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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly in the section entitled “Risk Factors” in Part I, Item 1A that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K,and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Overview

We are a pioneering gene editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases. We have developed a proprietary gene editing platform based on CRISPR technology and we continue to expand its capabilities. Our product development strategy is to target diseases where gene editing can be used to enable or enhance therapeutic outcomes for patients, while maximizing probability of technical, regulatory and commercial success. We are focused on the development of in vivo gene editing medicines utilizing functional upregulation, which aims to increase the expression and function of a normal gene copy and its normal protein function to treat diseases caused by genetic mutations that eliminate or disrupt normal function. We believe the ability to provide in vivo gene editing, in which the medicine is injected or infused into the patient to edit the cells inside their body, and functionally upregulates normal gene expression and normal protein function in the target tissues holds the potential to significantly expand the addressable therapeutic possibilities of CRISPR-based gene editing. To that end, our preclinical efforts are also focused on the creation of a “plug ‘n play” LNP platform that enables delivery of the gene editing cargo to multiple cells and tissues, including hematopoietic stem cells (“HSCs”), the liver and other cells and tissues.

We previously demonstrated proof of concept of our functional upregulation strategy in our clinical trials of renizgamglogene autogedtemcel (“reni-cel”), an experimental ex vivo gene-edited medicine to treat sickle cell disease (“SCD”) and transfusion-dependent beta thalassemia (“TDT”). Despite the robust and clinically meaningful improvements observed in these trials, we determined in December 2024 not to pursue commercialization for reni-cel in order to optimize our cost structure and accelerate our intent to achieve in vivo human proof of concept in approximately two years. However, leveraging our differentiated approach and the insights gained from these trials, we are initially focused on pursuing next generation in vivo gene editing medicines targeting HSCs. In October 2024, we shared our achievement of in vivo preclinical proof of concept of hematopoietic stem and progenitor cell editing and fetal hemoglobin induction in

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humanized mice engrafted with human HSCs and lacking their own hematopoietic cells using a novel and proprietary targeted lipid nanoparticle (“tLNP”) formulation for non-liver, or extrahepatic, tissue delivery. Building on this achievement, in January 2025, we announced in vivo preclinical proof of concept of editing HSCs in non-human primates, a key step in developing a treatment for SCD and TDT. We are on track to declare adevelopment candidate in HSCs for the in vivo treatment of SCD and TDT in mid-2025.

Beyond hemoglobinopathies, our discovery and development efforts are focused on in vivo gene editing medicines in liver cells and other cells and tissues. In preclinical studies for an undisclosed liver target, we have achieved an editing level of approximately 65% in non-human primates, near the theoretical maximum liver editing level of 70%, with minimal non-target tissue editing using AsCas12a and a liver targeted lipid nanoparticle (“LNP”). This editing resulted in robust serum biomarker reduction from the baseline of approximately 80%. We further announced in vivo delivery to two additional cell types in humanized mice using our proprietary LNP targeting platform. We are on track to declare a development candidate for an in vivo gene editing medicine in liver cells for an undisclosed indication in mid-2025 and to establish and disclose an extrahepatic, non-HSC target cell type or tissue by the end of 2025. We expect to present further in vivo HSC data and present further in vivo data in one liver indication by the end of 2025.

We are pursuing the right combination of gene editing and targeted delivery tools through internal development and the in-licensing of complementary technologies to build our preclinical pipeline and accelerate the achievement of our goal of delivering lifesaving medicines to patients with previously untreatable diseases. Through in-licensing of complementary technologies, we can expand our existing gene editing platform and further drive the development of our in vivo pipeline. This was recently demonstrated with our entry in 2024 into a collaboration and license agreement to access LNPs targeting the liver, which we used in our achievement of in vivo editing of liver cells in non-human primates. We also actively seek opportunities to out-license and partner our robust intellectual property portfolio to drive the development of CRISPR-based medicines in therapeutic areas outside of our core focus and to provide non-dilutive capital. For example, in cellular therapy medicines, we are leveraging partnerships to progress engineered cell medicines to treat various cancers, including in our collaboration with Bristol Myers Squibb Company (“BMS”) through its wholly owned subsidiary, Juno Therapeutics, Inc. (“Juno Therapeutics”). This collaboration, which leverages our Cas9 and AsCas12a platform technologies, seeks to advance alpha-beta T-cell experimental medicines for the treatment of solid and liquid tumors, and has resulted in 14 total programs to date.

In addition, in December 2023, we and Vertex Pharmaceuticals Incorporated (“Vertex”) entered into a license agreement, under which Vertex obtained a non-exclusive license for our Cas9 gene editing technology for ex vivo gene editing medicines targeting the BCL11A gene in the fields of SCD and TDT, including Vertex’s CASGEVYTM (exagamglogene autotemcel). We received a $50.0 million upfront cash payment in the fourth quarter of 2023 and the 2024 annual license fee of $10.0 million in the first quarter of 2024. The license agreement further provides for the payment by Vertex of a potential additional $50.0 million contingent upfront payment and further future fixed and sales-based annual license fees, ranging from $10.0 million to $40.0 million annually, inclusive of certain sales-based annual license fee increases, through 2034. We are required to pay The Broad Institute, Inc. (“Broad”) and the President and Fellows of Harvard College (“Harvard”) a mid-double-digit percentage of amounts payable to us from Vertex under the license agreement as it relates to Cas9 technology licensed by us from Broad and Harvard. In October 2024, we entered into an agreement (the “DRI Agreement”) with a wholly owned subsidiary of DRI Healthcare Trust (“DRI”) providing for an upfront cash payment by DRI to us of $57.0 million in exchange for the acquisition by DRI of up to 100% of certain of the annual license fees owed to us under the Vertex license agreement, which fees range from $5.0 million to $40.0 million per year (inclusive of certain sales-based annual license fees that may become due), and a mid-double-digit percentage of the $50.0 million contingent upfront payment, in each case after subtracting amounts owed by us to Broad and Harvard. We have retained rights to our portions of certain other sales-based annual license fees and the contingent upfront payment that may become due under the license agreement with Vertex, and the amounts that correspond to our licensor obligations.

In August 2023, we entered into a license agreement with Vor Biopharma, Inc. (“Vor Bio”), providing Vor Bio a non-exclusive license for the development of ex vivo Cas 9 gene edited HSC therapies for the treatment and/or prevention of hematological malignancies. Under this agreement, we received an upfront payment and will be eligible for future development, regulatory and commercial milestone payments, as well as royalties on medicines utilizing the related intellectual property.

Since our inception in September 2013, our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio, assembling our core capabilities in gene editing, seeking to identify potential product candidates, and undertaking preclinical studies and clinical trials. All of our ongoing research programs are still in the preclinical or research stage of development and the risk of failure of all of our

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research programs is high. We have not generated any revenue from product sales. We have primarily financed our operations through various equity financings, payments received under our research collaboration with BMS through its wholly owned subsidiary Juno Therapeutics, our former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020, payments received under the DRI Agreement in connection with our license agreement with Vertex, and payments under the Vertex license agreement.

Since inception, we have incurred significant operating losses. Our net losses were $237.1 million, $153.2 million, and $220.4 million for the years ended December 31, 2024, 2023 and 2022 respectively. As of December 31, 2024, we had an accumulated deficit of $1.5 billion. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and from year to year. We anticipate that our expenses will increase substantially as we continue our current research programs and our preclinical development activities; seek to identify additional research programs and additional product candidates; initiate preclinical testing and clinical trials for other product candidates we identify and develop; maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for such expenses related to the intellectual property that we in-license from such licensors; further develop our genome editing platform; hire additional clinical, quality control, and scientific personnel; and incur additional costs associated with operating as a public company. We do not expect to be profitable for the year ending December 31, 2025 or the foreseeable future.

Financial Operations Overview

Revenue

To date, we have not generated any revenue from product sales and we do not expect to generate any revenue from product sales for the foreseeable future.

In connection with our collaboration with BMS, we have received an aggregate of $146.5 million in payments, which have primarily consisted of the initial upfront and amendment payments, development milestone payments and research funding support. We no longer receive research funding support. During the year ended December 31, 2024, we recognized $18.1 million of revenue related to our collaboration with BMS of which $6.5 million was previously deferred revenue. As of December 31, 2024, we had $50.2 million of deferred revenue related to BMS, of which $50.2 million is classified as long-term on our consolidated balance sheet. Under this collaboration, we will recognize revenue upon delivery of option packages to BMS or when milestones are achieved. As such, we expect that our revenue will fluctuate from quarter-to-quarter and year-to-year as a result of the timing of when these events occur.

Pursuant to the license agreement with Vertex, we received a $50.0 million upfront cash payment in the fourth quarter of 2023 upon execution of the agreement and the 2024 annual license fee of $10.0 million in the first quarter of 2024. The license agreement further provides for the payment by Vertex of a potential additional $50.0 million contingent upfront payment and further future fixed and sales-based annual license fees, ranging from $10.0 million to $40.0 million annually, inclusive of certain sales-based annual license fee increases, through 2034. For the year ended, December 31, 2024, we have recorded $10.0 million of revenue related to the agreement.

For additional information about our revenue recognition policy related to the Vertex license agreement and BMS collaboration, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Revenue Recognition” included in this Annual Report on Form 10-K.

For the foreseeable future we expect substantially all of our revenue will be generated from our license agreements with Vertex and Vor Bio, collaboration with BMS, and any other collaborations or license agreements we may enter into.

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Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research, preclinical development, process and scale-up development, manufacture and clinical development of our product candidates, and the performance of development activities under our collaboration agreements. These costs are expensed as incurred and include:

•employee-related expenses including salaries, benefits, and stock-based compensation expense;

•costs incurred under clinical trial agreements with investigative sites for our former reni-cel program;

•costs associated with conducting our preclinical, process and scale-up development, manufacturing, quality, clinical and regulatory activities, including fees paid to third-party professional consultants, service providers and suppliers;

•costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical and clinical study materials;

•costs incurred for the research and development activities under our collaboration agreements;

•facility costs including rent, depreciation, and maintenance expenses; and

•fees for acquiring and maintaining licenses under our third-party licensing agreements, including any sublicensing or success payments made to our licensors.

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of any product candidates we may identify and develop. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of:

•successful completion of preclinical studies, IND-enabling studies and natural history studies;

•successful enrollment in, and completion of, clinical trials;

•receipt of marketing approvals from applicable regulatory authorities;

•establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

•obtaining and maintaining patent and trade secret protection and non-patent exclusivity;

•launching commercial sales of a product, if and when approved, whether alone or in collaboration with others;

•acceptance of a product, if and when approved, by patients, the medical community, and third-party payors;

•effectively competing with other therapies and treatment options;

•a continued acceptable safety profile following approval;

•enforcing and defending intellectual property and proprietary rights and claims; and

•achieving desirable medicinal properties for the intended indications.

A change in the outcome of any of these variables with respect to the development of any product candidates we develop would significantly change the costs, timing, and viability associated with the development of that product candidate.

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Research and development activities are central to our business model. We expect research and development costs to increase significantly for the foreseeable future as our development programs progress, including as we continue to support preclinical studies and prepare for the clinical development of our research programs.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in executive, finance, investor relations, business development, legal, corporate affairs, information technology, facilities and human resource functions. Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters, and fees for accounting and consulting services.

We anticipate that our general and administrative expenses will decrease or remain flat in the near future to support continued research and development activities. We anticipate that expenses associated with operating as a public company, including costs for audit, legal, regulatory, and tax-related services, director and officer insurance premiums, and investor relation costs will remain flat or decrease in the near future. With respect to reimbursement of third-party intellectual property-related expenses specifically, given the ongoing nature of the opposition and interference proceedings involving the patents licensed to us under our license agreement with Broad and Harvard, we anticipate general and administrative expenses associated with reimbursement of third-party intellectual property-related expense will continue to fluctuate as the interference proceedings continue.

Restructuring Charges

In December 2024, our board of directors approved the discontinuation of the clinical development of our ex vivo reni-cel program. As part of the discontinuation, our board approved a reduction in our employee workforce by approximately 180 positions, or by approximately 65%. Restructuring charges consist primarily of expenses in connection with the wind-down of various activities related to clinical development of reni-cel, including contract termination costs, impairment charges and non-cash charges, and expenses related to the employee workforce reduction, primarily consisting of severance payments and employee benefit costs. We may also incur additional costs not currently contemplated due to events that may occur as a result of or that are associated with the discontinuation and headcount reduction. We estimate that we will incur approximately $45.0 million to $55.0 million in cash costs to implement the discontinuation and workforce reduction. We expect restructuring charges to be substantially incurred through the end of June 2025, when the related activities are expected to be substantially complete.

Other Income (Expense), Net

For the years ended December 31, 2024, and 2023, other income (expense), net consisted primarily of changes in interest income and accretion of discounts associated with other marketable securities.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of our consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates.

While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements requires the most significant judgments and estimates.

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Revenue Recognition

We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 606, Revenue Recognition (“ASC 606”). Accordingly, we recognize revenue following the five step model prescribed under Accounting Standards Updates No. 2014-09, Revenue from Contractswith Customers: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the accounting for these arrangements, we must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract and use judgement in the determination of the transaction price and the application of the constraint. The determination of standalone selling price has not had a significant impact on the accounting for our revenue arrangements given the nature of the performance obligations. We have also not been required to apply significant judgement in determining the transaction price given the nature of the variable consideration and the application of the constraint.

Accrued Research and Development Expenses

As part of the process of preparing our financial statements, we are required to estimate our accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to clinical research organizations, to investigative sites in connection with clinical trials, to sponsored research organizations, to service providers in connection with preclinical development activities and to service providers related to product manufacturing, development and distribution of clinical supplies.

We base our accrued expenses related to clinical trials on our estimates of the services performed and efforts expended pursuant to our contractual arrangements, including those with clinical research organizations. The financial terms of these agreements are sometimes subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our service providers will exceed the level of services performed and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly.

Although we do not expect our estimates to be materially different from expenses actually incurred, if our estimates of the status and timing of services performed differs from the actual status and timing of services performed, we may report amounts that are too high or too low in any particular period. To date, there have been no material differences from our estimates to the amounts actually incurred.

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Results of Operations

Comparison of Years Ended December 31, 2024 and 2023

The following table summarizes our results of operations for the years ended December 31, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Year Ended December 31, Dollar Change Percentage Change

Operating expenses:

Other income, net:

For our results of operations, we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (n/m).

Collaboration and Other Research and Development Revenues

Collaboration and other research and development revenues decreased by $45.8 million, to $32.3 million for the year ended December 31, 2024, from $78.1 million for the year ended December 31, 2023. The decrease was primarily attributable to revenue recognized in 2023 under our license agreement with Vertex, which was executed in December 2023.

Research and Development Expenses

Research and development expenses increased by $21.5 million, to $199.2 million for the year ended December 31, 2024 from $177.7 million for the year ended December 31, 2023. The following table summarizes our research and development expenses for the years ended December 31, 2024 and December 31, 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Year Ended December 31, Dollar Change Percentage Change

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The increase in research and development expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily attributable to:

•approximately $25.1 million in increased external research and development expenses primarily related to clinical and manufacturing costs related to the progression of our former reni-cel program as well as costs attributable to in vivo research and discovery;

•approximately $6.9 million in increased employee related expenses related to increased headcount;

•approximately $5.0 million in increased facility expenses primarily related to increased rent expense incurred in connection with a lease commencement for manufacturing space in the second quarter of 2024; and

•approximately $1.9 million in increased other expenses attributable to consulting and external fees to support clinical and quality initiatives.

These increases were partially offset by the following decreases in research and development expenses:

•approximately $16.1 million in decreased sublicense and license fees related to reduced licensing activity in 2024 compared to 2023; and

•approximately $1.2 million in decreased stock-based compensation expense due primarily to a reduction in the market price of our common stock, resulting in a lower valuation of equity awards granted.

General and Administrative Expenses

General and administrative expenses increased by approximately $2.3 million, to $72.0 million for the year ended December 31, 2024 from $69.7 million for the year ended December 31, 2023. The following table summarizes our general and administrative expenses for the years ended December 31, 2024 and December 31, 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Year Ended December 31, Dollar Change Percentage Change

The increase in general and administrative expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily attributable to:

•approximately $3.8 million in increased employee related expenses related to increased headcount;

•approximately $2.8 million in increased stock-based compensation expense due primarily to the vesting of certain restricted stock units upon the achievement of performance-based milestones in 2024, along with an increased headcount;

•approximately $0.7 million in increased intellectual property and patent related fees for legal activity;

•approximately $0.3 million in increased facility and other expenses.

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These increases were partially offset by approximately $5.3 million in decreased professional services expenses primarily related to one-time expenses incurred in 2023 to support strategic initiatives and business development activities.

Restructuring Charges

Restructuring charges were $12.2 million for the year ended December 31, 2024, with no equivalent charges for the year ended December 31, 2023. The following table summarizes our restructuring charges for the years ended December 31, 2024 and December 31, 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Year Ended December 31, Dollar Change Percentage Change

During the year ended December 31, 2024, we recorded $10.5 million and $1.8 million related to employee termination benefits and program-related contract termination costs, respectively, due to the discontinuation of the clinical development of our reni-cel program that we initiated in December 2024 and the related workforce reduction.

Total Other Income, Net

For the years ended December 31, 2024, and 2023, total other income, net was $14.1 million and $16.0 million, respectively, which was primarily attributable to interest income and accretion of discounts associated with marketable securities. The decrease was attributable to reduction of investment balances offset by increased market rates.

Comparison of Years Ended December 31, 2023 and 2022

For a discussion of our results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2023, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28, 2024.

Liquidity and Capital Resources

Sources of Liquidity

As of December 31, 2024, we have raised an aggregate of $1.0 billion in net proceeds through the sale of shares of our common stock in public offerings and at-the-market offerings. We also have funded our business from our research collaboration with BMS through its wholly owned subsidiary Juno Therapeutics, our former strategic alliance with Allergan (which was terminated in August 2020), payments received under the DRI Agreement in connection with our license agreement with Vertex, and payments under the Vertex license agreement. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $269.9 million.

In May 2021, we entered into a common stock sales agreement with TD Securities (USA) LLC (as successor to Cowen and Company, LLC) (“TD Cowen”) under which we from time to time can issue and sell shares of our common stock through TD Cowen in at-the-market offerings for aggregate gross sale proceeds of up to $300.0 million (the “Prior ATM Facility”). We amended the common stock sales agreement with TD Cowen in February 2024 in connection with filing a new registration statement. In March 2025, we further amended our common stock sales agreement with TD Cowen in connection with amending our existing shelf registration statement following the loss of our status as a “well-known seasoned issuer” (as defined under Rule 450 of the Securities Act of 1933, as amended), reducing the amount of shares of common stock we may issue and sell through TD Cowen to aggregate gross sale proceeds of up to $150.0 million (the “ATM Facility”). As of December 31, 2024, we had not sold any shares of our common stock under the Prior ATM Facility or the ATM Facility.

In addition to our existing cash, cash equivalents and marketable securities, we are eligible to earn milestone and other payments under our collaboration agreement with BMS and our other collaboration and license agreements. Our

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ability to earn applicable milestone and other payments and the timing of earning these amounts are dependent upon the timing and outcome of development, regulatory and commercial activities and, as such, are uncertain at this time. As of December 31, 2024, our right to contingent payments under our collaboration agreements with BMS and Vor Bio, as well as the retained portions of the contingent upfront payment and other amounts under our license agreement with Vertex, are our only significant committed potential external source of funds.

Cash Flows

The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023, respectively (in thousands):

Year Ended December 31,

Net cash (used in) provided by:

Net Cash Used in Operating Activities

The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.

Net cash used in operating activities was approximately $210.3 million for the year ended December 31, 2024, which primarily consisted of operating expenses that related to increasing our research efforts, the progression of clinical and manufacturing activities in support of our former reni-cel program and supporting business operations.

Net cash used in operating activities was approximately $132.2 million for the year ended December 31, 2023, which primarily consisted of operating expenses related to the focused progression of clinical and manufacturing activities in support of our former reni-cel program, sublicense and license fees, and supporting business operations.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was approximately $162.1 million for the year ended December 31, 2024, primarily related to maturities of marketable securities of $257.2 million. This was offset by $86.2 million of purchases of marketable securities and purchases of property and equipment of $8.8 million.

Net cash used in investing activities was approximately $3.7 million for the year ended December 31, 2023, primarily related to the purchase of property and equipment of $4.7 million. The remaining offset related to maturities of marketable securities of $259.5 million and purchases of marketable securities of $258.5 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was approximately $56.0 million for the year ended December 31, 2024 primarily related to net proceeds received from the sale of future revenue of $55.2 million, proceeds received from issuance of common stock under our employee stock purchase plan of $0.6 million and proceeds from the exercise of stock options of $0.2 million.

Net cash provided by financing activities was approximately $118.0 million for the year ended December 31, 2023, primarily related to proceeds received from the public offering of common stock, net of issuance costs, of $117.1 million in June 2023 and proceeds received from issuance of common stock under our employee stock purchase plan of $0.9 million.

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For a discussion of our cash flows for the year ended December 31, 2022, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 28, 2024.

Funding Requirements

We expect our expenses to decrease over the next few years due to the discontinuation of the reni-cel program, but we will continue to incur significant expenses as we continue to advance our research programs and our preclinical development activities; seek to identify product candidates and additional research programs; initiate preclinical testing and clinical trials for other product candidates we identify and develop; maintain, expand, and project our intellectual property portfolio, including reimbursing our licensors for expenses related to the intellectual property that we in-license from such licensors; and incur costs associated with operating as a public company. In addition, if we obtain marketing approval for any product candidate that we identify and develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution to the extent that such sales, marketing, and distribution are not the responsibility of a collaborator. We do not expect to generate significant recurring revenue unless and until we obtain regulatory approval for and commercialize a product candidate. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.

We expect that our existing cash, cash equivalents and marketable securitieson December 31, 2024, together with the retained portions of the payments payable under our license agreement with Vertex, will fund our operating expenses and capital expenditure requirements into the second quarter of 2027.Our forecast of the period of time through which our existing cash and cash equivalents and investments will be adequate to support our operations is a forward-looking statement and involves significant risks and uncertainties. We have based this forecast on assumptions that may prove to be wrong, and actual results could vary materially from our expectations, which may adversely affect our capital resources and liquidity. We could utilize our available capital resources sooner than we currently expect. The amount and timing of future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:

•the restructuring costs associated with the discontinuation of reni-cel;

•the scope, progress, results, and costs of clinical trials, drug discovery, preclinical development, laboratory testing, and clinical or natural history study trials for other product candidates we develop;

•the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims;

•the costs, timing, and outcome of regulatory review of the product candidates we develop;

•the costs of establishing and maintaining a supply chain for the development and manufacture of our product candidates;

•the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any product candidates for which we receive regulatory approval;

•the success of our collaboration with BMS, including whether BMS exercises any of its options to extend the research program term and/or to additional research programs under our collaboration;

•our ability to establish and maintain additional collaborations on favorable terms, if at all;

•the extent to which we acquire or in-license other medicines and technologies;

•the costs of reimbursing our licensors for the prosecution and maintenance of the patent rights in-licensed by us; and

•our ability to establish and maintain healthcare coverage and adequate reimbursement for any product candidates for which we receive regulatory approval.

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Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive, and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, even if we successfully identify and develop product candidates and those are approved, we will require significant additional amounts in order to launch and commercialize our product candidates and may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of genomic medicines that we do not expect to be commercially available for years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and future royalty sales. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

If we raise funds through additional collaborations, strategic alliances, licensing arrangements, or future royalty sales with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required 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.

Contractual Obligations

As of December 31, 2024, we had non-cancelable operating leases with total future minimum lease payments of $39.9 million, of which $17.1 million will be payable in 2025. These minimum lease payments exclude our share of the facility operating expenses, real-estate taxes and other costs that are reimbursable to the landlord under the leases.

In 2023, we entered into a license and service agreement pursuant to which we leased manufacturing space for our continued research and development activities. The lease commenced April 1, 2024. In September 2024, we modified the lease, and as a result of the modification the lease payments decreased and the notification period for the termination of the license and service agreement increased from 12 months’ prior written notice to 18 months’ prior written notice. In January 2025, we gave our termination notice on the license and service agreement. The license and service agreement will terminate in July 2026. From January 2025 through July 2026, we will incur minimum lease payments of up to $11.1 million.

In October 2024, we entered into a purchase and sale agreement (the “Purchase and Sale Agreement”) with DRI Healthcare Acquisitions LP (the “DRI”) under which we sold, transferred, assigned, and conveyed to DRI certain future license fees and other payments (the “Purchased Receivables”) owed to us by Vertex Pharmaceuticals, Inc. (“Vertex”) under the terms of a license agreement (the “License Agreement”) in exchange for an upfront cash payment by DRI to us of $57.0 million. Under the Purchase and Sale Agreement, DRI is purchasing up to 100% of certain future fixed and sales-based annual license fees owed to us under the License Agreement, which fees range from $5.0 million to $40.0 million per year (inclusive of certain sales-based annual license fee increases), and a mid-double-digit percentage of the $50.0 million contingent upfront payment that we may receive under the License Agreement, in each case after subtracting amounts owing by us to our licensors, The Broad Institute, Inc. and the President and Fellows of Harvard College. We have retained rights to our portions of certain other sales-based annual license fees and the contingent upfront payment that may become due under the License Agreement, and the amounts that correspond to our licensor obligations.

Our agreements with certain institutions to license intellectual property include potential milestone and success fees, sublicense fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs that we may be required to pay. Our agreements to license intellectual property include potential milestone payments that are dependent upon the development of products using the intellectual property licensed under the agreements and contingent upon the achievement of development or regulatory approval milestones, as well as commercial milestones. These potential obligations are contingent upon the occurrence of future events and the timing and likelihood of such potential obligations are not known with certainty. For further information regarding these agreements, please see Part I, Item 1 “Business—Our Collaborations and Licensing Strategy” of this Annual Report on Form 10-K.

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We also enter into contracts in the normal course of business with contract research organizations, contract manufacturing organizations and other vendors to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination at any time upon prior notice.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk related to changes in interest rates. As of December 31, 2024, we had cash and cash equivalents of $131.5 million, primarily held in money market mutual funds, and marketable securities of $138.4 million, primarily consisting of U.S. government-backed securities, U.S. Treasuries and corporate debt securities. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are in the form, or may be in the form of, money market funds or marketable securities and are or may be invested in U.S. Treasury and U.S. government agency obligations. Due to the short-term maturities and low risk profiles of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our investments.

While we contract with certain vendors and institutions internationally, substantially all of our total liabilities as of December 31, 2024 were denominated in the United States dollar and we believe that we do not have any material exposure to foreign currency exchange rate risk.

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Item 8. Financial Statement and Other Supplementary Information.

EDITAS MEDICINE, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID 42) 118

Consolidated Balance Sheets 120

Consolidated Statements of Operations 121

Consolidated Statements of Comprehensive Loss 122

Consolidated Statements of Stockholders’ Equity 123

Consolidated Statements of Cash Flows 124

Notes to Consolidated Financial Statements 126

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Editas Medicine, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Editas Medicine, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company‘s management. Our responsibility is to express an opinion on the Company‘s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the

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consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued Research and Development Expenses

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2015.

Boston, Massachusetts

March 5, 2025

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Editas Medicine, Inc.

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)

December 31,

ASSETS

Current assets:

Prepaid expenses and other current assets 3,136 7,531

Marketable securities — 104,024

Restricted cash and other non-current assets 5,223 8,588

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Liability for sale of future revenues, current 5,000 —

Operating lease liabilities, net of current portion 20,380 24,372

Liability for sale of future revenues - non-current 52,434 —

Deferred revenue, net of current portion 54,204 60,667

Other non-current liabilities 3,072 1,800

Stockholders’ equity

Accumulated other comprehensive income 268 198

Total liabilities and stockholders’ equity $ 341,589 $ 499,153

The accompanying notes are an integral part of the consolidated financial statements.

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Editas Medicine, Inc.

Consolidated Statements of Operations

(amounts in thousands, except per share and share data)

Year Ended December 31,

Operating expenses:

Restructuring charges 12,232 — —

Other income, net:

Other expense, net (3) (1,604) —

Net loss per share, basic and diluted $ (2.88) $ (2.02) $ (3.21)

The accompanying notes are an integral part of the consolidated financial statements.

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Editas Medicine, Inc.

Consolidated Statements of Comprehensive Loss

(amounts in thousands)

Year Ended December 31,

Other comprehensive income (loss):

Unrealized gain (loss) on marketable debt securities 70 3,799 (3,108)

The accompanying notes are an integral part of the consolidated financial statements.

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Editas Medicine, Inc.

Consolidated Statements of Stockholders’ Equity

(amounts in thousands except share data)

Shares Amount

Stock-based compensation expense — — 29,294 — — 29,294

Vesting of restricted common stock awards 286,642 — — — — —

Purchase of common stock under benefits plans 105,714 — 979 — — 979

Unrealized loss on marketable debt securities — — — — (3,108) (3,108)

Exercise of stock options 6,587 — 41 — — 41

Stock-based compensation expense — — 19,798 — — 19,798

Vesting of restricted common stock awards 297,934 — — — — —

Purchase of common stock under benefit plan 115,360 — 919 — — 919

Unrealized gain on marketable debt securities — — — — 3,799 3,799

Stock-based compensation expense — — 21,417 — — 21,417

Vesting of restricted common stock awards 730,157 — — — — —

Purchase of common stock under benefit plans 213,467 — 590 — — 590

Unrealized gain on marketable debt securities — — — — 70 70

The accompanying notes are an integral part of the consolidated financial statements.

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Editas Medicine, Inc.

Consolidated Statements of Cash Flows

(amounts in thousands)

Year Ended December 31,

Cash flow from operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on disposal of fixed assets 149 — —

Non-cash interest expense on liability for sale of future revenues 2,190 — —

Other non-cash items, net (415) 1,596 —

Changes in operating assets and liabilities:

Prepaid expenses and other current assets 4,396 (197) (137)

Other current and non-current liabilities 1,271 1,800 —

Cash flow from investing activities

Proceeds from the sale of equipment — — 18

Cash flow from financing activities

Proceeds from offering of common stock, net of issuance costs — 117,079 —

Proceeds from sale of future revenues, net 55,244

Proceeds from exercise of stock options 193 41 305

Issuance of common stock under benefit plans 590 919 979

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Supplemental disclosure of cash and non-cash activities:

Cash paid in connection with operating lease liabilities 18,447 12,428 14,851

Commencement of right-of-use asset 7,844 — 5,316

Modification of right-of-use asset 2,683 — —

The accompanying notes are an integral part of the consolidated financial statements.

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Editas Medicine, Inc.

Notes to Consolidated Financial Statements

1. Nature of Business

Editas Medicine, Inc. (the “Company”) is an early stage genome editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases. The Company was incorporated in the state of Delaware in September 2013. Its principal offices are in Cambridge, Massachusetts.

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital. The Company has primarily financed its operations through various equity financings, payments received under a research collaboration with Juno Therapeutics, Inc. (“Juno Therapeutics”), a wholly owned subsidiary of the Bristol-Myers Squibb Company (“BMS”), payments received under its former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020, payments received under our purchase and sale agreement with DRI Healthcare Acquisitions LP, and payments received in conjunction with the Company’s license agreement with Vertex Pharmaceuticals, Inc (“Vertex”, and such agreement, the “Vertex License Agreement”).

The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products.

Liquidity

As of December 31, 2024, the Company has raised an aggregate of $1.0 billion in net proceeds through the sale of shares of its common stock in public offerings and at-the-market offerings. The Company also has funded its business from payments received under our purchase and sale agreement with DRI Healthcare Acquisitions LP, payments received under its license agreement with Vertex, its research collaboration with BMS through its wholly owned subsidiary June Therapeutics and its former strategic alliance with Allergan (which was terminated in August 2020). As of December 31, 2024, the Company had cash, cash equivalents and marketable securities of $269.9 million.

In May 2021, the Company entered into a common stock sales agreement with TD Securities (USA) LLC (as successor to Cowen and Company, LLC) (“TD Cowen”), under which the Company from time to time can issue and sell shares of its common stock through TD Cowen in at-the-market offerings for aggregate gross sale proceeds of up to $300.0 million (the “Prior ATM Facility”). The Company amended the common stock sales agreement with TD Cowen in February 2024 in connection with filing a new registration statement. As of December 31, 2024 the Company has not sold any shares of its common stock under the Prior ATM Facility. In March 2025, the Company further amended the common stock sales agreement with TD Cowen in connection with amending its shelf registration statement following the loss of its status as a “well-known seasoned issuer” (as defined under Rule 405 of the Securities Act of 1933, as amended), lowering the amount of shares of common stock it may issue and sell through TD Cowen to aggregate gross sale proceeds of up to $150.0 million (the “ATM Facility”). As of December 31, 2024, the Company had not sold any shares of its common stock under the ATM Facility.

The Company has incurred annual net operating losses in every year since its inception. The Company has an accumulated deficit of $1.5 billion at December 31, 2024. As of March 5, 2025, the issuance date of the consolidated financial statements, the Company expects that its existing cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of the consolidate financial statements. The Company has never generated any product revenue. There can be no assurance that the Company will be able to obtain additional debt or equity financing or generate product revenue or revenues from collaborative partners, on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition.

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2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Editas Medicine, Inc. and its wholly owned subsidiaries, Editas Securities Corporation, which is a Delaware subsidiary created to buy, sell and hold securities, and Editas Medicine, LLC, a Delaware limited liability company. All intercompany transactions and balances have been eliminated.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the ASC and Accounting Standards Updates (“ASU”) of the FASB.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, estimates related to revenue recognition, stock-based compensation expense, the accrual for research and development expenses, valuations of in-process research and development assets, effective interest rates and deferred tax valuation allowances. The Company bases its estimates on historical experience and other market-specific or relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange 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 a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

•Level 1 – Quoted market prices in active markets for identical assets or liabilities.

•Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates, and yield curves.

•Level 3 – Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use.

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 the Company 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 measurement.

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, restricted cash, marketable securities, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, and other current liabilities approximate their fair values, due to their short-term nature.

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Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and amounts held in money market funds.

The Company has restricted cash of $3.9 million held as collateral for the Company’s office and lab facilities and credit card program. The restricted funds are maintained in a traditional bank account.

The following table presents cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets that equal the total amounts on the consolidated statements of cash flows (in thousands):

Year Ended December 31,

Total cash, cash equivalents, and restricted cash $ 135,418 $ 127,529

Marketable Securities

The Company classifies marketable securities with a remaining maturity when purchased of greater than three months and less than one year from the balance sheet date as current. Marketable securities are classified as long-term assets on the consolidated balance sheets if the contractual maturity exceeds one year and the Company does not intend to utilize the marketable securities to fund current operations. For the years ended December 31, 2024 and 2023, the Company’s marketable securities consisted of investments in available-for-sale debt securities.

Available-for-sale debt securities are carried at fair value with the unrealized gains and losses included in accumulated 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 and/or expense over the life of the of the underlying security. Realized gains and losses are included in other income (expense).

At each reporting date, the Company records an allowance for credit losses and reports it as credit loss expense which is included in “Other income (expense), net” in the Company’s consolidated statement of operations. The estimate for credit losses includes a measure of the expected risk of credit loss even if the risk is remote. When assessing financial assets for credit losses, the Company pools financial assets with similar risk characteristics and performs a collective evaluation. A credit loss on an available-for-sale debt security is limited to the difference in fair value and the amortized cost. A previously recognized credit loss may be increased or decreased in subsequent periods if the Company’s estimate of fair value changes. To determine whether to record a credit loss, the Company considers issuer or vendor specific credit ratings and historical losses as well as current economic conditions and its expectations for future economic conditions. To date, the Company has not had any credit losses, and the Company did not have an allowance for credit losses as of December 31, 2024 and 2023.

Accounts Receivable

The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. The Company's receivables primarily relate to amounts reimbursed under its collaboration agreements. The Company believes that credit risk associated with its collaborations partners is not significant. To date, the Company has not had any write-offs of bad debt, and the Company did not have an allowance for doubtful accounts as of December 31, 2024 and 2023.

Concentrations of Credit Risk and Off-Balance Sheet Risk

The Company has no financial instruments with off-balance sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to a concentration of credit risk are cash, cash equivalents, marketable securities and receivables owed to the Company from collaboration partners. The Company’s cash, cash equivalents and marketable securities are held in accounts at a financial

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institution that may exceed federally insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.

Property and Equipment

Property and equipment consists of computers, laboratory equipment, furniture and office equipment, and leasehold improvements and is stated at cost, less accumulated depreciation. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred, while costs of major additions and betterments are capitalized. Depreciation is calculated over the estimated useful lives of the assets using the straight-line method. The Company capitalizes laboratory equipment used for research and development if it has alternative future use in research and development or otherwise.

Asset: Estimated Useful life

Laboratory and manufacturing equipment 5 years

Computer equipment and software 3 years

Furniture and equipment 5 years

Leasehold improvements Shorter of useful life or remaining lease term

Impairment of Long-lived Assets

The Company evaluates long-lived assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value. The Company has not recognized any impairment losses from inception through December 31, 2024.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The Company enters into collaboration agreements and certain other agreements that are within the scope of ASC 606, under which the Company licenses, may license or grants an option to license rights to certain of the Company’s product candidates and performs research and development services in connection with such arrangements. The terms of these arrangements typically include payment of one or more of the following: non-refundable, up-front fees; reimbursement of research and development costs; development, clinical, regulatory and commercial sales milestone payments; and royalties on net sales of licensed products.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.

The promised goods or services in the Company’s arrangements typically consist of a license, or option to license, rights to the Company’s intellectual property or research and development services. The Company provides options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised good or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual

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property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available and whether the goods or services are integral or dependent to other goods or services in the contract.

The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

The Company’s contracts often include development and regulatory milestone payments that are as assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such development and clinical milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration and other research and development revenues in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes 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, the Company has not recognized any royalty revenue resulting from any of the Company’s collaboration or strategic alliance arrangements.

The Company allocates the transaction price based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation.

The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

The Company receives payments from its customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

Research and Development Expenses

Research and development expenses are charged to expense as incurred in performing research and development activities. The costs include employee-related expenses including salaries, benefits, and stock-based compensation expense, costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on the Company’s behalf, the cost of purchasing lab supplies and non-capital equipment used in preclinical and clinical activities and in manufacturing preclinical and clinical study materials, consultant fees, facility costs including rent, depreciation, and maintenance expenses, and fees for acquiring and maintaining licenses under third party licensing agreements which are typically expensed when incurred if the technology licensed has no alternate future uses, including any sublicensing or success payments made to the Company’s licensors. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the accrual or prepaid is

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adjusted accordingly. The Company defers and capitalizes non-refundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. In circumstances where amounts have been paid in excess of costs incurred, the Company records a prepaid expense.

In-process Research and Development Assets

In-process research and development assets that are acquired in a transaction that does not qualify as a business combination under GAAP and that do not have an alternative future use are expensed in the period in which the assets are acquired.

Patent Costs

The Company expenses patent and patent application costs and related legal costs for the prosecution and maintenance of such patents and patent applications, including patents and patent applications the Company in-licenses, as incurred, and classifies such costs as general and administrative expenses in the accompanying consolidated statements of operations.

Liability for Sale of Future Revenues

On October 3, 2024, the Company entered into a purchase and sale agreement (the “Purchase and Sale Agreement”) with DRI Healthcare Acquisitions LP (“DRI”) under which it sold, transferred, assigned, and conveyed to DRI certain future license fees and other payments (the “Purchased Receivables”) owed to the Company by Vertex under the terms of the Vertex License Agreement in exchange for an upfront cash payment by DRI to the Company of $57.0 million. Under the Purchase and Sale Agreement, DRI is purchasing up to 100% of certain future fixed and sales-based annual license fees owed to the Company under the Vertex License Agreement, which fees range from $5.0 million to $40.0 million per year (inclusive of certain sales-based annual license fee increases) and a mid-double-digit percentage of a $50.0 million contingent upfront payment that the Company may receive under the Vertex License Agreement, in each case after subtracting amounts owing by the Company to Broad and Harvard (each term as defined in Note 8, respectively). The Company has retained rights to certain portions of certain sales-based annual license fees and the contingent upfront payment that may become due under the Vertex License Agreement, and the amounts that correspond to its licensor obligations.

In accordance with ASC Topic 470, Borrower’s Accounting for Debt Modification, the Company has accounted for the transaction as debt. The gross proceeds of $57.0 million were recorded as a liability for the sale of future revenues, net of transaction costs of $1.8 million, which will be amortized over the estimated life of the arrangement using the effective interest method.

The Company estimates the effective interest rate used to record non-cash interest expense under the Purchase and Sale Agreement based on the estimate of future revenue payments to be made to DRI. As of December 31, 2024, the estimated effective interest rate under the agreement was 15.7%. Over the life of the arrangement, the actual effective interest rate will be affected by the amount and timing of the payments made to DRI and changes in the Company's revenue forecasts. At each reporting date, the Company will reassess its estimate of total future payments to be made to DRI, and prospectively adjust the effective interest rate and amortization of the liability as necessary. Refer to Note 16 for further details.

Leases

The Company accounts for leases in accordance with ASC Topic 842, Leases. At the inception of an arrangement the Company determines whether the arrangement contains a lease. If a lease is identified in an arrangement, the Company recognizes a right-of-use asset and liability on its balance sheet and determines whether the lease should be classified as a finance or operating lease. The Company does not recognize assets or liabilities for leases with lease terms of less than 12 months. Lease payments for short-term leases are recorded to operating expense on a straight-line basis over the lease term and variable lease payments are recorded in the period in which the obligation for those payments is incurred.

A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease: (i) there is a transfer of ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset, (iv) the present value of the sum of lease payments equals or exceeds substantially all of

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the fair value of the leased asset, and (v) the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of the lease term. All other leases are recorded as operating leases.

Finance and operating lease assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term using the discount rate implicit in the lease. If the rate is not readily determinable, the Company utilizes its incremental borrowing rate at the lease commencement date. Operating lease assets are further adjusted for prepaid or accrued lease payments. Operating lease payments are expensed using the straight-line method as an operating expense over the lease term. Finance lease assets are amortized to depreciation expense using the straight-line method over the shorter of the useful life of the related asset or the lease term. Finance lease payments are bifurcated into (i) a portion that is recorded as imputed interest expense and (ii) a portion that reduces the finance liability associated with the lease.

The Company does not separate lease and non-lease components when determining which lease payments to include in the calculation of its lease assets and liabilities. Variable lease payments are expensed as incurred. If a lease includes an option to extend or terminate the lease, the Company reflects the option in the lease term if it is reasonably certain it will exercise the option.

Stock-based Compensation Expense

The Company accounts for all stock-based awards granted to employees and non-employees as stock-based compensation expense at fair value in accordance with FASB ASC Topic 718 Compensation—Stock Compensation (“ASC 718”). The Company estimates the grant date fair value of restricted stock based on the market value of the Company’s common stock on the date of the grant. The Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model.

The Black-Scholes option pricing model requires the input of certain assumptions, including (1) the expected stock price volatility, (2) the calculation of expected term of the award, (3) the risk-free interest rate, and (4) the expected dividend yield. The Company used its own historical volatility data for its estimates of expected volatility. The Company calculates historical volatility based on a period of time commensurate with the expected term. The Company uses the simplified method as prescribed by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For options granted to non-employees, the Company utilizes the contractual term of the arrangement as the basis for the expected term. The Company determines the risk-free interest rate based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company uses an assumed dividend yield of zero as the Company has never paid dividends and does not have current plans to pay any dividends on its common stock.

Restricted stock awards (“RSAs”) are subject to repurchase rights. Accordingly, the Company has recorded the proceeds from the issuance of RSAs as a liability in the consolidated balance sheets. The restricted stock liability is reclassified into stockholders’ equity as the restricted stock vests.

Service-Based Awards

For stock-based awards issued to employees, non-employee service providers and members of the Company’s board of directors (the “Board”), the Company recognizes the grant date fair value of the service-based options, RSAs or restricted stock unit awards (“RSUs”) on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. If an employee or non-employee service requirement is concluded to be non-substantive, the stock-based compensation expense would be expensed immediately.

Market-Based Awards

For market-based awards, the Company recognizes the grant date fair value of the market-based options over the earlier of the derived service period, pursuant to a Monte-Carlo simulation model, or when the market-based vesting conditions are met. The Company estimates an award's derived service period based on the best estimate of the period over which an award's vesting condition(s) will be achieved. If the market-based vesting conditions are met ahead of the derived service period, the expense will be accelerated. If the market-based vesting conditions are not met and the market-based award is cancelled, the expense will not be reversed unless the market-based award is forfeited.

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Performance-Based Awards

For performance-based awards, the Company recognizes the grant date fair value of the performance-based options or RSUs over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable. Certain awards are subject to both performance and continued service conditions.

The Company classifies stock-based compensation expense in its consolidated statement of operations and comprehensive loss in the same manner in which the award recipient’s salary or service payments are classified. Forfeitures are recorded as they occur. If factors change or different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future.

Success Payments, Research Funding Payments and Notes Payables

Certain arrangements require the Company to make payments, if and when, the Company’s market capitalization reaches specified thresholds for a specific period of time or upon a sale of the Company for consideration in excess of those thresholds or above a specific amount. The payments are accounted for under the provisions of ASC 718, whereby the Company recognizes the expense and liability when it becomes probable that the amounts will become due. The Company records this expense as a research and development expense in its consolidated statements of operations. The arrangements and payments are described more fully in Note 8.

The payments are payable in either cash, common stock or promissory notes payable, depending upon the licensor and the Company’s election. If the Company elects to issue a promissory note relating to contractual obligations, the promissory note bears interest at 4.8% per annum. Outstanding principal and accrued interest on the promissory notes are typically payable on the earlier of five months or a specified period of time following a Company sale or change of control event, subject to certain exceptions.

Income taxes

Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the weight of available evidence, it is more likely than not that the deferred tax assets will be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

The Company assesses the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where they have operations to determine the potential effect on the Company’s business and any assumptions they have made about their future taxable income. The Company cannot predict whether any specific proposals will be enacted, the terms of any such proposals or what effect, if any, such proposals would have on the Company if they were to be enacted.

Comprehensive Loss

Comprehensive loss currently consists of net loss and changes in unrealized gains and losses on marketable securities.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or CODM, in deciding how to allocate resources and assess performance. The Company and the Company’s CODM, the Company’s Chief Executive Officer, or CEO, view the Company’s operations and manage the Company’s business as a single operating segment, which is the business of developing and commercializing genome editing technology.

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Recently Adopted Accounting Pronouncements

In November 2023, the FASB issues ASU 2023-07 Segment Reporting - Improvements to Reportable Segment Disclosures which amends Topic 280 by enhancing segment reporting by requiring more detailed expense information for each reportable segment. Under the guidance, public entities are required to disclose (1) significant segment expense categories and amounts as those regularly provided to the CODM for each reportable segment and how the CODM uses the reported measures of a segment’s profit or loss to assess segment performance and decide how to allocate resources; (2) the amount and composition of other segment items included in reported segment profit or loss, and (3) the CODM’s position and title. Additionally, multiple measures of a segment’s profit or loss may be reported, under certain conditions, and single reportable segment entities must apply Topic 280 in its entirety. Refer to Note 18 for additional information on the Company’s segment reporting.

The total of the reportable segment’s amount for the measure of profit or loss is to be reconciled to the public entity’s consolidated income before income taxes and discontinued operations. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted the ASU as of and for the period ended December 31, 2024.

Recently Issued Accounting Pronouncements

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 is intended to improve the disclosure of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied either prospectively or retrospectively. The Company has not early adopted this ASU and is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the United States and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statement disclosures.

In October 2023, the FASB issued ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative, which incorporates certain SEC disclosure requirements into the ASC. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety ASC topics, allow investors to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the ASC with the SEC's regulations. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this ASU should be applied prospectively. The Company does not expect ASU 2023-06 will have a material impact to its consolidated financial statements.

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3. Cash Equivalents and Marketable Securities

Cash equivalents and marketable securities consisted of the following at December 31, 2024 (in thousands):

Cash equivalents and marketable securities:

Government agency securities — — — — —

Cash equivalents and marketable securities consisted of the following at December 31, 2023 (in thousands):

Cash equivalents and marketable securities:

The Company's available-for-sale securities are subject to a periodic impairment review. A debt security is considered to be impaired when its fair value is less than its carrying cost, in which case the Company would further review the investment to determine whether it is other-than-temporarily impaired. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, intent to sell, and whether it is more likely than not we will be required to sell the investment before the recovery of its cost basis. If an investment is other-than-temporarily impaired or subject to credit losses, the Company writes it down through the statement of operations and comprehensive loss to its fair value and establishes that value as a new cost basis for the investment.

We determined that none of our available-for-sale securities were other-than-temporarily impaired as of December 31, 2024 and 2023, and we did not hold any marketable securities that had been in an unrealized loss position for more than twelve months. As such, the Company believes that it is more likely than not that investments will be held until maturity or a forecasted recovery of fair value.

Based on our procedures under the expected credit loss model, including an assessment of unrealized losses in our portfolio, the Company concluded that any unrealized losses on marketable securities were not attributable to credit and, therefore, did not record an allowance for credit losses for these securities as of December 31, 2024 and 2023. As of December 31, 2024, the Company holds no securities with remaining maturities greater than one year.

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4. Fair Value Measurements

Assets measured at fair value on a recurring basis as of December 31, 2024 were as follows (in thousands):

Cash equivalents:

Marketable securities:

Restricted cash and other non-current assets:

Assets measured at fair value on a recurring basis as of December 31, 2023 were as follows (in thousands):

Cash equivalents:

Marketable securities:

Restricted cash and other non-current assets:

5. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

As of

Laboratory and manufacturing equipment $ 29,128 $ 25,043

Furniture and office equipment 264 264

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The Company recorded $5.8 million, $6.1 million, and $6.3 million in depreciation expense during the years ended December 31, 2024, 2023 and 2022, respectively.

6. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

As of December 31,

External research and development expenses $ 11,630 $ 16,204

Intellectual property and patent related fees 1,471 983

Professional service expenses 1,593 750

Employee termination benefits 10,475 —

Contract termination costs 1,757 —

7. Leases

The Company has multiple lease agreements for office, laboratory and manufacturing space with varying contractual terms set to expire between 2025 and 2028. Typically, base rent payments commence at the beginning of each lease term and continue through the term of the respective lease. The Company’s lease agreements have escalating rent clauses, which require higher rent payments in future years. The Company has two significant leases for office and laboratory space located in Cambridge, Massachusetts, and one significant lease for manufacturing space in Devens, Massachusetts.

The Company’s leases are included on its consolidated balance sheet as follows (in thousands):

As of

Operating lease liabilities, current $ (14,652) $ (12,164)

Operating lease liabilities, noncurrent $ (20,380) $ (24,372)

During the years ended December 31, 2024, 2023 and 2022, the Company recorded $21.0 million, $15.2 million and $13.6 million of expense related to operating lease costs and $2.8 million, $3.3 million and $3.0 million related to variable costs associated with the Company’s operating leases.

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Maturities of the Company’s lease liabilities as of December 31, 2024 were as follows (in thousands):

Maturity of lease liabilities: Year Ended December 31, 2024

Total minimum lease payments $ 39,947

Less: imputed interest $ (4,915)

Total operating lease liabilities at December 31, 2024 $ 35,032

The weighted-average remaining lease term is 2.9 years and the weighted-average discount rate is 9.1%.

8. Commitments and Contingencies

The Company is a party to a number of license agreements under which the Company licenses patents, patent applications and other intellectual property from third parties. As such, the Company is obligated to reimburse licensors for various costs including upfront licenses fees, annual license fees, certain licensor expense reimbursements, success payments, research funding payments, and milestones triggerable upon certain development, regulatory, and commercial events as well as royalties on future products. These contracts are generally cancellable, with notice, at the Company’s option and do not have significant cancellation penalties.

Broad Sponsored Research Agreement

In 2018, the Company entered into a sponsored research agreement, which was amended in January 2021 (as amended, the “Sponsored Research Agreement”) with The Broad Institute, Inc. (“Broad”). The Sponsored Research Agreement provides for Broad to conduct research useful or relevant to genome editing in the field of genomic medicines for the prevention or treatment of human disease with funding from the Company. Under the Sponsored Research Agreement, Broad granted to the Company an exclusive right of first negotiation for licenses from Broad with respect to patentable inventions developed by Broad in the course of the sponsored research, subject to certain limitations and retained rights (“Sponsored Invention Licenses”).

Under the Sponsored Research Agreement, the Company is obligated to make payments (“Market Cap Research Funding”) in the event the Company’s market capitalization reaches certain amounts for a specified period of time. Unless the Company has undergone a change in control, Market Cap Research Funding is payable by the Company in cash, in shares of common stock, or in the form of promissory notes, which may be settled in shares of common stock at the election of the Company. In aggregate, the Company has triggered $25.0 million in Market Cap Research Funding and has primarily settled these amounts through the issuance of shares of its common stock. The remaining $100.0 million in Market Cap Research Funding may be triggered when the Company’s market capitalization reaches various low-ten to eleven figure dollar amounts or in the event of a Company sale. The Company is not required to make additional Market Cap Research Funding payments if the Company, whether directly or through its affiliates or sublicensees, is not researching, developing, or commercializing products based on or incorporating inventions exclusively licensed to the Company from Broad subject to certain exclusions.

The Sponsored Research Agreement is terminable by each party upon the occurrence of specified bankruptcy events of the other party and otherwise will continue in effect until the remaining Market Cap Research Funding payments are received by Broad and such time as the Company has no further rights of first negotiation for Sponsored Invention Licenses, unless otherwise mutually agreed between the parties.

Broad & Harvard License Agreements

The Company has entered into agreements with Broad and the President and Fellows of Harvard College (“Harvard”) to license certain patent rights owned or co-owned by the institutions. The foundational patent rights that were in-licensed by the Company include Cas9-I (as amended and restated to date, the “Cas9-I License Agreement”), Cas12a

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(formerly known as Cpf1) (as amended, the “Cpf1 License Agreement”), and Cas9-II (as amended, the “Cas9-II License Agreement”) (collectively referred to herein as the “License Agreements”). The Company received exclusive, worldwide, royalty-bearing, sublicensable licenses to certain patent rights to develop and commercialize licensed product and a non-exclusive, worldwide, royalty-bearing sublicensable license under the same patent rights for all other purposes, subject to certain limitations and retained rights. The Company is obligated to use commercially reasonable efforts to research, develop, and commercialize licensed products. The Company is also required to achieve certain development milestones within specified time periods for products covered by the License Agreements, with Broad or Harvard, as applicable, having the right to terminate the License Agreements, on a license agreement-by-license agreement basis, if the Company fails to achieve these milestones within the required time periods. Broad or Harvard may grant licenses under specified circumstances to third parties that wish to develop and commercialize products that target a particular gene that otherwise would fall within the scope of the exclusive licenses granted to the Company, provided that the Company is not, directly or through any of its affiliates, sublicensees, or collaborators, researching, developing, or commercializing a product directed toward the same gene target, or can demonstrate to Broad’s and/or Harvard’s, as applicable, reasonable satisfaction that the Company is interested in researching, developing, and commercializing a product directed toward the same gene target, that the Company has a commercially reasonable research, development, and commercialization plan to do so, and the Company commences and continues reasonable commercial efforts under such plan. The Company has the right to terminate each of the License Agreements at will with four months written notice to Broad. Unless terminated earlier, the term of each of the License Agreements will expire on a country-by-country basis, upon the expiration of the last to expire valid claim of the licensed patent rights in such country.

Milestones

In aggregate, the Company may pay up to $14.8 million, $20.0 million, and $3.7 million in clinical and regulatory milestones under the Cas9-I License Agreement, Cpf1 License Agreement, and Cas9-II License Agreement, respectively. In addition, the Company owes aggregate sales milestones totaling $54.0 million, $54.0 million, and $13.5 million under the Cas9-I License Agreement, Cpf1 License Agreement, and Cas9-II License Agreement, respectively. If the licensed product or service prevents or treats a human disease that afflicts fewer than a specified number of patients in the aggregate in the U.S. or a specified number of patients per year in the U.S., the clinical and regulatory milestones reduce to $4.1 million, $5.5 million, and $1.1 million under the Cas9-I License Agreement, Cpf1 License Agreement, and Cas9-II License Agreement, respectively. In addition, the aggregated sales milestones reduce to $36.0 million, $36.0 million, and $9.0 million under the Cas9-I License Agreement, Cpf1 License Agreement, and Cas9-II License Agreement, respectively. Certain clinical and regulatory milestones are subject to a multiplier payout equivalent to a double-digit percentage in the event of a change of control.

Royalties

The Company is required to pay on a product-by-product and country-by-country basis, a mid single-digit percentage royalty on net sales of licensed products made by the Company, its affiliates, or its sublicensees. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim. If the Company is legally required to pay royalties to a third party on net sales of the Company’s products because such third party holds patent rights that cover such licensed product, then the Company can credit up to a specified percentage of the amount paid to such third party against the royalties due to the institutions. Such credit may not exceed 50% of the applicable royalties paid by the Company to the applicable third party. The Company’s obligation to pay royalties will expire on a product-by-product and country-by-country basis upon the later of the expiration of the last to expire valid claim of the patent rights that covers each licensed product or service in each country or the tenth anniversary of the date of the first commercial sale of the licensed product or licensed service.

Licensor Expense Reimbursements

The Company is obligated to reimburse to Broad and Harvard for expenses incurred by each of them associated with the prosecution and maintenance of the patent rights that the Company licenses from them pursuant to the license agreement by and among the Company, Broad and Harvard, including the interference and opposition proceedings involving patents licensed to the Company under the license agreement, and other license agreements between the Company and Broad. As such, the Company anticipates that it has a substantial commitment in connection with these proceedings until such time as these proceedings have been resolved, but the amount of such commitment is not determinable. The Company incurred an aggregate of $8.2 million, $7.5 million, and $8.8 million in expense during the years ended December 31, 2024, 2023 and 2022, respectively, for such reimbursement.

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Success Payments

Under the Cpf1 License Agreement and Cas9-II License Agreement, the Company is obligated to make payments (“Success Payments”) in the event the Company’s market capitalization reaches certain thresholds for a specified period of time, or in the event of a change in control of the Company, if the consideration is in excess of those thresholds. Unless the Company has undergone a change in control, Success Payments are payable by the Company in cash, shares of the Company’s common stock, or in the form of promissory notes, which may be settled in shares of common stock at the election of the Company. In the event of a change in control of the Company, the Success Payments are required to be paid in cash. The Success Payments under the Cpf1 License Agreement are triggered when the Company’s market capitalization reaches certain amounts ranging from $750.0 million to $10.0 billion for a specified period of time. The Success Payments under the Cas9-II License Agreement are triggered when the Company’s market capitalization reaches certain amounts ranging from $1.0 billion to $9.0 billion for a specified period of time. In aggregate, the Company has triggered $25.0 million and $7.5 million of Success Payments under the Cpf1 License Agreement and Cas9-II License Agreement, respectively. The Company has primarily settled these amounts through the issuance of shares of its common stock.

The remaining $100.0 million and $22.5 million in Success Payments under the Cpf1 License Agreement and Cas9-II License Agreement, respectively are only payable if the market capitalization threshold are met and the Company or any affiliate or sublicensee has at least one product candidate covered by a claim of a patent right licensed to the Company that is or was subject of a clinical trial.

Other Payments

The Company pays nominal annual license fees to the institutions. If the Company sublicenses any of the patent rights to a third party, the institutions have the right to receive sublicense income, which may be offset by the licensor expense reimbursement payments that the Company has made to the institution subject to certain limitations.

Litigation

The Company is not a party to any litigation and did not have contingency reserves established for any litigation liabilities as of December 31, 2024 or 2023.

9. Collaboration Agreements

The Company has entered into multiple collaborations, out-licenses and strategic alliances with third parties that typically involve payments to or from the Company, including up-front payments, payments for research and development services, option payments, milestone payments and royalty payments to or from the Company.

Collaboration Revenue

As of December 31, 2024, the Company’s contract liabilities were primarily related to the Company’s collaboration with BMS and the Company's license agreement with Vertex. The following table presents changes in the Company’s accounts receivable and contract liabilities for the year ended December 31, 2024 (in thousands):

Contract liabilities:

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During the years ended December 31, 2024 and 2023, the Company recognized the following collaboration revenue (in thousands):

Revenue recognized in the period from: December 31, 2024 December 31, 2023

Amounts included in deferred revenue at the beginning of the period $ 8,463 $ —

Performance obligations satisfied in previous periods $ — $ —

Amendment to BMS Collaboration Agreement

In March 2024, the Company entered into an amendment (“2024 Amendment”) to the Second Amended and Restated Collaboration and License Agreement, dated as of November 11 2019, by and between the Company and Juno Therapeutics (the “2019 Collaboration Agreement”) extend the collaboration to November 2026, with options to extend the collaboration for up to an additional two years, and provided BMS the ability to select up to three new gene targets for research.

Accounting Assessment

The Company evaluated the 2024 Amendment and concluded that the agreement qualifies as a contract with a customer under ASC 606. The contract modification was accounted for on a prospective basis as if it were a termination of the existing contract and the creation of a new contract since the promised goods and services were distinct from the goods and services that were transferred on or before the effective date of the amendment.

The Company has identified the following performance obligations under the 2024 Amendment: eighteen material rights for additional development and commercialization licenses for other gene editing tools specific to a gene target and enzyme combination (or a “Program”).

As of December 31, 2024 the total transaction price was approximately $56.7 million, comprised of the remaining deferred revenue balance that was not recognized pursuant to the 2019 Amended Collaboration Agreement. The Company utilized the most likely amount method to estimate any development and regulatory milestone payments to be received, as well as extension term fees. As of December 31, 2024, there were no milestone or extension term fees included in the transaction price. The Company considers the stage of development and the risks associated with the remaining development required to achieve the milestone, as well as whether the achievement of the milestone is outside the control of the Company or BMS. The outstanding milestone payments and extension term fees were fully constrained as of December 31, 2024, as a result of the uncertainty of whether any of the milestones will be achieved or the term would be extended. The Company has determined that any commercial milestones and sales-based royalties will be recognized when the related sales occur. The Company reevaluates the transaction price at each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The Company concluded that rights and attributes of each of the development and commercialization licenses are identical for both the license granted at inception and the licenses that may be issued in the future upon exercise of the associated option. Each development and commercialization license is differentiated only by the Program to which it relates. The Company has considered the early stage of the science and the uncertainty of success and concluded that the probability of scientific success and opt-in is equal amongst all Programs. In addition, each Program is multi-functional, and a combination of Programs can be utilized in the development of a product candidate. As such, the Company concluded that the standalone selling price of each material right is the same. The Company will recognize the transaction price allocated to each material right when the material right is exercised, lapsed or expired.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized $18.1 million, $4.5 million and $18.8 million of revenue related to BMS. As of December 31, 2024, the Company recorded $50.2 million of deferred revenue, of which $50.2 million is classified as long-term on the Company's consolidated balance sheets.

Beam Therapeutics License Agreement

In 2018, the Company entered into a license agreement with Beam Therapeutics Inc. (“Beam,” and such agreement, the “Beam License Agreement”). Pursuant to the Beam License Agreement, the Company granted to Beam a worldwide, exclusive (subject to certain exceptions), sublicensable (subject to certain conditions), development and

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commercialization license under certain intellectual property controlled by the Company for the use of base editing therapies for the treatment of any field of human diseases and conditions, such to certain exceptions. Additionally, the Company granted Beam a non-exclusive research license. Lastly, the Company provided to Beam with an exclusive option to obtain three development and commercialization licenses to additional groups of intellectual property owned or controlled by the Company, on a group-by-group basis, during the specified option period, subject to certain exceptions.

The Company received preferred stock valued at $3.6 million and received a nominal upfront cash payment. The Company subsequently sold its equity investment in Beam following Beam’s initial public offering in 2023. The Company is also eligible to receive additional consideration if Beam exercises its option to obtain additional licenses for a fee ranging from a mid-teen million-dollar amount to a low to mid-eight-digit dollar amount per license, depending on the timing of the option exercise. To the extent that any products are commercialized, the Company would be entitled to receive tiered low single-digit royalty payments, plus any royalties that would be due from the Company to any applicable licensors related to the sale of such licensed products.

Unless earlier terminated by either party pursuant to the terms of the agreement, the Beam License Agreement will continue in full force and effect and will expire on a licensed product-by-licensed product and country-by-country basis upon the expiration of the royalty term with respect to such licensed product in such country. Beam has the right, at its sole discretion, at any time to terminate the Beam License Agreement in its entirety or on a group-by-group of intellectual property basis, upon ninety days written notice to the Company. Upon termination, all rights and licenses granted by the Company will immediately terminate.

Accounting Assessment

The Company identified the following performance obligations (i) the research license and (ii) the initial development and commercialization license. In addition, the Company concluded that the three options for the additional development and commercialization licenses are not discounted and therefore they do not represent material rights.

The total transaction price at the inception of the arrangement was determined to be approximately $3.8 million, consisting of the upfront cash payment and the non-cash value of the preferred shares received by the Company. The consideration associated with the exercise of the option(s) will be accounted for if and when Beam elects to exercise their options. The other forms of consideration, including nominal cost reimbursement for past patent and license fees and sublicense income reimbursement are based on the most-likely amount and were excluded from the initial transaction price as the most likely amount was estimated to be zero or the amount was otherwise fully constrained due to the significant uncertainties surrounding each payment. The commercial-based milestone reimbursement and the sales-based royalty payments will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted and therefore have also been excluded from the transaction price. Since both of the performance obligations were delivered at the inception of the arrangement and the licenses were made available for Beam’s use and benefit, the Company recognized the total transaction price at the inception of the agreement.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue under the Beam License Agreement of approximately $0.8 million, $0.2 million and $0.3 million, respectively.

Vertex Pharmaceuticals License Agreement

On December 12, 2023, the Company and Vertex entered into a license agreement. Under terms of the agreement, Vertex obtained a non-exclusive license for Editas Medicine’s Cas9 gene editing technology for ex vivo gene editing medicines targeting the BC11A gene in the fields of sickle cell disease and beta thalassemia, including exagamglogene autotemcel (exa-cel). In connection with the license agreement License Agreement, the Company received an upfront payment of $50.0 million. The Company is also eligible to receive annual license fees ranging from $10.0 million to $40.0 million annually, inclusive of certain fixed and sales-based annual license fee increases, through 2034 and other contingent fees of $50.0 million.

Accounting Assessment

The Company assessed this arrangement in accordance with Topic 606 and concluded that the contract counterparty, Vertex, is a customer.

The Company identified a single performance obligation, which is the non-exclusive license to certain Cas9-I patents.

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The total transaction price at the inception of the arrangement was determined to be $60.0 million, consisting of an upfront cash payment and the first annual license fee installment. The remaining annual license fees and contingent fees represent variable consideration that was evaluated under the most likely amount method, and excluded from the initial transaction price because the amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the annual license fees and contingent fees are outside the control of the Company. They will be recognized when each payment is determined to be probable. The Company will re-evaluate the transaction price in each reporting period, as uncertain events are resolved, or as other changes in circumstances occur. Since the single performance obligation was delivered at the inception of the arrangement and the license was made available for Vertex’s use and benefit, the Company recognized the total transaction price at the inception of the agreement.

During the years ended December 31, 2024 and 2023, the Company recognized revenue under the Vertex License Agreement of $10.0 million and $60.0 million, respectively.

10. Preferred Stock

The Company’s amended and restated certificate of incorporation authorized 5,000,000 shares of undesignated preferred stock that may be issued from time to time by the Board in one or more series. As of December 31, 2024, the Company had no shares of preferred stock issued or outstanding.

11. Common Stock

The voting, dividend, and liquidation rights of the holders of the common stock are subject to and qualified by the rights, powers, and preferences of holders of the preferred stock that may be issued from time to time. The common stock had the following characteristics as of December 31, 2024:

Voting

The holders of shares of common stock are entitled to one vote for each share of common stock held at any meeting of stockholders and at the time of any written action in lieu of a meeting.

Dividends

The holders of shares of common stock are entitled to receive dividends, if and when declared by the Board. Cash dividends may not be declared or paid to holders of shares of common stock until all unpaid dividends on any outstanding redeemable convertible preferred stock have been paid in accordance with their terms. No dividends have been declared or paid by the Company since its inception.

2013 Stock Incentive Plan

In September 2013, the board of directors adopted the 2013 Stock Incentive Plan, which was subsequently amended (as amended, the “2013 Plan”), which provides for the grant of incentive stock options and nonqualified stock options or other awards including restricted stock awards, unrestricted stock awards, and restricted stock units to the Company’s employees, officers, directors, advisors, and consultants for the purchase of up to 1,057,692 shares of the Company’s common stock, which has been amended several times, and as of July 2015, a total of 6,317,769 shares were reserved.

The terms of stock awards agreements, including vesting requirements, are determined by the board of directors and are subject to the provisions of the 2013 Plan. The stock options granted to employees generally vest over a four-year period and expire ten years from the date of grant. Certain awards contain performance based vesting criteria. There has only been one such award to date. Certain options provide for accelerated vesting in the event of a change in control, as defined in the applicable options. Awards granted to non-employee consultants generally vest monthly over a period of one to four years. In connection with the Company’s initial public offering (“IPO”), the Board determined to grant no further awards under the 2013 Plan.

2015 Stock Incentive Plan

The Board adopted and the Company’s stockholders approved the 2015 stock incentive plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards,

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restricted stock units, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2015 Plan.

The number of shares reserved for issuance under the 2015 Plan is subject to further increases for (a) any additional shares of the Company’s common stock subject to outstanding awards under the 2013 Plan that expire, terminate, or are otherwise surrendered, cancelled, forfeited, or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right and (b) annual increases, to be added as of the first day of each fiscal year, from January 1, 2017 until, and including, January 1, 2026, equal to the lowest of 2,923,076 shares of common stock, 4% of the number of shares of common stock outstanding on such first day of the fiscal year in question and an amount determined by the Company’s board of directors. In January 2025, the remaining shares reserved but unissued under the 2015 Plan increased to 12,248,887 shares pursuant to the annual increase described in the prior sentence.

2015 Employee Stock Purchase Plan

The Company’s board of directors adopted and the Company’s stockholders approved the 2015 employee stock purchase plan (the “2015 ESPP”). The number of shares reserved for issuance under the 2015 ESPP is subject to annual increases, to be added as of the first day of each fiscal year, from January 1, 2017 until, and including, January 1, 2026, in an amount equal to the least of (a) 769,230 shares of common stock, (b) 1% of the total number of shares of common stock outstanding on the first day of the applicable year, and (c) an amount determined by the board of directors. The first offering under the 2015 ESPP opened on December 1, 2017. In January 2025, the board of directors determined that there should be no increase in shares available under the 2015 ESPP for 2025.

Inducement Awards

From time to time the Board approves inducement awards to certain employees outside of the existing equity compensation plans in connection with such employees commencing employment with the Company. Inducement awards are typically a service-based option and a restricted stock unit and are subject to the Company’s typical vesting terms and the employee’s continued service relationship with the Company through the applicable vesting dates. In May 2023, July 2023 and September 2023, the Board approved three inducement grants to the Company’s recently hired Chief Financial Officer, Chief Scientific and Chief Commercial and Strategy Officer, respectively.

Shares Reserved for Future Issuance

As of December 31,

12. Stock-Based Compensation

Total compensation cost recognized for all stock-based compensation awards in the consolidated statements of operations was as follows (in thousands):

Year Ended December 31,

Total stock-based compensation expense $ 21,417 $ 19,798

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Restricted Stock and Restricted Stock Unit Awards

The following table summarizes restricted stock and restricted stock unit awards activity for the instruments discussed above as of December 31, 2024 and 2023 is as follows:

Shares Weighted Average Grant Date Fair Value Per Share

The expense related to restricted stock and restricted stock unit awards granted for the years ended December 31, 2024, 2023 and 2022 was $5.3 million, $5.1 million, and $7.9 million, respectively.

The restricted stock and restricted stock units granted in the year ended December 31, 2024 include 422,000 units granted to certain employees that contain performance-based vesting provisions. The expense related to the performance-based vesting of restricted stock units was $3.5 million, $0.5 million and $4.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, total unrecognized compensation expense related to unvested restricted stock and restricted stock unit awards was $12.2 million, which the Company expects to recognize over a remaining weighted-average period of 2.3 years.

Stock Options

The following is a summary of stock option activity for the year ended December 31, 2024:

The total intrinsic value of options exercised for the years ended December 31, 2024, 2023 and 2022 was $0.04 million, $0.03 million, and $0.09 million, respectively.

Using the Black-Scholes option pricing model, the weighted average fair value of options containing service-based vesting granted during the years ended December 31, 2024, 2023, and 2022 was $5.62, $6.04, and $15.87, respectively. The expense related to options containing service-based vesting was $12.2 million, $13.9 million, and $14.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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The fair value of each service-based vesting option issued was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

Year Ended December 31,

Expected option term (in years) 6.20 6.19 6.25

Risk free interest rate 4.2 % 4.2 % 1.7 %

Expected dividend yield — — —

As of December 31, 2024, total unrecognized compensation expense related to stock options was $22.1 million, which the Company expects to recognize over a remaining weighted-average period of 2.60 years.

13. 401(k) Savings Plan

The Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pretax basis. Effective in 2017, the Company will provide a 200% match of employee contributions up to a limit on the Company’s contributions of the lesser of $7,000 and 3% of the employee’s salary. The Company made $1.7 million, $1.2 million, and $1.4 million in contributions to the 401(k) Plan for the years ended December 31, 2024, 2023 and 2022, respectively.

14. Income Taxes

The Company had no income tax expense due to operating losses incurred for the years ended December 31, 2024 and 2023.

A reconciliation of the income tax expense computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

Year Ended December 31,

Income tax computed at federal statutory tax rate 21.0 % 21.0 %

State taxes, net of federal benefit 4.9 % 6.0 %

General business credit carryovers 2.6 % 2.5 %

162m limitation (0.2) % — %

Stock options (0.2) % (4.3) %

Non-deductible expenses (0.1) % (0.2) %

Tax rate changes (2.6) % (4.5) %

Change in valuation allowance (25.5) % (21.8) %

Other — % 1.3 %

(0.1) % — %

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