Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock has been publicly traded on the Nasdaq Global Select Market under the symbol “SDGR” since February 6, 2020. Prior to that date, there was no public market for our common stock. Our limited common stock is not listed or traded on any stock exchange.
Holders of Record
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. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Dividends
We have never declared or paid cash dividends on our common stock or our limited common stock. We currently intend to retain all available funds and any future earnings to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. 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.
Certain Provisions of our Certificate of Incorporation and Bylaws
During November 2020, the Bill & Melinda Gates Foundation Trust, Schrodinger Equity Holdings, LLC, D. E. Shaw & Co., L.P., D. E. Shaw Technology Development, LLC and D. E. 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
On February 5, 2020, our registration statement on Form S-1, as amended (File No. 333-235890) was declared effective by the SEC in connection with our initial public offering of common stock, pursuant to which we issued and sold on February 10, 2020, 13,664,704 shares of our common stock at a public offering price of $17.00 per share, including 1,782,352 additional shares of common stock issued upon the full exercise by the underwriters of their option to purchase additional shares, for total gross proceeds of $232.3 million. 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.
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 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.
77
Table of Contents
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
Not applicable.
78
Table of Contents
Item 6. Selected Financial Data.
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 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.
Year Ended December 31,
2020
2019
2018
2017
(in thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues:
Software products and services
$
92,530
$
66,735
$
59,885
$
50,841
Drug discovery
15,565
18,808
6,754
4,852
Total revenues
108,095
85,543
66,639
55,693
Cost of revenues:
Software products and services
18,003
13,646
10,687
7,843
Drug discovery
26,620
22,804
13,015
8,050
Total cost of revenues
44,623
36,450
23,702
15,893
Gross profit
63,472
49,093
42,937
39,800
Operating expenses:
Research and development
64,695
39,404
34,523
27,669
Sales and marketing
17,795
21,364
17,831
16,716
General and administrative
41,898
27,040
18,552
14,436
Total operating expenses
124,388
87,808
70,906
58,821
Loss from operations
(60,916
)
(38,715
)
(27,969
)
(19,021
)
Other income (expense):
Gain on equity investments
4,108
943
—
3,243
Change in fair value
28,263
9,922
(812
)
(1,641
)
Interest income
2,253
1,878
433
359
Total other income (expense)
34,624
12,743
(379
)
1,961
Loss before income taxes
(26,292
)
(25,972
)
(28,348
)
(17,060
)
Income tax expense (benefit)
345
(291
)
77
332
Net loss
(26,637
)
(25,681
)
(28,425
)
(17,392
)
Net loss attributable to noncontrolling interest
(2,174
)
(1,110
)
—
—
Net loss attributable to Schrödinger common
and limited common stockholders
$
(24,463
)
$
(24,571
)
$
(28,425
)
$
(17,392
)
Net loss per share attributable to Schrödinger common
and limited common stockholders, basic and diluted:
$
(0.41
)
$
(4.09
)
$
(4.93
)
$
(3.77
)
Weighted average common shares used to compute net
loss per share attributable to common and limited common
stockholders, basic and diluted (1) :
60,024,658
6,004,500
5,771,305
4,608,307
(1)
Reflects the one-for-7.47534 reverse stock split of our common stock that became effective on January 24, 2020.
79
Table of Contents
December 31,
December 31,
December 31,
December 31,
2020
2019
2018
2017
(in thousands)
Consolidated Balance Sheet Data
Cash, cash equivalents, marketable securities, and
restricted cash
$
643,191
$
86,330
$
84,067
$
36,343
Working capital (2)
609,773
73,516
77,685
30,236
Total assets
746,263
155,270
120,730
58,022
Deferred revenue, current and long-term
86,567
27,259
20,730
13,750
Convertible preferred stock
—
191,580
161,687
82,310
Total stockholders’ equity (deficit)
624,019
(93,323
)
(71,560
)
(45,362
)
(2)
Working capital is current assets less current liabilities.
80
Table of Contents