Cue Biopharma Inc

This proposal requests shareholder approval, pursuant to Nasdaq Listing Rules 5635(a), (c) and (d), to allow the company to issue up to 4,642,632 shares of common stock upon the exercise of pre-funded warrants and warrants issued in May 2026 in connection with a licensing arrangement for Ascendant-221 and a related private placement. Management seeks approval because the potential issuance far exceeds Nasdaq thresholds (representing approximately 142% of outstanding shares as of April 30, 2026) and because certain warrants were issued at effective discounts and to an insider (the newly appointed CEO), making Nasdaq listing-rule waivers/approvals necessary for the underlying exercises to occur. The transactions gave the company approximately $28 million of net proceeds and provided partial consideration for an exclusive license that includes upfront, milestone and royalty obligations; approval would permit the holders to exercise and the company to realize potential cash proceeds (up to ~$15 million if all cash Warrants are exercised) and allow the licensed program to be further developed and integrated into Cue’s pipeline. The primary risks to existing stockholders are substantial dilution to voting power and economic interests, potential negative signaling and increased share overhang that could pressure market price and increase volatility. Management notes contractual obligations to continue to hold special meetings until approval is obtained and the potential material costs of repeated solicitations, arguing approval is necessary to implement the financings and licensing economics. The participation of the new CEO in the financing creates a potential conflict that the company addresses by disclosing the terms and emphasizing that the financing was offered on the same terms to independent investors; nonetheless, shareholder approval is sought in part because Nasdaq treats that participation as an equity-compensation-related issuance. The board recommends a FOR vote on the basis that the transactions advance strategic objectives (acquisition and development of Ascendant-221), provide financing to support clinical development and corporate operations, and require shareholder authorization under Nasdaq rules to permit exercise consistent with the transaction agreements.

This management proposal asks shareholders to approve the Cue Biopharma 2026 Stock Incentive Plan, which would replace the 2025 Plan and provide a calibrated share reserve (including 2,327,826 new shares plus rollover shares and annual evergreen increases) to enable equity awards necessary to recruit, retain and motivate employees and directors following significant dilution from the recent licensing transaction and private placement. Management argues that the existing plan’s remaining share pool is insufficient given the dilution and that equity awards are essential to align employee interests with stockholders and to remain competitive in hiring. The 2026 Plan includes governance-oriented features—such as limits on repricing without shareholder approval, annual non-employee director caps, share counting rules, and clawback language—intended to protect shareholder interests. The board proposes a “reset” long-term incentive package (the 2026 LTI) consisting of approximately 1.8 million RSUs, half time-based and half subject to share-price thresholds tied to a multiple of the company’s recent financing price, which aims to balance retention and performance alignment but would be highly dilutive if fully granted. Management provides quantitative disclosure on overhang (36% current; 64% if the new shares are included) and burn rates to frame the dilutive impact and asserts the requested pool is calibrated to expected hiring and grant needs. If the plan is not approved, the company could face retention risks or have to increase cash compensation, potentially straining cash resources and hindering clinical and corporate objectives. The board recommends a FOR vote based on the need to maintain competitive compensation, align incentives, and support the company’s strategic development of Ascendant-221.

This proposal seeks shareholder authorization to permit the proxies to adjourn the Special Meeting to a later date or dates if there are insufficient votes to approve Proposal 1 and/or Proposal 2, enabling additional solicitation of proxies. Management's stated rationale is pragmatic: if shareholders initially decline or abstain such that requisite majorities are not achieved, an adjournment provides time to further engage with holders, solicit additional support, and potentially avoid the costs and disruption of repeated unscheduled special meetings. The proposal does not change the substance of Proposals 1 or 2, but gives management procedural flexibility to pursue approval of transaction- and governance-critical items already contracted or adopted by the board. Votes to abstain may be treated differently depending on the proposal (abstentions have no effect on Proposals 1 and 2 outcomes but count as a vote against Proposal 3), so the adjournment authority can be decisive in converting outstanding abstentions or broker non-votes into affirmative votes through outreach. While this is a common governance mechanism, it concentrates practical power in management and proxy holders to continue soliciting and seeking to flip votes post-meeting, which some investors may view skeptically if used to pressure or wear down opposition. The board recommends a FOR vote to preserve flexibility and avoid the potentially material costs and operational disruption of failing to obtain approval for the licensing transaction’s exercises or the new equity plan.