On November 30, 2022, the Company’s Board of Directors approved a restructuring plan and strategic prioritization (the “2022 Restructuring Plan”) of its clinical portfolio to concentrate on the development of its second-generation enhanced Antigen Presenting Cells (eAPC) cell therapy program. In connection with the 2022 Restructuring, the Company reprioritized its clinical and development programs, determined to terminate operations in its Hong Kong and China subsidiaries and the Board of Directors approved a workforce reduction of approximately 60%, including research and development and general and administrative support functions in the United States and China. In the first quarter of 2023, the Company decided to continue to enroll patients in its SQZ-AAC-HPV (AAC) clinical trial.

On September 29, 2023, the Company’s 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 the Company’s ongoing operating expenses while it pursues strategic alternatives which may include a sale of the Company or some or all of its assets by the end of 2023. In connection with the 2023 Restructuring Plan, the Company determined to continue to dose existing patients in its clinical programs through November 2023 and to discontinue enrollment of new patients in its clinical trials.

Also in connection with 2023 Restructuring Plan, each of Howard Bernstein, Ph.D., Interim Chief Executive Officer of the Company, Richard Capasso, Chief Accounting Officer of the Company, Marshelle Smith Warren, M.D., Chief Medical Officer of the Company, and Lawrence Knopf, General Counsel of the Company (collectively, the “Executive Officers”) each entered into transition agreements amending the terms of each of their employment agreements with the Company. The transition agreements provide for an agreed employment termination date for the Executive Officers of November 15, 2023, subject to certain early termination events, and a reduction in their current annual base salaries and expected working time commitments.‌ Following their respective employment termination dates, the Executive Officers are expected to enter into consulting agreements with the Company under which they will perform consulting services on an as-needed basis in return for hourly consulting fees.‌

The following table summarizes the activity for accrued restructuring costs for the nine months ended September 30, 2023 (in thousands):


	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

During the nine months ended September 30, 2023, the Company recorded $7.6 million of restructuring charges. Employee-related costs of $1.1 million were related to the elimination of the requirement for affected employees to provide continued service to retain certain retention payments received in 2023 which were subject to claw back in the event of voluntary termination prior to December 31, 2023, and salary and one-time termination benefits to the affected employees, including healthcare benefits to be paid in the fourth quarter of 2023.

The Company completed an evaluation of the impact of the 2023 Restructuring on the carrying value of its long-lived assets, including the headquarters facility operating lease asset. This process includes evaluating the estimated remaining lives, significant changes in the use, and potential impairment charges related to its long-lived assets. The Company used market participant assumptions to determine the fair value of the operating lease asset. Based on its evaluation, the Company determined that the facility operating lease asset was impaired and recorded a $6.5 million charge as of September 30, 2023, to reflect the estimated remaining life and reduced anticipated use of the facility. The remaining $0.5 million in facility-related charges represent accelerated depreciation on office and laboratory equipment that is no longer in use or recoverable and will be disposed of.

The accrued restructuring liability of $0.2 million is payable within the next twelve months and has been included as accrued restructuring costs in current liabilities in the consolidated balance sheet. The remaining accrued restructuring charges are subject to assumptions, and actual amounts may differ. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with restructuring activities.‌