Stockholders'/Members' Equity (Deficit)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stockholders' /Members' Equity (Deficit)

6. Stockholders’/Members' Equity (Deficit)

The statement of members' deficit for the three months ended September 30, 2020 is as follows (in thousands, except unit amounts):

	Series D Convertible Preferred Stock				Class C Preferred Units						Class A Units						Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Members’
	Units		Amount		Units			Amount			Units			Amount			Units		Amount		Capital			Deficit			Interest			Deficit
Balance at June 30, 2020		—	$	—		23,968,178		$	89,345			54,600,000		$	750			—	$	—	$	2,295		$	(156,180	)	$	(47	)	$	(63,837	)
Issuance of Series D convertible preferred stock for cash, net of $4,317 of issuance costs		140,626,711		68,183		—			—			—			—			—		—		—			—			—			—
Issuance of Series D convertible preferred stock in connection with settlement of convertible promissory notes		59,164,808		30,594		—			—			—			—			—		—		—			—			—			—
LLC Conversion		—		—		(23,968,178	)		(89,345	)		(54,600,000	)		(750	)		6,220,050		1		(3,196	)		93,290			—			—
Assumption of profits interest liability by affiliate		—		—		—			—			—			—			—				991			—			—			991
Change in profits interest liability pushed down from affiliate		—		—		—			—			—			—			—		—		(24	)	$	—			—			(24	)
Noncontrolling interest—distribution of net assets to affiliate and related deconsolidation		—		—		—			—			—			—			—		—		(66	)	$	—			47			(19	)
Net loss		—		—		—			—			—			—			—		—		—			(11,632	)		—			(11,632	)
Balance at September 30, 2020		199,791,519	$	98,777		—		$	—			—		$	—			6,220,050	$	1	$	—		$	(74,522	)	$	—		$	(74,521	)

The statement of members' deficit for the nine months ended September 30, 2020 is as follows (in thousands, except unit amounts):

	Series D Convertible Preferred Stock				Class C Preferred Units						Class A Units						Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Members’
	Units		Amount		Units			Amount			Units			Amount			Units		Amount		Capital			Deficit			Interest			Deficit
Balance at December 31, 2019		—	$	—		23,968,178		$	89,345			54,600,000		$	750			—	$	—	$	2,295		$	(148,354	)	$	(47	)	$	(56,011	)
Issuance of Series D convertible preferred stock for cash, net of $4,317 of issuance costs		140,626,711		68,183		—			—			—			—			—		—		—			—			—			—
Issuance of Series D convertible preferred stock in connection with settlement of convertible promissory notes		59,164,808		30,594		—			—			—			—			—		—		—			—			—			—
LLC Conversion		—		—		(23,968,178	)		(89,345	)		(54,600,000	)		(750	)		6,220,050		1		(3,196	)		93,290			—			—
Assumption of profits interest liability by affiliate		—		—		—			—			—			—			—		—		991			—			—			991
Change in profits interest liability pushed down from affiliate		—		—		—			—			—			—			—		—		(24	)		—			—			(24	)
Noncontrolling interest—distribution of net assets to affiliate and related deconsolidation		—		—		—			—			—			—			—		—		(66	)		—			47			(19	)
Net loss		—		—		—			—			—			—			—		—		—			(19,458	)		—			(19,458	)
Balance at September 30, 2020		199,791,519	$	98,777		—		$	—			—		$	—			6,220,050	$	1	$	—		$	(74,522	)	$	—		$	(74,521	)

Initial Public Offering and Related Transactions

In December 2020, the Company completed its IPO selling 12,075,000 shares of its common stock at $18.00 per share. Proceeds from the Company’s IPO, net of underwriting discounts and commissions and other offering costs, were $198.3 million. 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.

Private Placement of Common Stock

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"). Proceeds from the Private Placement, net of underwriting discounts and commissions and other offering costs, were $71.0 million.

In connection with the Private Placement, the Company also issued registration rights to the investors. The stock purchase agreements provide that the Company shall file a registration statement on Form S-1, or other appropriate form available to the Company, registering the resale of the shares as promptly as practicable and in any event within 30 days following the Closing Date (the “Filing Deadline”). In connection with the Private Placement, the Company filed a registration statement on Form S-1 (File No. 333-260440) with the SEC registering for resale the shares of common stock issued in the Private Placement.

2020 Equity Incentive Plan

On October 29, 2020, the Company’s board of directors approved the adoption of the BioAtla, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) and approved certain amendments to the 2020 Plan in December 2020. The Company’s stockholders approved the 2020 Plan, as amended, in December 2020. Under the 2020 Plan, the Company may grant awards of common stock 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 September 30, 2021 and December 31, 2020, the total number of common shares authorized for issuance under the 2020 Plan was 6,226,540 and 4,939,678, respectively. 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. The maximum term of the options granted under the 2020 Plan is no more than ten years. 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.

There was no stock-based compensation expense reported for the three and nine months ended September 30, 2020 as the 2020 Plan was not yet adopted. Stock-based compensation expense for the three and nine months ended September 30, 2021 has been reported in the consolidated statements of operations and comprehensive loss as follows (in thousands):

	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Research and development	$	1,267	$	3,376
General and administrative		3,099		17,931
Total	$	4,366	$	21,307

Restricted Stock Units

The following table summarizes RSU activity under the 2020 Plan for the nine months ended September 30, 2021:

	Number of Shares			Weighted - Average Grant Date Fair Value
Outstanding at December 31, 2020		1,920,037		$	18.00
Vested		(327,241	)	$	18.00
Outstanding at September 30, 2021		1,592,796		$	18.00

As of September 30, 2021, total unrecognized stock-based compensation expense for RSUs was $19.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.4 years. During the nine months ended September 30, 2021, the Company modified 138,461 RSU's under the Transition Agreement (See Note 9).

Stock Options

The following table summarizes stock option activity under the 2020 Plan for the nine months ended September 30, 2021 (in thousands, except share and per share data and years):

	Number of Options			Weighted - Average Exercise Price Per Share		Weighted -Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value
Balance at December 31, 2020		615,106		$	18.00		9.95	$	9,848
Granted		353,043		$	42.21
Exercised		(7,747	)	$	18.00
Balance at September 30, 2021		960,402		$	26.83	9.39		$	6,948
Vested and expected to vest at September 30, 2021		960,402		$	26.83	9.39		$	6,948
Exercisable at September 30, 2021		-

As of September 30, 2021, total unrecognized stock-based compensation cost for unvested common stock options was $14.3 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 nine months ended September 30, 2021 was $27.42 per share. During the nine months ended September 30, 2021, the Company modified 7,747 stock options under the Transition Agreement (See Note 9).

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

	Nine Months Ended September 30, 2021
Expected volatility	74.7%
Risk-free interest rate	0.99%
Expected dividend yield	0.0%
Expected term	5.86 years

Expected volatility. As the Company’s common stock does not have a significant trading history, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry.

Risk-free interest rate. The Company bases the risk-free interest rate assumption on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present plans to pay cash dividends.

Expected term. For employees, the expected term represents the period of time that options are expected to be outstanding. Because the Company has minimal historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period. For nonemployees, the expected term is generally the contractual term of the option.

Employee Stock Purchase Plan

In December 2020, the Company’s board of directors and stockholders approved the BioAtla, Inc. Employee Stock Purchase Plan (the “ESPP”). The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation. As of September 30, 2021 and December 31, 2020, a total of 833,993 shares and 464,829 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). In February 2021, employees began to enroll in the ESPP and the Company’s first offering period commenced. The Company's first ESPP purchase transaction occurred on June 30, 2021. The Company's second offering period commenced in July 2021. During the nine months ended September 30, 2021, the Company issued 5,280 shares of common stock under the ESPP. As of September 30, 2021, 828,713 shares of common stock remained available for issuance under the ESPP. Stock-based compensation expense related to the ESPP for the three and nine months ended September 30, 2021 was immaterial.

Common Stock Warrants

Upon adoption of ASU No. 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. As of September 30, 2021 all the common stock warrants below are exercisable and expire as follows:

Outstanding and Exercisable		Exercise Price per Share		Expiration Date
	566,586	$	88.25	December 17, 2021
	151,088	$	132.37	March 12, 2022
	717,674

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance are as follows in common equivalent shares:

	September 30, 2021		December 31, 2020
Warrants for the purchase of common stock		717,674		717,674
Common stock options and restricted stock units issued and outstanding		2,553,198		2,535,143
Awards available for future issuance under the 2020 Plan		3,338,354		2,404,535
Awards available for future issuance under the ESPP		828,713		464,829
Total common stock reserved for future issuance		7,437,939		6,122,181