we have not included all of the executive compensation related information that would be required if we were not an emerging growth company.

We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.

This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are a holding company with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations.

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These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act (“Rule 144”), including our directors, executive officers and other affiliates (including EQT and Arsenal Capital Partners and its affiliates (“Arsenal”), are “restricted securities” within the meaning of Rule 144 and subject to certain restrictions on resale.

Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144.

Shares covered by registration rights represent approximately 64.9% of our outstanding common stock as of December 31, 2020.

Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement.

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of our shares of common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them.

As of December 31, 2021, shares held by EQT and our officers and directors in aggregate represented approximately 27.5% of our outstanding common stock.

The market price of our shares of common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them.

These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

In addition, the shares of our common stock reserved for future issuance under the 2020 Incentive Plan or our 2020 Employee Stock Purchase Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and Rule 144, as applicable.

A total of 20,000,000 and 1,700,000 shares of common stock have been reserved for future issuance under the 2020 Incentive Plan and our 2020 Employee Stock Purchase Plan, respectively.

In addition, the shares of our common stock reserved for future issuance under the 2020 Incentive Plan (“Plan Share Reserve”) or our 2020 Employee Stock Purchase Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and Rule 144, as applicable.

A total of 19,898,104 and 1,700,000 shares of common stock have been reserved for future issuance under the 2020 Incentive Plan and our 2020 Employee Stock Purchase Plan, respectively as of December 31, 2021.

Pursuant to the terms of the 2020 Incentive Plan, the Plan Share Reserve automatically increases on the first day of each fiscal year by a number of shares of common stock equal to the lesser of (i) the positive difference, if any, between (A) 4% of the Company’s outstanding common stock on the last day of the immediately preceding fiscal year, and (B) the Plan Share Reserve on the last day of the immediately preceding fiscal year, and (ii) the number of shares of common stock as may be determined by the Board.

In the future, we may also issue our securities in connection with investments or acquisitions.

For example, we issued 2,239,717 shares of common stock in connection with our acquisition of Pinnacle in October 2021.

The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock.

Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution.

Provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of our amended and restated certificate of incorporation, amended and restated bylaws and stockholders agreement may have the effect of delaying or preventing a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider to be in its best interest, including attempts that might result in a premium over the market price of our common stock.

These provisions provide for, among other things:

● the division of our board of directors into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year;

● that at any time when EQT and certain of its affiliates beneficially own, in the aggregate, less than 40% in voting power of the stock of our company entitled to vote generally in the election of directors, directors may only be removed for cause, and only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of stock entitled to vote thereon, voting together as a single class;

● the ability of our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change of control;

● advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings;

change of control transaction that a stockholder might consider to be in its best interest, including attempts that might result in a premium over the market price of our common stock.

These provisions provide, among other things:

● for the division of our board of directors into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year;

● that directors may only be removed for cause, and only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of stock entitled to vote thereon, voting together as a single class;

● for the ability of our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change of control;

● for advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings;

● that special stockholder meetings may be called only by or at the direction of our board of directors or the chairman of our board of directors;

provided, however , that at any time when EQT and certain of its affiliates beneficially own, in the aggregate, at least 40% in voting power of our stock entitled to vote generally in the election of directors, EQT may request a special stockholder meeting be held, which provision may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our Company;

● that certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws pertaining to amendments, our board of directors, limitation of director liability, stockholder consents, annual and special stockholder meetings, competition and corporate opportunities and business combinations, may be amended only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class, if EQT and certain of its affiliates beneficially own, in the aggregate, less than 40% in voting power of our stock entitled to vote generally in the election of directors, which limitation may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our Company.

● that certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws pertaining to amendments, our board of directors, limitation of director liability, stockholder consents, annual and special stockholder meetings, competition and corporate opportunities and business combinations, may be amended only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class, which limitation may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our Company.

These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders.

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EQT holds a substantial amount of our outstanding common stock, and its interests may be different than the interests of other holders of our common stock.

As of December 31, 2020, EQT owns approximately 49.0% of our outstanding common stock, and has the ability to nominate a majority of the members of our board of directors.

As a result, EQT is able to control actions to be taken by us, including future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, amendments to our organizational documents and the approval of significant corporate transactions, including mergers, sales of substantially all of our assets, distributions of our assets, the incurrence of indebtedness and any incurrence of liens on our assets.

The interests of EQT may be materially different than the interests of our other stakeholders.

In addition, EQT may have an interest in pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to you.

For example, EQT may cause us to take actions or pursue strategies that could impact our ability to make payments under our Credit Facilities or cause a change of control.

In addition, to the extent permitted by agreements governing our Credit Facilities, EQT may cause us to pay dividends rather than make capital expenditures or repay debt.

As of December 31, 2021, EQT owned approximately 23.5% of our outstanding common stock.

Under the terms of our stockholders agreement, EQT and certain of its affiliates have the right to nominate to our board of directors a number of nominees equal to (x) the total number of directors comprising our board of directors at such time, multiplied by (y) the percentage of our outstanding common stock held from time to time by EQT and such affiliates (with any fractional amounts are rounded up to the nearest whole number).

As a result, EQT retains relatively significant influence over actions to be taken by us.

EQT is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us.

Our amended and restated certificate of incorporation will provide that none of EQT, any of their respective affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.

Our amended and restated certificate of incorporation provides that none of EQT, any of their respective affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.

EQT also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

So long as EQT continues to own a significant amount of our outstanding common stock, even though such amount is less than 50%, they will be able to strongly influence or effectively control our decisions and, so long as EQT continues to own shares of our outstanding common stock, EQT will have the ability to nominate individuals to our board of directors.

In addition, EQT will be able to determine the outcome of all matters requiring stockholder approval and will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of our company.

The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of our company and ultimately might affect the market price of our common stock.

So long as EQT continues to own a significant amount of our outstanding common stock, even though such amount is less than 50%, they will be able to influence our decisions and, so long as EQT continues to own shares of our outstanding common stock, EQT will have the ability to nominate individuals to our board of directors.

In addition, EQT will have significant influence over the outcome of all matters requiring stockholder approval, including any potential change of control of our company.

The concentration of ownership could deprive investors of an opportunity to receive a premium for shares of common stock as part of a sale of our Company and ultimately might affect the market price of our common stock.

Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America will be the sole and exclusive forums for certain stockholder litigation matters, which could limit our stockholder’s ability to obtain a favorable judicial forum for disputes with us or our current and former directors, officers, employees or stockholders.

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If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations.

In addition, we will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our next annual report.

This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

Testing internal controls may divert our management’s attention from other matters that are important to our business.

Our independent registered public accounting firm may be required to issue an

attestation report on effectiveness of our internal controls.

However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the SOX for compliance with the requirements of Section 404.

In addition, we are required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our annual report.

Our management conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, our management concluded that our internal control over financial reporting was not effective at December 31, 2021, because of the material weakness described below.

A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is more than a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

We concluded that we did not have an effective information technology general controls over one of the information technology system that supports the project set-up and time submissions for services provided.

We believe these control deficiencies were a result of IT processes lacking adequate reviews and documentation to maintain effective controls related to access management, change management and review over third party service organization report.

The material weakness did not result in any identified misstatements and there were no changes to previously released financial result.

We are taking steps to remediate the material weakness.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may in the future identify other deficiencies that we may not be able to remediate in time to meet the deadline imposed by the SOX for compliance with the requirements of Section 404.

In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent registered public accounting firm in connection with the issuance of their attestation report.

Our testing, or the subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses.

A material weakness in internal controls could result in our failure to detect a material misstatement of our annual or quarterly consolidated financial statements or disclosures.

We may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404.

If we are unable to conclude that we have effective internal controls over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.

We incur substantial costs as a result of operating as a publicly traded company, and our management is required to devote substantial time to compliance initiatives.

As a publicly traded company, and particularly after we are no longer an emerging growth company, we will incur additional legal, accounting, and other expenses that we did not previously incur.

Although we are currently unable to estimate these costs with any degree of certainty, they may be material in amount.

As a publicly traded company, and a large accelerated filer, we incur material legal, accounting, and other expenses that we did not previously incur.

In addition, the SOX, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the rules of the SEC, and the stock exchange on which our common shares are listed, have imposed various requirements on public companies.

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Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.

Changes in accounting standards issued by the Financial Accounting Standards Board (the “FASB”), or other standard-setting bodies may adversely affect trends and comparability of our financial results.

We are required to prepare our financial statements in accordance with GAAP, which is periodically revised and/or expanded.

From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the FASB and the SEC.

It is possible that future accounting standards we are required to adopt may require additional changes to the current accounting treatment that we apply to our financial statements and may result in significant changes to our results, disclosures and supporting reporting systems.

Such changes could result in a material adverse impact on our results of operations and financial condition.

Unresolved Staff Comments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors