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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 June 30, 2022
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 August 4, 2022, the registrant had 58,566,537 shares of Class A common stock, $0.00001 par value per share, and 4,044,969 shares of Class B common stock, $0.00001 par value per share, outstanding.



TABLE OF CONTENTS


                                        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 execute our broad release commercialization plan, including our ability to attract customers;
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 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)
June 30,
December 31,
20222021
ASSETS
Current assets:
Cash and cash equivalents$79,023 $232,813 
Short-term investments372,167 167,261 
Accounts receivable, net3,341 2,495 
Related party receivables843 1,283 
Other receivables998 366 
Inventory6,838 4,145 
Prepaid expenses and other current assets3,547 3,336 
Total current assets466,757 411,699 
Long-term investments4,915 93,186 
Operating lease right-of-use assets27,958 20,142 
Property and equipment, net15,350 13,087 
Restricted cash524 524 
Other assets796 501 
Total assets
$516,300 $539,139 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$4,141 $3,789 
Accrued expenses9,142 8,394 
Deferred revenue429 376 
Operating lease liabilities, current1,115 864 
Other current liabilities197  
Total current liabilities15,024 13,423 
Operating lease liabilities, net of current portion28,910 22,459 
Other noncurrent liabilities323 341 
Total liabilities44,257 36,223 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized as of June 30, 2022 and December 31, 2021; zero shares issued and outstanding as of June 30, 2022 and December 31, 2021
  
Class A common stock, $0.00001 par value; 94,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 58,565,210 and 57,493,005 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
1 1 
Class B common stock, $0.00001 par value; 6,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 4,044,969 and 4,522,478 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
  
Additional paid-in capital648,146 629,981 
Accumulated other comprehensive loss(3,113)(536)
Accumulated deficit(172,991)(126,530)
Total stockholders’ equity472,043 502,916 
Total liabilities and stockholders’ equity$516,300 $539,139 
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 June 30,Six Months Ended June 30,
2022202120222021
Revenue:
Product$2,406 $837 $4,555 $837 
Service57  137  
Related party1,108 380 2,178 380 
Grant and other50 117 64 179 
Total revenue3,621 1,334 6,934 1,396 
Cost of revenue:
Product1,643 504 3,303 504 
Service15  29  
Related party354 82 748 82 
Total cost of revenue2,012 586 4,080 586 
Gross profit1,609 748 2,854 810 
Operating expenses:
Research and development10,871 6,935 21,607 13,162 
Selling, general and administrative14,172 10,484 28,466 20,816 
Total operating expenses25,043 17,419 50,073 33,978 
Loss from operations(23,434)(16,671)(47,219)(33,168)
Other income (expense):
Interest income676 55 819 123 
Other expense(57) (61) 
Total other income619 55 758 123 
Net loss$(22,815)$(16,616)$(46,461)$(33,045)
Other comprehensive loss:
Unrealized loss on available-for-sale securities(886)(62)(2,577)(88)
Comprehensive loss$(23,701)$(16,678)$(49,038)$(33,133)
Net loss per share attributable to common stockholders, basic and diluted$(0.37)$(0.27)$(0.75)$(0.55)
Weighted-average common shares outstanding, basic and diluted62,376,571 60,841,657 62,191,068 60,367,433 
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 CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal
SharesAmount
Balance at December 31, 202162,015,483 $1 $629,981 $(126,530)$(536)$502,916 
Issuance of Class A common stock from exercise of options and release of restricted stock units
283,251 — 773 — — 773 
Repurchase of Class A common stock (5,841)— — — —  
Vesting of early exercised stock options and restricted common stock— — 44 — — 44 
Stock-based compensation— — 8,062 — — 8,062 
Other comprehensive loss— — — — (1,691)(1,691)
Net loss— — — (23,646)— (23,646)
Balance at March 31, 202262,292,893 1 638,860 (150,176)(2,227)486,458 
Issuance of Class A common stock from exercise of options and release of restricted stock units260,533 — 445 — — 445 
Issuance of common stock in connection with employee stock purchase plan56,753 — 420 — — 420 
Vesting of early exercised stock options and restricted common stock— — 43 — — 43 
Stock-based compensation— — 8,378 — — 8,378 
Other comprehensive loss— — — — (886)(886)
Net loss— — — (22,815)— (22,815)
Balance at June 30, 202262,610,179 $1 $648,146 $(172,991)$(3,113)$472,043 
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 CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total
SharesAmount
Balance at December 31, 202059,261,051 $1 $486,915 $(55,361)$54 $431,609 
Issuance of Class A common stock from exercise of options399,174 — 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, 202161,309,349 1 607,531 (71,790)28 535,770 
Issuance of Class A common stock from exercise of options and release of restricted stock units132,766 — 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, 202161,423,263 $1 $614,483 $(88,406)$(34)$526,044 
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)
Six Months Ended June 30,
20222021
OPERATING ACTIVITIES
Net loss$(46,461)$(33,045)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation16,440 12,470 
Depreciation and amortization1,776 1,042 
Net amortization of premium on available-for-sale securities439 412 
Non-cash operating lease expense1,004 423 
Changes in operating assets and liabilities:
Accounts receivable, net(846)(896)
Related party receivables440 (340)
Other receivables(632)(177)
Prepaid expenses and other current assets(2,176)(2,601)
Inventory(3,002)(2,119)
Other assets(295)(16)
Accounts payable530 (644)
Deferred revenue53 195 
Accrued expenses(466)335 
Operating lease liabilities(153)(187)
Other current liabilities197 — 
Other noncurrent liabilities1 (74)
Net cash used in operating activities(33,151)(25,222)
INVESTING ACTIVITIES
Purchases of property and equipment(2,606)(2,943)
Purchase of available-for-sale securities(143,651)(129,320)
Proceeds from maturities of available-for-sale securities24,000 80,000 
Net cash used in investing activities(122,257)(52,263)
FINANCING ACTIVITIES
Proceeds from issuance of common stock upon follow-on public offering, net of issuance costs 102,959 
Proceeds from return of profit
 11,403 
Repurchase of Class A common stock(20)(13)
Proceeds from exercise of Class A common stock options including early exercised options
1,218 407 
Proceeds from issuance of common stock in connection with employee stock purchase plan420  
Net cash provided by financing activities1,618 114,756 
Net increase (decrease) in cash, cash equivalents and restricted cash(153,790)37,271 
Cash, cash equivalents and restricted cash, beginning of period233,337 333,928 
Cash, cash equivalents and restricted cash, end of period$79,547 $371,199 
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
Property and equipment purchases included in accounts payable$8 $246 
Property and equipment purchases included in accrued expenses$1,570 $361 
Lease liability obtained in exchange for right-of-use assets$6,855 $23,232 

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, with wholly-owned subsidiaries in Massachusetts and the United Kingdom. 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.
On May 25, 2022, the Company incorporated Seer Bio UK Limited, a wholly owned subsidiary under the laws of United Kingdom. There were no transactions during the period ended June 30, 2022.
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.
Liquidity
As of June 30, 2022, the Company has incurred significant losses and has had negative cash flows from operations. As of June 30, 2022, the Company had cash and cash equivalents and short-term investments of $451.2 million and an accumulated deficit of $173.0 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 June 30, 2022 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 subsidiaries. All intercompany transactions and balances have been eliminated.
The condensed consolidated balance sheet at December 31, 2021 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 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, 2021 included in our Annual Report on Form 10-K filed with the SEC on March 1, 2022.
6

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
The Company has also made certain presentation changes to retroactively adjust for the effects of Accounting Standards Codification No. 842, Leases (“ASC 842”), the adoption of which was disclosed in our Annual Report on Form 10-K filed on March 1, 2022, with an adoption effective date of January 1, 2021, using the modified retrospective method. The following table shows the affected line items within the unaudited condensed consolidated statements of cash flows (in thousands):
Six Months Ended June 30, 2021
As Previously Reported AdjustmentsAs Adjusted
Cash flows from operating activities:
Non-cash operating lease expense$ $423 $423 
Prepaid expenses and other current assets(2,756)155 (2,601)
Deferred rent391 (391) 
Operating lease liabilities (187)(187)
Net cash used in operating activities$(25,222)$ $(25,222)
Supplemental disclosure of non-cash activities:
Lease liability obtained in exchange for right-of-use assets$ $23,232 $23,232 
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 it relates to the Company’s phased commercial release. The Company’s personnel has experienced delays in accessing customers in certain countries with strict COVID-19 policies to provide installation and training services. 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 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 and 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. Cash and cash equivalents are stated at fair value.
Restricted cash as of June 30, 2022 and December 31, 2021 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 and 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):
June 30,December 31,
20222021
Cash and cash equivalents$79,023 $232,813 
Restricted cash524 524 
Total cash and cash equivalents and restricted cash$79,547 $233,337 
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 June 30, 2022 and December 31, 2021.
As of June 30, 2022, there were four customers that represented 20%, 12%, 10%, and 10% of the total accounts receivable balance, including related party receivables. As of December 31, 2021, there were three customers that represented 34%, 23%, and 19% of the total accounts receivable balance, including related party receivables.
Revenue Recognition
The Company generates revenue 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 as well as platform evaluation agreements. The Company began recognizing revenue from shipments of its Proteograph Product Suite during the second quarter of 2021. The service revenue primarily consists of revenue received from the generation and analysis of proteomic data on behalf of the customer and revenue is recognized upon delivery of the reports.
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 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 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
8

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
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 the 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.
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.
The Company recognizes revenue for research and development services contracts when control is transferred, which is upon completion of the services and when results of the services have been transferred to the customer. Upfront payments and fees received are recorded as deferred revenue until the Company performs its obligations under its arrangements. Amounts payable to the Company are recorded as other receivables when its right to consideration is unconditional.
Income Taxes
Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the period incurred and requires amortization over five years or fifteen years pursuant to Internal Revenue Code Section 174. Although Congress is considering legislation that would defer the amortization requirement to later years, there is no assurance that the requirement to amortize will be repealed or otherwise modified. The Company is currently assessing the impact of this provision but does not expect it to have a material impact on its financial position, results of operations or cash flows in 2022.
Recently Adopted Accounting Pronouncements
In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (ASC Topic 832): Disclosures by Business Entities about Government Assistance. This standard requires annual disclosures that increase the transparency of transactions involving government grants, including the type of transactions, the accounting for those transactions and the effect of those transactions on an entity’s financial statements. The Company adopted this standard as of January 1, 2022, which did not have a material impact on its financial statements as of the adoption date.
9

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
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).
June 30, 2022
Level 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market funds
$56,320 $ $ $56,320 
Commercial paper
 9,486  9,486 
Corporate debt securities
 7,014  7,014 
Total cash equivalents
56,320 16,500  72,820 
Investments:
U.S. Treasury securities 262,605  262,605 
Commercial paper
 52,128  52,128 
Corporate debt securities
 62,349  62,349 
Total investments
 377,082  377,082 
Total assets measured at fair value
$56,320 $393,582 $ $449,902 
December 31, 2021
Level 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market funds
$232,813 $ $ $232,813 
Total cash equivalents232,813   232,813 
Investments:
U.S. Treasury securities 260,447  260,447 
Total investments 260,447  260,447 
Total assets measured at fair value
$232,813 $260,447 $ $493,260 

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.
10

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):
June 30, 2022
Amortized Cost BasisUnrealized GainsUnrealized LossesFair Value
Assets:
Cash equivalents:
Money market funds
$56,320 $ $ $56,320 
Commercial paper
9,488  (2)9,486 
Corporate debt securities
7,019  (5)7,014 
Total cash equivalents72,827  (7)72,820 
Investments:
U.S. Treasury securities265,396  (2,791)262,605 
Commercial paper
52,179 6 (57)52,128 
Corporate debt securities
62,613  (264)62,349 
Total investments380,188 6 (3,112)377,082 
Total assets measured at fair value
$453,015 $6 $(3,119)$449,902 
December 31, 2021
Amortized Cost BasisUnrealized GainsUnrealized LossesFair Value
Assets:
Cash equivalents:
Money market funds
$232,813 $ $ $232,813 
Total cash equivalents
232,813   232,813 
Investments:
U.S. Treasury securities260,983  (536)260,447 
Total investments
260,983  (536)260,447 
Total assets measured at fair value
$493,796 $ $(536)$493,260 
As of June 30, 2022 and December 31, 2021, unrealized losses on available-for-sale investments are not attributable to credit risk and are considered to be temporary. No investments have been in a continuous unrealized loss position for 12 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 June 30, 2022, $4.9 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 June 30, 2022 and December 31, 2021, the Company recorded $0.6 million and $0.3 million of accrued interest, respectively, related to its available-for-sale investments as a component of other receivables on the condensed consolidated balance sheets.
11

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
4.OTHER FINANCIAL STATEMENT INFORMATION
Inventory
Inventory consists of the following (in thousands):
June 30,December 31,
20222021
Raw materials$2,704 $1,836 
Work-in-progress341 221 
Finished goods3,793 2,088 
Total inventory$6,838 $4,145 

Property and Equipment, Net
Property and equipment, net consists of the following (in thousands):
June 30,December 31,
20222021
Laboratory equipment$17,217 $13,823 
Computer equipment and software575 461 
Furniture and fixtures572 478 
Leasehold improvements3,124 2,449 
Construction-in-progress338 784 
Property and equipment21,826 17,995 
Less: accumulated depreciation and amortization(6,476)(4,908)
Total property and equipment, net$15,350 $13,087 
Depreciation and amortization expense related to property and equipment was $0.9 million and $0.6 million for the three months ended June 30, 2022 and 2021, respectively. Depreciation and amortization expense related to property and equipment was $1.8 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively.
Accrued Expenses
Accrued expenses consist of the following (in thousands):
June 30,December 31,
20222021
Accrued compensation$4,381 $4,730 
Accrued professional services260 388 
Accrued property and equipment1,570 269 
Accrued taxes336 457 
Other2,595 2,550 
Total accrued expenses$9,142 $8,394 
5.REVENUE AND DEFERRED REVENUE
Product revenue consists of an instrument with embedded software essential to the instrument’s functionality, consumables and platform evaluation agreements. Service revenue primarily consists of revenue received from the
12

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
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 PrognomIQ, as further discussed in Note 9. Grant revenues consist of services performed specifically for the reimbursement of research-related expenses.
Product Revenue
For the three and six months ended June 30, 2022, the Company recognized $2.4 million and $4.6 million of product revenue to non-related customers, respectively. For the three and six months ended June 30, 2021, the Company recognized $0.8 million of product revenue to non-related customers.
As of June 30, 2022 and December 31, 2021, the Company recorded $0.1 million and $0.4 million of deferred revenue related to product sales, respectively.
Service Revenue
For the three and six months ended June 30, 2022, the Company recognized $0.1 million and $0.1 million of service revenue to non-related customers, respectively.
As of June 30, 2022 and December 31, 2021, the Company recorded $0.3 million and $0 of deferred service revenue, respectively.
Deferred revenue activity for the period ended June 30, 2022 and December 31, 2021 are as follows (in thousands):
June 30,December 31,
20222021
Balance, beginning of period$376 $250 
Additions315 376 
Revenue recognized(262)(250)
Balance, end of period$429 $376 
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 revenues in future periods. As of June 30, 2022, $5.2 million of revenue is expected to be recognized from the remaining performance obligations over the next 24 months.
For the three and six months ended June 30, 2022, 33% and 29% of our total revenue, respectively, were generated outside of the United States, primarily from countries in Asia. For the three and six months ended June 30, 2021, 28% and 27% of our total revenue, respectively, were generated outside of the United States, primarily in Asia.
For the three months ended June 30, 2022, two customers accounted for 31% and 12% of the Company’s total revenue. For the six months ended June 30, 2022, one customer accounted for 31% of the Company’s total revenue. For the three months ended June 30, 2021, three customers accounted for 28%, 28%, and 15% of the Company’s total revenue. For the six months ended June 30, 2021, three customers accounted for 27%, 27%, and 14% of the Company’s total revenue.
Grant and Other Revenue
In August 2019, the Company received a notice of a Small Business Innovation Research (SBIR) 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 would be awarded. In May 2022, the SBIR grant reached the end of the award period. During the three months ended June 30, 2022 and 2021, the Company recognized grant revenue of $50,000 and $0.1
13

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
million, respectively, with respect to the award. During the six months ended June 30, 2022 and 2021, the Company recognized grant revenue of $64,000 and $0.2 million, respectively, with respect to the award.
6.CAPITAL STOCK AND STOCKHOLDERS’ EQUITY
As of June 30, 2022, 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:
June 30,December 31,
20222021
Class A common stock58,565,210 57,493,005 
Class B common stock4,044,969 4,522,478 
Total common stock issued and outstanding62,610,179 62,015,483 
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.
Common stock issued and outstanding on the condensed consolidated balance sheets and condensed consolidated statements of changes in stockholders' equity includes shares related to early exercised options and restricted stock that are subject to repurchase.
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.
7.EQUITY INCENTIVE PLANS
As of June 30, 2022, there are 11,400,396 shares of Class A common stock reserved for issuance under the 2020 Equity Incentive Plan, 4,678,241 of which shares are available for issuance in connection with grants of future awards.
14

SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Stock Options
Stock option activity for the six months ended June 30, 2022 is as follows:
Options Outstanding
Weighted Average Exercise Price
Balance at December 31, 2021
9,832,924 $12.49 
Options granted2,575,478 14.96 
Options exercised(281,823)4.33 
Options cancelled and forfeited(384,631)18.93 
Balance at June 30, 202211,741,948$13.02 
Vested and exercisable, June 30, 2022
4,280,871$8.74 
Restricted Stock Awards
Certain stock options granted 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. There were 108,534 shares and 174,300 shares of restricted stock that were unvested and subject to repurchase as of June 30, 2022 and December 31, 2021, respectively.
Restricted Stock Units
RSU activity for the six months ended June 30, 2022 is as follows:
Restricted Stock Units
Weighted-Average
Grant Date
Fair Value
Balance at December 31, 2021
740,366 $26.49 
Granted1,536,111 15.37 
Vested
(261,961)21.14 
Cancelled
(169,344)15.63 
Balance at June 30, 2022
1,845,172$18.52 
Employee Stock Purchase Plan
A total of 1,195,327 shares of Class A common stock are reserved for issuance under the 2020 Employee Stock Purchase Plan (ESPP) as of June 30, 2022. During the six months ended June 30, 2022, 56,753 shares of Class A common stock were issued under the ESPP.
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SEER, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
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
June 30,
Six Months Ended
June 30,
2022202120222021
Cost of revenue$278 $344 $485 $747 
Research and development2,392 1,098 4,393 2,187 
Selling, general and administrative5,708 4,989 11,562 9,535 
Total stock-based compensation$8,378 $6,431 $16,440 $12,469 
In February 2022, in connection with a leave of absence taken by one of our executives, a total of 1,330,892 share-based awards were modified to extend the overall term and change the timing of the vesting of the awards. The total incremental stock-based compensation associated with the modification is $0.9 million, which will be recognized over the next eight years.
On June 21 2022, the Board of Directors approved an option repricing to reduce the exercise price of certain vested, outstanding, and unexercised stock options with an exercise price greater than $19.00 per share that were held by employees who were not members of the Board or Director or officers for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (“Non-Section 16 employees”) to $19.00 per share, which was the Company’s initial public offering price. The Board of Directors also approved the repricing of certain unvested, outstanding, and unexercised stock options with an exercise price greater than $19.00 per share that were held by Non-Section 16 employees to $7.40 per share, which was the closing price of the Company’s Class A common stock on the Nasdaq Global Select Market on the date of the approval of the repricing. Except for the exercise price, the amended stock options have the same terms and conditions (including vesting schedule, number of shares, and expiration date) and will continue to be governed by the terms of the 2020 Equity Incentive Plan.
As a result of the option repricing, the Company recorded $0.4 million of incremental compensation expense during the three and six months ended June 30, 2022. The total unrecognized incremental stock-based compensation associated with the option repricing is $2.3 million, which will be recognized over the next three years.
8.COMMITMENTS AND CONTINGENCIES
Facility Lease Agreement
The Company leases office and laboratory space in Redwood City, California with a lease term that is set to end on September 30, 2032. The Company has an option to renew for an additional five-year term at then-current market rates, which is not reasonably certain of being exercised. The lease of additional office and laboratory space pursuant to an amendment entered into in June 2020 commenced in February 2022 and the Company recorded a right-of-use asset of $8.8 million and lease liability of $6.9 million as of the commencement of the lease. This lease liability is based on the present value of lease payments over the lease term, which was estimated using an incremental borrowing rate of 7.4% based on information available at the commencement date