Item 5. Market for Registrant’s Common Equity
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock trades on the Nasdaq Global Select Market under the symbol “GRPH.” Trading of our common stock commenced on June 25, 2021 in connection with our IPO. Prior to that time, there was no established public trading market for our common stock.
Holders
As of February 23, 2024, we had approximately 17 holders of record of our common stock. This number does not include beneficial owners whose shares were held in street name.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. Further, prior to the effective time of the merger with LENZ, our board of directors will declare and set aside the aggregate cash amount to be paid in accordance with a special cash dividend (the “special cash dividend”) to holders of record of outstanding shares of our common stock as of a record date prior to the effective time of the merger, to be set by our board of directors as close as reasonably practicable to (but not later than) the anticipated closing. The aggregate amount of the special cash dividend is expected to be $60.0 million, subject to certain adjustments depending on our net cash and our private placement.
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Form 10-K.
Recent Sales of Unregistered Securities
On November 14, 2023, concurrently with the execution of the Merger Agreement, we entered into a subscription agreement (the “Subscription Agreement”) with certain institutional investors (the “PIPE investors”), pursuant to which, and on the terms and subject to the conditions of which, the PIPE investors have collectively subscribed for approximately $53.5 million of shares of our common stock, which amount may be increased to up to $125 million through additional subscriptions under the Subscription Agreement from additional PIPE investors (the “Graphite private placement”).
The closing of the Graphite private placement is expected to occur concurrently with, and is conditioned upon, the closing of the merger. Following the closing of the merger and Graphite private placement, assuming a subscription amount of $53.5 million, the former LENZ stockholders are expected to own approximately 56.3% of the outstanding shares of our common stock on a fully-diluted basis, our stockholders as of immediately prior to the effective time of the merger are expected to own approximately 30.7% of the outstanding shares of our common stock on a fully-diluted basis and the investors issued shares of our common stock in the Graphite private placement are expected to own approximately 13.0% of the outstanding shares of our common stock on a fully-diluted basis (excluding any shares reserved for future grants under the 2024 Plan and the 2024 ESPP).
The Graphite private placement was exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated by the SEC thereunder. The common stock in the Graphite private placement was sold to “accredited investors”, as defined in Regulation D.
Use of Proceeds from the Initial Public Offering of Common Stock
On June 29, 2021, we completed our IPO and issued 14,000,000 shares of our common stock at an initial offering price of $17.00 per share. On July 2, 2021, we issued 2,100,000 shares of our common stock to the underwriters of the IPO pursuant to the exercise of their option to purchase additional shares at a price of $17.00 per share less underwriting discounts and commissions. We received net proceeds from the IPO of approximately $251.3 million, after deducting underwriting discounts and commissions of approximately $19.1 million and offering expenses of approximately $3.2 million. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to their associates. Morgan Stanley & Co. LLC, BofA Securities, Inc., Cowen and Company, LLC and SVB Leerink, LLC acted as book-running managers for the IPO.
Shares of our common stock began trading on The Nasdaq Global Market on June 25, 2021. The offer and sale of the shares were registered under the Securities Act on a registration statement on Form S-1 (Registration No. 333-256838), which was declared effective on June 24, 2021.
As of December 31, 2023, we have used approximately $229.2 million of the net proceeds received in the IPO. Cash used since the IPO is described elsewhere in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our
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periodic reports filed with the SEC. There has been no material change in the planned use of proceeds from our IPO as described in the registration statement on Form S-1. We invested the funds received in cash equivalents and other marketable securities in accordance with our investment policy.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 6. R eserved.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.