(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 ~~November 3, 2022,~~October 31, 2023, the registrant had ~~29,450,616~~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~~plans to cease remaining research and clinical ~~trials for SQZ-PBMC-HPV, SQZ-AAC-HPV, SQZ-eAPC-HPV or any of~~activities, our ~~other pipeline product candidates and any future product candidates, the clinical utility of our product candidates,~~plans to pursue a strategic transaction to raise additional capital, 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”), the timing of, our execution of, and the expected benefits from our restructuring initiatives and cost-saving measures, 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; our ability to identify and execute one or more strategic alternative transactions; risks associated with a potential bankruptcy or dissolution; 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.


	THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,						THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Revenue:
Collaboration revenue	$	3,130		$	4,755		$	9,011		$	14,748		$	—		$	3,130		$	178		$	9,011
Grant revenue		322			—			524			—			—			322			—		$	524
Total revenue		3,452			4,755			9,535			14,748			—			3,452			178			9,535
Operating expenses:
Research and development		19,631			20,520			55,401			52,942			10,504			19,631			36,209			55,401
General and administrative		6,919			6,691			20,789			18,744			5,614			6,919			15,566			20,789
Restructuring charges														7,683			—			7,567			—
Total operating expenses		26,550			27,211			76,190			71,686			23,801			26,550			59,342			76,190
Loss from operations		(23,098	)		(22,456	)		(66,655	)		(56,938	)		(23,801	)		(23,098	)		(59,164	)		(66,655	)
Other income (expense):
Interest income		436			8			608			28			164			436			1,009			608
Other income (expense), net		19			(2	)		130			(9	)		(2	)		19			59			130
Total other income, net		455			6			738			19			162			455			1,068			738
Net loss and comprehensive loss		(22,643	)		(22,450	)		(65,917	)		(56,919	)		(23,639	)		(22,643	)		(58,096	)		(65,917	)
Net loss per share, basic and diluted	$	(0.77	)	$	(0.80	)	$	(2.30	)	$	(2.08	)	$	(0.80	)	$	(0.77	)	$	(1.97	)	$	(2.30	)
Weighted-average common shares outstanding, basic and diluted		29,284,151			28,050,130			28,603,020			27,421,839			29,491,125			29,284,151			29,491,125			28,603,020

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

Depreciation and amortization expense for ~~each of~~ the three months ended September 30, 2023 and 2022 was $0.1 million and ~~2021 was~~ $0.3 ~~million.~~million respectively. Depreciation and amortization expense for the nine months ended September 30, 2023 and 2022 was $0.5 million and ~~2021 was~~ $0.8 million, respectively. In addition to the depreciation and amortization expense recorded during the nine months ended September 30, 2023, the Company recorded restructuring charges of $~~0.9~~0.5 million ~~respectively.~~(see Note 12).

Based on an evaluation, using market participant assumptions to determine the fair value of the operating lease asset, of the remaining useful life of its office and laboratory facilities (see Note 12), the Company determined that the facility operating lease asset was impaired and recorded a $6.5 million charge as of September 30, 2023.

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.

~~In oncology, we are developing~~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 ~~platforms that are based~~program, focused 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):

Although clinical enrollment has remained challenging across our clinical trials, we have advanced our trial to evaluate SQZ-PBMC-HPV in combination with checkpoint inhibitor therapies. 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+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.

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. 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 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. On September 13, 2023, we and Roche agreed to terminate the 2018 Roche Agreement, effective immediately. No early termination penalty was incurred by either party. As of September 13, 2023, we regained 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 partner all our clinical and preclinical assets across all disease areas and indications. Potential strategic partnerships may include, but are ~~targeting initial interim data~~not limited to, a partnership, acquisition, merger, business combination, asset sales or other transactions. 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 have not yet set a timetable for ~~patients in combination with checkpoint inhibitors~~completion of this process and do not intend to comment further unless or until the Board of Directors has approved a definitive course of action, the process is concluded, or it is determined that other disclosure is appropriate.

On September 29, 2023, our Board of Directors approved an additional workforce reduction of approximately 80% of
the remaining employees (the “2023 Restructuring Plan”) and ceased substantially all research and development activities to reduce
our ongoing operating expenses while we pursue strategic alternatives which may include a sale of the Company or
some or all of its assets by the end of ~~2022. Additionally,~~2023. Should a strategic alternative be implemented, we anticipate using
available net proceeds to discharge our liabilities and outstanding obligations, distribute the remainder, if any, to stockholders and
wind down our operations. Should we be unable to identify and implement a meaningful strategic alternative in a timely
manner, our Board of Directors are ~~continuing~~likely to ~~enroll~~consider bankruptcy or other dissolution proceedings. In connection with the 2023 Restructuring Plan, we determined to continue to dose existing patients in ~~the highest dose monotherapy cohort~~our clinical programs through November 2023 and ~~are targeting additional monotherapy data by the end~~to discontinue enrollment of ~~2022.~~new patients in our clinical trials.

We have continued to build upon the progress of our SQZ® APC platform through the development of the novel 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 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 initial cohort 1 data by the end of 2022.Other Developments

In 2021, we received allowance to proceed with clinical trials from 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 of the Phase 1 ENVOY-001 trial to assess safety and tolerability as well as secondary outcome measures of the investigational SQZ-AAC-HPV therapy in HPV16+ advanced solid tumors, and plan to announce initial interim safety data for a limited number of patients by the end of 2022.

~~We are also advancing our SQZ~~® TAC platform focused on creating novel and proprietary cell therapies as it relates 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 tolerizing treatment option provide a compelling opportunity for us to pursue Celiac disease. We presented characterization of TAC-mediated mechanisms of antigen-specific tolerance in preclinical models at the 2021 Federation of Clinical Immunology Societies, 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.

As we continue to develop our point-of-care manufacturing system we are also evaluating the capacity to utilize the system to reduce manufacturing-related costs for our other therapeutic product candidates. Furthermore, we are evaluating the possibility of allowing access to the Cell Squeeze® ~~technology, associated methods and clinical-scale systems for manufacturing uses together with third-parties.~~

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 September 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 nine months ended September 30, 2022, we raised $3.7 million in net proceeds, utilizing an “at-the-market”~~Offering, and our at-the market offering facility ~~pursuant to which we sold 1,160,768 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 ~~$65.9~~$58.1 million for the nine months ended September 30, ~~2022.~~2023. As of September 30, ~~2022,~~2023, we had an accumulated deficit of ~~$261.4~~$333.1 million. WeAlthough we anticipate reduced expenses for the remainder of 2023, we expect to continue to incur significant expenses and increasing operating losses for at least the next several years. Absent significant changes to our current operating structure, we expect that our expenses and capital requirements will increase substantially 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.expenses. Currently, market conditions in the biotechnology sector are challenging due to ongoing global and economic uncertainties. ~~Accordingly,~~Should we ~~may~~ be unable to ~~raise additional funds~~identify and implement a meaningful strategic alternative in a timely manner, our Board of Directors are likely to consider bankruptcy or ~~enter into such~~ other ~~agreements or arrangements when needed on favorable terms, or at all. If~~dissolution proceedings. In connection with the 2023 Restructuring Plan, 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 unabledetermined to continue to dose existing patients in our ~~operations at planned levels~~clinical programs through November 2023 and ~~be forced~~ to ~~reduce or terminate~~discontinue enrollment of new patients in our ~~operations.~~clinical trials.

As of November ~~9, 2022,~~8, 2023, the issuance date of the interim condensed consolidated financial statements for the three and nine ~~month periods~~months ended September 30, ~~2022,~~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 ability to continue as a going concern for a period of one year from the 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 the use of 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 as appropriate and continue to assess 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, uncertainty about economic stability 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~~uncertainty created by geopolitical conflict, war and ~~economies worldwide and could result in adverse effects on our business and operations.~~terrorism. We are monitoring the potential impact of ~~the COVID-19 pandemic~~general economic conditions on our business and financial statements. ~~To date,~~Unstable market and economic conditions or pandemics may have serious adverse consequences on our business, financial condition and results of operations.

On September 29, 2023, as noted above, our the Board of Directors approved a reduction in our workforce by approximately 80% (see Note 12). In addition, we ~~have not incurred impairment losses~~completed an evaluation of the impact of the reduction in the workforce on the carrying ~~values~~value of our long-lived assets, including our headquarters facility operating lease asset. This process included evaluating the estimated remaining lives, significant changes in the use, and potential impairment charges related to its long-lived assets. Based on our evaluation, we determined that the facility operating lease asset was impaired and recorded a $6.0 million charge as of September 30, 2023.

As a result of the ~~pandemic~~impact of the 2023 Restructuring, including the reduction in force and the anticipated cessation of remaining research and clinical activities in the fourth quarter of 2023, we ~~are not aware~~determined that we would no longer require the use of ~~any specific related event or circumstance that would require us to revise~~ our ~~estimates reflected~~headquarters facility. As noted in ~~our~~Note 13 “Subsequent Event”, in the interim condensed consolidated financial ~~statements. We cannot be certain what~~statements for the ~~overall impact~~three and nine months ended September 30, 2023 included elsewhere in this Quarterly Report on Form 10-Q, on November 6, 2023, in exchange for a commitment that we vacate the facility by mid-November 2023, payment of one quarter of the ~~COVID-19 pandemic~~November 2023 Base Rent, as defined, and certain common area maintenance and utility fees, release of a $2.3 million letter of credit securing our performance under the lease and a lump sum payment of $1.0 million by a certain date following the closing of a strategic transaction, the landlord has agreed to discharge the lease and release us from remaining payment obligations under the lease.. In the event the lump sum is not paid when due, outstanding obligations under the lease will be 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 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.remain in full force.

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 nine months ended September 30, 2022.

During the three and nine months ended September 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 $0.4 million, respectively. We recognized revenue of $0.3 million and $1.0 million during the three and nine months ended September 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~~In July 2023, Roche ~~exercises~~determined that it would not exercise its option and pays a specified incremental amount, Roche will receive worldwide, exclusive commercialization rights for the licensed products. Through September 30, 2022, Roche had not exercised any of its options under the 2018 Roche Agreement.

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~~obtain an exclusive license to develop and commercialize the ~~FDA. During~~Company’s candidate targeting HPV 16 positive solid tumors under the ~~first quarter of 2020,~~Company’s SQZ-APC-HPV program. On September 13, 2023, we ~~received a payment of $20.0 million following the achievement of the second development milestone under~~and Roche agreed to terminate 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 endorsementeffective immediately. No early termination penalty was incurred 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.~~either party.

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 and~~ nine months ended September 30, ~~2022, 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. During the three and nine months ended September 30, 2021, the estimated costs expected to be incurred to satisfy the performance obligations under the 2018 Roche Agreement increased by $0.4 million.this agreement. We recognized ~~revenue of $3.1 million~~$0 and ~~$4.5~~$3.5 million during the three months ended September 30, ~~2022~~2023 and ~~2021, respectively, under this agreement. We recognized revenue of $9.0 million and $13.6 million during the nine months ended September 30,~~ 2022, ~~and 2021,~~ respectively, under this agreement. As of September 30, ~~2022,~~2023, we ~~recorded as a contract liability~~had fully recognized all deferred revenue related to the 2018 Roche Agreement of $12.2 million, of which $3.0 million was a current liability. As of September 30, 2022, the research and development services related to the performance obligations were expected to be performed over a remaining period of three months.Agreement.

As of September 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 we decide to continue clinical development of a product candidate. 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.

Comparison of the Three Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

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

Collaboration revenue decreased by ~~$1.6~~$3.1 million to $0 for the three months ended September 30, 2023, compared to $3.1 million for the three months ended September 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 September 30, 2023 compared to ~~$4.8~~the three months ended September 30, 2022. The decrease in grant revenue was because we did not perform any government grant related services during the three months ended September 30, 2023.

Research and development expenses decreased by $9.1 million to $10.5 million for the three months ended September 30, ~~2021. The decrease in revenue was primarily due to the following:~~

The decrease in collaboration revenue for the three months ended September 30, 2022 was partially offset by a $0.3 million increase in grant revenue. 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 decreased by $0.9 million to~~2023, from $19.6 million for the three months ended September 30, ~~2022, from $20.5 million for the three months ended September 30, 2021.~~2022. The net 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 2022 Restructuring Plan.

General and administrative expenses ~~increased~~decreased by ~~$0.2~~$1.3 million during the three months ended September 30, ~~2022~~2023 to ~~$6.9~~$5.6 million, compared to ~~$6.7~~$6.9 million for the three months ended September 30, ~~2021.~~2022. The ~~increase~~decrease was primarily due ~~to:~~

•

~~an increase of $0.6 million in personnel-related costs due~~ to ~~an increase in salary~~cost and ~~benefit costs~~headcount reductions as a result of ~~increased headcount~~the implementation of the 2022 Restructuring Plan.

Restructuring Charges

Restructuring charges for the three months ended September 30, 2023 were $7.6 million, compared to $0 for the three months ended September 30, 2022. The increase in restructuring charges was primarily due to the following:‌

•

An impairment charge of $6.5 million in connection with the impairment of the right-of-use asset related to our office facilities based on an assessment using market participant data and ~~higher salary costs.~~the remaining estimated useful life and anticipated use.

•

~~a decrease~~Personnel-related costs increased by $1.1 million primarily due to $1.1 million related to the elimination of ~~$0.4~~the requirement for affected employees to provide continued service to keep certain retention payments received in 2023 which were subject to claw back in the event of voluntary termination prior to December 31, 2023, and $0.1 million in ~~professional, consultant~~salary and ~~patent related costs~~one-time termination benefits to the affected employees, including healthcare benefits to be paid in the fourth quarter of 2023.

•

Depreciation expense increased by $0.5 million due to ~~lower legal costs incurred.~~accelerated depreciation expense as a result of reducing the estimated useful lives and accelerating the depreciation expense for certain equipment that will no longer be required and will be disposed of.

Interest Income

Interest income for the three months ended September 30, 2023 and 2022 was $0.2 million and ~~2021 was~~ $0.4 million, ~~and $8 thousand,~~ respectively. The ~~increase~~decrease in interest income was due to ~~the increase in~~our lower average ~~interest rates~~cash and equivalents balances during ~~the respective periods.~~2023 as compared to 2022.

Other Income (Expense), Net

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Other income (expense), net for ~~the~~ both the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 was not significant.

Comparison of the Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

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

FOR THE NINE MONTHS
ENDED SEPTEMBER 30,

2022

2021

CHANGE

(in thousands)

Revenue:

Collaboration revenue

$
9,011

$
14,748

$
(5,737
)
Grant revenue

524

—

524

Total revenue

$
9,535

$
14,748

$
(5,213
)
Operating expenses:

Research and development

55,401

52,942

2,459

General and administrative

20,789

18,744

2,045

Total operating expenses

76,190

71,686

4,504

Loss from operations

(66,655
)

(56,938
)

(9,717
)
Other income (expense):

Interest income

608

28

580

Other income (expense), net

130

(9
)

139

Total other income, net

738

19

719

Net loss

$
(65,917
)

$
(56,919
)

$
(8,998
)

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	FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2023			2022			CHANGE
	(in thousands)
Revenue:
Collaboration revenue	$	178		$	9,011		$	(8,833	)
Grant revenue		—			524			(524	)
Total revenue	$	178		$	9,535		$	(9,357	)
Operating expenses:
Research and development		36,209			55,401			(19,192	)
General and administrative		15,566			20,789			(5,223	)
Restructuring charges		7,567			—			7,567
Total operating expenses		59,342			76,190			(16,848	)
Loss from operations		(59,164	)		(66,655	)		7,491
Other income (expense):
Interest income		1,009			608			401
Other income (expense), net		59			130			(71	)
Total other income, net		1,068			738			330
Net loss	$	(58,096	)	$	(65,917	)	$	7,821

Revenue

Collaboration revenue decreased by ~~$5.7~~$8.8 million to $0.2 million for the nine months ended September 30, 2023, compared to $9.0 million for the nine months ended September 30, 2022 ~~compared to $14.7 million for the three months ended September 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 $0.5 million to ~~the same period in 2021.~~

•

~~a decrease in the number of performance obligations~~$0 for ~~which revenue is being recognized. During~~ the nine months ended September 30, ~~2021,~~2023 compared to the nine months ended September 30, 2022. The decrease in grant revenue was because we ~~recognized revenue of $1.0 million under the 2017 Roche Agreement whereas~~did not perform any government grant related services during the nine months ended September 30, ~~2022, we recognized no revenue under this agreement as the performance obligations were fully satisfied.~~

The decrease in collaboration revenue for the nine months ended September 30, 2022 was partially offset by a $0.5 million increase in grant revenue. 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 2022.2023.

Research and Development Expenses

FOR THE NINE MONTHS
ENDED SEPTEMBER 30,

2022

2021

CHANGE

(in thousands)

Direct research and development expenses by program:

SQZ-PBMC-HPV

$
7,193

$
11,314

$
(4,121
)
SQZ-AAC-HPV

4,889

3,005

1,884

SQZ-eAPC-HPV

9,622

11,607

(1,985
)
Other programs

8,557

5,870

2,687

Unallocated research and development expenses:

Personnel related (including stock-based compensation)

17,604

13,991

3,613

Facility related

4,149

3,816

333

Laboratory and consumable materials

1,041

985

56

Platform-related external services and other

2,346

2,354

(8
)
Total research and development expenses

$
55,401

$
52,942

$
2,459


	FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		CHANGE
	(in thousands)
Direct research and development expenses by program:
SQZ-PBMC-HPV	$	2,502	$	7,193	$	(4,691	)
SQZ-AAC-HPV		7,506		4,889		2,617
SQZ-eAPC-HPV		11,157		9,622		1,535
Other programs		1,461		8,557		(7,096	)
Unallocated research and development expenses:
Personnel related (including stock-based compensation)		9,732		17,604		(7,872	)
Facility related		3,092		4,149		(1,057	)
Laboratory and consumable materials		52		1,041		(989	)
Platform-related external services and other		707		2,346		(1,639	)
Total research and development expenses	$	36,209	$	55,401	$	(19,192	)

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Research and development expenses ~~increased~~decreased by ~~$2.5~~$19.2 million to $36.2 million for nine months ended September 30, 2023, from $55.4 million for the nine months ended September 30, ~~2022 from $52.9 million for the nine months ended September 30, 2021.~~2022. The net ~~increase~~decrease was primarily due to the following:

•

SQZ-PBMC-HPV and other program costs decreased by $4.7 million and $7.1 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 $7.9 million primarily as a result of the headcount reductions included in the implementation of the 2022 Restructuring Plan in the fourth quarter of 2022.

The decreases in facilities, laboratory and consumable materials and platform-related external services and other costs were due to cost reductions as a result of the implementation of the 2022 Restructuring Plan.

Partially offsetting the above decreases were:

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•

SQZ-AAC-HPV program costs increased by ~~$1.9~~$2.6 million primarily as a result of an increase in allocated manufacturing costs and clinical trial-related costs ~~partially offset by reduced technology transfer costs.~~

•

~~Other program costs increased by $2.7 million primarily due~~related to ~~expenses incurred on developing a point-of-care system to manufacture our product candidates, as well as development of other platform related programs.~~

•

Personnel-related costs increased by $3.6 million was primarily due to a $3.7 million increase in salary and benefit costs as a result of increased headcount in our research and development function, partially offset by a $0.1 million decrease in stock-based compensation expense.

•

~~Facilities costs increased by $0.3 million due to higher operational costs.~~

~~Partially offsetting the above increases were:~~

•

~~SQZ-PBMC-HPV program costs, which decreased by $4.1 million primarily due to a decrease in allocated and direct manufacturing costs, partially offset by an increase in clinical trial-related costs.~~patient enrollment.

•

SQZ-eAPC-HPV program costs ~~which decreased~~increased by ~~$2.0 million~~$1.5.million due to ~~a decrease in mRNA materials manufacturing costs, partially offset by~~ an increase in ~~allocated and direct manufacturing and~~ clinical ~~costs.~~trial-related costs related to patient enrollment.

~~The changes in laboratory and consumable materials and platform-related external services and other costs were not significant.~~

General and Administrative Expenses


	FOR THE NINE MONTHS ENDED SEPTEMBER 30,							FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		CHANGE			2023		2022		CHANGE
	(in thousands)							(in thousands)
Personnel related (including stock-based compensation)	$	10,887	$	9,141	$	1,746		$	7,773	$	10,887	$	(3,114	)
Professional, consultant and patent related costs		4,384		4,398		(14	)		3,522		4,384		(862	)
Facility related and other costs		5,518		5,205		313			4,271		5,518		(1,247	)
Total general and administrative expenses	$	20,789	$	18,744	$	2,045		$	15,566	$	20,789	$	(5,223	)

General and administrative expenses ~~increased~~decreased by ~~$2.1~~$5.2 million during the nine months ended September 30, ~~2022~~2023 to ~~$20.8~~$15.6 million, compared to ~~$18.7~~$20.8 million for the nine months ended September 30, ~~2021.~~2022. The ~~increase~~decrease was primarily due ~~to:~~

•

~~an increase of $1.7 million in personnel-related costs due~~ to ~~a $1.1 million increase in salary~~cost and ~~benefit costs~~headcount reductions as a result of ~~increased headcount and higher salary costs and a $0.6~~the implementation of the 2022 Restructuring Plan.

Restructuring Charges

Restructuring charges for the nine months ended September 30, 2023 were $7.7 million, compared to $0 for the nine months ended September 30, 2023. The increase in ~~stock-based compensation expense.~~restructuring charges was primarily due to the following:‌

•

An impairment charge of $6.5 million in connection with the impairment of the right-of-use asset related to our office facilities based on an assessment using market participant data and the remaining estimated useful life and anticipated use.

•

~~an increase of $0.3~~Personnel-related costs increased by $1.1 million ~~in facility related and other costs~~ primarily due to ~~higher operational costs.~~the elimination of the requirement for affected employees to provide continued service to keep certain retention payments received in 2023 which were subject to claw back in the event of voluntary termination prior to December 31, 2023, and $0.1 million in salary and one-time termination benefits to the affected employees, including healthcare benefits to be paid in the fourth quarter of 2023.

•

Depreciation expense increased by $0.5 million due to accelerated depreciation expense as a result of reducing the estimated useful lives and accelerating the depreciation expense for certain equipment that will no longer be required and will be disposed of.

Interest Income

Interest income for the nine months ended September 30, 2023 and 2022 was $1.0 million and ~~2021 was~~ $0.6 million, ~~and $28 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 nine months ended September 30, 2023 and 2022 was $0.1 million. The other income of $0.1 million for the nine months ended September 30, 2022 was primarily related to a grant received from a Massachusetts economic development and investment agency. Other income (expense), net for the nine months ended September 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 September 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 nine months ended September 30, 2022, we raised $3.7 million in net proceeds, under the ATM Facility, pursuant to which we sold 1,160,768 shares of our common stock. See Note 1 to our consolidated financial statements

~~Table of Contents~~

~~appearing elsewhere in this Quarterly Report on Form 10-Q for further information on the ATM Facility.~~ As of September 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$84.2~~$10.2 million. We maintain the majority of 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.

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Cash Flows

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


	NINE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2022			2021			2023			2022
	(in thousands)						(in thousands)
Net cash used in operating activities	$	(62,789	)	$	(61,117	)	$	(53,574	)	$	(62,789	)
Net cash used in investing activities		(387	)		(613	)
Net cash provided by (used in) investing activities								58			(387	)
Net cash provided by financing activities		3,902			55,627			—			3,902
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(59,274	)	$	(6,103	)
Net decrease in cash, cash equivalents and restricted cash							$	(53,516	)	$	(59,274	)

Operating Activities

During the nine months ended September 30, 2023, operating activities used $53.6 million of cash, primarily resulting from our net loss of $58.1 million and changes in our operating assets and liabilities of $12.2 million, partially offset by net non-cash charges of $16.8 million. Net cash used by changes in our operating assets and liabilities for the nine months ended September 30, 2023 consisted of a $6.0 million decrease in operating lease liabilities, a $2.6 million decrease in prepaid expenses and other current assets, a $4.5 million decrease in accrued expenses, including the payment of approximately $2.8 million of restructuring costs.

During the nine months ended September 30, 2022, operating activities used $62.8 million of cash, primarily resulting from our net loss of $65.9 million and changes in our operating assets and liabilities of $11.8 million, partially offset by net non-cash charges of $15.0 million. Net cash used by changes in our operating assets and liabilities for the nine months ended September 30, 2022 consisted primarily of a $9.0 million decrease in deferred revenue, a $7.2 million decrease in operating lease liabilities, a $1.0 million decrease in prepaid expenses and other current assets, a $1.0 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 nine months ended September 30, 2022 was due to the revenue we recognized in that same period under the 2018 Roche Agreement.

During the nine months ended September 30, 2021, operating activities used $61.1 million of cash, primarily resulting from our net loss of $56.9 million and changes in our operating assets and liabilities of $18.7 million, partially offset by net non-cash charges of $14.5 million. Net cash used by changes in our operating assets and liabilities for the nine months ended September 30, 2021 consisted primarily of a $14.5 million decrease in deferred revenue, a $6.8 million decrease in operating lease liabilities, a $1.4 million decrease in accrued expenses, all of which were partially offset by a $2.7 million decrease in prepaid expenses and other current assets and a $1.9 million decrease in accounts receivable. The decrease in deferred revenue during the nine months ended September 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 nine months ended September 30, ~~2022~~2023, net cash provided by investing activities was $58 thousand consisting of proceeds from disposal of equipment, offset by purchases of property and ~~2021,~~equipment. During the nine months ended September 30, 2022, net cash used inby investing activities was $0.4 million ~~and $0.6 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 nine months ended September 30, 2023, net cash provided by financing activities was $0.

During the nine months ended September 30, 2022, net cash provided by financing activities was $3.9 million consisting of proceeds from the ATM Facility, employee stock purchase plan issuances, and stock option exercises during the period.

During the nine months ended September 30, 2021, net cash provided by financing activities was $55.6 million, consisting of net proceeds from the Follow-on Offering in February 2021, of $56.4 million, in addition to proceeds of $1.1 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

~~Absent significant changes~~On September 29, 2023,our Board of Directors approved the 2023 Restructuring Plan, which included (i) an additional workforce reduction of approximately 80% of the remaining employees and (ii) ceased substantially all research and development activities to reduce our ~~current~~ongoing operating ~~structure,~~expenses while we ~~expect that~~pursue strategic alternatives which may include a sale of the Company or some or all of its assets by the end of 2023. Should a strategic alternative be implemented, we anticipate using available net proceeds to discharge our ~~expenses will increase substantially~~liabilities and outstanding obligations, distribute the remainder, if any, to stockholders and wind down our operations. Should we be unable to identify and implement a meaningful strategic alternative in a timely manner, our Board of Directors are likely to consider bankruptcy or other dissolution proceedings. In connection with ~~our ongoing activities, particularly as~~the 2023 Restructuring Plan, we ~~advance the preclinical activities and clinical trials for our product candidates~~determined to continue to dose existing patients 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~~programs through November 2023 and ~~Asia;~~

~~Table~~to discontinue enrollment of ~~Contents~~

•

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

•

~~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.~~

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 a common stockholder. 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.trials.

As of September 30, ~~2022,~~2023, we had an accumulated deficit of ~~$261.4~~$333.1 million. During the nine months ended September 30, ~~2022,~~2023, we recorded a net loss of ~~$65.9~~$58.1 million. In addition, during the nine months ended September 30, ~~2022~~2023 we used ~~$63.2~~$53.5 million in operating and investing activities resulting in a cash and cash equivalents balance of ~~$84.2~~$10.2 million as of September 30, ~~2022.~~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

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existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the ~~fourth~~first quarter of ~~2023, but not for more than one year after the date that the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued.~~2024. 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 November ~~9, 2022,~~8, 2023, the issuance date of ~~these~~the interim condensed consolidated financial statements for the three and nine months ended September 30, ~~2022,~~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~~working to mitigate this risk, which primarily ~~consist of raising~~by reducing cash expenditures and exploring opportunities to raise additional capital through some combination of ~~equity or debt financings, and/or potentially new collaborations, business~~strategic 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 mayShould the Company be unable to ~~continue operations.~~

~~Table~~identify and implement a meaningful strategic alternative or raise additional capital in a timely manner, the Company’s Board of ~~Contents~~Directors is likely to consider bankruptcy or other dissolution proceedings.

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.

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As of September 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$84.2~~$10.2 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.

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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 September 30, ~~2022.~~2023.

Changes in Internal Control over Financial Reporting

~~Table of Contents~~

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 September 30, ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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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. ~~Other than as discussed below, there~~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.

We may be unable to realize expected benefits from our restructuring plan and we may need to pursue bankruptcy or dissolution if we are not able to identify and implement a meaningful strategic alternative in a timely manner.

On September 29, 2023, our Board of Directors approved the 2023 Restructuring Plan, which includes a workforce reduction of approximately 80% of our employees, ceasing substantially all research and development activities to reduce our ongoing operating expenses, and other cost saving measures, such as the discharge of our headquarters facilities lease, while we pursue strategic alternatives, which may include a sale of the Company or some or all of our assets.

We may undertake further restructuring actions or workforce reductions in the future. These types of restructuring and cost reduction activities are complex and may result in unintended consequences and costs, including decreased employee morale, loss of institutional knowledge and expertise, and potential impacts on financial reporting. They could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel. Should a strategic alternative be implemented, we anticipate using
available net proceeds to discharge our liabilities and outstanding obligations, distribute the remainder, if any, to stockholders and wind down our operations.Should we be unable to identify and implement a meaningful strategic alternative in a timely manner, our Board of Directors is likely to consider bankruptcy or other dissolution proceedings. If we do not ~~currently have sufficient working capital~~successfully manage our current restructuring plan or other similar activities that we may undertake in the future, or if we fail to ~~fund~~identify and implement a meaningful strategic alternative in a timely manner, our ~~planned~~business, financial condition, and results of operations may be materially adversely affected and we may need to pursue bankruptcy or dissolution.

An active, liquid trading market for ~~the next twelve months and~~our common stock may not be ~~able to continue as a going concern.~~
sustained.

~~As of November 9, 2022,~~On July 3, 2023, we received a written notice from the ~~issuance date~~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 ~~interim condensed consolidated financial statements, included elsewhere~~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 ~~this Quarterly Report~~our common stock immediately after market close on ~~Form 10-Q,~~July 3, 2023. On July 5, 2023, our ~~management~~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 ~~concluded~~depressed and could further depress the trading price of our common stock. We can provide no assurance that ~~there is substantial doubt about~~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 ~~continue~~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 was important to our business. As a ~~going concern, as we currently do~~result of the termination of the Roche Agreement, the development and commercialization of certain of our product candidates could be materially delayed and our business will be adversely affected.

In July 2023, Roche determined that it will not ~~have adequate financial resources~~exercise its option under the Roche Agreement to ~~fund~~obtain an exclusive license to develop and commercialize the Company’s candidate targeting HPV 16 positive solid tumors under our ~~forecasted operating costs for at least twelve months from~~SQZ-APC-HPV program. On September 13, 2023, the ~~filing of this Quarterly Report on Form 10-Q.~~Company and Roche agreed to terminate the 2018 Roche Agreement, effective immediately. No early termination penalty was incurred by either party. As of September ~~30, 2022,~~13, 2023, we ~~have~~regained full clinical development and future commercialization rights for our programs targeting HPV 16 positive tumors. In connection with this determination, we intend to explore potential strategic alternatives to support the advancement of our oncology programs including HPV 16 positive tumors, in an ~~accumulated deficit~~effort to allow us to partner all our clinical and

Table of $261.4 million. During the nine months ended September 30, 2022, we recorded a net loss of $65.9 million. In addition, during the nine months ended September 30, 2022 we used $63.2 million in operatingContents

preclinical assets across all disease areas and investing activities resulting in a cash and cash equivalents balance of $84.2 million as of September 30, 2022.As a result, absent significant changes to our operating structure, our existing cash resourcesindications. Potential strategic partnerships may include, but are not ~~expected~~limited to, ~~be sufficient to meet our anticipated needs over the next twelve months from the date hereof, and we will need to raise additional capital to continue our operations and to implement our~~a partnership, acquisition, merger, business ~~plan. Although we have been able to raise capital in the past primarily through debt~~combination, or ~~equity financings and strategic collaborations, there is~~other transaction. There can be no assurance that wethis process will result in us pursuing a transaction or that any transaction, if pursued, will be ~~able to obtain additional financing~~completed on ~~favorable~~attractive terms or at all. Should a strategic alternative be implemented, we anticipate using available net proceeds to discharge our liabilities and outstanding obligations, distribute the remainder, if any, to stockholders and wind down our operations. Should we be unable to identify and implement a meaningful strategic alternative in a timely manner, our Board of Directors is likely to consider bankruptcy or other dissolution proceedings.

~~If we raise funds from the issuance of equity securities, substantial dilution to our existing stockholders would likely result. If we raise additional funds by incurring debt financing, the terms~~Termination of the ~~debt~~Roche Agreement has caused significant delays in any development and commercialization efforts we undertake for our SQZ APC platform in oncology as 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 ~~involve significant cash payment obligations as well as covenants~~take considerable time to negotiate and ~~specific financial ratios that~~ may ~~restrict~~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 ~~ability to operate~~product candidates in oncology either of which could have a material adverse effect on our business. Further, ~~any contracts or license arrangements~~On September 29, 2023, our Board of Directors approved the 2023 Restructuring Plan and ceased substantially all research and development activities to reduce our ongoing operating expenses while we ~~enter into~~pursue strategic alternatives. See “—We may be unable to ~~raise funds may require us to relinquish~~realize expected benefits from our ~~rights to our products or technology,~~restructuring plan and we may need to pursue bankruptcy or dissolution if we are not be able to ~~enter into any such contracts~~pursue one or license arrangements on favorable terms, or at all. Additionally, our fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates, if approved. Having insufficient funds may require us to delay or scale back our development programs and other activities, revise our business plan and strategy, liquidate certain assets to remain afloat, or cease our operations altogether.more strategic alternatives.”

Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing. If potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.

We have prepared our condensed consolidated financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Our interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q do not include any adjustments to reflect our possible inability to continue as a going concern within one year after the issuance of such financial statements. If we are unable to continue as a going concern, you could lose all or part of your investment in our Company.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~Effective~~(a) We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 1.01 - Entry into a Material Definitive Agreement and Item 1.02 - Termination of a Material Definitive Agreement.

On November ~~1, 2022, our Board of Directors, or Board, appointed existing director Bernard Coulie, M.D., to serve~~6, 2023, as ~~Chair~~a result of the ~~Board following Amy W. Schulman's decision~~impact of the 2023 Restructuring, including the reduction in force and anticipated cessation of remaining research and clinical activities in the fourth quarter of 2023, the Company entered into an agreement (the “Agreement”) with Arsenal Yards Core Holding LLC, successor in interest under the lease to ~~step down as Chair. Ms. Schulman continues to serve on~~Arsenal Yards Holding LLC (the “Landlord”), the ~~Board.~~landlord of the Company’s headquarters facility (the “Premises”).

30Under the Agreement, Landlord has agreed to terminate the lease for the Premises (the “Lease”), subject to certain terms and conditions, including that the Company will (i) vacate the Premises on or before November 15, 2023, (ii) pay to the Landlord at least 25% of the November 2023 Base Rent (as defined in the Lease) and certain common area maintenance and utility fees, (iii) release a letter of credit for $2.3 million securing the Company’s performance under the Lease, and (iv) pay to the Landlord a lump sum payment of $1.0 million (the “Payment”) following the closing of a strategic transaction by February 1, 2024 subject to extension upon request to April 1, 2024. Following the making of the Payment, Landlord has agreed to discharge the Lease and release the Company from remaining payment obligations under the Lease.

In the event the Payment is not made by April 1, 2024, outstanding obligations under the Lease will remain in full force and effect and Landlord’s agreement to terminate the Lease will be null and void.

The foregoing descriptions of the Lease and the Agreement do not purport to be complete and are subject to and qualified in their entirety by reference to the Lease and the Agreement. A copy of the Lease was filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-1/A, filed with the SEC on October 26, 2020 and is incorporated herein by reference. A copy of the Agreement is attached hereto as Exhibit 10.6 to this Quarterly Report on Form 10-Qand is incorporated herein by reference..

(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

10.1

Amended Non-Employee Director Compensation Program

10.2

Transition Agreement between the Registrant and Howard Bernstein, dated October 3, 2023

10.3

Transition Agreement between the Registrant and Richard Capasso, dated October 3, 2023

10.4

Transition Agreement between the Registrant and Lawrence Knopf, dated October 3, 2023

10.5

Transition Agreement between the Registrant and Marshelle Smith Warren, dated October 3, 2023

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

~~Table of Contents~~

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

Separation Agreement between SQZ Biotechnologies Company and Howard Bernstein, dated September 2, 2022.

*

10.2

Transition Consulting Agreement between SQZ Biotechnologies Company and Howard Bernstein, dated November 1, 2022.

*

10.3

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

*

3228

Table of Contents

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)

* Filed herewith.

** Furnished herewith.

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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: November ~~9, 2022~~8, 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: November ~~9, 2022~~8, 2023	By:	/s/ ~~Micah Zajic~~Richard Capasso
			~~Micah Zajic~~Richard Capasso
			Chief ~~Financial~~Accounting Officer
		(principal financial officer)

3430


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


	SEPTEMBER 30,			DECEMBER 31,			SEPTEMBER 30,			DECEMBER 31,
	2022			2021			2023			2022
Assets
Current assets:
Cash and cash equivalents	$	84,239		$	143,513		$	10,193		$	63,709
Accounts receivable		—			3,000
Prepaid expenses and other current assets		3,098			4,122			1,894			4,495
Total current assets		87,337			150,635			12,087			68,204
Property and equipment, net		2,521			3,046			978			1,959
Restricted cash		2,305			2,305			2,305			2,305
Deferred offering costs		306			323
Operating lease right-of-use assets		62,385			69,843			14,418			27,432
Total assets	$	154,854		$	226,152		$	29,788		$	99,900
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,311		$	3,971		$	1,913		$	2,511
Accrued expenses		7,823			6,810			4,352			8,893
Current portion of deferred revenue		3,500			12,507
Accrued restructuring expenses								170			3,162
Deferred revenue								—			715
Current portion of operating lease liabilities		10,627			9,936			2,397			6,562
Total current liabilities		25,261			33,224			8,832			21,843
Deferred revenue, net of current portion		9,196			9,196
Operating lease liabilities, net of current portion		51,823			59,756			19,075			20,909
Total liabilities		86,280			102,176			27,907			42,752
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2022 and December 31, 2021; No shares issued or outstanding.		—			—
Common stock, $0.001 par value; 200,000,000 shares authorized at September 30, 2022 and December 31, 2021; 29,350,158 and 28,133,368 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.		29			28
Preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2023 and December 31, 2022; No shares issued or outstanding.								—			—
Common stock, $0.001 par value; 200,000,000 shares authorized at September 30, 2023 and December 31, 2022; 29,491,125 shares issued and outstanding at September 30, 2023 and December 31, 2022.								29			29
Additional paid-in capital		329,972			319,458			334,922			332,093
Accumulated deficit		(261,427	)		(195,510	)		(333,070	)		(274,974	)
Total stockholders’ equity		68,574			123,976			1,881			57,148
Total liabilities and stockholders’ equity	$	154,854		$	226,152		$	29,788		$	99,900


	COMMON STOCK
	SHARES		AMOUNT		ADDITIONAL PAID-IN CAPITAL		ACCUMULATED DEFICIT			TOTAL STOCKHOLDERS’ EQUITY
Balances at June 30, 2022		29,148,053	$	29	$	326,943	$	(238,784	)	$	88,188
Issuance of common stock under at-the-market offering, net of issuance costs of $3		202,105		—		653		—			653
Stock-based compensation expense		—		—		2,376		—			2,376
Net loss		—		—		—		(22,643	)		(22,643	)
Balances at September 30, 2022		29,350,158	$	29	$	329,972	$	(261,427	)	$	68,574


	COMMON STOCK
	SHARES		AMOUNT		ADDITIONAL PAID-IN CAPITAL		ACCUMULATED DEFICIT			TOTAL STOCKHOLDERS’ EQUITY
Balances at June 30, 2023		29,491,125	$	29	$	333,939	$	(309,431	)	$	24,537
Stock-based compensation expense		—		—		983		—			983
Net loss		—		—		—		(23,639	)		(23,639	)
Balances at September 30, 2023		29,491,125	$	29	$	334,922	$	(333,070	)	$	1,881


☒	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	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	~~Controls and Procedures~~	27
~~PART II.~~	~~OTHER INFORMATION~~	29
~~Item 1.~~	~~Legal Proceedings~~	29
~~Item 1A.~~	~~Risk Factors~~	29
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	30
~~Item 3.~~	~~Defaults Upon Senior Securities~~	30
~~Item 4.~~	Mine Safety Disclosures	3027
Item 5.	Other Information	3027
Item 6.	Exhibits	3128
Signatures		3430


	COMMON STOCK				ADDITIONAL					TOTAL
	SHARES		AMOUNT		PAID-IN CAPITAL		ACCUMULATED DEFICIT			STOCKHOLDERS’ EQUITY
Balances at June 30, 2021		28,031,404	$	28	$	313,914	$	(161,238	)	$	152,704
Issuance of common stock upon exercise of stock options		33,365		—		171		—			171
Stock-based compensation expense		—		—		2,781		—			2,781
Net loss		—		—		—		(22,450	)		(22,450	)
Balances at September 30, 2021		28,064,769	$	28	$	316,866	$	(183,688	)	$	133,206


	FAIR VALUE MEASUREMENTS AT SEPTEMBER 30, 2022 USING:								FAIR VALUE MEASUREMENTS AT SEPTEMBER 30, 2023 USING:
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL		LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Cash equivalents:
Money market funds	$	83,107	$	—	$	—	$	83,107	$	4,360	$	—	$	—	$	4,360
	$	83,107	$	—	$	—	$	83,107	$	4,360	$	—	$	—	$	4,360


	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		2,541,920			5.75
Exercised		(14,757	)		1.95
Forfeited or canceled		(260,186	)		10.63
Outstanding at September 30, 2022		6,606,500		$	8.19		7.69	$	169
Vested and expected to vest at September 30, 2022		6,606,500		$	8.19		7.69	$	169
Options exercisable at September 30, 2022		2,825,300		$	7.97		5.94	$	169


	SEPTEMBER 30, 2022			DECEMBER 31, 2021
Other information:
Weighted-average remaining lease term (in years)		5.5			6.2
Weighted-average discount rate		7.6	%		7.6	%


	Employee Related Costs			Facility Related Costs			Total
Balance as of December 31, 2022	$	3,162		$	—		$	3,162
Expenses incurred		1,071			6,496			7,567
Payments		(2,897	)		(69	)		(2,966	)
Non-cash charges		(1,097	)		(6,496	)		(7,593	)
Balance as of September 30, 2023	$	239		$	(69	)	$	170


	SEPTEMBER 30,			DECEMBER 31,			SEPTEMBER 30,			DECEMBER 31,
	2022			2021			2023			2022
Machinery and equipment	$	6,728		$	6,659		$	6,467		$	6,840
Leasehold improvements		579			579			579			579
Furniture and fixtures		319			319			319			319
	$	7,626		$	7,557		$	7,365		$	7,738
Less: Accumulated depreciation and amortization		(5,105	)		(4,511	)		(6,387	)		(5,779	)
	$	2,521		$	3,046		$	978		$	1,959