Seer, Inc. Leases Disclosure
As a lessee, the Company leases approximately 51,000 square feet of office and laboratory space in Redwood City, California with a lease term that is set to end in September 2032. The Company has an option to renew all leased space for an additional five-year term at then-current market rates. In connection with the lease, the Company maintains a letter of credit issued to the lessor in the amount of $0.5 million as of each of December 31, 2024 and 2023, which is secured by restricted cash and is presented as noncurrent at each date based on the term of the underlying lease. In addition, the Company leases approximately 6,000 square of office space in San Diego, California under a lease that runs through September 2024. The Company entered into a lease for approximately 3,500 square of office space in San Diego, California that runs from October 2024 through July 2025.
The components of lease expense and supplemental information were as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Operating lease costs |
|
$ |
4,061 |
|
|
$ |
4,153 |
|
Variable lease costs |
|
|
976 |
|
|
|
397 |
|
Short-term lease costs |
|
|
67 |
|
|
|
22 |
|
Total lease costs |
|
$ |
5,104 |
|
|
$ |
4,572 |
|
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Weighted-average remaining lease term (in years) |
|
|
7.8 |
|
|
|
8.7 |
|
Weighted-average incremental borrowing rate |
|
|
6.2 |
% |
|
|
6.2 |
% |
Variable lease costs primarily consist of common area maintenance.
Supplemental cash flow information related to leases are as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
3,969 |
|
|
$ |
3,941 |
|
Lease liability obtained in exchange for right-of-use assets |
|
$ |
— |
|
|
$ |
514 |
|
As of December 31, 2024, future minimum commitments under the Company’s non-cancelable facility operating leases are as follows:
Years ending December 31, |
|
(in thousands) |
|
|
2025 |
|
$ |
3,846 |
|
2026 |
|
|
3,957 |
|
2027 |
|
|
4,072 |
|
2028 |
|
|
4,191 |
|
2029 |
|
|
4,312 |
|
Thereafter |
|
|
12,562 |
|
Total undiscounted future minimum lease payments |
|
|
32,940 |
|
Present value adjustment for minimum lease commitments |
|
|
(6,976 |
) |
Total operating lease liabilities |
|
$ |
25,964 |
|
As a lessor, the Company has contracts for equipment leased to customers. The Company accounts for the non-lease component under the revenue recognition ASC 606 guidance and the lease component under ASC 842 guidance.
For an arrangement that has been classified as a sales-type lease, revenue is recognized when the transfer of control of the underlying leased asset has occurred and the net investment lease recorded, which is calculated at the present value of the remaining lease payments due from the lessee. For an arrangement that has been classified as an operating lease, revenue is recognized on a straight-line basis over the lease term.
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About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.