Seer, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer (CEO), and Chief Financial Officer (CFO), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the CEO and the CFO, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of December 31, 2020 because of the material weakness in internal controls further discussed below. Notwithstanding the material weakness, our management, including our CEO and CFO, has concluded that our consolidated financial statements, included in the 2020 Annual Report on Form 10-K, fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with generally accepted accounting principles. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis. Specifically, our management determined that, as of December 31, 2020, we have material weaknesses in each of the following components of the “Internal Control—Integrated Framework” (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission: • insufficient accounting personnel to enable segregation of duties relating to the general ledger, disbursement, and certain accounting functions; • no formalized processes or controls for account reconciliations, including independent review of such reconciliations, or related financial statement analysis prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP); and • an insufficient complement of accounting personnel with the necessary U.S. GAAP technical expertise to timely identify and account for complex or non-routine transactions or to formalize accounting policies, memoranda, or controls for such transactions. These material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement of our annual or interim consolidated financial statements that may not be prevented or detected, and accordingly, it was determined that these control deficiencies constitute material weaknesses. Remediation Plan We have begun to take certain actions to address the control deficiencies in our financial reporting, including hiring three finance department employees with appropriate expertise, including our Chief Financial Officer and our Controller, and retaining an accounting consulting firm to provide additional depth and breadth to our technical accounting and financial reporting capabilities. We have also begun to review and document our accounting and financial processes and internal controls, build out our financial 122 management and reporting systems infrastructure, and further develop and formalize our accounting policies and financial reporting procedures, which includes ongoing senior management review and establishing our audit committee oversight. In addition, our current plan includes engaging a consulting firm to assist in the design effectiveness and testing of our internal controls and the hiring of an additional four finance and accounting personnel during 2021 to assist in executing on these specific functions, of which we have hired two personnel as of January 31, 2021. Management’s Annual Report on Internal Control over Financial Reporting This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies. Inherent Limitations on Effectiveness of Controls Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Changes in Internal Control over Financial Reporting Except for the identification of the material weaknesses and the remediation plan described above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 123 Item 9B. Other Information None 124 PART III. Item 10. Directors, Executive Officers and Corporate Governance. We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or, persons performing similar functions. The code of business conduct and ethics is available on our website at http://seer.bio. We intend to disclose future amendments to such code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, or our directors on our website identified above or in a Current Report on Form 8-K. Information contained on the website is not incorporated by reference into this Annual Report. The remaining information required under this item is incorporated herein by reference to our definitive proxy statement (the “Proxy Statement”) pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, which Proxy Statement is expected to be filed with Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2020. Item 11. Executive Compensation The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. 125 PART IV. 126 Item 15. Exhibit and Financial Statement Schedules The following documents are filed as part of this Annual Report: 1. Financial Statements: The financial statements filed as part of this Annual Report are included in Part II, Item 8 of this Annual Report. 2. Financial Statement Schedules: Financial statement schedules have been omitted in this Annual Report because they are not applicable, not required under the instructions or the information requested is set forth in the financial statements or related notes thereto. 3. Exhibits: The list of exhibits filed with this Annual Report on Form 10-K is set forth in the Exhibit Index preceding the signature page and is incorporated herein by reference or filed with this Annual Report on Form 10-K, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K). Exhibit Number Description Form File No. Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation of the Registrant . 8-K 001-39747 3.1 12/8/2020 3.2 Amended and Restated Bylaws of the Registrant . 8-K 001-39747 3.2 12/8/2020 4.1 Form of common stock certificate of the Registrant. S-1 333-250035 4.1 11/12/2020 4.2 Amended and Restated Investors’ Rights Agreement, by and among the Registrant and certain holders of its capital stock, dated as of December 9 , 2020. S-1 333-252395 4.2 1/25/2021 4.3 Description of the Registrant ’ s securities registered p ursuant to S ection 12 of the Securities Exchange Act of 1934. * 10.1+ Form of Indemnification Agreement between the Registrant and each of its directors and executive officers. S-1 333-250035 10.1 11/12/2020 10.2+ 2020 Equity Incentive Plan and related form agreements. S-1/A 333-250035 10.2 11/30/2020 10.3+ 2017 Stock Incentive Plan and related form agreements. S-1/A 333-250035 10.3 11/30/2020 127 10.4+ 2020 RSU Equity Incentive Plan and related form agreements. S-1/A 333-250035 10.4 11/30/2020 10.5+ 2020 Employee Stock Purchase Plan. S-1/A 333-250035 10.5 11/30/2020 10.6+ Key Executive Change in Control and Severance Plan, and form of Participation Agreement thereunder. S-1/A 333-250035 10.6 11/30/2020 10.7+ Confirmatory Offer Letter between the Registrant and Dr. Omid Farokhzad, dated November 30, 2020. S-1/A 333-250035 10.7 11/30/2020 10.8+ Confirmatory Offer Letter between the Registrant and Omead Ostadan, dated November 30, 2020. S-1/A 333-250035 10.8 11/30/2020 10.9+ Confirmatory Offer Letter between the Registrant and David Horn, dated November 30, 2020. S-1/A 333-250035 10.9 11/30/2020 10.10+ CEO Change in Control and Severance Agreement between the Registrant and Dr. Omid Farokhzad, dated November 30, 2020. S-1/A 333-250035 10.10 11/30/2020 10.11+ Executive Incentive Compensation Plan . S-1/A 333-250035 10.11 11/30/2020 10.12+ Outside Director Compensation Policy. S-1/A 333-250035 10.12 11/30/2020 10.13# Umbrella Development & Supply Agreement between the Registrant and Hamilton Company, dated March 9, 2020 . S-1 333-250035 10.14 11/12/2020 10.14# Exclusive Patent License Agreement between the Registrant and The Brigham and Women’s Hospital, Inc., dated December 18, 2017. S-1 333-250035 10.15 11/12/2020 128 10.15 Class A Common Stock Purchase Agreement by and among the Registrant, Fidelity Management & Research Company LLC, SoftBank, certain funds and accounts advised by T. Rowe Price Associates, Inc. and aMoon Fund, dated as of November 12, 2020 . S-1 333-250035 10.15 11/12/2020 21.1 List of Subsidiaries of the Registrant. S-1 333-252395 4.2 1/25/2021 23.1 Consent of Deloitte & Touche LLP, independent registered public accounting firm. * 31.1† Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * 31.2† Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * 32.1† Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 129 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document __________ + Indicates management contract or compensatory plan. † The certifications attached as Exhibit 31.1, 31.2 and 32.1 that accompany this Annual Report on Form 10-K, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing. # Confidential treatment has been requested for portions of this exhibit. These portions have been omitted and have been filed separately with the Securities and Exchange Commission. 130 Item 16. Form 10-K Summary None. 131 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 29, 2021 SEER, INC. By: /s/ Omid Farokhzad, M.D. Omid Farokhzad, M.D. Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/ Omid Farokhzad, M.D. Chief Executive Officer and Chair of the Board of Directors ( Principal Executive Officer ) March 29, 2021 Omid Farokhzad, M.D. /s/ David R. Horn Chief Financial Officer ( Principal Financial Officer and Accounting Officer ) March 29, 2021 David R. Horn /s/ David Hallal Lead Independent Director March 29, 2021 David Hallal /s/ Catherine Friedman Director March 29, 2021 Catherine Friedman /s/ Robert Langer, Sc.D. Director March 29, 2021 Robert Langer, Sc.D. /s/ Terrance McGuire Director March 29, 2021 Terrance McGuire /s/ Deep Nishar Director March 29, 2021 Deep Nishar /s/ Omead Ostadan Director March 29, 2021 Omead Ostadan /s/ Mostafa Ronaghi, Ph.D. Director March 29, 2021 Mostafa Ronaghi, Ph.D. /s/ David Singer Director March 29, 2021 David Singer 132