What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-05-11 · 155 added, 82 removed, 439 unchanged (35% of the section changed)

21 unchanged sentences

200,000,000 shares authorized at

March 31, 2023 and December 31, 2022;

June 30, 2023 and December 31, 2022;

0 shares issued and outstanding at

March 31, 2023 and December 31, 2022

June 30, 2023 and December 31, 2022

Common stock, $ 0.0001 par value;

350,000,000 shares authorized at

March 31, 2023 and December 31, 2022;

June 30, 2023 and December 31, 2022;

47,803,306 and 46,336,166

shares issued and outstanding at March 31, 2023 and December 31, 2022

shares issued and outstanding at June 30, 2023 and December 31, 2022

Class B common stock, $ 0.0001 par value;

15,368,569 shares authorized at

March 31, 2023 and December 31, 2022;

June 30, 2023 and December 31, 2022;

0 and 1,211,959

shares issued and outstanding at March 31, 2023 and December 31, 2022

shares issued and outstanding at June 30, 2023 and December 31, 2022

Additional paid-in capital

Accumulated deficit

Total stockholders' equity

Total stockholders’

Total liabilities and stockholders’

3 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

14 unchanged sentences

(in thousands, except share amounts)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Stockholders’

Balance at March 31, 2023

Stock-based compensation expense

Issuance of common stock under equity incentive plans, net of shares withheld for taxes

Issuance of common stock for Employee Stock Purchase Plan

Issuance of common stock for director compensation

Taxes related to net share settlement of equity awards

Balance at June 30, 2023

Three Months Ended June 30, 2022

Stockholders’

Balance at March 31, 2022

Stock-based compensation expense

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Taxes related to net share settlement of equity awards

Balance at June 30, 2022

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’

(in thousands, except share amounts)

Six Months Ended June 30, 2023

Stockholders’

Balance at December 31, 2022

1 unchanged sentence

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Issuance of common stock for director compensation

Taxes related to net share settlement of equity awards

Conversion of Class B common stock

Balance at March 31, 2023

Three Months Ended March 31, 2022

Balance at June 30, 2023

Six Months Ended June 30, 2022

Stockholders’

2 unchanged sentences

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Taxes related to net share settlement of equity awards

Balance at March 31, 2022

Balance at June 30, 2022

See accompanying notes.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

1 unchanged sentence

Depreciation and amortization

Loss on disposal of property and equipment

Stock-based compensation

6 unchanged sentences

Purchases of property and equipment

Proceeds from sale of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issuance of common stock under Employee Stock Purchase Plan

Payments for taxes related to net settlement of equity awards

18 unchanged sentences

Basis of Presentation

The unaudited condensed financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements.

The unaudited condensed financial statements as of June 30, 2023, and for the three and six months ended June 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements.

These unaudited condensed financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented.

2 unchanged sentences

Liquidity and Going Concern

The Company has incurred cumulative operating losses and negative cash flows from operations since its inception and expects to continue to incur significant expenses and operating losses for the foreseeable future as it continues the development of its product candidates.

As of March 31, 2023, the Company had an accumulated deficit of $ 320.3 million .

As of June 30, 2023, the Company had an accumulated deficit of $ 356.0 million .

The Company plans to continue to fund its losses from operations and capital funding needs through public or private equity or debt financings, or other sources.

41 unchanged sentences

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.

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.

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 BioAtla, Inc.

Employee Stock Purchase Plan (the “ESPP”).

Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common stock equivalents):

Three Months Ended

Six Months Ended

Common stock options

1 unchanged sentence

Recent Accounting Pronouncements

There were no new accounting standards that had a material impact on the Company’s financial statements during the three or three months ended March 31, 2023, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of March 31, 2023 that the Company expects to have a material impact on its financial statements.

There were no new accounting standards that had a material impact on the Company’s financial statements during the three or six months ended June 30, 2023, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of June 30, 2023 that the Company expects to have a material impact on its financial statements.

Balance Sheet Details

15 unchanged sentences

The carrying amounts of the Company’s current financial assets and current financial liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.

As of March 31, 2023 and December 31, 2022 , the Company had no financial assets or liabilities measured at fair value on a recurring basis.

As of June 30, 2023 and December 31, 2022 , the Company had no financial assets or liabilities measured at fair value on a recurring basis.

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis.

11 unchanged sentences

The components of lease expense included in the Company’s statements of operations and loss include (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease expense

2 unchanged sentences

Variable lease costs are primarily related to payments made to lessors for common area maintenance, property taxes, insurance, and other operating expenses.

The Company did not have any short-term leases or finance leases for the three months ended March 31, 2023 and 2022, respectively.

The Company did not have any short-term leases or finance leases for the three and six months ended June 30, 2023 and 2022, respectively.

The weighted average remaining lease term and weighted average discount rate for operating leases were as follows:

As of March 31,

As of June 30,

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):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cash paid for amounts included in the measurement of operating leases

As of March 31, 2023, future minimum payments under the Company's non-cancelable operating lease under ASC 842 were as follows (in thousands):

Nine months ending December 31, 2023

As of June 30, 2023, future minimum payments under the Company’s non-cancelable operating lease under ASC 842 were as follows (in thousands):

Six months ending December 31, 2023

Total future lease payments

6 unchanged sentences

2020 Equity Incentive Plan

The Company may grant awards of common stock under the 2020 Equity Incentive Plan (the "2020 Plan") to the Company’s employees, consultants and non-employee directors pursuant to option awards, stock appreciation rights awards, restricted stock awards, restricted stock unit awards, performance stock awards, performance stock unit awards and other stock-based awards.

March 31, 2023 and December 31, 2022 , the total number of common shares authorized for issuance under the 2020 Plan was 9,196,970 and 7,658,509 , respective ly.

The Company may grant awards of common stock under the 2020 Equity Incentive Plan (the “2020 Plan”) to the Company’s employees, consultants and non-employee directors pursuant to option awards, stock appreciation rights awards, restricted stock

awards, restricted stock unit awards, performance stock awards, performance stock unit awards and other stock-based awards.

As of June 30, 2023 and December 31, 2022 , the total number of common shares authorized for issuance under the 2020 Plan was 9,196,970 and 7,658,509 , respective ly.

On January 1st of each year, commencing with the first January 1st following the effective date of the 2020 Plan, the shares authorized for issuance under the 2020 Plan shall be increased by a number of shares equal to the lesser of 4 % of the total number of shares outstanding on the immediately preceding December 31st and such lesser number of shares determined by the Company’s board of directors.

1 unchanged sentence

Awards under the 2020 Plan generally vest at 25 % one year from the vesting commencement date and ratably each month thereafter for a period of 36 months , subject to continuous service.

Stock-based compensation expense for the three months ended March 31, 2023 and 2022 has been reported in the condensed statements of operations and comprehensive loss as follows (in thousands):

Stock-based compensation expense for the three and six months ended June 30, 2023 and 2022 has been reported in the condensed statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended

Six Months Ended

Research and development

1 unchanged sentence

Restricted Stock Units

The following table summarizes RSU activity under the 2020 Plan for the three months ended March 31, 2023:

In December 2022, the Company’s board of directors approved an amendment to the Director Compensation Policy, which allows each director to elect to receive their quarterly director fees in the form of restricted stock in lieu of cash.

Two board members elected to receive shares of restricted stock in lieu of cash.

For the six months ended June 30, 2023 the Company issued 18,807 shares of fully vested restricted stock to the two board members.

Compensation expense was earned and recognized for these fully vested restricted stock grants in the amount of $ 26,000 and $ 53,000 for the three and six months ended June 30, 2023, respectively.

The following table summarizes RSU activity under the 2020 Plan for the six months ended June 30, 2023:

Weighted - Average

Outstanding at December 31, 2022

Outstanding at March 31, 2023

As of March 31, 2023, total unrecognized stock-based compensation expense for RSUs was $ 7.2 million , which is expected to be recognized over a remaining weighted-average period of approximately 1.1 years .

Outstanding at June 30, 2023

As of June 30, 2023, total unrecognized stock-based compensation expense for RSUs was $ 5.2 million , which is expected to be recognized over a remaining weighted-average period of approximately 0.9 years .

Stock Options

The following table summarizes stock option activity under the 2020 Plan for the three months ended March 31, 2023:

The following table summarizes stock option activity under the 2020 Plan for the six months ended June 30, 2023:

Weighted - Average

1 unchanged sentence

Balance at December 31, 2022

Balance at March 31, 2023

Vested and expected to vest at March 31, 2023

Exercisable at March 31, 2023

As of March 31, 2023 , total unrecognized stock-based compensation cost for unvested common stock options was $ 22.4 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.5 years.

The weighted- average grant date fair value of stock options granted during the three months ended March 31, 2023 was $ 2.69 per share.

The total fair value of options vested during the three months ended March 31, 2023 was $ 2.7 million.

On February 26, 2023, the Compensation Committee of the Company’s Board of Directors approved a modification to the Company’s 2020 Equity Incentive Plan to allow vesting of RSUs or stock options, as applicable, subject to the grantee’s continued

service to the Company and/or one of its subsidiaries as an employee, non-employee director, or independent contractor.

Unvested RSUs totaling 139,730 shares and 574,244 unvested options which would have been forfeited under the original terms of the 2020 Equity Incentive plan will now continue to vest.

Balance at June 30, 2023

Vested and expected to vest at June 30, 2023

Exercisable at June 30, 2023

As of June 30, 2023 , total unrecognized stock-based compensation cost for unvested common stock options was $ 21.1 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.2 years.

The weighted- average grant date fair value of stock options granted during the six months ended June 30, 2023 was $ 2.66 per share.

The total fair value of options vested during the six months ended June 30, 2023 was $ 4.4 million.

On February 26, 2023, the Compensation Committee of the Company’s board of directors approved a modification to the Company’s 2020 Plan to allow vesting of RSUs or stock options, as applicable, subject to the grantee’s continued service to the Company and/or one of its subsidiaries as an employee, non-employee director, or independent contractor.

Unvested RSUs totaling 139,730 shares and 574,244 unvested options which would have been forfeited under the original terms of the 2020 Plan will now continue to vest.

The Company applied modification accounting to these awards which resulted in a decrease in fair value to these awards.

2 unchanged sentences

The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:

Three Months Ended

Six Months Ended

Expected volatility

16 unchanged sentences

Employee Stock Purchase Plan

The BioAtla, Inc.

Employee Stock Purchase Plan (the “ESPP”) permits participants to purchase common stock through payroll deductions of up to 15 % of their eligible compensation.

As of March 31, 2023 and December 31, 2022, a total of 1,737,098 shares and 1,229,148 shares, respectively, of common stock were authorized for issuance under the ESPP.

The ESPP permits participants to purchase common stock through payroll deductions of up to 15 % of their eligible compensation.

As of June 30, 2023 and December 31, 2022, a total of 1,737,098 shares and 1,229,148 shares, respectively, of common stock were authorized for issuance under the ESPP.

The number of shares of common stock authorized for issuance will automatically increase on January 1 of each calendar year, from January 1, 2021 through January 1, 2030 by the least of (i) 1.0 % of the total number of common shares of our common stock outstanding on December 31 of the preceding calendar year (calculated on a fully diluted basis), (ii) 929,658 common shares or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii).

The Company did not issue any common shares under the ESPP during the three months ended March 31, 2023 and 2022.

As of March 31, 2023, 1,578,352 shares o f common stock remained available for issuance under the ESPP.

Stock-based compensation expense related to the ESPP for the three months ended March 31, 2023 and 2022 was immaterial.

The Company issued 56,793 and 9,482 shares of common stock under the ESPP during the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, 1,521,559 shares o f common stock remained available for issuance under the ESPP.

Stock-based compensation expense related to the ESPP for the three and six months ended June 30, 2023 and 2022 was immaterial.

Common Stock Reserved for Future Issuance

13 unchanged sentences

In the event the license is terminated, the liability will be extinguished with no further payment to BeiGene.

For the three months ended March 31, 2023 and 2022 , the Company did no t recognize any revenue related to the collaboration agreement with BeiGene.

The Company had a $ 19.8 million liability to licensor as of March 31, 2023 and December 31, 2022.

For the three and six months ended June 30, 2023 and 2022 , the Company did no t recognize any revenue related to the collaboration agreement with BeiGene.

The Company had a $ 19.8 million liability to licensor as of June 30, 2023 and December 31, 2022.

Service Contracts

2 unchanged sentences

The Company is also eligible to receive royalties based on certain product sales.

The Company did no t recognize any revenue related to its legacy service contracts during the three months ended March 31, 2023 or 2022.

The Company did no t recognize any revenue related to its legacy service contracts during the three and six months ended June 30, 2023 or 2022.

BMS Collaboration

5 unchanged sentences

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.

The BMS Agreement was amended in October 2022 to include additional territories for our BA3011 and BA3021 combination study trials.

There was no impact to the Company's financial results for the three months ended March 31, 2023 or 2022 as a result of this agreement.

The BMS Agreement

was amended in October 2022 to include additional territories for our BA3011 and BA3021 combination study trials.

There was no impact to the Company's financial results for the three and six months ended June 30, 2023 and 2022 as a result of this agreement.

Related Party Transactions

5 unchanged sentences

Payments are due and payable by BioAtla to Himalaya Therapeutics SEZC on a quarterly calendar basis and are non-refundable.

For the three months ended March 31, 2023, the Company recognized $ 0.1 million in research and development expense related to the Clinical Trial Agreement.

The Company did not have any amounts due from or due to Himalaya Therapeutics SEZC as of March 31, 2023.

The Company made its final payment under the agreement in January 2023.

For the three and six months ended June 30, 2023 , the Company recognized $ 0 and $ 0.1 million, respectively, in research and development expense related to the agreement, compared to $ 0.1 million, for the three and six months ended June 30, 2022.

The Company did not have any amounts due from or due to Himalaya Therapeutics SEZC as of June 30, 2023 .

The Company maintains a defined contribution 401(k) plan available to eligible employees.

21 unchanged sentences

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.

Our net loss was $27.5 million for the three months ended March 31, 2023 compared to $24.3 million for three months ended March 31, 2022.

As of March 31, 2023, we had an accumulated deficit of $320.3 million.

Our net loss was $35.8 million and $63.2 million for the three and six months ended June 30, 2023, respectively, compared to $28.9 million and $53.2 million for the three and six months ended June 30, 2022, respectively.

As of June 30, 2023, we had an accumulated deficit of $356.0 million.

These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations.

21 unchanged sentences

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to raise capital, maintain our research and development efforts, expand our business or continue our operations at planned levels, and as a result we may be forced to substantially reduce or terminate our operations.

As of March 31, 2023, our cash and cash equivalents totaled approximately $192.7 million.

As of June 30, 2023, our cash and cash equivalents totaled approximately $168.7 million.

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 of issuance of the financial statements included in this report.

13 unchanged sentences

We may in the future seek third-party collaborators or joint venture partners for development and commercialization of BA3071 and additional CAB product candidates.

We did not recognize any collaboration revenue for the three months ended March 31, 2023 and 2022.

We did not recognize any collaboration revenue for the three and six months ended June 30, 2023 and 2022.

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.

We did not recognize any revenue from our legacy service contracts for the three months ended March 31, 2023 and 2022.

We did not recognize any revenue from our legacy service contracts for the three and six months ended June 30, 2023 and 2022.

Operating Expenses

25 unchanged sentences

Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

Comparison of the Three Months Ended June 30, 2023 and 2022

Three Months Ended

24 unchanged sentences

Total research and development expenses

Research and development expenses were $21.7 million and $16.9 million for the three months ended March 31, 2023 and 2022, respectively.

The increase of approximately $4.8 million was primarily driven by a $2.9 million increase in pre-clinical development and manufacturing costs for various programs, a $0.8 million increase in clinical development for our clinical-stage programs, a $0.6 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, a $0.2 million increase in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.2 million increase in facility related and other costs.

Research and development expenses were $31.0 million and $20.7 million for the three months ended June 30, 2023 and 2022, respectively.

The increase of approximately $10.2 million was primarily driven by a $8.9 million increase in clinical development for our clinical-stage programs including startup activities on our EpCAM bispecific trial, a $0.5 million increase in development costs for various pre-clinical programs including manufacturing, a $0.3 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, a $0.3 million increase in facility related and other costs, and a $0.2 million increase in stock-based compensation related to awards issued under the 2020 Plan.

General and Administrative Expense

General and administrative expenses were $7.2 million and $7.4 million for the three months ended March 31, 2023 and 2022, respectively.

The decrease of approximately $0.2 million was primarily driven by a $0.3 million decrease in insurance due to a decrease in premiums for our D&O policy, and a $0.2 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan.

This was offset by a $0.2 million increase in travel related costs and a $0.1 million increase in personnel related expense.

General and administrative expenses were $6.2 million and $8.3 million for the three months ended June 30, 2023 and 2022, respectively.

The decrease of approximately $2.1 million was primarily driven by a $1.4 million decrease in accounting and legal services which included a $1.0 million legal settlement in 2022, $0.3 million decrease in insurance due to a decrease in premiums for our D&O policy, and a $0.3 million decrease in stock-based compensation related to awards issued under the 2020 Plan.

Interest Income

Interest income was $1.5 million and $85,000 for the three months ended March 31, 2023 and 2022, respectively.

The increase of $1.4 million was due to greater cash balances and higher yields earned compared to the same period in 2022.

Interest income was $1.5 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively.

The increase of $1.4 million was due to higher yields earned compared to the same period in 2022.

Results of Operations

Comparison of the Six Months Ended June 30, 2023 and 2022

Six Months Ended

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest income

Other income (expense)

Total other income (expense)

Net loss and comprehensive loss

Research and Development Expense

The following table summarizes our research and development expenses allocated by CAB program for the periods indicated:

Six Months Ended

(in thousands)

External expenses:

BA3011 (AXL-ADC)

BA3021 (ROR2-ADC)

BA3071 (CTLA-4)

Other CAB Programs

Total external expenses

Personnel and related

Equity-based compensation

Facilities and other

Total research and development expenses

Research and development expenses were $52.7 million and $37.6 million for the six months ended June 30, 2023 and 2022, respectively.

The increase of approximately $15.0 million was primarily driven by a $11.2 million increase in clinical development for our clinical-stage programs including startup activities on our EpCAM bispecific trial, a $2.0 million increase in development costs for various pre-clinical programs including manufacturing, a $0.9 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, a $0.6 million increase in facility and other allocated costs, and a $0.3 million increase in stock-based compensation due to awards issued in connection with the 2020 Plan.

General and Administrative Expense

General and administrative expenses were $13.5 million and $15.8 million for the six months ended June 30, 2023 and 2022, respectively.

The decrease of approximately $2.3 million was primarily driven by a decrease of $1.4 million in accounting and legal services including a $1.0 million legal settlement in 2022, $0.6 million decrease in insurance due to a decrease in premiums for our D&O policy, and a $0.5 million decrease in stock-based compensation related to awards issued under the 2020 Plan, offset by a $0.1 million increase in personnel related costs.

Interest Income

Interest income was $2.9 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively.

The increase of $2.7 million was due to higher yields earned compared to the same period in 2022.

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.

As of March 31, 2023, we had cash and cash equivalents of $192.7 million.

As of June 30, 2023, we had cash and cash equivalents of $168.7 million.

Future Funding Requirements

30 unchanged sentences

The following summarizes our cash flows for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

Net cash used in:

Net cash provided by:

Operating activities

3 unchanged sentences

Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2023 was $22.7 million, which consisted of a net loss of $27.5 million, a net change of $0.9 million in our operating assets and liabilities and $3.9 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 $3.2 million, offset by an increase in prepaid expenses and other assets of $2.1 million.

Net cash used in operating activities for the six months ended June 30, 2023 was $46.7 million, which consisted of a net loss of $63.2 million, a net change of $8.6 million in our operating assets and liabilities and $7.9 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 $10.6 million, partially offset by an increase in prepaid expenses and other assets of $1.7 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million.

The non-cash transactions primarily consisted of $7.3 million of stock-based compensation and non-cash charges of $0.6 million related to depreciation and amortization.

Net cash used in operating activities for the three months ended March 31, 2022 was $25.1 million, which consisted of a net loss of $24.3 million, a net change of $4.8 million in our operating assets and liabilities and $3.9 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $2.4 million, offset by an increase in prepaid expenses and other assets of $2.3 million.

Net cash used in operating activities for the six months ended June 30, 2022 was $42.1 million, which consisted of a net loss of $53.2 million, a net change of $3.0 million in our operating assets and liabilities and $8.1 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 $5.8 million, offset by an increase in prepaid expenses and other assets of $2.6 million.

The non-cash transactions primarily consisted of $7.5 million of stock-based compensation and non-cash charges of $0.6 million related to depreciation and amortization.

Cash Used in Investing Activities

Cash used in investing activities was $50,000 for the three months ended March 31, 2023 and $10,000 for the three months ended March 31, 2022, respectively, related to the purchase of property and equipment.

Cash used in investing activities was $65,000 for the six months ended June 30, 2023 and $0.2 million for the six months ended June 30, 2022, respectively, primarily related to the purchase of property and equipment.

Cash Used in Financing Activities

Net cash used in financing activities was $0.1 million for the three months ended March 31, 2023, which consisted primarily of the payment of taxes related to the net settlement of restricted stock units.

Net cash used in financing activities was $0.4 million for the three months ended March 31, 2022, which consisted primarily of the payment of taxes related to the net settlement of restricted stock units.

Net cash used in financing activities was immaterial for the six months ended June 30, 2023, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, offset by payment of taxes related to the net settlement of restricted stock units.

Net cash used in financing activities was $0.5 million for the six months ended June 30, 2022, which consisted primarily of the payment of taxes related to the net settlement of restricted stock units.

Critical Accounting Policies and Estimates

3 unchanged sentences

Actual results may differ from these estimates under different assumptions and conditions.

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.

For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations

and results of operations, as well as the specific manner in which we apply those principles.

For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —

Critical Accounting Policies and Estimates”

contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2023.

There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2023.

Off-Balance Sheet Arrangements

3 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements