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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 September 30, 2021
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)
Delaware82-1153150
(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 classTrading Symbol(s)Name of Exchange on which registered
Common Stock, par value $0.00001SEERNASDAQ 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 filerAccelerated filer
Smaller reporting company
Non-accelerated filerEmerging 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 November 5, 2021, the registrant had 57,022,436 shares of Class A common stock, $0.00001 par value per share, and 4,686,028 shares of Class B common stock, $0.00001 par value per share, outstanding.



TABLE OF CONTENTS






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 three phase commercialization plan, including our ability to expand to additional key opinion leaders during the Limited Release phase and to attract customers during the Broad Release phase;
the implementation of our business model and strategic plans for our Proteograph™ Product Suite, including the expected pricing of the solution and associated consumables;
our expectations regarding the rate and degree of market acceptance of our Proteograph Product Suite;
the impact of our 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 and commercialize our Proteograph Product Suite;
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 COVID-19 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
(Unaudited)
(in thousands, except share and per share amounts)
September 30,
December 31,
20212020
ASSETS
Current assets:
Cash and cash equivalents$331,402 $333,585 
Investments175,202 98,278 
Accounts receivable, net1,165  
Related party receivables703 99 
Other receivables672 163 
Inventory2,557 551 
Prepaid expenses and other current assets2,566 452 
Total current assets514,267 433,128 
Property and equipment, net12,588 8,441 
Restricted cash524 343 
Other assets459 407 
Total assets
$527,838 $442,319 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$2,573 $2,115 
Accrued expenses5,974 5,147 
Accrued research and development627 396 
Deferred revenue111 250 
Deferred rent, current268 186 
Total current liabilities9,553 8,094 
Deferred rent, net of current portion2,687 1,899 
Other noncurrent liabilities402 717 
Total liabilities12,642 10,710 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized as of September 30, 2021 and December 31, 2020; zero shares issued and outstanding as of September 30, 2021 and December 31, 2020
  
Class A common stock, $0.00001 par value; 94,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 56,967,870 and 53,395,319 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively;
1 1 
Class B common stock, $0.00001 par value; 6,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 4,686,028 and 5,865,732 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively;
  
Additional paid-in capital621,994 486,915 
Accumulated other comprehensive income (loss)(8)54 
Accumulated deficit(106,791)(55,361)
Total stockholders’ equity515,196 431,609 
Total liabilities and stockholders’ equity$527,838 $442,319 
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 September 30,Nine Months Ended September 30,
2021202020212020
Revenue:
Product$858 $ $1,695 $ 
Service500  500  
Related party787  1,167  
Grant
10 72 189 320 
Total revenue2,155 72 3,551 320 
Cost of revenue:
Product 574  1,078  
Service42  42  
Related party370  452  
Total cost of revenue986  1,572  
Gross profit1,169 721,979 320 
Operating expenses:
Research and development7,745 4,762 20,906 13,520 
Selling, general and administrative11,855 3,726 32,672 7,408 
Total operating expenses19,600 8,488 53,578 20,928 
Loss from operations(18,431)(8,416)(51,599)(20,608)
Other income (expense):
Interest income46 196 169 778 
Other expense (9) (9)
Total other income46 187 169 769 
Net loss$(18,385)$(8,229)$(51,430)$(19,839)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities26 (159)(62)119 
Comprehensive loss$(18,359)$(8,388)$(51,492)$(19,720)
Net loss per share attributable to common stockholders, basic and diluted$(0.30)$(0.80)$(0.85)$(2.04)
Weighted-average common shares outstanding, basic and diluted61,133,518 10,285,401 60,625,601 9,709,501 
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)


Convertible Preferred Stock
Class A and Class B
Common Stock
Additional Paid in CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total
SharesAmountSharesAmount
Balance at December 31, 2020 $ 59,261,051 $1 $486,915 $(55,361)$54 $431,609 
Issuance of Class A common stock from exercise of options
— — 399,174 — 171 — — 171 
  Repurchase of Class A common stock— — (876)— — — — — 
Vesting of early exercised stock options and restricted common stock
— — — — 44 — — 44 
Issuance of Class A common stock upon follow-on offering, net of issuance costs of $7,591
— — 1,650,000 — 102,959 — — 102,959 
Return of profit— — — 11,403 — — 11,403 
Stock-based compensation— — — — 6,039 — — 6,039 
Other comprehensive loss— — — — — — (26)(26)
Net loss— — — — — (16,429)— (16,429)
Balance at March 31, 2021  61,309,349 1 607,531 (71,790)28 535,770 
Issuance of Class A common stock from exercise of options and release of restricted stock units
— — 132,766 — 236 — 236 
Repurchase of Class A common stock— — (18,852)— — — — 
Vesting of early exercised stock options and restricted common stock
— — — — 285 — 285 
Stock-based compensation— — — — 6,431 — 6,431 
Other comprehensive loss— — — — — — (62)(62)
Net loss— — — — — (16,616)(16,616)
Balance at June 30, 2021  61,423,263 1 614,483 (88,406)(34)526,044 
Issuance of Class A common stock from exercise of options and release of restricted stock units
— — 230,635 — 631 — — 631 
Vesting of early exercised stock options and restricted common stock
— — — — 94 — — 94 
Stock-based compensation— — — — 6,786 — — 6,786 
Other comprehensive income— — — — — — 26 26 
Net loss— — — — — (18,385)— (18,385)
Balance at September 30, 2021 $ 61,653,898 $1 $621,994 $(106,791)$(8)$515,196 
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)


Convertible Preferred Stock
Class A and Class B
Common Stock
Additional Paid in CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total
SharesAmountSharesAmount
Balance at December 31, 201922,173,216 $107,953 12,193,677 $ $2,288 $(22,586)$24 $87,679 
Issuance of Class A common stock from exercise of options
— — 40,207 — 24 — — 24 
Vesting of early exercised stock options and restricted common stock— — — — 4 — — 4 
Stock-based compensation— — — — 579 — — 579 
Other comprehensive income— — — — — — 533 533 
Net loss— — — — — (5,493)— (5,493)
Balance at March 31, 202022,173,216 107,953 12,233,884  2,895 (28,079)557 83,326 
Issuance of Class A common stock from exercise of options— — 11,877 — 28 — — 28 
Repurchase of Class A common stock— — (215,245)— — — —  
Vesting of early exercised stock options and restricted common stock— — — — 10 — — 10 
Issuance of Series D-1 convertible preferred stock, net of issuance costs of $104
6,853,571 54,896 — — — — — 54,896 
Stock-based compensation— — — — 808 — — 808 
Other comprehensive loss— — — — — — (255)(255)
Net loss— — — — — (6,117)— (6,117)
Balance at June 30, 202029,026,787 162,849 12,030,516  3,741 (34,196)302 132,696 
Issuance of Class A common stock from exercise of options— — 611,824 — 42 — — 42 
Vesting of early exercised stock options and restricted common stock— — — — 49 — — 49 
Distribution of PrognomIQ shares— — — — (40)— — (40)
Stock-based compensation— — — — 1,177 — — 1,177 
Other comprehensive loss— — — — — — (159)(159)
Net loss— — — — — (8,229)— (8,229)
Balance at September 30, 202029,026,787 $162,849 12,642,340 $ $4,969 $(42,425)$143 $125,536 
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)
Nine Months Ended September 30,
20212020
OPERATING ACTIVITIES
Net loss$(51,430)$(19,839)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation19,256 2,564 
Depreciation and amortization1,722 1,132 
Net amortization of premium on available-for-sale securities819 185 
Non-cash interest expense and other adjustments 10 
Changes in operating assets and liabilities:
Accounts receivable, net(1,165) 
Related party receivables(604) 
Other receivables(513)(330)
Prepaid expenses and other current assets(2,114)(128)
Inventory(2,006) 
Other assets(52)(18)
Accounts payable302 (60)
Deferred revenue(139)250 
Deferred rent870 256 
Accrued expenses919 738 
Accrued research and development231 (133)
Other noncurrent liabilities(74)30 
Net cash used in operating activities(33,978)(15,343)
INVESTING ACTIVITIES
Purchases of property and equipment(5,588)(4,407)
Purchase of available-for-sale securities(169,801)(75,624)
Proceeds from maturities of available-for-sale securities92,000 40,250 
Investment in equity method investee (50)
Net cash used in investing activities(83,389)(39,831)
FINANCING ACTIVITIES
Proceeds from issuance of common stock upon follow-on public offering, net of issuance costs102,959  
Proceeds from return of profit
11,403  
Repurchase of Class A common stock(35)(6)
Proceeds from stock option exercises including early exercised options1,038 578 
Proceeds from issuance of Series D-1 preferred stock, net of issuance costs 54,896 
Payments of deferred offering costs (73)
Net cash provided by financing activities115,365 55,395 
Net increase (decrease) in cash, cash equivalents and restricted cash(2,002)221 
Cash, cash equivalents and restricted cash, beginning of period333,928 17,828 
Cash, cash equivalents and restricted cash, end of period$331,926 $18,049 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes$605 $ 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Property and equipment purchases included in accounts payable$183 $20 
Property and equipment purchases included in accrued expenses$271 $ 
Deferred offering costs in accounts payable$ $90 
Deferred offering costs in accrued expenses$ $1,006 
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. In December 2020, the Company formed the wholly-owned subsidiary, Seer Securities Corporation, located in Massachusetts. 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. Since inception, the Company has devoted its efforts principally to research, development and commercialization of its technology and products, recruiting management and technical staff, acquiring operating assets, and raising capital.
The Company is subject to a number of risks, similar to other early-stage life science companies, including, but not limited to, development and commercialization of its products, market acceptance of its products, development by its competitors of new technological innovations, protection of its intellectual property, and raising additional capital.
Public Offering
On February 1, 2021, the Company completed an underwritten public offering of 1,650,000 shares of its Class A common stock at a public offering price of $67.00 per share. The Company received net proceeds of $103.0 million after deducting offering costs, underwriting discounts, and commissions of $7.6 million.
Reverse Stock Split
In November 2020, the Company’s board of directors approved an amended and restated certificate of incorporation to effect a reverse split of shares of the Company’s common stock and convertible preferred stock on a 1-for-2.14 basis (the Reverse Stock Split) effective as of November 25, 2020. The par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, restricted stock awards, restricted stock units, convertible preferred stock, share data, per share data, and related information contained in the unaudited condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.
Liquidity
As of September 30, 2021, the Company has incurred significant losses and has had negative cash flows from operations. As of September 30, 2021, the Company had cash, cash equivalents and investments of $506.6 million and an accumulated deficit of $106.8 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 balance as of September 30, 2021 provides sufficient capital resources to continue its operations for at least 12 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
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 Company has issued shares of Class A common stock, herein referred to as “Class A common stock” or “Class A,” and Class B common stock, herein referred to as “Class B common stock” or “Class B,” and collectively as “common stock.” The unaudited condensed consolidated financial statements include the accounts of Seer, Inc. and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated.
The condensed consolidated balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements of the Company at that date. Certain information and footnote disclosures typically included in the Company’s audited consolidated financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the
6

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive loss and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period.
The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2020 included in the Annual Report on Form 10-K filed with the SEC on March 29, 2021.
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, the fair value of common stock, stock-based compensation, accrued research and development expenses, allowance for credit losses, inventory valuation, 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.
Impact of the COVID-19 Pandemic
As a result of the COVID-19 pandemic (COVID-19), the Company’s operations experienced disruptions and restrictions on employees’ ability to work and on the hiring of additional personnel, particularly as a result of preventive and precautionary measures taken by the Company and some of its suppliers and other service providers. In particular, some of the Company’s laboratory material and equipment suppliers, collaborators, and service providers used in the performance of its research activities and phased commercial launch plan have been similarly impacted by COVID-19, which may limit the Company’s ability to achieve its planned progress. COVID-19 has adversely affected the broader economy, which could affect the Company’s financing prospects. Continued disruptions from COVID-19 could harm the Company’s operations and the Company cannot anticipate all the ways in which it could be adversely impacted by health epidemics such as COVID-19.
The COVID-19 pandemic has mainly impacted some of the Company’s suppliers who have experienced a surge in demand for their products resulting in supply delays for critical hardware, instrumentation and medical and testing supplies used for product development and commercialization. The Company continues to monitor and assess the effects of the COVID-19 pandemic on its business, financial condition, results of operations and cash flows.
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 September 30, 2021 and December 31, 2020, all amounts recorded as cash and cash equivalents consist of money market funds and are stated at fair value.
Restricted cash as of September 30, 2021 and December 31, 2020 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.
7

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):
September 30,December 31,
20212020
Cash and cash equivalents$331,402 $333,585 
Restricted cash524 343 
Total cash, cash equivalents and restricted cash$331,926 $333,928 
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. Specific allowance amounts are established to record the appropriate allowance for customers that have an identified risk of default. General allowance amounts are established based upon an assessment of expected credit losses for the Company’s receivables by aging category. Balances are written off when they are ultimately determined to be uncollectible. There was no allowance for credit losses related to accounts receivable as of September 30, 2021 and December 31, 2020.
Inventory
Inventory is recorded at the lower of standard cost, which approximates actual cost on a weighted-average basis, or net realizable value. Provisions for slow-moving, excess or obsolete inventories are recorded when required to reduce inventory values to their estimated net realizable values based on product expiration, development plans, or quality issues.
Revenue Recognition
Product and Service Revenue
The Company generates revenue from sales of products and services. The Company’s product, the Proteograph Product Suite, consists of an instrument with software and consumables. The Company began shipping its Proteograph Product Suite during the second quarter of 2021.
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 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 contract price, allocating the contract 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 separately identified in 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 use and obtain the benefit of the good or service. The Company elected 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.
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 is recorded net of discounts and sales taxes collected on behalf of governmental authorities. Customers are invoiced generally upon shipment, or upon order for services, and payment is typically due within 30 or 60 days. Cash received from customers in
8

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
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 or a significant financing component.
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 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 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.
Shipping and Handling Costs
Shipping and handling costs are included in cost of revenue.
Stock-Based Compensation
The Company accounts for stock-based compensation, including from restricted common stock awards (RSAs), grants of restricted stock units (RSUs), and stock options that may be settled in shares of our common stock, based on the fair values of the equity instruments issued. The fair value is determined on the measurement date, which is generally the date of grant. The fair value of RSAs is the difference between the fair value of the underlying stock at the measurement date and the purchase price. The fair value of RSUs is the fair value of the underlying stock at the measurement date. The fair value for our stock option awards is determined at the grant date using the Black-Scholes valuation model. For share-based payment awards that vest subject to the satisfaction of a service requirement, the fair value of the awards is recognized as expense on a straight-line basis over the requisite service period in which the awards are expected to vest. For share-based payment awards with performance-based vesting conditions, the fair value of the awards is recognized as expense using the accelerated attribution method over the vesting period. Forfeitures are accounted for in the period in which they occur. Share-based payment awards that include a service condition and a performance condition are expected to vest when the performance condition is probable of being met.
The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards that require judgment, for which changes if they occur can materially affect the resulting estimates of fair value. These assumptions include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield, and the expected stock price volatility over the expected term as follows:
Fair Value of Common Stock
For grants prior to the Company’s initial public offering (IPO) in December 2020, the grant-date fair market value of the shares of common stock underlying stock options was determined by the Company’s Board of Directors with assistance of third-party valuation specialists. Because there was no public market for the Company’s common stock, the Board of Directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair market value, which include important developments in the Company’s operations, the prices at which the Company sold shares of its convertible preferred stock, the rights, preferences and privileges of the Company’s convertible preferred stock relative to those of the Company’s common stock, actual operating results, financial performance, external market conditions in the life sciences industry,
9

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
general U.S. market conditions, equity market conditions of comparable public companies, and the lack of marketability of the Company’s common stock. For all grants subsequent to the IPO, the fair value of common stock was determined by using the closing price per share of common stock as reported on the Nasdaq Global Select Market.
Expected Volatility
The Company had no publicly available stock price information prior to its IPO and limited publicly available stock price information subsequent to its IPO and therefore the Company has used the historical volatility of the stock price of similar publicly traded peer companies. The historical volatility is calculated based on a period of time commensurate with the expected term assumptions.
Expected Term
For stock options granted to employees and directors, the expected term is calculated using the simplified method for “plain vanilla” stock option awards. The expected term for stock options granted to non-employees is the contractual term.
Risk-Free Interest Rate
The risk-free interest rate is based on the yield available on U.S. Treasury issues similar in duration to the expected term of the equity-settled award.
Expected Dividends
The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay dividends on its common stock.
Net Loss Per Share Attributable to Common Stockholders
Net loss per share of common stock is computed using the two-class method required for multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period has been distributed. The rights, including the liquidation and dividend rights and sharing of losses, of the Class A and Class B common stock are identical, other than voting rights. As the liquidation and dividend rights and sharing of losses are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share attributed to common stockholders is therefore the same for Class A and Class B common stock on an individual or combined basis.
The Company’s participating securities include the Company’s convertible preferred stock that was outstanding prior to the completion of the Company’s IPO, as the holders were entitled to receive noncumulative dividends on a pari passu basis in the event that a dividend is paid on common stock. The Company also considers any shares issued on the early exercise of stock options subject to repurchase to be participating securities because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of convertible preferred stock, as well as the holders of early exercised shares subject to repurchase, do not have a contractual obligation to share in losses.
Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase.
Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
10

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify the accounting for income taxes. This standard removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing standards to improve consistent application. The Company adopted this standard as of January 1, 2021, which did not have a material impact on its financial statements as of the adoption date.
In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This standard clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivative instruments. The Company adopted this standard as of January 1, 2021, which did not have a material impact on its financial statements as of the adoption date.
Recently Issued Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard clarifies the definition of a lease and requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The Company anticipates that it will no longer qualify as an emerging growth company as of December 31, 2021, and will first present the application of this standard in its annual financial statements for the year ending December 31, 2021. While the Company has not yet quantified the impact, these adjustments will increase total assets and total liabilities relative to such amounts reported prior to adoption.
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).
September 30, 2021
Level 1Level 2Level 3Total
Assets:Classification:
Money market funds
Cash and cash equivalents$330,308 $ $ $330,308 
U.S. Treasury securitiesInvestments 175,202  175,202 
Total assets measured at fair value
$330,308 $175,202 $ $505,510 
December 31, 2020
Level 1Level 2Level 3Total
Assets:Classification:
Money market funds
Cash and cash equivalents$333,585 $ $ $333,585 
U.S. Treasury securitiesInvestments 98,278  98,278 
Total assets measured at fair value
$333,585 $98,278 $ $431,863 
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) 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.
11

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
The following is a summary of the Company’s cash equivalents and investments and the gross unrealized holding gains and losses (in thousands):
September 30, 2021
Amortized Cost BasisUnrealized GainsUnrealized LossesFair Value
Assets:
Money market funds
$330,308 $ $ $330,308 
U.S. Treasury securities175,210 12 (20)175,202 
Total$505,518 $12 $(20)$505,510 
December 31, 2020
Amortized Cost BasisUnrealized GainsUnrealized LossesFair Value
Assets:
Money market funds
$333,585 $ $ $333,585 
U.S. Treasury securities98,223 57 (2)98,278 
Total$431,808 $57 $(2)$431,863 
As of September 30, 2021 and December 31, 2020, unrealized losses on available-for-sale investments are not attributable to credit risk and are considered to be temporary. 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.
12

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
4.OTHER FINANCIAL STATEMENT INFORMATION
Inventory
Inventory consists of the following (in thousands):
September 30,December 31,
20212020
Raw materials$1,743 $ 
Finished goods814 551 
Total inventory$2,557 $551 
Property and Equipment, Net
Property and equipment, net consists of the following (in thousands):
September 30,December 31,
20212020
Laboratory equipment$12,470 $8,075 
Computer equipment and software1,344 182 
Furniture and fixtures478 241 
Leasehold improvements2,369 2,294 
Property and equipment16,661 10,792 
Less: accumulated depreciation and amortization4,073 2,351 
Total property and equipment, net$12,588 $8,441 
Depreciation and amortization expense related to property and equipment was $0.7 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively. Depreciation and amortization expense related to property and equipment was $1.7 million and $1.1 million for the nine months ended September 30, 2021 and 2020, respectively.
Accrued Expenses
Accrued expenses consists of the following (in thousands):
September 30,December 31,
20212020
Accrued compensation$3,600 $2,866 
Accrued professional services480 1,074 
Accrued property and equipment271  
Accrued taxes374  
Restricted stock liability, current267 484 
Other982 723 
Total accrued expenses$5,974 $5,147 
13

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
5.REVENUE AND DEFERRED REVENUE
Product revenue consists of instruments, consumables and platform evaluation agreements. Related party revenue is comprised of both the sale of products and services performed.
As of September 30, 2021 and December 31, 2020, the Company recorded $0.1 million and $0.3 million of contract liabilities, consisting of deferred revenue. None of the revenue recorded in the nine months ended September 30, 2021 was included in contract liabilities as of December 31, 2020. All contract liabilities are expected to be recognized as revenue in the next twelve months.
Research Agreements
In February 2019 and March 2020, the Company entered into sponsored research agreements with a biotechnology company and a pharmaceutical company, respectively, under which the Company is required to execute certain research and development activities for total aggregate consideration payable of $0.9 million. During the three and nine months ended September 30, 2021 and 2020, the Company did not recognize any revenue with respect to these agreements.
National Institutes of Health Grant
In August 2019, the Company received a notice of a Small Business Innovation Research grant award from the National Institutes of Health, which will provide funding of approximately $1.1 million to the Company for its development of research applications. In June 2020, the Company received a notice that additional grant consideration of $0.9 million will be awarded. During the three months ended September 30, 2021 and 2020, the Company recognized grant revenue of approximately $10,000 and $0.1 million, respectively, with respect to the award. During the nine months ended September 30, 2021 and 2020, the Company recognized grant revenue of $0.2 million and $0.3 million, respectively, with respect to the award.
6.CAPITAL STOCK AND STOCKHOLDERS’ EQUITY
As of September 30, 2021, the Company is authorized to issue 105,000,000 shares of capital stock consisting of 94,000,000 shares of Class A common stock, 6,000,000 shares of Class B common stock, and 5,000,000 shares of preferred stock.
Common Stock
Common stock issued and outstanding is as follows:
September 30,December 31,
20212020
Class A common stock56,967,870 53,395,319 
Class B common stock4,686,028 5,865,732 
Total common stock issued and outstanding61,653,898 59,261,051 
Class A and Class B common stock have a par value of $0.00001 per share. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to 10 votes per share. Class B common shares are convertible to Class A common shares at any time at the option of the holder on a one-for-one basis. Holders of common stock are entitled to dividends as declared by the Board of Directors, subject to rights of holders of all classes of stock outstanding having priority rights as to dividends. There have been no dividends declared to date.
In the first quarter of 2021, the Company received $11.4 million related to the return of short-swing profits from one of its beneficial owners. These proceeds are recognized as a capital contribution from stockholders as an increase to additional paid-in capital on the condensed consolidated statements of changes in stockholders’ equity and as cash provided by financing activities on the condensed consolidated statements of cash flows.
14

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
7.EQUITY INCENTIVE PLANS
In 2017, the Company adopted the 2017 Stock Incentive Plan (2017 Plan), which provided for the granting of awards to employees, directors, and consultants of the Company. Awards issuable under the Plan include incentive stock options (ISO), nonqualified stock options (NSO), and restricted stock awards. In 2020, the Company adopted the 2020 RSU Equity Incentive Plan (2020 RSU Plan), which provided for the granting of RSUs to certain employees of the Company.
In 2020, the Company adopted the 2020 Equity Incentive Plan (2020 Plan), which became effective in connection with the IPO. The Company’s 2017 Plan and 2020 RSU Plan were terminated in connection with the IPO and no further grants will be made under the 2017 Plan and 2020 RSU Plan from the date that the 2020 Plan became effective.
Stock Options
As of September 30, 2021, there are 8,302,701 shares of Class A common stock reserved for issuance under the 2020 Plan, 5,734,044 shares of which are available for issuance in connection with grants of future awards.
Stock option activity for the nine months ended September 30, 2021 is as follows:
Options Outstanding
Weighted Average Exercise Price
Balance - December 31, 20209,551,105 $5.55 
Options granted1,384,227 50.57 
Options exercised(760,383)1.37 
Options cancelled and forfeited(276,880)17.08 
Balance - September 30, 20219,898,069 $11.84 
Vested and exercisable, September 30, 2021
2,600,982 $3.63 
Restricted Stock Awards
Certain stock options granted under the 2017 Plan provide stock option holders the right to exercise unvested stock options in exchange for restricted shares of Class A common stock. The Company has also issued restricted shares of Class A common stock to employees and directors under the 2017 Plan.
The activity of restricted shares of Class A common stock for the nine months ended September 30, 2021 is as follows:
Number of Shares
Weighted Average
Grant Date
Fair Value
Unvested at December 31, 2020775,641 $1.77 
Granted10,728 1.66 
Repurchased(19,728)1.14
Vested(461,077)1.78
Unvested at September 30, 2021305,564$1.79 
15

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Restricted Stock Units
The Company has granted RSUs under the 2020 RSU Plan and the 2020 Plan. RSU activity for the nine months ended September 30, 2021 is as follows:
Number of Shares
Weighted Average
Grant Date
Fair Value
Balance at December 31, 2020491,318 $7.91 
Granted300,943 53.81 
Vested
(2,192)46.49
Cancelled
(6,752)19.00
Balance at September 30, 2021
783,317$25.34 
Employee Stock Purchase Plan
In November 2020, the Company’s board of directors adopted the 2020 Employee Stock Purchase Plan (ESPP), which was subsequently approved by the Company’s stockholders and became effective in connection with the IPO. A total of 1,195,327 shares of Class A common stock are reserved for issuance under the ESPP as of September 30, 2021. The first offering period commenced in July 2021. Stock-based compensation related to the ESPP was $0.1 million for the three months ended September 30, 2021.
Stock-Based Compensation
The following table summarizes the components of stock-based compensation recognized in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Cost of revenue$523 $ $1,271 $ 
Research and development1,022 210 3,209 561 
Selling, general and administrative5,241 967 14,776 2,003 
Total stock-based compensation$6,786 $1,177 $19,256 $2,564 
8.COMMITMENTS AND CONTINGENCIES
Facility Lease Agreement
On January 4, 2019, the Company entered into a lease agreement for office and laboratory space in Redwood City, California. The lease term commenced in November 2019 and ends on September 30, 2029. In connection with the lease and its amendments, the Company maintains a letter of credit issued to the lessor in the amount of $0.5 million, which is secured by restricted cash that is classified as noncurrent at September 30, 2021 and December 31, 2020 based on the term of the underlying lease.
The Company entered into an amendment to the lease agreement with respect to its facility in Redwood City, California in June 2020. The amendment makes certain changes to the original lease, including (i) additional office and laboratory space in the same building (the Expansion Premises) and (ii) an extension of the expiration date of the original lease to 127.5 months following the delivery date of the Expansion Premises, which is estimated to be in the first quarter of 2022.
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SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
The amendment provides for annual base rent for the Expansion Premises of approximately $0.9 million in the first year of the lease term (subject to an abatement period of nine months), which increases on an annual basis to approximately $1.2 million in the final year of the lease term. The amendment also provides for tenant incentives in the amount of $2.4 million. Under the amendment, the Company retains its original option to renew the lease for an additional five-year term, at then-current market rates.
The Company entered into another amendment to the lease agreement with respect to its facility in Redwood City, California in April 2021. The amendment expanded the office and laboratory space by approximately 25,000 square feet, commenced in May 2021, and has a term of approximately 11 years.
During the period from June 2020 through May 2021, the Company was provided with temporary space. The Company was not required to pay additional rent for the temporary space, but was required to pay property taxes, insurance and normal maintenance costs with respect to the temporary space.
Rent expense was $0.7 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively. Rent expense was $1.5 million and $0.5 million for the nine months ended September 30, 2021 and 2020, respectively. The Company is required to pay property taxes, insurance, and normal maintenance costs for the facility and will be required to pay any increases over the base year of these expenses.
As of September 30, 2021, future minimum commitments under the Company’s non-cancelable facility operating lease are as follows:
Years ending December 31,(in thousands)
2021 (three months remaining)$250 
20222,485 
20233,637 
20243,742 
2025