UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 001-38327 Cue Biopharma, Inc. (Exact name of registrant as specified in its charter) Delaware 47-3324577 (State or other jurisdictio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 001-38327 Cue Biopharma, Inc. (Exact name of registrant as specified in its charter) Delaware 47-3324577 (State or other jurisdicti ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Cue Biopharma is a clinical-stage biopharmaceutical company focused on engineering novel injectable biologics using its Immuno-STAT™ platform to selectively modulate T cells, prioritizing oncology programs and seeking partnerships for non-oncology programs, with no commercial revenue and a need for additional capital - Cue Biopharma is a clinical-stage biopharmaceutical company developing novel injectable biologics via its Immuno-STAT™ platform to selectively engage and modulate targeted T cells[17](index=17&type=chunk)[485](index=485&type=chunk) - The company is currently prioritizing its oncology programs, specifically the IL-2 based CUE-100 series, and is actively seeking third-party support for its non-oncology programs (CUE-200, CUE-300, CUE-400 series)[18](index=18&type=chunk)[20](index=20&type=chunk)[486](index=486&type=chunk) - As of the report date, the company has not commenced any commercial revenue-generating operations and has limited cash flows, indicating a need for additional capital[19](index=19&type=chunk)[487](index=487&type=chunk) [Overview](index=5&type=section&id=Overview) The company is a clinical-stage biopharmaceutical firm utilizing its proprietary Immuno-STAT™ platform to develop injectable biologics for selective T cell modulation, aiming to treat cancer, chronic infectious diseases, and autoimmune conditions while minimizing broad immune activation, with current strategic focus on the CUE-100 oncology series and other programs seeking external support - The Immuno-STAT™ platform is designed to selectively engage and modulate targeted T cells directly within the patient's body, aiming to fight cancer and restore health while avoiding deleterious side effects of broad immune activation[17](index=17&type=chunk) - Current strategic priority is on drug product candidates for treating cancer in the CUE-100 series, which utilizes rationally engineered interleukin 2 (IL-2) within the Immuno-STAT framework[18](index=18&type=chunk) - Programs outside of oncology (CUE-200, CUE-300, CUE-400 series) are actively seeking third-party support through partnerships, collaborations, or alternative funding structures[18](index=18&type=chunk) [Our Immuno-STAT Platform Pipeline](index=5&type=section&id=Our%20Immuno-STAT%20Platform%20Pipeline) The company's pipeline prioritizes the IL-2-based CUE-100 series for oncology, with CUE-101 being the most advanced clinical asset in Phase 1b monotherapy and Phase 1 combination trials for HPV-driven head and neck cancer, while other candidates include CUE-102 (targeting WT1) with an IND filing anticipated by Q1 2022, and CUE-103 (targeting KRAS G12V), with the Neo-STAT™ platform being developed for broader targeting flexibility - CUE-101, the most advanced clinical stage asset, is currently in a Phase 1b monotherapy trial and a first-line Phase 1 combination trial with KEYTRUDA® (pembrolizumab) for HPV-driven recurrent/metastatic head and neck cancer (R/M HNSCC)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - CUE-102, targeting Wilm's tumor protein (WT1) over-expressed in over 20 different cancers, is anticipated to have an Investigational New Drug (IND) application filed by the end of the first quarter of 2022[26](index=26&type=chunk)[68](index=68&type=chunk) - The Neo-STAT™ platform is a derivative scaffold designed to provide greater flexibility for targeting multiple tumor epitopes, enhancing production efficiencies, and potentially enabling personalized neo-antigen strategies[28](index=28&type=chunk)[75](index=75&type=chunk) [Our Business Strategy](index=7&type=section&id=Our%20Business%20Strategy) The company's core strategy is to become a leader in highly selective biologics for immune modulation, involving advancing the IL-2-based CUE-100 oncology series through clinical trials to demonstrate selective T cell activation and anti-tumor immunity, while also seeking strategic partnerships for its non-oncology programs (CUE-200, CUE-300, CUE-400 series) - Primary objective is to become a leading biopharmaceutical company developing breakthrough, highly selective and differentiated biologics for safe and effective therapeutic immune modulation[32](index=32&type=chunk) - Key strategies include advancing the IL-2-based CUE-100 series for oncology to demonstrate selective and tolerable IL-2 delivery to tumor-specific T cells and expanding patient access[32](index=32&type=chunk) - Actively seeking strategic partnerships and collaborations or alternative funding structures for programs outside of oncology, including the CUE-200, CUE-300, and CUE-400 series[33](index=33&type=chunk) [Our Approach](index=7&type=section&id=Our%20Approach) The Immuno-STAT platform is designed to mimic the natural immune synapse by combining key T cell activation signals (Signal 1: peptide-MHC complex, Signal 2: co-stimulatory signals like IL-2) into a single, stable molecular scaffold, aiming for selective T cell modulation, avoiding broad immune activation, and built on an Fc backbone for stability and manufacturability - The Immuno-STAT platform's core protein framework combines key T cell activation signals (Signal 1: stabilized peptide-MHC complex, Signal 2: activating co-stimulatory signals like modified IL-2) into a singular molecular scaffold[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - This design allows for selective delivery of activating signals to tumor-specific T cells, circumventing global immune activation and enabling therapeutic dosing of highly immune-activating signals such as IL-2[39](index=39&type=chunk)[44](index=44&type=chunk) - Immuno-STAT molecules are manufactured using established processes similar to antibody and Fc-fusion molecules, providing modularity and structural stability via an Fc backbone[39](index=39&type=chunk)[43](index=43&type=chunk) [The Immuno-STAT: "Immune Responses, on Cue"](index=9&type=section&id=The%20Immuno-STAT%3A%20%22Immune%20Responses%2C%20on%20Cue%22) The Immuno-STAT platform develops biologic drug candidates that selectively modulate antigen-specific T cells by fusing a TCR targeting pMHC complex (Signal 1) with co-stimulatory signaling molecules (Signal 2), mimicking natural immune responses, aiming to overcome challenges of systemic, non-specific immune activation and the complexities of adoptive cell therapies, offering 'off-the-shelf' biologics with targeted action and convenient administration - Immuno-STATs are designed to emulate natural immune synapse signals by fusing a TCR targeting pMHC complex (Signal 1) with co-stimulatory signaling molecules (Signal 2) for targeted T cell modulation[45](index=45&type=chunk) - Preliminary clinical data from the CUE-101 Phase 1 trial supports the hypothesis of selective T cell activation with corresponding antitumor activity and clinical benefit[46](index=46&type=chunk) - The platform offers advantages over existing immunotherapies by providing 'off-the-shelf' biologics, direct in-patient administration, specific T cell targeting, broad disease target access, standard delivery, and cost-effective production[51](index=51&type=chunk) [Enhancing the Body's Capacity to Fight Cancer](index=9&type=section&id=Enhancing%20the%20Body%27s%20Capacity%20to%20Fight%20Cancer) The company believes its IL-2-based CUE-100 series can overcome the limitations of non-specific T cell modulation in cancer by selectively activating and amplifying only cancer-specific immune cells directly within the patient's body, aiming to achieve therapeutically effective dose levels with better tolerability compared to broad immune activation strategies - The IL-2-based CUE-100 series aims to selectively activate and amplify cancer-specific immune cells directly in the patient's body, addressing the challenge of non-specific T cell modulation[50](index=50&type=chunk)[51](index=51&type=chunk) - This selective targeting is expected to achieve well-tolerated and therapeutically effective dose levels, offering clinical advantages over competing immunotherapy approaches[50](index=50&type=chunk)[51](index=51&type=chunk) [IL-2 Therapy Challenges](index=10&type=section&id=IL-2%20Therapy%20Challenges) Current IL-2 therapies face challenges due to lack of selectivity and indiscriminate immune activation, leading to poor tolerability and limited therapeutic dosing, while the CUE-100 series Immuno-STATs are engineered with an affinity-attenuated IL-2 variant to selectively deliver IL-2 to tumor-specific T cells, activated only when their TCR is engaged with the Immuno-STAT's pHLA component, thus enabling specific activation and amplification of cancer-relevant T cells - Wild-type IL-2 and its variants indiscriminately engage T cells, leading to poor tolerability and limited therapeutic dosing ranges due to non-selective immune activation[52](index=52&type=chunk) - The CUE-100 series Immuno-STATs are engineered with an affinity-attenuated IL-2 variant, designed to selectively act only on tumor-specific T cells whose TCR is engaged to the pHLA component[53](index=53&type=chunk) - This concurrent signaling (HLA-epitope/TCR and IL-2 co-stimulatory) enables selective and specific activation and amplification of cancer-relevant T cells[53](index=53&type=chunk) [CUE-101](index=10&type=section&id=CUE-101) CUE-101 is the company's lead product candidate from the CUE-100 series, designed as a fusion protein biologic to target and activate antigen-specific T cells against HPV-driven cancers, incorporating an IL-2 variant and a peptide-MHC complex (HLA-A*02:01) with a dominant peptide from the HPV-16 E7 protein, a key driver of tumorigenesis - CUE-101 is a fusion protein biologic from the CUE-100 series, designed to target and activate antigen-specific T cells for HPV-driven cancers[54](index=54&type=chunk) - Its design includes an IL-2 variant and a pMHC composed of HLA-A*02:01 complexed with a dominant peptide from the HPV-16 E7 protein, a primary driver of tumorigenesis[54](index=54&type=chunk) - Extensive in vitro and in vivo preclinical studies with CUE-101 have been published in Clinical Cancer Research[56](index=56&type=chunk) [CUE-101 Clinical Development](index=11&type=section&id=CUE-101%20Clinical%20Development) CUE-101 is undergoing multiple clinical trials for HPV-driven cancers, including a Phase 1 monotherapy trial for second-line and beyond HPV+R/M HNSCC, a Phase 1 combination trial with KEYTRUDA for first-line HPV+R/M HNSCC, and an investigator-sponsored Phase 1b neoadjuvant trial, addressing a significant unmet medical need with approximately 24,600 new cases of HPV+ head and neck, cervical, and genitoanal cancers annually in the United States - CUE-101 is currently in a Phase 1 monotherapy trial for second-line and beyond HPV+R/M HNSCC and a Phase 1 combination trial with KEYTRUDA for first-line HPV+R/M HNSCC[57](index=57&type=chunk) - An investigator-sponsored Phase 1b neoadjuvant trial for locally advanced HPV+ HNSCC patients was initiated in the second half of 2021[57](index=57&type=chunk) - HPV+ cancers represent a significant unmet medical need, with approximately **24,600 cases** and **9,000 deaths annually** in the United States[58](index=58&type=chunk) [Phase 1 Monotherapy Trial of CUE-101](index=11&type=section&id=Phase%201%20Monotherapy%20Trial%20of%20CUE-101) The Phase 1 monotherapy trial of CUE-101 for HPV+R/M HNSCC completed its dose escalation phase in June 2021, with no maximum tolerated dose identified across seven cohorts, demonstrating a favorable tolerability profile, and the expansion stage is enrolling patients at the 4 mg/kg recommended Phase 2 dose (RP2D), with preliminary results from 14 evaluable patients at RP2D showing one confirmed partial response lasting over 36 weeks and six patients with stable disease for at least 12 weeks, alongside an observed trend of enhanced overall survival - The dose escalation portion of the Phase 1 monotherapy trial for CUE-101 completed in June 2021, treating 38 patients across seven cohorts (0.06mg/kg to 8mg/kg) without identifying a maximum tolerated dose (MTD)[59](index=59&type=chunk) - At the recommended Phase 2 dose (RP2D) of **4 mg/kg**, 14 evaluable patients showed one confirmed partial response (PR) lasting over **36 weeks** and six patients with confirmed stable disease (SD) lasting at least **12 weeks**[59](index=59&type=chunk) - Preliminary safety data from 45 patients as of January 25, 2022, indicates CUE-101 is well tolerated at RP2D, with common adverse events (fatigue, anemia, decreased lymphocyte counts) consistent with IL-2 administration or CPIs, and no observations of capillary leak syndrome or severe cytokine storm[60](index=60&type=chunk)[63](index=63&type=chunk) [Phase 1 Trial of CUE-101 in Combination with KEYTRUDA](index=12&type=section&id=Phase%201%20Trial%20of%20CUE-101%20in%20Combination%20with%20KEYTRUDA) The Phase 1 combination trial of CUE-101 with KEYTRUDA for first-line R/M HNSCC, initiated in Q4 2020, has shown encouraging early signs of activity, with no dose-limiting toxicities observed across three cohorts, and three out of three patients in cohort two (2 mg/kg) demonstrated reductions in target tumor lesions, with two patients in dose escalation (cohorts two and three) having ongoing, confirmed partial responses - The Phase 1 combination trial of CUE-101 with KEYTRUDA for first-line R/M HNSCC was initiated in Q4 2020, with the first patient dosed in Q1 2021[65](index=65&type=chunk) - No dose-limiting toxicities have been observed in the three cohorts to date[65](index=65&type=chunk) - Early signs of activity include reductions in target tumor lesions for **three out of three patients** in cohort two (2 mg/kg) and two ongoing, confirmed partial responses among four patients treated in dose escalation (cohorts two and three)[65](index=65&type=chunk) [Other Applications of Immuno-STATs to Oncology](index=13&type=section&id=Other%20Applications%20of%20Immuno-STATs%20to%20Oncology) The Immuno-STAT platform's modularity is being leveraged to develop additional oncology candidates like CUE-102 and CUE-103, and the Neo-STAT platform, to address tumor heterogeneity and escape mechanisms, with Neo-STAT, with its 'empty' MHC pocket, offering flexibility for targeting multiple tumor antigens, neo-antigens, and post-translationally modified antigens, potentially enhancing production efficiency and enabling personalized cancer immunotherapy - The Immuno-STAT platform's modularity and versatility are being leveraged to design and develop additional Immuno-STATs, including CUE-102 and CUE-103, to address tumor heterogeneity and escape mechanisms[67](index=67&type=chunk) - The Neo-STAT™ platform, a derivative scaffold with a stable 'peptide-less' MHC pocket, allows for chemical attachment of defined peptides post-manufacturing, offering greater flexibility for targeting multiple tumor epitopes and potentially personalized neo-antigen strategies[67](index=67&type=chunk)[75](index=75&type=chunk) - Significant progress has been made with the Neo-STAT platform, including feasibility proof of concept and experimental data demonstrating activation and expansion of primary human T cells with HLA-A02 Neo-STAT molecules[76](index=76&type=chunk) [CUE-102](index=13&type=section&id=CUE-102) CUE-102, part of the CUE-100 series, utilizes the same framework as CUE-101 but targets the Wilm's tumor protein (WT1), an oncofetal antigen over-expressed in over 20 different cancers, with preclinical data supporting selective WT1-specific T cell activation, expansion, and cytotoxic killing, and an IND filing for CUE-102 is anticipated by the end of Q1 2022 - CUE-102 leverages the CUE-101 framework but targets WT1, an oncofetal antigen over-expressed in more than **20 different cancers**, including solid tumors and hematologic malignancies[68](index=68&type=chunk) - Preclinical data demonstrates ex-vivo expansion of WT1-specific T cells from human donors and in vivo expansion in transgenic mice, along with polyfunctional effector function and cytotoxic killing of target cells[69](index=69&type=chunk) - An Investigational New Drug (IND) application for CUE-102 is anticipated to be filed by the end of the first quarter of 2022[68](index=68&type=chunk) [CUE-103](index=14&type=section&id=CUE-103) CUE-103 is a CUE-100 series Immuno-STAT being developed to target the KRAS G12V mutation, a primary tumor driver mutation found in various solid tumor types like colorectal, lung, and pancreatic cancers, with preclinical data demonstrating the feasibility of producing HLA-A11 Immuno-STATs with functional engagement and activity on targeted T cells specific for the G12V mutation, highlighting the platform's modularity - CUE-103 is a CUE-100 series Immuno-STAT targeting the KRAS G12V mutation, associated with many solid tumor types including colorectal carcinoma, lung cancer, and pancreatic cancer[74](index=74&type=chunk) - Preclinical data presented at SITC 2020 suggested the feasibility of producing HLA-A11 Immuno-STATs with functional engagement and activity on targeted T cells specific for the G12V mutation[74](index=74&type=chunk) - The development of CUE-103 underscores the modularity of the Immuno-STAT platform by extending its application to additional HLA alleles and modifying targeting epitopes[74](index=74&type=chunk) [Neo-STAT Platform](index=14&type=section&id=Neo-STAT%20Platform) The Neo-STAT™ platform is a next-generation derivative of the CUE-100 series, featuring a 'peptide-less' MHC pocket that allows for covalent attachment of defined peptides post-manufacturing, designed to significantly enhance productivity, increase flexibility for targeting multiple tumor antigens (including neo-antigens and post-translationally modified antigens), and potentially enable personalized neo-antigen strategies in cancer immunotherapy, with feasibility proof-of-concept achieved, demonstrating T cell activation with various epitopes - The Neo-STAT™ platform is a next-generation derivative approach designed to enhance productivity and flexibility by generating a 'peptide-less' MHC pocket within the Immuno-STAT scaffold for post-manufacturing peptide conjugation[75](index=75&type=chunk) - This platform has the potential to target multiple tumor antigens, neo-antigens, and post-translationally modified antigens, and could enable personalized neo-antigen strategies in cancer immunotherapy[75](index=75&type=chunk) - Significant progress includes feasibility proof of concept, creation of a master cell line, and experimental data demonstrating expansion and activation of primary human T cells with HLA-A02 Neo-STAT molecules deploying different T cell epitopes[76](index=76&type=chunk) [Application of Immuno-STATs Outside of Oncology: CUE-200, CUE-300 and CUE-400](index=15&type=section&id=Application%20of%20Immuno-STATs%20Outside%20of%20Oncology%3A%20CUE-200%2C%20CUE-300%20and%20CUE-400) Beyond oncology, the Immuno-STAT platform has developed three additional biologic series: CUE-200 for chronic infectious diseases (targeting T cell exhaustion), CUE-300 for autoimmune diseases with known autoantigens (incorporating PD-L1 co-modulator), and CUE-400 for autoimmune diseases with diverse/unknown autoantigens (expanding induced regulatory T cells), but due to strategic prioritization on oncology, the company is actively seeking third-party support for these non-oncology programs - The CUE-200 series focuses on cell surface receptors (CD80 and/or 4-1BBL) to address T cell exhaustion in chronic infections[31](index=31&type=chunk) - The CUE-300 series for autoimmune diseases incorporates the inhibitory PD-L1 co-modulator for selective inhibition of autoreactive T cells, with data generated through a collaboration with Merck[31](index=31&type=chunk)[80](index=80&type=chunk) - The CUE-400 series, also for autoimmune diseases, represents novel bispecific molecules designed to selectively expand induced regulatory T cells (iTregs), with CUE-401 incorporating IL-2 and TGF-beta[31](index=31&type=chunk)[82](index=82&type=chunk) - Due to strategic focus on oncology, the company is actively seeking third-party support (partnerships, collaborations, or alternative funding) to further develop these non-oncology programs[31](index=31&type=chunk)[84](index=84&type=chunk) [Our License Agreement with Einstein](index=16&type=section&id=Our%20License%20Agreement%20with%20Einstein) The company holds an exclusive worldwide license from Albert Einstein College of Medicine (Einstein License) for patent rights related to its core Immuno-STAT technology platform, which is a royalty-bearing license including milestone payments (up to **$1.85 million** per product/indication, **$5.75 million** cumulative sales) and annual maintenance fees, and the company issued 671,572 shares of common stock to Einstein and is obligated to meet specific diligence milestones, all of which have been met as of the report date - The company holds an exclusive worldwide, royalty-bearing license from Albert Einstein College of Medicine for patent rights related to its core technology platform for engineering biologics to control T cell activity[85](index=85&type=chunk)[86](index=86&type=chunk) - Milestone payments can aggregate up to **$1.85 million** for each Licensed Product and new indication, plus up to **$5.75 million** for cumulative sales of all Licensed Products, with a **$150,000** milestone payment made for CUE-101 IND approval[87](index=87&type=chunk) - The company is obligated to meet certain due diligence milestones, including initiating clinical trials and submitting FDA applications, and has met all required milestones as of the report date[93](index=93&type=chunk)[94](index=94&type=chunk) [Our Collaboration Agreement with Merck](index=17&type=section&id=Our%20Collaboration%20Agreement%20with%20Merck) The company entered into an exclusive patent license and research collaboration agreement with Merck in November 2017 to research and develop Immuno-STAT drug product candidates for certain autoimmune disease indications, with Merck providing a **$2.5 million** upfront payment and the company eligible for up to **$371 million** in research, development, regulatory, and commercial milestones, plus tiered royalties, and the research collaboration term expired on December 31, 2021, with discussions ongoing for a potential path forward - An exclusive patent license and research collaboration agreement was established with Merck in November 2017 for autoimmune disease indications, with Merck funding further development of selected Immuno-STAT candidates[95](index=95&type=chunk) - The company received a **$2.5 million** upfront payment and is eligible for up to **$101 million** in R&D milestones, **$120 million** in regulatory milestones, and **$150 million** in commercial milestones, in addition to tiered single-digit royalties[98](index=98&type=chunk) - The research collaboration term was extended through December 31, 2021, and has since expired, with ongoing discussions with Merck to define a clinical candidate[100](index=100&type=chunk) [Our Collaboration Agreement with LG Chem](index=18&type=section&id=Our%20Collaboration%20Agreement%20with%20LG%20Chem) The company has a collaboration, license, and option agreement with LG Chem (November 2018) for oncology Immuno-STATs, granting LG Chem an exclusive license to develop, manufacture, and commercialize CUE-101 and two additional cancer antigens (WT1 selected) in the LG Chem Territory (Asia/Australia), while the company retains US and global rights, and LG Chem made a **$5.0 million** upfront payment and a **$5.0 million** equity investment, with potential for up to **$400 million** in milestones and tiered single-digit royalties, and the company has earned **$6.75 million** in milestones to date under this agreement - A collaboration, license, and option agreement with LG Chem (effective November 6, 2018) grants LG Chem exclusive rights to develop, manufacture, and commercialize CUE-101 and two additional cancer antigens (WT1 selected) in the LG Chem Territory (Australia, Japan, Republic of Korea, Singapore, Malaysia, Vietnam, Thailand, Philippines, Indonesia, China, Taiwan)[101](index=101&type=chunk)[102](index=102&type=chunk)[108](index=108&type=chunk) - LG Chem provided a **$5.0 million** non-refundable upfront payment and purchased approximately **$5.0 million** of the company's common stock[103](index=103&type=chunk) - The company is eligible to receive additional aggregate payments of approximately **$400 million** for research, development, regulatory, and commercial milestones, plus tiered single-digit royalties on net sales in the LG Chem Territory, with milestones earned including **$2.5 million** (CUE-101 IND acceptance), **$1.25 million** (preclinical candidate selection), and **$3.0 million** (clinical product candidate confirmation)[103](index=103&type=chunk)[105](index=105&type=chunk) [Our Intellectual Property](index=19&type=section&id=Our%20Intellectual%20Property) The company's business relies heavily on its intellectual property, including **76 issued patents** and numerous pending applications (**52 US, 20 PCT, 190 foreign**) covering its Immuno-STAT and Neo-STAT platforms, specific biologics, and treatment methods, with these patents set to expire no earlier than 2033-2042, and Cue products protected until at least December 2037, and the company actively protects its IP through patents, trade secrets, and confidentiality agreements, but acknowledges risks of challenges, circumvention, and varying international protection - As of December 31, 2021, the company owned or licensed **76 issued patents**, **52 pending U.S. patent applications**, **20 pending international PCT applications**, and **190 pending foreign patent applications**[109](index=109&type=chunk) - These intellectual property rights protect the Immuno-STAT platform, Neo-STAT platform, CAR-T and ex-vivo applications, RDI-STAT platform, specific biologic molecules, drug product candidates, and methods of treatment[109](index=109&type=chunk) - Granted patents generally have a term of **20 years** from their U.S. non-provisional priority filing date, with those specifically covering Cue products expiring no earlier than December 2037, subject to extensions[111](index=111&type=chunk) [Competition](index=20&type=section&id=Competition) The biopharmaceutical industry is highly competitive, with the company facing rivals from established pharmaceutical and biotechnology firms, academic institutions, and government agencies, and competitors are developing various immunotherapy technologies, including bi-specific antibodies, cell therapies, antibody-drug conjugates, immune checkpoint inhibitors, and modified cytokines, and the company believes its antigen-specific targeting of cytokines, coupled with genetically modified IL-2, provides a competitive advantage, but acknowledges the risk of new products, price competition, and the need to demonstrate superior efficacy, convenience, tolerability, or safety - The company faces significant competition from established and emerging pharmaceutical and biotechnology companies, academic institutions, and governmental agencies[112](index=112&type=chunk) - Competitors are developing various immunotherapy technologies, including bi-specific antibodies, cell therapies, antibody-drug conjugates, immune checkpoint inhibitors, and modified cytokines[113](index=113&type=chunk) - The company believes its approach of antigen-specific targeting of cytokines, such as IL-2, by engineering proteins with a peptide-MHC targeting moiety coupled to genetically modified cytokines, provides a competitive advantage[113](index=113&type=chunk) [Government Regulation and Licensure of Products](index=21&type=section&id=Government%20Regulation%20and%20Licensure%20of%20Products) The company's products are subject to extensive government regulation in the United States (FDA) and internationally (e.g., European Union), covering all stages from research and development to commercialization, including stringent requirements for preclinical and clinical testing, manufacturing (GMP), marketing approval (BLA/MAA), post-approval monitoring, and pricing/reimbursement, with various expedited review programs existing but not guaranteeing approval, and compliance with these complex and evolving regulations, including those for orphan drugs, biosimilars, and companion diagnostics, is critical and resource-intensive, with non-compliance leading to significant penalties - Pharmaceutical products, including biologics, are extensively regulated by government authorities in the United States (FDA) and other countries (e.g., European Union) across all stages from research to commercialization[120](index=120&type=chunk) - The regulatory process involves preclinical testing (GLP), manufacturing under GMP, IND applications, IRB approval, multi-phase clinical trials (GCP), BLA/MAA submissions, and post-approval compliance, requiring substantial time and financial resources[121](index=121&type=chunk) - Expedited review programs (Fast Track, Breakthrough Therapy, Priority Review, Accelerated Approval, Regenerative Advanced Therapy) exist but do not change approval standards or guarantee faster review[161](index=161&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk) [Human Capital](index=39&type=section&id=Human%20Capital) As of December 31, 2021, the company had **57 full-time** and **two part-time employees**, primarily located in Cambridge, Massachusetts, and emphasizes a workplace culture of respect, collaboration, and integrity, focusing on attracting, developing, and retaining diverse talent through competitive benefits and professional development, and in response to the COVID-19 pandemic, safety protocols such as remote work and travel restrictions were implemented and largely remained in place during 2021 - As of December 31, 2021, the company had **57 full-time** and **two part-time employees**, with most located in Cambridge, Massachusetts[245](index=245&type=chunk) - The company is committed to fostering a workplace that encourages respect, collaboration, communication, transparency, and integrity, and focuses on attracting, developing, and retaining diverse talent[246](index=246&type=chunk) - During 2020 and 2021, additional safety protocols were implemented due to the COVID-19 pandemic, including remote working standards, non-essential travel pauses, and limits on in-person meetings[247](index=247&type=chunk) [Status as an Emerging Growth Company](index=39&type=section&id=Status%20as%20an%20Emerging%20Growth%20Company) The company is classified as an "emerging growth company" (EGC) under the JOBS Act and will retain this status until December 31, 2022, having irrevocably opted out of the extended transition period for new accounting standards but benefiting from other EGC provisions, such as exemptions from auditor attestation for internal controls and reduced executive compensation disclosure, and is also a "smaller reporting company," which provides similar reduced disclosure obligations - The company is an "emerging growth company" (EGC) as defined by the JOBS Act and will remain so until December 31, 2022[248](index=248&type=chunk)[448](index=448&type=chunk) - It has irrevocably elected to opt out of the extended transition period for complying with new or revised financial accounting standards[250](index=250&type=chunk)[449](index=449&type=chunk) - As an EGC, the company benefits from reduced disclosure obligations, including exemption from auditor attestation requirements for internal control over financial reporting and reduced executive compensation disclosure[250](index=250&type=chunk)[448](index=448&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks inherent to a clinical-stage biopharmaceutical company, including a history of operating losses and no commercial revenue, substantial dependence on the success of its limited clinical-stage drug candidates, and challenges in securing additional financing, with operational risks including the impact of the COVID-19 pandemic, potential adverse events in clinical trials, intense competition, reliance on third-party CROs and CMOs, and the need to protect intellectual property, and extensive government regulation, healthcare reform, and compliance with various laws (e.g., anti-kickback, HIPAA) also posing substantial risks to its business, financial condition, and future profitability - The company is a clinical-stage biopharmaceutical company with no history of commercial revenue, a history of operating losses (accumulated deficit of approximately **$197.4 million** as of December 31, 2021), and may never achieve profitability[253](index=253&type=chunk)[254](index=254&type=chunk) - The business is substantially dependent on the success of its drug product candidates, with only CUE-101 currently in clinical trials, and significant additional R&D and clinical testing are required for regulatory approval and commercialization[260](index=260&type=chunk)[261](index=261&type=chunk) - Key risks include potential adverse events or toxicities in clinical trials, significant competition from other biopharmaceutical companies, reliance on third parties for clinical trials and manufacturing, and the inability to protect intellectual property[272](index=272&type=chunk)[300](index=300&type=chunk)[311](index=311&type=chunk)[323](index=323&type=chunk) - The company is subject to extensive government regulation, including the lengthy and unpredictable marketing approval process, potential competition from biosimilars, and compliance with healthcare fraud and abuse laws, which could lead to substantial penalties[351](index=351&type=chunk)[364](index=364&type=chunk)[394](index=394&type=chunk) - Future losses and negative cash flow are anticipated, requiring additional financing which may dilute stockholders, restrict operations, or encumber assets, and the company's loan agreement with Silicon Valley Bank imposes covenants and restrictions[436](index=436&type=chunk)[437](index=437&type=chunk)[438](index=438&type=chunk)[439](index=439&type=chunk)[444](index=444&type=chunk)[445](index=445&type=chunk) [Item 1B. Unresolved Staff Comments](index=71&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section indicates that there are no unresolved staff comments from the SEC regarding the company's previous filings [Item 2. Properties](index=72&type=section&id=Item%202.%20Properties) The company's principal office and laboratory facilities are located in Cambridge, Massachusetts, encompassing approximately **19,900 square feet**, with the lease for this space extended in October 2021 to March 2024, with monthly rental rates increasing from **$375,000** to **$388,000**, and additionally, the company leases three procedure and holding rooms for approximately **$61,000** per month until June 2022 - The company's principal office and laboratory space in Cambridge, Massachusetts, covers approximately **19,900 square feet**[476](index=476&type=chunk) - The lease term for the principal space was extended in October 2021 from June 2022 to March 2024[476](index=476&type=chunk) - Monthly rental rates for the principal space are **$375,000** until June 2022, increasing to **$388,000** for the remainder of the term, and additional laboratory space costs approximately **$61,000** per month until June 2022[476](index=476&type=chunk) [Item 3. Legal Proceedings](index=72&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any pending legal proceedings that are expected to have a material adverse effect on its business or financial condition, but it may, however, encounter various claims and legal actions in the ordinary course of business - The company is not currently a party to any pending legal proceedings that are believed to have a material adverse effect on its business or financial conditions[477](index=477&type=chunk) - The company may be subject to various claims and legal actions arising in the ordinary course of business from time to time[477](index=477&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=73&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock has been listed on the Nasdaq Capital Market under the symbol "CUE" since January 2, 2018, with approximately **51 registered holders** as of March 7, 2022, and the company has never paid cash dividends and does not anticipate doing so in the foreseeable future, intending to reinvest earnings into the business, with dividend payments currently restricted by the terms of its Loan Agreement - The company's common stock has been listed on the Nasdaq Capital Market under the symbol "CUE" since January 2, 2018[480](index=480&type=chunk) - As of March 7, 2022, there were approximately **51 registered holders** of the company's common stock[481](index=481&type=chunk) - The company has never paid cash dividends and does not anticipate paying any in the foreseeable future, planning to reinvest all earnings into the business, and its ability to pay dividends is currently restricted by the Loan Agreement[482](index=482&type=chunk)[460](index=460&type=chunk) [Item 6. [Reserved.]](index=73&type=section&id=Item%206.%20%5BReserved.%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's financial condition and operational results, highlighting its status as a clinical-stage biopharmaceutical company focused on oncology, with ongoing R&D and clinical trials, detailing the impact of the COVID-19 pandemic on operations and supply chain, outlining critical accounting policies, and discussing significant collaboration agreements with Merck and LG Chem, with the company reporting an increase in collaboration revenue but also higher operating expenses, resulting in a net loss, and liquidity primarily from equity offerings and collaboration payments, with existing cash expected to fund operations for the next 12 months, though additional capital will be needed - The company is a clinical-stage biopharmaceutical company prioritizing oncology programs (CUE-100 series) and seeking third-party support for non-oncology programs[485](index=485&type=chunk)[486](index=486&type=chunk) - The COVID-19 pandemic caused supply chain disruptions and delayed CUE-102 GMP manufacturing, impacting its IND filing date[489](index=489&type=chunk) - Collaboration revenue increased significantly in 2021, primarily due to cost sharing and a **$3.0 million** milestone from the LG Chem Collaboration Agreement[542](index=542&type=chunk) Consolidated Statements of Operations and Comprehensive Loss (Years Ended December 31) | Metric | 2021 (USD) | 2020 (USD) | |:---|:---|:---| | Collaboration revenue | $14,941,370 | $3,154,325 | | General and administrative expenses | $17,306,678 | $14,651,205 | | Research and development expenses | $41,346,765 | $33,545,705 | | Total operating expenses | $58,653,443 | $48,196,910 | | Loss from operations | $(43,712,073) | $(45,042,585) | | Interest income, net | $45,898 | $463,914 | | Provision for income taxes | $(495,000) | $(206,250) | | Net loss | $(44,161,175) | $(44,784,921) | | Comprehensive loss | $(44,168,306) | $(44,767,469) | | Net loss per common share – basic and diluted | $(1.41) | $(1.56) | | Weighted average common shares outstanding – basic and diluted | 31,285,418 | 28,688,625 | - The company's cash, cash equivalents, and marketable securities totaled approximately **$64.4 million** at December 31, 2021, down from **$84.9 million** at December 31, 2020, and management believes existing cash resources are sufficient for at least the next 12 months, but additional capital will be needed for future operations[553](index=553&type=chunk)[573](index=573&type=chunk)[574](index=574&type=chunk) [Overview](index=76&type=section&id=Overview) Cue Biopharma is a clinical-stage biopharmaceutical company focused on developing injectable biologics using its Immuno-STAT™ platform to selectively modulate T cells for cancer, chronic infectious diseases, and autoimmune disorders, with the company prioritizing its CUE-100 oncology series and actively seeking partnerships for its non-oncology programs, and it has not yet generated commercial revenue and requires additional capital for growth - The company is a clinical-stage biopharmaceutical company engineering novel injectable biologics to selectively engage and modulate targeted T cells using its Immuno-STAT™ platform[485](index=485&type=chunk) - Current strategic focus is on drug product candidates for treating cancer in the CUE-100 series, while actively seeking third-party support for non-oncology programs (CUE-200, CUE-300, CUE-400 series)[486](index=486&type=chunk) - The company has not yet commenced commercial revenue-generating operations, has limited cash flows, and will need additional capital to fund its growth and ongoing business[487](index=487&type=chunk) [The COVID-19 Pandemic](index=76&type=section&id=The%20COVID-19%20Pandemic) The COVID-19 pandemic led the company to implement precautionary measures like remote work and travel restrictions, and while these actions have not significantly impacted productivity, the company experienced supply chain disruptions for lab supplies, and notably, the manufacturing of GMP material for the CUE-102 drug candidate was delayed by approximately **six weeks** due to the Defense Production Act, pushing its IND filing from Q4 2021 to Q1 2022 - The company implemented precautionary measures due to COVID-19, including remote working standards and travel restrictions, which have not significantly impacted productivity or operations[488](index=488&type=chunk) - Supply chain disruptions for lab supplies used in preclinical research have been experienced[489](index=489&type=chunk) - Manufacture of GMP material for the CUE-102 drug product candidate was delayed by approximately **six weeks** due to the Defense Production Act, shifting its anticipated IND filing from Q4 2021 to Q1 2022[489](index=489&type=chunk) [Plan of Operation](index=76&type=section&id=Plan%20of%20Operation) As a development-stage company, the majority of its activities are dedicated to research and development, with the plan to maximize the value of Immuno-STAT drug candidates through R&D, early-stage clinical development, and strategic partnerships for later clinical stages, alongside robust patent protection - As a development-stage company, the majority of business activities are devoted to furthering research and development[492](index=492&type=chunk) - The company intends to maximize the value of its Immuno-STAT drug product candidates by focusing on research, testing, optimization, pilot studies, early-stage clinical development, and potentially partnering for later clinical stages[490](index=490&type=chunk) - A fundamental part of the corporate development strategy is to establish strategic partnerships with leading pharmaceutical or biotechnology organizations[493](index=493&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=77&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) The preparation of financial statements requires management to make significant estimates and assumptions, particularly in revenue recognition (ASC 606), research and development costs, stock-based compensation, and income taxes (ASC 740), with these estimates, based on historical experience and forecasts, affecting reported asset/liability amounts and revenue/expense recognition, and no material changes to critical accounting policies occurred in 2021 - Financial statements are prepared in accordance with U.S. GAAP, requiring management to make estimates and assumptions affecting reported amounts of assets, liabilities, revenue, and expenses[494](index=494&type=chunk) - Critical accounting policies include revenue recognition (ASC 606), research and development costs, stock-based compensation, and income taxes (ASC 740)[495](index=495&type=chunk)[496](index=496&type=chunk)[499](index=499&type=chunk)[503](index=503&type=chunk)[509](index=509&type=chunk) - There were no material changes to the company's critical accounting policies and estimates as of December 31, 2021[495](index=495&type=chunk) [Significant Contracts and Agreements Related to Research and Development Activities](index=79&type=section&id=Significant%20Contracts%20and%20Agreements%20Related%20to%20Research%20and%20Development%20Activities) The company has significant R&D agreements, including an exclusive license with Albert Einstein College of Medicine for its core technology, requiring milestone payments and annual fees, and collaboration agreements with Merck (for autoimmune diseases) and LG Chem (for oncology) involve upfront payments, potential milestones, and royalties, with the Merck agreement's research term expiring in December 2021, while the LG Chem agreement has yielded several milestone payments and ongoing cost-sharing - The Einstein License Agreement grants the company exclusive worldwide rights to its core technology platform, requiring significant milestone payments and annual maintenance fees[514](index=514&type=chunk)[515](index=515&type=chunk) - The Merck Collaboration Agreement, for autoimmune disease programs, provided a **$2.5 million** upfront payment and potential milestones up to **$371 million**, and its research term expired on December 31, 2021[521](index=521&type=chunk)[523](index=523&type=chunk)[526](index=526&type=chunk) - The LG Chem Collaboration Agreement, for oncology Immuno-STATs in Asian markets, included a **$5.8 million** upfront payment and **$5.0 million** equity investment, with potential milestones up to **$400 million**, and the company recognized approximately **$12.8 million** in revenue from this agreement in 2021[528](index=528&type=chunk)[530](index=530&type=chunk)[533](index=533&type=chunk) [Results of Operations](index=82&type=section&id=Results%20of%20Operations) For the years ended December 31, 2021 and 2020, the company reported a net loss of approximately **$44.16 million** and **$44.78 million**, respectively, with collaboration revenue significantly increasing to **$14.94 million** in 2021 from **$3.15 million** in 2020, driven by the LG Chem agreement, and operating expenses also rose, with general and administrative expenses increasing to **$17.31 million** and research and development expenses to **$41.35 million** in 2021, primarily due to higher compensation, professional fees, and lab costs, and interest income decreased substantially due to marketable securities maturing Consolidated Statements of Operations and Comprehensive Loss (Years Ended December 31) | Metric | 2021 (USD) | 2020 (USD) | |:---|:---|:---|\n| Collaboration revenue | $14,941,370 | $3,154,325 | | General and administrative expenses | $17,306,678 | $14,651,205 | | Research and development expenses | $41,346,765 | $33,545,705 | | Total operating expenses | $58,653,443 | $48,196,910 | | Loss from operations | $(43,712,073) | $(45,042,585) | | Interest income, net | $45,898 | $463,914 | | Provision for income taxes | $(495,000) | $(206,250) | | Net loss | $(44,161,175) | $(44,784,921) | | Comprehensive loss | $(44,168,306) | $(44,767,469) | | Net loss per common share – basic and diluted | $(1.41) | $(1.56) | | Weighted average common shares outstanding – basic and diluted | 31,285,418 | 28,688,625 | - Collaboration revenue increased by approximately **$11.787 million** in 2021, primarily due to cost sharing and a **$3.0 million** milestone from the LG Chem Collaboration Agreement[542](index=542&type=chunk) - General and administrative expenses increased by approximately **$2.656 million** in 2021, mainly due to higher stock-based compensation, professional fees, and employee/board compensation[543](index=543&type=chunk) - Research and development expenses increased by approximately **$7.801 million** in 2021, driven by higher laboratory and drug substance manufacturing costs, employee/advisory board compensation, and other professional fees[546](index=546&type=chunk) [Liquidity and Capital Resources](index=84&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily supported by equity offerings, collaboration agreements, and a loan from Silicon Valley Bank, and as of December 31, 2021, unrestricted cash, cash equivalents, and marketable securities totaled approximately **$64.4 million**, a decrease from **$84.9 million** in 2020, and while these resources are estimated to fund operations for the next 12 months, significant additional capital will be required for ongoing R&D, clinical trials, and potential commercialization, and the company actively uses ATM equity offerings and recently secured a **$10.0 million** term loan with an option for an additional **$10.0 million** - The company's working capital is financed through private and public equity offerings, 'at-the-market' (ATM) equity sales, cash from Merck and LG Chem collaboration agreements, and a loan from Silicon Valley Bank (SVB)[553](index=553&type=chunk) Cash, Cash Equivalents, and Restricted Cash (Years Ended December 31) | Metric | 2021 (USD) | 2020 (USD) | |:---|:---|:---|\n| Net cash used in operating activities | $(38,837,166) | $(32,494,034) | | Net cash provided by investing activities | $9,108,511 | $4,455,874 | | Net cash provided by financing activities | $19,233,322 | $58,614,263 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(10,495,333) | $30,576,103 | | Cash, cash equivalents, and restricted cash at end of year | $64,520,800 | $75,016,133 | - As of December 31, 2021, unrestricted cash, cash equivalents, and marketable securities totaled approximately **$64.4 million**, which is estimated to fund operating requirements for at least the next **12 months**[553](index=553&type=chunk)[573](index=573&type=chunk) - The company will need to raise additional capital or incur indebtedness to continue funding future operations, with funding requirements dependent on R&D progress, clinical trials, regulatory approvals, and commercialization efforts[574](index=574&type=chunk) [Principal Commitments](index=88&type=section&id=Principal%20Commitments) The company's principal commitments include multi-year operating leases for its Cambridge, Massachusetts office and laboratory spaces, which were amended to extend terms and adjust rental rates, and as of December 31, 2021, future minimum lease payments totaled approximately **$10.69 million**, and additionally, the company has a manufacturing agreement with Catalent Pharma Solutions, LLC, with approximately **$1.255 million** owed as of December 31, 2021, and ongoing milestone-based commitments under the Einstein License Agreement - The company has multi-year, noncancelable operating lease agreements for its Cambridge, Massachusetts office and laboratory space, with the Laboratory and Office Lease extended to March 14, 2024[584](index=584&type=chunk)[769](index=769&type=chunk) Future Minimum Lease Payments (as of December 31, 2021) | Year | Amount (USD) | |:---|:---|\n| 2022 | $4,931,675 | | 2023 | $4,754,796 | | 2024 | $1,004,739 | | Total lease payments | $10,691,210 | | Less: present value discount | $(638,358) | | Present value of lease payments | $10,052,853 | - As of December 31, 2021, the company owed Catalent Pharma Solutions, LLC approximately **$1.255 million** for contracted manufacturing services related to CUE-102 materials[586](index=586&type=chunk) - Commitments under the Einstein License Agreement are based on the attainment of future milestones, with aggregate milestone payments potentially reaching up to **$1.85 million** per Licensed Product/new indication and **$5.75 million** for cumulative sales[762](index=762&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk.](index=87&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk [Item 8. Financial Statements and Supplementary Data.](index=87&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section refers to the company's financial statements and related notes, which are presented starting on page F-1 (document page 91) of this Annual Report on Form 10-K - The company's financial statements and related notes are included starting on page F-1 of this Annual Report on Form 10-K[589](index=589&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.](index=87&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company reports that there have been no changes in or disagreements with accountants on accounting and financial disclosure - There are no changes in and disagreements with accountants on accounting and financial disclosure[590](index=590&type=chunk) [Item 9A. Controls and Procedures.](index=87&type=section&id=Item%209A.%20Controls%20and%20Procedures.) As of December 31, 2021, management, with the participation of its principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective, and management also assessed and concluded that its internal control over financial reporting was effective based on the COSO framework, and the annual report does not include an auditor attestation report due to the company's status as an emerging growth company - As of December 31, 2021, the company's management, including its principal executive and financial officers, concluded that its disclosure controls and procedures were effective[592](index=592&type=chunk) - Management assessed and concluded that the company's internal control over financial reporting was effective as of December 31, 2021, based on the COSO Internal Control Integrated Framework (2013)[593](index=593&type=chunk) - This annual report does not include an attestation report from the registered public accounting firm regarding internal control over financial reporting, due to the company's status as an emerging growth company[594](index=594&type=chunk) [Item 9B. Other Information.](index=87&type=section&id=Item%209B.%20Other%20Information.) This item is not applicable and contains no additional information [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](index=87&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections.) This item is not applicable to the company PART III [Item 10. Directors, Executive Officers and Corporate Governance.](index=88&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) The information required for this item, pertaining to directors, executive officers, and corporate governance, is incorporated by reference from the company's definitive proxy statement on Schedule 14A, to be filed within **120 days** after the fiscal year ended December 31, 2021 - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement on Schedule 14A[600](index=600&type=chunk) - The proxy statement is to be filed with the SEC within **120 days** after the end of the fiscal year ended December 31, 2021[600](index=600&type=chunk) [Item 11. Executive Compensation](index=88&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item, concerning executive compensation, is incorporated by reference from the company's definitive proxy statement on Schedule 14A, which will be filed within **120 days** after the fiscal year ended December 31, 2021 - Information regarding executive compensation is incorporated by reference from the definitive proxy statement on Schedule 14A[601](index=601&type=chunk) - The proxy statement is to be filed with the SEC within **120 days** after the end of the fiscal year ended December 31, 2021[601](index=601&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.](index=88&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholders%20Matters.) The information required for this item, covering security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the company's definitive proxy statement on Schedule 14A, to be filed within **120 days** after the fiscal year ended December 31, 2021 - Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the definitive proxy statement on Schedule 14A[602](index=602&type=chunk) - The proxy statement is to be filed with the SEC within **120 days** after the end of the fiscal year ended December 31, 2021[602](index=602&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=88&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item, concerning certain relationships and related transactions, and director independence, is incorporated by reference from the company's definitive proxy statement on Schedule 14A, to be filed within **120 days** after the fiscal year ended December 31, 2021 - Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the definitive proxy statement on Schedule 14A[603](index=603&type=chunk) - The proxy statement is to be filed with the SEC within **120 days** after the end of the fiscal year ended December 31, 2021[603](index=603&type=chunk) [Item 14. Principal Accountant Fees and Services](index=88&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The information required for this item, detailing principal accountant fees and services, is incorporated by reference from the company's definitive proxy statement on Schedule 14A, to be filed within **120 days** after the fiscal year ended December 31, 2021 - Information regarding principal accountant fees and services is incorporated by reference from the definitive proxy statement on Schedule 14A[604](index=604&type=chunk) - The proxy statement is to be filed with the SEC within **120 days** after the end of the fiscal year ended December 31, 2021[604](index=604&type=chunk) PART IV [Item 15. Exhibits, Financial Statements and Schedules](index=89&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statements%20and%20Schedules) This section lists the documents filed as part of the report, including the financial statements and supplementary data (starting on page F-1), and a comprehensive list of exhibits, which include various corporate documents, agreements (e.g., license, collaboration, employment), and certifications, with some portions subject to confidential treatment or omission - The report includes financial statements and supplementary data, which are incorporated by reference from Item 8 and begin on page F-1 (document page 91)[787](index=787&type=chunk) - A comprehensive list of exhibits is filed as part of this Annual Report on Form 10-K, detailing various corporate and contractual documents[788](index=788&type=chunk) - Exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, specimen stock certificates, warrants, registration rights agreements, collaboration agreements (Merck, LG Chem), employment agreements, and certifications[788](index=788&type=chunk)[790](index=790&type=chunk)[794](index=794&type=chunk) [Item 16. Form 10-K Summary](index=92&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company Financial Statements [Reports of Independent Registered Public Accounting Firm](index=92&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) RSM US LLP, the independent registered public accounting firm, issued an unqualified opinion on the consolidated financial statements of Cue Biopharma, Inc. for the years ended December 31, 2021 and 2020, with the audit conducted in accordance with PCAOB standards, confirming that the financial statements present fairly, in all material respects, the company's financial position and results of operations in conformity with U.S. GAAP, and the firm has served as the company's auditor since 2018 - RSM US LLP issued an unqualified opinion on the consolidated financial statements for the years ended December 31, 2021 and 2020[610](index=610&type=chunk) - The financial statements present fairly, in all material respects, the financial position and results of operations in conformity with U.S. GAAP[610](index=610&type=chunk) - The audit was conducted in accordance with PCAOB standards, but an audit of internal control over financial reporting was not performed as the company is not required to have one[612](index=612&type=chunk) [Consolidated Balance Sheets](index=93&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show the company's financial position as of December 31, 2021, and 2020, with total assets decreasing from **$99.53 million** in 2020 to **$83.40 million** in 2021, primarily due to a reduction in cash, cash equivalents, and marketable securities, and total liabilities also decreased from **$20.62 million** to **$17.91 million**, while total stockholders' equity decreased from **$78.91 million** to **$65.49 million**, largely influenced by the accumulated deficit Consolidated Balance Sheets (as of December 31) | ASSETS | 2021 (USD) | 2020 (USD) | |:---|:---|:---|\n| Cash and cash equivalents | $64,370,800 | $74,866,133 | | Marketable securities | — | $10,002,550 | | Accounts receivable | $3,142,527 | $1,417,482 | | Prepaid expenses and other current assets | $954,792 | $1,241,239 | | Total current assets | $68,468,119 | $87,527,404 | | Property and equipment, net | $2,111,949 | $2,108,024 | | Operating lease right-of-use assets | $9,809,876 | $6,774,229 | | Deposits | $2,720,991 | $2,572,476 | | Restricted cash | $150,000 | $150,000 | | Other long term assets | $140,000 | $401,667 | | **Total assets** | **$83,400,935** | **$99,533,800** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $2,590,701 | $2,070,303 | | Accrued expenses | $4,619,963 | $2,787,211 | | Research and development contract liability, current portion | $645,345 | $6,681,025 | | Operating lease liabilities, current portion | $4,931,675 | $4,777,427 | | Total current liabilities | $12,787,684 | $16,315,966 | | Research and development contract liability, net of current portion | — | $1,937,575 | | Operating lease liabilities, net of current portion | $5,121,179 | $2,368,787 | | **Total liabilities** | **$17,908,863** | **$20,622,328** | | Stockholders' equity: | | | | Common stock | $32,202 | $30,351 | | Additional paid-in capital | $262,906,084 | $232,159,029 | | Accumulated other comprehensive income | — | $7,131 | | Accumulated deficit | $(197,446,214) | $(153,285,039) | | **Total stockholders' equity** | **$65,492,072** | **$78,911,472** | | **Total liabilities and stockholders' equity** | **$83,400,935** | **$99,533,800** | - Total assets decreased from **$99.53 million** in 2020 to **$83.40 million** in 2021, primarily driven by a reduction in cash and marketable securities[617](index=617&type=chunk) - The accumulated deficit increased from **$(153.29) million** in 2020 to **$(197.45) million** in 2021, reflecting ongoing operating losses[617](index=617&type=chunk) [Consolidated Statements of Operat

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 001-38327 Cue Biopharma, Inc. (Exact name of registrant as specified in its charter) Delaware 47-3324577 (State or other jurisd ...

Cue Biopharma, Inc. (NASDAQ:CUE) Q2 2021 Results Conference Call August 17, 2021 4:30 PM ET Company Participants Dr. George Zavoico - VP, IR & Corporate Development Dan Passeri - Chief Executive Officer Dr. Anish Suri - President & Chief Scientific Officer Dr. Ken Pienta - Acting Chief Medical Officer Dr. Matteo Levisetti - SVP, Clinical Development Kerri-Ann Millar - Chief Financial Officer Conference Call Participants Mark Breidenbach - Oppenheimer Stephen Wiley - Stifel Tom Shrader - BTIG Brian Skorney - ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.001 per share CUE Nasdaq Capital Market FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCH ...

Financial Data and Key Metrics Changes - The company reported collaboration revenue of approximately $1.6 million for Q1 2021, up from $0.9 million in Q1 2020, primarily due to the extension of the Merck research program [59] - Research and development expenses decreased slightly to $9.8 million in Q1 2021 from $9.9 million in Q1 2020, attributed to lower laboratory costs and travel-related expenses [60] - General and administrative expenses increased to $4.3 million in Q1 2021 from $4 million in Q1 2020, mainly due to stock-based compensation and legal fees [61] - The company ended the quarter with approximately $73.3 million in cash, cash equivalents, and marketable securities, and working capital of approximately $60.8 million [62] Business Line Data and Key Metrics Changes - The lead drug candidate CUE-101 is currently in a Phase 1 monotherapy clinical trial for HPV positive recurrent or metastatic head and neck squamous cell carcinoma, with a confirmed partial response reported in a heavily pretreated patient [12][13] - The company is also developing CUE-102, targeting Wilms' Tumor 1 protein, in collaboration with LG Chem [18] Market Data and Key Metrics Changes - The company aims to expand patient reach and address resistance mechanisms through the development of Neo-STAT and redirected Immuno-STAT (RDI-STAT) platforms [19][32] Company Strategy and Development Direction - The company focuses on demonstrating the transformative nature of its protein engineering approach to provide breakthrough immunotherapies [21] - The strategy includes pursuing a registration path for CUE-101 as a monotherapy and exploring combination therapies with pembrolizumab [64][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the clinical activity of CUE-101, highlighting its potential as a single-agent therapeutic for challenging patient populations [63] - The company anticipates several important milestones throughout the year, including the selection of a recommended Phase 2 dose for CUE-101 and updates on combination studies [64] Other Important Information - The company is collaborating with Merck on antigen-specific approaches for autoimmune diseases, with significant progress reported [38][90] - The Immuno-STAT platform is designed to selectively activate tumor-specific T cells while minimizing systemic activation of non-tumor related T cells [23][25] Q&A Session Summary Question: Can you provide details on the responding patient and their treatment history? - The patient had previously failed pembrolizumab and is still on study, with a confirmed partial response observed 12 weeks into treatment [77][78] Question: What metrics will drive the decision for the recommended Phase 2 dose? - The decision will be based on the totality of pharmacokinetic, pharmacodynamic, clinical response, and safety data [86] Question: How is the company prioritizing its pipeline opportunities? - The focus is on establishing a foothold with CUE-101 while also expanding into CUE-102 and other programs based on resource allocation [99][100]

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) [TABLE OF CONTENTS](index=2&type=section&id=TABLE%20OF%20CONTENTS) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents unaudited financial statements, management's discussion, market risk, and controls for Q1 2021 and 2020 [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This item presents unaudited consolidated financial statements, including balance sheets, income statements, equity, cash flows, and notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) These balance sheets present the company's financial position, assets, liabilities, and stockholders' equity as of March 31, 2021, and December 31, 2020 Consolidated Balance Sheet Highlights (Unaudited, in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :----------------------------------- | :------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $73,257 | $74,866 | | Marketable securities | $— | $10,003 | | Total current assets | $77,405 | $87,527 | | Total assets | $88,721 | $99,533 | | **Liabilities** | | | | Total current liabilities | $16,633 | $16,315 | | Total liabilities | $19,052 | $20,622 | | **Stockholders' Equity** | | | | Total stockholders' equity | $69,669 | $78,911 | [Consolidated Statements of Operations and Other Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) This statement details revenues, operating expenses, and net loss for Q1 2021 and 2020, showing increased collaboration revenue and net loss Consolidated Statements of Operations Highlights (Unaudited, in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Collaboration revenue | $1,553 | $900 | | General and administrative expenses | $4,255 | $3,989 | | Research and development expenses | $9,816 | $9,906 | | Total operating expenses | $14,071 | $13,895 | | Loss from operations | $(12,518) | $(12,995) | | Net loss | $(12,505) | $(12,818) | | Net loss per common share – basic and diluted | $(0.41) | $(0.48) | | Weighted average common shares outstanding – basic and diluted | 30,434,525 | 26,569,681 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in stockholders' equity for Q1 2021 and 2020, reflecting stock-based compensation, option exercises, and net loss Stockholders' Equity Changes (Unaudited, in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :----------------------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $69,669 | $78,911 | | Common Stock Shares Outstanding | 30,499,803 | 30,351,366 | | Additional Paid-in Capital | $235,428 | $232,159 | | Accumulated Deficit | $(165,790) | $(153,285) | - Key activities impacting equity during Q1 2021 included **$2.436 million** in stock-based compensation, **$919 thousand** from stock option exercises, and a **net loss of $12.505 million**[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) These statements detail cash flows from operating, investing, and financing activities for Q1 2021 and 2020, showing a net decrease in cash Consolidated Statements of Cash Flows Highlights (Unaudited, in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(11,795) | $(10,944) | | Net cash (used in) provided by investing activities | $9,352 | $(9,950) | | Net cash provided by financing activities | $834 | $36 | | Net decrease in cash, cash equivalents, and restricted cash | $(1,609) | $(20,858) | | Cash, cash equivalents, and restricted cash at end of period | $73,407 | $23,582 | [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the consolidated financial statements, covering organization, accounting policies, and financial accounts [1. Organization and Basis of Presentation](index=9&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) This note describes Cue Biopharma, Inc.'s business focus as a clinical-stage biopharmaceutical company and its financial position, including recurring losses and capital needs - **Cue Biopharma, Inc. is a clinical-stage biopharmaceutical company** focused on engineering injectable biologics to modulate T cells for treating cancers, chronic infectious diseases, and autoimmune disorders[28](index=28&type=chunk) - The company has **incurred recurring losses and negative cash flows since inception**, with **$73.257 million** in unrestricted cash, cash equivalents, and marketable securities as of March 31, 2021, deemed **sufficient for at least the next twelve months**[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines key accounting policies for the unaudited consolidated financial statements, including revenue recognition, stock-based compensation, and COVID-19 impacts [Basis of Presentation](index=9&type=section&id=Basis%20of%20Presentation) The unaudited consolidated financial statements are prepared under SEC rules and U.S. GAAP, consolidating Cue Biopharma Inc. and its wholly-owned subsidiary - **Financial statements are unaudited, prepared under SEC rules and U.S. GAAP**, and **consolidate Cue Biopharma Inc. and its wholly-owned subsidiary**[30](index=30&type=chunk)[34](index=34&type=chunk) [Public Offerings](index=9&type=section&id=Public%20Offerings) The company used ATM equity offerings in March and June 2020 to sell common stock, raising approximately $34.3 million and $22.4 million net of commissions - The company completed a **March 2020 ATM offering**, selling 1,824,901 shares for **$34.3 million (net)**[32](index=32&type=chunk) - Under the **June 2020 ATM offering**, 1,192,000 shares were sold for **$22.4 million (net)** as of March 31, 2021, with **up to $40 million authorized**[32](index=32&type=chunk) [Consolidation](index=10&type=section&id=Consolidation) The consolidated financial statements include Cue Biopharma Inc. and its wholly-owned subsidiary, with all intercompany transactions eliminated - Consolidated financial statements include Cue Biopharma Inc. and its wholly-owned subsidiary, Cue Biopharma Securities Corporation, Inc., with all intercompany transactions eliminated[34](index=34&type=chunk) [Reclassifications](index=10&type=section&id=Reclassifications) Certain prior year amounts were reclassified for consistency with the current year's presentation, with no impact on reported results of operations - **Prior year amounts were reclassified for consistency, with no effect on reported results**[35](index=35&type=chunk) [Use of Estimates](index=10&type=section&id=Use%20of%20Estimates) Financial statement preparation requires significant management estimates and assumptions, particularly for collaboration revenue, accrued expenses, and stock-based compensation, with potential COVID-19 impacts - Management relies on **estimates for collaboration revenue, accrued expenses, stock-based compensation, deferred tax assets, and long-lived assets**[36](index=36&type=chunk) - The **COVID-19 pandemic's impact on financial results and liquidity is uncertain and could materially affect future consolidated financial statements**[36](index=36&type=chunk) [Cash Concentrations](index=10&type=section&id=Cash%20Concentrations) The company holds cash in federally insured accounts with a high credit rating institution, sometimes exceeding insurance limits, but has not experienced losses - **Cash balances are held in federally insured accounts with a high credit rating financial institution, sometimes exceeding insurance limits, but no losses have been incurred**[37](index=37&type=chunk) [Cash and Cash Equivalents](index=10&type=section&id=Cash%20and%20Cash%20Equivalents) Cash equivalents include highly liquid investments with maturities of three months or less at purchase, primarily invested in money market funds - **Cash equivalents are highly liquid investments with maturities of three months or less, primarily in money market funds**[38](index=38&type=chunk) [Marketable Securities](index=10&type=section&id=Marketable%20Securities) Marketable securities are classified as available-for-sale, recorded at fair value, with unrealized gains/losses in other comprehensive loss, primarily consisting of U.S. Treasury obligations - **Marketable securities are classified as available-for-sale, recorded at fair value, with unrealized gains/losses in other comprehensive loss and realized gains/losses in other income**[39](index=39&type=chunk) - Investments are primarily in **United States Treasury obligations**[39](index=39&type=chunk) [Restricted Cash](index=11&type=section&id=Restricted%20Cash) The company held $150,000 in restricted cash as of March 31, 2021, and December 31, 2020, to collateralize a credit card - **$150,000 in restricted cash was held to collateralize a credit card as of March 31, 2021, and December 31, 2020**[41](index=41&type=chunk) [Property and Equipment](index=11&type=section&id=Property%20and%20Equipment) Property and equipment are recorded at cost and depreciated using the straight-line method over estimated useful lives, with depreciation allocated to general and administrative or R&D - **Property and equipment are recorded at cost and depreciated using the straight-line method over 3-8 years**[42](index=42&type=chunk) - Depreciation and amortization expense is recognized in general and administrative or research and development expenses[42](index=42&type=chunk) [Trademark](index=11&type=section&id=Trademark) The company's "CUE BIOLOGICS Mark" trademark is a long-term asset with a 15-year useful life, incurring approximately $3,000 in quarterly amortization expense - **Trademark \"CUE BIOLOGICS Mark\" is a long-term asset with a 15-year useful life**[43](index=43&type=chunk)[44](index=44&type=chunk) - Amortization expense was **approximately $3,000** for the three months ended March 31, 2021 and 2020[44](index=44&type=chunk) [Revenue Recognition](index=11&type=section&id=Revenue%20Recognition) Collaboration revenue is recognized under ASC 606, primarily from intellectual property licenses and R&D services, using the "most likely amount" method for variable consideration - **Collaboration revenue is recognized under ASC 606, primarily from licenses and R&D services**[45](index=45&type=chunk) - The **\"most likely amount\" method is used to estimate variable consideration, and transaction prices are allocated based on standalone selling prices**[45](index=45&type=chunk) [Research and Development Expenses](index=12&type=section&id=Research%20and%20Development%20Expenses) R&D expenses include compensation, consultant fees, facility costs, and clinical trial costs, expensed as incurred or ratably over contract life - **R&D expenses include compensation, consultant fees, facility costs, and clinical trial costs**[47](index=47&type=chunk) - Expenses are charged to operations as incurred or ratably over contract life; nonrefundable advance payments are expensed as services are performed[48](index=48&type=chunk)[49](index=49&type=chunk) [Patent Expenses](index=12&type=section&id=Patent%20Expenses) All patent costs, including legal and filing fees, are expensed as incurred due to development uncertainty, totaling $520,000 and $655,000 for Q1 2021 and 2020, respectively - **All patent costs are expensed as incurred due to development uncertainty**[51](index=51&type=chunk) Patent Expenses (in thousands) | Period | Patent Expenses | | :----------------------------------- | :-------------- | | Three Months Ended March 31, 2021 | $520 | | Three Months Ended March 31, 2020 | $655 | [Licensing Fees and Costs](index=12&type=section&id=Licensing%20Fees%20and%20Costs) Licensing fees and costs, primarily related to the Einstein License Agreement, are charged to research and development expense as incurred - **Licensing fees and costs, mainly from the Einstein License Agreement, are expensed as R&D costs when incurred**[52](index=52&type=chunk) [Long-Lived Assets](index=12&type=section&id=Long-Lived%20Assets) Long-lived assets are reviewed for impairment annually or when circumstances indicate carrying value may exceed fair value, with no historical impairments recorded - **Long-lived assets are reviewed for impairment annually or when conditions change; no impairments have been recorded historically**[53](index=53&type=chunk) [Leases](index=12&type=section&id=Leases) The company adopted ASC 842 on January 1, 2019, recognizing right-of-use assets and corresponding lease liabilities, with no material net impact on operations - **Adopted ASC 842 on January 1, 2019, recognizing right-of-use assets and lease liabilities**[54](index=54&type=chunk)[122](index=122&type=chunk) - The adoption resulted in **approximately $9.692 million** of right-of-use assets and **$9.347 million** of lease liabilities, with **no material net impact** on operations or accumulated deficit[122](index=122&type=chunk) [Stock-Based Compensation](index=13&type=section&id=Stock-Based%20Compensation) Stock-based awards are recognized at grant date fair value using the Black-Scholes model and expensed over the service period, with forfeitures accounted for as they occur - **Stock-based awards are recognized at grant date fair value using the Black-Scholes model and expensed over the service period**[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Forfeitures are accounted for as they occur[59](index=59&type=chunk) [Comprehensive Income (Loss)](index=13&type=section&id=Comprehensive%20Income%20(Loss)) Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss), with unrealized gains or losses on available-for-sale securities being the only element - **Comprehensive income (loss) includes net income (loss) and unrealized gains/losses on available-for-sale securities**[61](index=61&type=chunk) [Earnings (Loss) Per Share](index=13&type=section&id=Earnings%20(Loss)%20Per%20Share) Basic and diluted loss per common share are identical due to the anti-dilutive effect of outstanding stock options and warrants for all periods presented - **Basic and diluted loss per common share are identical due to the anti-dilutive effect of outstanding stock options and warrants**[62](index=62&type=chunk) Anti-Dilutive Securities Excluded from EPS Calculation | Security Type | March 31, 2021 | March 31, 2020 | | :--------------------------- | :------------- | :------------- | | Common stock warrants | 851,969 | 1,189,827 | | Common stock options | 5,738,757 | 5,507,572 | | Nonvested restricted stock units | 213,336 | 250,001 | | **Total** | **6,804,062** | **6,947,400** | [Fair Value of Financial Instruments](index=14&type=section&id=Fair%20Value%20of%20Financial%20Instruments) The company uses a three-level fair value hierarchy for financial instruments, with cash equivalents valued using Level 1 inputs and marketable securities (Dec 31, 2020) using Level 2 - **Financial instruments are valued using a three-level fair value hierarchy**[65](index=65&type=chunk) - **Cash equivalents are valued using Level 1 inputs; marketable securities (Dec 31, 2020) used Level 2**[70](index=70&type=chunk)[77](index=77&type=chunk) [Recent Accounting Pronouncements](index=14&type=section&id=Recent%20Accounting%20Pronouncements) The company is evaluating ASU No. 2016-13 (CECL) for credit losses, effective after December 15, 2022, and adopted ASU No. 2019-12 (Income Taxes) on January 1, 2021, with no material impact - **Evaluating ASU No. 2016-13 (CECL) for credit losses, effective after December 15, 2022**[72](index=72&type=chunk) - **Adopted ASU No. 2019-12 (Income Taxes) on January 1, 2021, with no material impact**[73](index=73&type=chunk) [3. Fair Value](index=14&type=section&id=3.%20Fair%20Value) This note details the fair value measurements of the company's assets, primarily cash equivalents and marketable securities, categorized within the fair value hierarchy Fair Value Measurements (in thousands) | Asset | March 31, 2021 Fair Value | December 31, 2020 Fair Value | Level | | :-------------------- | :------------------------ | :------------------------- | :---- | | Cash equivalents | $67,997 | $72,943 | Level 1 | | Marketable securities | $— | $10,003 | Level 2 | [4. Marketable Securities](index=15&type=section&id=4.%20Marketable%20Securities) The company redeemed its entire investment in marketable securities by March 31, 2021, which totaled $10.003 million as of December 31, 2020, primarily in U.S. Treasury Securities - **Entire investment in marketable securities redeemed by March 31, 2021**[79](index=79&type=chunk) - As of December 31, 2020, **marketable securities were $10.003 million, primarily U.S. Treasury Securities**[79](index=79&type=chunk) [5. Property and Equipment](index=15&type=section&id=5.%20Property%20and%20Equipment) This note provides a breakdown of property and equipment, net of accumulated depreciation, and details the depreciation expense for the periods Property and Equipment, Net (in thousands) | Category | March 31, 2021 | December 31, 2020 | | :----------------------- | :------------- | :---------------- | | Laboratory equipment | $5,022 | $4,148 | | Furniture and fixtures | $93 | $93 | | Computer equipment | $268 | $268 | | Leasehold improvements | $7 | $— | | Construction in progress | $421 | $405 | | Less accumulated depreciation | $(3,025) | $(2,807) | | **Net property and equipment** | **$2,786** | **$2,108** | - Depreciation expense for the three months ended March 31, 2021, was **approximately $218,000** (vs. **$194,000** in 2020), excluding trademark and capitalized license amortization[84](index=84&type=chunk) [6. Stock-Based Compensation](index=16&type=section&id=6.%20Stock-Based%20Compensation) This note details stock option valuation assumptions, summarizes stock option and RSU activity, and reports total stock-based compensation expense [Stock Option Valuation](index=16&type=section&id=Stock%20Option%20Valuation) Stock options are valued using the Black-Scholes model with specific assumptions for risk-free interest rate, expected dividend yield, volatility, and expected life Stock Option Valuation Assumptions (Black-Scholes Model) | Assumption | March 31, 2021 | March 31, 2020 | | :-------------------- | :------------- | :------------- | | Risk-free interest rate | 0.61 to 1.18% | 1.00 to 1.56% | | Expected dividend yield | 0% | 0% | | Expected volatility | 92.2-94.7% | 98.0-99.6% | | Expected life | 5.50 to 6.25 years | 4.0 to 6.25 years | - Stock options outstanding at March 31, 2021, were **5,738,757** with a weighted average exercise price of **$9.79** and a remaining contractual life of **6.01 years**[85](index=85&type=chunk) - Unrecognized stock-based compensation expense for stock options was **approximately $23.048 million** as of March 31, 2021, to be recognized over 2.6 years[85](index=85&type=chunk) [Restricted Stock Units](index=16&type=section&id=Restricted%20Stock%20Units) The company granted various RSUs with time-based vesting conditions to executive officers, with compensation expense recognized on a straight-line basis - Nonvested RSU balance at March 31, 2021, was **213,336 shares** with a weighted average grant date fair value of **$16.86 per share**[90](index=90&type=chunk) - Unrecognized stock-based compensation for RSUs was **approximately $2.406 million** as of March 31, 2021, to be recognized over **1 year**[90](index=90&type=chunk) [Stock-based Compensation](index=17&type=section&id=Stock-based%20Compensation) Total stock-based compensation expense for Q1 2021 was $2.436 million, a decrease from $3.175 million in the prior year, allocated between general and administrative and R&D expenses Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--------------------------- | :-------------------------------- | :-------------------------------- | | General and administrative | $1,114 | $1,017 | | Research and development | $1,322 | $2,158 | | **Total** | **$2,436** | **$3,175** | [7. Warrants](index=17&type=section&id=7.%20Warrants) The company had two tranches of common stock warrants outstanding at March 31, 2021, totaling 851,969 shares, with an intrinsic value of approximately $2.825 million for in-the-money warrants - **Two tranches of common stock warrants outstanding at March 31, 2021, totaling 851,969 shares**[92](index=92&type=chunk)[94](index=94&type=chunk) - Intrinsic value of exercisable in-the-money warrants was **approximately $2.825 million** as of March 31, 2021[92](index=92&type=chunk) [8. Collaboration Revenue](index=18&type=section&id=8.%20Collaboration%20Revenue) This note details the company's revenue recognition policies for collaboration agreements with Merck and LG Chem, outlining upfront payments, milestone eligibility, and recognized revenue - **Merck Collaboration Agreement**: Received **$2.5 million upfront payment**; eligible for **up to $101.0 million in R&D milestones**, **$120.0 million in regulatory milestones**, and **$150.0 million in commercial milestones**, plus **tiered royalties**[103](index=103&type=chunk)[170](index=170&type=chunk) Collaboration Revenue from Merck Agreement (in thousands) | Period | Revenue | | :----------------------------------- | :------ | | Three Months Ended March 31, 2021 | $765 | | Three Months Ended March 31, 2020 | $55 | - **LG Chem Collaboration Agreement**: Received **$5.0 million upfront cash payment** and **$5.0 million equity investment**; eligible for **up to $400.0 million in research, development, regulatory, and sales milestones**, plus **tiered single-digit royalties**[105](index=105&type=chunk)[175](index=175&type=chunk) - **LG Chem milestone payments earned**: **$2.5 million** for CUE-101 IND acceptance (May 2019) and **$1.25 million** for pre-clinical candidate selection (Dec 2020)[106](index=106&type=chunk)[107](index=107&type=chunk)[175](index=175&type=chunk) Collaboration Revenue from LG Chem Agreement (in thousands) | Period | Revenue | | :----------------------------------- | :------ | | Three Months Ended March 31, 2021 | $788 | | Three Months Ended March 31, 2020 | $844 | [9. Commitments and Contingencies](index=22&type=section&id=9.%20Commitments%20and%20Contingencies) This note outlines the company's commitments under the Einstein License Agreement and collaboration agreements, stating no material legal proceedings or accruals for contingent liabilities [Einstein License Agreement](index=22&type=section&id=Einstein%20License%20Agreement) The company holds an exclusive worldwide license from Einstein for its core technology platform, involving annual fees and potential milestone payments - **Exclusive worldwide license from Albert Einstein College of Medicine for core technology platform**[112](index=112&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - Potential milestone payments **up to $1.85 million** per product/indication and **$5.75 million** for cumulative sales[113](index=113&type=chunk) - Incurred **$18,750 in fees and expenses to Einstein** for the three months ended March 31, 2021 and 2020[112](index=112&type=chunk)[165](index=165&type=chunk) [Collaboration Agreement with Merck](index=22&type=section&id=Collaboration%20Agreement%20with%20Merck) Refers to Note 8 for details on the Merck Collaboration Agreement [Collaboration Agreement with LG Chem Life Sciences](index=22&type=section&id=Collaboration%20Agreement%20with%20LG%20Chem%20Life%20Sciences) Refers to Note 8 for details on the LG Chem Collaboration Agreement [Contingencies](index=22&type=section&id=Contingencies) The company accrues for probable and estimable contingent liabilities but has no such accruals and is not a party to any material legal proceedings - **No accruals for contingent liabilities and not a party to any material legal proceedings as of March 31, 2021**[116](index=116&type=chunk)[117](index=117&type=chunk)[223](index=223&type=chunk) [10. Leases](index=22&type=section&id=10.%20Leases) This note details the company's operating lease for office and laboratory space in Cambridge, Massachusetts, including lease terms, amendments, and financial impacts under ASC 842 - Leases **approximately 19,900 square feet** of office space in Cambridge, Massachusetts, expiring **June 14, 2022**[118](index=118&type=chunk)[127](index=127&type=chunk) - As of March 31, 2021, recorded **$5.656 million** for operating right-of-use asset and **$4.989 million (short-term)** and **$1.085 million (long-term)** for operating lease liability[128](index=128&type=chunk) Lease Information (in thousands) | Metric | Three Months Ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | | Total rent expense | $1,220 | | Operating cash flows from operating leases | $1,174 | | Weighted average discount rate | 6.0% | | Weighted average remaining lease term | 1.21 years | [11. Subsequent Events](index=24&type=section&id=11.%20Subsequent%20Events) Subsequent to March 31, 2021, the company sold an additional 907,700 shares under the June 2020 ATM Agreement for $10.4 million (net), totaling $32.7 million, and LG Chem's option expired - **Subsequent to March 31, 2021, an additional 907,700 shares were sold under the June 2020 ATM Agreement for $10.4 million (net), totaling $32.7 million**[132](index=132&type=chunk) - **LG Chem's option for an additional Immuno-STAT oncology target expired on April 30, 2021**[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operations, future outlook, Immuno-STAT platform, pipeline, COVID-19 impact, and liquidity [Overview](index=25&type=section&id=Overview) Cue Biopharma is a clinical-stage biopharmaceutical company developing a novel Immuno-STAT platform to selectively modulate T cells for cancer, chronic infectious diseases, and autoimmune disorders - **Clinical-stage biopharmaceutical company engineering Immuno-STAT platform for selective T cell modulation** in cancer, chronic infectious diseases, and autoimmune disorders[136](index=136&type=chunk) - **Immuno-STATs aim for modularity, versatility, broad disease coverage, manufacturability, and convenient administration, avoiding broad immune activation/suppression side effects**[136](index=136&type=chunk) [Our Immuno-STAT Platform Pipeline](index=25&type=section&id=Our%20Immuno-STAT%20Platform%20Pipeline) The company's Immuno-STAT platform includes four biologic series for various indications, with CUE-101 in Phase 1 trials showing favorable tolerability and anti-tumor activity - **Immuno-STAT platform includes CUE-100 (oncology, IL-2 based), CUE-200 (chronic infections, CD80/4-1BBL), CUE-300 (autoimmune, PD-L1), and CUE-400 (autoimmune, iTregs with IL-2/TGF-beta)**[137](index=137&type=chunk) - **CUE-101 (most advanced) is in Phase 1 monotherapy and combination trials (with KEYTRUDA®) for HPV-driven R/M head and neck cancer, demonstrating favorable tolerability and anti-tumor activity (confirmed PR and SDs)**[139](index=139&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) - **CUE-102 (WT1) is advancing towards an IND filing in H1 2022, with preclinical data supporting selective T cell expansion and effector function**[144](index=144&type=chunk)[146](index=146&type=chunk) - **Neo-STAT™ is a derivative scaffold designed for greater flexibility in targeting multiple tumor epitopes, enhanced production, and potential for personalized neo-antigen strategies**[147](index=147&type=chunk) - **RDI-STAT (Re-Directed Immuno-STAT) platform engineered to address tumor escape mechanisms of HLA loss by re-purposing anti-viral T cell repertoire to kill cancers**[148](index=148&type=chunk) - **CUE-300 series for autoimmune disorders (e.g., type 1 diabetes) and CUE-401 for chronic autoimmune diseases (activating regulatory T cells) are also advancing**[149](index=149&type=chunk)[150](index=150&type=chunk) [Coronavirus (\"COVID-19\") Pandemic](index=27&type=section&id=Coronavirus%20(%22COVID-19%22)%20Pandemic) The COVID-19 pandemic has not significantly impacted productivity, but CUE-102 cGMP material manufacturing was delayed, pushing its IND filing to Q1 2022 - Precautionary measures (remote work, travel restrictions) due to COVID-19 have **not significantly impacted productivity**[151](index=151&type=chunk) - **CUE-102 cGMP material manufacturing delayed by ~6 weeks** due to **Defense Production Act**, **shifting IND filing from Q4 2021 to Q1 2022**[152](index=152&type=chunk)[154](index=154&type=chunk) [Plan of Operation](index=28&type=section&id=Plan%20of%20Operation) The company is in the development phase, focusing on early-stage clinical development of Immuno-STAT candidates, with a strategy to seek strategic partnerships for later-stage development - Company is in **development phase**, focusing on **research, testing, optimization, and early-stage clinical development** of Immuno-STAT candidates[155](index=155&type=chunk)[156](index=156&type=chunk) - Strategy includes **establishing strategic partnerships for later-stage clinical development and commercialization**[157](index=157&type=chunk) [Critical Accounting Policies and Significant Judgements and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgements%20and%20Estimates) Management's discussion relies on financial statements requiring significant estimates for collaboration revenue, accrued expenses, and stock-based compensation, with no material changes in Q1 2021 - Financial statements require **significant estimates for collaboration revenue, accrued expenses, stock-based compensation, deferred tax assets, and long-lived assets**[158](index=158&type=chunk) - **No material changes to critical accounting policies and estimates** during the three months ended March 31, 2021[159](index=159&type=chunk) [Recent Accounting Pronouncements and Adopted Standards](index=28&type=section&id=Recent%20Accounting%20Pronouncements%20and%20Adopted%20Standards) This section refers to Note 2 for a discussion of recent accounting pronouncements [Significant Contracts and Agreements Related to Research and Development Activities](index=29&type=section&id=Significant%20Contracts%20and%20Agreements%20Related%20to%20Research%20and%20Development%20Activities) This section details key agreements underpinning the company's R&D efforts, including the Einstein License Agreement and collaboration agreements with Merck and LG Chem [Einstein License Agreement](index=29&type=section&id=Einstein%20License%20Agreement) The company holds an exclusive worldwide license from Albert Einstein College of Medicine for its core technology platform, involving royalty payments, annual maintenance fees, and milestone payments - **Exclusive worldwide license from Einstein for core technology platform, with rights to sublicense**[162](index=162&type=chunk)[163](index=163&type=chunk) - Obligations include **royalties, escalating annual maintenance fees** (creditable against royalties), and **significant milestone payments**[163](index=163&type=chunk) - **In compliance with obligations as of March 31, 2021**[164](index=164&type=chunk) [Collaboration Agreement with Merck](index=30&type=section&id=Collaboration%20Agreement%20with%20Merck) The Merck Collaboration Agreement focuses on researching and developing Immuno-STAT drug candidates for autoimmune diseases, with Merck paying a $2.5 million upfront fee and the company eligible for up to $371 million in milestones plus tiered royalties - **Collaboration with Merck for Immuno-STAT drug candidates targeting autoimmune disease indications**[168](index=168&type=chunk) - Received **$2.5 million nonrefundable upfront payment**[170](index=170&type=chunk) - Eligible for **up to $101.0 million in R&D milestones**, **$120.0 million in regulatory milestones**, and **$150.0 million in commercial milestones**, plus **tiered royalties**[170](index=170&type=chunk) [Collaboration Agreement with LG Chem](index=30&type=section&id=Collaboration%20Agreement%20with%20LG%20Chem) The LG Chem Collaboration Agreement grants exclusive rights for Immuno-STATs in oncology in certain Asian countries, with the company receiving a $5.0 million upfront payment and equity investment, and eligible for up to $400.0 million in milestones plus tiered royalties - **Collaboration with LG Chem for Immuno-STATs in oncology, granting exclusive license in certain Asian countries**[172](index=172&type=chunk)[174](index=174&type=chunk) - Received **$5.0 million non-refundable upfront payment** and a **$5.0 million equity investment**[175](index=175&type=chunk) - Eligible for **up to $400.0 million in research, development, regulatory, and sales milestones**, plus **tiered single-digit royalties**[175](index=175&type=chunk) - **LG Chem's option for an additional Immuno-STAT oncology target expired on April 30, 2021**[174](index=174&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for Q1 2021 compared to 2020, focusing on collaboration revenue, operating expenses, and interest income [Collaboration Revenue](index=32&type=section&id=Collaboration%20Revenue) Collaboration revenue increased to $1.553 million for Q1 2021 from $900,000 for Q1 2020, entirely from the Merck and LG Chem agreements Collaboration Revenue (in thousands) | Period | Collaboration Revenue | | :----------------------------------- | :-------------------- | | Three Months Ended March 31, 2021 | $1,553 | | Three Months Ended March 31, 2020 | $900 | [Operating Expenses](index=32&type=section&id=Operating%20Expenses) Operating expenses include general and administrative and research and development costs, along with non-cash components, and are expected to increase with expanded R&D activities - **Operating expenses include general and administrative, research and development, and non-cash components** (depreciation, stock-based compensation)[180](index=180&type=chunk) - **Expected to increase with expanded R&D activities and personnel**[181](index=181&type=chunk)[182](index=182&type=chunk) [General and Administrative](index=33&type=section&id=General%20and%20Administrative) General and administrative expenses increased by $266,000 to $4.255 million for Q1 2021, primarily due to higher stock-based compensation and legal fees, partially offset by reduced travel General and Administrative Expenses (in thousands) | Period | General and Administrative Expenses | | :----------------------------------- | :-------------------------------- | | Three Months Ended March 31, 2021 | $4,255 | | Three Months Ended March 31, 2020 | $3,989 | - **Increase primarily due to stock-based compensation ($1.114M vs $1.017M) and legal fees**, offset by decreased travel due to COVID-19[187](index=187&type=chunk)[188](index=188&type=chunk) [Research and Development](index=33&type=section&id=Research%20and%20Development) Research and development expenses slightly decreased by $90,000 to $9.816 million for Q1 2021, mainly due to lower laboratory and drug manufacturing costs, offset by increased stock-based compensation Research and Development Expenses (in thousands) | Period | Research and Development Expenses | | :----------------------------------- | :-------------------------------- | | Three Months Ended March 31, 2021 | $9,816 | | Three Months Ended March 31, 2020 | $9,906 | - **Decrease primarily due to lower laboratory and drug substance manufacturing costs and clinical expenses, and reduced travel**, offset by **increased stock-based compensation ($1.322M vs $2.158M)**[189](index=189&type=chunk)[190](index=190&type=chunk) [Interest Income](index=33&type=section&id=Interest%20Income) Interest income decreased significantly to $13,000 for Q1 2021 from $177,000 for Q1 2020, due to reduced investment in cash equivalents and marketable securities Interest Income (in thousands) | Period | Interest Income | | :----------------------------------- | :-------------- | | Three Months Ended March 31, 2021 | $13 | | Three Months Ended March 31, 2020 | $177 | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from equity offerings and collaboration agreements, with current cash sufficient for 12 months, but additional capital will be needed for future growth - **Liquidity primarily from equity offerings and collaboration agreements**[192](index=192&type=chunk) - **Unrestricted cash, cash equivalents, and marketable securities totaled $73.257 million as of March 31, 2021, sufficient for at least the next 12 months**[192](index=192&type=chunk)[207](index=207&type=chunk) - **Additional capital or indebtedness will be required to fund future operations and growth**[208](index=208&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) This section summarizes net cash flows from operating, investing, and financing activities, showing a net decrease in cash, cash equivalents, and restricted cash for Q1 2021 Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(11,795) | $(10,944) | | Net cash provided by (used in) investing activities | $9,352 | $(9,950) | | Net cash provided by financing activities | $834 | $36 | | Net decrease in cash, cash equivalents, and restricted cash | $(1,609) | $(20,858) | [Operating Activities](index=35&type=section&id=Operating%20Activities) Net cash used in operating activities increased by $851,000 to $11.795 million for Q1 2021, primarily due to increased deposits for laboratory and drug substance manufacturing costs Net Cash Used in Operating Activities (in thousands) | Period | Net Cash Used in Operating Activities | | :----------------------------------- | :------------------------------------ | | Three Months Ended March 31, 2021 | $(11,795) | | Three Months Ended March 31, 2020 | $(10,944) | - **Increase in cash used primarily due to increased deposits for laboratory and drug substance manufacturing costs**[201](index=201&type=chunk) [Investing Activities](index=36&type=section&id=Investing%20Activities) Cash provided by investing activities significantly increased by $19.302 million to $9.352 million for Q1 2021, primarily due to the redemption of all short-term marketable securities Net Cash (Used in) Provided by Investing Activities (in thousands) | Period | Net Cash (Used in) Provided by Investing Activities | | :----------------------------------- | :------------------------------------------ | | Three Months Ended March 31, 2021 | $9,352 | | Three Months Ended March 31, 2020 | $(9,950) | - **Increase in cash provided primarily due to redemption of $10.000 million in short-term investments**, offset by **$648,000 in property and equipment purchases**[204](index=204&type=chunk) [Financing Activities](index=36&type=section&id=Financing%20Activities) Cash provided by financing activities increased by $798,000 to $834,000 for Q1 2021, mainly from proceeds from the exercise of common stock options Net Cash Provided by Financing Activities (in thousands) | Period | Net Cash Provided by Financing Activities | | :----------------------------------- | :------------------------------------ | | Three Months Ended March 31, 2021 | $834 | | Three Months Ended March 31, 2020 | $36 | - **Increase primarily due to $919,000 in proceeds from the exercise of common stock options**, offset by **$85,000 for restricted stock buy-back**[205](index=205&type=chunk) [Funding Requirements](index=36&type=section&id=Funding%20Requirements) The company anticipates increased expenses for R&D, clinical trials, regulatory approvals, and commercialization, requiring significant additional capital through various financing options - **Expenses expected to increase due to R&D, clinical trials, regulatory approvals, and commercialization**[206](index=206&type=chunk) - **Future funding needs may be met through equity offerings (potential dilution), debt financings (security interests, debt service), collaborations (relinquish rights), or grants**[211](index=211&type=chunk) [Contractual Obligations and Commitments](index=37&type=section&id=Contractual%20Obligations%20and%20Commitments) No material changes to contractual obligations and commitments were reported during Q1 2021 compared to December 31, 2020 - **No material changes to contractual obligations and commitments during Q1 2021**[213](index=213&type=chunk) [Off-balance Sheet Arrangements](index=37&type=section&id=Off-balance%20Sheet%20Arrangements) As of March 31, 2021, the company had no off-balance sheet arrangements - **No off-balance sheet arrangements as of March 31, 2021**[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Cue Biopharma is not required to provide the information typically required by this item [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This item addresses the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting [Disclosure Controls and Procedures](index=38&type=section&id=Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021 - **Disclosure controls and procedures were effective as of March 31, 2021**[219](index=219&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=38&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) Management acknowledges that control systems provide only reasonable assurance and may not prevent all errors or fraud due to inherent limitations - **Control systems provide only reasonable, not absolute, assurance and may not prevent all errors or fraud due to inherent limitations**[220](index=220&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no material changes in the company's internal control over financial reporting during the three months ended March 31, 2021 - **No material changes in internal control over financial reporting during Q1 2021**[221](index=221&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in Part I, including legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - **Not a party to any material legal proceedings as of March 31, 2021**[223](index=223&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company operates in a rapidly changing environment with various risks that could materially affect its business, financial condition, or results - **Business is subject to significant risks in a rapidly changing environment**[224](index=224&type=chunk) - **Refer to the Annual Report on Form 10-K for a comprehensive list of risk factors**[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This item lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications and XBRL documents

Cue Biopharma Reports Fourth Quarter and Full Year 2020 Financial Results and Recent Business Highlights March 16, 2021 Evaluated initial observations in CUE-101 Phase 1 monotherapy dose escalation clinical trial for treatment of human papilloma virus positive recurrent/metastatic head and neck squamous cell carcinoma (HPV+ R/M HNSCC), which demonstrated tolerability and generated encouraging emerging metrics pertaining to pharmacokinetic and pharmacodynamic profile, as well as early signs of anti-tumor act ...

Cue Biopharma, Inc. (NASDAQ:CUE) Q4 2020 Earnings Conference Call March 16, 2021 4:30 PM ET Company Participants George Zavoico - VP, IR & Corporate Development Daniel Passeri - CEO & Director Kenneth Pienta - Acting Chief Medical Officer Matteo Levisetti - SVP, Clinical Development Anish Suri - President & Chief Scientific Officer Kerri-Ann Millar - VP, Finance, Principal Finance & Accounting Officer Conference Call Participants Stephen Willey - Stifel, Nicolaus & Company Reni Benjamin - JMP Securities Kal ...