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Holders of Record
−Removed: As of February 25, 2022, there were 16 stockholders of record of our common stock and 2 stockholders of record of our Class B common stock.
+Added: As of March 16, 2023, there were 26 stockholders of record of our common stock and 0 stockholders of record of our Class B common stock.
These numbers were derived from our stockholder records and do not include beneficial owners of our common stock whose shares are held in “street”
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Information about securities authorized for issuance under our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K.
−Removed: Stock Performance Graph
−Removed: The graph set forth below compares the cumulative total stockholder return on our common stock for the period commencing on December 16, 2020, the date our common stock began trading on the Nasdaq, and ending on December 31, 2021, with the cumulative total return of the Nasdaq Composite Index and the Nasdaq Biotechnology Index over the same period.
−Removed: This graph assumes the investment of $100.00 on December 16, 2020 in each share of our common stock at the initial public offering price of $18.00, the Nasdaq Composite Index, and the Nasdaq Biotechnology Index, and assumes the reinvestment of dividends.
−Removed: The comparisons shown in the graph below are based upon historical data.
−Removed: We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock.
−Removed: Information used in the graph was obtained from sources believed to be reliable including Nasdaq, Bloomberg and Reuters, but we are not responsible for any errors or omissions in such information.
−Removed: Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this Annual Report on Form 10‑K or future filings made by us under those statutes, this Stock Performance Graph section is not “soliciting material,”
−Removed: shall not be deemed filed with the U.S.
−Removed: Securities and Exchange Commission and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes.
Recent Sales of Unregistered Securities
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There has been no material change in the planned use of such proceeds from that described in the final prospectus filed by us with the SEC on December 17, 2020.
−Removed: Selected Financial Data
−Removed: Not applicable.
Managemen t’s Discussion and Analysis of Financial Condition and Results of Operations
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Risk Factors.”
−Removed: The discussion of our financial condition and results of operations for the year ended December 31, 2019, included in Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) can be found in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 24, 2021.
We are a clinical-stage biopharmaceutical company developing our novel class of highly specific and selective antibody-based therapeutics for the treatment of solid tumor cancer.
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We are a United States-based company with research facilities in San Diego, California and, through our contractual relationship with BioDuro-Sundia, a provider of preclinical development services, in Beijing, China.
−Removed: Since the commencement of our operations, we have focused substantially all of our resources on conducting research and development activities, including drug discovery, preclinical studies and clinical trials of our product candidates, including the ongoing Phase 2 clinical trials of mecbotamab vedotin and ozuriftamab vedotin, establishing and maintaining our intellectual property portfolio, manufacturing clinical and research material through third parties, hiring personnel, establishing product development and commercialization collaborations with third parties, raising capital and providing general and administrative support for these operations.
+Added: Since the commencement of our operations, we have focused substantially all of our resources on conducting research and development activities, including drug discovery, preclinical studies and clinical trials of our product candidates, including the ongoing Phase 2 clinical trials of mecbotamab vedotin and ozuriftamab vedotin and our Phase 1 clinical trial of BA3071, establishing and maintaining our intellectual property portfolio, manufacturing clinical and research material through third parties, hiring personnel, establishing product development and commercialization collaborations with third parties, raising capital and providing general and administrative support for these operations.
Since 2014, such research and development activities have exclusively related to the research, development, manufacture and Phase 1 and Phase 2 clinical testing of our CAB antibody-based product candidates and the strengthening of our proprietary CAB technology platform and pipeline.
−Removed: We do not have any products approved for sale, and we have not generated any revenue from product sales.
We have incurred significant losses to date.
Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current and future product candidates.
−Removed: Our net losses were $95.4 million, $35.9 million, and $29.8 million for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: Our net losses were $106.5 million and $95.4 million for the years ended December 31, 2022 and 2021, respectively.
As of December 31, 2022, we had an accumulated deficit of $292.8 million.
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We do not expect to generate meaningful revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating expenses for the foreseeable future due to the cost of research and development, including identifying and designing product candidates and conducting preclinical studies and clinical trials, and the regulatory approval process for our product candidates.
−Removed: We expect our expenses, and the potential for losses, to increase substantially as we conduct clinical trials of our lead product candidates and seek to expand our pipeline.
+Added: We expect our expenses, and the potential for losses, to increase as we conduct clinical trials of our lead product candidates and seek to expand our pipeline.
We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities as we:
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attract, hire and retain additional clinical, scientific, management, administrative and commercial personnel.
−Removed: Furthermore, we expect to continue to incur additional costs associated with operating as a public company.
As a result, we will require substantial additional capital to develop our product candidates and fund operations for the foreseeable future.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings, collaborations and other similar arrangements.
−Removed: The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts.
+Added: The amount and timing of our future funding
+Added: requirements will depend on many factors, including the pace and results of our development efforts.
We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.
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As of December 31, 2022, our cash and cash equivalents totaled approximately $215.5 million.
−Removed: Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations into the first half of 2024.
+Added: Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations for a period of at least twelve months from the date the financial statements included in this report are issued.
However, we have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
−Removed: BioAtla was formed in April 2007 as a Delaware limited liability corporation.
−Removed: We initially operated as a service provider and service-related partnered drug developer for primarily human therapeutic proteins and simultaneously refined our proprietary CAB technology platform and related technologies.
−Removed: Since 2013, we transitioned away from our services business to focus on internal development of our own proprietary products.
Impact of COVID-19 on our business
−Removed: On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 caused by a novel strain of coronavirus as a pandemic, which continues to spread throughout the United States and around the world.
The worldwide COVID-19 pandemic may affect our ability to complete our current preclinical studies and clinical trials, initiate and complete our planned preclinical studies and clinical trials, disrupt regulatory activities or have other adverse effects on our business, results of operations, financial condition and prospects.
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To date, we have experienced modest business disruptions, including with respect to clinical trials we are conducting, and non-material impairments as a result of the pandemic.
−Removed: Our Phase 2 sarcoma trial remains on schedule and the Phase 2 interim analysis for AXL NSCLC and ROR2 studies have experienced some modest delays in patient initiations due to COVID-19, however, overall timelines for study completion essentially have not changed at this time.
−Removed: We are following, and plan to continue to follow, recommendations from federal, state and local governments regarding workplace policies, practices and procedures.
−Removed: In March 2020, we implemented a remote working policy for many of our employees, began restricting non-essential travel and temporarily reduced salaries of our employees from March 2020 to July 2020.
−Removed: We are complying with all applicable guidelines for our clinical trials, including remote clinical monitoring.
+Added: Our mecbotamab vedotin Phase 2 sarcoma trial remains on schedule and the Phase 2 interim analysis for mecbotamab vedotin NSCLC and ozuriftamab vedotin studies have experienced some modest delays.
In April 2020, we borrowed $0.7 million under the Paycheck Protection Program under the CARES Act and we received full loan forgiveness from the U.S.
Small Business Association in July 2021, resulting in the recognition of $0.7 million to other income for the twelve months ended December 31, 2021.
−Removed: The PPP loan is discussed further under “—Liquidity and capital resources.”
We are continuing to monitor the potential impact of the pandemic, but we cannot be certain what the overall impact will be on our business, financial condition, results of operations and prospects.
−Removed: Recent developments
−Removed: On January 5, 2022, we and Bristol-Myers Squibb Company (“BMS”) entered into a clinical trial collaboration and supply agreement (the “BMS Agreement”).
−Removed: Under the terms of the BMS Agreement, BioAtla and BMS will collaborate on clinical trials of separate combination therapies using two of BioAtla’s Conditionally Active Biologic Antibody Drug Conjugates, mecbotamab vedotin and ozuriftamab vedotin, each in combination with Opdivo® (nivolumab), BMS’
−Removed: proprietary anti-PD-1 monoclonal antibody product.
−Removed: We will serve as the study sponsor of the scheduled studies and will be responsible for costs associated with the trial execution.
−Removed: BMS will provide Opdivo® clinical drug supply at no cost for the combination study trials.
−Removed: After the completion of the combination therapy trials, we are obligated to provide BMS with a final report of the data resulting from the trial.
Financial operations overview
To date, we have not generated any revenue from the sale of products and do not expect to generate meaningful revenue in the near future.
−Removed: In addition to the collaboration agreements discussed below, we may in the future seek third-party collaborators or joint venture partners for development and commercialization of additional CAB product candidates.
−Removed: In April 2019, we entered into a Global Co-Development and Collaboration Agreement with BeiGene, Ltd.
−Removed: which was amended in December 2019, October 2020, and was terminated in November 2021.
−Removed: The original agreement provided for the development, manufacturing and commercialization of BA3071 in collaboration with BeiGene.
−Removed: After the November 2021 amendment, we are responsible for developing BA3071, including global regulatory filings and commercialization, and are responsible for all costs of development, manufacturing and commercialization globally.
−Removed: At the time of execution of the BeiGene collaboration, we received a $20.0 million upfront payment and in December 2019, we received an additional $5.0 million for the reimbursement of manufacturing costs.
−Removed: Pursuant to the terms of the November 2021 amendment, we agreed to
−Removed: pay single digit royalties to BeiGene and agreed to share on a limited basis in any upfront and milestone payments received through a sublicense of BA3071.
−Removed: During 2020, we recognized revenue primarily from our collaboration with BeiGene.
−Removed: During 2019, we recognized revenue from our collaboration with BeiGene and, to a much lesser degree, from our collaboration with Pfizer.
−Removed: Prior to developing our own programs, the Company received revenue from services performed under fixed price service contracts that, in some cases, provided for potential milestone and royalty payments to us.
−Removed: During 2021, we recognized $0.3 million in revenues from our legacy service contracts.
+Added: In 2019 we entered into a collaboration agreement with BeiGene, Ltd.
+Added: The agreement was amended several times and was terminated in November 2021, which resulted in the Company assuming responsibility for development of BA3071.
+Added: We received a total of $25.0 million in non-refundable payments from BeiGene from this collaboration.
+Added: Pursuant to the terms of the November 2021 amendment, we agreed to pay single digit royalties to BeiGene and agreed to share on a limited basis in any upfront and milestone payments, if received, through a sublicense of BA3071.
+Added: In addition, we may in the future seek third-party collaborators or joint venture partners for development and commercialization of additional CAB product candidates.
+Added: Prior to developing our own programs, we received revenue from services performed under fixed price service contracts that, in some cases, provided for potential milestone and royalty payments to us.
+Added: We recognized $0 and $0.3 million in revenues from our legacy service contracts for the years ended December 31, 2022 and 2021, respectively.
Operating expenses
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External expenses consist of:
−Removed: Fees paid to third parties such as contractors, clinical research organizations (CROs) and consultants, including through our relationship with BioDuro-Sundia, and other costs related to preclinical and clinical trials;
+Added: Fees paid to third parties such as contractors, clinical research organizations (CROs) and consultants, and other costs related to preclinical and clinical trials;
Fees paid to third parties such as contract manufacturing organizations (CMOs) and other vendors for manufacturing research and clinical trial materials;
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Personnel-related expenses, including salaries, benefits and equity-based compensation expenses, for personnel in our research and development functions;
−Removed: Related equipment, cost of facilities and depreciation expenses.
+Added: Related equipment and facilities depreciation expense.
We expense research and development costs in the periods in which they are incurred.
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The capitalized amounts are then expensed as the related goods are delivered and services are performed.
−Removed: We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities to advance our product candidates and our clinical programs and expand our product candidate pipeline.
+Added: We expect our research and development expenses to generally increase for the foreseeable future as we continue to invest in research and development activities to advance our product candidates and our clinical programs and expand our product candidate pipeline.
The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming.
−Removed: Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
+Added: Successful product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
Accordingly, to the extent that our product candidates continue to advance into clinical trials, including larger and later-stage clinical trials, our expenses will increase substantially and may become more variable.
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General and administrative
−Removed: Our general and administrative expenses consist primarily of personnel-related expenses for personnel in our executive, finance, corporate and other administrative functions, intellectual property and patent costs, facilities and other allocated expenses, other expenses for outside professional services, including legal, human resources, audit and accounting services and insurance costs.
+Added: Our general and administrative expenses include personnel-related expenses for personnel in our executive, finance, corporate and other administrative functions, intellectual property and patent costs, facilities and other allocated expenses, other expenses for outside professional services, including legal, human resources, investor relations, audit and accounting services and insurance costs.
Personnel-related expenses consist of salaries, benefits and equity-based compensation.
−Removed: We expect our general and administrative expenses to increase as a result of operating as a public company, including additional costs (i) to comply with the rules and regulations of the SEC and those of The Nasdaq Global Market, (ii) for legal and auditing services, (iii) for additional insurance, (iv) for investor relations activities and (v) for other administrative and professional services.
−Removed: We also expect our intellectual property expenses to increase as we expand our intellectual property portfolio.
+Added: We also expect our general and administrative expenses to increase in the future as we increase our personnel headcount to support our research and development activities to advance our product candidates and clinical stage programs.
Interest income
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Interest expense
−Removed: Interest expense consists primarily of interest incurred on our outstanding convertible debt, including coupon interest and the amortization of debt discounts, including those related to beneficial conversion features and embedded derivatives.
−Removed: Our interest expense declined subsequent to the settlement of our outstanding convertible debt in July 2020 and the forgiveness of our PPP loan in July 2021.
−Removed: Change in fair value of derivative liability
−Removed: The convertible promissory notes we issued during 2019 and 2020 contained redemption features which we determined were embedded derivatives to be recognized as liabilities and measured at fair value.
−Removed: At the end of each reporting period, changes in the estimated fair value during the period were recorded as a change in the fair value of derivative liability.
−Removed: The embedded derivative liability was recorded at fair value utilizing an income approach that identified the cash flows using a “with-and-without”
−Removed: valuation methodology.
−Removed: The inputs used to determine the estimated fair value of the derivative instrument were based primarily on the probability of an underlying event triggering the embedded derivative occurring and the timing of such event.
−Removed: We will no longer record changes in the fair value of the derivative liability subsequent to the settlement of the derivative liability in connection with the conversion of our outstanding convertible debt in July 2020.
+Added: Interest expense consists primarily of interest incurred on our previously outstanding debt.
+Added: We no longer have interest expense after the forgiveness of our PPP loan in July 2021.
Extinguishment of debt
−Removed: In April 2020, we amended the terms of certain outstanding convertible promissory notes that we concluded were extinguishments.
−Removed: In July 2020, in connection with our Corporate Reorganization, we settled all of our outstanding convertible promissory notes and recognized extinguishment losses for the difference between the fair value of the consideration given to the noteholders and the carrying value of the related convertible promissory notes.
In July 2021, our PPP loan was fully forgiven and we recorded a gain on extinguishment equal to the principal and interest outstanding at the time of forgiveness.
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Interest expense
−Removed: Change in fair value of derivative liability
Gain (loss) on extinguishment of long-term debt
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Collaboration and other revenue
−Removed: Collaboration and other revenue for the years ended December 31, 2021 and 2020 consisted of $0.3 million recognized under our legacy service contracts, and $0.4 million of revenue recognized under our collaboration with BeiGene, respectively.
+Added: We did not recognize any revenue for the year ended December 31, 2022.
+Added: Collaboration and other revenue for the year ended December 31, 2021 consisted of $0.3 million recognized under our legacy service contracts.
As part of the November 2021 amendment to the agreement with BeiGene, we reclassified the remaining $19.8 million of deferred revenue as a long-term liability which we expect to settle as licensing payments are made to BeiGene in accordance with the resulting amendment.
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BA3021 (ROR2-ADC)
+Added: BA3071 (CTLA-4)
Other CAB Programs
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Research and development expenses were $79.3 million and $58.3 million for the years ended December 31, 2022 and 2021, respectively.
−Removed: The increase of $38.3 million was primarily driven by a $17.8 million increase in external costs as due to manufacturing and clinical development for our clinical programs BA3011 and BA3021, a $11.2 million increase in pre-clinical development including manufacturing and IND enabling studies for CAB pipeline programs, a $4.0 million increase in stock-based compensation due to awards issued in connection with our 2020 Equity Incentive Plan, a $3.0 million increase in equity-based compensation related to a decrease in the fair value of awards under our profits interest plan during the year ended December 31, 2020, a $1.9 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, and $0.5 million increase in facility, depreciation and allocated costs.
+Added: The increase of $21.0 million was primarily driven by a $17.2 million increase in clinical development for our clinical-stage programs, a $3.8 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, a $0.7 million increase in stock-based compensation due to awards issued in connection with our 2020 Equity Incentive Plan, and a $0.4 million increase in facility and other allocated costs, offset by a $1.1 million decrease in pre-clinical and manufacturing costs for various programs.
General and administrative expense
General and administrative expenses were $28.8 million and $38.4 million for the years ended December 31, 2022 and 2021, respectively.
−Removed: The increase of $27.8 million was primarily driven by a $18.2 million increase in stock-based compensation due to awards issued in connection with our 2020 Equity Incentive Plan and the modification of awards issued to one of our co-founders, a $3.8 million increase in equity-based compensation related to a decrease in the fair value of awards under our profits interest plan during the year ended December 31, 2020, a $2.9 million increase in insurance expense, a $1.5 million increase in personnel related expenses as we expanded our administrative functions in support of our development activities plus severance benefits related to the departure of one of our co-founders, a $1.2 million increase in professional fees related to accounting, audit and legal services, a $0.4 million increase in other expenses including corporate franchise taxes and software subscriptions, and a $0.3 million increase in depreciation expense.
−Removed: These decreases were offset by a $0.4 million decrease in facility and allocated costs.
+Added: The decrease of $9.6 million was primarily driven by an $11.3 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, including new awards granted under the plan and the modification of awards issued to one of our co-founders in 2021, offset by an increase of $1.4 million in accounting and legal services, including a $1.0 million legal settlement, and a $0.3 million increase in travel related expenses.
Interest income
−Removed: Interest income was $350,000 and $100,000 for the years ended December 31, 2021 and 2020, respectively.
−Removed: The increase of $250,000 was due to higher average cash and cash equivalent balances after our December 2020 IPO and September 2021 private placement.
−Removed: Interest expense
−Removed: Interest expense was $3,000 and $1.4 million for the years ended December 31, 2021 and 2020, respectively.
−Removed: The decrease of $1.4 million was due to reduced interest expense as a result of the settlement of all of our convertible debt in July 2020.
−Removed: Change in fair value of derivative liability
−Removed: Change in fair value of derivative liability was $0 and $1.6 million for the years ended December 31, 2021 and 2020, respectively.
−Removed: The decrease of $1.6 million was primarily due to changes in the fair value of embedded derivatives issued in connection with our outstanding convertible promissory notes which all settled in July 2020.
+Added: Interest income was $1.6 million and $350,000 for the years ended December 31, 2022 and 2021, respectively.
+Added: The increase of $1.3 million was due to higher yields earned as compared to the same period in 2021.
Extinguishment of Debt
−Removed: Extinguishment of long-term debt resulted in a $0.7 million gain and a $2.9 million loss on extinguishment during the years ended December 31, 2021 and 2020 related to the forgiveness of our PPP loan in July 2021 and the settlement of our then outstanding convertible promissory notes in connection with our July 2020 Series D Financing, respectively.
−Removed: Other income (expense)
−Removed: We had minimal other income and expense for the years ended December 31, 2021 and 2020.
+Added: Extinguishment of debt was $0 and $0.7 million for the twelve months ended December 31, 2022 and 2021, respectively.
+Added: The $0.7 million gain on extinguishment during the twelve months ended December 31, 2021 was related to the forgiveness of our PPP loan in July 2021.
Liquidity and capital resources
We have incurred aggregate net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future.
+Added: Since July 2020, we have funded our operations primarily through the issuance of equity.
+Added: In November 2022, we received net proceeds of $61.7 million in an underwritten public offering of our common stock.
As of December 31, 2022, we had cash and cash equivalents of $215.5 million.
−Removed: On April 22, 2020, we received proceeds from a loan, or PPP Loan, in the amount of $0.7 million from City National Bank, as lender, pursuant to the Paycheck Protection Program, or PPP, of the CARES Act.
−Removed: In July 2021, we were notified by our lender, City National Bank, that our PPP Loan had been fully forgiven by the SBA and that there was no remaining balance on the PPP Loan.
−Removed: We recorded the forgiveness as other income in 2021.
+Added: On April 22, 2020, we received proceeds from a loan pursuant to the Paycheck Protection Program of the CARES Act, "the PPP Loan", in the amount of $0.7 million from City National Bank, as lender.
+Added: In July 2021, we were notified by our lender that our PPP Loan had been fully forgiven by the U.S.
+Added: Small Business Administration and that there was no remaining balance on the PPP Loan.
+Added: We recorded the forgiveness as other income in July
Future funding requirements
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the extent to which we acquire or invest in businesses, products or technologies, although we have no commitments or agreements relating to any of these types of transactions.
−Removed: Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations into the first half of 2024.
+Added: Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations for a period of at least twelve months from the date the financial statements included in this report are issued.
However, we have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
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Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control.
−Removed: For example, market volatility resulting from the COVID-19 pandemic could adversely impact our ability to access capital as and when needed.
+Added: For example, market volatility resulting from a variety of causes, including the COVID-19 pandemic, supply chain disruptions, and geopolitical disruptions, including the ongoing conflict between Russia and Ukraine, could adversely impact our ability to access capital as and when needed.
We may choose to raise additional capital through the issuance of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
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Financing activities
−Removed: Net increase in cash and cash equivalents
+Added: Net increase (decrease) in cash and cash equivalents
Cash used in operating activities
Net cash used in operating activities for the year ended December 31, 2022 was $90.4 million, which consisted of a consolidated net loss of $106.5 million, a net increase of $0.3 million in our net operating assets and liabilities and $15.8 million of non-cash transactions.
+Added: The net change in our operating assets and liabilities was primarily due to an increase in prepaid expenses and other assets of $2.6 million, partially offset by an increase in accounts payable and accrued expenses of $3.4 million and a net decrease in operating lease right-of-use assets and liabilities of $0.5 million.
+Added: The non-cash transactions primarily consisted of $14.6 million of stock-based compensation and non-cash charges of $1.2 million related to depreciation and amortization.
+Added: Net cash used in operating activities for the year ended December 31, 2021 was $62.2 million, which consisted of a consolidated net loss of $95.4 million, a net increase of $7.4 million in our net operating assets and liabilities and $25.8 million of non-cash transactions.
The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $8.0 million, a decrease in prepaid expenses and other assets of $0.2 million, offset by a net increase in operating lease right-of-use assets and liabilities of $0.3 million in conjunction with the adoption of ASC 842.
The non-cash transactions primarily consisted of $25.1 million of stock-based compensation and non-cash charges of $1.3 million related to depreciation and amortization, offset by the $0.7 million gain on the extinguishment of our PPP loan.
−Removed: Net cash used in operating activities for the year ended December 31, 2020 was $36.3 million, which consisted of a consolidated net loss of $35.9 million, a net change of $2.5 million in our net operating assets and liabilities and $2.0 million of non-cash transactions.
−Removed: The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $1.7 million, an increase in prepaid expenses and other assets of $1.3 million, an increase in accrued interest of $0.9 million on our outstanding convertible debt prior to its settlement in July 2020, and a decrease in deferred revenue of $0.4 million as we recognized deferred revenue related to our collaboration with BeiGene.
−Removed: The non-cash transactions primarily consisted of $3.0 million of stock-based compensation related to the issuance of RSUs and stock options in the fourth quarter of 2020, a $2.9 million loss on extinguishment of convertible debt, a $1.6 million change in the fair value of our derivative liability, non-cash charges of $1.0 million related to depreciation and amortization and $0.5 million of non-cash interest, offset by a decrease in the fair value of our profits interest liability and pushdown from our affiliate of $6.9 million and $0.2 million of deferred rent.
Cash used in investing activities
−Removed: Cash used in investing activities was $0.9 million and $0.6 million for the years ended December 31, 2021 and 2020, respectively, related to the purchase of property and equipment.
+Added: Cash used in investing activities was $0.3 million and $0.9 million for the years ended December 31, 2022 and 2021, respectively, primarily related to the purchase of property and equipment.
Cash provided by financing activities
+Added: Net cash provided by financing activities was $61.2 million for the year ended December 31, 2022, which consisted primarily of the $61.7 million net proceeds from the issuance of common stock through an underwritten offering in November 2022 and $0.3 million proceeds from the issuance of common stock under our Employee Stock Purchase Plan, partially offset by payment of taxes related to the net settlement of equity awards of $0.8 million.
Net cash provided by financing activities was $69.5 million for the year ended December 31, 2021, which consisted primarily of the net proceeds from the issuance of common stock through a private placement of $71.0 million, the proceeds from the issuance of common stock under our Employee Stock Purchase Plan of $0.3 million, and $0.1 million due to the exercise of stock options under our Equity Incentive Plan, partially offset by our payment of initial public offering costs of $1.9 million.
−Removed: Net cash provided by financing activities was $271.8 million for the year ended December 31, 2020, which consisted of $200.2 million of net proceeds from our initial public offering, $68.2 million of net proceeds from our issuance of Series D convertible preferred stock, $2.8 million of proceeds from the issuance of convertible promissory notes and $0.7 million of proceeds from our PPP loan.
Critical accounting policies and estimates
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As part of the process of preparing our consolidated financial statements, we accrue expenses as of each balance sheet date.
−Removed: This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or
−Removed: otherwise notified of the actual cost.
+Added: This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.
We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time.
−Removed: The estimates in our accrued research and development expenses include the costs incurred for services performed by our vendors in connection with research and development activities for which we have not yet been invoiced.
+Added: The estimates in our accrued research and development expenses include the costs incurred for services performed by
+Added: our vendors in connection with research and development activities for which we have not yet been invoiced.
We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary.
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To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.
−Removed: Collaboration revenue
−Removed: We recognize revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration we are entitled to receive in exchange for such product or service.
−Removed: In doing so, we follow a five-step approach:
−Removed: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) the customer obtains control of the product or service.
−Removed: We consider the terms of a contract and all relevant facts and circumstances when applying the revenue recognition standard.
−Removed: A customer is a party that has entered into a contract with us, where the purpose of the contract is to obtain a product or a service that is an output of our ordinary activities in exchange for consideration.
−Removed: To be considered a contract, (i) the contract must be approved (in writing, orally, or in accordance with other customary business practices), (ii) each party’s rights regarding the product or the service to be transferred can be identified, (iii) the payment terms for the product or the service to be transferred can be identified, (iv) the contract must have commercial substance (that is, the risk, timing or amount of future cash flows is expected to change as a result of the contract), and (v) it is probable that we will collect substantially all of the consideration to which we are entitled to receive in exchange for the transfer of the product or the service.
−Removed: A performance obligation is defined as a promise to transfer a product or a service to a customer.
−Removed: We identify each promise to transfer a product or a service (or a bundle of products or services, or a series of products and services that are substantially the same and have the same pattern of transfer) that is distinct.
−Removed: A product or a service is distinct if both (i) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) our promise to transfer the product or the service to the customer is separately identifiable from other promises in the contract.
−Removed: Each distinct promise to transfer a product or a service is a unit of accounting for revenue recognition.
−Removed: If a promise to transfer a product or a service is not separately identifiable from other promises in the contract, such promises should be combined into a single performance obligation.
−Removed: The transaction price is the amount of consideration we are entitled to receive in exchange for the transfer of control of a product or a service to a customer.
−Removed: To determine the transaction price, we consider the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer.
−Removed: If a significant financing component exists, the transaction price is adjusted for the time value of money.
−Removed: If an element of variability exists, we must estimate the consideration it expects to receive and uses that amount as the basis for recognizing revenue as the product or the service is transferred to the customer.
−Removed: There are two methods for determining the amount of variable consideration:
−Removed: (i) the expected value method, which is the sum of probability-weighted amounts in a range of possible consideration amounts, and (ii) the mostly likely amount method, which identifies the single most likely amount in a range of possible consideration amounts.
−Removed: If a contract has multiple performance obligations, we allocate the transaction price to each distinct performance obligation in an amount that reflects the consideration we are entitled to receive in exchange for satisfying each distinct performance obligation.
−Removed: For each distinct performance obligation, revenue is recognized when (or as) we transfer control of the product or the service applicable to such performance obligation.
−Removed: In those instances where we first receive consideration in advance of satisfying our performance obligation, we classify such consideration as deferred revenue until (or as) we satisfy such performance obligation.
−Removed: In those instances where we first satisfy our performance obligation prior to receipt of consideration, the consideration is recorded as accounts receivable.
−Removed: We expense incremental costs of obtaining and fulfilling a contract as incurred if the expected amortization period of the asset that would be recognized is one year or less, or if the amount of the asset is immaterial.
−Removed: Otherwise, such costs are capitalized as contract assets if they are incremental to the contract and amortized to expense proportionate to revenue recognition of the underlying contract.
−Removed: Profits interest liability
−Removed: Before the Corporate Reorganization, we had a profits interest plan which we determined was a liability award plan in accordance with authoritative guidance.
−Removed: We measured the fair value of each award on the grant date and recognized such fair value over the requisite service period (usually the vesting period) on a straight-line basis, net of estimated forfeitures.
−Removed: The fair value of the award was remeasured at each reporting date until the award was settled, with a true-up of compensation cost for changes in fair value prorated for the portion of the requisite service period rendered.
−Removed: Once vested, any subsequent change in fair value was recognized immediately.
−Removed: The fair value of any awards that expired or were forfeited or cancelled for no value was adjusted to zero, such that any previously recorded compensation cost was fully reversed.
−Removed: We were required to estimate the fair value of the Class B units issued in connection with our profits interest plan.
−Removed: The fair value of our Class B units was determined on each reporting date by our management, taking into account input from independent third-party valuation analysis.
−Removed: In the absence of a public trading market for our Class B units, on each reporting date we developed an estimate of the fair value of our Class B units in order to calculate the profit interest liability.
−Removed: Our determinations of the fair value of our Class B units were made using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Audit and Accounting Practice Aid Series:
−Removed: Valuation of Privately Held Company Equity Securities Issued as Compensation , or the Practice Aid.
−Removed: We considered various objective and subjective factors to determine the fair value of our Class B units, including:
−Removed: contemporaneous valuations of our Class B units performed by independent third-party valuation specialists;
−Removed: our stage of development and business strategy, including the status of research and development efforts of our product candidates, and the material risks related to our business and industry;
−Removed: our results of operations and financial position, including our levels of available capital resources;
−Removed: the valuation of publicly traded companies in the life sciences and biopharmaceutical sectors, as well as recently completed mergers and acquisitions of peer companies;
−Removed: the lack of liquidity of our Class B units;
−Removed: the rights, preferences and privileges of our Class C Preferred units and Class A units relative to those of our Class B units;
−Removed: the likelihood and timing of achieving a liquidity event for the holders of our Class B units, given prevailing market conditions;
−Removed: trends and developments in our industry;
−Removed: external market conditions affecting the life sciences and biopharmaceutical industry sectors.
−Removed: Valuation methodologies and methods used to allocate our enterprise value to classes of securities
−Removed: Our valuations were prepared in accordance with the guidelines in the Practice Aid, which prescribes several valuation approaches for setting the value of an enterprise, such as the cost, income and market approaches, and various methodologies for allocating the value of an enterprise to its common stock.
−Removed: The cost approach establishes the value of an enterprise based on the cost of reproducing or replacing the property less depreciation and functional or economic obsolescence, if present.
−Removed: The income approach establishes the value of an enterprise based on the present value of future cash flows that are reasonably reflective of our company’s future operations, discounting to the present value with an appropriate risk adjusted discount rate or capitalization rate.
−Removed: The market approach is based on the assumption that the value of an asset is equal to the value of a substitute asset with the same characteristics.
−Removed: Each valuation methodology was considered in our valuations.
−Removed: We utilized a market approach in 2019 and 2020.
−Removed: In 2020, in connection with our Corporate Reorganization and Series D preferred stock financing, our market approach included the back-solve method that assigns an implied enterprise value based on the most recent round of funding or investment and allows for the incorporation of the implied future benefits and risks of the investment decision assigned by an outside investor.
−Removed: In accordance with the Practice Aid, we considered the various methods for allocating the enterprise value across our classes and series of equity to determine the fair value of our equity instruments at each valuation date.
−Removed: We applied a hybrid method of the probability weighted expected return method, or PWERM, where the non-IPO scenario is modeled using an option pricing model to reflect the full distribution of possible non-IPO outcomes.
−Removed: Under the option pricing model, units are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class.
−Removed: The values of each class of units are inferred by analyzing these options.
−Removed: In the IPO scenario, we used the fully-diluted shares outstanding to allocate value to each class of units.
−Removed: The hybrid method is useful when certain discrete future outcomes can be predicted, but also accounts for uncertainty regarding the timing or likelihood of specific alternative exit events.
−Removed: Stock-based compensation
−Removed: In October 2020 we adopted our 2020 Equity Incentive Plan and began to grant stock options and RSUs and began to recognize stock-based compensation expense in the fourth quarter of 2020.
−Removed: Stock-based compensation expense represents the grant date fair value of equity awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis.
−Removed: We estimate the fair value of stock option grants using the Black-Scholes option pricing model and the fair value of RSUs is the fair value of our common stock on the date of grant.
−Removed: See Note 7 to our consolidated financial statements included elsewhere in this Annual Report for information concerning the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock option grants.
−Removed: The fair value of our common stock for awards granted under our equity incentive plan will be based on the closing price as reported on the date of the grant on the primary stock exchange on which our common stock is traded.
−Removed: Equity award forfeitures are recognized as they occur.
Other company information
4 unchanged sentences
Quantitative and Qualit ative Disclosures About Market Risk
−Removed: Interest Rate Risk
−Removed: We are exposed to market risks in the ordinary course of our business.
−Removed: We had cash, cash equivalents and short-term investments of $245.0 million and $238.6 million as of December 31, 2021 and 2020, respectively, which consisted of bank deposits and money market funds.
−Removed: Such interest-bearing instruments carry a degree of interest rate risk;
−Removed: however, historical fluctuations of interest income have not been significant.
−Removed: We do not enter into investments for trading or speculative purposes and we do not currently utilize derivative financial instruments to manage our interest rate exposure.
−Removed: We have not historically been exposed to material risks due to changes in interest rates.
−Removed: Foreign Currency Exchange Risk
−Removed: Our contracts with customers are primarily denominated in U.S.
−Removed: dollars, with a small amount denominated in foreign currencies.
−Removed: As such, fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our statement of operations.
−Removed: To date, foreign currency transaction gains and losses have not been material to our consolidated financial statements, and we have not engaged in any foreign currency hedging transactions.
+Added: Not applicable to a smaller reporting company.
Financial Stateme nts and Supplementary Data
4 unchanged sentences
Consolidated statements of operations and comprehensive loss
−Removed: Consolidated statements of convertible preferred stock and stockholders’/members’
−Removed: equity (deficit)
+Added: Consolidated statements of stockholders’
Consolidated statements of cash flows
4 unchanged sentences
We have audited the accompanying consolidated balance sheets of BioAtla, Inc.
−Removed: (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’/members’
−Removed: equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.
+Added: (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, and stockholders’
+Added: equity and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with U.S.
generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: 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.
1 unchanged sentence
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: 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.
+Added: Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
13 unchanged sentences
How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the accounting for accrued clinical trial expenses.
−Removed: For example, we tested controls over management’s assessment and measurement of estimated accrued clinical trial costs, including patient enrollment and total costs billed but unpaid as of year end.
To test the completeness of the Company’s accrued clinical trial expenses, we obtained from third-parties confirmation of the number of patients enrolled and costs billed but unpaid as of year-end for significant clinical trials.
−Removed: We obtained an understanding of the status of significant clinical trial activities from accounting personnel and the clinical project managers to understand the status of significant clinical trial activities.
+Added: We obtained an understanding of the status of significant clinical trial activities from accounting personnel and the clinical project managers.
To assess the appropriate measurement of accrued clinical trial expenses, we inspected key terms, timelines of completion, activities and costs for a sample of vendor contracts, including amendments, and compared these to management’s analyses used in tracking the progress of service agreements.
3 unchanged sentences
San Diego, California
−Removed: February 28, 2022
+Added: March 23, 2023
BioAtla, Inc.
Consolidate d balance sheets
−Removed: (in thousands, except share/unit amounts)
+Added: (in thousands, except share amounts)
Current assets:
7 unchanged sentences
Accounts payable and accrued expenses
−Removed: Current portion of deferred rent
−Removed: Current portion of deferred revenue
Operating lease liabilities
Total current liabilities
−Removed: Long-term accrued interest
−Removed: Deferred rent, less current portion
Operating lease liabilities, less current portion
4 unchanged sentences
Preferred stock, $ 0.0001 par value;
−Removed: 200,000,000 shares authorized at December 31,
−Removed: 2021 and 2020;
−Removed: 0 shares issued and outstanding at December 31, 2021 and 2020
+Added: 200,000,000 shares authorized at
+Added: December 31, 2022 and December 31, 2021;
+Added: 0 shares issued and outstanding at
+Added: December 31, 2022 and December 31, 2021
Common stock, $ 0.0001 par value;
−Removed: 350,000,000 authorized at December 31,
+Added: 350,000,000 shares authorized at
+Added: December 31, 2022 and December 31, 2021;
46,336,166 and 35,799,233
−Removed: 35,799,233 shares and 32,171,560 shares issued and outstanding at
−Removed: December 31, 2021 and 2020
+Added: shares issued and outstanding at December 31, 2022 and December 31, 2021
Class B common stock, $ 0.0001 par value;
15,368,569 shares authorized at
−Removed: December 31, 2021 and 2020;
−Removed: 1,492,059 shares issued and
−Removed: outstanding at December 31, 2021 and 2020
+Added: December 31, 2022 and December 31, 2021;
+Added: 1,211,959 and 1,492,059
+Added: shares issued and outstanding at December 31, 2022 and December 31, 2021
Additional paid-in capital
5 unchanged sentences
Consolidated st atements of operations and comprehensive loss
−Removed: (in thousands, except share/unit and per share/unit amounts)
+Added: (in thousands, except share and per share amounts)
Years ended December 31,
1 unchanged sentence
Operating expenses:
−Removed: Research and development expense (includes related party amounts of $ 0 , $ 0 , and $ 1,885 , respectively)
−Removed: General and administrative expense (includes related party amounts of $ 0 , $ 0 , and $ 15 , respectively)
+Added: Research and development expense
+Added: General and administrative expense
Total operating expenses
2 unchanged sentences
Interest income
−Removed: Interest expense (includes related party amounts of $ 0 , $ 147 and $ 52 , respectively)
−Removed: Change in fair value of derivative liability
−Removed: Gain (loss) on extinguishment of long-term debt
+Added: Interest expense
+Added: Gain on extinguishment of long-term debt
Other income (expense)
1 unchanged sentence
Consolidated net loss and comprehensive loss
−Removed: Net loss attributable to noncontrolling interests
−Removed: Net loss attributable to BioAtla, Inc./BioAtla LLC
−Removed: Net loss allocable to Class C preferred unit holders
−Removed: Class C preferred return
−Removed: Net loss attributable to Class A unit holders
−Removed: Net loss per unit attributable to Class A unit holders, basic and diluted
−Removed: Weighted-average Class A units outstanding, basic and diluted
Net loss per common share, basic and diluted
Weighted-average shares of common stock outstanding, basic and diluted
−Removed: (1) The net loss attributable to common stockholders and related per share amounts for the year ended December 31, 2020 are based on the period from July 10, 2020 to December 31, 2020, the period where the Company had outstanding common stock (see Note 1).
See accompanying notes.
BioAtla, Inc.
−Removed: Consolidated statements of convertib le preferred stock and stockholders’/members’
−Removed: equity (deficit)
−Removed: (in thousands, except share/unit amounts)
−Removed: Series D convertible
−Removed: preferred stock
−Removed: Class C preferred
−Removed: Class A units
+Added: Consolidated statements of stockholders’
+Added: (in thousands, except share amounts)
stockholders’
−Removed: members’
−Removed: equity (deficit)
−Removed: Balance at Ended December 31, 2018
−Removed: Noncontrolling interest
−Removed: Warrants issued by affiliates in
−Removed: connection with modification
−Removed: of convertible promissory notes
−Removed: Assumption of unvested profits
−Removed: interest liability by affiliates
−Removed: Assumption of vested profits
−Removed: interest liability by affiliates
−Removed: Beneficial conversion feature in
−Removed: convertible promissory notes
Balance at December 31, 2020
−Removed: Issuance of Series D convertible
−Removed: preferred stock for cash, net of
−Removed: $ 4,317 of issuance costs
−Removed: Issuance of Series D convertible
−Removed: preferred stock in connection
−Removed: with settlement of convertible
−Removed: promissory notes
−Removed: Assumption of profits interest
−Removed: liability by affiliate
−Removed: Change in profits interest liability
−Removed: Noncontrolling interest—
−Removed: distribution of net assets
−Removed: to affiliate and related
−Removed: deconsolidation
−Removed: LLC Conversion
−Removed: Conversion of Series D convertible
−Removed: preferred stock into common
−Removed: ( 199,791,519
−Removed: Initial public offering, net of
−Removed: $ 19,032 of issuance costs
+Added: Issuance of common stock, net of $ 4,007 of issuance costs
+Added: Issuance of common stock under equity incentive plans
+Added: Issuance of common stock upon exercise of options, net
+Added: Issuance of common stock for Employee Stock Purchase Plan
+Added: Taxes related to net share settlement of equity awards
Stock-based compensation expense
Balance at December 31, 2021
−Removed: Issuance of common stock,
−Removed: net of $ 4,007 of issuance costs
−Removed: Issuance of common stock under
−Removed: equity incentive plans
−Removed: Issuance of common stock upon
−Removed: exercise of options, net
−Removed: Issuance of common stock for
−Removed: Employee Stock Purchase Plan
−Removed: Taxes related to net share
−Removed: settlement of equity awards
+Added: Issuance of common stock, net of $ 3,318 of issuance costs
+Added: Issuance of common stock under equity incentive plans
+Added: Issuance of common stock for Employee Stock Purchase Plan
+Added: Taxes related to net share settlement of equity awards
+Added: Conversion of Class B Common Stock
Stock-based compensation expense
9 unchanged sentences
Loss on disposal of property and equipment
−Removed: Change in fair value of derivative liability
−Removed: Change in fair value of profits interest liability
−Removed: Loss/(gain) on extinguishment of debt
+Added: Gain on extinguishment of debt
Stock-based compensation
−Removed: Non-cash interest
Accrued interest
−Removed: Deferred rent
Changes in operating assets and liabilities:
1 unchanged sentence
Accounts payable and accrued expenses
−Removed: Accounts payable and accrued expenses—related parties
−Removed: Deferred revenue
Right-of-use assets and lease liabilities, net
2 unchanged sentences
Purchases of property and equipment
+Added: Proceeds from sale of property and equipment
Net cash used in investing activities
Cash flows from financing activities
−Removed: Noncontrolling interest
−Removed: Proceeds from issuance of convertible debt
−Removed: Proceeds from issuance of convertible preferred stock, net of issuance costs
−Removed: Proceeds from issuance of PPP loan
−Removed: Proceeds from initial public offering, net of issuance costs
Payment of initial public offering costs
−Removed: Proceeds from issuance of common stock
+Added: Proceeds from issuance of common stock, net of issuance costs
Proceeds from exercise of stock options
Proceeds from issuance of common stock under Employee Stock Purchase Plan
+Added: Payments for taxes related to net settlement of equity awards
Net cash provided by financing activities
4 unchanged sentences
Property and equipment additions included in accounts payable and accrued
−Removed: Fair value of warrants issued by affiliates in connection with modification of
−Removed: convertible promissory notes
−Removed: Assumption of profits interest liability by affiliates
−Removed: Equity issuance costs included in accounts payable and accrued expenses
−Removed: Carrying value of convertible promissory notes settled in connection with
−Removed: Corporate Reorganization
−Removed: Fair value of consideration issued in connection with settlement of convertible
−Removed: promissory notes
Tax related to net settlement of equity awards included in accounts payable and
4 unchanged sentences
Organization and summary of significant accounting policies
−Removed: BioAtla, LLC was formed in Delaware in March 2007 and, after undergoing two separate reorganizations that are further discussed below, was converted to a Delaware corporation in July 2020 and was renamed BioAtla, Inc.
−Removed: (BioAtla, Inc.
−Removed: together with the Pre-Division Predecessor and the Post-Division Successor as defined below, the “Company”).
+Added: BioAtla, LLC was formed in Delaware in March 2007 and was converted to a Delaware corporation in July 2020 and renamed BioAtla, Inc.
+Added: (the “Company”).
The Company has a proprietary platform for creating biologics, including its conditionally active biologics (“CAB”
1 unchanged sentence
CABs have been designed to be active only under certain conditions found in diseased tissue, while remaining inactive in normal tissue.
−Removed: The Company is currently in clinical development of its two lead CAB antibody drug conjugates (“CAB ADC”) targeting AXL and ROR2 receptors.
−Removed: In March 2019, BioAtla, LLC (the "Pre-Division Predecessor") was divided into three separate and distinct Delaware limited liability companies (the “Division”) as follows:
−Removed: 1) BioAtla, LLC renamed to BioAtla Holdings, LLC (“BioAtla Holdings”), 2) a new legal entity named Inversagen, LLC (“Inversagen”), and 3) a new legal entity named BioAtla, LLC (the “Post-Division Successor”
−Removed: and together with BioAtla Holdings and Inversagen, the “Post-Division LLCs”).
−Removed: Upon the Division, each Post-Division LLC had substantially the same form of operating agreement and capital structure as the Pre-Division Predecessor, with the following exceptions:
−Removed: i) 1,750,000 Class B units issued by the Post-Division Successor but not by BioAtla Holdings or Inversagen, ii) the outstanding warrants of the Pre-Division Predecessor at the Division date were transferred to the Post-Division Successor (see Note 7), and iii) the Class C units of the Post-Division Successor had liquidation preferences and a preferred return not included in the operating agreements of BioAtla Holdings and Inversagen.
−Removed: In connection with the Division, the Pre-Division Predecessor’s holdings of EXUMA Biotech Corp.
−Removed: (“EXUMA”, formerly F1 Oncology, Inc.) common and preferred stock (see Note 12) remained in BioAtla Holdings and certain rights related to the application of CAB technology in senescent cell therapy were transferred to the Post-Division Successor and simultaneously licensed to Inversagen (see Note 10).
−Removed: The remaining assets and liabilities (including ownership of Himalaya Therapeutics SEZC, or "HTKY", and its wholly-owned subsidiary, Himalaya Therapeutics HK Limited as described below in “Principles of consolidation and deconsolidation”), and substantially all of the operations of the Pre-Division Predecessor, including all existing employees, were transferred to the Post-Division Successor.
−Removed: Each of the Pre-Division Predecessor’s members at the time of the Division continued as a member in the Post-Division Successor, BioAtla Holdings and Inversagen, and each entity has Dr.
−Removed: Jay Short and his spouse, Carolyn Anderson Short, as its LLC managers.
−Removed: There are no shared services agreements between the Company and BioAtla Holdings or Inversagen.
−Removed: The Company has determined that Inversagen is a variable interest entity (“VIE”), the Company is not the primary beneficiary of Inversagen, and that the Post-Division LLCs are under the common control of Jay and Carolyn Short.
−Removed: The Company does not consolidate either BioAtla Holdings or Inversagen (see Note 10).
−Removed: In addition, the Company has no direct equity investment in either BioAtla Holdings or Inversagen that require either equity method or cost method accounting.
−Removed: The assets, liabilities, and employees transferred to the Post-Division Successor in the Division met the definition of a business and the transfer qualifies as a change in reporting entity under Accounting Standards Codification (“ASC”) 250-10-45-21.
−Removed: As such, the historical financial statements of the Pre-Division Predecessor are deemed to be those of the Post-Division Successor, even for periods prior to its formation.
−Removed: As a transfer of a business to an entity under common control, the assets and liabilities of the Pre-Division Predecessor were transferred to the Post-Division Successor at historical carrying values.
−Removed: At the Division date, the Pre-Division Predecessor’s investment in EXUMA and the assets licensed to Inversagen had a zero carrying value and neither EXUMA nor Inversagen had material operations.
−Removed: As such, the Pre-Division historical financial statements presented herein are the historical financial statements of the Pre-Division Predecessor without adjustment.
−Removed: In connection with the Division, certain modifications were made to then outstanding debt agreements and units, including:
−Removed: i) the participation threshold of each Class B unit in each Post-Division LLC was adjusted for the impact of the Division (see Note 8), ii) the amendment of the Pfizer Note and 2018 Notes (as defined and described in Note 4), and iii) the issuance, to both Pfizer and the holders of the 2018 Notes, of conditional warrants by BioAtla Holdings and Inversagen which become exercisable upon the conversion of the Pfizer Note and 2018 Notes into capital stock of the Post-Division Successor (see Note 4).
−Removed: The Post-Division Successor converted to a Delaware corporation in July 2020 as part of the Corporate Reorganization defined and described below, and was renamed BioAtla, Inc.
+Added: The Company is currently in clinical development of its two lead CAB antibody drug conjugates (“CAB ADC”) targeting AXL and ROR2 receptors, and its CAB immune-oncology antibody targeting CTLA-4.
+Added: Basis of Presentation
+Added: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
BioAtla, Inc.
−Removed: is the final successor to the Pre-Division Predecessor and the Post-Division Successor, and collectively these entities are referred to as “the Company.”
−Removed: The historical financial statements of the Company prior to the Corporate Reorganization are those of the Pre-Division Predecessor and the Post-Division Successor without adjustment.
−Removed: Corporate Reorganization and Series D Financing
−Removed: In July 2020, BioAtla, LLC (the Post-Division Successor) completed a series of transactions (the “Corporate Reorganization”) in connection with the conversion from a limited liability company into a Delaware corporation, the spin-off of Himalaya Therapeutics SEZC, and the completion of a Series D convertible preferred stock financing.
−Removed: The Corporate Reorganization involved the formation of Himalaya Parent LLC as a wholly owned subsidiary of BioAtla, LLC and the formation of BioAtla MergerSub LLC, as a wholly owned subsidiary of Himalaya Parent LLC.
−Removed: Under the Agreement and Plan of Merger (the “Merger Agreement”), BioAtla, LLC was merged into and with BioAtla MergerSub LLC, with BioAtla, LLC surviving, and the members of BioAtla, LLC immediately prior to the effective time of the Merger Agreement received membership interests, on a one-for-one basis, of Himalaya Parent LLC as consideration, and the then-outstanding warrants to purchase equity of BioAtla, LLC were converted into warrants to purchase common shares of common stock of BioAtla, Inc.
−Removed: (see Note 7).
−Removed: The Himalaya Parent
−Removed: LLC operating agreement provided identical equity rights for the then outstanding units of BioAtla, LLC.
−Removed: (i) the membership interests of BioAtla, LLC held by Himalaya Parent LLC were exchanged for 6,220,050 shares of BioAtla, Inc.
−Removed: common stock, (ii) BioAtla, Inc.
−Removed: issued an aggregate of 59,164,808 shares of Series D convertible preferred stock to Himalaya Parent LLC and Himalaya Parent LLC issued an aggregate of 59,164,808 Class D units to the holders of convertible notes of BioAtla, LLC in connection with the conversion of their convertible notes into Class D units of Himalaya Parent LLC (see Note 4), (iii) BioAtla, LLC distributed to Himalaya Parent LLC its equity interests in Himalaya Therapeutics SEZC, a then majority-owned subsidiary which is engaged in the development of a set of antibodies in the field of oncology primarily in Greater China, (iv) Himalaya Parent LLC assumed the profits interest liability of BioAtla, LLC (see Note 8) and (v) BioAtla, LLC converted into a Delaware corporation pursuant to a statutory conversion and changed its name to BioAtla, Inc.
−Removed: Following the Corporate Reorganization, Himalaya Parent LLC owned 59,164,808 shares of BioAtla, Inc.
−Removed: Series D convertible preferred stock and 6,220,050 shares of BioAtla, Inc.
−Removed: common stock, all of which were subsequently distributed ("the Distribution") to the members of Himalaya Parent, LLC.
−Removed: As a result of the sale of 140,626,711 shares of Series D convertible preferred stock to new investors in July 2020 (see Note 7), BioAtla, Inc.
−Removed: was not controlled by Himalaya Parent LLC and BioAtla, Inc.
−Removed: does not control Himalaya Parent LLC subsequent to the distribution discussed in item (iii) above (see further discussion in “Principles of consolidation and deconsolidation”
−Removed: All pre-Corporate Reorganization operations, employees, property, assets and obligations of BioAtla, LLC (exclusive of the profits interest liability and Himalaya Therapeutics SEZC now held by Himalaya Parent LLC) are held by BioAtla, Inc.
−Removed: Shares of Series D convertible preferred stock were subsequently converted into common stock as part of the Company’s initial public offering (“IPO”) in December 2020.
−Removed: Reverse Stock Split
−Removed: On December 2, 2020, the Company effected a 1-for-13 reverse stock split of its common stock.
−Removed: The par value and the authorized shares of the common stock were not adjusted as a result of the reverse stock split.
−Removed: The reverse stock split resulted in an adjustment to the convertible preferred stock conversion price to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion.
−Removed: The accompanying financial statements and notes to the financial statements give retroactive effect to the reverse stock split.
−Removed: No adjustments have been made to any period for the units outstanding prior to the LLC Conversion.
−Removed: Principles of Consolidation and Deconsolidation
−Removed: Prior to the Corporate Reorganization in July 2020, the consolidated financial statements included the accounts of BioAtla, LLC and those of its majority owned subsidiary Himalaya Therapeutics SEZC that had no material operations.
−Removed: Himalaya Therapeutics SEZC also had a wholly owned subsidiary, Himalaya Therapeutics HK Limited that had no material operations.
−Removed: All intercompany balances were eliminated in consolidation.
−Removed: In connection with the Corporate Reorganization, Himalaya Therapeutics SEZC and Himalaya Therapeutics HK Limited were deconsolidated without material impact to the consolidated financial statements.
−Removed: Subsequent to the Corporate Reorganization and subsequent to the Distribution as defined and described above, Himalaya Parent LLC does not control, is not under common control with, and is not consolidated by BioAtla, Inc.
−Removed: and BioAtla, Inc.
is a single legal entity with no consolidated variable interest entities ("VIEs") or subsidiaries (see Note 9).
15 unchanged sentences
The Company has a controlling financial interest in a VIE when the Company has a variable interest or interests that provide it with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.
−Removed: The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether or not it has a controlling financial interest (see Notes 10 and 12).
+Added: The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether or not it has a controlling financial interest (see Note 9).
Use of Estimates
15 unchanged sentences
The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
−Removed: For the years ended December 31, 2021, 2020, and 2019 , BeiGene, as defined and described in Note 9, represented 0 %, 100 % and 91 %, respectively, of total revenues.
Property and Equipment
8 unchanged sentences
The Company has no t recognized any impairment losses for the years ended December 31, 2022 and 2021 .
−Removed: The Company adopted the Accounting Standard Update (“ASU”) 2016-02, Leases, and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, “ASC 842”), as of January 1, 2021.
−Removed: See the section Recently Adopted Accounting Pronouncements below for more information.
The Company determines if an arrangement is a lease at inception.
9 unchanged sentences
The Company has a single lease agreement with lease and non-lease components, which are accounted for as a single lease component.
−Removed: The Company elected to use the transition relief package of practical expedients but did not elect to use the hindsight practical expedient in determining a lease term and impairment of ROU assets at the adoption date.
−Removed: For short-term leases, defined as leases with a term of twelve months or less, the Company elected the practical expedient to not recognize an associated lease liability and ROU asset.
−Removed: Lease payments for short-term leases are expensed on a straight-line basis over the lease term.
+Added: Lease payments for short-term leases, defined as leases with a term of twelve months or less, are expensed on a straight-line basis over the lease term.
The Company does not currently have any short-term leases.
1 unchanged sentence
The Company does not have any finance leases.
−Removed: Lease Accounting Prior to the Adoption of ASC 842
−Removed: For operating leases, the Company recorded rent expense using the straight-line method over the lease term, which includes the period of time from when the Company takes possession of the leased space until leasehold improvements are completed and the space is occupied.
−Removed: The difference between rent expense and amounts paid under the lease agreement is deferred in the accompanying consolidated balance sheets.
−Removed: Tenant improvement allowances and other lease incentives are recorded as liabilities and are amortized on the straight-line basis over the lease term as reductions to rent expense.
−Removed: Beneficial Conversion Features
−Removed: A beneficial conversion feature is a non-detachable conversion feature that is “in the money”
−Removed: at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments.
−Removed: A conversion option is “in the money”
−Removed: if the effective conversion price is lower than the commitment date fair value of the share into which it is convertible.
−Removed: Accounting for Derivatives
−Removed: The Company evaluates its convertible instruments and other contracts to determine if those contracts or embedded components of those contracts are required to be recognized under Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging .
−Removed: The result of this accounting treatment is that the derivative is carried at fair value as an asset or liability with changes in fair value recognized in earnings as they occur.
−Removed: Although separately measured at fair value, the fair value of bifurcated embedded derivatives is presented with the host contract in the consolidated balance sheets.
−Removed: Changes in the fair value of derivatives are recorded in the accompanying consolidated statements of operations and comprehensive loss as a component of other income (expense).
Revenue Recognition
6 unchanged sentences
A performance obligation is defined as a promise to transfer a product or a service to a customer.
−Removed: The Company identifies each promise to transfer a product or a service (or a bundle of products or services, or a series of products and services that are substantially the same and have the same pattern of transfer) that is distinct.
+Added: The Company identifies each promise to transfer a product or a service (or a bundle of products or services, or a series of products and services that are substantially the same and have the
+Added: same pattern of transfer) that is distinct.
A product or a service is distinct if both (i) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) the Company’s promise to transfer the product or the service to the customer is separately identifiable from other promises in the contract.
30 unchanged sentences
Costs related to filing and pursuing patent applications are recorded as general and administrative expenses and expensed as incurred since recoverability of such expenditures is uncertain.
−Removed: Equity-Based Compensation Related to Profits Interest Plan
−Removed: Prior to the Corporate Reorganization in July 2020, the Company had a profits interest plan that was a liability award plan in accordance with ASC Topic 718, Compensation –
−Removed: Stock Compensation (Topic 718) .
−Removed: The Company measured the fair value of each award on the grant date and recognized such fair value over the requisite service period (usually the vesting period) on a straight-line basis.
−Removed: The fair value of the award was remeasured at each reporting date until the award was settled, with a true-up of compensation cost for changes in fair value prorated for the portion of the requisite service period rendered.
−Removed: Once vested, any subsequent change in fair value was recognized immediately.
−Removed: The fair value of any awards that expired or were forfeited or canceled for no value was adjusted to zero, as they occurred, such that any previously recorded compensation cost would be fully reversed.
−Removed: Subsequent to the Corporate Reorganization and amendment of the profits interest plan by Himalaya Parent in October 2020, the Company no longer reflects compensation cost and a corresponding capital contribution associated with the ongoing mark-to-market of the Class B profits interests held by Himalaya Parent LLC.
Stock-Based Compensation
5 unchanged sentences
Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
−Removed: The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date.
+Added: The effect of a change in tax rates on deferred tax
+Added: assets and liabilities is recognized as income in the period that includes the enactment date.
The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized.
7 unchanged sentences
There have been no items qualifying as other comprehensive loss and, therefore, for all periods presented, the Company’s comprehensive loss was the same as its reported net loss.
−Removed: Net Loss Per Unit/Share
−Removed: Prior to the Corporate Reorganization, the Company applied the two-class method for calculating and presenting net loss per unit.
−Removed: In applying the two-class method, earnings are hypothetically allocated between the common, preferred, and other participating securities based on their respective rights to receive non-forfeitable distributions, whether or not declared.
−Removed: The Company considered its Class A units to be its “common units”
−Removed: since Class A units were the most subordinate class of equity with respect to preference in liquidation.
−Removed: In addition, the Class C units were entitled to a preferred return equal to 10 % per annum, simple interest, on the Class C issuance price.
−Removed: The Company’s Class B units were excluded from the net loss per unit calculations based on the presumption that the units would be settled in cash pursuant to the terms of the Company’s operating agreement.
−Removed: Basic net loss per Class A unit was calculated by dividing net loss allocable to Class A unit holders (after adjustment for Class C preferred return and allocation of net losses to Class C units) by the weighted-average number of Class A units outstanding during the period.
−Removed: The Company calculated diluted net loss per unit using the more dilutive of 1) the treasury stock method, if-converted method, or contingently issuable share method, as applicable, or 2) the two-class method.
−Removed: For the year ended December 31, 2019, the basic and diluted net loss per unit were the same as the inclusion of outstanding warrants, convertible debt or Class C preferred units would be antidilutive.
−Removed: Subsequent to the Corporate Reorganization, basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities.
+Added: Net Loss Per Share
+Added: Basic net loss per common share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities.
Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock method.
−Removed: Dilutive common stock equivalents are comprised of common stock warrants, RSUs, and common stock options outstanding under the Company’s stock option plan.
−Removed: For the year ended December 31, 2020, the Company determined that the attribution of pre-Corporate Reorganization net losses based on the post-Corporate Reorganization capital structure would not meaningfully represent the economic rights of the unit holders.
−Removed: As a result, the Company presents net loss per share information only for the period subsequent to the Corporate Reorganization.
−Removed: The basic and diluted net loss per share for the year ended December 31, 2020 represents only the period from July 10, 2020 to December 31, 2020, the period where the Company had outstanding common stock.
−Removed: The following table presents the calculation of basic and diluted net loss per share for the period following the Corporate Reorganization (in thousands, except share and per share data):
−Removed: July 10, 2020
−Removed: Weighted-average shares of common stock outstanding, basic and diluted
−Removed: Net loss per common share, basic and diluted
+Added: Dilutive common stock equivalents are comprised of RSUs, common stock options outstanding under the Company’s stock option plan, and contingently issuable shares under the Company's ESPP plan.
Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalents):
3 unchanged sentences
Recent Accounting Pronouncements
−Removed: Under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, emerging growth companies (“EGC”) can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
−Removed: The Company elected to retain the ability to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.
−Removed: The Company lost its emerging growth company status on December 31, 2021 because the Company became a large accelerated filer due to the fact that the Company’s public float exceeded $700 million as of the June 30, 2021 measurement date.
−Removed: The Company adopted the following accounting standards during the year ended December 31, 2021:
−Removed: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.
−Removed: 2016-02, Leases.
−Removed: The new standard establishes a right-of-use model and requires a lessee to recognize on the balance sheet a right-of-use asset and corresponding lease liability for all leases with terms longer than 12 months.
−Removed: Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.
−Removed: Effective January 1, 2021, the Company adopted this new standard prospectively using a modified retrospective transition approach.
−Removed: The Company elected the package of practical expedients permitted under the transition guidance of the new standard, which allowed the Company to carry forward its historical assessment on whether a contract is or contains a lease, lease classification, and initial direct costs.
−Removed: Upon adoption on January 1, 2021, the Company recognized operating lease ROU assets of $ 4.1 million, and current and non-current operating lease liabilities of $ 1.1 million and $ 5.4 million, respectively.
−Removed: The difference between the asset and liabilities is primarily attributable to adjustments to the right-of-use asset at transition related to lease incentives and deferred rent.
−Removed: The adoption of ASC 842 did not have a material impact to Company’s consolidated statements of operations and cash flows from operations.
−Removed: In December 2019, the FASB issued ASU No.
−Removed: 2019-12 Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes.
−Removed: The Board issued this Update as part of its Simplification Initiative to improve areas of GAAP and reduce cost and complexity while maintaining usefulness.
−Removed: The main provisions remove certain exceptions including the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.
−Removed: In addition, the amendments simplify income tax accounting in the areas such as income-based franchise taxes, eliminating the requirements to allocate consolidated current and deferred tax expense in certain instances, and a requirement that an entity reflects the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.
−Removed: For public companies, the standard is effective for fiscal years beginning after December 15, 2020 and interim periods therein.
−Removed: The Company adopted ASU 2019-12 on the effective date of January 1, 2021.
−Removed: The amendments were applied on a prospective basis and the adoption did not have a significant impact on the Company's financial results.
+Added: There were no recently issued or effective FASB Accounting Standards Updates (ASUs) that had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.
Balance sheet details
12 unchanged sentences
Accrued research and development
−Removed: Accrued equity issuance costs
Other accrued expenses
11 unchanged sentences
No transfers between levels have occurred during the periods presented.
−Removed: The 2018 Notes (as amended in 2020), the 2019 Notes and the 2020 Notes (each as defined and described in Note 4) contained a redemption feature which was determined to be an embedded derivative requiring bifurcation and separate accounting.
−Removed: The fair value of the derivative was determined based on an income approach that identified the cash flows using a “with-and-without”
−Removed: valuation methodology.
−Removed: inputs used to determine the estimated fair value of the derivative instrument were based primarily on the probability of an underlying event triggering the embedded derivative occurring and the timing of such event.
−Removed: The following table provides a reconciliation of the embedded derivative liability measured at fair value using Level 3 unobservable inputs (in thousands):
−Removed: Balance at December 31, 2019
−Removed: Initial fair value of embedded derivatives issued
−Removed: Change in fair value
−Removed: Balance at December 31, 2020
−Removed: Convertible and other debt
−Removed: Pfizer convertible promissory note
−Removed: In December 2015, the Company issued a $ 10.0 million unsecured convertible promissory note (“Pfizer Note”) to certain affiliates of Pfizer, Inc.
−Removed: (“Pfizer”).
−Removed: The Pfizer Note accrued interest at 8.0 % per annum with a maturity date in December 2020.
−Removed: Prior to amendment in March 2019 as described below, the Pfizer Note, including accrued interest, was convertible at the election of the holder into Class C preferred units at a price of $ 3.394142 per unit and was automatically convertible into i) common shares upon the completion of an IPO based on the price per share paid by investors in the IPO or ii) qualified financing shares upon the completion of a qualified financing based on the price per share paid by investors in the qualified financing.
−Removed: The Company assessed the terms of the Pfizer Note and concluded that it was not share-settled debt, did not contain any embedded derivative features requiring bifurcation and did not contain a beneficial conversion feature.
−Removed: As a result, the Pfizer Note was carried at cost since the Company did not incur a material amount of issuance costs in connection with the debt.
−Removed: The Pfizer Note was amended in March 2019 in connection with the Division to provide the lender additional accrued interest upon conversion.
−Removed: The amended conversion amount of the Pfizer Note was equal to the greater of a) the then outstanding principal plus accrued interest, or b) principal plus accrued interest through December 7, 2020.
−Removed: In connection with the March 2019 amendment, Pfizer received conditional warrants in BioAtla Holdings and Inversagen which allowed Pfizer to acquire an equity interest in each of BioAtla Holdings and Inversagen upon conversion of the Pfizer Note of the Post-Division Successor.
−Removed: The amendment of the Pfizer Note was accounted for as a modification, which required prospective consideration of the revised terms.
−Removed: The Company recognized the initial fair value of the warrants of $ 0.5 million as a fee paid by the Company to the lenders, which was recorded as debt discount on the modified debt and as a capital contribution, as the warrants were written on two entities under common control that were not consolidated with the Company.
−Removed: The debt discount was amortized to interest expense using the effective interest method over the term of the Pfizer Note.
−Removed: The fair value of the conditional warrants was determined using the Option Pricing Method based on the underlying value of the assets allocated to BioAtla Holdings and Inversagen .
−Removed: The Company incurred interest expense in connection with the Pfizer Note of $ 0.6 million and $ 1.0 million for the years ended December 31, 2020 and 2019.
−Removed: As further described below, the Pfizer Note was amended and settled in connection with the Corporate Reorganization in July 2020.
−Removed: 2018 convertible promissory notes
−Removed: In August 2018, the Company issued unsecured convertible promissory notes for an aggregate of $ 5.0 million (the “2018 Notes”).
−Removed: The 2018 Notes accrued interest at 8.0 % per annum with a maturity date in July 2023.
−Removed: Prior to amendment in March 2019, as described below, the then outstanding principal plus accrued interest under the 2018 Notes was convertible at the election of the holder into Class C preferred units at a price of $ 3.394142 per unit and was automatically convertible into i) common shares upon the completion of an IPO based on the price per share paid by investors in the IPO or ii) qualified financing shares upon the completion of a qualified financing based on the price per share paid by investors in the qualified financing.
−Removed: The Company assessed the terms of the 2018 Notes and concluded that they were not share-settled debt, did not contain any embedded derivative features requiring bifurcation and did not contain a beneficial conversion feature.
−Removed: As a result, the 2018 Notes were carried at cost since the Company did not incur a material amount of issuance costs in connection with the issuance of the promissory notes.
−Removed: The 2018 Notes were amended in March 2019 in connection with the Division to provide the lenders additional accrued interest upon conversion.
−Removed: The amended conversion amount of the 2018 Notes was equal to the greater of a) the then outstanding principal plus accrued interest, or b) principal plus accrued interest through December 7, 2020.
−Removed: In connection with the March 2019 amendment, the lenders received conditional warrants in BioAtla Holdings and Inversagen which allowed them to acquire an equity interest in each of BioAtla Holdings and Inversagen upon conversion of the 2018 Notes of the Post-Division Successor.
−Removed: The amendment of the 2018 Notes was accounted for as a modification, which required prospective consideration of the revised terms.
−Removed: The Company recognized the initial fair value of the warrants of $ 0.2 million as a fee paid by the Company to the lenders, which was recorded as debt discount on the modified debt and as a capital contribution, as the warrants were written on two entities under common control that were not consolidated with the Company.
−Removed: The debt discount was amortized to interest expense using the effective interest method over the term of the 2018 Notes.
−Removed: The fair value of the conditional warrants was determined using the Option Pricing Method based on the underlying value of the assets allocated to BioAtla Holdings.
−Removed: The underlying value of the assets allocated to Inversagen was immaterial.
−Removed: The 2018 Notes were amended in April 2020 to add a discount to the conversion prices such that they were convertible (i) automatically into preferred stock upon a qualified equity financing, with a conversion price of 80% of the lowest purchase price per share of preferred stock paid by investors in such qualified equity financing, (ii) automatically convert into common stock upon an initial public offering, with a conversion price of 80% of the price per share of common stock paid by investors in such initial public offering, and (iii) upon the election of each note holder, into Class C preferred units, with a conversion price per share of $ 2.7153136 .
−Removed: The Company concluded that the amendment was an extinguishment and the fair value of the amended 2018 Notes was equal to the then outstanding principal and accrued interest of the 2018 Notes.
−Removed: As a result, the Company recognized a loss on extinguishment for the $ 0.2 million of unamortized discounts at the extinguishment date.
−Removed: In addition, the Company assessed the terms and concluded the amended 2018 Notes:
−Removed: (i) were not share-settled debt, (ii) contained a redemption feature that was determined to be an embedded derivative requiring bifurcation and (iii) did not contain a beneficial conversion feature.
−Removed: The $ 2.2 million issuance date fair value of the embedded derivative liability was recorded as a debt discount and amortized to interest expense using the effective interest method over the remaining term of the 2018 Notes.
−Removed: The Company incurred interest expense, including coupon interest and amortization of debt discounts, in connection with the 2018 Notes of $ 0.4 million and $ 0.4 million for the years ended December 31, 2020 and 2019, respectively.
−Removed: As further described below, the 2018 Notes were amended and settled in connection with the Corporate Reorganization in July 2020.
−Removed: 2019 convertible promissory notes
−Removed: Between August and December 2019, the Company issued unsecured convertible promissory notes payable to various entities in an aggregate principal amount of $ 4.0 million (the “2019 Notes”), of which $ 1.5 million was to related parties.
−Removed: The 2019 Notes accrued interest at 8.0 % per annum with maturity dates of five years after issuance.
−Removed: The outstanding principal amount and any accrued and unpaid interest on the 2019 Notes was due and payable on the earlier to occur of (i) the maturity date, (ii) an event of default, or (iii) immediately prior to an acquisition event.
−Removed: The 2019 Notes were convertible (i) automatically into preferred stock upon a qualified equity financing, with a conversion price of 80% of the lowest purchase price per share of preferred stock paid by investors in such qualified equity financing, (ii) automatically into common stock upon an initial public offering, with a conversion price of 80% of the price per share of common stock paid by investors in such initial public offering, and (iii) upon the election of each note holder, into Class C preferred units, with a conversion price per share of $ 2.7153136 .
−Removed: The number of shares or units issuable upon conversion is determined by dividing the conversion amount by the conversion price, with the conversion amount equal to the greater of a) the then outstanding principal plus accrued interest, or b) principal plus accrued interest through December 7, 2020.
−Removed: The Company assessed the terms and concluded the 2019 Notes:
−Removed: (i) were not share-settled debt, (ii) contained a redemption feature that was determined to be an embedded derivative requiring bifurcation and (iii) certain of the notes contained a beneficial conversion feature because the fair value of the securities into which the 2019 Notes were convertible at the time of issuance, the Class C preferred units, was greater than the effective conversion price of the 2019 Notes.
−Removed: The $ 0.5 million beneficial conversion feature was recorded as additional paid-in capital and a debt discount and the $ 1.8 million issuance date fair value of the embedded derivative liability was recorded as a debt discount, both of which discounts were amortized to interest expense using the effective interest method over the term of the 2019 Notes.
−Removed: In April and May of 2020 certain of the 2019 Notes, representing $ 2.5 million of the then outstanding principal balance, were amended such that the conversion shares or units issuable upon conversion is the greater of:
−Removed: (i) the then outstanding principal plus accrued interest divided by $ 0.86866 or (ii) the amount determined by dividing the conversion amount by the conversion price, with the conversion amount equal to the greater of a) the then outstanding principal plus accrued interest, or b) principal plus accrued interest through December 7, 2020.
−Removed: The amendment of the 2019 Notes was accounted for as a modification, which required prospective consideration of the revised terms.
−Removed: For the year ended December 31, 2020 and 2019, the Company recognized interest expense, including coupon interest and amortization of debt discounts, in connection with the 2019 Notes of $ 0.3 million and $ 0.1 million, respectively.
−Removed: As further described below, the 2019 Notes were amended and settled in connection with the Corporate Reorganization in July 2020.
−Removed: 2020 convertible promissory notes
−Removed: During March, April and May of 2020 the Company issued unsecured convertible promissory notes (the “2020 Notes”) payable to various entities in an aggregate principal amount of $ 2.8 million, of which $ 0.5 million was to related parties.
−Removed: The 2020 Notes accrued interest at 8.0 % per annum with maturity dates of five years after issuance.
−Removed: The Company assessed the terms and concluded the 2020 Notes:
−Removed: (i) were not share-settled debt,(ii) contained a redemption feature that was determined to be an embedded derivative requiring bifurcation and (iii) did not contain a beneficial conversion feature.
−Removed: The $ 1.2 million issuance date fair value of the embedded derivative liability was recorded as a debt discount which was amortized to interest expense using the effective interest method over the term of the 2020 Notes.
−Removed: In May of 2020 certain of the 2020 Notes, representing $ 0.1 million of the then outstanding principal balance, were amended such that the conversion shares or units issuable upon conversion is the greater of:
−Removed: (i) the then outstanding principal plus accrued interest divided by $ 0.86866 or (ii) the amount determined by dividing the conversion amount by the conversion price, with the conversion amount equal to the greater of a) the then outstanding principal plus accrued interest, or b) principal plus accrued interest through December 7, 2020 .
−Removed: The amendment of the 2020 Notes was accounted for as a modification, which required prospective consideration of the revised terms.
−Removed: For the year ended December 31, 2020, the Company recognized interest expense, including coupon interest and amortization of debt discounts, in connection with the 2020 Notes of $ 0.1 million.
−Removed: As further described below, the 2020 Notes were amended and settled in connection with the Corporate Reorganization in July 2020.
−Removed: Amendment and settlement of convertible notes
−Removed: As a condition of the closing of the Series D financing in July 2020, the Pfizer Note, 2018 Notes, 2019 Notes and 2020 Notes (and together, the “Convertible Notes”) were amended to settle the Convertible Notes into 59,164,808 Class D units of Himalaya Parent LLC.
−Removed: As of the settlement date, the aggregate outstanding principal and accrued interest of the Convertible Notes was $ 21.8 million and $ 4.7 million, respectively.
−Removed: The Pfizer Note converted into Class D units at a conversion price of $ 0.51554931 and the 2018 Notes and 2019 Notes converted into Class D units at a conversion price of $ 0.412439448 , which is 80% of the price paid by investors in the Series D financing.
−Removed: As of the July 10, 2020 settlement date, the Convertible Notes had a carrying value of $ 27.9 million, including related accrued interest, embedded derivatives and unamortized debt discounts.
−Removed: The fair value of the Class D units of Himalaya Parent LLC issued to the noteholders in exchange for the Convertible Notes was $ 30.6 million, resulting in a loss on extinguishment of convertible debt of $ 2.7 million.
−Removed: The fair value per unit of the Class D units of Himalaya Parent LLC was based on the fair value per share paid by investors in the Company’s Series D financing.
+Added: The Company did no t have any outstanding debt as of December 31, 2022 or December 31, 2021 .
In April 2020, the Company borrowed $ 0.7 million under the Paycheck Protection Program (“PPP”) under the CARES Act.
−Removed: was subsequently forgiven in July 2021.
+Added: The loan was subsequently forgiven in July 2021.
The $ 0.7 million balance of the forgiven loan was recognized as other income on the Company's Statement of Operations and Comprehensive Loss for the twelve months ended December 31, 2021 .
3 unchanged sentences
Additionally, the lease includes certain rent abatement, rent escalations, tenant improvement allowances and additional charges for common area maintenance and other costs.
−Removed: Supplemental balance sheet information related to lease liabilities at December 31, 2021, was as follows (in thousands):
−Removed: Lease-Related Assets and Liabilities
−Removed: Financial Statement Line Items
−Removed: As of December 31, 2021
−Removed: Right-of-use assets:
−Removed: Operating leases
−Removed: Operating lease right-of-use assets
−Removed: Total right-of-use assets
−Removed: Lease Liabilities:
−Removed: Operating leases
−Removed: Operating lease liabilities
−Removed: Operating lease liabilities, noncurrent
−Removed: Total lease liabilities
The components of lease expense included in the Company’s consolidated statements of operations include (in thousands):
−Removed: December 31, 2021
+Added: Years ended December 31,
Operating lease expense
4 unchanged sentences
The weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2022 were as follows:
−Removed: December 31, 2021
+Added: Years ended December 31,
Weighted average remaining lease term (in years)
1 unchanged sentence
Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands):
−Removed: December 31, 2021
+Added: Years ended December 31,
Cash paid for amounts included in the measurement of operating leases
4 unchanged sentences
Total operating lease liabilities
−Removed: As of December 31, 2020, prior to the Company’s adoption of ASC 842, annual minimum payments under noncancelable operating leases were as follows (in thousands):
−Removed: Years ending December 31:
−Removed: Total minimum lease payments
−Removed: Under ASC 840, during the years ended December 31, 2020 and 2019, net rent expense was $ 1.7 million and $ 1.1 million, respectively.
Commitments and contingencies
1 unchanged sentence
The Company is not currently a party to any legal proceedings the outcome of which the Company believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition.
−Removed: Convertible preferred stock and members’/stockholders’
−Removed: equity (deficit)
−Removed: Convertible preferred stock
−Removed: The Company had convertible preferred stock outstanding between the date of its Series D financing in July 2020 until the closing of its IPO in December 2020.
−Removed: The Company’s convertible preferred stock was classified as temporary equity in the accompanying consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption is based upon certain change in control events outside of the Company’s control, including liquidation, sale or change of control of the Company.
−Removed: Because these change in control events were not probable, the Company did not adjust the carrying values of the convertible preferred stock to redemption value.
−Removed: Series D financing
−Removed: On July 13, 2020, BioAtla, Inc.
−Removed: entered into a Series D Preferred Stock Purchase Agreement, pursuant to which it issued 140,626,711 shares of Series D convertible preferred stock at $ 0.51554931 per share, for aggregate cash proceeds of $ 72.5 million.
−Removed: The Company incurred $ 4.3 million of issuance costs.
−Removed: Initial public offering and related transactions
−Removed: In December 2020, the Company completed its IPO selling 12,075,000 shares its common stock at $ 18.00 per share.
−Removed: Proceeds from the Company’s IPO, net of underwriting discounts and commissions and other offering costs, were $ 198.3 million.
−Removed: In connection with the IPO, all 199,791,519 shares of convertible preferred stock outstanding at the time of the IPO converted into 13,876,510 shares of the Company’s common stock and 1,492,059 shares of the Company’s Class B common stock.
−Removed: Private Placement of Common Stock
−Removed: In September 2021, the Company entered into agreements to sell 2,678,600 shares of its common stock at a price of $ 28.00 per share through a private investment in public equity financing (or "Private Placement").
−Removed: Proceeds from the Private Placement, net of underwriting discounts and commissions and other offering costs, were $ 71.0 million.
−Removed: In connection with the Private Placement, the Company also issued registration rights to the investors.
−Removed: The Company filed a registration statement on Form S-1 (File No.
−Removed: 333-260440) with the SEC registering for resale the shares of common stock issued in the Private Placement.
+Added: Stockholders’
Description of securities of Delaware corporation
8 unchanged sentences
Except as otherwise expressly provided in the Company’s amended and restated certificate of incorporation or as required by applicable law, on any matter that is submitted to a vote by the Company’s stockholders, holders of the Company’s common stock are entitled to one vote per share of common stock, and holders of the Company’s Class B common stock are not entitled to any votes per share of Class B common stock, including for the election of directors.
−Removed: Operating agreement
−Removed: Prior to the Corporate Reorganization, the Company’s operating agreement, as amended and restated, provided for classes of units, allocation of profits and losses, distribution preferences, other member rights and management of the LLC.
−Removed: The operating agreement designated Class A units, Class B units and Class C preferred units.
−Removed: The Class B units and Class C preferred units were non-voting, except as required by law.
−Removed: The Class B units were liability awards pursuant to authoritative guidance and, as such, were reported at fair value outside of members’
−Removed: Members were limited in their liability to their capital contributions.
+Added: September 2021 Private Placement of Common Stock
+Added: In September 2021, the Company entered into agreements to sell 2,678,600 shares of its common stock at a price of $ 28.00 per share through a private investment in public equity financing (or "Private Placement").
+Added: Proceeds from the Private Placement, net of underwriting discounts and commissions and other offering costs, were $ 71.0 million.
+Added: In connection with the Private Placement, the Company also issued registration rights to the investors.
+Added: The Company filed a registration statement on Form S-1 (File No.
+Added: 333-260440) with the SEC registering for resale the shares of common stock issued in the Private Placement.
+Added: November 2022 Underwritten Offering
+Added: On November 8, 2022, the Company completed a follow-on offering under its shelf registration statement on Form S-3 (File No.
+Added: 333-262528) and a related prospectus supplement pursuant to which the Company issued an aggregate of 9,745,128 shares of its common stock to at a public offering price of $ 6.67 per share.
+Added: The Company received aggregate net proceeds of $ 61.7 million fro m the offering after deducting underwriting discounts and commissions and other offering expenses.
Common stock warrants
2 unchanged sentences
Upon adoption of ASU No.
−Removed: 2018-07 on October 1, 2020, the measurement date of the warrants described below became fixed in accordance with the guidance, and such fair value was nominal since the warrants were deeply out-of-the-money.
+Added: 2018-07 on October 1, 2020, the measurement date of the warrants became fixed in accordance with the guidance, and such fair value was nominal since the warrants were deeply out-of-the-money.
In December 2021, a total of 566,586 warrants with an exercise period of 365 days after our IPO expired unexercised.
−Removed: As of December 31, 2021 the remaining common stock warrants below are exercisable and expire as follows:
−Removed: Outstanding and exercisable
−Removed: Exercise price per share
−Removed: Expiration date
−Removed: March 12, 2022
−Removed: Noncontrolling interests
−Removed: In December 2018, the Company issued a noncontrolling interest in HTKY in the form of ordinary shares in connection with the termination of a collaboration and license agreement.
−Removed: In addition to the ordinary shares issued, certain employees and shareholders of the Company purchased 19,000,000 ordinary shares of HTKY for an aggregate purchase price of $ 19,000 , of which 5,000,000 were repurchased for $ 5,000 in March 2019.
−Removed: As of December 31, 2019, the Company held all of the outstanding HTKY preferred equity, consisting of 97,183,256 Series B convertible preference shares, and 1,000 ordinary shares.
−Removed: The Series B convertible preference shares had a liquation preference equal to the greater of $ 1.00 per share, plus declared and unpaid dividends, or the if-converted value, and pay non-cumulative dividends in preference to the holders of ordinary shares at an annual rate of 7 % of the purchase price per share when, as and if declared by the board.
−Removed: The net income (loss) of HTKY was allocated to the ordinary shareholders on a pro rata basis.
−Removed: However, any net income was initially be allocated to the preference shares until the liquidation preference is met.
−Removed: Thereafter, preference shares would only be allocated dividends declared by the board of directors of HTKY.
−Removed: For the year ended December 31, 2019, substantially all of the $ 61,000 net loss of HTKY was allocated to the noncontrolling interest.
−Removed: HTKY had no material operations for the year ended December 31, 2020.
−Removed: As discussed in Note 1, HTKY was deconsolidated as part of the July 2020 Corporate Reorganization.
+Added: The remaining 151,088 warrants with an exercise period of 450 days after the Company's IPO expired unexercised in March 2022.
+Added: Accordingly, there are no remaining common stock warrants outstanding and exercisable at December 31, 2022.
2020 Equity Incentive Plan
8 unchanged sentences
Stock-based compensation expense recognized for all equity awards under the 2020 Plan has been reported in the consolidated statements of operations and comprehensive loss as follows (in thousands):
+Added: Years ended December 31,
Research and development
1 unchanged sentence
Restricted stock units
−Removed: In December 2020, the Company granted an aggregate of 1,920,037 restricted stock units (“RSUs”) to certain of the Company’s employees and service providers, including executive officers and non-employee directors.
The following table summarizes RSU activity under the 2020 Plan for the years ended December 31, 2022 and 2021:
12 unchanged sentences
The weighted- average grant date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $ 4.06 per share and $ 24.61 per share, respectively.
−Removed: The total fair value of options vested during the year ended December 31, 2021 was $ 1.9 million.
−Removed: No options vested during the years ended December 31, 2020 and 2019.
+Added: The total fair value of options vested during the years ended December 31, 2022 and 2021 was $ 6.9 million and $ 1.9 million, respectively.
Upon option exercise, the Company issues new shares of its common stock.
The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:
+Added: Years ended December 31,
Expected volatility
23 unchanged sentences
In February 2021, employees began to enroll in the ESPP, and the Company’s first offering period commenced.
−Removed: ESPP purchase transactions occurred on June 30, 2021 and on December 31, 2021.
−Removed: During the year ended December 31, 2021, the Company issued 11,182 shares of common stock under the ESPP.
+Added: During the years ended December 31, 2022 and 2021 , the Company issued 147,564 and 11,182 shares of common stock under the ESPP, respectively.
As of December 31, 2022 , 1,070,402 shares of common stock remained available for issuance under the ESPP.
−Removed: Stock-based compensation expense related to the ESPP for the twelve months ended December 31, 2021 was immaterial.
+Added: Stock-based compensation expense related to the ESPP for the twelve months ended December 31, 2022 and 2021 was $ 0.2 million and $ 0.1 million, respectively.
Common stock reserved for future issuance
5 unchanged sentences
Total common stock reserved for future issuance
−Removed: Profits interest incentive plan
−Removed: Prior to the Corporate Reorganization in July 2020, the Company maintained a Profits Interest Incentive Plan (the “Plan”) for selected employees, consultants and other service providers.
−Removed: In connection with the Corporate Reorganization, Himalaya Parent LLC assumed the Plan and the $ 1.0 million fair value of the liability was reclassified to additional paid-in capital.
−Removed: As of December 31, 2019, the Company had reserved a total of 16,665,977 Class B units for issuance under the Plan.
−Removed: The Class B units generally vested over four years , were subject to continued service requirements, and only provide the participants with benefits (in the form of distributions) if the distributions from BioAtla exceed specified threshold values.
−Removed: Generally, upon termination of services, all unvested Class B units were forfeited to the Company and the Company had the right, but not the obligation, to repurchase the vested Class B units within two years at the termination date fair value.
−Removed: The Class B unit repurchase would be settled in cash, at all times at the option of the Company, and the holder did not have the right to put the Class B units to the Company under any condition.
−Removed: Vested Class B units that are neither repurchased by the Company nor forfeited remained subject to the terms of the Company’s operating agreement.
−Removed: The Class B units were not subject to sale, assignment, transfer, pledge, or allowed to be otherwise encumbered or disposed of without prior written consent of the Company.
−Removed: No Class B units had been repurchased through the date of the Corporate Reorganization.
−Removed: Activity under the Plan is summarized as follows:
−Removed: Outstanding at December 31, 2019
−Removed: Assumption of Plan by Himalaya Parent LLC on July 10, 2020
−Removed: Outstanding at December 31, 2020
−Removed: Vesting of Class B units under the Plan is summarized as follows:
−Removed: Unvested at December 31, 2019
−Removed: Assumption of unvested Class B units by Himalaya Parent LLC on
−Removed: July 10, 2020
−Removed: Unvested at December 31, 2020
−Removed: The Class B units were liability awards pursuant to authoritative guidance, which required the Company to record a liability based on the fair value of the Class B units as of each reporting period.
−Removed: Through the date of the Corporate Reorganization, the fair value of the liability awards was determined based on the Company’s estimated enterprise value, which was allocated based on a hybrid model that, in addition to the option pricing model, considering the Company’s expected IPO.
−Removed: Under the option pricing method, units were valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each unit class.
−Removed: In connection with the Division, the distribution thresholds that had to be achieved before the Class B unit holders were entitled to distributions were adjusted, resulting in a $ 0.9 million reduction to the aggregate profits interest liability between the Predecessor and the Post-Division LLCs at the date of the Division.
−Removed: The thresholds of the Post-Division Successor were changed in order to reflect the impact of the assets assigned to BioAtla Holdings and Inversagen in the Division.
−Removed: For the year ended December 31, 2019, the profits interest liability decreased $ 7.4 million, including the $0.9 million reduction described above, and $ 0.8 million recognized as additional paid-in capital related to the fair value of vested Class B units assumed by BioAtla Holdings and Inversagen in connection with the Division.
−Removed: In addition, the Company recognized stock-based compensation expense and additional paid-in capital of $ 0.2 million related to the fair value of the unvested Class B units assumed by BioAtla Holdings and Inversagen in connection with the Division since these Class B unit holders were employees of the Post-Division Successor, and were not expected to provide services to BioAtla Holdings or Inversagen.
−Removed: The following table provides a reconciliation of the profits interest liability (in thousands):
−Removed: Balance at December 31, 2019
−Removed: Decrease in fair value of vested liability (Pre-Corporate Reorganization) recognized as decrease to stock-based
−Removed: compensation expense
−Removed: Fair value of vested liability assumed by Himalaya Parent LLC on July 10, 2020 recognized as additional paid-in
−Removed: Balance at December 31, 2020
−Removed: The allocation of equity-based compensation, including $ 0.7 million from Himalaya Parent as a capital contribution during 2020, for all Class B units is as follows (in thousands):
−Removed: Years ended December 31,
−Removed: Research and development
−Removed: General and administrative
Collaboration, license and option agreements
1 unchanged sentence
In April 2019, the Company entered into a Global Co-Development and Collaboration agreement (the “BeiGene Collaboration”) with BeiGene, Ltd.
−Removed: and BeiGene Switzerland GmbH (collectively “BeiGene”), a commercial-stage biopharmaceutical company, for the development, manufacturing and commercialization of the Company’s investigational CAB CTLA-4 antibody (BA3071).
−Removed: The Company and BeiGene amended the Global Co-Development and Collaboration agreement in December 2019 and in October 2020 (the “Amended BeiGene Collaboration”).
−Removed: Under the BeiGene Collaboration, the Company would co-develop the CAB-CTLA-4 antibody to reach defined early clinical objectives (“POC Milestone”), whereby the Company would perform the development activities and BeiGene would reimburse the Company for a portion of the costs incurred by the Company.
−Removed: Following the POC Milestone, BeiGene would then lead the parties’
−Removed: joint efforts to develop the product candidate and be responsible for global regulatory filings and commercialization.
−Removed: BeiGene would be responsible for all costs of development, manufacturing and commercialization in China, parts of the Middle East and Asia (excluding Japan), Australia and New Zealand (the “BeiGene Territory”), and the parties would share development and manufacturing costs and commercial profits and losses upon specified terms in the rest of the world that are not part of the BeiGene Territory (the “ROW”).
−Removed: In 2019, BeiGene paid the Company an upfront non-refundable payment of $ 20.0 million and paid the Company $ 5.0 million for reimbursement of manufacturing costs.
−Removed: Under the BeiGene Collaboration, the Company was eligible to receive variable consideration for subsequent development and regulatory milestones globally and commercial milestones in the BeiGene Territory and tiered royalties ranging from the mid-single digits to the mid-double digits based on net sales in the BeiGene Territory.
−Removed: The Company concluded that the BeiGene Collaboration was a contract with a customer and applied relevant guidance from Topic 606 through reaching the POC milestone as the licenses to intellectual property granted to BeiGene and the obligation to perform research and development services are outputs of the Company’s ongoing activities.
−Removed: The Company identified material promises in the BeiGene Collaboration through POC Milestone, consisting of the licenses described above and the development services.
−Removed: It was determined that the licenses were not distinct from the development services resulting in a single performance obligation.
−Removed: In accordance with Topic 606, the Company determined the transaction price of the agreement was limited to the $ 25.0 million received, and excluded the variable consideration of expense reimbursements, milestone payments and royalties as they were fully constrained.
−Removed: The expense reimbursements were included in the transaction price in the reporting period the Company concluded it was probable that inclusion of such amounts in the transaction price would not result in a significant reversal in revenue recognized.
−Removed: As part of the Company’s evaluation of the milestone constraints, the Company determined the achievement of such milestones were contingent upon success of future developments, regulatory approvals and commercial activities which were not within its control and were uncertain.
−Removed: Variable consideration related to royalties would be recognized when the related sales occurred.
−Removed: Under the terms of the Amended BeiGene Collaboration, BeiGene was generally responsible for developing BA3071 and for global regulatory filings and commercialization.
−Removed: Subject to the terms of the Amended BeiGene Collaboration, BeiGene held an exclusive license with the Company to develop and manufacture the BA3071 candidate globally, and BeiGene was responsible for all costs of development, manufacturing and commercialization globally.
−Removed: The Amended BeiGene Collaboration provided that the Company was eligible to receive tiered royalties on sales worldwide, subsequent development and regulatory milestone payments globally and commercial milestones in the BeiGene
−Removed: Under the Amended BeiGene Collaboration, the Company’s amended performance obligation would be satisfied at a point in time determined to be when BeiGene received the know-how and master cell bank for BA3071.
−Removed: Until then BeiGene could not benefit from the ability to further develop and manufacture the BA3071 candidate.
−Removed: Under the original collaboration agreement, the Company recognized revenue over time using an input method based on actual costs incurred compared to estimated total costs expected to be incurred to fulfill its performance obligation to perform development services.
−Removed: On November 18, 2021, the Company entered into Amendment No.
−Removed: 3 to the Amended BeiGene Collaboration (“Amendment No.3”).
−Removed: Under Amendment No.
−Removed: 3, the Amended BeiGene Collaboration was terminated, subject to survival of certain provisions, and BeiGene handed back rights to know-how and materials received under the Amended BeiGene Collaboration.
−Removed: As a result, the Company will assume responsibility for the global development and commercialization of BA3071.
−Removed: As consideration for Amendment No.3, the Company agreed to pay BeiGene mid-single digit royalties on sales worldwide and on a limited basis will share in any upfront and milestone payments received through a sublicense of BA3071.
−Removed: As part of Amendment No.3, the Company reclassified its remaining $ 19.8 million of deferred revenue as a long-term liability which is expected to settle as licensing payments are made to BeiGene in accordance with the resulting amendment.
+Added: and BeiGene Switzerland GmbH (collectively “BeiGene”), for the development, manufacturing and commercialization of the Company’s investigational CAB CTLA-4 antibody (BA3071).
+Added: The BeiGene Collaboration was amended several times between 2019 and 2021 and the Company received a total of $ 25.0 million in non-refundable payments from BeiGene during that time.
+Added: In November 2021, the BeiGene Collaboration was terminated, subject to survival of certain provisions, and BeiGene handed back rights to know-how and materials received under the amended BeiGene Collaboration.
+Added: As a result, the Company is responsible for the global development and commercialization of BA3071.
+Added: As consideration for this amendment, the Company agreed to pay BeiGene mid-single digit royalties on sales worldwide and on a limited basis will share in any upfront and milestone payments received through a sublicense of BA3071.
+Added: The Company reclassified its then remaining $ 19.8 million of deferred revenue as a long-term liability which is expected to settle as licensing payments are made to BeiGene in accordance with the resulting amendment.
In the event the license is terminated, the liability will be extinguished with no further payment to BeiGene.
−Removed: For the year ended December 31, 2021, the Company did no t recognize any revenue related to the collaboration agreement with BeiGene.
−Removed: Collaboration revenue recognized for the years ended December 31, 2020 and 2019 was $ 0.4 million and $ 5.2 million, respectively.
−Removed: As of December 31, 2021 and December 31, 2020, the Company had a $ 19.8 million Liability to Licensor, and $ 19.8 million of deferred revenue which was classified as current, respectively.
+Added: The Company did no t recognize any revenue related to the collaboration agreement with BeiGene for the years ended December 31, 2022 and 2021.
+Added: The Company had a $ 19.8 million Liability to Licensor as of December 31, 2022 and 2021.
+Added: Collaboration and Supply Agreement with Bristol-Myers Squib
+Added: On January 5, 2022, BioAtla and Bristol-Myers Squibb Company (“BMS”) entered into a clinical trial collaboration and supply agreement (the “BMS Agreement”).
+Added: Under the terms of the BMS Agreement, BioAtla and BMS will collaborate on clinical trials of separate combination
+Added: therapies using two of BioAtla’s Conditionally Active Biologic Antibody Drug Conjugates, BA3011 and BA3021, each in combination with Opdivo® (nivolumab), BMS’
+Added: proprietary anti-PD-1 monoclonal antibody product.
+Added: The Company will serve as the study sponsor of the scheduled studies and will be responsible for costs associated with the trial execution.
+Added: BMS will provide Opdivo® clinical drug supply at no cost for the combination study trials.
+Added: After the completion of the combination therapy trials, the Company is obligated to provide BMS with a final report of the data resulting from the trial.
+Added: The BMS Agreement was amended in October 2022 to include additional territories for our BA3011 and BA3021 combination study trials.
+Added: There was no impact to the Company's financial results for the years ended December 31, 2022 or 2021 as a result of this agreement.
+Added: Exclusive License Agreement with Exuma Biotech Corp
+Added: Under an Exclusive License Agreement entered into in May 2016, the Company granted EXUMA and its affiliates an exclusive, worldwide, sublicensable license under certain patents and know-how controlled by the Company to develop, manufacture and commercialize Adoptive Cellular Therapy (“ACT”) preparations and treatments for cancer.
+Added: EXUMA’s rights under the agreement exclude the right to grant sublicenses to third parties to discover, develop or manufacture any CAB ACT or any component of the Company’s CAB ACT technology, except as used in or incorporated into EXUMA’s ACTs for cancer.
+Added: The license to EXUMA is royalty bearing.
+Added: EXUMA granted the Company an exclusive, worldwide, royalty free, fully paid-up, sublicensable license under certain patents and know-how controlled by EXUMA and EXUMA’s interest in technology jointly developed under the agreement to develop, manufacture and commercialize non-ACT CAB products for any indication.
+Added: EXUMA is obligated to pay the Company during the royalty term, on a product-by-product basis and country-by-country basis, mid-single digit royalties based on annual net sales of certain EXUMA ACT products, subject to certain adjustments.
+Added: The term during which EXUMA is obligated to pay royalties under the agreement with respect to any particular product in any particular country, will begin on the first commercial sale of such product in such country and will end on the date of expiration of the last-to-expire of certain product-related patent rights in such country.
+Added: All royalties to be paid under the agreement are subject to certain adjustments.
+Added: Future royalties will be recognized when earned.
+Added: Unless earlier terminated, the agreement continues in effect so long as EXUMA or any of its affiliates, licensees or sublicensees are developing or commercializing any EXUMA products in the ACT field or the Company or any of its affiliates, licensees or sublicensees are developing or commercializing any CAB products for any indication outside the ACT field.
+Added: The agreement may be terminated only by the mutual written agreement of the parties.
+Added: In November 2019, the Company entered into an Amended and Restated Exclusive License Agreement with EXUMA (the “Amended and Restated EXUMA License”).
+Added: The Amended and Restated EXUMA License limits CAB ACT products to four specified targets.
+Added: EXUMA is a VIE, and the Company has a variable interest in EXUMA due to its right to receive royalties during the royalty term under the Amended and Restated EXUMA License.
+Added: The Company has no equity ownership in EXUMA, no representation on the EXUMA board of directors, and the Amended and Restated EXUMA License does not provide the Company with the ability to make decisions regarding the execution of business strategy that most significantly impact the economic performance of EXUMA.
+Added: The Company has not funded and has no commitment to fund EXUMA’s losses, and has no exposure to loss as a result of its Amended and Restated EXUMA License.
+Added: As of December 31, 2022 and 2021, the Company has determined it is not the primary beneficiary of EXUMA and, as such, the Company does not consolidate EXUMA.
+Added: The Company’s financial statements do not include any assets or liabilities related to the Amended and Restated EXUMA License at December 31, 2022 and 2021.
Service Contracts
3 unchanged sentences
The Company recognized revenue of $ 0.3 million for the year ended December 31, 2021, related to the achievement of a clinical milestone on a fixed price service contract.
−Removed: License and Option Agreement with Pfizer, Inc.
−Removed: The Company was party to a license and option agreement with Pfizer that was terminated in December 2019 .
−Removed: Pfizer paid the Company $ 1.0 million in December 2015 upon execution of the agreement.
−Removed: The Company had identified a single deliverable at inception of the agreement, which consisted of the company’s obligation to nominate targets, perform certain preclinical research, efficacy studies and related reports (“research and development services”).
−Removed: These services were prerequisites to Pfizer’s exercise of Pfizer’s substantive options, including the option to obtain exclusive licenses to develop and commercialize a certain number of Antibody Drug Conjugates (“ADC”) CAB antibodies, under the agreement.
−Removed: As such, the Company recognized revenue for the consideration received over the four-year period over which it delivered its research and development services.
−Removed: In connection with the license and option agreement with Pfizer, the Company recognized collaboration revenue of $ 0.5 million for the year ended December 31, 2019.
Related party transactions
Jay Short and Carolyn Anderson Short
−Removed: Jay Short and Carolyn Anderson Short loaned the Company $ 1.0 million and $ 0.5 million, respectively, under the terms of the 2019 Notes and 2020 Notes described in Note 4 above.
−Removed: For the years ended December 31, 2020 and 2019, the Company recognized interest expense (including amortization of debt discounts) of $ 0.1 million and $ 32,000 , respectively, on outstanding 2019 Notes and 2020 Notes payable to Dr.
−Removed: Jay Short and Carolyn Anderson Short.
−Removed: The 2019 Notes and 2020 Notes payable to Dr.
−Removed: Jay Short and Carolyn Anderson Short were settled in connection with the Corporate Reorganization in July 2020 .
−Removed: On March 18, 2021, the Company and Carolyn Anderson Short, its co-founder and former Chief of Intellectual Property & Strategy, mutually agreed that Ms.
−Removed: Short would depart the Company on May 31, 2021 following an agreed upon transition period.
−Removed: The Transition Agreement provides for the following severance benefits in exchange for a release of claims by Ms.
−Removed: (i) a lump sum payment equal to eighteen (18) months of Ms.
−Removed: Short’s current base salary, (ii) a payment at her targeted bonus rate for 2021, pro-rated to the separation date, and (iii) accelerated full vesting of her equity awards including 7,747 stock options and 138,461 restricted stock units.
−Removed: The modification of these equity awards resulted in an incremental fair value of $ 7.0 million which was recognized on a straight-line basis over the transition service period.
−Removed: For the twelve months ended December 31, 2021, the Company recognized $ 1.0 million related to the lump sum salary payment and target bonus.
−Removed: The Company also recognized non-cash stock-based compensation charges of $ 9.4 million related to the modified equity awards for the twelve months ended December 31, 2021.
−Removed: No unrecognized stock-based compensation remained as of December 31, 2021.
−Removed: Short exercised her 7,747 stock options in 2021, therefore there are no remaining options outstanding related to Ms.
−Removed: Short’s transition agreement as of December 31, 2021.
+Added: On March 23, 2021, the Company entered into a transition agreement with Ms.
+Added: Anderson Short, our Co-founder and Executive Vice President and Chief of Intellectual Property and Strategy at that time.
+Added: Pursuant to this transition agreement, Ms.
+Added: Anderson Short continued in her role with the same base salary and employee benefits until her employment with the Company was terminated on May 31, 2021.
+Added: Upon her separation from the Company and subject to her execution of a release of claims, Ms.
+Added: Anderson Short received the following severance benefits as set forth in the transition agreement, which satisfied existing severance obligations owing to her under a legacy pre-IPO severance agreement she had entered into with the Company on July 1, 2018:
+Added: (i) a lump sum payment equal to 18 months of Ms.
+Added: Anderson Short’s then-current base salary, (ii) a payment at her targeted bonus rate for 2021, pro-rated to the date of her termination of employment, and (iii) full accelerated vesting of her equity awards including 7,747 stock options and 138,461 restricted stock units.
+Added: The modification of these equity awards resulted in an incremental fair value of $ 7.0 million which was recognized on a straight-line basis over the transition service period which ended on the separation date.
+Added: For the year ended December 31, 2021, the Company recognized $ 1.0 million related to the lump sum salary payment and target bonus.
+Added: The Company also recognized non-cash stock-based compensation charges of $ 9.4 million related to the modified equity awards for the year ended December 31, 2021.
+Added: No unrecognized stock-based compensation related to the transition agreement was recognized for the year ended December 31, 2022.
Inversagen, LLC
−Removed: Inversagen was formed in conjunction with the LLC Division.
On March 15, 2019, the Company entered into an Exclusive License Agreement with Inversagen (the “Inversagen License”).
8 unchanged sentences
The Company has no equity interest in Inversagen, and no exposure to its losses.
−Removed: Inversagen is currently inactive, and the Company has not provided any services to Inversagen, has not provided any support to Inversagen and has no obligation to do so, and Inversagen’s creditors have no recourse to the general credit of the Company.
+Added: The Company has not provided any services to Inversagen, has not provided any support to Inversagen and has no obligation to do so, and Inversagen’s creditors have no recourse to the general credit of the Company.
The Company does no t have any assets or liabilities associated with its variable interest in Inversagen at December 31, 2022 and 2021.
17 unchanged sentences
Himalaya Therapeutics SEZC
−Removed: Prior to the Corporate Reorganization, Himalaya Therapeutics SEZC met the definition of a VIE under ASC 810-10, as the entity did not have enough equity to finance its activities without additional subordinated financial support.
−Removed: The Company consolidated Himalaya Therapeutics SEZC as the primary beneficiary, as it had (i) the power to direct activities of a VIE that most significantly impact the VIE’s economic performance and (ii) the right to receive benefits from the VIE that could potentially be significant to the VIE, resulting from its control of the board of directors, and voting control of the entity via a voting agreement among its shareholders, and its equity holdings.
−Removed: The Company was not obligated to provide financial support to Himalaya Therapeutics SEZC.
−Removed: Himalaya Therapeutics SEZC’s creditors had no recourse in the general credit of the Company.
−Removed: Himalaya Therapeutics SEZC held intellectual property related to certain CAB Antibodies under an Exclusive Rights
−Removed: Agreement with the Company dated December 20, 2018.
−Removed: As of December 31, 2019, Himalaya Therapeutics SEZC had no material operations, did not have any employees and the carrying value of its assets and liabilities was nominal.
+Added: Exclusive Rights Agreement
On January 1, 2020, the Company entered into an Amended and Restated Exclusive Rights Agreement (the “Amended Rights Agreement”) with Himalaya Therapeutics SEZC.
−Removed: Under the terms of the Amended Rights Agreement, Himalaya Therapeutics SEZC acquired the rights to 10 CAB-antibodies for the territory of China, Macao, Hong Kong and Taiwan, global rights to a CAB-HER2-bispecific-antibody and global co-development rights with us to an IL-22 non-CAB-antibody.
+Added: Under the terms of the Amended Rights Agreement, Himalaya Therapeutics SEZC acquired the rights to 10 CAB-antibodies for the territory of China, Macao, Hong Kong and Taiwan, global rights to a CAB-HER2-bispecific-antibody and global co-development rights with the Company to an IL-22 non-CAB-antibody.
Payments to the Company may include upfront payments, milestone payments and double digit royalties, which represent a variable interest held by the Company, but no payments have been made to the Company to date.
−Removed: As part of the Corporate Reorganization, Himalaya Therapeutics SEZC was distributed to Himalaya Parent LLC at the carrying value of its assets and liabilities, which were nominal, and no gain or loss was recorded on the transaction in the Company’s financial statements for the year ended December 31, 2020.
−Removed: Himalaya Therapeutics SEZC continues to be a variable interest entity as it does not have sufficient equity to finance its activities without additional subordinated financial support.
+Added: Himalaya Therapeutics SEZC is a variable interest entity as it does not have sufficient equity to finance its activities without additional subordinated financial support.
The Company is not obligated to provide financial support to Himalaya Therapeutics SEZC.
2 unchanged sentences
The Company does no t have any assets or liabilities recorded at December 31, 2022 associated with its variable interest in Himalaya Therapeutics SEZC, and has no exposure to Himalaya Therapeutics SEZC losses.
−Removed: The Company does not have a variable interest in Himalaya Parent LLC.
−Removed: Himalaya Therapeutics SEZC is a related party whose controlling shareholder is Himalaya Parent LLC.
−Removed: Jay Short and his spouse, Carolyn Anderson Short, serve as directors of Himalaya Therapeutics SEZC, and Carolyn Anderson Short serves as an officer of such entity.
+Added: Himalaya Therapeutics SEZC is a related party as Dr.
+Added: Jay Short and his spouse, Carolyn Anderson Short, serve as directors, and Carolyn Anderson Short also serves as an officer of such entity.
+Added: Clinical Trial Services Agreement
+Added: In April 2022, the Company entered into a Clinical Trial Agreement with Himalaya Therapeutics SEZC.
+Added: Under the agreement, Himalaya Therapeutics SEZC agreed to provide services related to the initiation of clinical trials for BA3011 in the People’s Republic of China.
+Added: For the first year following effectiveness of the agreement, the Company has agreed to pay Himalaya Therapeutics SEZC for the full-time use of two of its personnel.
+Added: Payments are due and payable by BioAtla to Himalaya Therapeutics SEZC on a quarterly calendar basis and are non-refundable.
+Added: For the twelve months ended December 31, 2022, the Company recognized $ 0.4 million in research and development expense related to the Clinical Trial Agreement.
+Added: The Company did not have any amounts due from or due to Himalaya Therapeutics SEZC as of December 31, 2022 .
Himalaya Parent LLC
−Removed: In connection with the Corporate Reorganization, Himalaya Parent assumed the Company’s profits interest plan, including equity awards to employees of the Company.
−Removed: For the years ended December 31, 2021 and 2020, the Company recognized $ 0 and $ 0.7 million, respectively, of compensation cost and a related capital adjustment in connection with the assumed profits interest plan.
Jay Short and his spouse, Carolyn Anderson Short, serve as managers of Himalaya Parent LLC.
−Removed: EXUMA Biotech Corp.
−Removed: and subsidiary
−Removed: As of December 31, 2019, the Company and EXUMA are no longer related parties since none of the Post-Division LLCs own any common or preferred stock of EXUMA and have no ongoing contractual relationships other than the license agreement described below (see Note 12).
−Removed: The Company was a named party to a lease where a subsidiary of EXUMA was the primary tenant.
−Removed: The EXUMA subsidiary paid the landlord directly for payments due under the lease and was reimbursed by the Company for its share of the payments.
−Removed: For the year ended December 31, 2019, the Company expensed $ 15,000 for its share of payments due under the lease.
−Removed: In addition, the Company expensed $ 10,000 related to a November 2019 amendment of the license agreement described in Note 12.
−Removed: Biotech Investment Group, LLC
−Removed: Prior to the Corporate Reorganization, Biotech Investment Group, LLC (“BIG”), was a principal owner, related party of the Company and affiliated with BioDuro, LLC (“BioDuro”) and Biotech Investment Group II LLC (“BIG II”).
−Removed: Subsequent to the Corporate Reorganization, BIG is no longer a principal owner and, as a result, neither BIG nor its affiliates are related parties of the Company.
−Removed: BioDuro-Sundia
−Removed: BioDuro-Sundia is a contract research organization that provides services to the Company.
−Removed: For the year ended December 31, 2019, the Company incurred expenses of $ 1.9 million in connection with services provided by BioDuro-Sundia.
−Removed: During 2019, an affiliate of BIG sold a majority interest in BioDuro-Sundia to an unaffiliated entity.
−Removed: Effective January 1, 2020, BioDuro-Sundia is no longer considered a related party of the Company.
−Removed: Biotech Investment Group II LLC
−Removed: BIG II loaned the Company $ 0.5 million under the terms of the 2019 Notes described in Note 4 above.
−Removed: For the years ended December 31, 2020 and 2019, the Company recognized interest expense (including amortization of debt discounts) of $ 42,000 and $ 20,000 , respectively on outstanding 2019 Notes payable to BIG II.
−Removed: The 2019 Notes payable to BIG II were settled in connection with the Corporate Reorganization in July 2020.
+Added: The Company does not have a variable interest in Himalaya Parent LLC.
Private Placement of Common Stock
As part of the 2021 Private Placement, the Company issued 625,000 shares of common stock for total net proceeds of $ 17.5 million to certain stockholders considered to be related parties.
+Added: November 2022 Underwritten Offering
+Added: As part of the 2022 underwritten offering, the Company issued 2,998,500 shares of common stock for total net proceeds of $ 19.1 million to certain stockholders considered to be related parties.
The Company maintains a defined contribution 401(k) plan available to eligible employees.
2 unchanged sentences
To date, the Company has no t made any matching contributions.
−Removed: EXUMA Biotech Corp.
−Removed: Exclusive License Agreement
−Removed: Under an Exclusive License Agreement entered into in May 2016, the Company granted EXUMA and its affiliates an exclusive, worldwide, sublicensable license under certain patents and know-how controlled by the Company to develop, manufacture and commercialize Adoptive Cellular Therapy (“ACT”) preparations and treatments for cancer.
−Removed: EXUMA’s rights under the agreement exclude the right to grant sublicenses to third parties to discover, develop or manufacture any CAB ACT or any component of the Company’s CAB ACT technology, except as used in or incorporated into EXUMA’s ACTs for cancer.
−Removed: The license to EXUMA is royalty bearing.
−Removed: EXUMA granted the Company an exclusive, worldwide, royalty free, fully paid-up, sublicensable license under certain patents and know-how controlled by EXUMA and EXUMA’s interest in technology jointly developed under the agreement to develop, manufacture and commercialize non-ACT CAB products for any indication.
−Removed: EXUMA is obligated to pay the Company during the royalty term, on a product-by-product basis and country-by-country basis, mid-single digit royalties based on annual net sales of certain EXUMA ACT products, subject to certain adjustments.
−Removed: The term during which EXUMA is obligated to pay royalties under the agreement with respect to any particular product in any particular country, will begin on the first commercial sale of such product in such country and will end on the date of expiration of the last-to-expire of certain product-related patent rights in such country.
−Removed: All royalties to be paid under the agreement are subject to certain adjustments.
−Removed: Future royalties will be recognized when earned.
−Removed: Unless earlier terminated, the agreement continues in effect so long as EXUMA or any of its affiliates, licensees or sublicensees are developing or commercializing any EXUMA products in the ACT field or the Company or any of its affiliates, licensees or sublicensees are developing or commercializing any CAB products for any indication outside the ACT field.
−Removed: The agreement may be terminated only by the mutual written agreement of the parties.
−Removed: In connection with the Exclusive License Agreement, the Pre-Division Predecessor received common and preferred stock of EXUMA.
−Removed: The preferred stock was accounted for as a cost method investment and the common stock was accounted for as an equity method investment.
−Removed: Both the cost method investment and equity method investment had initial carrying values of zero and neither resulted in adjustments to the consolidated statements of operations for the years ended December 31, 2019.
−Removed: These holdings of EXUMA common and preferred stock were retained by BioAtla Holdings in connection with the LLC Division.
−Removed: In November 2019, the Company entered into an Amended and Restated Exclusive License Agreement with EXUMA (the “Amended and Restated EXUMA License”).
−Removed: The Amended and Restated EXUMA License curtailed the rights to certain CAB intellectual property previously licensed to EXUMA in exchange for a one-time, non-refundable, non-creditable license fee of $ 10,000 .
−Removed: More specifically, the Amended and Restated EXUMA License limits CAB ACT products to four specified targets, and BioAtla is no longer obligated to provide new targets to EXUMA.
−Removed: The Amended and Restated EXUMA License does not change EXUMA’s obligation to pay BioAtla royalties on licensed products.
−Removed: In connection with the Amended and Restated EXUMA License, BioAtla Holdings sold its EXUMA common and preferred holdings back to EXUMA for consideration of $ 25,000 .
−Removed: The Company concluded that the Amended and Restated EXUMA License was priced at fair value and was not influenced by the pricing of the contemporaneous related party stock sale.
−Removed: EXUMA is a VIE, and the Company has a variable interest in EXUMA due to its right to receive royalties during the royalty term under the Amended and Restated EXUMA License.
−Removed: As of December 31, 2021 and 2020, the Company has determined it is not the primary beneficiary of EXUMA and, as such, the Company does not consolidate EXUMA.
−Removed: The Company has no equity ownership in EXUMA, no representation on the EXUMA board of directors, and the Amended and Restated EXUMA License does not provide the Company with the ability to make decisions regarding the execution of business strategy that most significantly impact the economic performance of EXUMA.
−Removed: The Company has not funded and has no commitment to fund EXUMA’s losses, and has no exposure to loss as a result of its Amended and Restated EXUMA License.
−Removed: The Company’s financial statements do not include any assets or liabilities related to the Amended and Restated EXUMA License at December 31, 2021 and 2020.
−Removed: Historically, the Company had conducted its U.S.
−Removed: operations through a pass through entity that filed its income tax returns as a partnership for federal and state income tax purposes.
−Removed: As a result, the Company was not subject to U.S.
−Removed: federal or state income taxes as the related tax consequences were reported by its individual members.
−Removed: In July 2020, the Company changed its status from a limited liability company to a corporation, and accordingly, the Company became taxable at the entity level for U.S.
−Removed: federal and state tax purposes.
A reconciliation of income tax expense computed at the U.S.
federal statutory income tax rate to the Company’s income tax expense is as follows (in thousands):
+Added: Years Ended December 31,
Tax computed at the federal statutory rate
+Added: State income taxes, net of federal tax benefit
Deferred impact of conversion to C Corporation
−Removed: Partnership income not subject to tax
Nondeductible executive compensation
5 unchanged sentences
The Company’s net deferred tax assets (liabilities) are as follows (in thousands):
+Added: Years Ended December 31,
Deferred tax assets:
Net operating loss carryforwards
−Removed: Guaranteed payments
Liability to licensor
−Removed: Deferred revenue
−Removed: Deferred rent
Lease liability
1 unchanged sentence
Research credit carryforwards
+Added: Section 174 cost capitalization
+Added: Section 59(e) cost capitalization
Stock-based compensation
Gross deferred tax assets
−Removed: Less valuation allowance
+Added: valuation allowance
Total deferred tax assets
5 unchanged sentences
The valuation allowance increased by approximately $ 23.4 million during 2022.
−Removed: At December 31, 2021 , the Company had federal net operating loss carryforwards of approximately $ 104.5 million.
−Removed: The federal net operating losses can be carried forward indefinitely, subject to an 80% limitation against taxable income.
+Added: At December 31, 2022 , the Company had federal and state net operating loss carryforwards of approximately $ 83.0 million and $ 0.2 million, respectively.
+Added: The federal and state net operating losses can be carried forward indefinitely, subject to an 80% limitation against taxable income.
At December 31, 2022 , the Company had federal and California research and development credit carryforwards of approximately $ 3.7 million and $ 2.0 million, respectively.
7 unchanged sentences
Further, the Company’s deferred tax assets associated with such tax attributes could be significantly reduced upon realization of an ownership change within the meaning of IRC Section 382.
−Removed: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES”
−Removed: Act) was enacted in response to the COVID-19 pandemic.
−Removed: The CARES Act, among other things, permits net operating loss carryovers and carrybacks to offset 100 % of taxable income for taxable years beginning before 2021.
−Removed: In addition, the CARES Act allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.
−Removed: As the Company operated as a partnership during the carryback period, net operating loss carrybacks will not be allowed.
−Removed: Due to the Company’s history of net operating losses, other provisions of the CARES Act are not expected to have a material impact on the Company’s financial statements.
Pursuant to the Paycheck Protection Program (the “PPP”) of the CARES Act, the Company received a PPP loan in the amount of $ 0.7 million.
7 unchanged sentences
The Company regularly evaluates the likelihood of recognizing the benefit for income tax positions taken in various federal and state filings by considering all relevant facts, circumstances, and information available.
−Removed: The following table summarizes the reconciliation of the unrecognized tax benefits activity during the year ended December 31, 2021 (in thousands):
−Removed: Balance as of December 31, 2019
−Removed: Gross increase –
−Removed: current-period tax positions
−Removed: Balance as of December 31, 2020
+Added: A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands):
+Added: Years Ended December 31,
+Added: Unrecognized tax benefits - beginning
+Added: Gross increases - tax positions in prior period
Gross increase –
current-period tax positions
−Removed: Balance as of December 31, 2021
+Added: Unrecognized tax benefits - ending
As of December 31, 2022 , the Company had gross unrecognized tax benefits of approximately $ 2.0 million, none of which would affect the Company’s effective tax rate due to the existence of the valuation allowance.
4 unchanged sentences
The Company is subject to examination by tax authorities in those jurisdictions since 2019 and 2018, respectively, and forward.
−Removed: However, any adjustment made for the period prior to the conversion to C Corporation in July 2020 would be passed through to the Company's former members.
−Removed: Post-conversion to C Corporation, to the extent allowed by law, the taxing authorities may have the right to examine periods where NOLs and research and development credits were generated and carried forward, and make adjustments to the amount of the NOL and research credits carryforward amount.
+Added: However, to the extent allowed by law, the taxing authorities may have the right to examine periods where NOLs and research and development credits were generated and carried forward, and make adjustments to the amount of the NOL and research credits carryforward amount.
The Company is not currently under examination by any jurisdiction.
Subsequent events
−Removed: The Company has completed an evaluation of all subsequent events through February 28, 2022 for the financial statements as of and for the year ended December 31, 2021 to ensure these consolidated financial statements include appropriate disclosure of events both recognized in the consolidated financial statements and events which occurred but were not recognized in the consolidated financial statements.
+Added: The Company has completed an evaluation of all subsequent events through March 23, 2023 for the financial statements as of and for the year ended December 31, 2022 to ensure these consolidated financial statements include appropriate disclosure of events both recognized in the consolidated financial statements and events which occurred but were not recognized in the consolidated financial statements.
Except as described below or elsewhere in these consolidated financial statements, the Company has concluded that no subsequent event has occurred that requires disclosure.
−Removed: On January 5, 2022, BioAtla and Bristol-Myers Squibb Company (“BMS”) entered into a clinical trial collaboration and supply agreement (the “BMS Agreement”).
−Removed: Under the terms of the BMS Agreement, BioAtla and BMS will collaborate on clinical trials of separate combination therapies using two of BioAtla’s Conditionally Active Biologic Antibody Drug Conjugates, BA3011 and BA3021, each in combination with Opdivo® (nivolumab), BMS’
−Removed: proprietary anti-PD-1 monoclonal antibody product.
−Removed: The Company will serve as the study sponsor of the scheduled studies and will be responsible for costs associated with the trial execution.
−Removed: BMS will provide Opdivo® clinical drug supply at no cost for the combination study trials.
−Removed: After the completion of the combination therapy trials, the Company is obligated to provide BMS with a final report of the data resulting from the trial.
−Removed: There was no impact to the Company's financial results for the year ended December 31, 2021 as a result of this agreement.
+Added: In January 2023, BioAtla, Inc.
+Added: (the “Company”) entered into an open market sale agreement under which the Company may offer and sell, from time to time in its sole discretion, shares of the Company’s common stock, par value $ 0.0001 per share, with aggregate gross sales proceeds of up to $ 100,000,000 through an “at the market”
+Added: equity offering program under which Jefferies LLC will act as sales agent.
+Added: No shares have been sold under the agreement to date.
Changes in and Disa greements with Accountants on Accounting and Financial Disclosure
11 unchanged sentences
Based on the assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2022, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
−Removed: Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report with respect to our internal control over financial reporting, which is included herein.
Changes in Internal Control over Financial Reporting.
1 unchanged sentence
Based on that evaluation, our principal executive officers and principal financial officer concluded that there has not been any material change in our internal control over financial reporting during the fourth quarter of fiscal 2022 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
−Removed: We are continually monitoring and assessing the COVID-19 situation on our internal controls to understand the potential impact on their design and operating effectiveness.
Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting
1 unchanged sentence
In addition, the design of disclosure controls and procedures and internal control over financial reporting 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.
−Removed: See Management’s Report on Internal Control over Financial Reporting above and the Report of Independent Registered Public Accounting Firm on our internal control over financial reporting herein.
−Removed: Report of Independent Registered Public Accounting Firm
−Removed: To the Stockholders and the Board of Directors of BioAtla, Inc.
−Removed: Opinion on Internal Control over Financial Reporting
−Removed: We have audited BioAtla, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
−Removed: In our opinion, BioAtla, Inc.
−Removed: (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of BioAtla, Inc.
−Removed: as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’/members’
−Removed: equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon.
−Removed: Basis for Opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.
−Removed: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Definition and Limitations of Internal Control over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of 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 the policies or procedures may deteriorate.
−Removed: /s/ Ernst & Young LLP
−Removed: San Diego, California
−Removed: February 28, 2022
+Added: See Management’s Report on Internal Control over Financial Reporting above.
Other Information
24 unchanged sentences
Exhibit Index
+Added: The following exhibits, if not filed or furnished herewith, are incorporated herein by reference to this Annual Report on form 10-K:
Exhibit Description
11 unchanged sentences
2020 Employee Stock Purchase Plan
−Removed: Exclusive License Agreement with Himalaya SEZC, dated January 1, 2020
+Added: Exclusive Rights Agreement with Himalaya SEZC, dated January 1, 2020
Exclusive License Agreement with Inversagen LLC, dated March 15, 2019, as amended by First Amendment to Exclusive License Agreement, dated July 7, 2020
7 unchanged sentences
Employment Letter Agreement between BioAtla, LLC and Jay Short, as amended by the Letter Amendment dated October 1, 2011
−Removed: Offer Letter between BioAtla, LLC and Carolyn Short, dated November 30, 2015
Severance Agreement between BioAtla, LLC and Jay Short, dated July 1, 2018
2 unchanged sentences
Severance Agreement between BioAtla, LLC and Scott Smith, dated August 20, 2018
−Removed: Severance Agreement between BioAtla, LLC and Carolyn Short, as amended by the Amended Severance Agreement between BioAtla, LLC and Carolyn Short, dated April 1, 2020
Offer Letter between BioAtla, LLC and Richard Waldron, dated October 23, 2013
−Removed: Severance Agreement between BioAtla, LLC and Richard Waldron, dated July 1, 2018
Exhibit Description
Filed/Furnished Herewith
+Added: Severance Agreement between BioAtla, LLC and Richard Waldron, dated July 1, 2018
Offer Letter between BioAtla, LLC and Eric Sievers, dated June 17, 2019
2 unchanged sentences
Lease Agreement with HCP Torreyana, LLC, dated June 2, 2017, as amended by First Amendment to Lease, dated January 16, 2019
−Removed: Payment Protection Program Promissory Note dated April 22, 2020, by and between BioAtla, LLC and City National Bank.
+Added: Master Clinical Trial Collaboration Agreement, dated January 5, 2022, by and between BioAtla, Inc.
+Added: and Bristol-Myers Squibb
+Added: First Amendment to Master Clinical Trial Agreement between BioAtla, Inc.
+Added: and Bristol-Myers Squibb
+Added: China Clinical Trial Services Agreement, dated April 8, 2022, by and between BioAtla, Inc.
+Added: and Himalaya Therapeutics Limited Company
Amendment No.
7 unchanged sentences
Form of Employee Stock Option Agreement
−Removed: BioAtla Director Compensation Policy
+Added: Amended and Restated BioAtla Director Compensation Policy
+Added: BioAtla, Inc.
+Added: Management Change of Control Severance Plan
Consent of Independent Registered Public Accounting Firm
16 unchanged sentences
BioAtla, Inc.
−Removed: February 28, 2022
+Added: March 23, 2023
Chief Executive Officer
−Removed: (Principal Executive Officer and
−Removed: Authorized Signatory)
+Added: (Principal Executive Officer and Authorized Signatory)
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jay M.
4 unchanged sentences
(Principal Executive Officer)
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Richard A.
1 unchanged sentence
(Principal Financial and Accounting Officer)
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Scott Smith
−Removed: President and Director
−Removed: February 28, 2022
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Lawrence Steinman
Lawrence Steinman
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Mary Ann Gray, Ph.D.
Mary Ann Gray, Ph.D.
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Susan Moran, M.D.
Susan Moran, M.D.
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Sylvia McBrinn
Sylvia McBrinn
−Removed: February 28, 2022
+Added: March 23, 2023
/s/ Edward Williams
−Removed: February 28, 2022
+Added: March 23, 2023
Edward Williams
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.