Item 1.01. | Entry into a Material Definitive Agreement. |
On September 26, 2024, Cue Biopharma, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Oppenheimer & Co. Inc., as representative of the several underwriters named therein (collectively, the “Underwriters”), relating to an underwritten public offering of (i) 11,564,401 shares (the “Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”), and accompanying common stock warrants (“Common Stock Warrants”) to purchase 2,891,100 shares of Common Stock, and (ii) to certain investors in lieu of Common Stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase 12,435,599 shares of Common Stock and accompanying Common Stock Warrants to purchase 3,108,900 shares of Common Stock. All of the Shares, the Pre-Funded Warrants and the Common Stock Warrants will be sold by the Company. Each Share is being offered and sold together with an accompanying Common Stock Warrant at a combined offering price of $0.50, and each Pre-Funded Warrant is being offered and sold together with an accompanying Common Stock Warrant at a combined offering price of $0.499, which is equal to the combined offering price per share of Common Stock and accompanying Common Stock Warrant less the $0.001 exercise price of each Pre-Funded Warrant. The Underwriters will purchase (i) each Share and accompanying Common Stock Warrant from the Company pursuant to the Underwriting Agreement at a combined price of $0.47 and (ii) each Pre-Funded Warrant and accompanying Common Stock Warrant from the Company pursuant to the Underwriting Agreement at a combined price of $0.46906.
The Company estimates that the net proceeds from the offering will be approximately $10.7 million, after deducting underwriting discounts and commissions and estimated offering expenses, and excluding any proceeds that may be received from exercise of the Common Stock Warrants and the Pre-Funded Warrants.
The Shares, the Pre-Funded Warrants and the Common Stock Warrants will be issued pursuant to a shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission (the “SEC”) on May 9, 2023 and declared effective by the SEC on May 26, 2023 (File No. 333-271786). A prospectus supplement relating to the offering has been filed with the SEC. The closing of the offering is expected to take place on or about September 30, 2024, subject to the satisfaction of customary closing conditions.
Each Pre-Funded Warrant will have an exercise price equal to $0.001 per share. Each Pre-Funded Warrant will be exercisable from the date of issuance by means of a cashless exercise. Under the Pre-Funded Warrants, the Company may not effect the exercise of any Pre-Funded Warrant, and a holder will not be entitled to exercise any portion of any Pre-Funded Warrant that, upon giving effect to such exercise, would cause: (i) the aggregate number of shares of Common Stock beneficially owned by such holder (together with its affiliates) to exceed 4.99% or 9.99%, as elected by the holder, of the number of shares of Common Stock outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company’s securities beneficially owned by such holder (together with its affiliates) to exceed 4.99% or 9.99%, as elected by the holder, of the combined voting power of all of the Company’s securities outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrant, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon 61 days’ notice to the Company. In addition, in certain circumstances, upon a fundamental transaction (as described in the Pre-Funded Warrant), a holder of Pre-Funded Warrants will be entitled to receive, upon exercise of the Pre-Funded Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-Funded Warrants immediately prior to the fundamental transaction; provided, however, that in the event of a fundamental transaction where the consideration consists solely of cash, solely of marketable securities or a combination thereof, each Pre-Funded Warrant will be deemed to be exercised in full in a cashless exercise effective immediately prior to and contingent upon the consummation of such fundamental transaction.
Each Common Stock Warrant will have an exercise price equal to $0.50. Each Common Stock Warrant will be exercisable from the date of issuance until the date that is five years after the original issuance date. Each Common Stock Warrant is exercisable solely by means of a cash exercise, except that the Common Stock Warrant is exercisable via cashless exercise if at the time of exercise, a registration statement registering the issuance of the shares of Common Stock underlying the Common Stock Warrants under the Securities Act of 1933, as amended (the “Securities Act”), is not then effective. The Common Stock Warrants include certain rights upon fundamental transactions (as described