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Item 5. Market for Registrant’s Common Equity

2021-03-04 compared with 2020-03-16 · 23 added, 36 removed, 54 unchanged (52% of the section changed)

5 unchanged sentences

Holders of Record

As of March 12, 2020, there were approximately 307 holders of record of our common stock and one holder of record of our limited common stock.

As of February 26, 2021 , there were approximately 146 holders of record of our common stock and one holder of record of our limited common stock.

The actual number of stockholders is greater than this number of holders of record and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

3 unchanged sentences

Any future determination to declare and pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by this item is set forth in “Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and is incorporated herein by reference.

Certain Provisions of our Certificate of Incorporation and Bylaws

During November 2020, the Bill & Melinda Gates Foundation Trust, Schrodinger Equity Holdings, LLC, D.

Shaw & Co., L.P., D.

Shaw Technology Development, LLC and D.

Shaw Valence Portfolios, L.L.C.

and their respective successors and affiliates ceased to collectively beneficially own (directly or indirectly) more than 40% of our outstanding shares of common stock and limited common stock.

Accordingly, pursuant to the provisions in our certificate of incorporation and our bylaws, our directors may be removed only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of common stock, and our stockholders may not take action by written consent in lieu of an annual or special meeting of stockholders.

Use of Proceeds

2 unchanged sentences

On February 10, 2020, we received net proceeds of $209.6 million, after deducting $16.3 million in underwriting discounts and commissions and $6.4 million in estimated offering expenses borne by us.

None of the underwriting discounts and commissions or offering expenses incurred by us were direct or indirect payments to any of (i) our officers or directors or their associates, (ii) persons owning 10% or more of our common stock or our limited common stock, or (iii) our affiliates.

The joint book-running managers of our initial public offering were Morgan Stanley & Co.

LLC, BofA Securities, Inc., Jefferies LLC, and BMO Capital Markets Corp.

The offering commenced on February 5, 2020 and did not terminate until the sale of all of the shares offered.

There has been no material change in the planned use of proceeds from our initial public offering from that described in the final prospectus related to the offering, dated February 5, 2020, as filed with the SEC on February 6, 2020.

Recent Sales of Unregistered Securities

Set forth below is information regarding shares of our preferred stock and stock options granted by us during the year ended December 31, 2019 that were not registered under the Securities Act of 1933, as amended, or the Securities Act, and that have not been otherwise described in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

The following share numbers have been adjusted, as appropriate, to reflect the one-for-7.47534 reverse stock split of our common stock that became effective on January 24, 2020, which also resulted in a proportional adjustment to the ratios at which our outstanding shares of preferred stock converted into common stock.

Our shares of preferred stock converted into shares of common stock upon the closing of our initial public offering on February 10, 2020, at the as-adjusted conversion ratios.

Issuances of Preferred Stock

On January 4, 2019, we issued and sold 3,354,353 shares of our Series E preferred stock to one investor at a price per share of $1.4906 in cash, for an aggregate purchase price of $4,999,998.59.

On April 8, 2019, we issued and sold 3,689,788 shares of our Series E preferred stock to two investors at a price per share of $1.4906 in cash, for an aggregate purchase price of $5,499,998.01.

On April 26, 2019, we issued and sold 8,268,481 shares of our Series E preferred stock to three investors at a price per share of $1.4906 in cash, for an aggregate purchase price of $12,324,997.79.

On May 6, 2019, we issued and sold 3,354,353 shares of our Series E preferred stock to one investor at a price per share of $1.4906 in cash, for an aggregate purchase price of $4,999,998.59.

On May 14, 2019, we issued and sold 1,459,143 shares of our Series E preferred stock to one investor at a price per share of $1.4906 in cash, for an aggregate purchase price of $2,174,998.56.

No underwriters were involved in the foregoing issuances of securities.

The securities described in this section were issued to investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(a)(2) under the Securities Act and, in certain cases, Regulation D thereunder, relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required.

All purchasers received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration statement or an available exemption from such registration.

Stock Option Grants and Exercises

Between January 1, 2019 and December 31, 2019, we granted options to purchase an aggregate of 1,255,242 shares of common stock, with exercise prices ranging from $4.34 to $11.52 per share, to our employees, directors, advisors and consultants pursuant to our 2010 Stock Plan.

Between January 1, 2019 and December 31, 2019, we issued 214,845 shares of our common stock to our employees, directors, advisors and consultants upon the exercise of stock options outstanding under our 2010 Stock Plan for aggregate consideration of $549,648.

The stock options and the shares of common stock issued upon the exercise of stock options described in this section were issued pursuant to written compensatory plans or arrangements with our employees, directors, advisors, and consultants, in reliance on the exemption provided by Rule 701 promulgated under the Securities Act, or pursuant to Section 4(a)(2) under the Securities Act, relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required.

All recipients either received adequate information about our company or had access, through employment or other relationships, to such information.

Set forth below is information regarding issuances of shares of our common stock during the year ended December 31, 2020 that were not registered under the Securities Act of 1933, as amended, or the Securities Act, and that have not been otherwise described in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

Issuances of Common Stock Upon Exchange of Limited Common Stock

On November 24, 2020, the Bill & Melinda Gates Foundation Trust voluntarily converted 4,000,000 shares of limited common stock into 4,000,000 shares of common stock.

The shares of common stock issued upon the conversion of the limited common stock described in this section were issued in reliance on the exemption provided by Section 3 (a)( 9 ) under the Securities Act.

Issuer Purchases of Equity Securities

1 unchanged sentence

Selected Financial Data.

You should read the following selected consolidated financial data together with our consolidated financial statements and the related notes, “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in this Annual Report.

You should read the following selected consolidated financial data together with our consolidated financial statements and the related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in this Annual Report.

We have derived the consolidated statement of operations data for the years ended December 31, 2020 and 2019 and the consolidated balance sheet data as of December 31, 2020 and 2019 from our audited consolidated financial statements, which are included elsewhere in this Annual Report.

The consolidated statement of operations data for the year ended December 31, 2017 and the selected consolidated balance sheet data as of December 31, 2017 is derived from our audited consolidated financial statements not included in this Annual Report.

The consolidated statement of operations data for the years ended December 31, 2018 and 2017 and the selected consolidated balance sheet data as of December 31, 2018 and December 31, 2017 are derived from our audited consolidated financial statements not included in this Annual Report.

Our historical results are not necessarily indicative of results that should be expected in any future period.

16 unchanged sentences

Other income (expense):

Gain on equity investment

Gain on equity investments

Change in fair value

4 unchanged sentences

Net loss attributable to noncontrolling interest

Net loss attributable to Schrödinger

Net loss attributable to Schrödinger common

and limited common stockholders

Net loss per share attributable to Schrödinger common

stockholders, basic and diluted

and limited common stockholders, basic and diluted:

Weighted average common shares used to compute net

loss per share attributable to common stockholders,

basic and diluted(1)

loss per share attributable to common and limited common

stockholders, basic and diluted (1) :

Reflects the one-for-7.47534 reverse stock split of our common stock that became effective on January 24, 2020.

Refer to Note 16 to the Consolidated Financial Statements of this Annual Report.

(in thousands)

Consolidated Balance Sheet Data

Cash, cash equivalents, marketable securities, and restricted

Cash, cash equivalents, marketable securities, and

restricted cash

Working capital (2)

1 unchanged sentence

Convertible preferred stock

Total stockholders' deficit

Total stockholders’ equity (deficit)

Working capital is current assets less current liabilities.

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 5. Market for Registrant’s Common Equity