Seer(US:SEER)2025-05-13 20:31PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Seer, Inc.'s unaudited condensed consolidated financial statements for Q1 2025 report a net loss of $19.9 million and $285.3 million in cash and investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $347,261 | $366,597 | | Cash and cash equivalents | $52,445 | $40,753 | | Total investments | $232,859 | $258,760 | | Total Liabilities | $36,255 | $39,028 | | Total Stockholders' Equity | $311,006 | $327,569 Condensed Consolidated Statements of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $4,205 | $3,066 | | Gross Profit | $2,061 | $1,361 | | Total Operating Expenses | $22,792 | $26,553 | | Loss from Operations | $(20,731) | $(25,192) | | Net Loss | $(19,948) | $(20,679) | | Net Loss Per Share | $(0.34) | $(0.32) | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,417) | $(10,456) | | Net cash provided by investing activities | $24,611 | $32,355 | | Net cash used in financing activities | $(1,502) | $0 | | Net increase in cash, cash equivalents and restricted cash | $11,692 | $21,899 | Notes to Unaudited Condensed Consolidated Financial Statements Detailed notes clarify liquidity, significant customer concentration, related-party revenue from PrognomiQ, and $25.4 million in operating lease liabilities - Management believes that its cash, cash equivalents, and investments of $285.3 million as of March 31, 2025, are sufficient to fund operations for at least the next twelve months, despite an accumulated deficit of $412.3 million31 - In Q1 2025, two customers accounted for 12% and 10% of total revenue. In Q1 2024, one related-party customer accounted for 31% of total revenue. Revenue generated outside the U.S. increased from 13% in Q1 2024 to 37% in Q1 202535 - The company holds an investment in PrognomiQ, which is accounted for as an equity method investment. The carrying value was $5.8 million as of March 31, 2025. Seer recognized $51.9 thousand in related party revenue from PrognomiQ in Q1 2025, down from $1.0 million in Q1 20247880 - As of March 31, 2025, the company has total operating lease liabilities of $25.4 million, primarily for its office and laboratory space in Redwood City, CA, with a lease term ending in September 20326973 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, noting a 37% revenue increase to $4.2 million, a 14% decrease in operating expenses, and a net loss of $19.9 million Results of Operations Q1 2025 saw total revenue increase by 37% to $4.2 million, driven by product and service sales, while operating expenses decreased by 14%, narrowing the loss from operations by 18% Comparison of Results of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $4,205 | $3,066 | $1,139 | 37% | | Product Revenue | $2,890 | $1,668 | $1,222 | 73% | | Service Revenue | $1,203 | $408 | $795 | 195% | | Related Party Revenue | $52 | $954 | $(902) | (95)% | | Gross Profit | $2,061 | $1,361 | $700 | 51% | | R&D Expenses | $11,350 | $12,265 | $(915) | (7)% | | SG&A Expenses | $11,442 | $14,288 | $(2,846) | (20)% | | Loss from Operations | $(20,731) | $(25,192) | $4,461 | (18)% | - The decrease in R&D expenses was primarily due to a $0.4 million decrease in laboratory expenses and a $0.3 million decrease in stock-based compensation104 - The decrease in SG&A expenses was primarily due to a $2.3 million decrease in stock-based compensation105 Liquidity and Capital Resources As of March 31, 2025, Seer held $285.3 million in cash and investments, with $11.4 million used in Q1 2025 operating activities, and sufficient capital for the next twelve months - Net cash used in operating activities was $11.4 million in Q1 2025, primarily due to a net loss of $19.9 million, partially offset by non-cash charges like stock-based compensation ($4.7 million) and depreciation ($1.6 million)113 - Net cash provided by investing activities was $24.6 million, resulting from $87.6 million in proceeds from maturities of securities, offset by $62.7 million in purchases of securities115 - Net cash used in financing activities was $1.5 million, attributable to share repurchases ($0.7 million) and taxes paid for RSU settlements ($0.8 million)117 Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk occurred during Q1 2025 compared to the 2024 Annual Report on Form 10-K disclosures - There were no material changes in market risk during Q1 2025122 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective123 - No changes occurred in the company's internal control over financial reporting during Q1 2025 that have materially affected, or are reasonably likely to materially affect, these controls125 PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings, though it may be involved in ordinary course legal matters - Seer, Inc. is not currently a party to any material legal proceedings128 Risk Factors This section outlines various risks, including historical net losses, market acceptance of products, supply chain dependencies, regulatory hurdles, intellectual property challenges, and stock price volatility Risks Related to Business and Industry Key business risks include a history of net losses, dependence on Proteograph Product Suite market acceptance, reliance on a single contract manufacturer, and competition from larger companies - The company is an early-stage life sciences company with a history of net losses, incurring $19.9 million in net loss for Q1 2025, and an accumulated deficit of $412.3 million as of March 31, 2025131 - Commercial success depends on broad scientific and market acceptance of the Proteograph Product Suite, which is subject to adoption curves and influenced by key opinion leaders and peer-reviewed publications143145 - The company relies on a single contract manufacturer, Hamilton Company, for its SP100 automation instruments, posing a supply chain risk if Hamilton fails to perform169 Risks Related to Regulatory Compliance Regulatory risks include the need for FDA clearance if products shift from Research Use Only to clinical diagnostics, potential FDA reclassification, and uncertainty from evolving regulations like the LDT final rule - Products are currently labeled for Research Use Only (RUO), but if the company seeks to market them for clinical diagnostics, it would require FDA 510(k) clearance or Premarket Approval (PMA)219 - The FDA could deem the company's products to be medical devices even without a change in marketing, particularly if customers use them for clinical purposes, which would subject Seer to significant regulatory requirements225226 - Recent legislative and regulatory proposals, such as the VALID Act and the FDA's final rule to regulate LDTs, create significant uncertainty regarding the future regulatory framework for products like the Proteograph227 Risks Related to our Intellectual Property Intellectual property risks include challenges in obtaining and enforcing patents, ongoing legal challenges to licensed patents, reliance on a key license from Brigham and Women's Hospital, and potential U.S. government march-in rights - The company's ability to commercialize its products may be impaired if it cannot obtain and maintain sufficient intellectual property protection, as competitors could develop similar products231 - The company's licensed patents are currently being challenged. PreOmics GmbH and Biognosys AG filed a petition for Inter Partes Review against a key U.S. patent, and an anonymous third party initiated nullity actions against the corresponding European patent in Germany251 - The company relies on an exclusive license from Brigham and Women's Hospital (BWH) for key technology. Termination of this license or failure by BWH to enforce the patents could harm Seer's ability to commercialize its products277278 Risks Related to Ownership of Class A Common Stock Risks related to Class A common stock include price volatility, concentrated voting power due to a dual-class structure, and the absence of anticipated future dividends - The market price of the Class A common stock has been and may continue to be volatile due to factors like operating results, competitor announcements, and market conditions295 - The dual-class stock structure concentrates 42.5% of voting power with Class B stockholders as of May 6, 2025, allowing them to control matters submitted for stockholder approval. All Class B stock will automatically convert to Class A on December 9, 2025298299 - The company does not anticipate paying dividends in the foreseeable future, and any return on investment will be limited to potential stock value appreciation308 Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities The company reported no unregistered equity sales and repurchased 352,000 Class A common shares for $0.7 million in Q1 2025, with $12.6 million remaining for future repurchases - There were no unregistered sales of equity securities during the period337 Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining for Purchase ($ thousands) | | :--- | :--- | :--- | :--- | | January 2025 | 0 | $— | $13,249 | | February 2025 | 0 | $— | $13,249 | | March 2025 | 352,000 | $1.91 | $12,577 | | Total | 352,000 | $1.91 | | Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter341 Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and the amended Outside Director Compensation Policy - Exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL data files343