LENZ Therapeutics, Inc. 10-Q

Item 1. Financial Statements. LENZ THERAPEUTICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for shares and par value) June 30, 2025 December 31, 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 37,608 $ 20,158 Marketable securities 171,911 188,872 Prepaid expenses and other current assets 3,969 2,773 Restricted cash 114 114 Total current assets 213,602 211,917 Property and equipment, net 1,169 651 Operating lease right-of-use asset 959 1,338 Other assets 1,602 1,398 Total assets $ 217,332 $ 215,304 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 2,854 $ 4,257 Accrued liabilities 7,544 6,149 Total current liabilities 10,398 10,406 Operating lease liability, net 569 814 Total liabilities 10,967 11,220 Commitments and contingencies (Note 6) Stockholders' equity: Common stock, par value of $ 0.00001 per share; 300,000,000 shares authorized; 28,501,715 and 27,531,490 shares issued at June 30, 2025 and December 31, 2024, respectively; and 28,500,122 and 27,518,439 shares outstanding at June 30, 2025 and December 31, 2024, respectively 1 1 Additional paid-in capital 380,871 348,901 Accumulated deficit ( 174,545 ) ( 145,014 ) Accumulated other comprehensive income 38 196 Total stockholders’ equity 206,365 204,084 Total liabilities and stockholders’ equity $ 217,332 $ 215,304 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 Table of Contents LENZ THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue: License revenue $ 5,000 $ — $ 5,000 $ — Total revenue 5,000 — 5,000 — Operating expenses: Research and development 9,061 6,945 14,879 17,482 Selling, general and administrative 12,796 7,407 23,909 12,958 Total operating expenses 21,857 14,352 38,788 30,440 Loss from operations ( 16,857 ) ( 14,352 ) ( 33,788 ) ( 30,440 ) Other income: Other income 199 1,635 188 287 Interest income 2,246 2,463 4,569 3,251 Total other income, net 2,445 4,098 4,757 3,538 Net loss before income taxes ( 14,412 ) ( 10,254 ) ( 29,031 ) ( 26,902 ) Income tax expense 500 — 500 — Net loss $ ( 14,912 ) $ ( 10,254 ) $ ( 29,531 ) $ ( 26,902 ) Other comprehensive loss: Unrealized loss on marketable securities ( 85 ) ( 61 ) ( 158 ) ( 68 ) Comprehensive loss $ ( 14,997 ) $ ( 10,315 ) $ ( 29,689 ) $ ( 26,970 ) Net loss per share, basic and diluted $ ( 0.53 ) $ ( 0.40 ) $ ( 1.06 ) $ ( 1.77 ) Weighted-average common shares outstanding, basic and diluted (1) 28,079,071 25,608,594 27,804,112 15,163,103 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. (1) See Note 2 for further information on weighted-average common shares outstanding. 2 Table of Contents LENZ THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED AND COMMON STOCK AND STOCKHOLDERS’ EQUITY (in thousands, except share data) (unaudited) Stockholders' Equity Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Stockholders' Equity Shares Amount Balance as of December 31, 2024 27,518,439 $ 1 $ 348,901 $ ( 145,014 ) $ 196 $ 204,084 Exercise of stock options and common warrants 11,630 — 44 — — 44 Unrealized loss on marketable securities — — — — ( 73 ) ( 73 ) Vesting of early exercised stock options 5,594 — 19 — — 19 Share-based compensation — — 2,555 — — 2,555 Net loss — — — ( 14,619 ) — ( 14,619 ) Balance as of March 31, 2025 27,535,663 $ 1 $ 351,519 $ ( 159,633 ) $ 123 $ 192,010 Exercise of stock options 29,003 — 196 — — 196 Unrealized loss on marketable securities — — — — ( 85 ) ( 85 ) Vesting of early exercised stock options 5,593 — 19 — — 19 Share-based compensation — — 2,845 — — 2,845 Issuance of common stock through at-the-market offerings, net of issuance costs 920,500 — 26,067 — — 26,067 Exercise of stock warrant 271 — — — — — Issuance of common stock under employee stock purchase plan 9,092 — 225 — — 225 Net loss — — — ( 14,912 ) — ( 14,912 ) Balance as of June 30, 2025 28,500,122 $ 1 $ 380,871 $ ( 174,545 ) $ 38 $ 206,365 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Contents LENZ THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED AND COMMON STOCK AND STOCKHOLDERS’ EQUITY (in thousands, except share data) (unaudited) Convertible Preferred and Common Stock Stockholders' Equity (Deficit) Series A Convertible Preferred Stock Series A-1 Convertible Preferred Stock Series B Convertible Preferred Stock Class B Convertible Common Stock Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Stockholders' Equity (Deficit) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount 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 ( 21,977,282 ) ( 44,621 ) ( 2,950,548 ) ( 9,893 ) ( 28,019,181 ) ( 82,976 ) ( 2,744,184 ) ( 5,900 ) 11,260,672 ( 10 ) 143,400 — — 143,390 Issuance of common stock to Graphite stockholders as a result of the Merger — — — — — — — — 8,320,485 — 116,145 — — 116,145 Issuance of common stock from private placement, net — — — — — — — — 3,559,565 — 49,840 — — 49,840 Reclassification of warrant liability to equity — — — — — — — — — — 1,918 — — 1,918 Merger transaction costs — — — — — — — — — — ( 5,146 ) — — ( 5,146 ) Unrealized loss on marketable securities — — — — — — — — — — — — ( 7 ) ( 7 ) Exercise of stock options and common warrants — — — — — — — — 383,898 — 430 — — 430 Vesting of early exercised stock options — — — — — — — — 6,150 — 10 — — 10 Share-based compensation — — — — — — — — — — 947 — — 947 Net loss — — — — — — — — — — — ( 16,648 ) — ( 16,648 ) 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 loss on marketable securities — — — — — — — — — — — — ( 61 ) ( 61 ) Vesting of early exercised stock options — — — — — — — — 7,281 — 28 — — 28 Share-based compensation — — — — — — — — — — 1,597 — — 1,597 4 Table of Contents 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. (1) Retroactively recast for the reverse recapitalization as described in Note 3. 5 Table of Contents LENZ THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended June 30, 2025 2024 Cash flows from operating activities Net loss $ ( 29,531 ) $ ( 26,902 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 55 23 Loss on impairment of operating right-of-use assets and related property and equipment 82 — Accretion of discounts on marketable securities ( 2,022 ) ( 1,234 ) Change in fair value of preferred stock warrants — 1,047 Share-based compensation expense 5,400 2,544 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 1,196 ) ( 399 ) Accounts payable ( 1,628 ) ( 3,955 ) Accrued liabilities 1,487 ( 9,479 ) Other assets ( 204 ) ( 1,377 ) Net cash used in operating activities ( 27,557 ) ( 39,732 ) Cash flows from investing activities Purchases of marketable securities ( 91,385 ) ( 111,257 ) Proceeds from maturities of marketable securities 110,210 31,000 Purchases of property and equipment ( 350 ) ( 133 ) Net cash provided by (used in) investing activities 18,475 ( 80,390 ) Cash flows from financing activities Proceeds from issuance of common stock through at-the-market offerings, net of issuance costs 26,067 — Proceeds from exercises of stock options 240 3,843 Proceeds from issuance of common stock under employee stock purchase plan 225 — Cash, cash equivalents, and restricted cash acquired in connection with the Merger — 117,824 Proceeds from issuance of common stock, net of issuance costs — 49,824 Merger transaction costs — ( 2,360 ) Net cash provided by financing activities 26,532 169,131 Net increase in cash, cash equivalents, and restricted cash 17,450 49,009 Cash and cash equivalents, and restricted cash, beginning of the period 20,272 35,140 Cash, cash equivalents, and restricted cash, end of the period $ 37,722 $ 84,149 Supplemental cash flow information Conversion of Series A, A-1, and B convertible preferred stock to common stock $ — $ 137,490 Conversion of Class B convertible common stock to common stock $ — $ 5,900 Reclassification of warrant liability to equity $ — $ 1,918 Prepaid expenses and other current assets assumed in the Merger $ — $ 1,313 Accounts payable and accrued liabilities assumed in the Merger $ — $ 2,950 Merger transaction costs included in accounts payable and accrued expenses $ — $ 42 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 Property and equipment included in accounts payable $ 225 $ — The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 Table of Contents LENZ THERAPEUTICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Organization and Liquidity Description of the Business LENZ Therapeutics, Inc. (“LENZ” or the “Company”), formerly known as Graphite Bio, Inc. (“Graphite”), was incorporated in Ontario, Canada in June 2017 as Longbow Therapeutics Inc., and was reincorporated in the State of Delaware in October 2019. The Company has a wholly owned subsidiary, LENZ Therapeutics Operations, Inc. (“LENZ OpCo”), previously named Lenz Therapeutics, Inc., which became a corporation in Delaware on October 28, 2020 upon the filing of a Certificate of Conversion to convert Presbyopia Therapies, LLC, a Delaware limited liability company (formed in September 2013), to a Delaware corporation. The Company is a pre-commercial biopharmaceutical company focused on the development and commercialization of innovative therapies to improve vision. Reverse Merger Transaction 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”). 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 . Liquidity As of June 30, 2025, the Company has devoted substantially all of its efforts to product development and pre-commercial activities and has not realized product revenue 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, 2025, had an accumulated deficit of $ 174.5 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, 2025, the Company had cash, cash equivalents, and marketable securities of $ 209.6 million, which is available to fund future operations. The Company believes that its existing cash, cash equivalents, and marketable securities as of June 30, 2025 will be sufficient to support operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements were prepared based on the accrual method of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). 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 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The results for interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period. All intercompany accounts and transactions have been eliminated in consolidation. 7 Table of Contents 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. 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 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Estimates used in preparing the accompanying financial statements include, but are not limited to, estimates related to the research and development accruals, and share-based compensation. Although actual results could differ from those estimates, management does not believe that such differences would be material. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments, which potentially subject the Company to a concentration of credit risk, consist primarily of cash and cash equivalents and marketable securities. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Cash and Cash Equivalents 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 and money market funds with a financial institution. Restricted cash of $ 0.1 million as of June 30, 2025 relates to a security deposit in the form of a letter of credit issued in connection with one of the Company's leases, which expired in March 2025. The security deposit was released and became unrestricted in July 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 classified all marketable securities with maturity dates beyond three months at the date of purchase as current assets in the accompanying condensed consolidated balance sheets. As of June 30, 2025, 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’ equity until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield over the life of the instrument. 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 commercial paper, U.S. Treasury securities, U.S. government agency securities, and corporate debt securities. Available-for-sale securities are classified as marketable securities on the Company's condensed consolidated balance sheets. Management evaluates whether unrealized losses on available-for-sale marketable securities are the result of credit worthiness of the securities held or other non-credit related factors. If an unrealized loss is the result of credit quality factors, the Company recognizes an allowance reflective of the current estimate of credit losses expected to be incurred over the life of the financial instrument on a specific identification basis upon initial recognition and at each reporting period. If a reduction in value is a result of other factors, losses are recognized within comprehensive loss unless either the Company intends to sell the security or it is more likely than not the Company will be required to sell the security. Based on a review of these marketable securities, the Company concluded none of the unrealized loss is the result of a credit loss as of June 30, 2025, 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. 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 8 Table of Contents value or any impairment losses. The Company had one long-term equity investment which was classified as a non-current asset in the condensed consolidated balance sheets, 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 statements of operations and comprehensive loss in the period in which they occur. 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 statements of operations and comprehensive loss as an expense in the period in which they occur. Allowance for Credit Losses For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or if it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the severity of the impairment, any changes in interest rates, market conditions, changes to the underlying credit ratings and forecasted recovery, among other factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income through an allowance account. Any impairment that has not been recorded through an allowance for credit losses is included in other comprehensive income (loss) on the condensed consolidated balance sheets. The Company excludes the applicable accrued interest from both the fair value and amortized cost basis of available-for-sale securities for purposes of identifying and measuring an impairment. Accrued interest receivable on available-for-sale securities is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets. 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. Leases 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. If a lease is identified, classification is determined at lease commencement. To date, all of the Company’s leases have been determined to be operating leases. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the estimated interest rate that the Company would have to pay to borrow on a collateralized basis, an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are determined based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. The operating lease ROU asset also includes impairment charges if the Company determines the ROU asset is impaired. The Company considers a lease term to be the noncancelable period that it has the right to use the underlying asset, including any periods where it is reasonably assured the Company will exercise the option to extend the contract. Operating lease expenses are recognized, and the ROU assets are amortized on a straight-line basis over the lease term. Sublease income, if any, is recognized on a straight-line basis over the sublease term as a reduction to the Company's operating lease cost within general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss. The Company has elected not to separate lease and non-lease components for its leased assets and accounts for all lease and non-lease components of its agreements as a single lease component. The Company has elected not to recognize leases with terms of one year or less on the condensed consolidated balance sheets. 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 9 Table of Contents 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 condensed consolidated 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 incurred. The Company is required to estimate expenses resulting from its obligations under contracts with vendors, service providers and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in cash flows that do not match the periods over which materials or services are provided. The Company estimates and records accrued expenses for the related research and development activities based on the level of services performed but not yet invoiced pursuant to agreements established with its service providers, according to the progress of clinical trials or related activities, and discussions with applicable personnel and service providers as to the progress or state of consummation of goods and services. During the course of a clinical trial, the rate of expense recognition is adjusted if actual results differ from the Company’s estimates. Management estimates accrued expenses as of each balance sheet date in its condensed consolidated financial statements based on the facts and circumstances known at that time. The clinical trial accrual is dependent in part upon the timely and accurate reporting of CROs, CMOs and other third-party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its estimates may vary from the actual results. To date, the Company has not experienced material differences between its accrued expenses and actual expenses. Preferred Stock Warrants Liability The Company issued freestanding warrants to purchase shares of its Series A convertible preferred stock (“Series A Convertible Preferred”). 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. 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 were classified as a non-current liability in the condensed consolidated balance sheet since the underlying Series A Convertible Preferred stock was 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. As a result of the Merger, the warrants no longer met the requirements for liability accounting and, as such, the Company adjusted the value of the warrants to the estimated fair value as of the Merger date and reclassified them to stockholders' equity. Share-Based Compensation The Company maintains equity incentive plans as a long-term incentive for employees, directors, and non-employee service providers. All share-based payments to employees and directors, including grants of incentive stock options, nonqualified stock options, restricted stock awards, unrestricted stock awards, or restricted stock units, are recognized as expense based on their grant date fair values. T he Company recognizes expense on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Stock-based compensation is classified in the condensed consolidated statements of operations and comprehensive loss based on the function to which the related services are provided. The Company has elected to account for forfeitures as they occur. Stock Options The Company estimated the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions. A discussion of management’s methodology for developing the assumptions used in the valuation model follows: Fair Value of Common Stock —The Company used the closing stock price on the grant date to determine the grant date fair value, adjusted for special dividends, if any. Expected Dividend Yield —The expected dividend yield is based on the Company’s historical and expected dividend payouts. The Company has historically paid no dividends, other than the special dividend paid by Graphite immediately prior to the close of the Merger, and does not anticipate dividends to be paid in the future. 10 Table of Contents Expected Equity Volatility —The Company used an average volatility for comparable publicly-traded biopharmaceutical companies over a period equal to the expected term of the stock award grant as the Company does not yet have sufficient historical trading history for its own stock. Risk-Free Interest Rate —The risk-free interest rate was based on a United States Treasury instrument whose term is consistent with the expected term of the stock options. Expected Term —The Company used the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Restricted Stock Units For restricted stock units that vest subject to the satisfaction of a service requirement, the related expense was recognized on a straight-line basis over each award’s actual or implied vesting period. The Company used the closing stock price on the grant date to determine the grant date fair value. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using effective tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets where, based upon the available evidence, the Company concludes that it is more-likely-than-not that some or all of the deferred tax assets will not be realized. In evaluating its ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. Because of the uncertainty of the realization of deferred tax assets, the Company has recorded a valuation allowance against its net deferred tax assets. Liabilities are provided for tax benefits for which realization is uncertain. Such benefits are only recognized when the underlying tax position is considered more-likely-than-not to be sustained on examination by a taxing authority, assuming they possess full knowledge of the position and facts. Interest and penalties related to uncertain tax positions are recognized in the provision of income taxes. As of June 30, 2025 and December 31, 2024, 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 condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024 and has not recognized interest or penalties in the condensed consolidated statements of operations for the three and six months ended June 30, 2025 or 2024. Revenue Recognition The Company evaluates its revenue agreements in accordance with FASB ASC 606, Revenue from Contracts with Customers (ASC 606). ASC 606 requires a five-stage approach, including (i) identification of the contract; (ii) identification of performance obligations; (iii) determination of the transaction price; (iv) allocation of the transaction price; and (v) recognition of revenue. Our revenues have consisted of upfront payments for licenses and milestone payments. License Agreements We enter into license arrangements with partners that typically include payment to us of one of more of the following: (i) license fees; (ii) payments related to the achievement of developmental, regulatory, or commercial milestones; and (iii) royalties on net sales of licensed products. As part of the accounting for these arrangements, we must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligation(s). The stand-alone selling price may include items such as forecasted revenues, development timelines, discount rates, and probabilities of technical and regulatory success. We evaluate each 11 Table of Contents performance obligation to determine if it can be satisfied at a point in time, or over time. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. License Fees If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other performance obligations, we use judgment to assess the nature of the combined performance obligation to determine whether it is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Milestone Payments At the inception of each arrangement that includes milestone payments (variable consideration), we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price. If it is probable that a milestone event would occur at the inception of an arrangement, the associated milestone value is included in the transaction price. Milestone payments that are contingent upon the achievement of events that are uncertain or not controllable, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received, and therefore not included in the transaction price. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, we evaluate the probability of achievement of such milestones and any related constraint(s), and if necessary, may adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which could affect license or other revenues and earnings in the period of adjustment. Royalties For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, we have not recognized any royalty revenue resulting from any of our license agreements. Net Loss Per Share Basic net loss per share was calculated by dividing net loss attributed to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Stock options, common stock warrants, and 2024 Employee Stock Purchase Plan (“ESPP”) shares to be purchased were considered potentially dilutive to common stock. Prior to the Merger, the convertible preferred stock and Class B convertible common stock were not participating securities, because they did not participate in losses. Stock options, preferred stock warrants, Class A warrants, Class B convertible common stock, and convertible preferred stock were considered potentially dilutive common stock. The Company computed diluted net loss per share attributable to common stockholders after giving consideration to all potentially dilutive common stock outstanding during the period, determined using the treasury-stock and if-converted methods, except where the effect of including such securities was antidilutive. Prior to the Merger, the Company made adjustments to diluted net loss attributed to common stockholders to reflect the reversal of gains on the change in the value of preferred stock warrants liability, assuming conversion of warrants to acquire convertible preferred stock at the beginning of the period or at time of issuance, if later, to the extent that those preferred stock warrants are dilutive. 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. 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) Other comprehensive income (loss) represents the change in the Company’s stockholders’ equity (deficit) from all sources other than investments by or distributions to stockholders. The Company’s other comprehensive income (loss) is the result of unrealized gains and losses on marketable securities. 12 Table of Contents Segment Reporting Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer acts as the CODM. The CODM views the Company’s operations and manages its business as one operating segment operating exclusively in the United States. The Company’s singular focus is on the development and commercialization of innovative therapies to improve vision, and has generated limited revenue since inception. The CODM utilizes consolidated net loss to monitor budgeted versus actual results, and to assess the overall financial performance and operational efficiency of the business. The CODM manages and allocates resources to the operations of the Company on an entity-wide basis using net loss as the primary performance measure. Asset information provided to the CODM is consistent with those reported on the condensed consolidated balance sheets and are attributable to the United States. The table below shows a reconciliation of the Company's net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S. GAAP, to the Company's total consolidated net loss in the condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue: License revenue $ 5,000 $ — $ 5,000 $ — Total revenue 5,000 — 5,000 — Operating expenses: Research and development expenses (1) 8,334 6,583 13,499 16,926 Selling, general, and administrative expenses (1) 10,678 6,172 19,889 10,970 Share-based compensation expense 2,845 1,597 5,400 2,544 Total operating expenses 21,857 14,352 38,788 30,440 Loss from operations ( 16,857 ) ( 14,352 ) ( 33,788 ) ( 30,440 ) Other income (expense): Other income (expense) 199 1,635 188 287 Interest income 2,246 2,463 4,569 3,251 Net loss before income taxes ( 14,412 ) ( 10,254 ) ( 29,031 ) ( 26,902 ) Income tax expense 500 — 500 — Net loss $ ( 14,912 ) $ ( 10,254 ) $ ( 29,531 ) $ ( 26,902 ) __________________ (1) Amounts exclude share-based compensation expense. Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The update requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign jurisdictions if the amount is at least 5% of total income tax payments, net of refunds received. Adoption of the ASU allows for either the prospective or retrospective application of the amendment and is effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has not yet completed its assessment of the impact of ASU 2023-09 on the Company’s financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires additional disclosure about specific expense categories included in the income statement. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company has not yet completed its assessment of the impact of ASU 2024-03 on the Company’s financial statements. 13 Table of Contents 3. Merger and Related Transactions As described in Note 1, LENZ OpCo merged with a wholly owned subsidiary of Graphite on March 21, 2024. The Merger was accounted for as a reverse recapitalization under GAAP. LENZ OpCo was considered the accounting acquirer for financial reporting purposes. 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 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. It was concluded that any in-process research and development assets that remained as of the Merger were immaterial. Under reverse recapitalization accounting, the assets and liabilities of Graphite were recorded at their fair value, which approximated book value due to their short-term nature. The Company's condensed consolidated financial statements reflect 8,670,653 shares and options held by the former stockholders and option holders of Graphite. Graphite assumed each outstanding and unexercised option to purchase LENZ OpCo’s common stock, whether vested or not vested, and assumed each outstanding and unexercised warrant to purchase LENZ OpCo’s common stock or preferred stock, which became options and warrants to purchase shares of Graphite common stock. 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 “March 2024 PIPE Financing”). 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. LENZ OpCo also acquired assets, primarily prepaid and other current assets, of approximately $ 1.5 million and assumed payables and accruals of approximately $ 3.2 million. 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. 4. 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. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs such as quoted prices in active markets. Level 2—Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value of the instrument. The carrying 14 Table of Contents amounts of the Company’s financial instruments, including cash equivalents classified within the Level 1 designation, prepaid and other current assets, accounts payable, and accrued liabilities approximate fair value due to their short maturities. 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. Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 At June 30, 2025: Cash equivalents Money market funds $ 35,609 $ 35,609 $ — $ — Corporate debt securities 1,550 — 1,550 — Total cash equivalents measured at fair value $ 37,159 $ 35,609 $ 1,550 $ — Marketable securities U.S. treasury securities $ 51,902 $ 51,902 $ — $ — Commercial paper 50,548 — 50,548 — Corporate debt securities 49,005 — 49,005 — U.S. government agency securities 18,444 — 18,444 — Asset-backed securities 2,012 — 2,012 — Total marketable securities measured at fair value $ 171,911 $ 51,902 $ 120,009 $ — At December 31, 2024: Cash equivalents Money market funds $ 17,693 $ 17,693 $ — $ — U.S. government securities 999 — 999 — U.S. treasury securities 997 997 — — Total cash equivalents measured at fair value $ 19,689 $ 18,690 $ 999 $ — Marketable securities Commercial paper $ 58,823 $ — $ 58,823 $ — U.S. treasury securities 46,309 46,309 — — Corporate debt securities 43,669 — 43,669 — U.S. government agency securities 40,071 — 40,071 — Total marketable securities measured at fair value $ 188,872 $ 46,309 $ 142,563 $ — 15 Table of Contents 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): June 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash equivalents: Money market funds $ 35,609 $ — $ — $ 35,609 Corporate debt securities 1,550 — — 1,550 Marketable securities: U.S. treasury securities $ 51,865 $ 42 $ ( 5 ) $ 51,902 Commercial paper 50,563 5 ( 20 ) 50,548 Corporate debt securities 48,992 17 ( 4 ) 49,005 U.S. government agency securities 18,440 8 ( 4 ) 18,444 Asset-backed securities 2,013 — ( 1 ) 2,012 Totals $ 209,032 $ 72 $ ( 34 ) $ 209,070 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash equivalents: Money market funds $ 17,693 $ — $ — $ 17,693 U.S. government securities 999 — — 999 U.S. treasury securities 997 — — 997 Marketable securities: Commercial paper $ 58,798 $ 56 $ ( 31 ) $ 58,823 U.S. treasury securities 46,231 80 ( 2 ) 46,309 Corporate debt securities 43,634 49 ( 14 ) 43,669 U.S. government agency securities 40,013 60 ( 2 ) 40,071 Totals $ 208,365 $ 245 $ ( 49 ) $ 208,561 The following table presents available-for-sale securities by contractual maturity date as of June 30, 2025 (in thousands): June 30, 2025 Amortized Cost Estimated Fair Value Due in one year or less $ 157,218 $ 157,228 Due after one year 14,655 14,683 Total $ 171,873 $ 171,911 As of June 30, 2025, fifty-one of the Company's marketable securities with a fair market value of $ 70.7 million were in an immaterial aggregate gross unrealized loss position; these fifty-one marketable securities have all been in a gross unrealized loss position for less than one year. 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, 2025, 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. Refer to Note 2 for further discussion on the Company's evaluation of unrealized losses on available-for-sale securities. Accrued interest receivable on marketable securities was $ 1.3 million and $ 1.1 million at June 30, 2025 and December 31, 2024, respectively, and was recorded within prepaid expenses and other current assets in the condensed consolidated balance sheets. We did not write off any accrued interest receivables for the six months ended June 30, 2025 and 2024. The Company did not transfer any assets measured at fair value on a recurring basis between levels during the six months ended June 30, 2025 and 2024. 16 Table of Contents 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 Balance at December 31, 2023 $ 871 Change in fair value 1,047 Conversion of preferred stock warrants liability to equity ( 1,918 ) Balance at June 30, 2024 $ — 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 ( 0.0 %), volatility ( 103.0 % - 104.0 %) and exercise price ($ 10.64 per common share). No fair value liabilities exist as of June 30, 2025. 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 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. 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 at the time of the Seed Financing. In May 2025, the private company executed an extension of the initial seed funding round (“Seed Extension”), which the Company identified as an observable price change under the measurement alternative, and resulted in a $ 0.2 million increase in the fair value of the equity investment. There were no other upward or downward adjustments to the carrying value of the Company's investment without a readily determinable fair value during the three and six months ended June 30, 2025 and 2024. 5. Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, 2025 December 31, 2024 Accrued payroll and related expenses $ 2,941 $ 3,564 Research and development accrued expenses 2,208 808 Sales, general, and administrative accrued expenses 1,776 1,109 Operating lease liability, current portion 482 567 Other accrued liabilities 137 101 Total accrued liabilities $ 7,544 $ 6,149 6. Commitments and Contingencies Operating Leases 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”). In April 2024, the Company entered into a lease agreement for office space in Solana Beach, California (the “Lomas lease”). As of June 30, 2025, the weighted average remaining lease term was 2.0 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. 17 Table of Contents Maturities of the Company's operating lease liabilities as of June 30, 2025 are as follows (in thousands): 2025 $ 274 2026 511 2027 361 Total undiscounted lease payments 1,146 Less: present value adjustment ( 95 ) Operating lease liabilities $ 1,051 Rent expense for the three months ended June 30, 2025 and 2024 was $ 0.1 million and less than $ 0.1 million, respectively, and $ 0.3 million and $ 0.1 million for the six months ended June 30, 2025 and 2024, respectively. Legal Proceedings From time to time, the Company may be subject to legal proceedings and claims arising in the ordinary course of business. The Company is not currently a party to or aware of any proceedings that it believes will have, individually or in the aggregate, a material adverse effect on it's business, financial condition or results of operations. Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. 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 date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of June 30, 2025 and December 31, 2024, the Company did not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities. 7. Stockholders' Equity Convertible Preferred Stock Immediately prior to the closing of the Merger, LENZ OpCo had authorized 53,761,506 shares of preferred stock with a par value of $ 0.001 , and there were 21,977,282 shares of Series A Convertible Preferred, 2,950,548 shares of Series A-1 convertible preferred stock (“Series A-1 Convertible Preferred”), and 28,019,181 shares of Series B convertible preferred stock (“Series B Convertible Preferred”) issued and outstanding. Immediately prior to the closing of the Merger, the total liquidation preference of issued and outstanding Series A Convertible Preferred, Series A-1 Convertible Preferred, and Series B Convertible Preferred 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. Common Stock Prior to the closing of the Merger, LENZ OpCo had authorized two series of common stock, designated Class A common stock and Class B convertible common stock, and there were 11,838,624 and 9,915,013 shares of Class A common stock issued, respectively, and 11,668,867 and 9,739,818 shares of Class A common stock outstanding, respectively. Immediately prior to the closing of the Merger, there were 2,744,184 shares of Class B convertible common stock issued and outstanding. At the closing of the Merger, 11,838,624 and 11,668,867 issued and outstanding shares of Class A common stock, respectively, were exchanged for 2,393,729 and 2,359,408 shares of issued and outstanding shares of Graphite's common stock, respectively. Additionally, at the closing of the Merger, 2,744,184 shares of Class B convertible common stock were exchanged for 554,843 shares of Graphite's common stock. 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 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 18 Table of Contents 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. On April 4, 2025, the Company 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. Under the Sales Agreement, the Company will set the parameters for the sale of shares, including the number or dollar amount of shares to be issued, the time period during which sales are requested to be made, limitations on the number or dollar amount of shares that may be sold in any one trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the Sales Agreement, TD Cowen may sell the shares by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement. The shares will be issued pursuant to the Company’s shelf registration statement on Form S-3, including the prospectus supplement contained therein, which was declared effective by the SEC on April 14, 2025. 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. 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, 2025, and any such dividends are not cumulative. Common stock reserved for future issuance consist of the following: June 30, 2025 Common stock options granted and outstanding 3,888,145 Shares available for issuance under incentive plans 1,952,105 Shares available for issuance under the ESPP 517,217 Warrants to purchase common stock 164,252 Restricted stock units granted and outstanding 29,740 Total 6,551,459 Warrants LENZ OpCo issued warrants to acquire Class A common stock and Series A Convertible Preferred stock. The warrants to purchase 470,000 shares of Class A common stock had an exercise price of $ 0.21 per share and were issued in December 2020 with an expiration date in February 2024. In February 2024, prior to expiration, the holder exercised 470,000 warrants, resulting in $ 0.1 million of proceeds. These shares were subsequently exchanged for 95,034 shares of common stock at the closing of the Merger. The Series A Convertible Preferred stock warrants had an exercise price of $ 2.15 per share and were issued in October 2020 with an expiration date in October 2027. There were no exercises of the Series A Convertible Preferred stock warrants for any of the periods presented. In connection with the Merger, the Series A preferred stock warrants were converted to 164,676 common stock warrants of the Company at an exercise price of $ 10.64 , and were subsequently reclassified to stockholders’ equity at their fair value of $ 1.9 million. Share-Based Compensation Share-based compensation expense was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Selling, general and administrative $ 2,118 $ 1,235 $ 4,020 $ 1,988 19 Table of Contents Research and development 727 362 1,380 556 Total $ 2,845 $ 1,597 $ 5,400 $ 2,544 8. Net Loss Per Share The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. 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: June 30, 2025 2024 Common stock options granted and outstanding 3,888,145 3,005,809 Warrants to purchase common stock 164,252 164,676 Restricted stock units granted and outstanding 29,740 — ESPP shares to be purchased 4,791 — Total 4,086,928 3,170,485 9. License Agreements CORXEL License and Collaboration Agreement 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 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. 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 in Greater China. Additional consideration to be paid to the Company upon reaching regulatory and sales milestones is excluded from the transaction price. Future milestone payments are fully contingent as the risk of significant revenue reversal will only be resolved depending on future regulatory approval and sales level outcomes. The sales-based royalty fee qualifies for the royalty constraint exception and does not require an estimate of the future transaction price. 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 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 six months ended June 30, 2025 or 2024. 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, which represents the transaction price at inception, 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. Additional consideration to be paid to the Company upon reaching regulatory and sales milestones is excluded from the transaction price. Future 20 Table of Contents milestone payments are fully contingent as the risk of significant revenue reversal will only be resolved depending on future regulatory approval and sales level outcomes. The sales-based royalty fee qualifies for the royalty constraint exception and does not require an estimate of the future transaction price. 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 Lotus License and concluded the Lotus License comprises a single performance obligation providing the right to use functional intellectual property. The $ 5.0 million transaction price allocated to that single performance obligation was recognized upon transfer of the Lotus License during the three months ended June 30, 2025. The upfront payment was subject to a withholding tax in the Republic of Singapore, which the Company recorded as income tax expense during the three and six months ended June 30, 2025. Such withholding may be eligible to be recovered against future taxable income in the United States in the form of a foreign tax credit. No regulatory or sales milestones were met under the Lotus License during the three months ended June 30, 2025. 10. Related Party Transactions 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. Fees incurred for services performed by the vendor for the three months ended June 30, 2025 and 2024 were $ 0.4 million and $ 0.1 million, respectively, and $ 0.7 million and $ 0.2 million for the six months ended June 30, 2025 and 2024, respectively, and were charged to research and development expenses. The Company had $ 0.3 million and $ 0.1 million due to the vendor within accounts payable as of June 30, 2025 and December 31, 2024, respectively. 11. Subsequent Events 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. One Big Beautiful Bill Act The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025 and the Company continues to evaluate the impact on its financial position. The OBBBA is not currently expected to materially impact the Company’s effective tax rate or cash flows in the current fiscal year. 21 Table of Contents