What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-05-08 · 123 added, 74 removed, 462 unchanged (30% of the section changed)

3 unchanged sentences

(in thousands, except for shares and par value)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

7 unchanged sentences

Deferred offering costs — 2,739

Security deposit 21 21

Other assets 1,398 21

Total assets $ 202,639 $ 70,376

11 unchanged sentences

Series A convertible preferred stock, par value of $ 0.001 per share;

no shares and 22,791,777 shares authorized at March 31, 2024 and December 31, 2023, respectively;

no shares and 21,977,282 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

no shares and 22,791,777 shares authorized at June 30, 2024 and December 31, 2023, respectively;

no shares and 21,977,282 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series A-1 convertible preferred stock, par value of $ 0.001 per share;

no shares and 2,950,548 shares authorized at March 31, 2024 and December 31, 2023, respectively;

no shares and 2,950,548 issued and outstanding at March 31, 2024 and December 31, 2023, respectively

no shares and 2,950,548 shares authorized at June 30, 2024 and December 31, 2023, respectively;

no shares and 2,950,548 issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series B convertible preferred stock, par value of $ 0.001 per share;

no shares and 28,019,181 shares authorized at March 31, 2024 and December 31, 2023, respectively;

no shares and 28,019,181 issued and outstanding at March 31, 2024 and December 31, 2023, respectively

no shares and 28,019,181 shares authorized at June 30, 2024 and December 31, 2023, respectively;

no shares and 28,019,181 issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Class B convertible common stock, par value of $ 0.001 per share;

no shares and 2,744,184 shares authorized at March 31, 2024 and December 31, 2023, respectively;

no shares and 2,744,184 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

no shares and 2,744,184 shares authorized at June 30, 2024 and December 31, 2023, respectively;

no shares and 2,744,184 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Total convertible preferred and common stock — 143,390

1 unchanged sentence

Common stock, par value of $ 0.00001 per share;

300,000,000 and 16,017,929 shares authorized at March 31, 2024 and December 31, 2023, respectively, 25,534,451 and 2,004,783 shares issued at March 31, 2024 and December 31, 2023, respectively, and 25,500,130 and 1,969,360 shares outstanding at March 31, 2024 and December 31, 2023, respectively

300,000,000 and 16,017,929 shares authorized at June 30, 2024 and December 31, 2023, respectively, 25,872,718 and 2,004,783 shares issued at June 30, 2024 and December 31, 2023, respectively, and 25,845,671 and 1,969,360 shares outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 315,130 2,517

8 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Operating expenses:

4 unchanged sentences

Other income (expense):

Other expense ( 1,348 ) ( 54 )

Other income (expense) 1,635 ( 18 ) 287 ( 73 )

Interest income 2,463 251 3,251 252

6 unchanged sentences

Weighted-average common shares outstanding, basic and diluted (1)

25,608,594 1,956,244 15,163,103 1,953,464

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

16 unchanged sentences

Balance as of December 31, 2023 (1)

21,977,282 $ 44,621 2,950,548 $ 9,893 28,019,181 $ 82,976 2,744,184 $ 5,900 1,969,360 $ 10 $ 2,517 $ ( 95,245 ) $ 6 $ ( 92,712 )

Conversion of convertible preferred stock and Class B convertible common stock to common stock as a result of the Merger and reset to par of $ 0.00001

10 unchanged sentences

Balance as of March 31, 2024 — $ — — $ — — $ — — $ — 25,500,130 $ — $ 310,061 $ ( 111,893 ) $ ( 1 ) $ 198,167

Adjustments to reverse recapitalization accounting and issuance of common stock from private placement — — — — — — — — — — 31 — — 31

Exercise of stock options — — — — — — — — 338,260 — 3,413 — — 3,413

Unrealized gain (loss) on marketable securities — — — — — — — — — — — — ( 61 ) ( 61 )

Vesting of early exercised stock options — — — — — — — — 7,281 — 28 — — 28

Share-based compensation — — — — — — — — — — 1,597 — — 1,597

Net loss — — — — — — — — — — — ( 10,254 ) — ( 10,254 )

Balance as of June 30, 2024 — $ — — $ — — $ — — $ — 25,845,671 $ — $ 315,130 $ ( 122,147 ) $ ( 62 ) $ 192,921

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

20 unchanged sentences

Balance as of March 31, 2023 21,977,282 $ 44,621 2,950,548 $ 9,893 28,019,181 $ 82,976 2,744,184 $ 5,900 1,952,581 $ 10 $ 1,259 $ ( 37,947 ) $ — $ ( 36,678 )

Unrealized gain (loss) on marketable securities — — — — — — — — — — — — ( 14 ) ( 14 )

Vesting of early exercised stock options — — — — — — — — 5,593 — 19 — — 19

Share-based compensation — — — — — — — — — — 189 — — 189

Net loss — — — — — — — — — — — ( 14,726 ) — ( 14,726 )

Balance as of June 30, 2023 21,977,282 $ 44,621 2,950,548 $ 9,893 28,019,181 $ 82,976 2,744,184 $ 5,900 1,958,174 $ 10 $ 1,467 $ ( 52,673 ) $ ( 14 ) $ ( 51,210 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

9 unchanged sentences

Accrued liabilities ( 9,479 ) 2,831

Other assets ( 1,377 ) 10

Net cash used in operating activities ( 39,732 ) ( 26,322 )

Cash flows from investing activities

Purchases of marketable securities ( 111,257 ) ( 26,851 )

Proceeds from maturities of marketable securities 31,000 —

Purchases of property and equipment ( 133 ) ( 30 )

Net cash provided by (used in) investing activities 18,000 ( 6 )

Net cash used in investing activities ( 80,390 ) ( 26,881 )

Cash flows from financing activities

14 unchanged sentences

Accounts payable and accrued liabilities assumed in the Merger $ 2,950 $ —

Common stock issuance costs included in accounts payable and accrued expenses $ 3,547 $ —

Merger transaction costs included in accounts payable and accrued expenses $ 42 $ —

Right-of-use assets assumed in the Merger in exchange for lease liabilities

Right-of-use assets assumed in the Merger in exchange for operating lease liabilities $ 218 $ —

Right-of-use assets obtained in exchange for operating lease liabilities $ 1,218 $ 190

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11 unchanged sentences

On March 21, 2024, Graphite and LENZ OpCo completed a merger transaction in accordance with the terms and conditions of the Agreement and Plan of Merger (the “Merger Agreement”) dated November 14, 2023, pursuant to which, among other matters, Generate Merger Sub, Inc., a wholly-owned subsidiary of Graphite, merged with and into LENZ OpCo, with LENZ OpCo surviving the merger as the surviving corporation and a wholly-owned subsidiary of Graphite (the “Merger”).

Additionally, Graphite changed its name to “LENZ Therapeutics, Inc.” The Merger was accounted for as a reverse recapitalization, with LENZ OpCo being treated as the acquirer for accounting purposes.

In connection with the Merger, Graphite changed its name to “LENZ Therapeutics, Inc.” The Merger was accounted for as a reverse recapitalization, with LENZ OpCo being treated as the acquirer for accounting purposes.

See discussions of the transactions in connection with the Merger in Note 3 .

As of March 31, 2024, the Company has devoted substantially all of its efforts to product development and has not realized product revenues from its planned principal operations.

As of June 30, 2024, the Company has devoted substantially all of its efforts to product development and has not realized product revenues from its planned principal operations.

The Company has a limited operating history, and the sales and income potential of the Company’s business and market are unproven.

The Company has experienced net losses since its inception and, as of March 31, 2024, had an accumulated deficit of $ 111.9 million.

The Company has experienced net losses since its inception and, as of June 30, 2024, had an accumulated deficit of $ 122.1 million.

The Company expects to incur additional losses in the future as it continues its research and development efforts, advances its product candidate through clinical development, seeks regulatory approval, prepares for commercialization, hires additional personnel, protects its intellectual property, and grows its business.

1 unchanged sentence

Such activities are subject to significant risks and uncertainties.

As of March 31, 2024, the Company had cash, cash equivalents, and marketable securities of $ 213.3 million, which is available to fund future operations.

The Company believes that its existing cash, cash equivalents, and marketable securities as of March 31, 2024 will be sufficient to support operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements.

As of June 30, 2024, the Company had cash, cash equivalents, and marketable securities of $ 196.1 million, which is available to fund future operations.

The Company believes that its existing cash, cash equivalents, and marketable securities as of June 30, 2024 will be sufficient to support operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements.

Summary of Significant Accounting Policies

8 unchanged sentences

Since LENZ OpCo was determined to be the accounting acquirer in connection with the Merger, for periods prior to the Merger, the condensed consolidated financial statements were prepared on a stand-alone basis for LENZ OpCo and did not include the combined entities activity or financial position.

Subsequent to the Merger, the condensed consolidated financial statements as of and for the three months ended March 31, 2024 include Graphite’s activity from March 21, 2024 through March 31, 2024, and assets and liabilities at their acquisition date fair value.

Subsequent to the Merger, the condensed consolidated financial statements as of and for the six months ended June 30, 2024 include Graphite’s activity from March 21, 2024 through June 30, 2024, and assets and liabilities at their acquisition date fair value.

Historical share and per share figures of LENZ OpCo have been retroactively recast based on the Merger exchange ratio of 0.2022 .

9 unchanged sentences

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents.

The Company deposits its cash primarily in traditional checking and savings accounts with a financial institution.

Restricted cash of $ 0.1 million as of March 31, 2024 relates to a security deposit in the form of a letter of credit issued in connection with one of the Company's leases.

The Company deposits its cash primarily in traditional checking and savings accounts and money market funds with a financial institution.

Restricted cash of $ 0.1 million as of June 30, 2024 relates to a security deposit in the form of a letter of credit issued in connection with one of the Company's leases.

Marketable Securities

The Company classifies marketable securities as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all marketable securities with maturity dates beyond three months at the date of purchase as current assets in the accompanying balance sheets.

As of March 31, 2024, the Company had no intent to sell any marketable securities prior to maturity.

As of June 30, 2024, the Company had no intent to sell any marketable securities prior to maturity.

Marketable securities classified as available-for-sale are carried at fair value with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’ deficit until realized.

1 unchanged sentence

Realized gains and losses are calculated using the specific identification method and recorded as interest income or expense.

The Company invests in available-for-sale securities consisting of money market funds, commercial paper, U.S.

The Company invests in available-for-sale securities consisting of commercial paper, U.S.

Treasury securities and U.S.

agency securities.

Available-for-sale securities are classified as either cash, cash equivalents or marketable securities on the Company's condensed consolidated balance sheets.

Available-for-sale securities are classified as marketable securities on the Company's condensed consolidated balance sheets.

Long-term Investment

Long-term investments without a readily determinable fair value are accounted for using the cost method.

The cost method is applied when there is no active market for the investment, thus the fair value cannot be reliably determined.

The cost of long-term investments include the purchase price, and are adjusted to fair value based on any observable changes in market value or any impairment losses.

The Company has one long-term equity investment which is classified as a non-current asset in the condensed consolidated balance sheet, as the Company had no intent to sell or dispose of the long-term investment within one year of the balance sheet date.

Equity investments without a readily determinable fair value are remeasured from time to time based on observable price changes in orderly transactions for an identical or similar investment.

Changes in fair value due to observable price changes are recorded as other income (expense) in the condensed consolidated statement of operations and comprehensive loss in the period in which they occur.

See Note 4 for further discussion on the remeasurement of the Company's long-term investment during the three months ended June 30, 2024.

Impairment of long-term investments is assessed periodically or whenever there are indicators of potential impairment.

An impairment loss is recognized if the carrying amount of the investment exceeds its recoverable amount.

The recoverable

amount is determined based on the higher of the investment's fair value less costs to sell or its value in use.

Any impairment losses are recognized in the condensed consolidated statement of operations and comprehensive loss as an expense in the period in which they occur.

Allowance for Credit Losses

7 unchanged sentences

Accrued interest receivable on available-for-sale securities is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets.

Company’s accounting policy is to not measure an allowance for credit loss for accrued interest receivable and to write-off any uncollectible accrued interest receivable as a reversal of interest income in a timely manner, which is considered to be in the period in which it’s determined the accrued interest will not be collected.

The Company’s accounting policy is to not measure an allowance for credit loss for accrued interest receivable and to write-off any uncollectible accrued interest receivable as a reversal of interest income in a timely manner, which is considered to be in the period in which it’s determined the accrued interest will not be collected.

The Company determines if an arrangement is or contains a lease at inception by assessing whether it conveys the right to control the use of an identified asset in exchange for consideration.

15 unchanged sentences

The Company had capitalized deferred offering costs of $ 2.7 million as of December 31, 2023 related to the Merger.

The Company had no capitalized deferred offering costs as of June 30, 2024.

Research and Development Expenses and Related Prepaid Assets and Accrued Liabilities

13 unchanged sentences

Prior to the Merger, the Company revalued the warrants at each balance sheet date utilizing an option pricing method that back solved the fair value of the warrants based on recent financing transactions and also considered the enterprise value of the Company when considering potential exit events.

The warrants’ estimated fair value as of the Merger date utilized the Black-Scholes-Merton ("Black-Scholes") model and the following input assumptions:

The warrants’ estimated fair value as of the Merger date utilized the Black-Scholes model and the following input assumptions:

risk free interest rate ( 4.3 % - 4.4 %), expected term ( 3.6 - 4.1 years), dividend yield ( 0 %), volatility ( 103.0 % - 104.0 %) and exercise price ($ 10.64 per common share).

Changes in fair value were recognized as increases or reductions to other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

The fair value of these warrants was classified as a non-current liability in the condensed consolidated balance sheet since the underlying Series A Convertible Preferred stock is potentially redeemable.

Pursuant to the Merger Agreement, the Series A Convertible preferred stock warrants became warrants to purchase shares of the Company's common stock.

14 unchanged sentences

In determining the fair value of its common stock, LENZ OpCo used methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants’ ("AICPA") Audit and Accounting Practice Aid Series:

Valuation of Privately Held Company Equity Securities Issued as Compensation .

Valuation of Privately Held Company Equity

Securities Issued as Compensation .

In addition, LENZ OpCo considered various objective and subjective factors, along with input from the independent third-party valuation firm.

24 unchanged sentences

Interest and penalties related to uncertain tax positions are recognized in the provision of income taxes.

As of March 31, 2024 and December 31, 2023, the Company had incurred no interest or penalties related to uncertain income tax benefits.

As of June 30, 2024 and December 31, 2023, the Company had incurred no interest or penalties related to uncertain income tax benefits.

The Company’s policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense.

The Company has no accruals for interest or penalties in the balance sheets as of March 31, 2024 and December 31, 2023 and has not recognized interest or penalties in the condensed consolidated statements of operations for the three months ended March 31, 2024 or 2023.

The Company has no accruals for interest or penalties in the balance sheets as of June 30, 2024 and December 31, 2023 and has not recognized interest or penalties in the condensed consolidated statements of operations for the three and six months ended June 30, 2024 or 2023.

Net Loss Per Share

5 unchanged sentences

Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the net loss for each period presented.

For the three months ended March 31, 2024, net loss per share included the weighted-average shares outstanding as a result of the Merger and shares issued in conjunction with the PIPE Financing (as defined in Note 3).

For the six months ended June 30, 2024, net loss per share included the weighted-average shares outstanding as a result of the Merger and shares issued in conjunction with the March 2024 PIPE Financing (as defined in Note 3).

Other Comprehensive Income (Loss)

13 unchanged sentences

The Company has not yet completed its assessment of the impact of ASU 2023-09 on the Company’s financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , to improve existing disclosure requirements for segment reporting, primarily through enhanced disclosures about significant segment expenses and new disclosures requirements applicable to entities with a single reportable segment.

This guidance is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, on a retrospective basis.

The Company expects to adopt this guidance for the annual period ending December 31, 2024 and has not yet determined the impact the adoption of this guidance will have on the Company's financial statements.

Merger and Related Transactions

12 unchanged sentences

At the closing of the Merger, each outstanding share of LENZ OpCo’s common stock and preferred stock, and options and warrants to purchase LENZ OpCo’s common stock and preferred stock were converted into the right to receive or purchase 0.2022 shares of Graphite’s common stock, which resulted in the issuance by Graphite of an aggregate of 15,409,102 shares of, and options and warrants to purchase, Graphite common stock to the stockholders, option holders, and warrant holders of LENZ OpCo.

In connection with the Merger Agreement, the Company concurrently entered into a subscription agreement (the “Subscription Agreement”) with certain institutional investors (the “PIPE investors”) pursuant to which, among other things, the Company agreed to issue to the PIPE investors shares of LENZ common stock immediately following the Merger in a private placement transaction for an aggregate purchase price of $ 53.5 million (the “PIPE Financing”).

Immediately following the consummation of the Merger and PIPE Financing, LENZ OpCo, Graphite stockholders, and the PIPE investors collectively owned approximately 56 %, 31 %, and 13 % of the Company, respectively, on a fully diluted basis.

Immediately following the consummation of the Merger and March 2024 PIPE Financing, LENZ OpCo, Graphite stockholders, and the PIPE investors collectively owned approximately 56 %, 31 %, and 13 % of the Company, respectively, on a fully diluted basis.

As part of the reverse recapitalization, LENZ OpCo received $ 112.6 million of cash and cash equivalents, net of transaction costs.

1 unchanged sentence

LENZ OpCo also incurred transaction costs of approximately $ 5.2 million, which was recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated statements of convertible preferred and common stock and stockholders' equity.

The Company also recorded a one-time charge of $ 0.3 million for the acceleration of the Graphite stock awards that is recorded in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024.

Fair Value of Financial Instruments

Financial Instruments

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis.

10 unchanged sentences

Cash equivalents, marketable securities, and the preferred stock warrants liability are recorded at fair value on a recurring basis.

Equity investments without a readily determinable fair value are recorded at cost and adjusted to fair value based on observable price changes in orderly transactions for identical or similar investment of the same issuer.

None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis.

2 unchanged sentences

Total Level 1 Level 2 Level 3

At March 31, 2024:

At June 30, 2024:

Cash equivalents

3 unchanged sentences

Commercial paper $ 61,423 $ — $ 61,423 $ —

treasury securities 1,991 1,991 — —

government agency securities 27,579 — 27,579 —

treasury securities 18,653 18,653 — —

Corporate debt securities 4,421 — 4,421 —

Total marketable securities measured at fair value $ 112,076 $ 18,653 $ 93,423 $ —

11 unchanged sentences

Marketable securities consisted of the following (in thousands):

March 31, 2024

June 30, 2024

Amortized Cost Gross

3 unchanged sentences

government agency securities 27,588 — ( 9 ) 27,579

Corporate debt securities 4,421 — — 4,421

Totals $ 112,137 $ — $ ( 61 ) $ 112,076

6 unchanged sentences

Totals $ 30,646 $ 11 $ ( 3 ) $ 30,654

As of March 31, 2024, three of the Company's marketable securities with a fair market value of $ 4.5 million were in an aggregate gross unrealized loss position of $ 1,000 ;

these three marketable securities have all been in a gross unrealized loss position for less than one year.

When evaluating an investment for impairment, management reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, intent to sell or the likelihood that the Company would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made.

Based on a review of these marketable securities, the Company believes none of the unrealized loss is the result of a credit loss as of March 31, 2024, because the Company does not intend to sell these securities, and it is not more-likely-than-not that the Company will be required to sell these securities before the recovery of their amortized cost basis.

As of March 31, 2024, all marketable securities had contractual maturities of less than one year.

The Company did not transfer any assets measured at fair value on a recurring basis between levels during the three months ended March 31, 2024 and 2023.

The following table presents activity for the preferred stock warrants liability during the three months ended March 31, 2024 (in thousands):

As of June 30, 2024, thirty-six of the Company's marketable securities with a fair market value of $ 103.2 million were in an aggregate gross unrealized loss position of $ 0.1 million;

these thirty-six marketable securities have all been in a gross unrealized loss position for less than one year.

When evaluating an investment for impairment, management reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, intent to sell or the

likelihood that the Company would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made.

Based on a review of these marketable securities, the Company believes none of the unrealized loss is the result of a credit loss as of June 30, 2024, because the Company does not intend to sell these securities, and it is not more-likely-than-not that the Company will be required to sell these securities before the recovery of their amortized cost basis.

As of June 30, 2024, all marketable securities had contractual maturities of less than one year.

The Company did not transfer any assets measured at fair value on a recurring basis between levels during the six months ended June 30, 2024 and 2023.

The following table presents activity for the preferred stock warrants liability during the six months ended June 30, 2024 (in thousands):

Preferred Stock Warrants Liability

2 unchanged sentences

Conversion of preferred stock warrants liability to equity ( 1,918 )

Balance at March 31, 2024 $ —

No fair value liabilities exist as of March 31, 2024.

Balance at June 30, 2024 $ —

No fair value liabilities exist as of June 30, 2024.

Upon completion of the Merger, the preferred stock warrants became exercisable into shares of common stock and will no longer continue to be remeasured at each reporting date.

Refer to Note 2 for further discussion on the valuation of the preferred stock warrants liability.

Equity investment without a readily determinable fair value

In conjunction with the Merger, the Company obtained an investment in common stock of an unfunded privately held, pre-clinical life sciences company, which the Company carried at a $ 0 value as of March 31, 2024.

During the three months ended June 30, 2024, the private company executed a seed funding round ("Seed Financing"), which triggered an anti-dilution provision under the License and Option Agreement (“Option Agreement”), resulting in the issuance of shares of common stock.

The Company identified the Seed Financing as an observable price change under the measurement alternative, and adjusted the equity investment from zero to an estimated fair value of $ 1.3 million as of June 30, 2024.

There were no downward adjustments to the carrying value of the Company's investment without a readily determinable fair value on both a cumulative basis or for the three and six months ended June 30, 2024.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

March 31, 2024 December 31,

June 30, 2024 December 31,

Research and development accrued expense $ 937 $ 10,289

Accrued transaction costs 5,134 —

Accrued payroll and related 1,552 1,998

Accrued insurance premiums 777 —

Operating lease liability, current portion 649 137

4 unchanged sentences

Commencing on April 1, 2022, LENZ OpCo entered into a lease agreement for office space in Del Mar, California, which was subsequently amended to expand the office space leased and extend the term (the "Del Mar lease").

As of March 31, 2024, the remaining lease term was 2.0 years, and the discount rate used to determine the right-of-use assets and corresponding operating lease liabilities was 7.0 %.

In April 2024, the Company entered into a lease agreement for office space in Solana Beach, California (the "Lomas lease").

As of June 30, 2024, the weighted average remaining lease term was 3.0 years, and the weighted average discount rate used to determine the right-of-use assets and corresponding operating lease liabilities was 7.7 %.

Cash paid for operating leases approximated rent expense for the periods presented.

Maturities of the operating lease liability as of March 31, 2024 for the Del Mar lease are as follows (in thousands):

Maturities of the operating lease liabilities as of June 30, 2024 for the Del Mar and Lomas leases are as follows (in thousands):

Total undiscounted lease payments 1,676

24 unchanged sentences

Its exposure under these agreements is unknown because it involves claims that may be made against the Company in the future.

To the extent permitted under Delaware law, the Company has agreed to indemnify its

directors and officers for certain events or occurrences while the director or officer is, or was serving, at a request in such capacity.

To the extent permitted under Delaware law, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at a request in such capacity.

To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations.

As of March 31, 2024 and December 31, 2023, the Company did not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

As of June 30, 2024 and December 31, 2023, the Company did not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Stockholders' Equity

2 unchanged sentences

Immediately prior to the closing of the Merger and as of December 31, 2023, there were 21,977,282 shares of Series A, 2,950,548 shares of Series A-1, and 28,019,181 shares of Series B Convertible Preferred Stock (Series B) issued and outstanding.

Immediately prior to the closing of the Merger and as of December 31, 2023, the total liquidation preference of issued and outstanding Series A, Series A-1, and Series B was $ 47.3 million, $ 10.0 million, and $ 83.5 million, or $ 2.15 per share, $ 3.3892 per share, and $ 2.9801 per share, respectively.

Immediately prior to the closing of the Merger and as of

December 31, 2023, the total liquidation preference of issued and outstanding Series A, Series A-1, and Series B was $ 47.3 million, $ 10.0 million, and $ 83.5 million, or $ 2.15 per share, $ 3.3892 per share, and $ 2.9801 per share, respectively.

At the closing of the Merger, the 52,947,011 shares of LENZ OpCo preferred stock were exchanged for 10,705,829 shares of Graphite’s common stock.

5 unchanged sentences

At the closing of the Merger on March 21, 2024, legacy Graphite stockholders held 8,320,485 shares of common stock.

Concurrent with the closing of the Merger on March 21, 2024, the Company completed the PIPE Financing of 3,559,565 shares for an aggregate purchase price of $ 53.5 million.

Concurrent with the closing of the Merger on March 21, 2024, the Company completed the March 2024 PIPE Financing of 3,559,565 shares for an aggregate purchase price of $ 53.5 million.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

Other than the special dividend paid by Graphite immediately prior to the close of the Merger, no dividends have been declared or paid by the Company through March 31, 2024, and any such dividends are not cumulative.

Other than the special dividend paid by Graphite immediately prior to the close of the Merger, no dividends have been declared or paid by the Company through June 30, 2024, and any such dividends are not cumulative.

Common stock reserved for future issuance consist of the following:

March 31, 2024

June 30, 2024

Common stock warrants 164,676

11 unchanged sentences

Share-based compensation expense was as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Selling, general and administrative $ 1,235 $ 131 $ 1,988 $ 235

5 unchanged sentences

The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti-dilutive effect:

As of March 31,

As of June 30,

Convertible preferred stock — 10,705,829

15 unchanged sentences

The $ 15.0 million transaction price allocated to that single performance obligation was recognized on completion of the transfer of the Ji Xing License during the year ended December 31, 2022.

No contractual milestones were met under the Ji Xing License during the three months ended March 31, 2024 or 2023.

No contractual milestones were met under the Ji Xing License during the six months ended June 30, 2024 or 2023.

Related Party Transactions

In March 2023, LENZ OpCo issued 22,146,905 shares of its Series B preferred stock for total cash proceeds of $ 66.0 million to investors that included significant shareholders that had designated members on LENZ OpCo’s board of directors and are considered to be related parties.

Through the Subscription Agreement and PIPE Financing executed as part of the Merger, the Company issued 3,343,330 shares to investors that the Company considers to be related parties.

Two of these investors also have designated members on the Company's board of directors.

In March 2023, LENZ OpCo issued 22,146,905 shares of its Series B preferred stock for total cash proceeds of $ 66.0 million to investors, including to significant shareholders that had designated members on LENZ OpCo’s board of directors.

Through the Subscription Agreement and March 2024 PIPE Financing executed in conjunction with the Merger, the Company issued 3,343,330 shares to investors that had designated members on the Company's board of directors.

A member of the Company’s Board of Directors currently serves as a member of the board of directors of one of the Company’s vendors, and has served in that capacity since 2023.

LENZ OpCo entered into a Master Services Agreement with this vendor in September 2023 to provide manufacturing services.

Accordingly, the Company considers the vendor to be a related party.

For the three months ended March 31, 2024, fees incurred for services performed by the vendor were $ 0.1 million, and were charged to research and development expenses.

The Company had no amounts due to the vendor within accounts payable as of March 31, 2024.

Accordingly, the Company considers the vendor to

be a related party.

For the three and six months ended June 30, 2024, fees incurred for services performed by the vendor were $ 0.1 million and $ 0.2 million, and were charged to research and development expenses.

The Company had no amounts due to the vendor within accounts payable as of June 30, 2024.

Subsequent Events

In April 2024, the Company entered into an agreement to lease 9,795 square feet of office space in Solana Beach, California, with a 39 months term commencing on July 1, 2024.

The monthly base rent is approximately $ 37,000 and will increase approximately 4 % every twelve months over the life of the lease.

Private Placement

On July 14, 2024, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) for a private placement with Ridgeback Capital Investment, L.P.

(“July 2024 PIPE Financing”).

Pursuant to the Purchase Agreement, the Company agreed to sell 1,578,947 shares of the Company’s common stock, par value 0.00001 per share, at a purchase price of $ 19.00 per share.

The gross proceeds of the July 2024 PIPE Financing were $ 30.0 million.

The July 2024 PIPE Financing closed on July 17, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements