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Item 2. Management’s Discussion and Analysis

2025-07-30 compared with 2025-05-07 · 94 added, 50 removed, 173 unchanged (45% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of LENZ’ consolidated results of operations and financial condition.

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of LENZ’s consolidated results of operations and financial condition.

The discussion should be read together with the condensed consolidated financial statements and the accompanying notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and the related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

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In October 2024, the FDA assigned a Prescription Drug User Fee Act (“PDUFA”) target action date of August 8, 2025, which, if approved, will be immediately followed by a commercial launch in the United States, with the product anticipated to be available in the market in the fourth quarter of 2025.

The FDA notified the Company in its letter to notify its acceptance to review the NDA that they do not plan to hold an advisory committee meeting, which was reiterated during the mid-cycle and late-cycle review.

We believe that LNZ100 could be the first and only aceclidine-based product approved by the FDA and would then be eligible for five years of new chemical entity (“NCE”) exclusivity in the United States.

As of March 31, 2025 , we had $194.1 million of cash, cash equivalents, restricted cash, and marketable secu rities.

We believe that our existing cash, cash equivalents and marketable securities as of March 31, 2025 will allow us to continue to build infrastructure and commercialize LNZ100, subject to FDA approval, and will be sufficient to fund the Company to positive operating cash flow subsequent to such commercial launch.

As of June 30, 2025 , we had $209.6 million of cash, cash equivalents, restricted cash, and marketable secu rities.

We believe that our existing cash, cash equivalents and marketable securities as of June 30, 2025 will allow us to continue to build infrastructure and commercialize LNZ100, subject to FDA approval, and will be sufficient to fund the Company to positive operating cash flow subsequent to such commercial launch.

We do not expect to generate any revenue from product sales unless and until we suc cessfully obtain regulatory approval for LNZ100 .

We have incurred net losses in each year since inception, and as of March 31, 2025 , we had an accumulated deficit of $159.6 million .

We have incurred net losses in each year since inception, and as of June 30, 2025 , we had an accumulated deficit of $174.5 million .

These losses have resulted principally from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations.

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Additionally, we anticipate incurring expenses related to product sales, marketing, manufacturing, and distribution, and additional costs associated with being a public company, including audit, legal, regulatory and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements.

As a result of these and other factors, while we believe that our existing cash, cash equivalents and marketable securities as of March 31, 2025 will fund the Company to positive operating cash flow subsequent to commercial launch, if LNZ100 is approved, it is possible that we may require additional financing to fund our operations and planned growth.

As a result of these and other factors, while we believe that our existing cash, cash equivalents and marketable securities as of June 30, 2025 will fund the Company to positive operating cash flow subsequent to commercial launch, if LNZ100 is approved, it is possible that we may require additional financing to fund our operations and planned growth.

Through the completion of the Merger, L ENZ OpCo financed its operations primarily through private placements of its common stock and convertible preferred stock.

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of 1,578,947 shares of common stock for an aggregate gross purchase price of $30.0 million.

The Company has also sold an aggregate of 920,500 shares of common stock under the sales agreement with TD Securities (USA) LLC , resulting in net proceeds to the Company of $26.1 million.

If we are unsuccessful in generating sufficient revenue and operating cash flow from sales of LNZ100, if approved, we may be required to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

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Our failure to raise capital or enter into such other arrangements if and when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

License Agreements

CORXEL License and Collaboration Agreement

and sell products containing LNZ100 (“Products”) 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”).

In April 2022, we entered into a License and Collaboration Agreement with CORXEL Pharmaceuticals (formerly known as Ji Xing Pharmaceuticals Hong Kong Limited) (“CORXEL”) granting CORXEL an exclusive license (the “CORXEL License” formerly referred to as the “Ji Xing License”) to certain of our intellectual property rights to develop, use, import, and sell products containing LNZ100 (“Products”) 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”).

We also granted CORXEL (i) the right to negotiate in good faith and enter into agreements to purchase Products from us for clinical and commercial uses at cost plus a negotiated percentage and (ii) the right of first negotiation to obtain a regional license from us on other products we might develop outside of the field of presbyopia for commercialization in Greater China.

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The $15.0 million upfront payments allocated to that single performance obligation was recognized on execution of the CORXEL License during the year ended December 31, 2022.

No contractual milestones were met under the CORXEL License during the three months ended March 31, 2025 or 2024.

No contractual milestones were met under the CORXEL License during the six months ended June 30, 2025 or 2024.

On October 27, 2024, CORXEL and the Company announced positive topline data from the Phase 3 JX07001 clinical trial of LNZ100 in patients with presbyopia in China.

In this China Phase 3 safety and efficacy trial, LNZ100 achieved the primary endpoint and key secondary endpoints, with statistically significant three-lines or greater improvement in Best Corrected Distance Visual Acuity (“BCDVA”) at near, without losing one-line or more in distance visual acuity.

In July 2025, a regulatory milestone was achieved upon the submission of the NDA for LNZ100 to the National Medical Products Administration (“NMPA”) in Greater China for the treatment of presbyopia.

Lotus Pharmaceutical Co., LTD.

License and Commercialization Agreement

On May 7, 2025 the Company entered into a license and commercialization agreement providing an exclusive license (the “Lotus License”) to certain of the Company's IP to commercialize LNZ100 for the treatment of presbyopia in humans in the Republic of Korea, the Kingdom of Thailand, Republic of the Philippines, the Socialist Republic of Vietnam, Malaysia, Negara Brunei Darussalam, the Republic of Indonesia, and the Republic of Singapore (collectively, “Southeast Asia”).

Under the terms of the Lotus License, the Company received a $5.0 million nonrefundable, non-creditable upfront payment, and is eligible to receive up to $120.0 million of regulatory and sales milestones, as well as tiered, double-digit royalties on future net sales in Southeast Asia.

Laboratoires Théa License and Commercialization Agreement

On July 7, 2025, the Company entered into a license and commercialization agreement providing an exclusive license (the “Théa License”) to register and commercialize LNZ100 for the treatment of presbyopia in Canada.

Under the terms of the Théa License, the Company is eligible to receive up to $70.0 million in upfront, regulatory and commercial milestone payments, as well as tiered, double-digit royalties on future net sales in Canada.

Key Trends and Factors Affecting Comparability Between Periods

• Our research and development costs decreased during the three months ended March 31, 2025, relative to the three months ended March 31, 2024, primarily as a result of reduced clinical research expenses related to the substantial completion of our Phase 3 CLARITY trials in March 2024.

We expect our research and development costs will continue to decrease in 2025, relative to 2024, given the completion of the CLARITY trials and subsequent wind-down of clinical activities over 2024.

• Our research and development costs increased during the three months ended June 30, 2025, relative to the comparative period in 2024 due to an increase in pre-approval and contingent product manufacturing to support the potential commercial launch of LNZ100, which is recorded in research and development prior to approval.

Our research and development costs decreased during the six months ended June 30, 2025, relative to the six months ended June 30, 2024, primarily as a result of reduced clinical research expenses related to the substantial completion of our Phase 3 CLARITY trials in March 2024.

We expect our research and development costs will decrease in 2025, relative to 2024, given the completion of the CLARITY trials and subsequent wind-down of clinical activities over 2024.

• We expect that selling, general and administrative expenses will continue to increase in 2025, relative to 2024, as we have built a cross-functional commercial team consisting of marketing and commercial operations and will continue to strategically build our sales and commercial infrastructure with capabilities designed to scale when necessary to support a potential commercial launch of LNZ100, subject to FDA approval.

These expenses increased during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, and we expect such expenses to continue to increase for the foreseeable future.

• The Company’s corporate general and administrative expenses increased during the three months ended March 31, 2025 relative to the three months ended March 31, 2024 as a result of the Merger, given we operated for most of the prior period as a privately held company.

These costs are related to (i) compliance with the rules and regulations of the SEC and those of Nasdaq, (ii) legal, accounting and other professional services, (iii) insurance, (iv) investor relations activities, and (v) other administrative and professional services.

These expenses increased during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, and we expect such expenses to continue to increase for the foreseeable future.

• License revenue increased during the three and six months ended June 30, 2025 relative to the three and six months ended June 30, 2024 as a result of an upfront payment received under the Lotus License.

The Company may generate future revenue from additional license and collaboration agreements to commercialize LNZ100 outside the U.S.

The Company has not recorded any product sales revenue for the periods presented.

Recent Developments

NDA Filing and PDUFA Date

On October 21, 2024, we announced the FDA has assigned a PDUFA target action date of August 8, 2025 for LNZ100.

The FDA notified the Company in its letter to notify its acceptance to review the NDA that they do not plan to hold an advisory committee meeting, which was reiterated during the mid-cycle review.

Hiring of Sales Force

During the three months ended June 30, 2025, we recruited and hired eighty-eight sales specialists, who, combined with our inside sales team, are expected to target approximately 15,000 eye care professionals.

Our sales force has completed onboarding activities in anticipation of a potential commercial launch of LNZ100, subject to FDA approval.

Recently Executed License Agreements

The Company executed two additional license agreements to out-license the commercialization rights for LNZ100 in the Republic of Korea and certain countries in Southeast Asia to Lotus Pharmaceutical Co., LTD., and to Laboratoires Théa in Canada.

Under these licensing agreements, the Company is eligible to receive up to $195 million in upfront, regulatory and commercial milestone payments, as well as tiered, double-digit royalties on future net sales in the respective contractual territories.

CORXEL New Drug Application Submission

In July 2025, a regulatory milestone was achieved upon the submission of the NDA for LNZ100 to the NMPA in Greater China for the treatment of presbyopia.

Basis of Presentation

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Components of Statements of Operations and Comprehensive Loss

LENZ currently has no products approved for sale, and it has not generated any revenue from product sales to date.

It has generated revenue related to various license and collaboration agreements, and in the future may generate revenue from payments received under licenses or collaboration agreements LENZ may enter into with respect to its product candidate.

Operating Expenses

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Other selling, general and administrative expenses include marketing and advertising costs, professional fees for legal, tax and business consulting services, public company related expenses such as audit fees and insurance costs, intellectual property and patent costs, facility costs and travel costs.

Other Income (Expense), Net

Other income (expense), net consists of interest income earned on cash, cash equivalents, and short-term investments, and changes in the fair value of long-term investments due to observable price changes in orderly transactions for an identical or similar investment, and the change in fair value of preferred stock warrants liability.

Other Income, Net

Other income, net consists of interest income earned on cash, cash equivalents, and short-term investments, changes in the fair value of long-term investments due to observable price changes in orderly transactions for an identical or similar investment, and the change in fair value of preferred stock warrants liability.

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.

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table presents the results of operations for the periods indicated (amounts in thousands, except percentages):

Three Months Ended March 31,

Three Months Ended June 30,

2025 2024 $ Change % Change

License revenue $ 5,000 $ — $ 5,000 N/A

Research and development expenses 9,061 6,945 2,116 30 %

Selling, general and administrative expenses 12,796 7,407 5,389 73 %

Other income, net 2,445 4,098 (1,653) (40) %

License Revenue

License revenue increased during the three months ended June 30, 2025 due to revenue recognized from the upfront payment under the Lotus License.

There was no license revenue in the three months ended June 30, 2024.

Research and Development

Research and development expenses incurred for the three months ended June 30, 2025 were primarily driven by pre-approval and contingent product manufacturing activities to support the potential commercial launch of LNZ100, which is recorded in research and development prior to approval, while research and development expenses for the three months ended June 30, 2024 were substantially all related to the development of LNZ100 in our Phase 3 CLARITY trials.

Research and development expenses increased by $2.1 million, or 30%, to $9.1 million for the three months ended June 30, 2025 compared to $6.9 million for the three months ended June 30, 2024.

The increase was primarily driven by increases of $2.5 million in non-clinical regulatory and chemistry, manufacturing, and control (“CMC”) expenses and $0.2 million in travel related expenses, partially offset by a $0.7 million decrease in regulatory consulting costs as we ramped up regulatory activities in the prior year in advance of our NDA submission.

Selling, General and Administrative

Other income (expense), net 2,312 (560) 2,872 (513) %

Selling, general and administrative expenses increased $5.4 million, or 73%, to $12.8 million for the three months ended June 30, 2025 compared to $7.4 million for the three months ended June 30, 2024.

The change was primarily driven by increases of $3.9 million in employee salaries and related expenses due to a rise in headcount, including the hiring of eighty-eight sales specialists, and $1.4 million in pre-commercial marketing, advertising and sales infrastructure expenses as we prepare for a potential commercial launch of LNZ100, subject to FDA approval.

Other Income, net

Other income, net for the three months ended June 30, 2025, was $2.4 million, compared to $4.1 million for the three months ended June 30, 2024.

Interest income earned on our cash, cash equivalents, and marketable securities were materially consistent in the comparative periods.

During the three months ended June 30, 2024, we recorded other income of $1.3 million due to a change in the fair value of the Company’s equity investment without a readily determinable fair value.

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table presents the results of operations for the periods indicated (amounts in thousands, except percentages):

Six Months Ended June 30,

2025 2024 $ Change % Change

License revenue $ 5,000 $ — $ 5,000 N/A

Research and development expenses 14,879 17,482 (2,603) (15) %

Selling, general and administrative expenses 23,909 12,958 10,951 85 %

Other income, net 4,757 3,538 1,219 34 %

License Revenue

License revenue increased during the six months ended June 30, 2025 due to revenue recognized from the upfront payment under the Lotus License.

There was no license revenue in the six months ended June 30, 2024.

Research and Development

Research and development expenses incurred for the three months ended March 31, 2025 were primarily incurred to further refine the manufacturing process for LNZ100, while research and development expenses for the three months ended March 31, 2024 were substantially all related to the development of LNZ100 in our Phase 3 CLARITY trials.

Research and development expenses decreased by $4.7 million, or 45%, to $5.8 million for the three months ended March 31, 2025 compared to $10.5 million for the three months ended March 31, 2024.

The decrease was primarily driven by a $4.8 million decrease in contract research expense for our clinical trials, as our Phase 3 CLARITY trials were substantially completed in March 2024, and a $1.3 million decrease in nonclinical research expense primarily due to a reduction in costs related to toxicology studies, partially offset by a $1.2 million increase in non-clinical regulatory and chemistry, manufacturing, and control ("CMC") employee salaries and related expenses due to increased headcount and non-cash share-based compensation expense.

Research and development expenses incurred for the six months ended June 30, 2025 were primarily driven by pre-approval and contingent product manufacturing activities to support the potential commercial launch of LNZ100, while research and development expenses incurred for the six months ended June 30, 2024 were substantially all related to the development of LNZ100 in our Phase 3 CLARITY trials.

Research and development expenses decreased $2.6 million, or 15%, to $14.9 million for the six months ended June 30, 2025 compared to $17.5 million for the six months ended June 30, 2024.

The decrease was primarily driven by a $6.1 million decrease in clinical and nonclinical research expense for our clinical trials, and a $1.0 million decrease in contract regulatory consulting expenses associated with the prior period preparation and filing of our NDA for LNZ100.

The decrease was partially offset by a $2.4 million increase in employee salaries and related expenses due to increased non-clinical regulatory and CMC headcount, a $1.6 million increase in contract manufacturing expenses, and a $0.3 million increase in travel expenses.

Selling, General and Administrative

Selling, general and administrative expenses increased $5.6 million, or 100%, to $11.1 million for the three months ended March 31, 2025 compared to $5.6 million for the three months ended March 31, 2024.

The change was primarily driven by increases of $2.7 million in employee salaries and related expenses due to a rise in headcount and non-cash share-based compensation expense, $1.8 million in pre-commercial marketing, advertising and sales infrastructure expenses as we prepare for a potential commercial launch of LNZ100, subject to FDA approval, and $0.7 million in corporate general and administrative expenses as we operated as a public company for the full three months ended March 31, 2025.

Other Income (Expense), net

Other income, net for the three months ended March 31, 2025, was $2.3 million, compared to expense of $0.6 million for the three months ended March 31, 2024.

The change was primarily driven by additional interest income earned on our cash, cash equivalents, and marketable securities of $1.5 million as a result of an overall increase in cash on-hand during the three months ended March 31, 2025 over the comparative period, and by a non-recurring, non-cash charge at the close of the Merger of $1.0 million related to the fair value of the preferred stock warrants liability.

Selling, general and administrative expenses increased $11.0 million, or 85%, to $23.9 million for the six months ended June 30, 2025 compared to $13.0 million for the six months ended June 30, 2024.

Increases in the comparative period included $6.6 million in employee salaries and related expenses due to a rise in headcount, $3.2 million in pre-commercial marketing, advertising and sales infrastructure as we expanded our pre-commercial planning initiatives for a potential commercial launch of LNZ100, subject to FDA approval, and $0.7 million in travel expenses.

Other Income, net

Other income, net for the six months ended June 30, 2025, was $4.8 million, compared to $3.5 million for the six months ended June 30, 2024.

Interest income earned on our cash, cash equivalents, and marketable securities increased by $1.3 million as a result of an overall increase in cash on-hand in 2025 over the comparative period.

During the six months ended June 30, 2024, we recorded a $1.0 million charge due to an increase in the fair value of the preferred stock warrants liability, resulting in a non-recurring, non-cash charge at the close of the Merger, and $1.3 million in other income related to an increase in the fair value of the Company's equity investment without a readily determinable fair value.

Liquidity and Capital Resources

Sources of Liquidity

As of March 31, 2025, we had $194.1 million of cash, cash equivalents, restricted cash, and marketable securities.

We have incurred net losses in each year since inception and as of March 31, 2025, we had an accumulated deficit of $159.6 million.

Our net losses were $14.6 million and $16.6 million for the three months ended March 31, 2025 and 2024, respectively.

As of June 30, 2025, we had $209.6 million of cash, cash equivalents, restricted cash, and marketable securities.

We have incurred net losses in each year since inception and as of June 30, 2025, we had an accumulated deficit of $174.5 million.

Our net losses were $14.9 million and $10.3 million for the three months ended June 30, 2025 and 2024, respectively, and $29.5 million and $26.9 million for the six months ended June 30, 2025 and 2024, respectively.

These losses have resulted principally from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations.

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These costs include expenses associated with the regulatory approval process for LNZ100, and the preparation for the potential commercial launch of our product, subject to FDA approval.

From inception through March 31, 2025, we received funding of $13.0 million from our initial seed financing, $47.0 million from the sale of Series A Convertible Preferred stock, $10.0 million from the sale of Series A-1 Convertible Preferred Stock, gross proceeds of $83.5 million from the sale of Series B Convertible Preferred stock, approximately $117.8 million in cash and cash equivalents from the Merger, approximately $53.5 million in gross cash proceeds from the March 2024 PIPE Financing, and $30.0 million in gross cash proceeds from the July 2024 PIPE Financing.

From inception through June 30, 2025, we received funding of $13.0 million from our initial seed financing, $47.0 million from the sale of Series A Convertible Preferred stock, $10.0 million from the sale of Series A-1 Convertible Preferred Stock, gross proceeds of $83.5 million from the sale of Series B Convertible Preferred stock, approximately $117.8 million in cash and cash equivalents from the Merger, approximately $53.5 million in gross cash proceeds from the March 2024 PIPE Financing, and $30.0 million in gross cash proceeds from the July 2024 PIPE Financing.

On April 4, 2025, we entered into a sales agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) under which we may offer and sell up to $150.0 million of shares of our common stock from time to time through an “at the market” offering program under which TD Cowen will act as sales agent.

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The shares will be issued pursuant to our shelf registration statement on Form S-3, including the prospectus supplement contained therein, which was declared effective by the SEC on April 14, 2025.

In April 2025, we sold 600,500 shares of common stock at a price of $27.55 per share for total gross proceeds of $16.5 million pursuant to the Sales Agreement.

After deducting commissions and expenses of $0.2 million, net proceeds to the Company were $16.3 million.

During the three and six months ended June 30, 2025 , the Company sold an aggregate of 920,500 shares of common stock at a weighted-average price of $28.75 under the Sales Agreement, resulting in net proceeds of $26.1 million .

As of June 30, 2025, the Company had $123.5 million of capacity remaining under the Sales Agreement.

Funding Requirements

We believe that our cash, cash equivalents, and marketable securities as of March 31, 2025 will allow us to continue to build infrastructure and commercialize LNZ100, subject to FDA approval, and such funds are anticipated to fund the Company to positive operating cash flow subsequent to such commercial launch.

We believe that our cash, cash equivalents, and marketable securities as of June 30, 2025 will allow us to continue to build infrastructure and commercialize LNZ100, subject to FDA approval, and such funds are anticipated to fund the Company to positive operating cash flow subsequent to such commercial launch.

This belief is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than expected.

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The following table summarizes our cash flows for the periods presented (amounts in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash (used in) provided by:

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Net cash used in operating activities primarily results from net loss adjusted for non-cash expenses, changes in working capital components, amounts due to contract research organizations to conduct our clinical programs, manufacturing of drug product and employee-related expenditures for research and development and selling, general and administrative activities.

Cash flows from operating activities will continue to be impacted by spending to develop and pursue regulatory approval for LNZ100 and commercialization activities, if approval is obtained, and will also be impacted by any potential future revenue from commercialization activities.

Cash flows will also continue to be affected by other operating and general administrative activities, including operating as a public company.

For the three months ended March 31, 2025, cash used in operating activities was $16.0 million and resulted from a net loss of $14.6 million, in addition to an approximate $2.0 million cash outflow from the payment of accounts payable and accrued liabilities and a $1.0 million increase in operating assets, offset by $1.5 million in non-cash adjustments primarily driven by share-based compensation expense.

For the three months ended March 31, 2024, cash used in operating activities was $23.9 million primarily resulting from a net loss of $16.6 million plus an $8.5 million cash outflow from the payment of accounts payable and accrued liabilities associated with the Merger and accrued clinical activities and a $0.5 million increase in operating assets, offset by $1.7

million in non-cash adjustments primarily related to the change in the fair value of preferred warrants and share-based compensation expense.

For the six months ended June 30, 2025, cash used in operating activities was $27.6 million and resulted from a net loss of $29.5 million, in addition to a $1.2 million increase in operating assets, offset by $3.5 million in non-cash adjustments primarily driven by share-based compensation expense.

For the six months ended June 30, 2024, cash used in operating activities was $39.7 million primarily resulting from a net loss of $26.9 million in addition to a $13.4 million cash outflow from the payment of accounts payable and accrued liabilities associated with the Merger and accrued clinical activities, offset by $1.0 million in non-cash adjustments primarily driven by share-based compensation expense and the change in the fair value of preferred warrants.

Net Cash Provided by Investing Activities

Cash provided by investing activities for the three months ended March 31, 2025 was $18.9 million, primarily due to $52.1 million in proceeds from maturities of marketable securities, and partially offset by $33.1 million of purchases of marketable securities.

Cash provided by investing activities for the three months ended March 31, 2024 was $18.0 million, due to proceeds from maturities of marketable securities.

Cash provided by investing activities for the six months ended June 30, 2025 was $18.5 million, primarily due to $110.2 million in proceeds from maturities of marketable securities, and partially offset by $91.4 million of purchases of marketable securities and $0.4 million in purchases of property and equipment.

Cash used in investing activities for the six months ended June 30, 2024 was $80.4 million, primarily due to $111.3 million of purchases of marketable securities, and partially offset by $31.0 million in proceeds from maturities of marketable securities.

Net Cash Provided by Financing Activities

Cash provided by financing activities for the three months ended March 31, 2025 was immaterial.

For the three months ended March 31, 2024, cash provided by financing activities was $171.3 million and includes $117.8 million in cash and cash equivalents acquired in the Merger and $53.5 million in gross cash proceeds from the March 2024 PIPE Financing.

Cash provided by financing activities for the six months ended June 30, 2025 was primarily driven by $26.1 million in net proceeds from common stock sold under the Sales Agreement.

For the six months ended June 30, 2024, cash provided by financing activities was $169.1 million and includes $117.8 million in cash and cash equivalents acquired in the Merger, $53.5 million in gross cash proceeds from the March 2024 PIPE Financing, and approximately $3.8 million in net cash proceeds from exercises of stock options.

Material Cash Requirements from Contractual Obligations

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We estimate the fair value of equity awards using the Black-Scholes option pricing model and recognize forfeitures as they occur.

Estimating the fair

value of equity awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, is affected by assumptions regarding a number of variables, including the risk-free interest rate, the expected stock price volatility, the expected term of stock options, the expected dividend yield and the fair value of the underlying common stock on the date of grant.

Estimating the fair value of equity awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, is affected by assumptions regarding a number of variables, including the risk-free interest rate, the expected stock price volatility, the expected term of stock options, the expected dividend yield and the fair value of the underlying common stock on the date of grant.

Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized.

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We are also a “smaller reporting company” because the market value of our stock held by non-affiliates was less than $700 million as of June 30, 2025 and the Company's annual revenue was less than $100 million during the fiscal year ended December 31, 2024.

We may continue to be a smaller reporting company in any given year if either (i) the market value of our stock held by non-affiliates is less than $250 million as of June 30 in the most recently completed fiscal year or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of June 30 in the most recently completed fiscal year.

We may continue to be a smaller reporting company in any given year if either (i) the market value of our stock held by non-affiliates is less than $250 million as of the last day of the most recently completed second quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of the last day of the most recently completed second quarter.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual

Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recent Accounting Pronouncements

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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 2. Management’s Discussion and Analysis