Company: LENZ
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001815776-25-000071
Chunk: 356

Company: LENZ Therapeutics, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 356
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 sales in Canada. 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, thus variable consideration related to the remaining milestone payments was fully constrained as of September 30, 2025. 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 Théa License and concluded the Théa License comprises a single performance obligation providing the right to use functional intellectual property. The $2.5 million transaction price allocated to that single performance obligation was recognized upon transfer of the Théa License during the three months ended September 30, 2025. No regulatory or sales milestones were met under the Théa License during the three months ended September 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. There were no fees incurred for services performed by the vendor for the three months ended September 30, 2025. Fees incurred for services performed by the vendor for the three months ended September 30, 2024 were $0.2 million, and $0.7 million and $0.4 million for the nine months ended September 30, 2025 and 2024, respectively, and were charged to research and development expenses. The Company had no amounts and $0.1 million due to the vendor within accounts payable as of September 30, 2025 and December 31, 2024, respectively.

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Item 2. 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’s consolidated results