What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-14 · 125 added, 94 removed, 491 unchanged (31% of the section changed)

3 unchanged sentences

(in thousands, except for shares and par value)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

21 unchanged sentences

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

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

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

no shares and 21,977,282 shares issued and outstanding at September 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 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

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

no shares and 2,950,548 issued and outstanding at September 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 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

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

no shares and 28,019,181 issued and outstanding at September 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 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

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

no shares and 2,744,184 shares issued and outstanding at September 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 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

300,000,000 and 16,017,929 shares authorized at September 30, 2024 and December 31, 2023, respectively;

27,500,401 and 2,004,783 shares issued at September 30, 2024 and December 31, 2023, respectively;

and 27,480,634 and 1,969,360 shares outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 347,119 2,517

Accumulated deficit ( 132,362 ) ( 95,245 )

Accumulated other comprehensive income (loss) ( 62 ) 6

Accumulated other comprehensive income 523 6

Total stockholders’ equity (deficit) 215,280 ( 92,712 )

5 unchanged sentences

(in thousands, except share and per share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Interest income 2,736 1,086 5,987 1,338

Total other income (expense), net 4,098 233 3,538 179

Total other income, net 2,730 985 6,268 1,164

Net loss $ ( 10,215 ) $ ( 18,880 ) $ ( 37,117 ) $ ( 46,276 )

Other comprehensive loss:

Unrealized loss on marketable securities ( 61 ) ( 14 ) ( 68 ) ( 14 )

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities 585 9 517 ( 5 )

Comprehensive loss $ ( 9,630 ) $ ( 18,871 ) $ ( 36,600 ) $ ( 46,281 )

27 unchanged sentences

Merger transaction costs — — — — — — — — — — ( 5,146 ) — — ( 5,146 )

Unrealized gain (loss) on marketable securities — — — — — — — — — — — — ( 7 ) ( 7 )

Unrealized loss on marketable securities — — — — — — — — — — — — ( 7 ) ( 7 )

Exercise of stock options and common warrants — — — — — — — — 383,898 — 430 — — 430

5 unchanged sentences

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

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

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

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

2 unchanged sentences

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

Adjustments to reverse recapitalization accounting and issuance of common stock from private placement — — — — — — — — — — 29 — — 29

Issuance of common stock from private placement, net — — — — — — — — 1,578,947 — 29,693 — — 29,693

Exercise of stock options — — — — — — — — 48,736 — 57 — — 57

Unrealized gain on marketable securities — — — — — — — — — — — — 585 585

Vesting of early exercised stock options — — — — — — — — 7,280 — 19 — — 19

Share-based compensation — — — — — — — — — — 2,191 — — 2,191

Net loss — — — — — — — — — — — ( 10,215 ) — ( 10,215 )

Balance as of September 30, 2024 — $ — — $ — — $ — — $ — 27,480,634 $ — $ 347,119 $ ( 132,362 ) $ 523 $ 215,280

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

25 unchanged sentences

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 )

Unrealized gain on marketable securities — — — — — — — — — — — — 9 9

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

Share-based compensation — — — — — — — — — — 494 — — 494

Net loss — — — — — — — — — — — ( 18,880 ) — ( 18,880 )

Balance as of September 30, 2023 21,977,282 $ 44,621 2,950,548 $ 9,893 28,019,181 $ 82,976 2,744,184 $ 5,900 1,963,767 $ 10 $ 1,980 $ ( 71,553 ) $ ( 5 ) $ ( 69,568 )

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

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

18 unchanged sentences

Proceeds from issuance of Series B convertible preferred stock, net of issuance costs — 82,976

Deferred offering costs — ( 568 )

Proceeds from issuance of common stock, net of issuance costs 79,598 —

3 unchanged sentences

Net cash provided by financing activities 198,949 82,611

Net increase in cash 49,009 29,976

Net increase in cash, cash equivalents, and restricted cash 6,020 ( 1,593 )

Cash and cash equivalents, beginning of the period 35,140 44,441

6 unchanged sentences

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

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

Common stock issuance costs included in accounts payable and accrued expenses $ 81 $ —

Right-of-use assets assumed in the Merger in exchange for operating lease liabilities $ 146 $ —

Right-of-use assets obtained in exchange for operating lease liabilities $ 1,205 $ 190

Property and equipment included in accrued expenses $ 32 $ —

Deferred offering costs included in accounts payable and accrued expenses $ — $ 1,298

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

13 unchanged sentences

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

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.

As of September 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 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.

The Company has experienced net losses since its inception and, as of September 30, 2024, had an accumulated deficit of $ 132.4 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 for LNZ100, prepares for commercialization, hires additional personnel, protects its intellectual property, and grows its business.

The Company may need to raise additional capital to support its continuing operations and pursue its long-term business plan, including the development and commercialization of its product candidate, if approved.

Such activities are subject to significant risks and uncertainties.

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.

As of September 30, 2024, the Company had cash, cash equivalents, restricted cash, and marketable securities of $ 217.2 million, which is available to fund future operations.

The Company believes that its existing cash, cash equivalents, and marketable securities as of September 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

4 unchanged sentences

The accompanying condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and its cash flows for the periods presented.

These statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the year ended December 31, 2023, which are contained in the Company’s Form 8-K, dated March 21, 2024, filed with the SEC on March 22, 2024.

These statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the year ended December 31, 2023, which are contained in the Company's final 424B3 prospectus filed with the SEC on September 19, 2024.

The results for interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period.

1 unchanged sentence

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 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.

Subsequent to the Merger, the condensed consolidated financial statements as of and for the nine months ended September 30, 2024 include Graphite’s activity from March 21, 2024 through September 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 .

10 unchanged sentences

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.

Restricted cash of $ 0.1 million as of September 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, which expires in March 2025.

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

As of September 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.

2 unchanged sentences

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

Treasury securities and U.S.

agency securities.

Treasury securities, U.S.

agency securities, and Yankee debt securities.

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

6 unchanged sentences

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.

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.

26 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.

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

Research and Development Expenses and Related Prepaid Assets and Accrued Liabilities

Research and development costs are expensed as incurred.

Research and development expenses primarily consist of internal research and development expense, including personnel-related expenses (such as salaries, benefits and noncash stock-based compensation) and external research and development expenses incurred under arrangements with vendors conducting research and development services on its behalf, such as contract research organizations ("CROs") and contract manufacturing organizations ("CMOs").

conducting research and development services on the Company's behalf, such as contract research organizations ("CROs") and contract manufacturing organizations ("CMOs").

Payments made prior to the receipt of goods or services to be used in research and development are capitalized, evaluated for current or long-term classification, and included in prepaid expenses and other current assets or other assets in the balance sheets based on when the goods are received or the services are expected to be received or consumed, and recognized in research and development expenses when they are realized.

28 unchanged sentences

The fair value of LENZ OpCo’s common stock was determined by the board of directors with input from management and consideration of third-party valuation reports.

In the absence of a public trading market, and as a clinical-stage company with no significant revenues, LENZ OpCo believed that it was appropriate to consider a range of factors to determine the fair market value of the common stock at each grant date.

In the absence of a public trading market, and as a clinical-stage company with no significant revenues, LENZ OpCo believed that it was appropriate to consider a range of factors to determine the

fair market value of the common stock at each grant date.

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 .

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

Valuation of Privately Held Company Equity Securities Issued as Compensation .

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

The factors included (1) the achievement of clinical and operational milestones by LENZ OpCo;

23 unchanged sentences

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

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

As of September 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 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.

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

For the nine months ended September 30, 2024, net loss per share included the weighted-average shares outstanding as a result of the Merger, and shares issued in conjunction with both the March 2024 PIPE Financing (as defined in Note 3) and the July 2024 PIPE Financing (as defined in Note 7).

Other Comprehensive Income (Loss)

21 unchanged sentences

LENZ OpCo was considered the accounting acquirer for financial reporting purposes.

This determination is based on the facts that, immediately following the Merger:

This determination was based on the facts that, immediately following the Merger:

former LENZ OpCo stockholders owned a substantial majority of the voting rights of the combined company;

LENZ OpCo designated a majority ( five of seven ) of the initial members of the board of directors of the combined company;

and no members of Graphite's senior management hold key positions in senior management of the combined company.

designated a majority ( five of seven ) of the initial members of the board of directors of the combined company;

and no members of Graphite's senior management held key positions in senior management of the combined company.

The transaction was accounted for as a reverse recapitalization of Graphite by LENZ OpCo similar to the issuance of equity for the net assets of Graphite, which were primarily cash and cash equivalents and other non-operating assets.

9 unchanged sentences

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 six months ended June 30, 2024.

Financial Instruments

16 unchanged sentences

Total Level 1 Level 2 Level 3

At June 30, 2024:

At September 30, 2024:

Cash equivalents

Money market funds $ 28,379 $ 28,379 $ — $ —

treasury securities 2,991 2,991 — $ —

government securities 1,997 — 1,997 $ —

Corporate debt securities 498 — 498 $ —

Total cash equivalents measured at fair value $ 33,865 $ 31,370 $ 2,495 $ —

4 unchanged sentences

Corporate debt securities 31,421 — 31,421 —

Yankee debt securities 695 — 695 —

Total marketable securities measured at fair value $ 176,061 $ 38,643 $ 137,418 $ —

10 unchanged sentences

Total liabilities measured at fair value $ 871 $ — $ — $ 871

Marketable securities consisted of the following (in thousands):

June 30, 2024

The following table presents the amortized cost and estimated fair market value of our cash equivalents and marketable securities as of the dates presented (in thousands):

September 30, 2024

Amortized Cost Gross

Losses Estimated Fair

Cash equivalents:

Money market funds $ 28,379 $ — $ — $ 28,379

treasury securities 2,990 1 — 2,991

government securities 1,997 — — 1,997

Corporate debt securities 498 — — 498

Marketable securities:

Commercial paper $ 61,691 $ 137 $ ( 16 ) $ 61,812

2 unchanged sentences

Corporate debt securities 31,313 108 — 31,421

Yankee debt securities 694 1 — 695

Totals $ 209,402 $ 541 $ ( 17 ) $ 209,926

2 unchanged sentences

Losses Estimated Fair

Marketable securities

Commercial paper $ 18,742 $ 9 $ — $ 18,751

2 unchanged sentences

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

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):

The following table presents available-for-sale securities by contractual maturity date as of September 30, 2024 (in thousands):

September 30, 2024

Amortized Cost Estimated Fair Value

Due in one year or less $ 165,612 $ 166,073

Due after one year 9,926 9,988

Total $ 175,538 $ 176,061

As of September 30, 2024, eight of the Company's marketable securities with a fair market value of $ 11.7 million were in an immaterial aggregate gross unrealized loss position;

these eight 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 September 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.

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

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

Preferred Stock Warrants Liability

2 unchanged sentences

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

Balance at June 30, 2024 $ —

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

Balance at September 30, 2024 $ —

No fair value liabilities exist as of September 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.

1 unchanged sentence

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.

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 initially carried at no value.

In May 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 additional shares of common stock.

There were no adjustments to the carrying value of the Company's investment without a readily determinable fair value during the three months ended September 30, 2024, and 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 nine months ended September 30, 2024.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

June 30, 2024 December 31,

Research and development accrued expense $ 937 $ 10,289

September 30, 2024 December 31,

Accrued payroll and related $ 2,190 $ 1,998

Sales, general, and administrative accrued expense 1,146 376

Research and development accrued expense 982 10,289

Operating lease liability, current portion 625 137

5 unchanged sentences

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 %.

As of September 30, 2024, the weighted average remaining lease term was 2.8 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 liabilities as of June 30, 2024 for the Del Mar and Lomas leases are as follows (in thousands):

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

Total undiscounted lease payments 1,600

26 unchanged sentences

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

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.

As of September 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.

6 unchanged sentences

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.

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

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 June 30, 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 September 30, 2024, and any such dividends are not cumulative.

Common stock reserved for future issuance consist of the following:

June 30, 2024

September 30, 2024

Common stock warrants 164,676

11 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

6 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 June 30,

As of September 30,

Convertible preferred stock — 10,705,829

5 unchanged sentences

License Agreements

In April 2022, the Company entered into a license and collaboration agreement providing an exclusive license (the "Ji Xing License") to certain of the Company’s intellectual property ("IP") for use in the treatment of presbyopia in humans in mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan (collectively, “Greater China”).

The Company also agreed to negotiate a separate agreement for the purchase of clinical and commercial supply of IP for clinical and commercial requirements at cost plus a negotiated percentage and granted a right of first negotiation to obtain a regional license on other products the Company might develop outside the field of presbyopia for commercialization in Greater China.

The Company received nonrefundable, non-creditable upfront payments totaling $ 15.0 million as initial consideration under the Ji Xing License, which represents the transaction price at inception.

In addition, the Company is also eligible to receive up to $ 95.0 million of regulatory and sales milestones, as well as tiered mid single-digit to low double-digit royalties on net sales of IP in Greater China.

In April 2022, the Company entered into a license and collaboration agreement providing an exclusive license (the "CORXEL License," formerly referred to as the "Ji Xing License") to certain of the Company’s intellectual property ("IP") for use in the treatment of presbyopia in humans in mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan (collectively, “Greater China”).

The Company also agreed to negotiate a separate agreement for the purchase of clinical and commercial supply of products containing the IP for clinical and commercial requirements at cost plus a negotiated percentage and granted a right of first negotiation to obtain a regional license on other products the Company might develop outside the field of presbyopia for commercialization in Greater China.

The Company received nonrefundable, non-creditable upfront payments totaling $ 15.0 million as initial consideration under the CORXEL License, which represents the transaction price at inception.

Additional consideration to be paid to the Company upon reaching regulatory and sales milestones is excluded from the transaction price.

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The sales-based royalty fee is considered variable consideration and will be recognized as revenue as such sales occur, if any.

The Company assessed the promises made under the Ji Xing License and concluded the Ji Xing License comprises a single performance obligation providing the right to use functional intellectual property.

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 six months ended June 30, 2024 or 2023.

The Company assessed the promises made under the CORXEL License and concluded the CORXEL License comprises a single performance obligation providing the right to use functional intellectual property.

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

No contractual milestones were met under the CORXEL License during the nine months ended September 30, 2024 or 2023.

Related Party Transactions

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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 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

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.

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 and nine months ended September 30, 2024, fees incurred for services performed by the vendor were $ 0.2 million and $ 0.4 million, and were charged to research and development expenses.

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