SCHEDULE: Shareholder Group Challenges Seer Inc. Board Over 'NOL Pill'

An activist shareholder group has filed an amended Schedule 13D, expressing deep concern over Seer Inc.'s adoption of a tax benefits preservation plan, which they view as an entrenchment device.

Summary

• An activist shareholder group, including Bradley L. Radoff and Michael Torok, has increased its beneficial ownership in Seer, Inc. to approximately 7.6% of outstanding Class A Common Stock.
• The group is deeply concerned by the Seer Board's adoption of a 'tax benefits preservation plan' (NOL Pill) on February 26, 2026.
• They believe the NOL Pill is designed to insulate the current Board, deter proxy contests, and prevent stockholders from acquiring 4.9% or more of the shares.
• The group calls on the Board to provide evidence justifying the NOL Pill and prove it is not an entrenchment device, specifically asking about the Issuer's proximity to an 'ownership change' under Section 382 of the Internal Revenue Code.
• This follows a previous instance where the Board sought to delay the conversion of Class B common stock (10 votes per share, primarily held by the CEO) for five years, only abandoning the plan after being informed it violated Nasdaq listing standards.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing negatively due to the explicit conflict between a significant shareholder group and the Board over corporate governance issues, particularly the perceived entrenchment tactics like the NOL Pill and past actions regarding Class B stock.

Positives

• Increased beneficial ownership by a group of shareholders, indicating conviction in the company's underlying value.
• The activist group is actively engaging with the Board on corporate governance issues, potentially leading to improved oversight.

Negatives

• The Board's adoption of a 'tax benefits preservation plan' (NOL Pill) is viewed by the reporting persons as an entrenchment device rather than a genuine tax-related justification.
• The NOL Pill is perceived to deter shareholders from acquiring 4.9% or more of shares, potentially limiting shareholder activism and influence.
• A history of questionable corporate governance decisions, including a prior attempt to delay Class B common stock conversion that violated Nasdaq listing standards.

Risks

• The 'tax benefits preservation plan' (NOL Pill) could limit shareholder ability to accumulate significant stakes, potentially hindering beneficial activist engagement.
• Potential for ongoing conflict between the Board and activist shareholders, which could distract management and impact company focus.
• Risk of negative perception regarding corporate governance practices due to the Board's actions and past attempts to entrench management.

Future Outlook

The reporting persons' statements indicate an expectation of continued engagement with Seer Inc.'s Board regarding corporate governance, particularly concerning the recently adopted NOL Pill and its implications for shareholder rights and potential proxy contests.

Management Comments

• The Reporting Persons are deeply concerned by the Board's recent decision to adopt the tax benefits preservation plan, dated February 26, 2026 (the 'NOL Pill'), which the Reporting Persons believe was designed to insulate the current Board and to deter or gain an unfair advantage in any potential proxy contest.
• The Reporting Persons believe that the NOL Pill was implemented in order to thwart stockholders from acquiring 4.9% or more of the Shares, despite the Board's purported tax-related justifications.
• In the Reporting Persons' view, the NOL Pill is simply a means to prevent stockholders from gaining too much voting power in the event of a potential proxy contest given the fact that the Board adopted the NOL Pill only six days after the Reporting Persons filed the initial Schedule 13D.
• We specifically call on the Board to provide stockholders with evidence justifying the adoption of the draconian NOL Pill and prove that it is not just another entrenchment device.
• As a reminder, this is the same Board that sought to delay the conversion of the Issuer's Class B common stock, which were primarily held by the Issuer's CEO and provided 10 votes per share, for five years, and only abandoned such plan after being informed that it would violate Nasdaq's listing standards.

Industry Context

StockSavvy.ai notes that Schedule 13D filings are often precursors to shareholder activism, indicating that a significant investor or group intends to influence or change the control of a company. The concerns raised about the 'NOL Pill' reflect a broader trend where boards implement defensive measures, sometimes perceived as entrenchment tactics, to protect against hostile takeovers or activist campaigns. This situation highlights the ongoing tension between corporate boards' fiduciary duties and shareholders' rights to influence company direction, a common theme in the biotech and high-growth tech sectors where control and strategic direction are highly valued.

Comparison to Industry Standards

• The adoption of a 'NOL Pill' or similar shareholder rights plan is a common defensive tactic used by companies to protect valuable tax assets (Net Operating Losses) from being impaired by an 'ownership change' under Section 382 of the Internal Revenue Code. However, such plans are often scrutinized by corporate governance advocates and activist investors, who view them as potential entrenchment devices.
• Compared to best practices in corporate governance, the reporting persons' assertion that the NOL Pill was adopted just six days after their initial Schedule 13D filing raises questions about the Board's primary motivation, suggesting it might be more reactive to shareholder activity than proactively protecting tax assets. Companies like Seer, Inc. are expected to demonstrate clear, independent justification for such measures, especially when they could limit shareholder influence.
• The reference to the Board's prior attempt to delay Class B common stock conversion, which was abandoned due to Nasdaq listing standard violations, further suggests a pattern of governance decisions that deviate from transparent and shareholder-friendly practices, unlike many industry peers who prioritize clear and equitable shareholder rights.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased shareholder activism and scrutiny of the Board's decisions. The NOL Pill could limit the ability of large shareholders to increase their stake, impacting their influence.
• Management/Board: Increased pressure from activist shareholders to justify governance decisions and potentially face a proxy contest.
• Employees/Customers/Suppliers/Creditors: Indirect impact from potential management distraction or changes in strategic direction if the activist campaign escalates.

Next Steps

• The reporting persons call on the Board to provide evidence justifying the adoption of the NOL Pill.
• The reporting persons specifically request information on how close the Issuer is to experiencing an 'ownership change' as defined in Section 382 of the Internal Revenue Code.
• Continued engagement or potential escalation of shareholder activism by the reporting group.

Key Dates

Recommendation

While the increased beneficial ownership by an activist group could signal potential for value creation through governance improvements, the immediate conflict with the Board over the 'NOL Pill' introduces significant uncertainty and potential for distraction. The historical governance issues also raise red flags. Investors should hold to observe how this shareholder-Board conflict unfolds and assess the Board's response to the demands for justification before making further investment decisions.

Keywords

Seer Inc., Schedule 13D, Shareholder Activism, Corporate Governance, NOL Pill, Tax Benefits Preservation Plan, Proxy Contest, Beneficial Ownership, SEC Filing, SRDX