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Item 7. 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 the related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion and other parts of this Annual Report on Form 10-K contain forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Annual Report on Form 10-K.

Overview

We are a clinical-stage biopharmaceutical company focused on developing modality-agnostic targeted oncology therapies. Our mission is creating new standards of care for patients. Our strategy is to identify high-impact cancer targets, which we define as those that play key roles as either oncogenic drivers or immune system activators, and then select what we believe is the optimal therapeutic modality for those targets. We source innovation both internally and externally, focusing on product candidates with novel technology or differentiated mechanisms. Before we advance a product candidate into clinical development, we evaluate its potential for anti-tumor activity as a single agent as well as its ability to generate an immune response or to inhibit oncogenic processes. Using this strategy, we have built a broad and deep pipeline of targeted oncology programs that includes six distinct clinical-stage product candidates.

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Our lead unpartnered program, CLN-619, is a monoclonal antibody that stabilizes expression of MICA/B on the tumor cell surface to promote tumor cell lysis mediated by both cytotoxic innate and adaptive immune cells. CLN-619 is being investigated as both monotherapy and in combination with checkpoint inhibitor therapy in an ongoing Phase 1 clinical trial in patients with advanced solid tumors. We intend to present initial data from the checkpoint inhibitor therapy combination dose escalation module of the clinical trial, as well as updated data from the monotherapy dose escalation module, in the second quarter of 2024. Initial data from the disease specific expansion cohorts are anticipated in the first half of 2025. Separately, in February 2024, the United States ("“U.S."”) Food and Drug Administration ("“FDA"”) cleared our Investigational New Drug ("“IND"”) application to evaluate CLN-619 in a Phase 1 clinical trial in relapsed/refractory multiple myeloma patients.

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CLN-978 is a CD19xCD3 T cell engager with extended serum half-life and, based on preclinical data, robust potency against target cells expressing low levels of CD19. In August 2023, we dosed the first patient in our Phase 1 clinical trial of CLN-978 in patients with relapsed/refractory B cell non-Hodgkin lymphoma (“B-NHL”). Recently, academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to sustained improvements in disease, including durable remission in some cases, in several B cell mediated autoimmune indications. Nonetheless, cell therapy has many limitations, including the need for lymphodepleting chemotherapy, which is associated with significant toxicities, an FDA-recognized risk of secondary malignancies, and extended manufacturing timelines due to complexity of production. Based on the emerging clinical data supporting the efficacy of CD19 directed therapy in multiple autoimmune diseases and our belief that CLN-978 may address these limitations of CAR T cell therapy, we are also exploring the development of CLN-978 in autoimmune diseases.

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Zipalertinib (CLN-081/TAS6417), which we are co-developing with an affiliate of Taiho Pharmaceutical Co., Ltd ("Taiho"), is an orally-available small-molecule, irreversible epidermal growth factor receptor ("EGFR") inhibitor that is designed to selectively target cells expressing EGFR exon 20 ("EGFRex20") insertion mutations with relative sparing of cells expressing wild-type EGFR. The FDA has granted Breakthrough Therapy designation to zipalertinib. In collaboration with our partners at Taiho, we are evaluating zipalertinib in the pivotal Phase 2b portion of the REZILIENT1 clinical trial in patients with EGFRex20 non-small-cell lung cancer ("NSCLC") who progressed after prior systemic therapy, and in a global Phase 3 clinical trial (“REZILIENT3”) in combination with chemotherapy as a potential first-line treatment for EGFRex20 NSCLC adult patients. We expect to complete enrollment in the pivotal Phase 2b portion of the REZILIENT1 clinical trial by year-end 2024. Taiho and we will each receive 50% of any future pre-tax profits from potential U.S. sales of zipalertinib.

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CLN-049 is a FLT3xCD3 T cell engaging bispecific antibody being investigated in patients with relapsed/refractory acute myeloid leukemia ("AML") or myelodysplastic syndrome ("MDS"). CLN-049 is currently in an ongoing Phase 1 clinical trial with updated clinical data expected in the second half of 2024. In December 2023, we initiated a second Phase 1 clinical trial designed to evaluate the safety of CLN-049 in minimal residual disease-positive AML.

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CLN-418 is a B7H4x4-1BB fully human bispecific immune activator designed to achieve conditional activation of 4-1BB by targeting B7H4, a tumor-associated antigen that is highly expressed across multiple cancers with minimal expression on normal tissues. CLN-418 is being investigated in an ongoing Phase 1 clinical trial in patients with advanced solid tumors with initial clinical data expected in the second half of 2024.

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CLN-617 is a fusion protein combining two potent antitumor cytokines, interleukin-2 ("IL-2") and interleukin-12 ("IL-12") with tumor retention domains for the treatment of solid tumors. In December 2023, we dosed the first patient in the CLN-617 first-in-human Phase 1 clinical trial.

In addition to the product candidates described above, we are actively developing several preclinical oncology programs, all in the discovery stage, including our collaboration with Icahn School of Medicine at Mount Sinai for the development of novel hematopoietic progenitor kinase 1 degraders.

When we were a private company, we established development subsidiaries when we acquired or licensed exclusive worldwide rights to intellectual property, including for CLN-619, CLN-049, and CLN-617. The structure of our financing arrangements with each development subsidiary enables us to increase our economic ownership when we provide additional capital. We have not established development subsidiaries for our other current product candidates and programs. In June 2022, we sold our equity interest in our development subsidiary for zipalertinib to Taiho, and in connection with the sale and pursuant to a co-development agreement, we are co-developing zipalertinib with an affiliate of Taiho. We hold the intellectual property rights for CLN-978 and CLN-418, and we hold intellectual property rights or exclusive options for worldwide intellectual property for our earlier-stage programs. The following table shows our ownership interest as of December 31, 2023 in our development subsidiaries and their product candidates:

Development Subsidiary (Product Candidate) Ownership as ofDecember 31, 2023

Cullinan MICA Corp. (CLN-619) 95%

Cullinan Florentine Corp. (CLN-049) 96%

Cullinan Amber Corp. (CLN-617) 94%

Since our inception in 2016, we have focused all of our efforts and financial resources on raising capital, organizing and staffing our company, identifying, acquiring or in-licensing and developing product and technology rights, establishing and protecting our intellectual property portfolio and developing and advancing our programs. We do not have any products approved for sale and have not generated any revenue from product sales.

We have funded our operations primarily through the sale of equity securities and from licensing or selling the rights to our product candidates. As of December 31, 2023, we have received net proceeds of $579.6 million from equity financings, inclusive of our net proceeds of $264.5 million from our initial public offering ("IPO"). We have received $18.9 million in revenue from a previous license agreement and cash proceeds of $275.0 million from the sale of our equity interest in Cullinan Pearl Corp. ("Cullinan Pearl") to Taiho in June 2022.

As of December 31, 2023, we had cash, cash equivalents, short-term investments, and interest receivable of $468.3 million. Interest receivable is included in prepaid expenses and other current assets on the consolidated balance sheets and represents accrued and unpaid interest on our marketable securities. We have incurred significant operating losses, with the exception of 2022, and have had negative cash flows from operations since our inception. As of December 31, 2023, we had an accumulated deficit of $200.9 million. We expect to continue to generate operating losses for the foreseeable future. Our future viability is dependent on the success of our research and development and our ability to access additional capital to fund our operations. There can be no assurance that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.

We are subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the ability to obtain additional capital to fund operations. Our current and future product candidates will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require additional capital, adequate personnel and extensive compliance-reporting capabilities. There can be no assurance that our research and development will be successfully completed, that adequate protection for our intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable.

Components of Our Results of Operations

Revenue

We have not generated any revenue from the sale of products since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.

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Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the research and development of our product candidates and programs. These expenses include:

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compensation costs for employees engaged in research and development functions;

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expenses incurred under agreements with organizations that support our drug discovery and development activities;

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expenses incurred in connection with the preclinical and clinical development of our product candidates and programs, including under agreements with contract research organizations ("CROs");

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costs related to contract manufacturing organizations, that are primarily engaged to provide drug substance, raw materials, and drug product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct our clinical trials, nonclinical studies, and other scientific development services;

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the costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches;

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costs related to compliance with quality and regulatory requirements;

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payments made under third-party licensing agreements; and

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direct and allocated costs related to facilities, information technology, personnel and other overhead.

Following the sale of our equity interest in Cullinan Pearl in the second quarter of 2022, development costs and any future potential pre-tax profits from potential U.S. sales of zipalertinib are shared equally between us and Taiho.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation costs for personnel in executive management, finance, legal, corporate and business development, and other administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax, and administrative consulting services; insurance costs; administrative travel expenses; marketing expenses; and other operating costs.

Gain on Sale of Cullinan Pearl

Gain on sale of Cullinan Pearl represents the excess of the consideration received over the carrying value of the non-financial assets sold. Refer to Note 3 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for additional details relating to the transaction.

Impairment of Long-Lived Assets

Impairment of long-lived assets represents the impairment charge for the carrying value in excess of the fair value of the assets. Refer to Note 12 of our notes to the consolidated financial statements in this Annual Report on Form 10-K for additional details relating to the impairment.

Other Income

Other income consists primarily of interest income earned on our cash, cash equivalents, and investments.

Income Taxes

Income taxes consist primarily of federal and state income taxes.

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Results of Operations

Comparison of 2023 and 2022

The following table presents our results of operations for 2023 and 2022 (in thousands):

Operating expenses:

Impairment of long-lived assets (440 ) —

Gain on sale of Cullinan Pearl — 276,785

Other income (expense):

Other income (expense), net 239 57

Net loss attributable to noncontrolling interests (1,939 ) (2,019 )

Research and Development Expenses

The following table summarizes our research and development expenses for 2023 and 2022 (in thousands):

Total research and development expenses $ 148,156 $ 91,948

The $56.2 million increase in research and development expenses in 2023 compared to 2022 was primarily related to increased clinical costs ($33.3 million), an upfront fee due upon in-licensing CLN-418 ($25.0 million), higher personnel costs due to increased headcount and expansion of operations to support our research and development activities ($9.1 million), and higher equity-based compensation costs ($1.2 million), partially offset by lower preclinical costs ($11.0 million) some of which is allocated to product candidates in the above table.

General and Administrative Expenses

The increase of $2.3 million in general and administrative expenses in 2023 compared to 2022 was primarily due to an increase in personnel costs ($3.1 million), an increase in equity-based compensation expense ($1.3 million), and higher occupancy and other costs to support our expanded operations ($0.8 million), partially offset by one-time costs related to the sale of Cullinan Pearl in 2022 that did not recur in 2023 ($2.0 million), and lower legal and other professional service fees ($0.9 million).

Impairment of Long-Lived Assets

Impairment of long-lived assets represents the impairment charge for the carrying value in excess of the fair value of the assets. Refer to Note 12 of our notes to the consolidated financial statements in this Annual Report on Form 10-K for additional details relating to the impairment.

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Gain on Sale of Cullinan Pearl

Gain on sale of Cullinan Pearl represents the excess of the consideration received over the carrying value of the non-financial assets sold. Refer to Note 3 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for additional details relating to the transaction.

Other Income

The $15.2 million increase in other income in 2023 compared to 2022 was primarily related to higher interest income earned.

Income Tax Expense (Benefit)

The income tax benefit recognized for 2023 represents return to provision adjustments for the utilization of 2022 and historical tax attributes against the gain on sale of Cullinan Pearl and the expected utilization of tax attributes generated during 2023 that can be carried back to 2022. The income tax expense recognized for 2022 represents the tax from the gain on sale of Cullinan Pearl, including the expected utilization of tax attributes generated during 2022 and the release of valuation allowance for the expected utilization of certain historical tax attributes against the gain from the sale.

Net Loss Attributable to Noncontrolling Interests

Net loss attributable to noncontrolling interests is determined as the difference in the noncontrolling interests in the consolidated balance sheets between the start and end of each reporting period, after taking into account any capital transactions between our development subsidiaries and third parties. Refer to Note 8 of our notes to the consolidated financial statements included in this Annual Report on Form 10-K for additional details of capital transactions between our development subsidiaries and third parties.

Liquidity and Capital Resources

Overview

We have incurred significant operating losses, with the exception of 2022, and have had negative cash flows from operations since our inception and expect to continue to generate operating losses for the foreseeable future. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. To date, we have funded our operations primarily with proceeds from the sale of equity securities and from licensing or selling the rights to our product candidates. As of December 31, 2023, we had cash, cash equivalents, short-term investments, and interest receivable of $468.3 million.

Based on our current operational plans and assumptions, we expect that our current cash, cash equivalents, investments, and interest receivable, will be sufficient to fund operations into the second half of 2026. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We cannot guarantee that we will be able to raise additional capital on reasonable terms or at all.

In February 2023, we entered into a license and collaboration agreement (the “Harbour License Agreement”) with Harbour BioMed US Inc. ("Harbour"), pursuant to which Harbour granted us an exclusive license for the development, manufacturing and commercialization of CLN-418 in the U.S. Under the terms of the Harbour License Agreement, we paid Harbour an upfront license fee of $25.0 million at signing.

In May 2023, we entered into an agreement with Cowen and Company, LLC (“Cowen”) to establish an at-the-market equity offering program (the "ATM"), pursuant to which we may offer and sell up to $125.0 million of our common stock from time to time through Cowen, acting as our sales agent. In the second quarter of 2023, we sold approximately 3.3 million shares under the ATM and received net proceeds of $38.4 million, after deducting commissions. We have not subsequently made sales under the ATM. As of December 31, 2023, we had $85.6 million in shares of our common stock remaining under the ATM.

Cash Flows

Comparison of 2023 and 2022

The following table summarizes our sources and uses of cash for 2023 and 2022 (in thousands):

Net cash used in operating activities $ (134,275 ) $ (126,664 )

Net cash provided by investing activities 35,806 248,975

Net cash provided by (used in) financing activities 40,751 (25,933 )

Net increase (decrease) in cash and cash equivalents $ (57,718 ) $ 96,378

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Cash Flow from Operating Activities

During 2023, our operating activities used $134.3 million of cash, which primarily consisted of our operating expenses of $159.9 million excluding non-cash items, partially offset by interest income of $11.5 million excluding accretion on marketable securities, a benefit of $9.3 million from the net change in our non-tax operating assets and liabilities, income tax refunds of $4.4 million, and sublease income of $0.5 million. The non-cash operating expenses primarily consisted of equity-based compensation expense.

During 2022, our operating activities used $126.7 million of cash, which primarily consisted of our operating expenses of $103.7 million excluding non-cash items and $37.8 million in payments for a portion of our estimated tax liability from the gain on sale of Cullinan Pearl, partially offset by interest income of $7.9 million excluding amortization on marketable securities, and a benefit of $6.9 million from the net change in our non-tax operating assets and liabilities. The non-cash operating expenses primarily consisted of equity-based compensation expense.

Cash Flow from Investing Activities

During 2023, our investing activities provided $35.8 million of cash, which primarily consisted proceeds of $409.4 million from the maturities of marketable securities, partially offset by the purchase of marketable securities of $373.4 million.

During 2022, our investing activities provided $249.0 million of cash, which primarily consisted of proceeds of $352.9 million from the maturities of marketable securities and proceeds of $275.0 million from the sale of our equity interest in Cullinan Pearl, partially offset by $377.9 million used for the purchase of marketable securities and $1.1 million for the purchase of property and equipment to improve and furnish our leased office space.

Cash Flow from Financing Activities

During 2023, our financing activities provided $40.8 million of cash, which primarily consisted of $38.4 million of net proceeds from the issuance of common stock under our ATM, proceeds of $1.8 million from the issuance of a convertible note by our CLN-619 development subsidiary to a noncontrolling interest, and net issuance of common stock under equity-based compensation plans of $0.5 million.

During 2022, our financing activities used $25.9 million of cash, which primarily consisted of $33.3 million paid to acquire shares of our CLN-619 development subsidiary that were held by noncontrolling interests, partially offset by proceeds of $6.0 million from stock option exercises and proceeds of $1.2 million from the issuance of noncontrolling interests in our CLN-619 development subsidiary.

Future Funding Requirements

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we advance the clinical trials and manufacturing of our product candidates along with preclinical activities for our current and potential future product candidates. In addition, we have and will continue to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

Our expenses will also increase as we:

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continue our research and development efforts and submit INDs for our current and future product candidates and programs;

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conduct preclinical studies and clinical trials for our current and future product candidates;

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experience any delays or encounter any issues with any of the above, including but not limited to failed studies, or trials, complex results, safety issues, or other regulatory challenges;

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develop the necessary processes, controls, and manufacturing capabilities to obtain marketing approval for our current and future product candidates and to support manufacturing on a commercial scale;

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develop and implement plans to establish and operate in-house manufacturing operations and facilities, if deemed appropriate;

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seek regulatory approvals for our current and future product candidates that successfully complete clinical trials;

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hire and retain additional personnel, such as non-clinical, clinical, pharmacovigilance, quality assurance, regulatory affairs, manufacturing, distribution, legal, compliance, medical affairs, finance, general and administrative, commercial, and scientific personnel; and

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develop, maintain, expand, and protect our intellectual property portfolio.

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Based on our current operational plans and assumptions, we expect that our current cash, cash equivalents, investments, and interest receivable will be sufficient to fund operations into the second half of 2026. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. As we progress with our development programs and the regulatory review process, we expect to incur significant expenses related to product manufacturing, pre-commercial activities and commercialization. We may also require additional capital to pursue in-licenses or acquisitions of other programs to further expand our pipeline.

Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidates and programs, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:

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the scope, progress, results, and costs of drug discovery, laboratory testing, and preclinical and clinical development for our current and future product candidates;

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timely completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;

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the prevalence, duration, and severity of potential side effects or other safety issues experienced by patients receiving our current and future product candidates;

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our ability to establish and maintain collaborations and license agreements on favorable terms, if at all, and the extent to which we acquire or in-license technologies or programs, if at all;

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our ability to enroll clinical trials in a timely manner and to quickly resolve any delays or clinical holds that may be imposed on our development programs;

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the costs of expanding our facilities to accommodate our expected growth in personnel;

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our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our current and future product candidates, remain in good standing with regulatory authorities and develop, validate, and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices;

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the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;

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the extent to which we acquire or in-license technologies or programs;

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the sales price and availability of adequate third-party coverage and reimbursement for our product candidates, if and when approved; and

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the ongoing costs of operating as a public company.

Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through equity offerings, debt financings, government or other third-party funding, marketing and distribution arrangements, and other collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity, current ownership interests will be diluted. If we raise additional funds through government or third-party funding, collaboration agreements, strategic alliances, licensing arrangements, or marketing and distribution arrangements, 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. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Other Commitments

We have certain payment obligations under various license and collaboration agreements. Under these agreements, we are required to make milestone payments upon successful completion and achievement of certain intellectual property, clinical, regulatory, and sales milestones. The payment obligations under the license and collaboration agreements are contingent upon future events, such as our achievement of specified development, clinical, regulatory, and commercial milestones, and we will be required to make milestone and royalty payments in connection with the sale of products developed under these agreements. As the achievement and timing of these future milestone payments are not probable or estimable, such amounts have not been included in our consolidated balance sheet as of December 31, 2023 and 2022.

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As of December 31, 2023, total future minimum lease payments were $4.1 million with $1.7 million payable within 12 months. See Note 13 of our consolidated financial statements included in this Annual Report on Form 10-K for further detail on our lease obligations and the timing of expected future payments.

In addition, we enter into agreements in the normal course of business with CROs for clinical trials and with other vendors for preclinical studies, manufacturing services, and other services and products for operating purposes, which are generally cancelable upon written notice.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 of our consolidated financial statements included in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Research and Development Contract Costs and Accruals

Research and development costs are expensed as incurred. We record accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical studies, clinical trials and contract manufacturing activities. We record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and include these costs in accrued research and development liabilities in our consolidated balance sheets and within research and development expense in our consolidated statements of operations and comprehensive income (loss). These costs are a significant component of our research and development expenses.

We accrue for these costs based on factors such as estimates of the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and in accordance with agreements established with our third-party service providers for such services. We make significant judgments and estimates in determining the accrued research and development liabilities balance at each reporting period. As actual costs become known, we adjust our accrued estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, the status and timing of services performed, the number of patients enrolled in clinical trials and the rate of patient enrollment may vary from our estimates and could result in us reporting amounts that are too high or too low in any particular period. Our accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party service providers. We record advance payments to service providers as prepaid assets, which are expensed as the contracted services are performed.

Equity-Based Compensation Expense

We measure the fair value of market-based restricted stock units ("RSUs") on the grant date using a Monte Carlo simulation model. We estimate the fair value of stock options using the Black-Scholes option pricing model. Both the Monte Carlo simulation model and the Black-Scholes option pricing model require the input of objective and subjective assumptions. Certain assumptions used, including our expected stock price volatility, represent management’s estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, equity-based compensation expense could be materially different for future awards.

We do not have sufficient historical or implied volatility data for our common stock necessary to estimate expected volatility over a period of time commensurate with the expected term of our stock option awards. Prior to 2023, the expected volatility used in the Black-Scholes option pricing model for new options was based on historical volatilities of the stock prices of similar entities within our industry over a period of time commensurate with the expected term assumption. In 2023, we determined that a sufficient amount of historical information was available regarding the volatility of our stock price to begin using a blended rate that combines our historical volatility with the historical volatilities of the stock prices of similar entities within our industry over a period of time commensurate with the expected term assumption.

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Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. A reduction in the carrying value of the deferred tax assets is required when it is not more likely than not that such deferred tax assets are not realizable. Judgment is required to if certain income tax positions are more likely than not of being sustained and may change from period to period when there is a change in judgment.

Emerging Growth Company Status

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company,” (“EGC”) can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for new or revised accounting standards during the period in which we remain an emerging growth company; however, we may adopt certain new or revised accounting standards early.

We will remain an emerging growth company until the earliest to occur of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which requires the market value of our common stock that is held by non-affiliates to exceed $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 of our consolidated financial statements included in this Annual Report on Form 10-K.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the information otherwise required under this Item.

Item 8. Financial Statements and Supplementary Data.

The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. An index of those financial statements is found in Item 15, Exhibits and Financial Statement Schedules, of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

There has been no change of accountants nor any disagreements with accountants on any matter of accounting principles or practices of financial disclosure required to be reported under this Item.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the "Exchange Act"), designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the principal executive officer (our Chief Executive Officer) and principal financial officer (our Chief Financial Officer), to allow timely decisions regarding required disclosure. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of December 31, 2023, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily applies our judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at the reasonable assurance level as of December 31, 2023.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and our Chief Financial Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP, and includes those policies and procedures that:

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Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

2.

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and

3.

Provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting based on the framework provided in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.

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As an emerging growth company as defined in the JOBS Act, our independent registered accounting firm is not required to issue an attestation report on the internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15(d)-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Departure of Jeffrey Trigilio as Chief Financial Officer

On March 14, 2024, Cullinan Oncology, Inc. (the “Company”) announced the departure of Jeffrey Trigilio from the Company, effective as of March 29, 2024 (the “Transition Date”). Until the Transition Date, Mr. Trigilio will continue to be employed by the Company as the Chief Financial Officer and Treasurer pursuant to the terms and conditions of his employment agreement.

The Company and Mr. Trigilio will enter into a Separation and Transition Agreement (the “Separation Agreement”) to govern the terms of his separation from the Company. In recognition of Mr. Trigilio’s service to the Company and in consideration of his execution of a general release of claims, under the Separation Agreement, Mr. Trigilio will be entitled to severance in an amount equal to twelve (12) months of Mr. Trigilio’s base salary, plus the pro-rata portion of his target annual bonus for 2024, measured as of the Transition Date, payable in accordance with normal Company payroll practices. Subject to Mr. Trigilio’s proper election to receive benefits under COBRA and copayment of his portion of the COBRA premiums, the Company will also pay up to nine (9) months of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the Transition Date (or until Mr. Trigilio becomes eligible for alternative health benefits from a subsequent employer or ineligible for COBRA, if earlier). The Separation Agreement also contains non-disparagement covenants and a reaffirmation of Mr. Trigilio’s confidentiality and non-solicitation obligations to the Company.

Following the Transition Date and to ensure an orderly transition, Mr. Trigilio has agreed to be available to consult with the Company through September 30, 2024 (the “Transition Period”). The Separation Agreement will also govern the terms of his consulting arrangement with the Company for the Transition Period. Mr. Trigilio will receive (i) the payment of an agreed flat rate for the consulting work provided between the Transition Date and April 30, 2024, (ii) the payment of an agreed hourly rate for any consulting work provided between May 1, 2024 and September 30, 2024, (iii) continued vesting of his equity awards through the Transition Period, subject to continued service and (iv) on the last date of the Transition Period, accelerated vesting of the unvested equity awards that would have vested through April 30, 2025, subject to continued service through the Transition Period.

The foregoing summary is not complete and is qualified in its entirety by the Separation Agreement, a copy of which the Company intends to file with the Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024.

Appointment of Nate Nguyen as Interim Principal Financial Officer and Principal Accounting Officer

On March 11, 2024, in connection with Mr. Trigilio’s separation from the Company, the Board appointed Nate Nguyen as the Company’s Interim Principal Financial Officer (“PFO”) and Principal Accounting Officer (“PAO”), effective March 29, 2024. Mr. Nguyen will serve in this role during the search for and until the appointment of a permanent Chief Financial Officer, or until his earlier resignation or removal.

Mr. Nguyen, age 36, joined the Company in January 2021 and has served in a variety of roles including Director of Accounting, Controller from January 2021 to December 2021, Senior Director, Controller from January 2022 to June 2022, and, most recently, as Vice President, Controller where he has served since July 2022. Prior to joining the Company, Mr. Nguyen worked at Corporate Finance Group, Inc. as a senior manager from September 2017 to December 2020. Mr. Nguyen holds a B.S. in Finance and Accounting from Villanova University.

There are no arrangements or understandings between Mr. Nguyen and any other persons pursuant to which he was appointed as Interim PFO and PAO. There are no family relationships between Mr. Nguyen and any of the Company’s directors or executive officers and Mr. Nguyen has no direct or indirect material interest in any transaction required to be disclosed by the Company pursuant to Item 404(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Information About Our Executive Officers

The following table sets forth the name, age as of February 15, 2024, and position of each of our executive officers.

Name Position at Cullinan Oncology Officer Since Age

Nadim Ahmed President, Chief Executive Officer and Director 2021 56

Jeffrey Jones, M.D. Chief Medical Officer 2022 53

Jennifer Michaelson, Ph.D. Chief Scientific Officer 2018 57

Corinne Savill, Ph.D. Chief Business Officer 2017 64

Jeffrey Trigilio Chief Financial Officer and Treasurer 2020 40

Nadim Ahmed Mr. Ahmed has served as our President and Chief Executive Officer and member of our board of directors since October 2021. Before joining the Company, Mr. Ahmed served as President, Hematology at Bristol Myers Squibb (“BMS”), from November 2019 through January 2021. Prior to this, he served in increasing roles of responsibility at Celgene Corporation (“Celgene”) from March 2010 to November 2019, most recently as the President, Global Hematology & Oncology. Prior to his tenure at Celgene, Mr. Ahmed served in increasing roles of responsibility at GlaxoSmithKline plc (“GlaxoSmithKline”) from June 1998 through March 2010, most recently as the Senior Marketing Director, Hematologic Oncology Franchise. Mr. Ahmed holds a Master of Science degree from Loughborough University and a Bachelor of Science degree from University College London. We believe that Mr. Ahmed is qualified to serve as a member of our board of directors due to his extensive leadership experience in the biopharmaceutical industry.

Jeffrey Jones, M.D. Dr. Jones has served as our Chief Medical Officer since February 2022. Before joining the Company, Dr. Jones served as Vice President, Global Drug Development, Lymphoma and Myeloid Diseases at BMS from April 2020 to February 2022 and as Executive Medical Director, Global Clinical Research and Development at BMS from August 2017 to April 2020. Prior to this, Dr. Jones served as Associate Professor of Clinical Internal Medicine at The Ohio State University College of Medicine. Prior to that, Dr. Jones served as a Clinical Instructor from 2006 to 2014 at The Ohio State University. Dr. Jones received his M.D. from University of Michigan Medical School in Ann Arbor, Michigan and completed his residency in internal medicine at McGill University Faculty of Medicine in Montreal and a fellowship in hematology and medical oncology at MD Anderson Cancer Center in Houston, Texas. Dr. Jones also holds an M.B.A. from The Ohio State University Fisher College of Business and an M.P.H. from the University of Texas School of Public Health.

Jennifer Michaelson, Ph.D. Dr. Michaelson has served as our Chief Scientific Officer since June 2023. Previously, she was Chief Development Officer of the Company from February 2022 to June 2023 and prior to that, Chief Development Officer, Biologics of the Company from January 2020 to February 2022 and Vice President, Preclinical Research and Early Development of the Company from January 2018 through December 2019. Before joining the Company, Dr. Michaelson served as the Head of Biologics at Celsius Therapeutics, Inc., a biotechnology company, from July 2017 through December 2017. Prior to this, she served in increasing roles of responsibility at Jounce Therapeutics, Inc., from September 2012 through July 2017, most recently as Senior Director and Executive Program Leader and previously as Director of Tumor Immunology and as a consultant. Previously, during her 10-year tenure at Biogen Idec Inc., Dr. Michaelson served as project leader for several monoclonal antibody and bispecific antibody programs in both the oncology and immunology therapeutic areas. Dr. Michaelson holds a B.A. in Biology from Princeton University and Ph.D. from the Department of Cell Biology at Albert Einstein College of Medicine and completed a post-doctoral fellowship in Philip Leder’s laboratory in the Department of Genetics at Harvard Medical School.

Corinne Savill, Ph.D. Dr. Savill has served as our Chief Business Officer since February 2017. Before joining the Company, Dr. Savill served in increasing roles of responsibility at Novartis Pharma AG (“Novartis”), including Global Head of Business Development and Licensing from June 2013 through February 2017, Global Head of Pricing and Market Access from September 2010 through June 2013, Global Head Search and Evaluation, Business Development and Licensing from January 2005 through August 2010 and Regional Manager Europe, Transplantation and Immunology Business Unit from August 2002 through Jan 2005. Prior to her tenure at Novartis, Dr. Savill was Chief Executive Officer of Imutran, a UK based biotechnology company, which was acquired by Novartis. She also previously worked in research at AstraZeneca. Dr. Savill holds a B.S. in Biochemistry from the University of Manchester and obtained her Ph.D. at University College and Middlesex School of Medicine and the Charing Cross Sunley Research Centre in London.

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Jacquelyn Sumer, Esq. Ms. Sumer has served as our Chief Legal Officer since August 2022. Before joining the Company, Ms. Sumer served as Chief Legal and Compliance Officer at Genocea Biosciences, Inc. (“Genocea”) from February 2021 to June 2022. Prior to Genocea, Ms. Sumer was Vice President, Assistant General Counsel at BMS from November 2019 to February 2021. Prior to this, she served as head of Celgene’s CAR T legal team from July 2018 to November 2019. She previously worked at Kaye Scholer, LLP and clerked for the Honorable Gladys Kessler at the United States District Court in Washington D.C. Ms. Sumer holds a J.D. and a Master of Laws in international and comparative law from Duke University School of Law and a B.A. from Bucknell University.

Jeffrey Trigilio Mr. Trigilio has served as our Chief Financial Officer since September 2020. Before joining the Company, Mr. Trigilio served as the Chief Financial Officer at Amylyx Pharmaceuticals, Inc., a pharmaceutical company, from January 2020 through July 2020. Prior to this, he was Vice President, Corporate Finance at BlueRock Therapeutics, Inc. (“Bluerock”), from August 2018 through January 2020. Prior to his tenure at BlueRock, Mr. Trigilio was a Director, Healthcare Investment Banking at RBC Capital Markets LLC from November 2017 through August 2018. He previously served in increasing roles of responsibility at Alexion Pharmaceuticals, Inc. from April 2013 through November 2017 and at Credit Suisse Securities from July 2008 to March 2013. Mr. Trigilio holds a B.A. in Industrial and Labor Relations from Cornell University and an M.B.A. from Columbia University.

The principal occupation and employment during the past five years of each of our executive officers was carried on, in each case except as specifically identified in this Annual Report on Form 10-K, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our executive officers and any other person or persons pursuant to which he or she was or is to be selected as an executive officer.

There are no material legal proceedings to which any of our executive officers is a party adverse to us or our subsidiaries or in which any such person has a material interest adverse to us or our subsidiaries.

Directors

The following table sets forth the name and age as of February 15, 2024 of each of our non-employee directors.

Name Director Since Age

Anne-Marie Martin, Ph.D. 2022 52

Thomas Ebeling Mr. Ebeling has served as a member of our board of directors since August 2017. He also serves as an Advisor at MPM. Since 2018, he has served as Chief Executive Officer at TE Convest AG, a consulting and executive coaching company. Prior to that, Mr. Ebeling served as the Chief Executive Officer of ProSieben Media SE, a mass media company, from March 2009 through February 2017. Mr. Ebeling previously served as the Chief Executive Officer of Novartis Consumer Health from September 2007 through September 2008, and as Chief Executive Officer of Novartis Pharmaceuticals Corporation from July 2000 through September 2007. He served in numerous leadership roles at PepsiCo Germany from 1991 through 1996. He is a member of the boards of Qiagen N.V. and Orna Therapeutics. Additionally, he currently serves on the board of several private companies. Previously, Mr. Ebeling served on the board of directors of Bayer AG from April 2012 to September 2019 and on the board of directors of Lonza Group AG from March 2013 to March 2017. Mr. Ebeling holds a B.S. in Psychology from the University of Hamburg. We believe that Mr. Ebeling is qualified to serve as a member of our board of directors due to his extensive leadership experience in the life sciences industry.

Anne-Marie Martin, Ph.D. Dr. Martin has served as a member of our board of directors since March 2022. Dr. Martin currently serves as Senior Vice President, Global Head of the Experimental Medicine Unit at GlaxoSmithKline and has held this position since August 2020. She previously served as Senior Vice President, Global Head of Precision Medicine at Novartis from February 2016 to July 2020. Prior to her position at Novartis, she was Vice President, Head of Biomarker Research & Diagnostic Development at Adaptimmune Therapeutics plc ("Adaptimmune"), from May 2015 to February 2016. Prior to Adaptimmune, Dr. Martin held various roles of increasing responsibility at GlaxoSmithKline between March 2005 and April 2015. Additionally, she served as a board observer for Freenome Holdings, Inc., a private biotechnology company, from August 2019 to July 2020. She received her undergraduate degree in biomedical sciences from Sheffield Hallam University and holds a Ph.D. in Immunogenetics from MCP-Hahnemann University. We believe that Dr. Martin is qualified to serve on our board of directors due to her extensive experience in the biotechnology and pharmaceutical sectors.

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Anthony Rosenberg Mr. Rosenberg has served as a member of our board of directors since August 2017 and as the Chairperson of our board of directors since April 2020. Currently, Mr. Rosenberg serves as the Chief Executive Officer of TR Advisory Services GmbH, a consultancy firm advising on business development, licensing, and mergers and acquisitions. From April 2015 to April 2020, Mr. Rosenberg served as a Managing Director of MPM. From January 2012 to February 2015, Mr. Rosenberg served as Corporate Head of M&A and Licensing at Novartis. Mr. Rosenberg currently serves on the board of directors of argenx SE and Oculis Holding AG. Previously, Mr. Rosenberg served on the board of directors of Radius Health, Inc. He also serves on the board of two private companies. Mr. Rosenberg holds a B.Sc. from the University of Leicester and a M.Sc. Physiology from the University of London. We believe that Mr. Rosenberg is qualified to serve as a member of our board of directors due to his extensive tenure in biotech operations and strategic management.

David P. Ryan, M.D. Dr. Ryan has served as a member of our board of directors since November 2022. Since 2012, Dr. Ryan has served as Clinical Director and Chief of the Massachusetts General Hospital (“MGH”) Cancer Center. He has held increasing roles of responsibility at MGH since 1998, specializing in the research and treatment of patients with cancer. Additionally, Dr. Ryan is currently a Shelby Memorial Professor of Medicine in the Field of Cancer Therapeutics at Harvard Medical School and serves on the board of the College of the Holy Cross. Dr. Ryan is also a member of the American Society for Clinical Oncology and serves as an advisor to Boehringer Ingelheim and both MPM and BioImpact Capital, an affiliate manager of MPM. Dr. Ryan holds a M.D. from Columbia College of Physicians and Surgeons and a B.A. from the College of the Holy Cross. We believe that Dr. Ryan is qualified to serve as a member of our board of directors due to his extensive experience in oncology clinical research.

Stephen Webster Mr. Webster has served as a member of our board of directors since September 2020. Mr. Webster served as the Chief Financial Officer of Spark Therapeutics, Inc., a gene therapy company, from July 2014 until its acquisition by Roche Holding AG for $4.8 billion in December 2019. He was previously Senior Vice President and Chief Financial Officer of Optimer Pharmaceuticals Inc. from July 2012 until its acquisition by Cubist Pharmaceuticals Inc. in October 2013. Mr. Webster currently serves on the board of directors of NextCure, Inc. and Nabriva Therapeutics AG (formerly Nabriva Therapeutics plc). He previously served on the board of directors of TCR2. Mr. Webster received an A.B. in Economics from Dartmouth College and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania. We believe Mr. Webster is qualified to serve as a member of our board of directors due to his extensive experience in the biopharmaceutical industry, including his prior experience as a chief financial officer and in other management positions.

There are no family relationships between or among any of our directors or executive officers. The principal occupation and employment during the past five years of each of our directors was carried on, in each case except as specifically identified in this Annual Report on Form 10-K, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our directors and any other person or persons pursuant to which he or she is to be selected as a director.

There are no material legal proceedings to which any of our directors is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or our subsidiaries.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. A current copy of the code is posted on the corporate governance section of our website, which is located at https://investors.cullinanoncology.com/documents-charters. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for any director or officer, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.

Stockholder Nomination Process

There have been no material changes to the previously disclosed procedures by which our stockholders may recommend nominees to our board of directors.

Audit Committee

Our board of directors has established an audit committee. Thomas Ebeling, Anthony Rosenberg and Stephen Webster serve on the audit committee, which is chaired by Stephen Webster. Our board of directors has determined that each member of the audit committee is “independent” for audit committee purposes as that term is defined by the rules of the Securities and Exchange Commission (“SEC”), and Nasdaq Stock Market LLC (“Nasdaq”), and that each has sufficient knowledge in financial and auditing matters to serve on the audit committee. Our board of directors has designated Stephen Webster as an “audit committee financial expert,” as defined under the applicable rules of the SEC.

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Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers and beneficial owners of more than 10% of our common stock to file reports of holdings and transactions in securities of the Company with the SEC. The SEC has designated specific deadlines for these reports, and we must identify in this Part III of our Annual Report on Form 10-K those persons who did not file these reports when due.

Based solely on a review of on Forms 3, 4 and 5 and any amendments thereto filed electronically with the SEC with respect to the most recent fiscal year and written representations from the reporting persons, we believe all Section 16(a) filing requirements were satisfied in 2023 with the exception of: the Form 4 filed by Jeffrey Trigilio on March 27, 2023 reporting the sale of 399 shares of common stock on March 20, 2023; the Form 4 filed by Jeffrey Jones on March 27, 2023 reporting the sale of 390 shares of common stock on March 20, 2023; the Form 4 filed by Jennifer Michaelson on March 27, 2023 reporting the sale of 238 shares of common stock on March 20, 2023; and the Form 4 filed by Jacquelyn Sumer on March 27, 2023 reporting the sale of 305 shares of common stock on March 20, 2023.

Item 11. Executive Compensation.

The compensation provided to our named executive officers for 2023 and 2022 is detailed in the 2023 Summary Compensation Table and accompanying footnotes and narrative that follow this table. Our named executive officers for 2023, which consist of the individual who served as our principal executive officer during 2023 and our next two most highly compensated executive officers, are:

•

Nadim Ahmed, our President and Chief Executive Officer;

•

Jeffrey Jones, our Chief Medical Officer; and

•

Jeffrey Trigilio, our Chief Financial Officer.

2023 Summary Compensation Table

The following table presents total compensation awarded to, earned by or paid to our named executive officers for services rendered to us in all capacities during the years listed below.

Chief Medical Officer

(1)

The amounts reported for 2023 and 2022 represent discretionary cash bonuses paid by us based on our named executive officers’ performance during such fiscal year. Additionally, for Mr. Trigilio, the amounts reported for 2023 and 2022 include a cash retention bonus for his continued service through August 2022, February 2023 and August 2023 in the amounts of $180,800 for 2023 and $45,200 for 2022.

(2)

The amounts reported represent the aggregate grant date fair value of the stock option and restricted stock unit (“RSUs”) awards granted to the named executive officers during 2023 and 2022, respectively, computed in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures. The assumptions used to value the stock option and market-based RSU awards for this purpose are set forth in Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K. Service-based RSUs are valued based on the closing price of our common stock on the grant date.

(3)

Mr. Ahmed also serves as a member of our board of directors but does not receive any additional compensation for his service as a director.

(4)

The amounts reported for 2023 for Mr. Ahmed and Dr. Jones and for both 2023 and 2022 for Mr. Trigilio represent the grant date fair value of their respective service-based RSUs, which were valued based on the closing price of our common stock on the grant date.

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(5)

The amount reported for Mr. Ahmed for 2023 includes commuting and related travel expenses of $37,608, the use of a corporate apartment valued at $43,304, a housing allowance of $24,000, and 401(k) matching contributions of $16,500. The amount reported for Mr. Ahmed for 2022 includes commuting and related travel expenses of $46,343, a housing allowance of $87,000, and 401(k) matching contributions of $15,250. The housing allowance reported for 2022 reflects $15,000 in housing expenses for the portion of 2021 that Mr. Ahmed was employed by us but that were not paid to Mr. Ahmed until early 2022.

(6)

The amount reported represents the grant date fair value of Mr. Ahmed’s market-based RSUs based upon the probable achievement level of the corporate stock price metrics associated with the award at the time of grant.

(7)

The amount reported for Dr. Jones for 2023 includes commuting and related travel expenses of $34,501 and 401(k) matching contributions of $16,500.

(8)

The amount reported for Mr. Trigilio for 2023 includes commuting and related travel expenses of $25,839 and 401(k) matching contributions of $16,500. The amount reported for Mr. Trigilio for 2022 includes 401(k) matching contributions of $15,250.

Narrative to 2023 Summary Compensation Table

Overview

Our executive compensation program is designed to attract, retain and reward key employees and to align their interests with the interests of our stockholders. Our Chief Executive Officer makes recommendations to the compensation committee of our board of directors (our “compensation committee”) about the compensation of his direct reports (except with respect to his own compensation), and our compensation committee is responsible for determining the compensation of our executive officers.

Our compensation committee has engaged Compensia as its independent compensation consultant since November 2022. Compensia assists the compensation committee in evaluating the Company’s executive and director compensation practices, including program design, identification of an appropriate peer group for compensation comparison purposes and providing competitive market pay data. Our compensation committee assessed the independence of Compensia from management and, on the basis of that assessment and after taking into consideration the independence factors that are required to be considered under applicable stock exchange listing standards and SEC rules, determined that none of the work performed by Compensia gave rise to a conflict of interest or would compromise Compensia’s independence.

Base Salary

During 2023 and 2022, the annual base salary for Mr. Ahmed was $648,900 and $618,000, respectively. During 2023, the annual base salary for Dr. Jones was $492,200. During 2023 and 2022, the annual base salary for Mr. Trigilio was $474,600 and $452,000, respectively.

Bonus Arrangements

Pursuant to the terms of Mr. Ahmed’s employment agreement, his target incentive bonus was 50% of his base salary in both 2023 and 2022. Based on our compensation committee’s and board of directors’ evaluation of his and the Company’s performance during each of 2023 and 2022, Mr. Ahmed was awarded a discretionary bonus equal to 60% of his base salary.

Pursuant to the terms of Dr. Jones’ employment agreement, his target incentive bonus was 40% of his base salary in 2023. Based on our compensation committee’s evaluation of his and the Company’s performance during 2023, Dr. Jones was awarded a discretionary bonus equal to 48% of his base salary.

Pursuant to the terms of Mr. Trigilio’s employment agreement, his target incentive bonus was 40% of his base salary in both 2023 and 2022. Based on our compensation committee’s evaluation of his and the Company’s performance during 2023 and 2022, Mr. Trigilio was awarded a discretionary bonus equal to 47% and 48% of his base salary, respectively.

Additionally, Mr. Trigilio received a retention bonus as part of an initiative implemented broadly across the workforce. The purpose of the retention initiative was to ensure workforce stabilization and continuity during a transition period, especially for key roles given the company had 31 full time employees as of December 31, 2021. Pursuant to the supplemental bonus agreement entered into in February 2022, Mr. Trigilio was entitled to cash retention bonuses tied to continued service with the Company through August 2023. The total bonus amount was paid in installments according to the following payout schedule: 20% in August 2022, 40% in February 2023 and the remaining 40% in August 2023. Mr. Trigilio received $180,800 in 2023 and $45,200 in 2022 for his continued service through the respective payout dates.

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Equity Compensation

Our employees and executive officers are eligible to receive stock options and other stock-based awards pursuant to our 2021 Stock Option and Incentive Plan (the “2021 Stock Plan”).

We believe that equity awards provide our executive officers with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executive officers and our stockholders. In addition, we believe that equity awards with multi-year vesting requirements promote executive retention because they incentivize our executive officers to remain in our employment during the award's vesting period. Our compensation committee annually reviews the equity incentive compensation of our executive officers, including our named executive officers, and from time to time may grant equity awards to them. We typically grant equity awards in the form of stock options in connection with the commencement of an executive officer’s employment and as a combination of both stock options and RSUs on an annual basis thereafter. We set option exercise prices at the closing market price of a share of our common stock on the date of grant (or the immediately preceding date on which a closing market price was reported if there is no closing market price on the date of grant).

On February 22, 2023, Mr. Ahmed was granted (i) an option to purchase 211,000 shares of our common stock at an exercise price of $11.03 per share and (ii) RSUs that represent the right to receive, at settlement, 109,000 shares of our common stock (the “2023 Ahmed Equity Awards”). One forty-eighth of the shares underlying the 2023 Ahmed Equity Awards vest monthly, subject to continued service through each vesting date. The unvested portion of the 2023 Ahmed Equity Awards is subject to vesting acceleration in the event of a termination of Mr. Ahmed’s employment by us without cause or by him for good reason (as such terms are defined in his employment agreement), in either case within 12 months following a change in control of the Company, also known as a "sale event" (as defined in the 2021 Stock Plan). On March 5, 2022, pursuant to the terms of his employment agreement, Mr. Ahmed was granted market-based RSUs that represent the right to receive, at settlement, 215,000 shares of our common stock. The number of shares subject to market-based RSUs represents the number of shares issuable upon vesting, assuming the Company achieves its corporate stock price metrics at the target achievement level. The number of shares issuable, if any, when the award vests will depend on the degree of achievement of corporate stock price metrics at the vesting date and ranges between 0% and 200% of the target number of shares. The market-based RSUs will vest and be settled three years from the grant date in an amount to be determined based on the price per share of our common stock at such time. The market-based RSUs are subject to vesting acceleration in the event of a change in control of the Company prior to the vesting date.

On February 17, 2023, Dr. Jones was granted (i) an option to purchase 120,000 shares of our common stock at an exercise price of $11.34 per share and (ii) RSUs that represent the right to receive, at settlement, 60,000 shares of our common stock (the “2023 Jones Equity Awards”). One forty-eighth of the shares underlying the 2023 Jones Equity Awards vest monthly, subject to continued service through each vesting date. The unvested portions of the 2023 Jones Equity Awards are subject to vesting acceleration in the event of a termination of Dr. Jones’ employment by us without cause or by him for good reason (as such terms are defined in his employment agreement), in either case within 12 months following a change in control of the Company, also known as a "sale event" ( as defined in the 2021 Stock Plan).

On February 17, 2023, Mr. Trigilio was granted (i) an option to purchase 93,500 shares of our common stock at an exercise price of $11.34 per share and (ii) RSUs that represent the right to receive, at settlement, 47,000 shares of our common stock (the “2023 Trigilio Equity Awards”). One forty-eighth of the shares underlying the 2023 Trigilio Equity Awards vest monthly, subject to continued service through each vesting date. On February 11, 2022, Mr. Trigilio was granted (i) an option to purchase 75,000 shares of our common stock at an exercise price of $13.60 per share and (ii) RSUs that represent the right to receive, at settlement, 37,500 shares of our common stock, (the “2022 Trigilio Equity Awards”). One forty-eighth of the shares underlying the 2022 Trigilio Equity Awards vest monthly, subject to continued service through each vesting date. The unvested portions of the 2023 Trigilio Equity Awards and the 2022 Trigilio Equity Awards are subject to vesting acceleration in the event of a termination of Mr. Trigilio’s employment by us without cause or by him for good reason (as such terms are defined in his employment agreement), in either case within 12 months following a change in control of the Company, also known as a "sale event" (as defined in the 2021 Stock Plan).

Employment Agreements with our Named Executive Officers

We have entered into employment agreements with each of our named executive officers. Each agreement sets forth such executive officer’s base salary, target bonus percentage and eligibility to participate in our benefit plans generally. Each of our named executive officers is also subject to a confidentiality, assignment and non-solicitation agreement, which provides for a perpetual post-termination confidentiality covenant as well as non-solicitation of employees and consultants covenants that apply during employment and for one year following termination. The terms “cause”, “good reason” and “change in control” referred to below are defined in each named executive officer’s employment agreement.

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Nadim Ahmed

In October 2021, we entered into an employment agreement with Mr. Ahmed, who currently serves as our President and Chief Executive Officer. The employment agreement provides for an annual base salary, subject to periodic review by our board of directors or compensation committee, and an annual target bonus equal to 50% of Mr. Ahmed’s annual base salary, with the actual amount of any bonus payable determined in the sole discretion of our board of directors or compensation committee based on milestones to be determined by our board of directors or compensation committee. Pursuant to his employment agreement, Mr. Ahmed received a sign-on bonus of $625,000 and was also entitled to a housing allowance of $6,000 per month. In May 2023, we entered into an amendment to Mr. Ahmed’s employment agreement to permit use of a corporate apartment in lieu of the provision of a housing allowance. The employment agreement also provides for Mr. Ahmed to be nominated for election to our board of directors and to be recommended to our stockholders for election to our board of directors for so long as he remains our Chief Executive Officer.

Under Mr. Ahmed’s employment agreement, in the event that Mr. Ahmed’s employment is terminated by us without cause or Mr. Ahmed resigns for good reason, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, he will be entitled to receive (i) an amount equal to 12 months of his then-current base salary plus a pro-rata portion of his annual bonus, based on actual performance for the year, and (ii) if Mr. Ahmed is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the 12-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA. The employment agreement also provides that, in lieu of the payments and benefits described above, in the event that Mr. Ahmed’s employment is terminated by us without cause or Mr. Ahmed resigns for good reason, in either case within 12 months following a change in control of the Company, subject to the execution and effectiveness of a general release of claims in our favor, he will be entitled to receive (i) an amount equal to 24 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his prorated annual bonus, based on actual performance for the year, and (ii) an amount equal to the premiums the Company would have paid to its group health plan provider or the COBRA provider as a monthly employer contribution if Mr. Ahmed had remained employed by the Company for an additional 24 months.

In addition, in the event of a termination of Mr. Ahmed’s employment by us without cause or by him for good reason, in either case within 12 months following a change in control of the Company, all outstanding equity awards that vest solely based on time will become fully vested and nonforfeitable and any performance-based RSUs outstanding will vest pro-rata based on the period of Mr. Ahmed’s employment during the applicable performance period.

Jeffrey Jones, M.D.

In February 2022, we entered into an employment agreement with Dr. Jones, who currently serves as our Chief Medical Officer. The employment agreement provides for an annual base salary, subject to periodic review by our board of directors or compensation committee, and an annual target bonus equal to 40% of Dr. Jones’ annual base salary, with the actual amount of any bonus payable determined in the sole discretion of our board of directors or compensation committee, subject to the terms of any applicable incentive compensation plan of the Company. Pursuant to his employment agreement, Dr. Jones also received a sign-on bonus of $100,000.

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Under Dr. Jones’ employment agreement, in the event that Dr. Jones’ employment is terminated by us without cause or Dr. Jones resigns for good reason, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, he will be entitled to receive (i) an amount equal to nine months of his then-current base salary plus a prorated bonus for the year of termination, based on the termination date, and (ii) if Dr. Jones is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the nine-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA. Dr. Jones’ employment agreement also provides that, in lieu of the payments and benefits described above, in the event that his employment is terminated by us without cause or he resigns for good reason, in either case within 12 months following a change in control of the Company, subject to the execution and effectiveness of a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 12 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his annual target bonus for the then-current year (or the annual target bonus in effect immediately prior to the change in control, if higher), and (ii) if Dr. Jones is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the 12-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA.

Dr. Jones’ employment agreement also provides that in the event Dr. Jones’ employment is terminated by us without cause or Dr. Jones resigns for good reason, in either case within 12 months following a change in control of the Company, each unvested stock option and outstanding equity award subject to time-based vesting will immediately accelerate and become fully vested and exercisable or nonforfeitable on the date of termination.

Jeffrey Trigilio

In connection with our initial public offering in 2021, we entered into a new employment agreement with Mr. Trigilio who currently serves as our Chief Financial Officer. His employment agreement provides for an annual base salary, subject to periodic review by our board of directors or compensation committee, and an annual target bonus equal to 40% of Mr. Trigilio’s annual base salary, with the actual amount of any bonus payable determined in the sole discretion of our board of directors or compensation committee, subject to the terms of any applicable incentive compensation plan of the Company.

Under Mr. Trigilio’s employment agreement, in the event that Mr. Trigilio’s employment is terminated by us without cause or Mr. Trigilio resigns for good reason, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, he will be entitled to receive (i) an amount equal to nine months of his then-current base salary plus a pro-rata portion of his annual target bonus, and (ii) if Mr. Trigilio is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the nine-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA. Mr. Trigilio’s employment agreement also provides that, in lieu of the payments and benefits described above, in the event that his employment is terminated by us without cause or he resigns for good reason, in either case within 12 months following a change in control of the Company, subject to the execution and effectiveness of a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 12 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his annual target bonus for the then-current year (or the annual target bonus in effect immediately prior to the change in control, if higher), and (ii) if Mr. Trigilio is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the 12-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA.

Mr. Trigilio’s employment agreement also provides that in the event his employment ends as a result of his death or disability, unless otherwise set forth in an award agreement evidencing an equity award subject to performance-based vesting, 25% of each then-unvested equity award outstanding, plus an additional 5% for each full year of service to the Company, will immediately accelerate and become fully vested and exercisable or nonforfeitable on the date of termination. The employment agreement further provides that in the event Mr. Trigilio’s employment is terminated by us without cause or Mr. Trigilio resigns for good reason, in either case within 12 months following a change in control of the Company, each outstanding equity award will immediately accelerate and become fully vested and exercisable or nonforfeitable on the date of termination.

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2023 Outstanding Equity Awards at Fiscal Year End Table

The following table presents the outstanding equity awards held by each of our named executive officers as of December 31, 2023.

Option Awards Stock Awards

(1)

Amounts shown are based on a price of $10.19 per share, which was the closing market price of our common stock as reported on the Nasdaq Global Select Market on the last trading day of the year, December 29, 2023.

(2)

Represents an option to purchase shares of our common stock, which vests in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

(3)

Represents shares of common stock underlying market-based RSUs granted on March 5, 2022, which vest three years from the grant date in an amount to be determined based on the price per share of our common stock at such time, assuming the Company achieves its corporate stock price metrics at the threshold achievement level.

(4)

Represents shares of common stock underlying service-based RSUs granted on February 22, 2023, which vest in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

(5)

Represents an option to purchase shares of our common stock, which vests as follows: 25% of the shares underlying the option vest on the first anniversary of the vesting commencement date and the remaining shares vest in 36 equal monthly installments thereafter, generally subject to the named executive officer’s continued service through each vesting date.

(6)

Represents shares of common stock underlying service-based RSUs granted on February 17, 2023, which vest in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

(7)

Reflects shares of common stock underlying service-based RSUs granted on February 11, 2022, which vest in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

Compensation Risk Assessment

We do not believe that our executive compensation program encourages excessive or unnecessary risk taking. Our compensation program, including any performance-based compensation, is designed to encourage our named executive officers and other employees to remain focused on both short-term and long-term strategic goals. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.

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Employee Benefits

Our eligible U.S. employees, including our executive officers, participate in a tax-qualified retirement plan that provides an opportunity to save for retirement on a tax-advantaged basis. Plan participants are able to defer eligible compensation subject to applicable annual limits under the Internal Revenue Code of 1986, as amended (the “Code”). We make a safe harbor matching contribution equal to 100% of our employee’s deferrals, up to a maximum of 5% of the employee’s salary, subject to applicable Code limits.

All of our full-time employees, including our executive officers, are eligible to participate in certain medical, disability and life insurance benefit programs offered by us. We pay the premiums for term life insurance and short-term and long-term disability for all of our employees, including our executive officers. We also provide all employees, including our executive officers, paid time off benefits including, vacation, sick time and holidays. We do not sponsor any qualified or non-qualified defined benefit plans nor any non-qualified defined contribution plans for any of our employees or executive officers.

In accordance with our insider trading policy, our non-employee directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. In addition, our directors and executive officers may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.

Director Compensation

2023 Director Compensation Table

The table below shows all compensation earned by or paid to our non-employee directors during 2023. Nadim Ahmed, our Chief Executive Officer, does not receive any compensation for his services as director and, consequently, is not included in this table. The compensation received by Mr. Ahmed during 2023 is set forth in the “Executive Compensation— 2023 Summary Compensation Table.”

(1)

In June 2023, the compensation committee approved a revised schedule of non-employee director cash retainers to align with the director cash retainers provided at our peer companies based on information provided by Compensia. The amounts represent payment of board fees at the previously-set fees for one quarter of the year and the revised fees for three quarters of the year.

(2)

Amounts represent the aggregate grant date fair value of options to purchase shares of our common stock granted to our non-employee directors in 2023, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used to value the options for this purpose are set forth in Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K.

(3)

As of December 31, 2023, the aggregate number of shares of our common stock subject to outstanding option awards held by our non-employee directors was as follows: Mr. Ebeling, 126,949 shares; Dr. Martin, 55,330 shares; Mr. Rosenberg, 250,609 shares; Dr. Ryan, 26,150 shares; and Mr. Webster, 68,014 shares.

(4)

Dr. Martin does not receive cash retainer fees due to her agreement with the Company.

(5)

Consists of reimbursement of travel expenses.

(6)

Dr. Ryan commenced service as a director in November 2022 and therefore was ineligible for an Annual Grant in 2023 under the terms of our non-employee director compensation policy, as described below.

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Non-Employee Director Compensation Policy

Under our non-employee director compensation policy, we pay our non-employee directors a cash retainer for service on the board of directors and for service on each committee on which the director is a member. The chairperson of our board of directors receives an additional annual retainer for such service. The fees are designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. In June 2023, the following increases to cash retainers for service on our board were approved based on market data of director compensation levels at our peer companies provided by Compensia: (i) the annual cash retainer for directors and the additional annual retainer for the non-executive chairman were increased from $35,000 to $40,000 and from $30,000 to $33,000, respectively, and (ii) the annual cash retainers for serving as the chairperson and a member of the Nominating and Corporate Governance Committee were increased from $8,000 to $10,000 and from $4,000 to $5,000, respectively. The schedule of non-employee director cash retainers in effect as of December 31, 2023 is set forth below.

Annual Retainer

Board of Directors:

Additional retainer for non-executive chairperson $ 33,000

Audit Committee:

Members (other than chairperson) $ 7,500

Compensation Committee:

Members (other than chairperson) $ 5,000

Nominating and Corporate Governance Committee:

Members (other than chairperson) $ 5,000

In addition, our non-employee director compensation policy provides that, upon initial election to our board of directors, each non-employee director will be granted an option to purchase shares of our common stock with a grant date fair value of $275,000 (the "Initial Grant"). The Initial Grant vests in equal installments on the first, second and third anniversaries of the grant date, subject to continued service as a director through the applicable vesting date. Furthermore, on the date of each annual meeting of stockholders, each non-employee director who continues as a non-employee director following such meeting will be granted an option to purchase shares of our common stock with a grant date fair value of $165,000 (the "Annual Grant"). The Annual Grant will vest in full on the earlier of (i) the first anniversary of the grant date or (ii) our next annual meeting of stockholders, subject to continued service as a director through the applicable vesting date. Directors are not entitled to the Annual Grant until they have been on the board for a full year. Initial Grants and Annual Grants vest in full upon the sale of the Company.

We reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending meetings of the board of directors and committees.

Under the non-employee director compensation policy, the aggregate amount of compensation, including both equity compensation and cash compensation, paid to a non-employee director in any year for service as a director may not exceed $500,000 ($750,000 for the year in which the non-employee director is initially elected or appointed to our board of directors).

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information, to the extent known by us or ascertainable from public filings, with respect to the beneficial ownership of our common stock as of February 15, 2024 by:

•

each of our directors;

•

each of our named executive officers;

•

all of our directors and executive officers as a group; and

•

each person, or group of affiliated persons, who is known by us to beneficially owner of 5% or greater of the outstanding shares of our common stock.

The column entitled “Percentage of Shares Beneficially Owned” is based on a total of 43,055,645 shares of our common stock outstanding as of February 15, 2024.

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Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock that a person or entity has the right to acquire within 60 days of February 15, 2024 are considered outstanding and beneficially owned by the person or entity holding the rights for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise indicated in the table below, addresses of named beneficial owners are in care of Cullinan Oncology, Inc., One Main Street, Suite 1350, Cambridge, MA 02142.

5% or Greater Stockholders

Entities affiliated with Franklin Resources, Inc.(4) 3,281,280 7.62 %

Named Executive Officers and Directors

Anne-Marie Martin, Ph.D.(11) 24,587 *

David P. Ryan, M.D. (13) 8,717 *

* Less than one percent

(1)

Information herein is solely based on a Form 4 filed with the SEC on September 20, 2021 by (i) UBS Oncology Impact Fund L.P. (“OIF”), (ii) Oncology Impact Fund (Cayman) Management L.P. (“OIF GP”), (iii) MPM Oncology Impact Management LP (“MPM LP”), and (iv) MPM Oncology Impact Management GP LLC (“MPM GP”). The general partner of OIF is OIF GP. The general partner of OIF GP is MPM LP. The general partner of MPM LP is MPM GP. Dr. Ansbert Gadicke was a member of our board of directors and is a managing member and the managing director of MPM GP. Each of the entities and individuals listed above expressly disclaims beneficial ownership of the securities listed above except to the extent of any pecuniary interest therein. The address of these entities 450 Kendall Street, Cambridge, MA 02142.

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(2)

Information herein is based on a Schedule 13G/A filed with the SEC on February 14, 2024 and information available to us. The number of shares shown includes (i) 3,196,701 shares of common stock and (ii) 1,226,058 shares of common stock issuable upon the conversion of Series A Preferred Stock, par value $0.0001 per share (“Preferred Stock”). BVF Inc. holds an aggregate of 647,500 shares of Preferred Stock, convertible into an aggregate of 6,475,000 shares of common stock, subject to certain limitations, including that the holder is prohibited from converting its Preferred Stock into shares of common stock if, as a result of the conversion, the holder, together with its affiliates, would beneficially own greater than 9.99% of the total common stock then issued and outstanding immediately following the conversion of such shares of Preferred Stock (the “Conversion Blocker”). As of February 15, 2024, the Conversion Blocker limits the conversion of Preferred Stock held by the holder to 1,226,058 shares out of the 6,475,000 shares underlying the Preferred Stock held by them. Biotechnology Value Fund, L.P. (“BVF”) is deemed to be the beneficial owner of 2,899,865 shares of common stock, 1,226,058 shares of which are issuable upon the conversion of Preferred Stock, all of which such entity reported having shared voting and dispositive power. BVF I GP LLC (“BVF GP”) is deemed to be the beneficial owner of 2,899,865 shares of common stock, 1,226,058 shares of which are issuable upon the conversion of Preferred Stock, all of which such entity reported having shared voting and dispositive power. Biotechnology Value Fund II, L.P. (“BVF2”) is deemed to be the beneficial owner of 1,321,582 shares of common stock, all of which such entity reported having shared voting and dispositive power. BVF II GP LLC (“BVF2 GP”) is deemed to be the beneficial owner of 1,321,582 shares of common stock, all of which such entity reported having shared voting and dispositive power. Biotechnology Value Trading Fund OS LP (“Trading Fund OS”) is deemed to be the beneficial owner of 154,259 shares, all of which such entity reported having shared voting and dispositive power. BVF Partners OS Ltd. (“Partners OS”) is deemed to be the beneficial owner of 154,259 shares, all of which such entity reported having shared voting and dispositive power. BVF GP Holdings LLC (“BVF GPH”) is deemed to be the beneficial owner of 4,221,447 shares of common stock, 1,226,058 shares of which are issuable upon conversion of Preferred Stock, all of which such entity reported having shared voting and dispositive power. BVF Partners L.P. (“Partners”) is deemed to be the beneficial owner of 4,422,759 shares of common stock, 1,226,058 shares of which are issuable upon conversion of Preferred Stock, all of which such entity reported having shared voting and dispositive power. BVF Inc. is deemed to be the beneficial owner of 4,422,759 shares of common stock, 1,226,058 shares of which are issuable upon conversion of Preferred Stock, all of which such entity reported having shared voting and dispositive power. Mark N. Lampert is deemed to be the beneficial owner of 4,422,759 shares of common stock, 1,226,058 shares of which are issuable upon conversion of Preferred Stock, all of which he reported as having shared voting and dispositive power. BVF GP is the general partner of BVF. BVF2 GP is the general partner of BVF2. Partners OS is the general partner of Trading Fund OS. BVF GPH is the sole member of each of BVF GP and BVF2 GP. Partners is the investment manager of BVF, BVF2, Trading Fund OS and is the sole member of Partners OS. BVF Inc. is the general partner of Partners. Mr. Lampert is a director and officer of BVF Inc. The address for correspondence for BVF, BVF GP, BVF2, BVF2 GP, BVF GPH, Partners, BVF Inc. and Mr. Lampert is 44 Montgomery St., 40th Floor, San Francisco, California 94104. The address for correspondence for Trading Fund OS and Partners OS is PO Box 309 Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

(3)

Information herein is solely based on a Schedule 13G filed with the SEC on February 14, 2024. Blue Owl Capital Holdings LP is deemed to be the beneficial owner of 3,419,842 shares of common stock, all of which such entity reported having sole voting and dispositive power. The address for correspondence of Blue Owl Capital Holdings LP is 399 Park Avenue, New York, New York 10022.

(4)

Information herein is solely based on a Schedule 13G filed with the SEC on February 6, 2024. Franklin Resources, Inc. (“FRI”), through one or more open or closed end investment companies or other managed accounts is deemed to be the beneficial owner of 3,281,280 shares of common stock. Charles B. Johnson and Rupert H. Johnson, Jr. (the “Principal FRI Stockholders”) each own more than 10% of the outstanding common stock of FRI and are the principal stockholders of FRI. FRI and the Principal Stockholders may be deemed the beneficial owners of the stock held by persons or entities for whom or for which FRI subsidiaries provide investment management services. Franklin Advisers, Inc. reported having sole voting and dispositive power over 3,259,968 shares; Fiduciary Trust Company International reported having sole voting and dispositive power over 20,000 shares; and Fiduciary Trust International, LLC reported having sole voting and dispositive power over 1,312 shares. The address for correspondence of FRI and its affiliates is One Franklin Parkway, San Mateo, California 94403-1906.

(5)

Information herein is solely based on a Schedule 13G filed with the SEC on January 29, 2024. BlackRock, Inc. is deemed to be the beneficial owner of 2,462,274 shares of common stock, with respect to which such entity reported having sole voting power over 2,371,159 shares and sole dispositive power over 2,462,274 shares. The address for correspondence of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001.

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(6)

Information herein is solely based on a Schedule 13G/A filed with the SEC on February 14, 2024. Globeways Holdings Ltd. (“Globeways”) is deemed to be the beneficial owner of 468,696 shares of common stock, all of which such entity reported having shared voting and dispositive power. F2 Bioscience I 2017 Ltd. (“F2 Bioscience 2017”) is deemed to be the beneficial owner of 66,390 shares of common stock, all of which such entity reported having shared voting and dispositive power. F2 MG Ltd. (“F2 MG”), is deemed to be the beneficial owner of 402,306 shares of common stock, all of which such entity reported having shared voting and dispositive power. Globeways Holdings II Ltd. (“Globeways II”) is deemed to be the beneficial owner of 1,013,334 shares of common stock, all of which such entity reported having shared voting and dispositive. F2-TPO Investments, LLC (“F2 TPO”), is deemed to be the beneficial owner of 622,175 shares of common stock, all of which such entity reported having shared voting and dispositive power. F2 Bio TD, LLC (“F2 Bio”) is deemed to be the beneficial owner of 71,599 shares, all of which such entity reported having shared voting and dispositive power. F2 MC, LLC (“F2 MC”) is deemed to be the beneficial owner of 214,798 shares of common stock, all of which such entity reported having shared voting and dispositive power. F2 GC, LLC (“F2 GC”) is deemed to be the beneficial owner of 104,762 shares of common stock, all of which such entity reported having shared voting and dispositive power. Wolfways Holdings Limited (“Wolfways”) is deemed to be the beneficial owner of 487,628 shares of common stock, all of which such entity reported having shared voting and dispositive power. Morana Jovan-Embiricos is deemed to be the beneficial owner of 2,177,461 shares of common stock, with respect to which she reported having sole voting and dispositive power over 207,803 shares and shared voting and dispositive power over 1,969,658 shares. Dr. Morana Jovan-Embiricos was a member of our board of directors and is the founding director and shareholder of Globeways, which is the appointed manager of each of F2 Bioscience 2017 and F2 MG. Dr. Morana Jovan-Embiricos is also the founder of Globeways’ wholly-owned subsidiary Globeways II, which is the appointed manager of F2 TPO, F2 MC, F2 GC and F2 Bio. Dr. Morana Jovan-Embiricos is also the founder of Globeways’ wholly-owned subsidiary F2 Vision Management, which is the appointed manager of F2 Vision. Dr. Morana Jovan-Embiricos makes investment decisions on behalf of all such entities with respect to shares held by such entities. The address for correspondence of Dr. Morana Jovan-Embiricos, Globeways, F2 Bioscience 2017 and Globeways II is c/o LJ Management (Suisse) SA, 7 Rue da la Confederation, Geneva 1204, Switzerland. The address for correspondence of F2 MG is c/o GISEV (Suisse) SA, Contrada di Sassello 2, 6900 Lugano, Switzerland. The address for correspondence of F2 TPO, F2 Bio, F2 GC and F2 MC is c/o Twin Focus, 75 Park Plaza, Boston, MA 02116 USA. The address for correspondence of F2 Vision and F2 Vision Management is c/o Atalux, 74 Grand-Rue, Luxembourg V8L-1660.

(7)

Consists of (i) 18,788 shares of common stock held by Mr. Ahmed, (ii) 4,541 shares underlying RSUs which are vested within 60 days of February 15, 2024, and (iii) 1,694,436 shares subject to options held by Mr. Ahmed which are vested and exercisable within 60 days of February 15, 2024.

(8)

Consists of (i) 9,941 shares of common stock held by Dr. Jones, (ii) 2,500 shares underlying RSUs which are vested within 60 days of February 15, 2024, and (iii) 144,479 shares subject to options held by Dr. Jones which are vested and exercisable within 60 days of February 15, 2024.

(9)

Consists of (i) 25,964 shares of common stock held by Mr. Trigilio, (ii) 3,521 shares underlying RSUs which are vested within 60 days of February 15, 2024 and (iii) 388,660 shares subject to options held by Mr. Trigilio which are vested and exercisable within 60 days of February 15, 2024.

(10)

Consists of (i) 67,504 shares of common stock held by Mr. Ebeling and (ii) 108,499 shares subject to options held by Mr. Ebeling which are vested and exercisable within 60 days of February 15, 2024.

(11)

Consists of 24,587 shares subject to options held by Dr. Martin which are vested and exercisable within 60 days of February 15, 2024.

(12)

Consists of (i) 45,002 shares of common stock held by Mr. Rosenberg and (ii) 232,159 shares subject to options held by Mr. Rosenberg which are vested and exercisable within 60 days of February 15, 2024.

(13)

Consists of 8,717 shares subject to options held by Dr. Ryan which are vested and exercisable within 60 days of February 15, 2024.

(14)

Consists of 46,402 shares subject to options held by Mr. Webster which are vested and exercisable within 60 days of February 15, 2024.

(15)

Consists of (i) 359,552 shares of common stock (ii) 16,855 shares underlying RSUs which are vested within 60 days of February 15, 2024 and (iii) 3,157,058 shares subject to options which are vested and exercisable within 60 days of February 15, 2024.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information as of December 31, 2023 with respect to the shares of our common stock that may be issued under our existing equity compensation plans.

Equity Compensation Plans as of December 31, 2023

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(1)

Consists of the 2021 Stock Plan and our 2021 Employee Stock Purchase Plan (the "ESPP").

(2)

The 2021 Stock Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1 by (i) 5% of the number of shares of our common stock outstanding on the immediately preceding December 31, or (ii) such lesser number of shares as determined by our compensation committee. On January 1, 2024, 2,145,004 additional shares were reserved for issuance under the 2021 Stock Plan pursuant to this provision.

(3)

The ESPP provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1 by the lesser of (i) 833,330 shares of common stock, (ii) 1% of the number of shares of our common stock outstanding on the immediately preceding December 31, or (iii) such lesser number of shares as determined by our board of directors. On January 1, 2024, 429,001 additional shares were reserved for issuance under the ESPP pursuant to this provision.

(4)

Consists of shares of common stock issuable upon exercise of outstanding stock options granted pursuant to the Nasdaq inducement grant exception as a component of employment compensation for employees. The inducement grants were made as an inducement material to employees entering into employment with us in accordance with Nasdaq Listing Rule 5635(c)(4).

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Other than the compensation agreements and other arrangements described under “Executive Compensation” and “Director Compensation” in this Part III of the Annual Report on Form 10-K and the transactions described below, since January 1, 2022, there has not been and there is not currently proposed, any transaction or series of similar transactions to which we were, or will be, a party in which the amount involved exceeded, or will exceed, $120,000 and in which any director, executive officer, holder of five percent or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of the foregoing persons, had, or will have, a direct or indirect material interest.

Agreements with Our Stockholders

Preferred Stock Financing Agreements

In connection with our preferred stock financings prior to our initial public offering (“IPO”), we entered into an investors’ rights agreement and stockholders agreement, in each case, with the purchasers of our preferred stock and certain holders of our common stock. All of the material provisions of these agreements terminated immediately prior to the completion of our IPO, other than the provisions relating to registration rights, which continued in effect following the completion of our IPO and entitle the holders of such rights to demand that we file a registration statement, subject to certain limitations, and to request that their shares be covered by a registration statement that we are otherwise filing.

Royalty Transfer Agreements

Cullinan Amber Corp. (“Cullinan Amber”), Cullinan Florentine Corp. (“Cullinan Florentine"), and Cullinan MICA Corp. (“Cullinan MICA”) are each party to royalty transfer agreements (the “Royalty Transfer Agreements") with MPM Oncology Charitable Foundation, Inc., and UBS Optimus Foundation (together, the “Foundations”). Under each of these respective agreements, each Foundation is entitled to receive a low single digit royalty percentage of all global net sales of any products developed by the applicable subsidiary, subject to limitations after patent expirations and on intellectual property developed after a change of control.

Unless earlier terminated, each Royalty Transfer Agreement shall terminate on a country-by-country basis upon the later of (i) the date that is the 12th anniversary of the first commercial sale of that subsidiary’s product in such country and (ii) the expiration of the last to expire issued patent claim of any pre-acquisition intellectual property covering the composition or use of such that subsidiary’s product in such country. The Foundations are affiliated with OIF, which beneficially owns more than five percent of our outstanding common stock, and Dr. Gadicke, a former member of our board of directors.

129

Simultaneously with the execution of each Royalty Transfer Agreement, Cullinan Amber, Cullinan Florentine, and Cullinan MICA each also entered into a letter agreement (the "Royalty Letter") with the Foundations and the Company. Pursuant to the Royalty Letters, the parties agreed that a portion of the cash consideration paid by the Company to the applicable subsidiary for the purchase of securities was to be treated as consideration for the right to receive a low single digit royalty percentage of all global net sales of any company products received by the applicable subsidiary (the "Royalty Stream"). Further, effective immediately subsequent to the purchase by the Company of the Royalty Stream, the Company transferred its rights under the Royalty Stream to the Foundations by directing the applicable subsidiary to execute, deliver, and perform a Royalty Transfer Agreement. In June 2022, in connection with the sale of our equity interest in Cullinan Pearl Corp. ("Cullinan Pearl") to Taiho Pharmaceutical Co., Ltd. ("Taiho"), we amended the Royalty Transfer Agreement and Royalty Letter applicable to Cullinan Pearl to provide that the applicable Royalty Stream would not include the net sales of products owned or controlled by Taiho that are commercialized by or on behalf of Taiho in Japan. The form of royalty transfer agreement is filed as Exhibit 10.21 to our Registration Statement on Form S-1 filed on December 18, 2020.

Employment Agreements

We have entered into employment agreements with our executive officers. For more information regarding the agreements with our named executive officers, see “Executive Compensation—Employment Agreements.”

Indemnification Agreements

We have entered into agreements to indemnify our directors and executive officers. These agreements will, among other things, require us to indemnify these individuals for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on behalf of our Company or that person’s status as a member of our board of directors to the maximum extent allowed under Delaware law.

Related Person Transaction Policy

Our board of directors reviews and approves transactions with directors, officers and holders of five percent or more of our voting securities and their affiliates, each a related party. Our related party transactions policy provides that such transactions must be approved by our audit committee. Pursuant to this policy, the audit committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. For purposes of this policy, a related person is defined as a director, executive officer, nominee for director, or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and their immediate family members.

Director Independence

Applicable Nasdaq rules require a majority of a listed company’s board of directors to be comprised of independent directors. In addition, the Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act and that compensation committee members satisfy independence criteria set forth in Rule 10C-1 under the Exchange Act. Under applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries. In addition, in affirmatively determining the independence of any director who will serve on a company’s compensation committee, Rule 10C-1 under the Exchange Act requires that a company’s board of directors must consider all factors specifically relevant to determining whether a director has a relationship to such company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including: the source of compensation to the director, including any consulting, advisory or other compensatory fee paid by such company to the director, and whether the director is affiliated with the company or any of its subsidiaries or affiliates.

130

Our board of directors has determined that all current members of the board of directors, except Nadim Ahmed, are independent directors, including for purposes of the rules of Nasdaq and the SEC. In making such independence determination, our board of directors considered the relationships that each non-employee director has with us and all other facts and circumstances that our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our board of directors considered the association of our directors with the holders of more than 5% of our common stock. There are no family relationships among any of our directors or executive officers. Mr. Ahmed is not an independent director under these rules because he is our President and Chief Executive Officer.

Item 14. Principal Accountant Fees and Services.

We incurred the following fees from KPMG LLP for the audit of the consolidated financial statements and for other services provided during 2023 and 2022.

Audit-related fees(2) — —

All other fees(4) — —

(1)

Audit fees consist of fees for the professional services rendered by KPMG for the audit of our annual financial statements, the financial statements included in our Form 10-Qs, the review of our interim financial statements, comfort letters and consents.

(2)

There were no audit-related fees for 2023 and 2022.

(3)

Tax fees consist of fees for tax compliance, tax advice and tax planning.

(4)

There were no other fees for 2023 and 2022.

Audit Committee Pre-approval Policy and Procedures

Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by our audit committee or the engagement is entered into pursuant to the pre-approval procedure described below.

From time to time, our audit committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval details the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

During 2023 and 2022, no services were provided to us by KPMG LLP other than in accordance with the pre-approval policies and procedures described above.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(1)

For a list of the financial statements included herein, see Index to the Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K, incorporated into this Item by reference.

(2)

Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto included in this Annual Report on Form 10-K.

(3)

The exhibits filed as part of this Annual Report on Form 10-K are set forth on the Exhibit Index immediately following our consolidated financial statements. The Exhibit Index is incorporated herein by reference.

Item 16. Form 10-K Summary.

None.

132

CULLINAN ONCOLOGY, INC.

Index to Financial Statements

Page

Consolidated Balance Sheets F-3

Consolidated Statements of Operations and Comprehensive Income (Loss) F-4

Consolidated Statements of Stockholders' Equity F-5

Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

Cullinan Oncology, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Cullinan Oncology, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2018.

Boston, Massachusetts

March 14, 2024

F-2

CULLINAN ONCOLOGY, INC.

Consolidated Balance Sheets

(in thousands, except share amounts)

December 31,

Assets

Current assets:

Prepaid expenses and other current assets 13,124 7,180

Property and equipment, net 989 1,174

Operating lease right-of-use assets 2,543 4,130

Long-term investments — 80,882

Liabilities and Stockholders' Equity

Current liabilities:

Accrued expenses and other current liabilities 24,204 14,135

Income tax payable — 4,282

Operating lease liabilities, current 1,440 1,421

Long-term liabilities:

Operating lease liabilities, net of current portion 2,150 3,590

Commitments and contingencies (Note 12)

Stockholders' equity:

Accumulated other comprehensive loss (129 ) (2,601 )

Noncontrolling interests 192 —

Total liabilities and stockholders' equity $ 484,182 $ 561,117

See accompanying notes to the consolidated financial statements.

F-3

CULLINAN ONCOLOGY, INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share amounts)

Operating expenses:

Impairment of long-lived assets (440 ) —

Gain on sale of Cullinan Pearl — 276,785

Other income (expense):

Other income (expense), net 239 57

Net loss attributable to noncontrolling interests (1,939 ) (2,019 )

Comprehensive income (loss):

Unrealized gain (loss) on investments 2,472 (1,763 )

Comprehensive loss attributable to noncontrolling interests (1,939 ) (2,019 )

Comprehensive income (loss) attributable to Cullinan $ (150,690 ) $ 109,451

Net income (loss) per share attributable to common stockholders of Cullinan:

See accompanying notes to the consolidated financial statements.

F-4

CULLINAN ONCOLOGY, INC.

Consolidated Statements of STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

Shares Amount Shares Amount Capital Loss Deficit Subsidiaries Equity

Contributions from noncontrolling interests — — — — — — — 1,527 1,527

Acquisition of noncontrolling interests — — — — (32,706 ) — — (575 ) (33,281 )

Unrealized loss on investments — — — — — (1,763 ) — — (1,763 )

Contributions from noncontrolling interests — — — — — — — 2,131 2,131

Equity-based compensation — — — — 30,438 — — — 30,438

Unrealized gain on investments — — — — — 2,472 — — 2,472

See accompanying notes to the consolidated financial statements.

F-5

CULLINAN ONCOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Operating activities:

Amortization (accretion) on marketable securities (10,154 ) 1,294

Impairment of long-lived assets 440 —

Depreciation and amortization 310 93

Non-cash contributions from noncontrolling interests 131 374

Gain on sale of Cullinan Pearl — (276,785 )

Realized loss on marketable securities — 109

Gain on disposal of fixed assets — (77 )

Changes in operating assets and liabilities:

Prepaid expenses and other current assets (5,944 ) (1,130 )

Accrued expenses and other liabilities 10,054 8,533

Investing activities:

Proceeds from maturities of marketable securities 409,397 352,933

Purchase of property and equipment (208 ) (1,133 )

Sale of Cullinan Pearl, net of cash transferred with sale of $2,898 — 275,000

Proceeds from sale of property and equipment — 91

Net cash provided by investing activities 35,806 248,975

Financing activities:

Proceeds from issuance of common stock 38,388 —

Proceeds from net issuance of convertible notes 1,825 2,375

Acquisition of noncontrolling interests — (33,281 )

Repayment of convertible note — (2,200 )

Contributions from noncontrolling interests — 1,153

Net cash provided by (used in) financing activities 40,751 (25,933 )

Net increase (decrease) in cash and cash equivalents (57,718 ) 96,378

Cash and cash equivalents at beginning of period 156,152 59,774

Cash and cash equivalents at end of period $ 98,434 $ 156,152

SUPPLEMENTAL NONCASH DISCLOSURE

Conversion of convertible note into noncontrolling interest $ 2,000 $ —

Cash paid (refunded) for income taxes $ (4,433 ) $ 37,801

See accompanying notes to consolidated financial statements.

F-6

CULLINAN ONCOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)

Nature of Business and Basis of Presentation

Organization

Cullinan Oncology, Inc., together with its consolidated subsidiaries ("Cullinan" or "the Company"), is a clinical-stage biopharmaceutical company focused on developing modality-agnostic targeted oncology therapies that was incorporated in September 2016 and has a principal place of business in Cambridge, Massachusetts.