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jay and car

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 June 30, 2023

OR

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.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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 July 28, 2023, the number of shares of the registrant’s common stock outstanding was 47,803,306 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 June 30, 2023 (unaudited) and December 31, 2022

1

Condensed Statements of Operations and Comprehensive Loss (unaudited) for the three and six months ended June 30, 2023 and 2022

2

Condensed Statements of Stockholders’ Equity (unaudited) for the three and six months ended June 30, 2023 and 2022

3

Condensed Statements of Cash Flows (unaudited) for the six months ended June 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

21

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

65

Item 3.

Defaults Upon Senior Securities

66

Item 4.

Mine Safety Disclosures

66

Item 5.

Other Information

66

Item 6.

Exhibits

66

SIGNATURES

67

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BioAtla, Inc.

Condensed Balance Sheets

(in thousands, except par value and share amounts)

 

 

 

June 30,
2023

 

 

December 31,
2022

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

168,693

 

 

$

215,507

 

Prepaid expenses and other current assets

 

 

6,614

 

 

 

4,924

 

Total current assets

 

 

175,307

 

 

 

220,431

 

Property and equipment, net

 

 

2,210

 

 

 

2,728

 

Operating lease right-of-use asset, net

 

 

1,966

 

 

 

2,423

 

Other assets

 

 

154

 

 

 

154

 

Total assets

 

$

179,637

 

 

$

225,736

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

32,084

 

 

$

21,610

 

Operating lease liabilities

 

 

1,569

 

 

 

1,521

 

Total current liabilities

 

 

33,653

 

 

 

23,131

 

Operating lease liabilities, less current portion

 

 

1,662

 

 

 

2,460

 

Liability to licensor

 

 

19,806

 

 

 

19,806

 

Total liabilities

 

 

55,121

 

 

 

45,397

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 200,000,000 shares authorized at
   June 30, 2023 and December 31, 2022;
0 shares issued and outstanding at
   June 30, 2023 and December 31, 2022

 

 

 

 

 

 

Common stock, $0.0001 par value; 350,000,000 shares authorized at
   June 30, 2023 and December 31, 2022;
47,803,306 and 46,336,166
   shares issued and outstanding at June 30, 2023 and December 31, 2022

 

 

5

 

 

 

5

 

Class B common stock, $0.0001 par value; 15,368,569 shares authorized at
   June 30, 2023 and December 31, 2022;
0 and 1,211,959
   shares issued and outstanding at June 30, 2023 and December 31, 2022

 

 

 

 

 

 

Additional paid-in capital

 

 

480,524

 

 

 

473,135

 

Accumulated deficit

 

 

(356,013

)

 

 

(292,801

)

Total stockholders’ equity

 

 

124,516

 

 

 

180,339

 

Total liabilities and stockholders’ equity

 

$

179,637

 

 

$

225,736

 

 

See accompanying notes.

1


 

BioAtla, Inc.

Unaudited Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2023

 

2022

 

 

2023

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development expense

$

30,960

 

$

20,711

 

 

$

52,657

 

$

37,634

 

General and administrative expense

 

6,241

 

 

8,344

 

 

 

13,474

 

 

15,767

 

Total operating expenses

 

37,201

 

 

29,055

 

 

 

66,131

 

 

53,401

 

Loss from operations

 

(37,201

)

 

(29,055

)

 

 

(66,131

)

 

(53,401

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

1,460

 

 

146

 

 

 

2,940

 

 

231

 

Other income (expense)

 

(11

)

 

3

 

 

 

(21

)

 

10

 

Total other income (expense)

 

1,449

 

 

149

 

 

 

2,919

 

 

241

 

Net loss and comprehensive loss

$

(35,752

)

$

(28,906

)

 

$

(63,212

)

$

(53,160

)

Net loss per common share, basic and diluted

$

(0.75

)

$

(0.77

)

 

$

(1.33

)

$

(1.42

)

Weighted-average shares of common stock outstanding, basic and diluted

 

47,706,426

 

 

37,420,327

 

 

 

47,639,977

 

 

37,371,614

 

 

See accompanying notes.

2


 

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)

 

 

 

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

 

 

 

 

Three Months Ended June 30, 2022

 

 

Common Stock

 

Class B
Common Stock

 

Additional
Paid-in

 

Accumulated

 

Total
Stockholders’

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Equity

 

Balance at March 31, 2022

 

35,891,284

 

$

4

 

 

1,492,059

 

$

 

$

400,622

 

$

(210,573

)

$

190,053

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

3,842

 

 

 

 

3,842

 

Issuance of common stock under equity incentive plans

 

92,692

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for Employee Stock Purchase Plan

 

9,482

 

 

 

 

 

 

 

 

19

 

 

 

 

19

 

Taxes related to net share settlement of equity awards

 

 

 

 

 

 

 

 

 

(56

)

 

 

 

(56

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(28,906

)

 

(28,906

)

Balance at June 30, 2022

 

35,993,458

 

$

4

 

 

1,492,059

 

$

 

$

404,427

 

$

(239,479

)

$

164,952

 

 

See accompanying notes.

 

3


 

BioAtla, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)

 

 

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

 

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

 

 

 

 

 

Six Months Ended June 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

 

 

 

 

 

 

 

 

 

7,474

 

 

 

 

7,474

 

Issuance of common stock under equity incentive plans

 

184,743

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for Employee Stock Purchase Plan

 

9,482

 

 

 

 

 

 

 

 

19

 

 

 

 

19

 

Taxes related to net share settlement of equity awards

 

 

 

 

 

 

 

 

 

(202

)

 

 

 

(202

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(53,160

)

 

(53,160

)

Balance at June 30, 2022

 

35,993,458

 

$

4

 

 

1,492,059

 

$

 

$

404,427

 

$

(239,479

)

$

164,952

 

 

See accompanying notes.

4


 

BioAtla, Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(63,212

)

 

$

(53,160

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

583

 

 

 

601

 

Loss on disposal of property and equipment

 

 

 

 

 

6

 

Stock-based compensation

 

 

7,289

 

 

 

7,474

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(1,690

)

 

 

(2,595

)

Accounts payable and accrued expenses

 

 

10,575

 

 

 

5,849

 

Right-of-use assets and lease liabilities, net

 

 

(293

)

 

 

(232

)

Net cash used in operating activities

 

 

(46,748

)

 

 

(42,057

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(65

)

 

 

(179

)

Proceeds from sale of property and equipment

 

 

 

 

 

3

 

Net cash used in investing activities

 

 

(65

)

 

 

(176

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock under Employee Stock Purchase Plan

 

 

173

 

 

 

19

 

Payments for taxes related to net settlement of equity awards

 

 

(174

)

 

 

(475

)

Net cash used in financing activities

 

 

(1

)

 

 

(456

)

Net decrease in cash and cash equivalents

 

 

(46,814

)

 

 

(42,689

)

Cash and cash equivalents, beginning of period

 

 

215,507

 

 

 

244,979

 

Cash and cash equivalents, end of period

 

$

168,693

 

 

$

202,290

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

Property and equipment additions included in accounts payable and accrued expenses

 

$

 

 

$

33

 

Tax related to net settlement of equity awards included in accounts payable and
   accrued expenses

 

$

19

 

 

$

18

 

 

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 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 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. 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 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. 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.

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.

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.

6


 

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):

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

Common stock options

 

 

6,557,990

 

 

 

2,727,336

 

Restricted stock units

 

 

288,070

 

 

 

739,959

 

ESPP shares

 

 

32,033

 

 

 

41,292

 

Total

 

 

6,878,093

 

 

 

3,508,587

 

 

7


 

 

Recent Accounting Pronouncements

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.

2. Balance Sheet Details

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

 

 

 

June 30,
2023

 

 

December 31,
2022

 

Prepaid research and development

 

$

4,888

 

 

$

4,385

 

Prepaid insurance

 

 

1,039

 

 

 

 

Other prepaid expenses and current assets

 

 

687

 

 

 

539

 

Total

 

$

6,614

 

 

$

4,924

 

 

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

 

 

 

Useful life
(years)

 

June 30,
2023

 

 

December 31,
2022

 

Furniture, fixtures and office equipment

 

3 - 7

 

$

2,140

 

 

$

2,140

 

Laboratory equipment

 

5

 

 

2,330

 

 

 

2,265

 

Leasehold improvements

 

2 - 3

 

 

3,687

 

 

 

3,687

 

 

 

 

 

8,157

 

 

 

8,092

 

Less accumulated depreciation and amortization

 

 

 

 

(5,947

)

 

 

(5,364

)

Total

 

 

 

$

2,210

 

 

$

2,728

 

 

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

 

 

 

June 30,
2023

 

 

December 31,
2022

 

Accounts payable

 

$

2,971

 

 

$

4,231

 

Accrued compensation