Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of December 31, 2020. The term “disclosure controls and procedures,” means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation of our disclosure controls and procedures as of December 31, 2020, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Control Over Financial Reporting and Attestation Report of Registered Public Accounting Firm
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officer to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management assessed our internal control over financial reporting as of December 31, 2020. Management based its assessment on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.
This Annual Report does not include an attestation report of our independent registered public accounting firm due to an exemption established by the JOBS Act for “emerging growth companies”.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act) that occurred during the fourth quarter of 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by
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management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9B. Other Information
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this Item 10 is incorporated herein by reference from the information that will be contained in our proxy statement related to the 2021 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission within 120 days of the end of our fiscal year ended December 31, 2020 pursuant to General Instruction G(3) of Form 10-K.
We have adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the code on our website, www.schrodinger.com. In addition, we intend to post on our website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the code. Our website is not incorporated by reference into this Annual Report and you should not consider any information contained in or accessible from our website to be a part of this Annual Report.
Item 11. Executive Compensation.
The information required by this Item 11 is incorporated herein by reference from the information that will be contained in our proxy statement related to the 2021 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission within 120 days of the end of our fiscal year ended December 31, 2020 pursuant to General Instruction G(3) of Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item 12 is incorporated herein by reference from the information that will be contained in our proxy statement related to the 2021 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission within 120 days of the end of our fiscal year ended December 31, 2020 pursuant to General Instruction G(3) of Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item 13 is incorporated herein by reference from the information that will be contained in our proxy statement related to the 2021 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission within 120 days of the end of our fiscal year ended December 31, 2020 pursuant to General Instruction G(3) of Form 10-K.
Item 14. Principal Accountant Fees and Services.
The information required by this Item 14 is incorporated herein by reference from the information that will be contained in our proxy statement related to the 2021 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission within 120 days of the end of our fiscal year ended December 31, 2020 pursuant to General Instruction G(3) of Form 10-K.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
(1)
Financial Statements
The following documents are included on pages F-2 through F-8 attached hereto and are filed as part of this Annual Report.
Page
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Balance Sheets as of December 31, 2020 and 2019
F-3
Consolidated Statements of Operations for the Years ended December 31, 2020 and 2019
F-4
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the Years ended December 31, 2020 and 2019
F-6
Consolidated Statements of Cash Flows for the Years ended December 31, 2020 and 2019
F-7
Notes to Consolidated Financial Statements
F-8
(2)
Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable, not required, or the information required is shown in the consolidated financial statements or the notes thereto.
(3)
Exhibits
The exhibits filed as part of this Annual Report are listed below.
Exhibit
Number
Description of Exhibit
Form
File No.
Exhibit
Filing Date
Filed Herewith
3.1
Restated Certificate of Incorporation
8-K
001-39206
3.1
2/10/2020
3.2
Amended and Restated Bylaws
8-K
001-39206
3.2
2/10/2020
4.1
Specimen Stock Certificate evidencing the shares of common stock
S-1/A
333-235890
4.1
1/27/2020
4.2
Amended and Restated Share Exchange Agreement, dated January 24, 2020, by and between the Registrant and Bill & Melinda Gates Foundation Trust
S-1/A
333-235890
4.2
1/27/2020
4.3
Description of Securities Registered Under Section 12 of the Exchange Act
X
10.1
Amended and Restated Investors’ Rights Agreement, dated as of November 9, 2018, by and among the Registrant and the other parties thereto, as amended
S-1/A
333-235890
10.1
1/27/2020
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10.2
2010 Stock Plan, as amended
S-1
333-235890
10.2
1/10/2020
10.3
Form of Notice of Stock Option Grant and Stock Option Agreement under 2010 Stock Plan
S-1
333-235890
10.3
1/10/2020
10.4+
2020 Equity Incentive Plan
S-1/A
333-235890
10.4
1/27/2020
10.5+
Form of Stock Option Agreement and Form of Restricted Stock Unit Agreement under the 2020 Equity Incentive Plan
S-1/A
333-235890
10.5
1/27/2020
10.6+
2020 Employee Stock Purchase Plan
S-1/A
333-235890
10.6
1/27/2020
10.7+
Second Amended and Restated Director Compensation Policy
X
10.8+
Senior Executive Incentive Compensation Plan
S-1
333-235890
10.8
1/10/2020
10.9+
Executive Severance and Change in Control Benefits Plan
S-1
333-235890
10.9
1/10/2020
10.10+
Employment Agreement, dated May 11, 2010, by and between the Registrant and Ramy Farid
S-1
333-235890
10.10
1/10/2020
10.11+
Employment Agreement, dated November 14, 2018, by and between the Registrant and Joel Lebowitz
S-1
333-235890
10.11
1/10/2020
10.12+
Employment Agreement, dated April 15, 2013, by and between the Registrant and Cony D’Cruz
S-1
333-235890
10.12
1/10/2020
10.13+
Managing Director Agreement, dated October 1, 2002, by and between Schrödinger GmbH and Jörg Weiser
S-1
333-235890
10.13
1/10/2020
10.14+
Employment Agreement, dated May 14, 2018, by and between the Registrant and Karen Akinsanya
S-1
333-235890
10.14
1/10/2020
10.15+
Employment Agreement, dated February 22, 2017, by and between the Registrant and Jennifer Daniel
S-1
333-235890
10.15
1/10/2020
10.16+
Employment Agreement, dated April 27, 2010, by and between the Registrant and Yvonne Tran
S-1
333-235890
10.16
1/10/2020
10.17+
Employment Agreement, dated September 11, 2006, by and between the Registrant and Patrick Lorton
S-1
333-235890
10.17
1/10/2020
10.18+
Employment Agreement, dated June 1, 2010, by and between the Registrant and Shane Brauner
S-1
333-235890
10.18
1/10/2020
10.19+
Employment Agreement, dated March 9, 2009, by and between the Registrant and Robert Abel
S-1
333-235890
10.19
1/10/2020
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10.20+
Consultant Agreement, dated July 1, 1999, between the Registrant and Richard A. Friesner, as amended
10-Q
001-39206
10.1
8/10/2020
10.21+
Form of Indemnification Agreement between the Registrant and each of its Executive Officers and Directors
S-1
333-235890
10.21
1/10/2020
10.22
Lease, dated July 8, 2009, between SLG Tower 45 LLC and Registrant, as amended
S-1
333-235890
10.22
1/10/2020
10.23
Lease, dated August 6, 2008, between One Main Place Portland – Oregon, Inc., Landlord, and Registrant, Tenant, as amended
S-1
333-235890
10.23
1/10/2020
10.24†
Agreement, dated as of May 5, 1994, between The Trustees of Columbia University in the City of New York and Registrant, as amended
S-1
333-235890
10.24
1/10/2020
10.25†
Agreement, dated as of July 15, 1998, between The Trustees of Columbia University in the City of New York and Registrant, as amended
S-1
333-235890
10.25
1/10/2020
10.26†
Agreement, dated as of September 2001, between The Trustees of Columbia University in the City of New York and Schrödinger, LLC, as amended
S-1
333-235890
10.26
1/10/2020
10.27†
Agreement, dated as of June 19, 2003, between The Trustees of Columbia University in the City of New York and Schrödinger, LLC
S-1
333-235890
10.27
1/10/2020
10.28†
Software and Patent License Agreement, dated May 27, 2008, between The Trustees of Columbia University in the City of New York and Schrödinger, LLC
S-1
333-235890
10.28
1/10/2020
10.29†
Services Royalty Amendment, dated November 1, 2008, by and between The Trustees of Columbia University in the City of New York and Schrödinger, LLC
S-1
333-235890
10.29
1/10/2020
10.30†
Services Agreement, dated June 25, 2013, between D.E. Shaw India Software Private Limited and Schrödinger, LLC, as amended
S-1
333-235890
10.30
1/10/2020
10.31†
License and Software Development Agreement, dated March 14, 2013, by and between D. E. Shaw Research LLC and Schrödinger, LLC
S-1
333-235890
10.31
1/10/2020
10.32†
Amended and Restated License and Software Development Agreement, dated May 20, 2014, by and between D. E. Shaw Research, LLC and Schrödinger, LLC
S-1
333-235890
10.32
1/10/2020
10.33+
Global Bonus Plan
S-1/A
333-235890
10.33
1/27/2020
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10.34 †
Independent Contractor Agreement, dated June 23, 2020, by and between the Registrant and Gates Ventures, LLC
10-Q
001-39206
10.2
8/10/2020
10.35
Restricted Stock Unit Agreement for Non-U.S. Participants under the 2020 Equity Incentive Plan
10-Q
001-39206
10.1
11/12/2020
10.36
Stock Option Agreement for Non-U.S. Participants under the 2020 Equity Incentive Plan
10-Q
001-39206
10.2
11/12/2020
10.37†
Collaboration and License Agreement, dated November 22, 2020, by and between the Registrant and Bristol-Myers Squibb Company
X
10.38+
2021 Inducement Equity Incentive Plan
X
10.39+
Nonstatutory Stock Option Agreement under 2021 Inducement Equity Incentive Plan
X
10.40+
Restricted Stock Unit Agreement for U.S. Participants under 2021 Inducement Equity Incentive Plan
X
10.41+
Restricted Stock Unit Agreement for Non-U.S. Participants under 2021 Inducement Equity Incentive Plan
X
21.1
Subsidiaries of the Registrant
S-1
333-235890
21.1
1/10/2020
23.1
Consent of KPMG LLP, independent registered public accounting firm
X
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1#
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2#
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
†
Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
#
The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Schrödinger, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report, irrespective of any general incorporation language contained in such filing.
+
Management contract or compensatory plan or arrangement filed in response to Item 15(a)(3) of the Instructions to the Annual Report on Form 10-K.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized .
SCHRÖDINGER, INC.
Date: March 4, 2021
By:
/s/ Ramy Farid
Ramy Farid, Ph.D.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name
Title
Date
/s/ Ramy Farid
President and Chief Executive Officer, Director
March 4, 2021
Ramy Farid, Ph.D.
(Principal Executive Officer)
/s/ Joel Lebowitz
Chief Financial Officer
March 4, 2021
Joel Lebowitz
(Principal Financial Officer)
/s/ Jenny Herman
Senior Vice President, Controller
March 4, 2021
Jenny Herman
(Principal Accounting Officer)
/s/ Michael Lynton
Chairman of the Board
March 4, 2021
Michael Lynton
/s/ Jeffrey Chodakewitz
Director
March 4, 2021
Jeffrey Chodakewitz, M.D.
/s/ Richard Friesner
Director
March 4, 2021
Richard Friesner, Ph.D.
/s/ Gary Ginsberg
Director
March 4, 2021
Gary Ginsberg
/s/ Rosana Kapeller-Libermann
Director
March 4, 2021
Rosana Kapeller-Libermann, M.D., Ph.D.
/s/ Gary Sender
Director
March 4, 2021
Gary Sender
/s/ Nancy Thornberry
Director
March 4, 2021
Nancy Thornberry
/s/ Timothy Wright
Director
March 4, 2021
Timothy Wright, M.D.
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