BioAtla, Inc. 10-Q

Item 1 . Financial Statements. BioAtla, Inc. Condensed Balance Sheets (in thousands, except par value and share amounts) June 30, 2024 December 31, 2023 (unaudited) Assets Current assets: Cash and cash equivalents $ 61,662 $ 111,471 Prepaid expenses and other current assets 4,831 4,935 Total current assets 66,493 116,406 Property and equipment, net 1,134 1,603 Operating lease right-of-use asset, net 1,011 1,495 Other assets — 154 Total assets $ 68,638 $ 119,658 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 15,800 $ 26,720 Operating lease liabilities 1,662 1,624 Total current liabilities 17,462 28,344 Operating lease liabilities, less current portion — 836 Liability to licensor 19,806 19,806 Total liabilities 37,268 48,986 Commitments and contingencies (Note 5 ) Stockholders’ equity: Preferred stock, $ 0.0001 par value; 200,000,000 shares authorized at June 30, 2024 and December 31, 2023; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023 — — Common stock, $ 0.0001 par value; 350,000,000 shares authorized at June 30, 2024 and December 31, 2023; 48,326,138 and 48,077,599 shares issued and outstanding at June 30, 2024 and December 31, 2023 5 5 Class B common stock, $ 0.0001 par value; 15,368,569 shares authorized at June 30, 2024 and December 31, 2023; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively — — Additional paid-in capital 491,934 486,930 Accumulated deficit ( 460,569 ) ( 416,263 ) Total stockholders’ equity 31,370 70,672 Total liabilities and stockholders’ equity $ 68,638 $ 119,658 See accompanying notes. 1 BioAtla, Inc. Unaudited Condensed State ments of Operations and Comprehensive Loss (in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Operating expenses: Research and development expense $ 16,198 $ 30,960 $ 35,050 $ 52,657 General and administrative expense 5,774 6,241 11,379 13,474 Total operating expenses 21,972 37,201 46,429 66,131 Loss from operations ( 21,972 ) ( 37,201 ) ( 46,429 ) ( 66,131 ) Other income: Interest income 900 1,460 2,123 2,940 Other expense — ( 11 ) — ( 21 ) Total other income 900 1,449 2,123 2,919 Net loss and comprehensive loss $ ( 21,072 ) $ ( 35,752 ) $ ( 44,306 ) $ ( 63,212 ) Net loss per common share, basic and diluted $ ( 0.44 ) $ ( 0.75 ) $ ( 0.92 ) $ ( 1.33 ) Weighted-average shares of common stock outstanding, basic and diluted 48,214,893 47,706,426 48,151,176 47,639,977 See accompanying notes. 2 BioAtla, Inc. Unaudited Condensed Statements of Stockholders’ Equity (in thousands, except share amounts) Three Months Ended June 30, 2024 Common Stock Class B Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance at March 31, 2024 48,106,317 $ 5 — $ — $ 489,208 $ ( 439,497 ) $ 49,716 Stock-based compensation expense — — — — 2,496 — 2,496 Issuance of common stock under equity incentive plans, net of shares withheld for taxes 28,801 — — — — — — Issuance of common stock for Employee Stock Purchase Plan 191,020 — — — 244 — 244 Taxes related to net share settlement of equity awards — — — — ( 14 ) — ( 14 ) Net loss — — — — — ( 21,072 ) ( 21,072 ) Balance at June 30, 2024 48,326,138 $ 5 — $ — $ 491,934 $ ( 460,569 ) $ 31,370 Three Months Ended June 30, 2023 Common Stock Class B Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance at March 31, 2023 47,637,321 $ 5 — $ — $ 476,683 $ ( 320,261 ) $ 156,427 Stock-based compensation expense — — — — 3,675 — 3,675 Issuance of common stock under equity incentive plans, net of shares withheld for taxes 90,385 — — — — — — Issuance of common stock for Employee Stock Purchase Plan 56,793 — — — 173 — 173 Issuance of common stock for director compensation 18,807 — — — 54 — 54 Taxes related to net share settlement of equity awards — — — — ( 61 ) — ( 61 ) Net loss — — — — — ( 35,752 ) ( 35,752 ) Balance at June 30, 2023 47,803,306 $ 5 — $ — $ 480,524 $ ( 356,013 ) $ 124,516 See accompanying notes. 3 BioAtla, Inc. Unaudited Condensed Statements of Stockholders’ Equity (in thousands, except share amounts) Six Months Ended June 30, 2024 Common Stock Class B Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance at December 31, 2023 48,077,599 $ 5 — $ — $ 486,930 $ ( 416,263 ) $ 70,672 Stock-based compensation expense — — — — 4,796 — 4,796 Issuance of common stock under equity incentive plans, net of shares withheld for taxes 57,519 — — — — — — Issuance of common stock for Employee Stock Purchase Plan 191,020 — — — 244 — 244 Taxes related to net share settlement of equity awards — — — — ( 36 ) — ( 36 ) Net loss — — — — — ( 44,306 ) ( 44,306 ) Balance at June 30, 2024 48,326,138 $ 5 — $ — $ 491,934 $ ( 460,569 ) $ 31,370 Six Months Ended June 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 — — — — 7,289 — 7,289 Issuance of common stock under equity incentive plans, net of shares withheld for taxes 179,581 — — — — — — Issuance of common stock for Employee Stock Purchase Plan 56,793 — — — 173 — 173 Issuance of common stock for director compensation 18,807 — — — 54 — 54 Taxes related to net share settlement of equity awards — — — — ( 127 ) — ( 127 ) Conversion of Class B common stock 1,211,959 — ( 1,211,959 ) — — — — Net loss — — — — — ( 63,212 ) ( 63,212 ) Balance at June 30, 2023 47,803,306 $ 5 — $ — $ 480,524 $ ( 356,013 ) $ 124,516 See accompanying notes. 4 BioAtla, Inc. Unaudited Condensed Statements of Cash Flows (in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities Net loss $ ( 44,306 ) $ ( 63,212 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 469 583 Stock-based compensation 4,796 7,289 Changes in operating assets and liabilities: Prepaid expenses and other assets 258 ( 1,690 ) Accounts payable and accrued expenses ( 10,924 ) 10,575 Right-of-use assets and lease liabilities, net ( 314 ) ( 293 ) Net cash used in operating activities ( 50,021 ) ( 46,748 ) Cash flows from investing activities Purchases of property and equipment — ( 65 ) Net cash used in investing activities — ( 65 ) Cash flows from financing activities Proceeds from issuance of common stock under Employee Stock Purchase Plan 244 173 Payments for taxes related to net settlement of equity awards ( 32 ) ( 174 ) Net cash provided by (used in) financing activities 212 ( 1 ) Net decrease in cash and cash equivalents ( 49,809 ) ( 46,814 ) Cash and cash equivalents, beginning of period 111,471 215,507 Cash and cash equivalents, end of period $ 61,662 $ 168,693 Supplemental disclosure of non-cash investing and financing activities Tax related to net settlement of equity awards included in accounts payable and accrued expenses $ 4 $ 19 See accompanying notes. 5 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 several CAB drug candidates including: its two lead CAB antibody drug conjugates (“CAB ADC”), mecbotamab vedotin (BA3011), a CAB ADC targeting AXL and ozuriftamab vedotin (BA3021), a CAB ADC targeting ROR2; evalstotug (BA3071), a CAB anti-CTLA-4 antibody; and BA3182 (CAB-EpCAM x CAB-CD3), a CAB bispecific antibody targeting EpCAM. Basis of Presentation The unaudited condensed financial statements as of June 30, 2024, and for the three and six months ended June 30, 2024 and 2023, 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, 2023 , included in its Annual Report on Form 10-K filed with the SEC on March 26, 2024. 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 June 30, 2024, the Company had an accumulated deficit of $ 460.6 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 June 30, 2024. 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. 6 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. 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 recognized as incurred and are not included in the calculation of the ROU asset or the related lease liability. 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, and consists of net loss and other comprehensive gain (loss). 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”). 7 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 June 30, 2024 2023 Common stock options 6,265,480 6,557,990 Restricted stock units 1,605,982 288,070 ESPP shares 57,683 32,033 Total 7,929,145 6,878,093 Recent Accounting Pronouncements There were no new accounting standards that had a material impact on the Company’s financial statements during the six months ended June 30, 2024. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements. 2. Balance Sheet Details Prepaid expenses and other current assets consist of the following (in thousands): June 30, 2024 December 31, 2023 Prepaid research and development $ 3,631 $ 4,615 Prepaid insurance 678 — Other prepaid expenses and current assets 522 320 Total $ 4,831 $ 4,935 Property and equipment consist of the following (in thousands): Useful life (years) June 30, 2024 December 31, 2023 Furniture, fixtures and office equipment 3 - 7 $ 1,721 $ 1,721 Laboratory equipment 5 2,280 2,280 Leasehold improvements 2 - 3 3,680 3,680 7,681 7,681 Less accumulated depreciation and amortization ( 6,547 ) ( 6,078 ) Total $ 1,134 $ 1,603 Accounts payable and accrued expenses consist of the following (in thousands): June 30, 2024 December 31, 2023 Accounts payable $ 1,356 $ 3,819 Accrued compensation 2,135 3,790 Accrued research and development 11,747 18,246 Other accrued expenses 562 865 Total $ 15,800 $ 26,720 3. Fair Value Measurements 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. 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 8 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 June 30, 2024 and December 31, 2023, the Company had $ 51.7 million and $ 50.4 million, 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Operating lease expense $ 261 $ 261 $ 521 $ 521 Variable lease expense 211 107 371 254 Total lease expense, net $ 472 $ 368 $ 892 $ 775 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 six months ended June 30, 2024 and 2023, respectively. The weighted average remaining lease term and weighted average discount rate for operating leases were as follows: As of June 30, 2024 2023 Weighted average remaining lease term (in years) 1.00 2.00 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cash paid for amounts included in the measurement of operating leases $ 279 $ 407 $ 836 $ 814 9 Maturities of operating lease liabilities as of June 30, 2024 were as follows (in thousands): Operating lease Six months ending December 31, 2024 849 2025 845 Thereafter — Total future lease payments 1,694 Less: imputed interest ( 32 ) Total operating lease liabilities $ 1,662 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 June 30, 2024 and December 31, 2023 , the total number of common shares authorized for issuance under the 2020 Plan was 10,735,431 and 9,196,970 , 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. 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. 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, continued to vest. The Company applied modification accounting to these awards which resulted in a decrease in fair value to these awards. The Company calculated compensation cost for the modified unvested awards of $ 416,000 related to the RSUs and $ 962,000 related to the options, and will recognize these amounts over the remaining requisite service periods. The modification also resulted in an increase to the term of 130,699 fully vested options for which $ 123,000 of incremental compensation cost was immediately recognized on the date of the modification. Stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 has been reported in the condensed statements of operations and comprehensive loss as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Research and development $ 1,164 $ 1,550 $ 2,243 $ 3,001 General and administrative 1,332 2,125 2,553 4,288 Total $ 2,496 $ 3,675 $ 4,796 $ 7,289 10 Restricted Stock Units The following table summarizes RSU activity under the 2020 Plan for the six months ended June 30, 2024: Number of Shares Weighted - Average Grant Date Fair Value Outstanding at December 31, 2023 99,104 $ 18.00 Granted 1,598,000 $ 2.48 Vested ( 74,122 ) $ 18.00 Forfeited ( 17,000 ) $ 2.65 Outstanding at June 30, 2024 1,605,982 $ 2.72 As of June 30, 2024, total unrecognized stock-based compensation expense for RSUs was $ 4.0 million , which is expected to be recognized over a remaining weighted-average period of approximately 3.4 years . Stock Options The following table summarizes stock option activity under the 2020 Plan for the six months ended June 30, 2024: Number of Options Weighted - Average Exercise Price Per Share Weighted -Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Balance at December 31, 2023 6,273,507 $ 7.62 8.64 $ 74,680 Granted 31,000 $ 2.89 Forfeited ( 35,750 ) $ 3.00 Expired ( 3,277 ) $ 14.28 Balance at June 30, 2024 6,265,480 $ 7.62 8.12 $ — Vested and expected to vest at June 30, 2024 6,265,480 $ 7.62 8.12 $ — Exercisable at June 30, 2024 3,114,628 $ 9.83 7.83 $ — As of June 30, 2024 , total unrecognized stock-based compensation cost for unvested common stock options was $ 11.6 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.44 years. The weighted-average grant date fair value of stock options granted during the six months ended June 30, 2024 was $ 2.19 per share. The total fair value of options vested during the six months ended June 30, 2024 was $ 6.2 million. 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: Six Months Ended June 30, 2024 2023 Expected volatility 88.1 % 77.4 % Risk-free interest rate 4.39 % 3.86 % Expected dividend yield 0.0 % 0.0 % Expected term 6.08 years 6.05 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. 11 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 (“ESPP”) The ESPP permits participants to purchase common stock through payroll deductions of up to 15 % of their eligible compensation. As of June 30, 2024 and December 31, 2023, a total of 2,281,600 shares and 1,737,098 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 issued 191,020 and 56,793 shares of common stock under the ESPP during the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, 1,766,284 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, 2024 and 2023 was immaterial. Common Stock Reserved for Future Issuance Common stock reserved for future issuance are as follows in common equivalent shares: June 30, 2024 December 31, 2023 Common stock options and restricted stock units issued and outstanding 7,871,462 6,372,611 Awards available for future issuance under the 2020 Plan 956,901 991,413 Awards available for future issuance under the ESPP 1,766,284 1,412,802 Total common stock reserved for future issuance 10,594,647 8,776,826 7. Collaboration, License and Option Agreements Global Co-Development and Collaboration Agreement with BeiGene In April 2019, the Company entered into a Global Co-Development and Collaboration agreement (the “BeiGene Collaboration”) with BeiGene, Ltd. and BeiGene Switzerland GmbH (collectively “BeiGene”), for the development, manufacturing and commercialization of evalstotug (BA3071). 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. 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. As a result, the Company is responsible for the global development and commercialization of evalstotug. 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 evalstotug. 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. The Company did no t recognize any revenue related to the collaboration agreement with BeiGene during the three and six months ended June 30, 2024 and 2023 , respectively. The Company had a $ 19.8 million Liability to Licensor as of June 30, 2024 and December 31, 2023, respectively. Collaboration and Supply Agreement with Bristol-Myers Squibb In January 2022, the Company and Bristol-Myers Squibb Company (“BMS”) entered into a clinical trial collaboration and supply agreement (the “BMS Agreement”). Under the terms of the BMS Agreement, BioAtla and BMS collaborate on clinical trials of separate combination therapies using two of BioAtla’s CAB ADCs, mecbotamab vedotin (BA3011) and ozuriftamab vedotin (BA3021), each in combination with Opdivo® (nivolumab), BMS’ proprietary anti-PD-1 monoclonal antibody product. The Company serves as the study sponsor of the scheduled studies and is responsible for costs associated with the trial execution. BMS provides Opdivo® clinical drug supply at no cost for the combination study trials. After the completion of the combination therapy trials, the 12 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 mecbotamab vedotin and ozuriftamab vedotin combination study trials. There was no impact to the Company's financial results for the three and six months ended June 30, 2024 and 2023 as a result of this agreement. 8. Related Party Transactions Himalaya Therapeutics SEZC Clinical Trial Services Agreement In January 2024, the Company entered into an amended Clinical Trial Services Agreement with Himalaya Therapeutics SEZC (as so amended, the “Clinical Trial Services Agreement”). Under the Clinical Trial Services Agreement, BioAtla will pay Himalaya Therapeutics SEZC for the full-time use of two of its personnel and provide services related to the initiation of clinical trials for evalstotug in China for a period of 12 months. For the three and six months ended June 30, 2024 , the Company recognized $ 0.1 million and $ 0.3 million, respectively, in research and development expense related to the Clinical Trial Services Agreement, compar ed to $ 0 and $ 0.1 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 , the Company had $ 0.1 million due to Himalaya Therapeutics SEZC, related to the Clinical Trial Services Agreement. 9. 401(k) Plan The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain matching contributions to the 401(k) plan. To date, the Company has no t made any matching contributions. 13