Seer Inc. conducts stock option repricing for retention

REDWOOD CITY, CA - Seer, Inc., a company specializing in laboratory analytical instruments, has executed a repricing of certain employee stock options as disclosed in a recent SEC filing. The Board of Directors approved the repricing on Monday, October 4, 2024, to retain and motivate employees.

The repricing affects nonstatutory stock options that were underwater — meaning the exercise price was above the current market value. Specifically, options with exercise prices greater than $2.00 per share were repriced to $2.00, which was the closing price of Seer's Class A common stock on the effective date of the repricing. This adjustment includes significant holdings by CEO Omid Farokhzad and President and CFO David Horn.

However, if employees exercise these options before the end of a designated retention period, ending April 4, 2026, they will be required to pay the original exercise price. Additionally, certain 2023 performance-based awards were amended to have a stock price hurdle amount of at least $3.00, up from the original $6.89.

The Board, with advice from an independent compensation consultant and the Talent and Compensation Committee, chose not to grant additional awards to executive officers at the Senior Vice President level or higher in 2025. This decision was part of a broader strategy to avoid further stock dilution and additional cash expenditures.

Seer Inc. emphasized that the decision was made after considering various alternatives and was aimed at aligning the interests of employees with those of the company and its stockholders. Before the repricing, a majority of the company's stock options were underwater, affecting approximately 7.9 million shares.

The information for this report is based on a press release statement filed with the SEC.

In other recent news, Seer Inc. reported a 23% decline in Q2 revenue, recording earnings of $3.1 million in 2024. The company attributes this decrease to a reduction in related party and grant revenue.

Despite this, Seer has been strategically expanding its operations and enhancing its Proteograph Product Suite. As part of its expansion plans, Seer launched the 2024 Seer Insights grant program and opened a new STAC lab in Germany. The company also released a new version of the Proteograph analysis suite.

In addition, Seer announced the appointment of Dr. Nicolas Roelofs to its Board of Directors, a move expected to provide valuable insights to the company's leadership team.

Seer has revised its 2024 revenue guidance to $13 million to $15 million, anticipating a slower recovery in the second half of the year. These are among the recent developments at Seer as it continues to advance in the field of proteomics research.

InvestingPro Insights

Seer's recent stock option repricing aligns with several key financial metrics and trends highlighted by InvestingPro. The company's market capitalization stands at $122.86 million, reflecting its current valuation in the market. InvestingPro Tips indicate that Seer holds more cash than debt on its balance sheet, which could provide some financial flexibility as it navigates its employee retention strategy.

However, the company faces challenges. An InvestingPro Tip notes that Seer is quickly burning through cash, which may have influenced the decision to reprice options rather than issue new ones. This approach aligns with the Board's strategy to avoid further stock dilution and additional cash expenditures. Additionally, the company is not profitable over the last twelve months, with a negative P/E ratio of -1.49 for the last twelve months as of Q2 2024.

Despite these challenges, Seer has shown strong returns over the last month and three months, with price total returns of 21.95% and 23.46% respectively. This recent stock performance may provide some context for the $2.00 repricing level and the new $3.00 stock price hurdle for certain performance-based awards.

For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Seer, providing a deeper understanding of the company's financial position and market performance.

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