SEC Filing | BioAtla, Inc

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39787

BIOATLA, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	85-1922320
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11085 Torreyana Road, San Diego, California	92121
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 558-0708

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

BCAB

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2023, the number of shares of the registrant’s common stock outstanding was 47,935,808 and the number of shares of the registrant’s Class B common stock outstanding was 0.

BIOATLA, INC.

Quarterly Report on Form 10-Q

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements:	1
	Condensed Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	1
	Condensed Statements of Operations and Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2023 and 2022	2
	Condensed Statements of Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2023 and 2022	3
	Condensed Statements of Cash Flows (unaudited) for the nine months ended September 30, 2023 and 2022	5
	Notes to Condensed Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II.	OTHER INFORMATION	21
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66
Item 6.	Exhibits	66
SIGNATURES		68

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BioAtla, Inc.

Condensed Balance Sheets

(in thousands, except par value and share amounts)


	September 30, 2023			December 31, 2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	141,282		$	215,507
Prepaid expenses and other current assets		6,229			4,924
Total current assets		147,511			220,431
Property and equipment, net		1,965			2,728
Operating lease right-of-use asset, net		1,732			2,423
Other assets		154			154
Total assets	$	151,362		$	225,736
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	34,006		$	21,610
Operating lease liabilities		1,596			1,521
Total current liabilities		35,602			23,131
Operating lease liabilities, less current portion		1,251			2,460
Liability to licensor		19,806			19,806
Total liabilities		56,659			45,397
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 200,000,000 shares authorized at September 30, 2023 and December 31, 2022; 0 shares issued and outstanding at September 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value; 350,000,000 shares authorized at September 30, 2023 and December 31, 2022; 47,907,395 and 46,336,166 shares issued and outstanding at September 30, 2023 and December 31, 2022		5			5
Class B common stock, $0.0001 par value; 15,368,569 shares authorized at September 30, 2023 and December 31, 2022; 0 and 1,211,959 shares issued and outstanding at September 30, 2023 and December 31, 2022		—			—
Additional paid-in capital		484,036			473,135
Accumulated deficit		(389,338	)		(292,801	)
Total stockholders’ equity		94,703			180,339
Total liabilities and stockholders’ equity	$	151,362		$	225,736

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development expense	$	28,400		$	19,839		$	81,057		$	57,473
General and administrative expense		6,620			6,340			20,094			22,107
Total operating expenses		35,020			26,179			101,151			79,580
Loss from operations		(35,020	)		(26,179	)		(101,151	)		(79,580	)
Other income (expense):
Interest income		1,734			370			4,674			601
Other income (expense)		(39	)		30			(60	)		40
Total other income		1,695			400			4,614			641
Net loss and comprehensive loss	$	(33,325	)	$	(25,779	)	$	(96,537	)	$	(78,939	)
Net loss per common share, basic and diluted	$	(0.70	)	$	(0.69	)	$	(2.02	)	$	(2.11	)
Weighted-average shares of common stock outstanding, basic and diluted		47,834,122			37,516,769			47,707,259			37,420,531

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)


	Three Months Ended September 30, 2023
	Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance at June 30, 2023		47,803,306	$	5		—	$	—	$	480,524		$	(356,013	)	$	124,516
Stock-based compensation expense		—		—		—		—		3,517			—			3,517
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		88,428		—		—		—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		—		—		—		—		14			—			14
Issuance of common stock for director compensation		15,661		—		—		—		27			—			27
Taxes related to net share settlement of equity awards		—		—		—		—		(46	)		—			(46	)
Net loss		—		—		—		—		—			(33,325	)		(33,325	)
Balance at September 30, 2023		47,907,395	$	5		—	$	—	$	484,036		$	(389,338	)	$	94,703


	Three Months Ended September 30, 2022
	Common Stock				Class B Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital			Deficit			Equity
Balance at June 30, 2022		35,993,458	$	4		1,492,059		$	—	$	404,427		$	(239,479	)	$	164,952
Stock-based compensation expense		—		—		—			—		3,588			—			3,588
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		91,759		—		—			—		—			—			—
Taxes related to net share settlement of equity awards		—		—		—			—		(127	)		—			(127	)
Conversion of Class B Common Stock		280,100		—		(280,100	)		—		—			—			—
Net loss		—		—		—			—		—			(25,779	)		(25,779	)
Balance at September 30, 2022		36,365,317	$	4		1,211,959		$	—	$	407,888		$	(265,258	)	$	142,634

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)


	Nine Months Ended September 30, 2023
	Common Stock				Class B Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital			Deficit			Equity
Balance at December 31, 2022		46,336,166	$	5		1,211,959		$	—	$	473,135		$	(292,801	)	$	180,339
Stock-based compensation expense		—		—		—			—		10,806			—			10,806
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		268,009		—		—			—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		56,793		—		—			—		187			—			187
Issuance of common stock for director compensation		34,468		—		—			—		81			—			81
Taxes related to net share settlement of equity awards		—		—		—			—		(173	)		—			(173	)
Conversion of Class B common stock		1,211,959		—		(1,211,959	)		—		—			—			—
Net loss		—		—		—			—		—			(96,537	)		(96,537	)
Balance at September 30, 2023		47,907,395	$	5		—		$	—	$	484,036		$	(389,338	)	$	94,703


	Nine Months Ended September 30, 2022
	Common Stock				Class B Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital			Deficit			Equity
Balance at December 31, 2021		35,799,233	$	4		1,492,059		$	—	$	397,136		$	(186,319	)	$	210,821
Stock-based compensation expense		—		—		—			—		11,062			—			11,062
Issuance of common stock under equity incentive plans, net of shares withheld for taxes		276,502		—		—			—		—			—			—
Issuance of common stock for Employee Stock Purchase Plan		9,482		—		—			—		19			—			19
Taxes related to net share settlement of equity awards		—		—		—			—		(329	)		—			(329	)
Conversion of Class B common stock		280,100		—		(280,100	)		—		—			—			—
Net loss		—		—		—			—		—			(78,939	)		(78,939	)
Balance at September 30, 2022		36,365,317	$	4		1,211,959		$	—	$	407,888		$	(265,258	)	$	142,634

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(96,537	)	$	(78,939	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		853			901
Loss on disposal of property and equipment		—			6
Stock-based compensation		10,806			11,062
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(1,305	)		(2,876	)
Accounts payable and accrued expenses		12,533			4,146
Right-of-use assets and lease liabilities, net		(443	)		(373	)
Net cash used in operating activities		(74,093	)		(66,073	)
Cash flows from investing activities
Purchases of property and equipment		(90	)		(237	)
Proceeds from sale of property and equipment		—			3
Net cash used in investing activities		(90	)		(234	)
Cash flows from financing activities
Proceeds from issuance of common stock under Employee Stock Purchase Plan		187			19
Payments for taxes related to net settlement of equity awards		(229	)		(571	)
Net cash used in financing activities		(42	)		(552	)
Net decrease in cash and cash equivalents		(74,225	)		(66,859	)
Cash and cash equivalents, beginning of period		215,507			244,979
Cash and cash equivalents, end of period	$	141,282		$	178,120
Supplemental disclosure of non-cash investing and financing activities
Property and equipment additions included in accounts payable and accrued expenses	$	—		$	1
Tax related to net settlement of equity awards included in accounts payable and accrued expenses	$	11		$	49

See accompanying notes.

BioAtla, Inc.

Notes to Unaudited Condensed Financial Statements

1. Organization and Summary of Significant Accounting Policies

Organization

BioAtla, LLC was formed in Delaware in March 2007 and was converted to a Delaware corporation in July 2020 and renamed BioAtla, Inc. (the “Company”). The Company has a proprietary platform for creating biologics, including its conditionally active biologics (“CAB” or “CABs”). CABs have been designed to be active only under certain conditions found in diseased tissue, while remaining inactive in normal tissue. The Company is currently in clinical development of its two lead CAB antibody drug conjugates targeting AXL and ROR2 receptors, its CAB immune-oncology antibody targeting CTLA-4 and its CAB BiSpecific targeting EpCAM.

Basis of Presentation

The unaudited condensed financial statements as of September 30, 2023, and for the three and nine months ended September 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. Interim results are not necessarily indicative of results for a full year or future periods. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022, included in its Annual Report on Form 10-K filed with the SEC on March 23, 2023.

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 development of its product candidates. As of September 30, 2023, the Company had an accumulated deficit of $389.3 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. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

In January 2023, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC pursuant to which the Company may, from time to time at its sole discretion, sell shares of the Company’s common stock, with aggregate gross sales proceeds of up to $100.0 million. The Company has not sold any shares of its common stock under the Sales Agreement as of September 30, 2023.

Management is required to perform a two-step analysis of the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2). Management’s assessment included the preparation of cash flow forecasts resulting in management’s conclusion that there is not substantial doubt about the Company’s ability to continue as a going concern as its current cash and cash equivalents will be sufficient to fund the Company’s operations for a period of at least one year from the issuance date of these unaudited condensed financial statements.

Use of Estimates

The preparation of the Company’s condensed financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to accruals for research and development costs, and equity-based compensation. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash equivalents. Cash equivalents consist of highly rated securities including U.S. Government and U.S. Treasury money market funds, which are unrestricted as to withdrawal or use. The cash and cash equivalents balance as of September 30, 2023 and 2022 includes $0.1 million and $0, respectively, invested in U.S. Government and U.S. Treasury money market funds.

Concentrations of Risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and may invest cash that is not required for immediate operating needs in highly liquid instruments that bear minimal risk. 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.

Stock-Based Compensation

Stock-based compensation expense represents the grant date fair value of equity awards, consisting of stock options, restricted stock units (“RSUs”) and employee stock purchase plan rights, over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of stock option grants and employee stock purchase plan rights using the Black-Scholes option pricing model. Prior to the Company’s IPO, the fair value of RSUs was based on the estimated fair value of the underlying common stock on the date of grant and, subsequent to the Company’s IPO, the fair value is based on the closing sales price of the Company’s common stock on the date of grant. Equity award forfeitures are recognized as they occur.

Leases

The Company determines if an arrangement is a lease at inception. An arrangement is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If a lease is identified, classification is determined at lease commencement. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the interest rate that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. Renewals or early terminations are not accounted for unless the Company is reasonably certain to exercise these options. Operating lease expense is recognized and the ROU asset is amortized on a straight-line basis over the lease term. Variable lease costs are not included in the calculation of the ROU asset and the related lease liability and are recognized as incurred.

The Company has a single lease agreement with lease and non-lease components, which are accounted for as a single lease component. 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.

Operating leases are included in operating lease right-of-use assets, operating lease liabilities, and operating lease liabilities, non-current on the Company’s balance sheets. The Company does not have any finance leases.

Comprehensive Loss

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. 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.

Net Loss Per Share

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. 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):


	As of September 30,
	2023		2022
Common stock options		6,362,386		2,718,930
Restricted stock units		161,219		629,007
ESPP shares		124,969		115,783
Total		6,648,574		3,463,720

Recent Accounting Pronouncements

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

2. Balance Sheet Details

Prepaid expenses and other current assets consist of the following (in thousands):


	September 30, 2023		December 31, 2022
Prepaid research and development	$	5,143	$	4,385
Prepaid insurance		532		—
Other prepaid expenses and current assets		554		539
Total	$	6,229	$	4,924

Property and equipment consist of the following (in thousands):


	Useful life (years)	September 30, 2023			December 31, 2022
Furniture, fixtures and office equipment	3 - 7	$	2,147		$	2,140
Laboratory equipment	5		2,349			2,265
Leasehold improvements	2 - 3		3,687			3,687
			8,183			8,092
Less accumulated depreciation and amortization			(6,218	)		(5,364	)
Total		$	1,965		$	2,728

Accounts payable and accrued expenses consist of the following (in thousands):


	September 30, 2023		December 31, 2022
Accounts payable	$	6,293	$	4,231
Accrued compensation		2,967		3,451
Accrued research and development		24,204		12,649
Other accrued expenses		542		1,279
Total	$	34,006	$	21,610

3. Fair Value Measurements

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

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. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

As of September 30, 2023 and December 31, 2022, the Company had $0.1 million and $0, respectively, invested in U.S. Government and U.S. Treasury money market funds which are recorded as cash equivalents and represent a Level 1 measurement within the fair value hierarchy.

None of the Company’s non-financial assets and liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

4. Leases

The Company has a single operating lease for its corporate headquarters and laboratory space in San Diego, California. The lease expires in July 2025 and the Company has an option to extend the term of the lease for an additional five years. Additionally, the lease includes certain rent abatement, rent escalations, tenant improvement allowances and additional charges for common area maintenance and other costs.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease expense	$	261	$	261	$	782	$	782
Variable lease expense		147		132		401		328
Total lease expense, net	$	408	$	393	$	1,183	$	1,110

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 and nine months ended September 30, 2023 and 2022, respectively.

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


	As of September 30,
	2023			2022
Weighted average remaining lease term (in years)		1.75			2.75
Weighted average discount rate percentage		3.50	%		3.50	%

Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cash paid for amounts included in the measurement of operating leases	$	411	$	401	$	1,226	$	1,155

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


	Operating lease
Three months ending December 31, 2023	$	411
2024		1,685
2025		845
Thereafter		—
Total future lease payments		2,941
Less: imputed interest		(94	)
Total operating lease liabilities	$	2,847

5. Commitments and Contingencies

From time to time, the Company may be subject to various claims and suits arising in the ordinary course of business. 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.

6. Stockholders’ Equity

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. As of September 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, 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.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	1,321	$	1,427	$	4,322	$	4,125
General and administrative		2,196		2,161		6,484		6,937
Total	$	3,517	$	3,588	$	10,806	$	11,062

Restricted Stock Units

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 nine months ended September 30, 2023, the Company issued 34,468 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 $27,000 and $80,000 for the three and nine months ended September 30, 2023, respectively.

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


	Number of Shares		Weighted - Average Grant Date Fair Value
Outstanding at December 31, 2022		510,039	$