10-Q 1 ck0001726445-20240331.htm 10-Q 10-Q
2024Q10001726445--12-31falseP1Yhttp://fasb.org/us-gaap/2023#RevenueFromContractWithCustomerExcludingAssessedTaxhttp://fasb.org/us-gaap/2023#RevenueFromContractWithCustomerExcludingAssessedTax0001726445us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001726445us-gaap:CommonStockMember2023-12-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001726445us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001726445us-gaap:RestrictedStockMember2023-01-012023-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445ck0001726445:MarketConditionOptionsMember2023-02-280001726445us-gaap:RelatedPartyMemberck0001726445:PrognomiqMember2024-01-012024-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001726445us-gaap:ServiceMemberus-gaap:NonrelatedPartyMember2024-01-012024-03-310001726445us-gaap:CostOfSalesMember2024-01-012024-03-310001726445us-gaap:ConstructionInProgressMember2024-03-310001726445ck0001726445:MarketConditionOptionsMembersrt:ExecutiveOfficerMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-02-012024-02-290001726445ck0001726445:NationalInstitutesOfHealthMemberus-gaap:GrantMember2023-01-012023-03-310001726445us-gaap:LeaseholdImprovementsMember2024-03-310001726445us-gaap:CommonClassBMember2024-03-310001726445us-gaap:EmployeeStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2023-12-310001726445ck0001726445:TwoThousandTwentyThreeMarketConditionOptionsGrantsMemberck0001726445:MarketConditionOptionsMember2024-01-012024-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:CommonClassAMember2024-05-060001726445us-gaap:CommonClassAMemberus-gaap:SubsequentEventMember2024-05-030001726445us-gaap:RelatedPartyMemberck0001726445:PrognomiqMember2023-01-012023-03-310001726445srt:MaximumMemberck0001726445:MarketConditionOptionsMemberus-gaap:MeasurementInputSharePriceMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMembersrt:ChiefExecutiveOfficerMember2024-03-310001726445us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberck0001726445:MajorCustomer1Member2023-01-012023-12-310001726445us-gaap:ConstructionInProgressMember2023-12-310001726445us-gaap:RestrictedStockMember2023-12-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:MeasurementInputExercisePriceMemberck0001726445:TwoThousandTwentyThreeMarketConditionOptionsGrantsMemberck0001726445:MarketConditionOptionsMember2023-03-310001726445us-gaap:CostOfSalesMember2023-01-012023-03-310001726445us-gaap:CommonStockMember2023-03-310001726445us-gaap:AdditionalPaidInCapitalMember2022-12-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:LeaseholdImprovementsMember2023-12-310001726445ck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-02-012024-02-290001726445us-gaap:CommonClassBMember2023-12-310001726445us-gaap:CustomerConcentrationRiskMemberck0001726445:MajorCustomer1Memberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001726445us-gaap:EmployeeSeveranceMemberus-gaap:SubsequentEventMember2024-05-082024-05-080001726445ck0001726445:AsiaAndEuropeMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-03-310001726445ck0001726445:MarketConditionOptionsMemberus-gaap:MeasurementInputSharePriceMembersrt:MinimumMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMembersrt:ChiefExecutiveOfficerMember2023-03-310001726445us-gaap:MeasurementInputExercisePriceMemberck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-03-310001726445us-gaap:BuildingMemberck0001726445:SanDiegoCaMember2024-03-310001726445us-gaap:CommonClassAMember2023-12-3100017264452023-01-012023-03-310001726445ck0001726445:ComputerEquipmentAndSoftwareMember2023-12-310001726445us-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2024-03-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:EmployeeStockMemberus-gaap:CommonClassAMember2024-03-310001726445us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445ck0001726445:A2020EquityIncentivePlanMember2023-01-012023-03-3100017264452024-03-310001726445ck0001726445:A2020EquityIncentivePlanMember2024-03-310001726445us-gaap:ProductMemberus-gaap:RelatedPartyMember2024-01-012024-03-310001726445us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001726445us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-3100017264452024-01-012024-03-310001726445ck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMembersrt:ChiefExecutiveOfficerMember2024-02-012024-02-290001726445us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:FurnitureAndFixturesMember2023-12-310001726445us-gaap:CommonStockMember2022-12-310001726445us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:InvestmentsMember2024-03-310001726445us-gaap:CommonClassAMember2024-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445srt:ExecutiveOfficerMemberus-gaap:RelatedPartyMember2024-01-012024-03-310001726445ck0001726445:MarketConditionOptionsMember2023-01-012023-03-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2024-03-310001726445ck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMemberus-gaap:MeasurementInputOptionVolatilityMember2023-03-310001726445us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445ck0001726445:TwoThousandTwentyThreeMarketConditionOptionsGrantsMemberck0001726445:MarketConditionOptionsMember2024-03-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:CustomerConcentrationRiskMemberck0001726445:MajorCustomer1Memberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001726445us-gaap:RelatedPartyMemberck0001726445:PrognomiqMember2024-03-310001726445us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001726445us-gaap:RestrictedStockMember2024-01-012024-03-310001726445ck0001726445:MarketConditionOptionsMemberus-gaap:CommonClassAMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMembersrt:ChiefExecutiveOfficerMember2024-02-290001726445us-gaap:BuildingMember2024-03-310001726445ck0001726445:GrantAndOtherMemberus-gaap:NonrelatedPartyMember2024-01-012024-03-310001726445srt:ExecutiveOfficerMemberus-gaap:RelatedPartyMember2023-01-012023-03-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001726445ck0001726445:MarketConditionOptionsMemberus-gaap:MeasurementInputSharePriceMembersrt:MinimumMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMembersrt:ChiefExecutiveOfficerMember2024-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:CommercialPaperMemberus-gaap:InvestmentsMember2024-03-310001726445us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2023-12-310001726445us-gaap:RetainedEarningsMember2023-12-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001726445srt:ExecutiveOfficerMemberus-gaap:RelatedPartyMember2023-12-310001726445us-gaap:RetainedEarningsMember2023-03-310001726445us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001726445us-gaap:RestrictedStockMember2024-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2024-03-310001726445ck0001726445:A2020EquityIncentivePlanMember2022-06-210001726445us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001726445us-gaap:RetainedEarningsMember2022-12-310001726445us-gaap:RestrictedStockUnitsRSUMember2023-12-310001726445ck0001726445:ComputerEquipmentAndSoftwareMember2024-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:CashEquivalentsMember2023-12-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-3100017264452023-03-310001726445us-gaap:InvestmentsMember2023-12-310001726445us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001726445us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001726445us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445ck0001726445:NationalInstitutesOfHealthMemberus-gaap:GrantMember2024-01-012024-03-310001726445srt:MaximumMember2024-03-310001726445us-gaap:CommonStockMember2024-03-310001726445us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001726445ck0001726445:USNonTreasurySecuritiesMemberus-gaap:InvestmentsMember2024-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:InvestmentsMember2023-12-310001726445ck0001726445:USNonTreasurySecuritiesMemberus-gaap:InvestmentsMember2023-12-3100017264452024-01-012024-03-310001726445ck0001726445:MarketConditionOptionsMember2024-01-012024-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2023-12-3100017264452023-12-310001726445ck0001726445:MarketConditionOptionsMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-03-310001726445us-gaap:EmployeeSeveranceMemberus-gaap:SubsequentEventMember2024-05-080001726445us-gaap:AdditionalPaidInCapitalMember2023-03-310001726445us-gaap:RelatedPartyMember2024-03-310001726445ck0001726445:LaboratoryMember2023-12-310001726445us-gaap:ProductMemberus-gaap:NonrelatedPartyMember2024-01-012024-03-310001726445ck0001726445:MajorCustomer2Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-03-310001726445ck0001726445:MarketConditionOptionsMembersrt:ExecutiveOfficerMemberus-gaap:CommonClassAMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-02-290001726445srt:MinimumMember2024-03-310001726445us-gaap:AdditionalPaidInCapitalMember2024-03-310001726445us-gaap:RestrictedStockUnitsRSUMember2024-03-310001726445us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001726445us-gaap:CommercialPaperMemberus-gaap:InvestmentsMember2023-12-310001726445us-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2023-12-310001726445us-gaap:RetainedEarningsMember2023-01-012023-03-310001726445ck0001726445:RedwoodCityCaMemberck0001726445:FacilityLeaseAgreementLetterOfCreditMemberus-gaap:LetterOfCreditMember2024-03-310001726445us-gaap:FairValueMeasurementsRecurringMember2024-03-3100017264452022-12-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:CommonStockMember2023-01-012023-03-310001726445srt:ExecutiveOfficerMemberus-gaap:RelatedPartyMember2024-03-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001726445us-gaap:AdditionalPaidInCapitalMember2023-12-310001726445us-gaap:RetainedEarningsMember2024-01-012024-03-310001726445us-gaap:ProductMemberus-gaap:RelatedPartyMemberck0001726445:PrognomiqMember2024-01-012024-03-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001726445ck0001726445:MarketConditionOptionsMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2023-03-310001726445us-gaap:CommonClassBMember2024-05-060001726445ck0001726445:MarketConditionOptionsMember2023-02-282023-02-280001726445us-gaap:CashEquivalentsMember2023-12-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:BuildingMemberck0001726445:RedwoodCityCaMember2024-03-310001726445us-gaap:FurnitureAndFixturesMember2024-03-310001726445us-gaap:ProductMemberus-gaap:RelatedPartyMember2023-01-012023-03-310001726445us-gaap:RetainedEarningsMember2024-03-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:CorporateDebtSecuritiesMemberus-gaap:CashEquivalentsMember2023-12-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2023-12-310001726445ck0001726445:NationalInstitutesOfHealthMemberus-gaap:GrantMember2019-08-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2024-03-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001726445us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001726445us-gaap:NonrelatedPartyMember2024-03-310001726445ck0001726445:MarketConditionOptionsMembersrt:MaximumMemberus-gaap:MeasurementInputSharePriceMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMembersrt:ChiefExecutiveOfficerMember2023-03-310001726445us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445ck0001726445:GrantAndOtherMemberus-gaap:NonrelatedPartyMember2023-01-012023-03-310001726445ck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-01-012024-03-3100017264452022-06-210001726445us-gaap:USTreasurySecuritiesMemberus-gaap:InvestmentsMember2024-03-310001726445us-gaap:ServiceMemberus-gaap:NonrelatedPartyMember2023-01-012023-03-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001726445us-gaap:CustomerConcentrationRiskMemberck0001726445:MajorCustomer2Memberus-gaap:AccountsReceivableMember2023-01-012023-12-310001726445ck0001726445:A2020EquityIncentivePlanMember2024-01-012024-03-310001726445ck0001726445:MarketConditionOptionsMemberus-gaap:CommonClassAMember2023-02-280001726445ck0001726445:AsiaAndEuropeMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2024-01-012024-03-310001726445us-gaap:RelatedPartyMemberck0001726445:PrognomiqMember2023-12-310001726445us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001726445us-gaap:BuildingMember2023-12-310001726445us-gaap:MeasurementInputExpectedDividendRateMemberck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-03-310001726445us-gaap:CommonStockMember2024-01-012024-03-310001726445us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2024-03-310001726445ck0001726445:LaboratoryMember2024-03-310001726445ck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMember2024-03-310001726445us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445us-gaap:RelatedPartyMember2023-12-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001726445ck0001726445:A2020EquityIncentivePlanMemberus-gaap:StockCompensationPlanMemberus-gaap:CommonClassAMember2024-03-310001726445ck0001726445:MarketConditionOptionsMemberck0001726445:TwoThousandTwentyFourMarketConditionOptionsGrantsMemberus-gaap:MeasurementInputOptionVolatilityMember2024-03-310001726445us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberck0001726445:USNonTreasurySecuritiesMember2024-03-310001726445us-gaap:CashEquivalentsMember2024-03-310001726445us-gaap:ProductMemberus-gaap:NonrelatedPartyMember2023-01-012023-03-310001726445us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberck0001726445:MajorCustomer1Member2024-01-012024-03-310001726445us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310001726445us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2023-12-310001726445ck0001726445:A2020EquityIncentivePlanMemberus-gaap:CommonClassAMember2024-03-31iso4217:USDxbrli:sharesxbrli:pureutr:sqftxbrli:sharesck0001726445:Voteiso4217:USD

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark one)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number 001-39747

 

SEER, INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

82-1153150

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

3800 Bridge Parkway, Suite 102

Redwood City, California 94065

650-453-0000

(Address, including zip code and telephone number, including area code, of Registrant’s principal executive offices)

 

Securities registered pursuant to section 12(b) of the Act:

 

Copies to:

 

Title of each class

 

Trading Symbol(s)

 

Name of Exchange on which registered

Common Stock, par value $0.00001

 

SEER

 

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

 

 

 

Smaller reporting company

 

 

 

 

 

Non-accelerated filer

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of May 6, 2024, the registrant had 60,891,711 shares of Class A common stock, $0.00001 par value per share, and 4,044,969 of Class B common stock, $0.00001 par value per share, outstanding.

 

 


 

TABLE OF CONTENTS

 

 

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

Condensed Consolidated Statements of Changes in Stockholders’ Equity

3

Condensed Consolidated Statements of Cash Flows

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

31

PART II.

OTHER INFORMATION

32

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 2.

Unregistered Sales of Equity Securities

86

Item 3.

Defaults Upon Senior Securities

86

Item 4.

Mine Safety Disclosure

86

Item 5.

Other Information

86

Item 6.

Exhibits

87

 

Signatures

 

 

 


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, commercial activities and costs, research and development costs, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

estimates of our addressable market, market growth, key performance indicators, capital requirements and our needs for additional financing;
our expectations regarding our financial performance, including among others, revenue, cost of revenue, gross profit, operating expenses, loss from operations and net losses;
our ability to successfully implement our commercialization strategy and attract customers, including our plans for international expansion;
the implementation of our business model, strategic plans and expected pricing for the Proteograph™ Product Suite;
our expectations regarding the rate and degree of market acceptance of the Proteograph Product Suite;
the impact of the Proteograph Product Suite on the field of proteomics and the size and growth of the addressable proteomics market;
competitive companies and technologies and our industry;
our ability to manage and grow our business;
our ability to develop and commercialize new products;
our ability to establish and maintain intellectual property protection for our products or avoid or defend claims of infringement;
the performance of third-party manufacturers and suppliers;
the potential effects of government regulation;
our ability to hire and retain key personnel and to manage our future growth effectively;
the volatility of the trading price of our Class A common stock;
the benefits of the PrognomiQ, Inc. transaction;

 


 

the impact of local, regional, and national and international economic conditions and events;
the impact of macroeconomic factors, such as pandemics, inflation, supply chain interruptions and foreign hostilities, on our business; and
our expectations about market trends.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements contained herein to reflect events or circumstances after the date of this Quarterly Report, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

 


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

SEER, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

 

 

March 31,
2024

 

 

December 31,
2023

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

54,398

 

 

$

32,499

 

Short-term investments

 

 

254,152

 

 

 

283,725

 

Accounts receivable, net

 

 

3,815

 

 

 

4,831

 

Related party receivables

 

 

989

 

 

 

559

 

Other receivables

 

 

1,346

 

 

 

1,326

 

Inventory

 

 

5,809

 

 

 

4,491

 

Prepaid expenses and other current assets

 

 

3,641

 

 

 

3,082

 

Total current assets

 

 

324,150

 

 

 

330,513

 

Long-term investments

 

 

50,642

 

 

 

56,858

 

Operating lease right-of-use assets

 

 

24,571

 

 

 

25,177

 

Property and equipment, net

 

 

21,175

 

 

 

22,193

 

Restricted cash

 

 

524

 

 

 

524

 

Other assets

 

 

900

 

 

 

1,004

 

Total assets

 

$

421,962

 

 

$

436,269

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,564

 

 

$

1,370

 

Accrued expenses

 

 

7,572

 

 

 

9,212

 

Deferred revenue

 

 

269

 

 

 

206

 

Operating lease liabilities, current

 

 

2,280

 

 

 

2,295

 

Other current liabilities

 

 

145

 

 

 

139

 

Total current liabilities

 

 

12,830

 

 

 

13,222

 

Operating lease liabilities, net of current portion

 

 

25,404

 

 

 

25,964

 

Other noncurrent liabilities

 

 

173

 

 

 

179

 

Total liabilities

 

 

38,407

 

 

 

39,365

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized as of
    March 31, 2024 and December 31, 2023;
zero shares issued and
    outstanding as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Class A common stock, $0.00001 par value; 94,000,000 shares authorized
    as of March 31, 2024 and December 31, 2023;
60,891,711 and
    
60,253,707 shares issued and outstanding as of March 31, 2024 and
   December 31, 2023, respectively

 

 

1

 

 

 

1

 

Class B common stock, $0.00001 par value; 6,000,000 shares authorized
   as of March 31, 2024 and December 31, 2023;
4,044,969 shares
   issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Additional paid-in capital

 

 

710,527

 

 

 

702,868

 

Accumulated other comprehensive loss

 

 

(521

)

 

 

(192

)

Accumulated deficit

 

 

(326,452

)

 

 

(305,773

)

Total stockholders’ equity

 

 

383,555

 

 

 

396,904

 

Total liabilities and stockholders’ equity

 

$

421,962

 

 

$

436,269

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1


SEER, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

Product

$

1,668

 

 

$

2,343

 

Service

 

408

 

 

 

69

 

Related party

 

954

 

 

 

1,306

 

Grant and other

 

36

 

 

 

335

 

Total revenue

 

3,066

 

 

 

4,053

 

Cost of revenue:

 

 

 

 

 

Product

 

991

 

 

 

1,436

 

Service

 

269

 

 

 

7

 

Related party

 

312

 

 

 

478

 

Grant and other

 

133

 

 

 

64

 

Total cost of revenue

 

1,705

 

 

 

1,985

 

Gross profit

 

1,361

 

 

 

2,068

 

Operating expenses:

 

 

 

 

 

Research and development

 

12,265

 

 

 

14,474

 

Selling, general and administrative

 

14,288

 

 

 

15,039

 

Total operating expenses

 

26,553

 

 

 

29,513

 

Loss from operations

 

(25,192

)

 

 

(27,445

)

Other income (expense):

 

 

 

 

 

Interest income

 

4,586

 

 

 

3,717

 

Other expense

 

(73

)

 

 

(231

)

Total other income

 

4,513

 

 

 

3,486

 

Net loss

$

(20,679

)

 

$

(23,959

)

Other comprehensive gain (loss):

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities

 

(329

)

 

 

1,158

 

Comprehensive loss

$

(21,008

)

 

$

(22,801

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.32

)

 

$

(0.38

)

Weighted-average common shares outstanding, basic and diluted

 

64,586,056

 

 

 

63,543,094

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2


SEER, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(in thousands, except share amounts)

 

 

 

 

 

 

Class A and Class B
Common Stock

 

 

Additional Paid-in

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Total

 

Balance at December 31, 2023

 

 

64,298,676

 

 

$

1

 

 

$

702,868

 

 

$

(305,773

)

 

$

(192

)

 

$

396,904

 

Issuance of Class A common stock from exercise of options and
   release of restricted stock units

 

 

638,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early exercised stock options and restricted
   common stock

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

4

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,655

 

 

 

 

 

 

 

 

 

7,655

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(329

)

 

 

(329

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(20,679

)

 

 

 

 

 

(20,679

)

Balance at March 31, 2024

 

 

64,936,680

 

 

$

1

 

 

$

710,527

 

 

$

(326,452

)

 

$

(521

)

 

$

383,555

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

3


SEER, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(in thousands, except share amounts)

 

 

 

 

 

Class A and Class B
Common Stock

 

 

Additional Paid-in

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Total

 

Balance at December 31, 2022

 

 

63,411,046

 

 

$

1

 

 

$

667,739

 

 

$

(219,496

)

 

$

(1,251

)

 

$

446,993

 

Issuance of Class A common stock from exercise of options and
   release of restricted stock units

 

 

328,273

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

 

30

 

Vesting of early exercised stock options and restricted
   common stock

 

 

 

 

 

 

 

 

43

 

 

 

 

 

 

 

 

 

43

 

Stock-based compensation

 

 

 

 

 

 

 

 

8,724

 

 

 

 

 

 

 

 

 

8,724

 

Other comprehensive gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,158

 

 

 

1,158

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(23,959

)

 

 

 

 

 

(23,959

)

Balance at March 31, 2023

 

 

63,739,319

 

 

$

1

 

 

$

676,536

 

 

$

(243,455

)

 

$

(93

)

 

$

432,989

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


SEER, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(20,679

)

 

$

(23,959

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation

 

 

7,580

 

 

 

8,724

 

Depreciation and amortization

 

 

1,494

 

 

 

1,249

 

Loss on disposal of property and equipment

 

 

45

 

 

 

226

 

Net amortization (accretion) of premium (discount) on available-for-sale securities

 

 

2,351

 

 

 

(2,378

)

Provision for inventory excess and obsolescence

 

 

8

 

 

 

178

 

Non-cash operating lease expense

 

 

31

 

 

 

57

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

566

 

 

 

(165

)

Prepaid expenses and other assets

 

 

(455

)

 

 

(2,280

)

Inventory

 

 

(967

)

 

 

(40

)

Accounts payable

 

 

1,381

 

 

 

(100

)

Deferred revenue

 

 

63

 

 

 

130

 

Accrued liabilities and other liabilities

 

 

(1,874

)

 

 

(973

)

Net cash used in operating activities

 

 

(10,456

)

 

 

(19,331

)

INVESTING ACTIVITIES

 

 

 

 

 

 

Purchases of property and equipment

 

 

(754

)

 

 

(121

)

Purchases of available-for-sale securities

 

 

(101,297

)

 

 

(134,520

)

Proceeds from sale of available-for-sale securities

 

 

 

 

 

2,990

 

Proceeds from maturities of available-for-sale securities

 

 

134,406

 

 

 

146,130

 

Net cash provided by investing activities

 

 

32,355

 

 

 

14,479

 

FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from exercise of Class A common stock options

 

 

 

 

 

30

 

Net cash provided by financing activities

 

 

 

 

 

30

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

21,899

 

 

 

(4,822

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

33,023

 

 

 

53,732

 

Cash, cash equivalents and restricted cash, end of period

 

$

54,922

 

 

$

48,910

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES

 

 

 

 

 

 

Capitalized stock-based compensation related to internal-use software development

 

$

75

 

 

$

 

Property and equipment purchases included in accounts payable and accrued expenses

 

$

466

 

 

$

204

 

Inventory transferred to property and equipment

 

$

 

 

$

771

 

Property and equipment transferred to inventory

 

$

359

 

 

$

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1.
ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Seer, Inc. (the Company) was incorporated in Delaware on March 16, 2017, and is headquartered in Redwood City, California. The Company is a life sciences company focused on capturing deep molecular insights from the proteome to enable novel insights and breakthroughs in the understanding of biology and disease.

Liquidity

As of March 31, 2024, the Company has incurred significant losses and has had negative cash flows from operations. As of March 31, 2024, the Company had cash and cash equivalents and short-term investments of $308.6 million and an accumulated deficit of $326.5 million. Management expects to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term while the Company makes investments to support its anticipated growth. The Company believes that its cash and cash equivalents and investments as of March 31, 2024 provide sufficient capital resources to continue its operations for at least twelve months from the issuance date of the accompanying unaudited condensed consolidated financial statements.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation and Principles of Consolidation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The unaudited condensed consolidated financial statements include the accounts of Seer, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 4, 2024.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including, but not limited to, those related to the determination of stand-alone selling price for revenue recognition, stock-based compensation, allowance for credit losses, inventory valuation, operating lease right-of-use assets and liabilities, useful lives and valuation of property and equipment, income tax uncertainties, and tax valuation allowances.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates.

6


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and investments. The Company maintains bank deposits in federally insured financial institutions, and these deposits may exceed federally insured limits. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents and issuers of investments to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation.

For the three months ended March 31, 2024 and 2023, the Company recognized revenue from a related party that represented 31% and 32%, respectively, of the Company’s total revenue.

For the three months ended March 31, 2024 and 2023, 13% and 22%, respectively, of the total revenue was generated outside of the United States, from countries in Asia and Europe.

As of March 31, 2024, there were two customers which represented 21% and 10% of the total accounts receivable balance, including related party receivables. As of December 31, 2023, there were two customers which represented 14% and 10% of the total accounts receivable balance, including related party receivables.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of March 31, 2024 and December 31, 2023, all amounts recorded as cash and cash equivalents consist of cash, money market funds, corporate debt securities and U.S. Treasury securities and are stated at fair value.

Restricted cash as of March 31, 2024 and December 31, 2023 represents cash held by a financial institution as security for a letter of credit issued to the lessor for one of the Company’s operating leases and is classified as noncurrent.

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the total amount presented in the unaudited condensed consolidated statements of cash flows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

54,398

 

 

$

48,386

 

Restricted cash

 

 

524

 

 

 

524

 

Total cash, cash equivalents and restricted cash

 

$

54,922

 

 

$

48,910

 

 

7


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Investments

The Company has designated all investments, which includes U.S. Treasury securities, U.S. Non-Treasury securities, commercial paper, and corporate debt securities as available-for-sale, and therefore, such investments are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a component of other comprehensive loss. The cost of available-for-sale securities is adjusted for the amortization of premiums and accretion of discounts to expected maturity. Such amortization and accretion are included in other income (expense) on the unaudited condensed consolidated statements of operations and comprehensive loss. Realized gains and losses and interest income on available-for-sale securities are also included in other income (expense). The cost of securities sold is based on the specific identification method. The Company determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such designation at each balance sheet date. As of March 31, 2024, the Company classifies its available-for-sale securities as short-term investments or long-term investments based on the remaining contractual maturity of the securities.

All of the Company’s investments are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other than temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which an investment’s fair value has been less than its cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security and whether or not the Company will be required to sell the security before the recovery of its amortized cost.

Any unrealized losses on available-for-sale debt securities that are attributed to credit risk are recorded to the unaudited condensed consolidated statements of operations and comprehensive loss through an allowance for credit losses.

Accounts Receivable, Net

Accounts receivable consist of amounts due from customers for the sales of products and services, net of any allowance for credit losses. The Company’s expected loss allowance methodology for receivables is developed using its historical collection experience, current and future economic market conditions and a review of the current aging status and financial condition of its customers. Balances are written off when they are ultimately determined to be uncollectible. The Company recorded a $4,000 allowance for credit losses related to accounts receivable as of each of March 31, 2024 and December 31, 2023.

Leases

The Company determines if an arrangement is or contains a lease at contract inception and classifies each lease as operating, sales-type or finance lease.

Operating lease right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the commencement date of the lease. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less any lease incentive received. The Company uses its incremental borrowing rate in determining the present value of lease payments based on the information available at the date of lease commencement. The incremental borrowing rate reflects the rate of interest that a lessee would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease expense for an operating lease is recognized on a straight-line basis over the lease term.

8


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company elected to not separate non-lease components from the associated lease components and to not recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Variable lease payments are primarily related to property taxes, insurance and common area maintenance, and are recognized as lease costs when incurred.

Revenue Recognition

The Company generates revenue primarily from sales of products and services. The Company’s product, the Proteograph Product Suite, consists of an instrument with embedded software essential to the instrument's functionality and consumables. The service revenue primarily consists of revenue received from the generation and analysis of proteomic data on behalf of customers.

The Company recognizes revenue when control of the products and services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to receive from its customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is distinct within the context of the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to direct the use and obtain substantially all the economic benefits from the good or service.

Revenue from product sales is recognized when control of the product is transferred, which is generally upon shipment to the customer. In instances where right of payment or transfer of title is contingent upon the customer’s acceptance of the product, revenue is deferred until all acceptance criteria have been met. Revenue from services is recognized once the report is delivered to a customer, which is when the customer obtains the benefit of the service.

Revenue is recorded net of discounts and sales taxes collected on behalf of governmental authorities. Customers are invoiced generally upon shipment, or upon delivery of services, and payment is typically due within 30 or 60 days. Cash received from customers in advance of product shipment or providing services is recorded as a contract liability. The Company’s contracts with its customers generally do not include rights of return.

At times, the Company may enter into arrangements with payment terms which exceed one year from the transfer of control of the product or service. In such cases, the Company assesses whether the arrangement contains a significant financing component. If a significant financing component exists, the transaction price is adjusted for the financing portion of the arrangement, which is recorded as interest income over the payment term using the effective interest method. The Company does not assess whether a significant financing component exists when, at contract inception, the period between the transfer of control to a customer and final payment is one year or less.

The Company elected the practical expedient to account for shipping and handling activities that occur after the customer has obtained control as a fulfillment activity and not a separate performance obligation. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period is one year or less or the amount is immaterial. The Company excludes from the transaction price all taxes assessed by a governmental authority on revenue-producing transactions that are collected by the Company from a customer.

9


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company regularly enters into contracts that include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The transaction price is allocated to each performance obligation in proportion to its standalone selling price. The Company determines the standalone selling price using average selling prices with consideration of current market conditions. If the product or service has no history of sales or if the sales volume is not sufficient, the Company relies upon prices set by management, adjusted for applicable discounts.

Grant and Other Revenue

Grant revenue represents funding under cost reimbursement programs from federal foundation sources for qualified research and development activities performed by the Company and are not based on estimates that are subject to change. Grants received are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution. An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred. Such amounts are recorded as revenue as grant-funded activities are performed up to the amount of expenses incurred. Any advance funding payments are recorded as deferred revenue until the activities are performed.

A portion of the Company’s revenue relates to lease arrangements. Standalone lease arrangements are outside the scope of Accounting Standards Codification (ASC) 606, Revenue From Contracts With Customers, and are therefore accounted for in accordance with ASC 842, Leases. The total consideration in a lease arrangement is allocated between lease and non-lease components on their relative stand-alone selling prices. The stand-alone selling price is based on the price the Company would separately sell that promised good or service to a customer. If a stand-alone price is not available for a component, it is estimated using the best information available.

In determining whether a transaction should be classified as a sales-type or operating lease, the Company considered the following criteria at lease commencement: (1) whether title of the instrument transfers automatically or for a nominal fee by the end of the lease term, (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased instrument, (3) whether the lease term is for the major part of the remaining economic life of the leased instrument, (4) whether the lease grants the lessee an option to purchase the leased instrument that the lessee is reasonably certain to exercise, and (5) whether the underlying instrument is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. If any of these criteria were met, the lease was classified as a sales-type lease. If none of these criteria are met, the lease was classified as an operating lease.

Shipping revenue is recognized when control of the product is transferred to the customer. The related shipping and handling costs are included in the cost of revenue.

10


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide enhancements to segment disclosures, even for entities with only one reportable segment. In particular, the standard will require disclosures of significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss. The standard will also require disclosure of all other segment items by reportable segment and a description of its composition. Finally, the standard will require disclosure of the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard is effective for annual periods beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the impact of this new guidance on its disclosures.

3.
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables set forth the fair value of the Company’s financial assets that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands).

 

 

 

March 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

52,551

 

 

$

 

 

$

 

 

$

52,551

 

Total cash equivalents

 

 

52,551

 

 

 

 

 

 

 

 

 

52,551

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

 

 

 

170,572

 

 

 

 

 

 

170,572

 

U.S. Non-Treasury securities

 

 

 

 

 

7,100

 

 

 

 

 

 

7,100

 

Commercial paper

 

 

 

 

 

16,742

 

 

 

 

 

 

16,742

 

Corporate debt securities

 

 

 

 

 

110,380

 

 

 

 

 

 

110,380

 

Total investments

 

 

 

 

 

304,794

 

 

 

 

 

 

304,794

 

Total assets measured at fair value

 

$

52,551

 

 

$

304,794

 

 

$

 

 

$

357,345

 

 

11


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

 

 

 

December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

22,646

 

 

$

 

 

$

 

 

$

22,646

 

Corporate debt securities

 

 

 

 

 

1,550

 

 

 

 

 

 

1,550

 

U.S. Treasury securities

 

 

 

 

 

4,985

 

 

 

 

 

 

4,985

 

Total cash equivalents

 

 

22,646

 

 

 

6,535

 

 

 

 

 

 

29,181

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

 

 

 

225,180

 

 

 

 

 

 

225,180

 

U.S. Non-Treasury securities

 

 

 

 

 

11,901

 

 

 

 

 

 

11,901

 

Commercial paper

 

 

 

 

 

18,186

 

 

 

 

 

 

18,186

 

Corporate debt securities

 

 

 

 

 

85,316

 

 

 

 

 

 

85,316

 

Total investments

 

 

 

 

 

340,583

 

 

 

 

 

 

340,583

 

Total assets measured at fair value

 

$

22,646

 

 

$

347,118

 

 

$

 

 

$

369,764

 

 

There were no financial liabilities measured at fair value. The Company classifies money market funds within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The Company classifies its investments in U.S. Treasury securities (Treasury bills, Treasury notes, and Treasury bonds), U.S. Non-Treasury securities (government agency debt), commercial paper, and corporate debt securities as Level 2 instruments and obtains fair value from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or inputs corroborated by observable market data.

The carrying amount of the Company’s accounts receivable, other receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value due to their short maturities.

The following is a summary of the Company’s cash equivalents and investments and the gross unrealized holding gains and losses (in thousands):

 

 

 

March 31, 2024

 

 

 

Amortized Cost Basis

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Fair Value

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

52,551

 

 

$

 

 

$

 

 

$

52,551

 

Total cash equivalents

 

 

52,551

 

 

 

 

 

 

 

 

 

52,551

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

171,048

 

 

 

3

 

 

 

(479

)

 

 

170,572

 

U.S. Non-Treasury securities

 

 

7,105

 

 

 

 

 

 

(5

)

 

 

7,100

 

Commercial paper

 

 

16,743

 

 

 

9

 

 

 

(10

)

 

 

16,742

 

Corporate debt securities

 

 

110,419

 

 

 

50

 

 

 

(89

)

 

 

110,380

 

Total investments

 

 

305,315

 

 

 

62

 

 

 

(583

)

 

 

304,794

 

Total assets measured at fair value

 

$

357,866

 

 

$

62

 

 

$

(583

)

 

$

357,345

 

 

12


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

 

 

 

December 31, 2023

 

 

 

Amortized Cost Basis

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Fair Value

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

22,646

 

 

$

 

 

$

 

 

$

22,646

 

Corporate debt securities

 

 

1,549

 

 

 

1

 

 

 

 

 

 

1,550

 

U.S. Treasury securities

 

 

4,984

 

 

 

1

 

 

 

 

 

 

4,985

 

Total cash equivalents

 

 

29,179

 

 

 

2

 

 

 

 

 

 

29,181

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

225,517

 

 

 

55

 

 

 

(392

)

 

 

225,180

 

U.S. Non-Treasury securities

 

 

11,904

 

 

 

2

 

 

 

(5

)

 

 

11,901

 

Commercial paper

 

 

18,166

 

 

 

26

 

 

 

(6

)

 

 

18,186

 

Corporate debt securities

 

 

85,190

 

 

 

142

 

 

 

(16

)

 

 

85,316

 

Total investments

 

 

340,777

 

 

 

225

 

 

 

(419

)

 

 

340,583

 

Total assets measured at fair value

 

$

369,956

 

 

$

227

 

 

$

(419

)

 

$

369,764

 

 

As of March 31, 2024 and December 31, 2023, unrealized losses on available-for-sale investments are not attributable to credit risk and are considered to be temporary. As of March 31, 2024, approximately $7.9 million of the Company's investments have been in a continuous unrealized loss position for twelve months or longer. The Company believes it is more likely than not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value. As of March 31, 2024, $50.6 million of available-for-sale investments had remaining maturities between one and two years. The remainder of the available-for-sale investments have a remaining maturity of one year or less. As of each of March 31, 2024 and December 31, 2023, the Company recorded $1.3 million of accrued interest, related to its available-for-sale investments and is presented as other receivables on the condensed consolidated balance sheets.

4.
OTHER FINANCIAL STATEMENT INFORMATION

Inventory

Inventory consists of the following (in thousands):

 

 

 

March 31,
2024

 

 

December 31,
2023

 

Raw materials

 

$

2,211

 

 

$

2,118

 

Work-in-progress

 

 

94

 

 

 

163

 

Finished goods

 

 

3,504

 

 

 

2,210

 

Total inventory

 

$

5,809

 

 

$

4,491

 

 

13


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

 

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

 

 

 

March 31,
2024

 

 

December 31,
2023

 

Laboratory equipment

 

$

28,571

 

 

$

28,563

 

Computer equipment and software

 

 

862

 

 

 

868

 

Furniture and fixtures

 

 

678

 

 

 

672

 

Leasehold improvements

 

 

3,577

 

 

 

3,520

 

Construction-in-progress

 

 

1,435

 

 

 

1,109

 

Property and equipment

 

 

35,123

 

 

 

34,732

 

Less: accumulated depreciation and amortization

 

 

(13,948

)

 

 

(12,539

)

Total property and equipment, net

 

$

21,175

 

 

$

22,193

 

 

Depreciation and amortization expense related to property and equipment was $1.5 million and $1.2 million for the three months ended March 31, 2024 and 2023, respectively.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

 

 

 

March 31,
2024

 

 

December 31,
2023

 

Accrued compensation

 

$

3,800

 

 

$

6,123

 

Accrued professional services

 

 

545

 

 

 

242

 

Accrued taxes

 

 

516

 

 

 

501

 

Other

 

 

2,711

 

 

 

2,346

 

Total accrued expenses

 

$

7,572

 

 

$

9,212

 

 

5.
REVENUE AND DEFERRED REVENUE

Product revenue consists of instruments with embedded software essential to the instrument's functionality and consumables. Service revenue primarily consists of revenue received from the generation and analysis of proteomic data on behalf of the customer. Related party revenue is comprised of both the sale of products and services performed for related parties, as further discussed in Note 10. Grant and other revenue consists of grant revenue from services performed specifically for the reimbursement of research-related expenses and other revenue which relates to shipping revenue and lease arrangements, as further discussed below.

Deferred revenue activities consist of the following (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Deferred revenue, current and noncurrent, as of the beginning of period

 

$

270

 

 

$

133

 

Additions

 

 

158

 

 

 

614

 

Revenue recognized

 

 

(99

)

 

 

(441

)

Deferred revenue, current and noncurrent, as of the end of period

 

$

329

 

 

$

306

 

 

14


Table of Contents

SEER, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2024, $1.6 million of revenue is expected to be recognized from the remaining performance obligations, of which 97% is expected to be recognized within twelve months.

Grant and Other Revenue

Since August 2019, the Company received total funding of $2.0 million from a Small Business Innovation Research grant award from the National Institutes of Health for its development of research applications. For the three months ended March 31, 2024 and 2023, the Company recognized