LENZ Therapeutics, Inc.(LENZ) - 2023 Q3 - Quarterly Report

Financial Performance - The net loss for the three months ended September 30, 2023, was $22.485 million, compared to a net loss of $24.682 million for the same period in 2022, reflecting a decrease of about 8.8%[10]. - The company reported a net loss of $101.7 million for the three months ended September 30, 2023, compared to a net loss of $76.5 million for the same period in 2022[17]. - The net loss for the quarter ending September 30, 2023, was $22,485,000, following a net loss of $55,314,000 for the previous quarter[12]. - For the nine months ended September 30, 2023, the net loss was $101.7 million, up from $76.5 million in the prior year[79]. - The company experienced a comprehensive loss of $22.309 million for the three months ended September 30, 2023, compared to a comprehensive loss of $25.245 million in the same period of 2022, a reduction of approximately 11.5%[10]. Assets and Liabilities - As of September 30, 2023, total assets decreased to $266.228 million from $321.902 million as of December 31, 2022, representing a decline of approximately 17.3%[8]. - Total liabilities rose to $62.209 million from $25.611 million, marking an increase of approximately 143.5%[9]. - As of September 30, 2023, total stockholders' equity was $204,019,000, a decrease from $276,224,000 as of June 30, 2023[12]. - The accumulated deficit increased to $344,136,000 as of September 30, 2023, compared to $321,651,000 at the end of June 2023[12]. - The total property and equipment, net, decreased to $12.534 million as of September 30, 2023, from $22.630 million as of December 31, 2022, reflecting a significant reduction in lab equipment and accumulated depreciation[41]. Cash Flow and Investments - Cash and cash equivalents increased significantly to $182.988 million from $47.730 million, indicating a growth of approximately 283.5%[8]. - The company had cash, cash equivalents, and restricted cash totaling $184.7 million as of September 30, 2023, up from $58.1 million at the end of the previous year[17]. - Net cash used in operating activities was $44.1 million for the three months ended September 30, 2023, a decrease from $65.6 million in the same period of 2022, indicating improved cash flow management[17]. - The company recorded a net cash provided by investing activities of $179.3 million for the three months ended September 30, 2023, compared to a net cash used of $255.4 million in the same period of 2022[17]. - The fair value of available-for-sale securities as of September 30, 2023, was $50.998 million, with an amortized cost basis of $51.093 million, resulting in unrealized losses of $95,000[37]. Expenses - Research and development expenses for the three months ended September 30, 2023, were $2.384 million, down from $18.302 million in the same period last year, a reduction of approximately 87%[10]. - General and administrative expenses increased to $11.294 million from $7.852 million, representing an increase of approximately 43.5%[10]. - The company reported total operating expenses of $25.027 million for the three months ended September 30, 2023, compared to $26.154 million in the prior year, a decrease of about 4.3%[10]. - The total stock-based compensation expense for the nine months ended September 30, 2023, was $8.269 million, down from $9.912 million in the same period of 2022[72]. - The Company recognized $2.8 million in cash retention bonuses for certain retained employees during the three months ended September 30, 2023[75]. Restructuring and Workforce - The company has undergone restructuring initiatives, including reductions in force, which may impact future operational and financial performance[5]. - A corporate restructuring resulted in a 78.1% reduction in workforce, aimed at reducing operational cash burn[18]. - The Company incurred approximately $3.4 million in employee termination benefits expense due to the First Restructuring Plan, which eliminated about 50% of the workforce[75]. - The Second Restructuring Plan further reduced the workforce by approximately 33.1%, totaling 78.1% of the workforce eliminated, with an expected additional expense of $3.5 million[75]. - As of September 30, 2023, the accrued employee termination benefits liability is $2.983 million[76]. Shareholder Equity and Stock Options - Common stock shares outstanding decreased to 57,971,910 as of September 30, 2023, from 58,194,818 as of June 30, 2023[12]. - The Company has reserved a total of 17,465,405 shares for future issuance as of September 30, 2023, compared to 13,893,161 shares as of December 31, 2022[60]. - The 2021 Stock Option and Incentive Plan reserves 5,636,000 shares for awards, with an automatic annual increase of 5% starting January 1, 2022[65]. - As of September 30, 2023, there are 9,831,161 shares available for future issuance under the 2021 Plan[66]. - The aggregate intrinsic value of stock options outstanding as of September 30, 2023, is $695,000[71]. Lease Obligations - As of September 30, 2023, the total liability for operating leases was $53.1 million, with current and non-current portions of $3.4 million and $49.7 million, respectively[56]. - The future minimum lease payments for operating leases total $86.5 million, with $2.2 million due in the remaining three months of 2023 and $9.2 million in 2024[57]. - Lease expense for the three and nine months ended September 30, 2023, was $2.4 million and $6.4 million, respectively, compared to $1.7 million and $5.0 million for the same periods in 2022[57]. - The Company recognized a $32.0 million right-of-use asset and corresponding lease liability upon the commencement of the Bayside lease in April 2023[56]. - The Company has determined not to utilize the Bayside and South San Francisco leases for its operations[77].