Company: LENZ
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001815776-25-000032
Chunk: 348

Company: LENZ Therapeutics, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 348
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4.The Company did not transfer any assets measured at fair value on a recurring basis between levels during the three months ended March 31, 2025 and 2024.The following table presents activity for the preferred stock warrants liability during the three months ended March 31, 2024 (in thousands):Preferred Stock Warrants LiabilityBalance at December 31, 2023$871 Change in fair value1,047 Conversion of preferred stock warrants liability to equity(1,918)Balance at March 31, 2024$— 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 March 31, 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

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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. There were no adjustments to the carrying value of the Company's investment without a readily determinable fair value during the three months ended March 31, 2025 and 2024, and there were no downward adjustments to the carrying value of the Company's investment without a readily determinable fair value on both a cumulative basis or for the three months ended March 31, 2025 and 2024.

5.    Accrued Liabilities

Accrued liabilities consist of the following (in thousands):March 31, 202