(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 28, 2022,~~August 4, 2023, the registrant had ~~29,248,553~~29,491,125 shares of common stock, $0.001 par value per share, outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. All statements other than statements of historical fact contained in this Quarterly Report, including without limitation statements regarding our plans to develop, manufacture and commercialize our product candidates, the timing or outcome of our ongoing or planned clinical trials for ~~SQZ-PBMC-HPV,~~ SQZ-AAC-HPV, SQZ-eAPC-HPV or any of our ~~other pipeline product candidates and any~~ future product candidates, the clinical utility of our product candidates, the anticipated impact of ~~the COVID-19 pandemic~~overall economic conditions on our business and operations, including manufacturing, research and development, clinical trials and employees, our cash needs and availability, the sufficiency of our cash and cash equivalents and our ability to raise additional capital to fund our operations, the impact of our delisting from the New York Stock Exchange (the “NYSE”), our plans to explore potential strategic alternatives to support the advancement of our oncology programs, our plans to mitigate the risk that we are unable to continue as a going concern, and the plans and objectives of management for future operations, are forward-looking statements.

The forward-looking statements in this Quarterly Report are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those projected in the forward-looking statements, including, but not limited to, risks and uncertainties related to our ability to continue as a going concern; risks related to the delisting of our common stock from the NYSE; our limited operating history; our significant losses incurred since inception and expectation to incur significant additional losses for the foreseeable future; the development of our initial product candidates, upon which our business is highly dependent; the impact of ~~the COVID-19 pandemic~~overall economic conditions on our operations and clinical activities; our need for additional funding and our cash runway; restructuring activities; the lengthy, expensive, and uncertain process of clinical drug development, including uncertain outcomes of clinical trials and potential delays in regulatory approval; our ability to maintain our relationships with our third party vendors and strategic collaborators; protection of our proprietary technology, intellectual property portfolio and the confidentiality of our trade secrets; general economic conditions and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022, this Quarterly Report on Form 10-Q and our other filings with the U.S. Securities and Exchange Commission.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


	SIX MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2022			2021			2023			2022
Cash flows from operating activities:
Net loss	$	(43,274	)	$	(34,469	)	$	(34,457	)	$	(43,274	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		558			640			409			558
Amortization of operating lease right-of-use assets		4,882			4,895			4,886			4,882
Stock-based compensation expense		4,254			3,412			1,846			4,254
Loss on disposal of equipment		42			6
(Gain) Loss on disposal of equipment								(106	)		42
Changes in operating assets and liabilities:
Accounts receivable		3,000			1,892			—			3,000
Prepaid expenses and other current assets		(369	)		386			1,520			(356	)
Accounts payable		(2,278	)		(793	)		(948	)		(2,278	)
Accrued expenses		2,901			(1,818	)		(4,032	)		2,901
Accrued restructuring expenses								(2,833	)		—
Deferred revenue		(5,877	)		(9,767	)		(215	)		(5,877	)
Deferred financing costs		13			—
Operating lease liabilities		(4,762	)		(4,609	)		(5,112	)		(4,762	)
Net cash used in operating activities		(40,910	)		(40,225	)		(39,042	)		(40,910	)
Cash flows from investing activities:
Purchases of property and equipment		(308	)		(521	)		(112	)		(308	)
Proceeds from disposals of property and equipment		34			—			155			34
Net cash used in investing activities		(274	)		(521	)
Net cash provided by (used in) investing activities								43			(274	)
Cash flows from financing activities:
Proceeds from follow-on public offering of common stock, net of commissions and underwriting discounts		—			56,400
Payment of public offering costs		—			(1,904	)
Proceeds from issuance of common stock under at-the market offering		3,092			—			—			3,092
Proceeds from issuance of common stock under employee stock purchase plan		111			—			—			111
Proceeds from exercise of stock options		29			960			—			29
Net cash provided by financing activities		3,232			55,456			—			3,232
Net (decrease) increase in cash, cash equivalents and restricted cash		(37,952	)		14,710			(38,999	)		(37,952	)
Cash, cash equivalents and restricted cash at beginning of period		145,818			172,662			66,014			145,818
Cash, cash equivalents and restricted cash at end of period	$	107,866		$	187,372		$	27,015		$	107,866
Supplemental disclosure of non-cash investing and financing activities:
Deferred offering costs included in accrued expenses at end of period	$	106		$	—		$	—		$	106

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission, or SEC, on March ~~16, 2022~~22, 2023 (the ~~“2021~~“2022 Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our ~~2021~~2022 Form 10-K and this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage biotechnology company focused on unlocking the full potential of cell therapies to benefit patients with cancer ~~autoimmune and infectious diseases,~~ and other serious medical conditions. The company was founded on the therapeutic potential of Cell ~~Squeeze~~® ~~technology,~~Squeeze®, our proprietary technology which allows for rapid delivery of a variety of cargo into different cell types. We aim to create multiple cell therapies that drive the immune system to combat diseases.

On November 30, 2022, our Board of Directors approved a restructuring plan and strategic prioritization of our clinical portfolio (the Restructuring Plan) to concentrate on the development of our second-generation enhanced Antigen Presenting Cells (eAPC) cell therapy program, focused on HPV16 positive recurrent, locally advanced, or metastatic solid tumors and reduce our workforce by approximately 60 percent. On November 30, 2022, the Board appointed Howard Bernstein, MD, PhD, our director and former Chief Scientific Officer, as Interim Chief Executive Officer.

Additionally, on November 30, 2022, we announced a pause of our Antigen Presenting Cells (APC), Activating Antigen Carrier (AAC) and Tolerizing Antigen Carrier (TAC) programs. This portfolio prioritization was designed to allow us to deliver initial data readouts for the SQZ® eAPC program’s highest-dose monotherapy cohort, which we anticipate in the third quarter of 2023. We will continue to explore partnerships and collaborations for our earlier stage assets and programs, including TAC, as well as our point-of-care manufacturing capabilities.

In oncology, we are developing cell therapy platforms that are based on directing tumor antigen-specific immune activation via engineered antigen presentation. We believe that by engineering physiological antigen presentation signals in subsets of peripheral blood cells that act on immune priming pathways, we have the potential to develop cell therapies that are designed to be potent drivers of tumor-specific immunity, well-tolerated, administered without lymphodepleting preconditioning or hospitalization, and produced in under 24 hours. ~~We have three oncology candidates in clinical trials across our SQZ~~® ~~Antigen Presenting Cell, or APC, SQZ~~® ~~enhanced APC, or eAPC, and SQZ~~® ~~Activating Antigen Carrier, or AAC, cell therapy platforms. In our autoimmune diseases portfolio, we are developing our SQZ~~® Tolerizing Antigen Carrier, or TAC, cell therapy platform with the aim to restore immune tolerance to self-antigens or other autoimmune disease-associated antigens that are central to disease pathogenesis.

In 2021, we executed on several key areas of our pipeline and advanced our APC platform objectives. As of December 31, 2021, we have dosed 20 patients in our Phase 1 trial for our lead APC candidate, SQZ-PBMC-HPV, in HPV16+ advanced solid tumors. We reported interim data from the first three monotherapy dose-escalation cohorts at the 2021 American Society of Clinical Oncology, or ASCO, Annual Meeting, and presented interim safety, biomarker, and clinical data from the highest dose SQZ-PBMC-HPV monotherapy cohort at the 2021 European Society for Medical Oncology Immuno-Oncology, or ESMO-IO, Congress. Key observations from the reported data include, as of a cutoff date of October 8, 2021 (n=18 patients):

We have advanced our trial to evaluate SQZ-PBMC-HPV in combination with checkpoint inhibitor therapies, and are continuing to enroll patients in the highest dose monotherapy cohort. We are targeting additional data in the second half of 2022. In April 2022, the U.S. Food and Drug Administration, or FDA, granted Fast Track Designation to SQZ-PBMC-HPV for the treatment of HPV16+ advanced or metastatic solid tumors.

We have continued to build upon the progress of our ~~SQZ~~®SQZ® APC platform through the development of the novel ~~SQZ~~®SQZ® eAPC platform. Our lead eAPC product candidate leverages the added capabilities and functionality of multiple antigen presentation and immunological signals achieved through multiplexed mRNA delivery to diverse immune cell types. In January 2022, we received allowance to proceed with clinical trials from the U.S. Food and Drug Administration, or FDA, under our Investigational New Drug, or IND, application for SQZ-eAPC-HPV, our lead eAPC candidate engineered with HPV16 antigens and costimulatory signals. We initiated the SQZ-eAPC-HPV trial, the COMMANDER-001 Phase 1/2 study, in patients with HPV16+ advanced solid tumors in the first half of 2022. We ~~anticipate announcing~~expect to announce initial ~~interim~~ data from highest-dose monotherapy cohort in this ~~study~~trial in the ~~second half~~third quarter of ~~2022. In addition to our efforts in the oncology field, we are also continuing to advance development of the eAPC platform in the infectious diseases field.~~2023.

~~In 2021, we received allowance to proceed with clinical trials from~~At the ~~FDA under our IND for SQZ-AAC-HPV, our lead AAC product candidate derived from red blood cells engineered with tumor-specific antigens. We are currently enrolling monotherapy cohorts as part~~time of the ~~Phase 1 ENVOY-001~~November 2022 strategic realignment announcement, the SQZ-AAC-HPV trial had one patient in the lowest-dose cohort on study. On December 21, 2022, after two treatment cycles, the patient’s CT scan showed reduction of the target lesion—a right hilar lymph node—from 16 millimeters (mm) at baseline to ~~assess safety and tolerability~~10mm, or approximately 38% from baseline, which was consistent with a partial response by RECIST 1.1 criteria. A subsequent scan on February 2, 2023, after four treatment cycles, showed further reduction of the target lesion to 8mm, or 50% from baseline, which was consistent with a confirmed partial response / unconfirmed complete response by RECIST 1.1 criteria, as well as ~~secondary outcome measures~~an unconfirmed complete response. In March 2023, after seven cycles of SQZ-AAC-HPV, a CT scan confirmed the complete response by RECIST 1.1 criteria. Biomarker analysis on this patient identified an inflamed tumor microenvironment that highly expressed MHC1 cells and an increase in CD8+ cell density was observed. In light of this response in the first patient dosed, we decided to continue to enroll patients in the SQZ-AAC-HPV clinical trial. We subsequently enrolled two additional patients in the low-dose cohort of the ~~investigational~~ SQZ-AAC-HPV ~~therapy in HPV16+ advanced solid tumors, and plan to announce initial interim data in the second half~~trial. Both patients achieved a best overall response of ~~2022.~~stable disease.

~~We are also advancing our SQZ~~® ~~TAC platform focused on creating novel~~Upon completion of the dose-limiting toxicity period for the lowest-dose cohort and ~~proprietary cell therapies as it relates~~following review and recommendation by the Study Safety Committee, we advanced SQZ-AAC-HPV-101 trial to ~~modulating or restoring immune tolerance. We have selected Celiac disease as~~ the ~~first proposed autoimmune indication for SQZ~~® ~~TAC platform development. We believe the evidence of a causal disease antigen and T-cell driven pathology, and the substantial unmet need for a~~highest-dose cohort.

On July 3, 2023, we received a written notice from the New York Stock Exchange (“NYSE”) notifying us that the NYSE commenced proceedings to delist our common stock (“Common Stock”) from the NYSE. The NYSE reached this determination pursuant to Section 802.01B of the NYSE’s Listed Company Manual because the Company had fallen below the NYSE’s continued listing standard requiring listed companies to maintain an average global market capitalization of at least $15 million over a consecutive 30-trading day period.

~~tolerizing treatment~~The NYSE suspended trading in the Common Stock immediately after market close on July 3, 2023. Our Common Stock began trading in the over-the-counter markets, under the symbol SQZB, commencing on July 5, 2023.The over-the-counter markets are significantly more limited than the NYSE, and quotation on the over-the-counter markets may result in a less liquid market available for existing and potential securityholders to trade the Common Stock and could further depress the trading price of the Common Stock. We can provide no assurance that the Common Stock will continue to trade on the over-the-counter markets, whether broker-dealers will continue to provide public quotes of the Common Stock or whether the trading volume of the Common Stock will be sufficient to provide for an efficient trading market. See Part I, Item 1A. “Risk Factors—An active, liquid trading market for our common stock may not be sustained” in the 2022 Form 10-K.

On July 25, 2023, we announced that F. Hoffmann-La Roche Ltd (“Roche Basel”) and Hoffmann-La Roche Inc. (“Roche US”, and together with Roche Basel, “Roche”) determined that Roche will not exercise its option ~~provide a compelling opportunity~~under the License and Collaboration Agreement, dated October 5, 2018, by and between us and Roche, to obtain an exclusive license to develop and commercialize the Company’s candidate targeting HPV 16 positive solid tumors under our SQZ-APC-HPV program. We will regain full clinical development and future commercialization rights for our programs targeting HPV 16 positive tumors. We also announced that we intend to explore potential strategic alternatives to support the advancement of our oncology programs including HPV 16 positive tumors, in an effort to allow us to ~~pursue Celiac disease.~~partner all our clinical and preclinical assets across all disease areas and indications. Potential strategic partnerships may include, but are not limited to, a partnership, acquisition, merger, business combination, or other transaction. There can be no assurance that this process will result in us pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms. We ~~presented characterization~~have not yet set a timetable for completion of ~~TAC-mediated mechanisms~~this process and do not intend to comment further unless or until the Board of ~~antigen-specific tolerance in preclinical models at~~Directors has approved a definitive course of action, the ~~2021 Federation of Clinical Immunology Societies,~~process is concluded, or FOCIS, Meeting. We anticipate further development of our TAC-Celiac candidate through IND-enabling studies in 2022 to support an IND submission in the first half of 2023, and, in parallel, are planning to use our proprietary, point-of-care manufacturing system for the production of the clinical batches.it is determined that other disclosure is appropriate.

Since our inception, we have focused substantially all of our resources on building our Cell Squeeze technology, establishing and protecting our intellectual property portfolio, conducting research and development activities, developing our manufacturing process and manufacturing product candidate materials, preparing for and initiating clinical trials of our product candidates, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. Through June 30, ~~2022,~~2023, we have funded our operations primarily with upfront and milestone payments received under our collaboration agreements with Hoffman La Roche Inc. and F. Hoffman La Roche Ltd. (together, "Roche",) and with proceeds from equity and debt offerings, most recently from our initial public offering, or IPO, ~~and~~ follow-on public offering of common stock, or the Follow-on ~~Offering. During the three~~Offering, and ~~six months ended June 30, 2022, we raised $3.1 million, utilizing an “at-the-market”~~our at-the market offering facility ~~pursuant to which we sold 958,663 shares of our common stock.~~with Jefferies LLC ("ATM Facility").

Since our inception, we have incurred significant operating losses. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates. We reported a net loss of ~~$43.3~~$34.5 million for the six months ended June 30, ~~2022.~~2023. As of June 30, ~~2022,~~2023, we had an accumulated deficit of ~~$238.8~~$309.4 million. WeAlthough we anticipate reduced quarterly expenses in each of the remaining quarters in 2023 as a result of the 2022 Restructuring Plan, we expect to continue to incur significant expenses and increasing operating ~~losses for at least the next several years. We~~losses. Absent significant changes to our current operating structure, we expect that although our anticipated quarterly expenses ~~and capital requirements~~for the remainder of 2023 will ~~increase substantially~~be lower compared to the corresponding quarters in 2022, we will continue to incur substantial expenses in connection with our ongoing activities, particularly if and as we:

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, and distribution.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. Currently, market conditions in the biotechnology sector are challenging due to ongoing global and economic uncertainties. Accordingly, we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we would have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with cell therapy product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

~~We believe~~As of August 10, 2023, the issuance date of the interim condensed consolidated financial statements for the three and six months ended June 30, 2023, included elsewhere in this Quarterly Report on Form 10-Q, based on our recurring losses from operations incurred since inception, expectation of continuing operating losses for the foreseeable future and the need to raise additional capital to finance future operations, our management has concluded that there is substantial doubt about our ~~existing cash and cash equivalents will enable us~~ability to ~~fund our operating expenses and capital expenditure requirements into~~continue as a going concern for a period of one year from the ~~fourth quarter of 2023.~~date that the condensed consolidated financial statements are issued. See “—Liquidity and Capital Resources.”

The COVID-19 pandemic and government measures taken in response have had a significant impact, both direct and indirect, on hospitals, businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, prices have increased and facilities and production have been suspended. The future progression of the pandemic and its effects on our business and operations are uncertain.

The COVID-19 pandemic has impacted and may continue to impact personnel at third-party manufacturing facilities or the availability or cost of materials, which would disrupt our supply chain. It also has affected and may continue to affect our ability to enroll patients in and timely complete our ongoing clinical trials of SQZ-PBMC-HPV, SQZ-AAC-HPV and SQZ-eAPC-HPV and delay the initiation of future clinical trials, disrupt regulatory activities or have other adverse effects on our business and operations. For example, we have experienced delays in receiving supplies of raw materials for our preclinical activities due to the impact of COVID-19 on our suppliers’ ability to timely manufacture these materials, and we have experienced an increase in the transportation cost of our product candidates due to the decreased availability of commercial flights. In addition, we have experienced delays in opening clinical trial sites and sites that are open may also have challenges enrolling patients. Further, staff shortages,global economy, including staff that are required to conduct certain testing, such as biopsies, at our clinical sites or at third-party vendors have resulted in delays in site initiations and in some tests not being properly or timely performed or being delayed. In response to the public health directives and to help reduce the risk to our employees, we took precautionary measures, including implementing work-from-home policies for our administrative employees and staggered work times for our lab employees. We plan to continue to implement restrictive measures and are assessing when and how to resume normal operations. The effects of the public health directives and our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines and future clinical trials, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, results of operationscredit and financial ~~condition,~~markets, has recently experienced extreme volatility and disruptions, including, ~~our ability to obtain financing.~~

~~The pandemic~~for example, severely diminished liquidity and ~~related uncertainties have already caused significant disruptions~~credit availability, rising interest and inflation rates, crises involving banking and financial institutions, declines in ~~the financial markets,~~consumer confidence, declines in economic growth, increases in unemployment rates and may continue to cause such disruptions, which could impact our ability to raise additional funds to support our operations. Moreover, the pandemic has significantly impacted inflation and economies worldwide and could result in adverse effects on our business and operations.uncertainty about economic stability. We are monitoring the potential impact of ~~the COVID-19 pandemic~~general economic conditions on our business and financial statements. To date, we have not incurred impairment losses in the carrying values of our assets as a result of ~~the pandemic~~general economic conditions and we are not aware of any specific related event or circumstance that would require us to revise our estimates reflected in ~~our~~these interim condensed consolidated financial statements. ~~We cannot be certain what the overall impact of the COVID-19 pandemic will be~~Unstable market and economic conditions or pandemics may have serious adverse consequences on our business, ~~and people. The extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations,~~ financial condition and ~~liquidity, including planned and future clinical trials and research and development costs, will depend on future developments that are highly uncertain, including as a result~~results of ~~new information that may emerge concerning COVID-19, the actions taken to contain or treat it, and the duration and intensity of the related effects.~~operations.

To date, we have not generated any revenue from product sales and do not expect to do so for the next several years. All of our revenue to date has been derived from three collaboration agreements with Roche, and, to a lesser extent, from government grants.

If our development efforts for our product candidates are successful and result in regulatory approval, or in license or additional collaboration agreements with third parties, we may generate revenue in the future from product sales, payments from additional collaboration or license agreements that we may enter into with third parties, or any combination thereof. We expect that our revenue for the next several years will be derived primarily from ~~our collaboration agreements with Roche as well as any additional~~ collaborations that we may enter into in the future. We cannot provide assurance as to the timing of future milestone or royalty payments or that we will receive any of these payments at all.

~~In April 2017, we entered into a second license and collaboration agreement with Roche (the “2017 Roche Agreement”) to allow Roche to use our Cell Squeeze~~® technology to enable gene editing of immune cells to discover new targets in cancer immunotherapy. The 2017 Roche Agreement included several licenses granted by Roche to us and by us to Roche in order to conduct a specified research program in accordance with a specified research plan. In the first quarter of 2022, the 2017 Roche Agreement was terminated and all active work

streams under the 2017 Roche Agreement were concluded. As of December 31, 2021, we had determined that we expected to incur no additional costs to satisfy the remaining performance obligations under the 2017 Roche Agreement and all remaining deferred revenue was recognized as of that date. There was no revenue recorded under this agreement during the three and six months ended June 30, 2022.

During the three and six months ended June 30, 2021, the total costs expected to be incurred to satisfy the performance obligation under the 2017 Roche Agreement decreased by $0.1 million and $0.3 million, respectively. We recognized revenue of $0.2 million and $0.8 million during the three and six months ended June 30, 2021, respectively.

In October 2018, we entered into a license and collaboration agreement with Roche, or the 2018 Roche Agreement, to jointly develop certain products based on mononuclear antigen presenting cells, or APCs, including human papillomavirus, or HPV, using our SQZ APC platform for the treatment of oncology indications. We granted Roche a non-exclusive license to our intellectual property, and Roche granted us a non-exclusive license to its and its affiliates’ intellectual property for the purpose of performing research activities. In connection with this agreement, the parties terminated an earlier agreement.

Under the 2018 Roche Agreement, Roche was granted option rights to obtain an exclusive license to develop APC products or products derived from the collaboration programs on a product-by-product basis and to develop a Tumor Cell Lysate, or TCL, product. For each of the APC products and TCL product, once Roche exercises its option and pays a specified incremental amount, Roche will receive worldwide, exclusive commercialization rights for the licensed products. ~~Through June 30, 2022,~~In July 2023, Roche ~~had~~determined that it will not ~~exercised any of~~exercise its ~~options~~option under the 2018 Roche ~~Agreement.~~Agreement, to obtain an exclusive license to develop and commercialize the Company’s candidate targeting HPV 16 positive solid tumors under the Company’s SQZ-APC-HPV program.

Under the 2018 Roche Agreement, we received an upfront payment of $45.0 million and are eligible to receive (i) reimbursement of a mid-double-digit percentage of our development costs; (ii) aggregate milestone payments on a product-by-product basis of up to $1.6 billion upon the achievement of specified milestones, consisting of up to $217.0 million of development milestone payments, up to $240.0 million of regulatory milestone payments and up to $1.2 billion of sales milestone payments; and (iii) tiered royalties on annual net sales of APC and TCL products licensed under the agreement at specified rates ranging from a mid-single-digit percentage to a percentage in the mid-twenties. We received the upfront payment of $45.0 million in October 2018 upon execution of the agreement. In addition, during the second quarter of 2019, we received a payment of $10.0 million following the achievement of the first development milestone under the 2018 Roche Agreement related to submission by us of preclinical data to the FDA. During the first quarter of 2020, we received a payment of $20.0 million following the achievement of the second development milestone under the 2018 Roche Agreement related to first-patient dosing in a Phase 1 clinical trial. In the first quarter of 2022, we received a milestone payment of $3.0 million having achieved in the fourth quarter of 2021 the following: (i) the endorsement by an independent panel that we could advance our SQZ-PBMC-HPV clinical trial to combination therapy using checkpoint inhibitors and (ii) the initiation of that therapy.

We identified three performance obligations at the outset of the 2018 Roche Agreement: (1) the license to our intellectual property, the research and development activities related to HPV through Phase 1 clinical trials under a specified research plan, and the manufacturing of our SQZ APC platform and equipment in order to support the HPV research plan (the “first performance obligation”); (2) the license to our intellectual property and the research and development activities on next-generation APCs (the “second performance obligation”); and (3) the license to our intellectual property and the research and development activities on TCL (the “third performance obligation”).

In addition, we determined that the upfront payment of $45.0 million as well as the reimbursable costs of $10.8 million estimated by us constituted the entirety of the consideration to be included in the transaction price. This transaction price of $55.8 million was initially allocated to the three performance obligations based on the relative standalone selling price of each obligation. The potential milestone payments that we may be eligible to receive were excluded from the transaction price at the outset of the arrangement. We reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, we will adjust our estimate of the transaction price.

We separately recognize revenue associated with each of the three performance obligations as the research, development and manufacturing services are provided using an input method, based on the cumulative costs incurred compared to the total estimated costs expected to be incurred to satisfy each performance obligation. The amounts received from Roche that have not yet been recognized as revenue are deferred as a contract liability in our consolidated balance sheet and will be recognized over the remaining research and development period until each performance obligation is satisfied.

During the fourth quarter of 2019, we evaluated our overall program priorities and determined that we would continue to focus our resources on progressing the specified APC programs related to the 2018 Roche Agreement as well as our SQZ AAC and SQZ TAC platforms. As a result of our continuing focus on these specific programs, we reduced the level of priority of the TCL research activities under the 2018 Roche Agreement and expect to perform such TCL research activities over a longer time period than as originally expected under the specified research plan of the agreement. Since the fourth quarter of 2019, we have classified $9.2 million as

~~non-current deferred revenue, which will remain unrecognized as revenue until TCL research activities resume or the 2018 Roche Agreement is modified by us and Roche.~~

~~During the~~ three months ended June 30, ~~2022 and 2021, there were~~2023, as a result of the determination by Roche that it would not exercise its option in relation to the first performance obligation, we concluded that we would incur no ~~significant changes in the total estimated~~further costs ~~expected to be incurred~~ to satisfy ~~the~~our performance obligations and as a result we fully recognized the remaining deferred revenue under ~~the 2018 Roche Agreement.~~this agreement. We recognized ~~revenue of $3.0~~$0.2 million and ~~$4.3~~$3.0 million during the three months ended June 30, ~~2022~~2023 and ~~2021, respectively, under this agreement. We recognized revenue of $5.9 million and $9.1 million during the six months ended June 30,~~ 2022, ~~and 2021,~~ respectively, under this agreement. As of June 30, ~~2022,~~2023, we ~~recorded as a contract liability~~had fully recognized all deferred revenue related to the 2018 Roche Agreement of $15.3 million, of which $6.1 million was a current liability. As of June 30, 2022, the research and development services related to the performance obligations were expected to be performed over a remaining period of six months.Agreement.

As of June 30, 2022, the expected remaining period of performance of our research and development services related to the third performance obligation was not determinable, and it will not become determinable until TCL research activities resume or the 2018 Roche Agreement is modified by us and Roche.

We generate revenue from a government contract with the National Institutes of Health (NIH), which reimburses us for certain allowable costs for funded projects, plus an agreed upon fee. Revenue from government grants is recognized as the qualifying expenses related to the contracts are incurred, provided that there is reasonable assurance of recoverability. Revenue recognized upon incurring qualifying expenses in advance of receipt of funding is recorded as unbilled receivables, a component of prepaid expenses and other current assets, in our consolidated balance sheet.

Research and development expenses consist primarily of costs incurred for our research activities, including development of our product candidates and costs incurred under our collaboration arrangements with Roche, which include:

We expense research and development costs as incurred. Nonrefundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered. Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.

Our direct research and development expenses are tracked on a program-by-program basis and consist of external costs and fees paid to consultants, contractors, CMOs and CROs in connection with our preclinical and clinical development and manufacturing activities. Such program costs also include the external costs of laboratory and consumable materials and costs of raw materials that are directly attributable to and incurred for any single program. We do not allocate employee costs, costs associated with our platform development and discovery efforts, payments made under third-party licensing agreements, costs of laboratory supplies and consumable materials that are not directly attributable to any single program, and facilities expenses, including rent, depreciation and other indirect costs, to specific product development programs because these costs are deployed across multiple programs and our platform technology and, as such, are not separately classified.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities in the near term and in the future, ~~particularly should Roche determine not to exercise its options and~~as we ~~decide to~~ continue clinical development of aour product ~~candidate.~~candidates. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. The successful development of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development, including the following:

A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. In addition, we may never succeed in obtaining regulatory approval for any of our product candidates.

General and administrative expenses consist primarily of salaries and related costs, including retention incentives and stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct

and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services. We anticipate that ~~our~~we will continue to incur general and administrative expenses ~~will increase in the future~~ as we ~~increase~~manage our headcount to support ~~our continued research activities and~~ development of our product candidates. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

Other income (expense), net consists of miscellaneous income and expense unrelated to our core operations.

Since our inception, we have not recorded any income tax benefits for the net losses we have incurred in each year or for our earned research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credit carryforwards will not be realized.

The following table summarizes our results of operations for the three months ended June 30, ~~2022~~2023 and ~~2021:~~2022:

Collaboration revenue decreased by ~~$1.5~~$2.8 million to $0.2 million for the three months ended June 30, 2023, compared to $3.0 million for the three months ended June 30, ~~2022,~~2022. The decrease in collaboration revenue was primarily because we had substantially satisfied the majority of the performance obligations related to the 2018 Roche Agreement as of December 31, 2022. Grant revenue decreased by $0.2 million to $0 for the three months ended June 30, 2023 compared to ~~$4.5~~the three months ended June 30, 2022. The decrease in grant revenue was because we did not perform any government grant related services during the three months ended June 30, 2023.

Research and development expenses decreased by $6.0 million to $12.7 million for the three months ended June 30, ~~2021. The decrease in revenue was primarily due to the following:~~

Grant revenue increased by $0.2 million. We were awarded a government grant by the NIH at the end of the first quarter of 2022 and began performing services under this grant during the second quarter of 2022.

~~Research and development expenses increased by $1.1 million to~~2023, from $18.8 million for the three months ended June 30, ~~2022, from $17.7 million for the three months ended June 30, 2021.~~2022. The net ~~increase~~decrease was primarily due to the following:

•

The ~~changes~~decreases in facilities, laboratory and consumable materials and platform-related external services and other costs were ~~not significant.~~due to cost reductions as a result of the implementation of the Restructuring Plan.

Partially offsetting the above decreases were:

•

SQZ-AAC-HPV program costs increased by $1.0 million primarily as a result of an increase in allocated manufacturing costs and clinical trial-related costs related to patient enrollment.

•

SQZ-eAPC-HPV program costs increased by $1.5 million due to an increase in clinical trial-related costs related to patient enrollment.

General and Administrative Expenses


	THREE MONTHS ENDED JUNE 30,			THREE MONTHS ENDED JUNE 30,
	2022	2021	CHANGE	2023	2022	CHANGE
	(in thousands)			(in thousands)
Personnel related (including stock-based compensation)	$3,626	$3,025	$601	$2,191	$3,626	$(1,435)
Professional, consultant and patent related costs	1,356	1,165	191	1,039	1,356	(317)
Facility related and other costs	1,976	1,743	233	1,327	1,976	(649)
Total general and administrative expenses	$6,958	$5,933	$1,025	$4,557	$6,958	$(2,401)

General and administrative expenses ~~increased~~decreased by ~~$1.1~~$2.4 million during the three months ended June 30, ~~2022~~2023 to $7$4.6 million, compared to ~~$5.9~~$7.0 million for the three months ended June 30, ~~2021.~~2022. The ~~increase~~decrease was primarily due ~~to:~~

•

~~an increase of $0.6 million in personnel-related costs due~~ to ~~a $0.4 million increase in stock-based compensation expense~~cost and ~~a $0.2 million increase in salary and benefit costs~~headcount reductions as a result of ~~increased headcount and higher salary costs.~~

•

~~an increase~~the implementation of ~~$0.2 million in professional, consultant and patent related costs due to higher legal costs.~~

the Restructuring Plan.•

~~an increase of $0.2 million in facility related and other costs primarily due to higher operational costs.~~

Interest Income

Interest income for the three months ended June 30, 2023 and 2022 was $0.3 million and ~~2021 was~~ $0.2 million, ~~and $11 thousand,~~ respectively. The increase in interest income was due to the increase in average interest rates ~~during the respective periods.~~in 2023 despite lower average cash and equivalents available for investment.

Other Income (Expense), Net

Other income (expense), net for the ~~three months ended June 30, 2022 was $0.1 million. The other income of $0.1 million for~~both the three months ended June 30, 2023 and 2022 was ~~primarily related to a grant received from a Massachusetts economic development and investment agency. Other income (expense), net for the three months ended June 30, 2021 was insignificant.~~not significant.

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Comparison of the Six Months Ended June 30, ~~2022~~2023 and ~~2021~~2022

The following table summarizes our results of operations for the six months ended June 30, ~~2022~~2023 and ~~2021:~~2022:


	FOR THE SIX MONTHS ENDED JUNE 30,									FOR THE SIX MONTHS ENDED JUNE 30,
	2022			2021			CHANGE			2023			2022			CHANGE
	(in thousands)									(in thousands)
Revenue:
Collaboration revenue	$	5,877		$	9,993		$	(4,116	)	$	178		$	5,877		$	(5,699	)
Grant revenue		207			—			207			—			207			(207	)
Total revenue	$	6,084		$	9,993		$	(3,909	)	$	178		$	6,084		$	(5,906	)
Operating expenses:
Research and development		35,771			32,422			3,349			25,705			35,771			(10,066	)
General and administrative		13,870			12,054			1,816			9,836			13,870			(4,034	)
Total operating expenses		49,641			44,476			5,165			35,541			49,641			(14,100	)
Loss from operations		(43,557	)		(34,483	)		(9,074	)		(35,363	)		(43,557	)		8,194
Other income (expense):
Interest income		172			20			152			845			172			673
Other income (expense), net		111			(6	)		117			61			111			(50	)
Total other income, net		283			14			269			906			283			623
Net loss	$	(43,274	)	$	(34,469	)	$	(8,805	)	$	(34,457	)	$	(43,274	)	$	8,817

Revenue

Collaboration revenue decreased by ~~$4.1~~$5.7 million to $0.2 million for the six months ended June 30, 2023, compared to $5.9 million for the six months ended June 30, 2022 ~~compared to $10.0 million for the three months ended June 30, 2021.~~ The decrease in revenue was primarily ~~due~~because we had substantially satisfied the majority of the performance obligations related to ~~the following:~~

•

~~an increase in the expected remaining performance period of~~ the 2018 Roche Agreement ~~at the end~~as of ~~2021, resulting in a longer period over which~~December 31, 2022. Grant revenue ~~is recognized in 2022 as compared~~decreased by $0.2 million to ~~the same period in 2021.~~

•

~~a decrease in the number of performance obligations~~$0 for ~~which revenue is being recognized. During~~ the six months ended June 30, ~~2021,~~2023 compared to the six months ended June 30, 2022. The decrease in grant revenue was because we ~~recognized revenue of $0.8 million under the 2017 Roche Agreement whereas~~did not perform any government grant related services during the six months ended June 30, ~~2022, we recognized no revenue under this agreement as the performance obligations were fully satisfied.~~

Research and Development Expenses

FOR THE SIX MONTHS
ENDED JUNE 30,

2022

2021

CHANGE

(in thousands)

Direct research and development expenses by program:

SQZ-PBMC-HPV

$
4,218

$
7,127

$
(2,909
)
SQZ-AAC-HPV

2,887

2,110

777

SQZ-eAPC-HPV

6,055

5,214

841

Other programs

6,345

4,501

1,844

Unallocated research and development expenses:

Personnel related (including stock-based compensation)

11,268

8,674

2,594

Facility related

2,721

2,565

156

Laboratory and consumable materials

646

596

50

Platform-related external services and other

1,631

1,635

(4
)
Total research and development expenses

$
35,771

$
32,422

$
3,349


	FOR THE SIX MONTHS ENDED JUNE 30,
	2023		2022		CHANGE
	(in thousands)
Direct research and development expenses by program:
SQZ-PBMC-HPV	$	1,911	$	4,218	$	(2,307	)
SQZ-AAC-HPV		5,046		2,887		2,159
SQZ-eAPC-HPV		8,232		6,055		2,177
Other programs		1,373		6,345		(4,972	)
Unallocated research and development expenses:
Personnel related (including stock-based compensation)		5,816		11,268		(5,452	)
Facility related		2,297		2,721		(424	)
Laboratory and consumable materials		35		646		(611	)
Platform-related external services and other		995		1,631		(636	)
Total research and development expenses	$	25,705	$	35,771	$	(10,066	)

Research and development expenses ~~increased~~decreased by ~~$3.4~~$10.1 million to $25.7 million for six months ended June 30, 2023, from $35.8 million for the six months ended June 30, ~~2022 from $32.4 million for the six months ended June 30, 2021.~~2022. The net ~~increase~~decrease was primarily due to the following:

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•

SQZ-PBMC-HPV and other program costs decreased by ~~$2.9~~$2.3 million and $5.0 million, respectively, primarily due to the conclusion of patient enrollment in the SQZ-PBMC-HPV clinical trial and the reprioritization of our clinical portfolio in order to focus on the SQZ-eAPC-HPV and SQZ-AAC-HPV programs.

•

Personnel-related costs decreased by $5.5 million primarily due to a ~~decrease in allocated and direct manufacturing costs.~~

•

~~SQZ-AAC-HPV program costs increased by $0.8~~$4.9 million ~~primarily as a result of an increase in allocated manufacturing costs partially offset by a~~ decrease ~~in technology transfer costs and a decrease in research materials expenses.~~

•

~~SQZ-eAPC-HPV program costs increased by $0.8 million due to an increase in allocated and direct manufacturing and clinical costs, partially offset by a decrease in materials costs.~~

•

~~Other program costs increased by $1.8 million primarily due to expenses incurred on developing a point-of-care system to manufacture our product candidates.~~

•

~~The increase in personnel-related costs of $2.6 million was primarily due to a $0.3 million increase in stock-based compensation expense and a $2.3 million increase~~ in salary and benefit costs and a $0.6 million decrease in stock-based compensation as a result of ~~increased~~the headcount reductions included in ~~our research and development function.~~the implementation of the Restructuring Plan in the fourth quarter of 2022.

•

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Partially offsetting the above decreases were:

•

SQZ-AAC-HPV program costs increased by $2.2 million primarily as a result of an increase in allocated manufacturing costs and clinical trial-related costs related to patient enrollment.

•

SQZ-eAPC-HPV program costs increased by $2.2.million due to an increase in clinical trial-related costs related to patient enrollment.

General and Administrative Expenses


	FOR THE SIX MONTHS ENDED JUNE 30,						FOR THE SIX MONTHS ENDED JUNE 30,
	2022		2021		CHANGE		2023		2022		CHANGE
	(in thousands)						(in thousands)
Personnel related (including stock-based compensation)	$	7,108	$	5,934	$	1,174	$	4,817	$	7,108	$	(2,291	)
Professional, consultant and patent related costs		3,102		2,690		412		2,190		3,102		(912	)
Facility related and other costs		3,660		3,430		230		2,829		3,660		(831	)
Total general and administrative expenses	$	13,870	$	12,054	$	1,816	$	9,836	$	13,870	$	(4,034	)

General and administrative expenses ~~increased~~decreased by ~~$1.8~~$4.1 million during the six months ended June 30, ~~2022~~2023 to ~~$13.9~~$9.8 million, compared to ~~$12.1~~$13.9 million for the six months ended June 30, ~~2021.~~2022. The ~~increase~~decrease was primarily due ~~to:~~

•

~~an increase of $1.2 million in personnel-related costs due~~ to ~~a $0.6 million increase in stock-based compensation expense~~cost and ~~a $0.6 million increase in salary and benefit costs~~headcount reductions as a result of ~~increased headcount and higher salary costs.~~

•

~~an increase~~the implementation of ~~$0.4 million in professional, consultant and patent related costs due to higher, legal, recruiting and public relations costs.~~

the Restructuring Plan.•

~~an increase of $0.2 million in facility related and other costs primarily due to higher operational costs.~~

Interest Income

Interest income for the six months ended June 30, 2023 and 2022 was $0.8 million and ~~2021 was~~ $0.2 million, ~~and $20 thousand,~~ respectively. The increase in interest income was due to the increase in average interest rates ~~during the respective periods.~~in 2023 despite lower average cash and equivalents available for investment.

Other Income (Expense), Net

Other income (expense), net for both the six months ended June 30, 2023 and 2022 was $0.1 million. The other income of $0.1 million for the six months ended June 30, 2022 was primarily related to a grant received from a Massachusetts economic development and investment agency. Other income (expense), net for the six months ended June 30, 2021 was insignificant.not significant.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for the next several years, if at all. Through June 30, ~~2022,~~2023, we have funded our operations primarily with payments received in connection with collaboration agreements, proceeds from equity and debt financing, most recently, with proceeds from our IPO, Follow-On Offering and our at-the market offering facility with Jefferies LLC ("ATM Facility"). During the three and six months ended June 30, 2022, we raised $3.1 million, under the ATM Facility, pursuant to which we sold 958,663 shares of our common stock. See Note 1 to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for further information on the ATM Facility. As of June 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$105.6~~$24.7 million.

~~Table~~ We maintain the majority of ~~Contents~~our cash and cash equivalents in accounts with major financial institutions, and our deposits at these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:


	SIX MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2022			2021			2023			2022
	(in thousands)						(in thousands)
Net cash used in operating activities	$	(40,910	)	$	(40,225	)	$	(39,042	)	$	(40,910	)
Net cash used in investing activities		(274	)		(521	)
Net cash provided by (used in) investing activities								43			(274	)
Net cash provided by financing activities		3,232			55,456			—			3,232
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(37,952	)	$	14,710
Net decrease in cash, cash equivalents and restricted cash							$	(38,999	)	$	(37,952	)

Operating Activities

During the six months ended June 30, 2023, operating activities used $39.0 million of cash, primarily resulting from our net loss of $34.5 million and changes in our operating assets and liabilities of $11.6 million, partially offset by net non-cash charges of $7.0 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2023 consisted of a $5.1 million decrease in

Table of Contents

operating lease liabilities, a $1.5 million decrease in prepaid expenses and other current assets, a $4.0 million decrease in accrued expenses, including the payment of approximately $2.8 million of restructuring costs.

During the six months ended June 30, 2022, operating activities used $40.9 million of cash, primarily resulting from our net loss of $43.3 million and changes in our operating assets and liabilities of $7.4 million, partially offset by net non-cash charges of $9.7 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2022 consisted primarily of a $5.9 million decrease in deferred revenue, a $4.8 million decrease in operating lease liabilities, a $0.4 million increase in prepaid expenses and other current assets, a $2.9 million increase in accrued expenses, all of which were partially offset by a $3.0 million decrease in accounts receivable. The decrease in deferred revenue during the six months ended June 30, 2022, was due to the revenue we recognized in that same period under the 2018 Roche Agreement.

During the six months ended June 30, 2021, operating activities used $40.2 million of cash, primarily resulting from our net loss of $34.5 million and changes in our operating assets and liabilities of $14.7 million, partially offset by net non-cash charges of $8.9 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2021 consisted primarily of a $9.8 million decrease in deferred revenue, a $4.6 million decrease in operating lease liabilities, a $2.0 million decrease in accrued expenses and a $0.4 million increase in prepaid expenses and other current assets, all of which were partially offset by a $1.9 million decrease in accounts receivable. The decrease in deferred revenue during the six months ended June 30, 2021 was due to the revenue we recognized in that same period under the 2018 Roche Agreement.

In all periods presented, other changes in prepaid expenses and other current assets, accounts receivable, accounts payable, accrued expenses and other liabilities not described above were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments. In all periods presented, decreases in operating lease liabilities were primarily due to our recurring payments made under recorded operating lease liabilities, including those arising from embedded leases.

Investing Activities

During the six months ended June 30, ~~2022~~2023, net cash provided by investing activities was $43 thousand consisting of proceeds from disposal of equipment, offset by purchases of property and ~~2021,~~equipment. During the six months ended June 30, 2022, net cash used inby investing activities was $0.3 million ~~and $0.5 million, respectively,~~ consisting of purchases of property and equipment.

The purchases of property and equipment in each period were primarily for equipment purchases and leasehold improvements related to the expansion of our research and development activities and the growth of our business.Financing Activities

~~Financing Activities~~During the six months ended June 30, 2023, net cash provided by financing activities was $0.

During the six months ended June 30, 2022, net cash provided by financing activities was $3.2 million consisting of proceeds from the ATM Facility, employee stock purchase plan issuances, and stock option exercises during the period.

During the six months ended June 30, 2021, net cash provided by financing activities was $55.5 million, consisting of net proceeds from the Follow-on Offering in February 2021, of $56.4 million, in addition to proceeds of $1.0 million from stock option exercises during the period, offset by the payment of $1.9 million of IPO and Follow-on Offering costs.

Funding Requirements

WeAbsent significant changes to our current operating structure, we expect that although our anticipated quarterly expenses for the remainder of 2023 will ~~increase substantially~~be lower compared to the corresponding quarters in 2022, we will continue to incur substantial expenses in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. The timing and amount of our operating and capital expenditures will depend largely on:

•

the timing and progress of preclinical and clinical development ~~activities, including geographic expansion of our clinical sites into Europe and Asia;~~activities;

•

the commencement, enrollment or results of the planned clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates;

~~Table of Contents~~

•

the timing and outcome of regulatory review of our product candidates;

•

our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial as well as Roche’s decision whether to exercise its options;

•

changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals;

•

adverse developments concerning our manufacturers and other third-party providers;

•

our ability to obtain materials to produce adequate product supply for any approved product or inability to do so at acceptable prices;

•

our ability to establish collaborations if needed;

•

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we obtain marketing approval;

•

the legal patent costs involved in prosecuting patent applications and enforcing patent claims and other intellectual property claims;

•

additions or departures of key scientific or management personnel;

•

unanticipated serious safety concerns related to the use of our product candidates;

•

the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder; and

•

the severity, duration and impact of the COVID-19 pandemic and macroeconomic conditions, which may adversely impact our business.

~~We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter~~23

Table of ~~2023. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.~~Contents

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders' interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of aour common ~~stockholder.~~stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, including due to adverse macroeconomic conditions such as rising interest rates, we would be required to delay, scale back or discontinue our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

As of June 30, 2023, we had an accumulated deficit of $309.4 million. During the six months ended June 30, 2023, we recorded a net loss of $34.5 million. In addition, during the six months ended June 30, 2023 we used $39.0 million in operating and investing activities resulting in a cash and cash equivalents balance of $24.7 million as of June 30, 2023. We expect that our operating losses and negative cash flows will continue for the foreseeable future. Based on our currently forecasted operating plan, which reflects reduced quarterly spending for the remainder of 2023 as compared to the corresponding quarters in 2022, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through the end of 2023. Therefore, based on our recurring losses from operations incurred since inception, expectation of continuing operating losses for the foreseeable future and the need to raise additional capital to finance future operations, as of August 10, 2023, the issuance date of the interim condensed consolidated financial statements for the three and six months ended June 30, 2023, included elsewhere in this Quarterly Report on Form 10-Q, management has concluded that there is substantial doubt about our ability to continue as a going concern for a period of one year from the date that the condensed consolidated financial statements are issued. We are developing plans to mitigate this risk, which primarily consist of raising additional capital through some combination of equity or debt financings, and/or potentially new collaborations, business transactions and reducing cash expenditures. If we are not able to secure adequate additional funding, we plan to make significant reductions in spending. In that event, we may have to delay, scale back, or eliminate some or all of our research and development programs and technology platform activities which could adversely affect our business prospects, or we may be unable to continue operations.

Contractual Obligations and Commitments

There have been no material changes to our contractual obligations from those described in our ~~2021~~2022 Form 10-K. For additional information, see Note 8 and 9 to our condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our ~~2021~~2022 Form 10-K. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting policies from those described in the ~~2021~~2022 Form 10-K.

~~Table of Contents~~

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As of June 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$105.6~~$24.7 million, which consisted of cash and money market funds. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these balances, an immediate 10% change in interest rates would not have a material effect on the fair market value of our cash and cash equivalents.

We are not currently exposed to significant market risk related to changes in interest rates or foreign currency exchange rates. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations. Our operations may be subject to inflation in the future.

Item 4. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934). Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, ~~2022.~~2023.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended June 30, ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

2725

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not subject to any material legal proceedings.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. In addition to the other information in this Quarterly Report on Form 10-Q, including our interim condensed consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Results of Operations and Financial Condition”, you should carefully consider the factors described in the section titled “Risk Factors” in our ~~2021~~2022 Form 10-K. There have been no material changes to our risk factors as previously disclosed in our ~~2021~~2022 Form ~~10-K.~~10-K, except for as set forth below.

28An active, liquid trading market for our common stock may not be sustained.

On July 3, 2023, we received a written notice from the NYSE notifying us that the NYSE commenced proceedings to delist our common stock from the NYSE. The NYSE reached this determination pursuant to Section 802.01B of the NYSE’s Listed Company Manual because the Company had fallen below the NYSE’s continued listing standard requiring listed companies to maintain an average global market capitalization of at least $15 million over a consecutive 30-trading day period.

The NYSE suspended trading in our common stock immediately after market close on July 3, 2023. On July 5, 2023, our common stock began trading in the over-the-counter markets, under the symbol SQZB. The over-the-counter markets are significantly more limited than the NYSE, and quotation on the over-the-counter markets may result in a less liquid market available for existing and potential securityholders to trade our common stock and has depressed and could further depress the trading price of our common stock. We can provide no assurance that our common stock will continue to trade on the over-the-counter markets, whether broker-dealers will continue to provide public quotes of our common stock or whether the trading volume of our common stock will be sufficient to provide for an efficient trading market.

Further, an inactive trading market may also impair our ability to raise capital by selling our securities, to attract and motivate employees through equity incentive awards, or to acquire other companies, products, or technologies by using our securities as consideration.

The Roche Agreement is important to our business. If we or Roche fail to adequately perform under the Roche Agreement, or if we or Roche terminate the Roche Agreement, the development and commercialization of certain of our product candidates could be materially delayed and our business would be adversely affected.

Under the Roche Agreement, Roche is jointly responsible for the clinical development, with Roche being primarily responsible for the late-stage clinical development of certain potential product candidates. We and Roche may be jointly responsible for conducting global clinical studies and coordinating commercial launch activities.

Termination of the Roche Agreement, in whole or in part, could cause significant delays in any development and commercialization efforts we undertake for our SQZ APC platform in oncology. If the Roche Agreement is terminated, we would need to expand our internal capabilities or enter into another collaboration agreement to compensate for the loss in funding and clinical development support from Roche. Any suitable alternative agreement may take considerable time to negotiate and may also be on less favorable terms to us. Whether or not we identify another suitable collaborator, we would need to seek additional financing to continue development in oncology, or we may be forced to discontinue development of our product candidates in oncology either of which could have a material adverse effect on our business.

In addition, under the Roche Agreement, we also agreed to use commercially reasonable efforts to mutually select additional antigens other than the HPV targeted SQZ-PBMC-HPV to develop collaboratively. With respect to each mutually selected antigen, we granted Roche an option, exercisable after we supply Roche with a clinical proof of concept for a product containing the antigen, to obtain an exclusive license of our intellectual property to exploit the product worldwide for the treatment of oncologic indications using our SQZ APC platform and a microfluidic chip. Roche granted us an option, exercisable with respect to every alternating mutually selected antigen product for which Roche exercises its own option, beginning with the second, to obtain an exclusive license of Roche’s intellectual property to exploit the antigen product in the United States. There can be no assurance that we will mutually agree to select additional antigens or that Roche would exercise any options they may have.

In July 2023, Roche determined that it will not exercise its option under the Roche Agreement to obtain an exclusive license to develop and commercialize the Company’s candidate targeting HPV 16 positive solid tumors under our SQZ-APC-HPV program. We will regain full clinical development and future commercialization rights for our programs targeting HPV 16 positive tumors. In connection with this

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determination, we intend to explore potential strategic alternatives to support the advancement of our oncology programs including HPV 16 positive tumors, in an effort to allow us to partner all our clinical and preclinical assets across all disease areas and indications. Potential strategic partnerships may include, but are not limited to, a partnership, acquisition, merger, business combination, or other transaction. There can be no assurance that this process will result in us pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms or at all.

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Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of ~~Proceeds.~~Proceeds, and Issuer Purchases of Equity Securities.

On October 29, 2020, the SEC declared effective our registration statement on Form S-1 (File No. 333-249422), as amended, filed in connection with our IPO, or the Registration Statement. Pursuant to the Registration Statement, we registered the offer and sale of 5,073,529 shares of our common stock with a proposed maximum aggregate offering price of approximately $91.3 million. On November 3, 2020, we issued and sold 4,411,765 shares of our common stock at a price to the public of $16.00 per share. Upon completion of the IPO on November 3, 2020, we received net proceeds of approximately $65.6 million, after deducting underwriting discounts and commissions, but before deducting offering costs payable by us, which were $2.6 million. On November 12, 2020, in connection with the full exercise of the over-allotment option granted to the underwriters of our IPO, we issued and sold 661,764 additional shares of common stock at a price of $16.00 per share, generating additional net proceeds of $9.8 million after deducting underwriting discounts of $0.7 million.None.

As of June 30, 2022, we estimate that we have used 100% of the net proceeds for advancing the clinical development of our product candidates, development of additional product candidates as well as for working capital and general corporate purposes. There were no material changes in the use of the net proceeds from our IPO as described in our final prospectus relating to the Registration Statement, filed with the SEC on October 30, 2020 pursuant to Rule 424(b)(4).

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a) None.

29(b) None.

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Item 6. Exhibits.

Exhibit

Number

Description

Form

File No.

Exhibit

Filing

Date

Filed/

Furnished

Herewith

3.1

Restated Certificate of Incorporation of SQZ Biotechnologies Company.

8-K

001-39662

3.1

11/04/2020

3.2

Amended and Restated Bylaws of SQZ Biotechnologies Company.

S-1/A

333-249422

3.4

10/26/2020

4.1

Amended and Restated Investors’ Rights Agreement, dated as of December 19, 2019, as amended.

S-1

333-252889

4.1

02/09/2021

4.2

Specimen Stock Certificate.

S-1/A

333-249422

4.2

10/26/2020

31.1

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Instance Document – the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101)

Exhibit
Number

Description

Form

File No.

Exhibit

Filing
Date

Filed/
Furnished
Herewith
3.1

Restated Certificate of Incorporation of SQZ Biotechnologies Company.

8-K

001-39662

3.1

11/04/2020

3.2

Amended and Restated Bylaws of SQZ Biotechnologies Company.

S-1/A

333-249422

3.4

10/26/2020

4.1

Amended and Restated Investors’ Rights Agreement, dated as of December 19, 2019, as amended.

S-1

333-252889

4.1

02/09/2021

4.2

Specimen Stock Certificate.

S-1/A

333-249422

4.2

10/26/2020

10.1

Employment Agreement between SQZ Biotechnologies Company and Marshelle Smith Warren, dated May 25, 2022.

*

10.2

Employment Agreement between SQZ Biotechnologies Company and Micah Zajic, dated July 7, 2022.

8-K

001-39662

10.1

07/11/2022

31.1

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*

31.2

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

**

32.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

**

101.INS

Instance Document – the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101)

~~Table of Contents~~

* Filed herewith.

** Furnished herewith.

3129

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SQZ Biotechnologies Company

Date: August ~~4, 2022~~10, 2023	By:	/s/ ~~Armon Sharei,~~Howard Bernstein, MD, Ph.D.
			~~Armon Sharei,~~Howard Bernstein, MD, Ph.D.
			~~President and~~Interim Chief Executive Officer
		(principal executive officer)



Date: August ~~4, 2022~~10, 2023	By:	/s/ ~~Micah Zajic~~Richard Capasso
			~~Micah Zajic~~Richard Capasso
			Chief ~~Financial~~Accounting Officer
		(principal financial officer)

3230


Delaware		46-2431115
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Arsenal Yards Blvd, Suite 210 Watertown, MA		02472
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	~~SQZ~~SQZB	~~New York Stock Exchange~~OTC Markets


	JUNE 30,			DECEMBER 31,			JUNE 30,			DECEMBER 31,
	2022			2021			2023			2022
Assets
Current assets:
Cash and cash equivalents	$	105,561		$	143,513		$	24,710		$	63,709
Accounts receivable		—			3,000
Prepaid expenses and other current assets		4,491			4,122			2,975			4,495
Total current assets		110,052			150,635			27,685			68,204
Property and equipment, net		2,683			3,046			1,612			1,959
Restricted cash		2,305			2,305			2,305			2,305
Deferred offering costs		310			323
Operating lease right-of-use assets		64,961			69,843			22,546			27,432
Total assets	$	180,311		$	226,152		$	54,148		$	99,900
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,656		$	3,971		$	1,563		$	2,511
Accrued expenses		9,711			6,810			4,861			8,893
Current portion of deferred revenue		6,630			12,507
Accrued restructuring expenses								328			3,162
Deferred revenue								500			715
Current portion of operating lease liabilities		10,446			9,936			2,659			6,562
Total current liabilities		28,443			33,224			9,911			21,843
Deferred revenue, net of current portion		9,196			9,196
Operating lease liabilities, net of current portion		54,484			59,756			19,700			20,909
Total liabilities		92,123			102,176			29,611			42,752
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at June 30, 2022 and December 31, 2021; NaN shares issued or outstanding.		—			—
Common stock, $0.001 par value; 200,000,000 shares authorized at June 30, 2022 and December 31, 2021; 29,148,053 and 28,133,368 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively.		29			28
Preferred stock, $0.001 par value; 10,000,000 shares authorized at June 30, 2023 and December 31, 2022; No shares issued or outstanding.								—			—
Common stock, $0.001 par value; 200,000,000 shares authorized at June 30, 2023 and December 31, 2022; 29,491,125 shares issued and outstanding at June 30, 2023 and December 31, 2022.								29			29
Additional paid-in capital		326,943			319,458			333,939			332,093
Accumulated deficit		(238,784	)		(195,510	)		(309,431	)		(274,974	)
Total stockholders’ equity		88,188			123,976			24,537			57,148
Total liabilities and stockholders’ equity	$	180,311		$	226,152		$	54,148		$	99,900


	COMMON STOCK
	SHARES		AMOUNT		ADDITIONAL PAID-IN CAPITAL		ACCUMULATED DEFICIT			TOTAL STOCKHOLDERS’ EQUITY
Balances at March 31, 2022		28,148,125	$	28	$	321,434	$	(216,548	)	$	104,914
Issuance of common stock under employee stock purchase plan		41,265		—		111					111
Issuance of common stock under at-the-market offering, net of issuance costs of $192		958,663		1		3,091					3,092
Stock-based compensation expense		—		—		2,307		—			2,307
Net loss		—		—		—		(22,236	)		(22,236	)
Balances at June 30, 2022		29,148,053	$	29	$	326,943	$	(238,784	)	$	88,188


	COMMON STOCK
	SHARES		AMOUNT		ADDITIONAL PAID-IN CAPITAL		ACCUMULATED DEFICIT			TOTAL STOCKHOLDERS’ EQUITY
Balances at March 31, 2023		29,491,125	$	29	$	332,788	$	(292,661	)	$	40,156
Stock-based compensation expense		—		—		1,151		—			1,151
Net loss		—		—		—		(16,770	)		(16,770	)
Balances at June 30, 2023		29,491,125	$	29	$	333,939	$	(309,431	)	$	24,537


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer	☐	Accelerated filer		☐

Non-accelerated filer	☒	Smaller reporting company		☒

			Emerging growth company		☒


		Page
	Forward-Looking Statements	1
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1514
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2725
Item 4.	Controls and Procedures	2725
PART II.	OTHER INFORMATION	2826
Item 1.	Legal Proceedings	2826
Item 1A.	Risk Factors	2826
Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	2928
Item 3.	Defaults Upon Senior Securities	2928
Item 4.	Mine Safety Disclosures	2928
Item 5.	Other Information	2928
Item 6.	Exhibits	29
Signatures		3230


	THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,						THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Revenue:
Collaboration revenue	$	3,008		$	4,539		$	5,877		$	9,993		$	178		$	3,008		$	178		$	5,877
Grant revenue		207			—			207			—			—			207			—		$	207
Total revenue		3,215			4,539			6,084			9,993			178			3,215			178			6,084
Operating expenses:
Research and development		18,760			17,682			35,771			32,422			12,729			18,760			25,705			35,771
General and administrative		6,958			5,933			13,870			12,054			4,557			6,958			9,836			13,870
Total operating expenses		25,718			23,615			49,641			44,476			17,286			25,718			35,541			49,641
Loss from operations		(22,503	)		(19,076	)		(43,557	)		(34,483	)		(17,108	)		(22,503	)		(35,363	)		(43,557	)
Other income (expense):
Interest income	156				11			172			20			340			156			845			172
Other income (expense), net		111			(5	)		111			(6	)		(2	)		111			61			111
Total other income, net		267			6			283			14			338			267			906			283
Net loss and comprehensive loss		(22,236	)		(19,070	)		(43,274	)		(34,469	)		(16,770	)		(22,236	)		(34,457	)		(43,274	)
Net loss per share, basic and diluted	$	(0.78	)	$	(0.68	)	$	(1.53	)	$	(1.27	)	$	(0.57	)	$	(0.78	)	$	(1.17	)	$	(1.53	)
Weighted-average common shares outstanding, basic and diluted		28,367,355			27,919,647			28,256,810			27,100,817			29,491,125			28,367,355			29,491,125			28,256,810


	COMMON STOCK				ADDITIONAL					TOTAL
	SHARES		AMOUNT		PAID-IN CAPITAL		ACCUMULATED DEFICIT			STOCKHOLDERS’ EQUITY
Balances at March 31, 2021		27,881,111	$	28	$	311,425	$	(142,168	)	$	169,285
Issuance of common stock upon exercise of stock options		150,293		—		660		—			660
Stock-based compensation expense		—		—		1,829		—			1,829
Net loss		—		—		—		(19,070	)		(19,070	)
Balances at June 30, 2021		28,031,404	$	28	$	313,914	$	(161,238	)	$	152,704


	FAIR VALUE MEASUREMENTS AT JUNE 30, 2022 USING:								FAIR VALUE MEASUREMENTS AT JUNE 30, 2023 USING:
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL		LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Cash equivalents:
Money market funds	$	104,215	$	—	$	—	$	104,215	$	22,233	$	—	$	—	$	22,233
	$	104,215	$	—	$	—	$	104,215	$	22,233	$	—	$	—	$	22,233


	FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2021 USING:								FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2022 USING:
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL		LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Cash equivalents:
Money market funds	$	142,547	$	—	$	—	$	142,547	$	62,598	$	—	$	—	$	62,598
	$	142,547	$	—	$	—	$	142,547	$	62,598	$	—	$	—	$	62,598


	NUMBER OF SHARES			WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM		INTRINSIC VALUE
						(in years)		(in thousands)
Outstanding at December 31, 2021		4,339,523		$	9.75		7.68	$	8,823
Granted		2,485,987			5.80
Exercised		(14,757	)		1.95
Forfeited or canceled		(232,215	)		10.83
Outstanding at June 30, 2022		6,578,538		$	8.24		7.93	$	482
Vested and expected to vest at June 30, 2022		6,578,538		$	8.24		7.93	$	482
Options exercisable at June 30, 2022		2,608,968		$	7.74		6.05	$	482


	JUNE 30, 2022			DECEMBER 31, 2021
Other information:
Weighted-average remaining lease term (in years)		5.7			6.2
Weighted-average discount rate		7.6	%		7.6	%


	JUNE 30,			DECEMBER 31,			JUNE 30,			DECEMBER 31,
	2022			2021			2023			2022
Machinery and equipment	$	6,615		$	6,659		$	6,530		$	6,840
Leasehold improvements		579			579			579			579
Furniture and fixtures		319			319			319			319
	$	7,513		$	7,557		$	7,428		$	7,738
Less: Accumulated depreciation and amortization		(4,830	)		(4,511	)		(5,816	)		(5,779	)
	$	2,683		$	3,046		$	1,612		$	1,959


	Employee Related Costs			Facility Related Costs			Total
Balance as of December 31, 2022	$	3,162		$	—		$	3,162
Expenses incurred		(7	)		—			(7	)
Payments		(2,758	)		(69	)		(2,827	)
Balance as of June 30, 2023	$	397		$	(69	)	$	328