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b
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2024
OR
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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: 001-41455
MAIA BIOTECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
83-1495913 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer
Identification No.) |
444 West Lake Street, Suite 1700 Chicago, IL |
60606 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (312) 416-8592
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $0.0001 par value per share |
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MAIA |
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NYSE American |
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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 August 9, 2024, the registrant had 23,907,212 shares of common stock, $0.0001 par value per share, outstanding.
Table of Contents
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned preclinical studies and clinical trials, research and development costs, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "would," "expect," "objective," "plan," "potential," "seek," "grow," "target," "if," and similar expressions intended to identify forward-looking statements. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those which we discuss under “Risk Factors,” elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission (the "SEC").
We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward‑looking statements.
Unless the context indicates or otherwise requires, “the Company,” “our Company,” “we,” “us,” and “our” refer to MAIA Biotechnology, Inc., a Delaware corporation, and its consolidated subsidiaries.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
June 30,
2024 |
|
|
December 31,
2023 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
11,579,391 |
|
|
$ |
7,150,695 |
|
Prepaid expenses and other current assets |
|
|
259,730 |
|
|
|
268,677 |
|
Australia research and development incentives receivable |
|
|
177,687 |
|
|
|
144,680 |
|
Total current assets |
|
|
12,016,808 |
|
|
|
7,564,052 |
|
Other assets |
|
|
2,800 |
|
|
|
2,800 |
|
Total assets |
|
$ |
12,019,608 |
|
|
$ |
7,566,852 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,263,788 |
|
|
$ |
1,638,546 |
|
Accrued expenses |
|
|
2,247,287 |
|
|
|
3,298,607 |
|
Total current liabilities |
|
|
3,511,075 |
|
|
|
4,937,153 |
|
Long term liabilities: |
|
|
|
|
|
|
Warrant liability |
|
|
5,346,638 |
|
|
|
2,152,188 |
|
Total liabilities |
|
|
8,857,713 |
|
|
|
7,089,341 |
|
Commitments and contingencies (Note 6) |
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 30,000,000 shares
authorized at June 30, 2024 and December 31, 2023,
0 shares issued and outstanding |
|
— |
|
|
— |
|
Common stock, $0.0001 par value, 70,000,000 shares authorized at
June 30, 2024 and December 31, 2023, 23,737,833 and 16,986,254
shares issued and outstanding at June 30, 2024 and December 31, 2023,
respectively |
|
|
2,374 |
|
|
|
1,699 |
|
Additional paid-in capital |
|
|
84,108,607 |
|
|
|
64,472,249 |
|
Accumulated deficit |
|
|
(80,926,908 |
) |
|
|
(63,980,177 |
) |
Accumulated other comprehensive loss |
|
|
(22,178 |
) |
|
|
(16,260 |
) |
Total stockholders' equity |
|
|
3,161,895 |
|
|
|
477,511 |
|
Total liabilities and stockholders' equity |
|
$ |
12,019,608 |
|
|
$ |
7,566,852 |
|
See the accompanying notes to the unaudited condensed consolidated financial statements.
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
$ |
2,052,233 |
|
|
$ |
2,599,315 |
|
|
$ |
4,372,975 |
|
|
$ |
4,795,306 |
|
General and administrative expenses |
|
|
1,763,029 |
|
|
|
2,065,331 |
|
|
|
3,391,163 |
|
|
|
4,053,590 |
|
Total operating expenses |
|
|
3,815,262 |
|
|
|
4,664,646 |
|
|
|
7,764,138 |
|
|
|
8,848,896 |
|
Loss from operations |
|
|
(3,815,262 |
) |
|
|
(4,664,646 |
) |
|
|
(7,764,138 |
) |
|
|
(8,848,896 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
— |
|
|
|
(1,715 |
) |
|
|
— |
|
|
|
(6,862 |
) |
Interest income |
|
|
88,383 |
|
|
|
172 |
|
|
|
132,501 |
|
|
|
508 |
|
Australian research and development
incentives |
|
|
18,048 |
|
|
|
39,766 |
|
|
|
36,649 |
|
|
|
91,009 |
|
Change in fair value of warrant liability |
|
|
(5,157,493 |
) |
|
|
102,799 |
|
|
|
(9,338,791 |
) |
|
|
123,741 |
|
Loss on fair value of warrants over proceeds |
|
|
(12,952 |
) |
|
|
— |
|
|
|
(12,952 |
) |
|
|
— |
|
Other (expense) income, net |
|
|
(5,064,014 |
) |
|
|
141,022 |
|
|
|
(9,182,593 |
) |
|
|
208,396 |
|
Net loss |
|
|
(8,879,276 |
) |
|
|
(4,523,624 |
) |
|
|
(16,946,731 |
) |
|
|
(8,640,500 |
) |
Net loss attributable to MAIA
Biotechnology, Inc. shareholders |
|
$ |
(8,879,276 |
) |
|
$ |
(4,523,624 |
) |
|
$ |
(16,946,731 |
) |
|
$ |
(8,640,500 |
) |
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.40 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.85 |
) |
|
$ |
(0.72 |
) |
Weighted average common shares
outstanding basic and diluted |
|
|
22,203,174 |
|
|
|
12,885,134 |
|
|
|
19,906,043 |
|
|
|
11,931,319 |
|
See the accompanying notes to the unaudited condensed consolidated financial statements.
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net loss |
|
$ |
(8,879,276 |
) |
|
$ |
(4,523,624 |
) |
|
$ |
(16,946,731 |
) |
|
$ |
(8,640,500 |
) |
Foreign currency translation adjustment |
|
|
7,868 |
|
|
|
(634 |
) |
|
|
(5,918 |
) |
|
|
(9,935 |
) |
Comprehensive loss |
|
$ |
(8,871,408 |
) |
|
$ |
(4,524,258 |
) |
|
$ |
(16,952,649 |
) |
|
$ |
(8,650,435 |
) |
See the accompanying notes to the unaudited condensed consolidated financial statements.
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three and Six Months Ended |
|
June 30, 2024 |
|
|
|
Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Additional Paid-In Capital |
|
|
Accumulated Deficit |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Total Stockholders' Equity (Deficit) |
|
Balance at December 31, 2023 |
|
|
— |
|
|
$ |
— |
|
|
|
16,986,254 |
|
|
$ |
1,699 |
|
|
$ |
64,472,249 |
|
|
$ |
(63,980,177 |
) |
|
$ |
(16,260 |
) |
|
$ |
477,511 |
|
Issuance of restricted stock |
|
|
— |
|
|
|
— |
|
|
|
12,500 |
|
|
|
1 |
|
|
|
11,499 |
|
|
|
— |
|
|
|
— |
|
|
|
11,500 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
349,965 |
|
|
|
— |
|
|
|
— |
|
|
|
349,965 |
|
Issuance of common shares in connection with At-The-Market financing, net of $179,628 of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
507,754 |
|
|
|
51 |
|
|
|
565,572 |
|
|
|
— |
|
|
|
— |
|
|
|
565,623 |
|
Issuance of common shares in connection with the Private Placement Offering #1, net of $50,000 of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
2,496,318 |
|
|
|
250 |
|
|
|
590,161 |
|
|
|
— |
|
|
|
— |
|
|
|
590,411 |
|
Issuance of common shares in connection with the Private Placement Offering #2, net of $47,261 of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
578,643 |
|
|
|
58 |
|
|
|
90,560 |
|
|
|
— |
|
|
|
— |
|
|
|
90,618 |
|
Issuance of warrants in connection with the Private Placement Offering #1 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
230,685 |
|
|
|
— |
|
|
|
— |
|
|
|
230,685 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13,786 |
) |
|
|
(13,786 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,067,455 |
) |
|
|
— |
|
|
|
(8,067,455 |
) |
Balance at March 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
20,581,469 |
|
|
$ |
2,059 |
|
|
$ |
66,310,691 |
|
|
$ |
(72,047,632 |
) |
|
$ |
(30,046 |
) |
|
$ |
(5,764,928 |
) |
Exercise of stock options |
|
|
— |
|
|
|
— |
|
|
|
101,837 |
|
|
|
10 |
|
|
|
185,636 |
|
|
|
— |
|
|
|
— |
|
|
|
185,646 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
413,948 |
|
|
|
— |
|
|
|
— |
|
|
|
413,948 |
|
Issuance of common shares in connection with At-The-Market financing, net of $315,314 of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
2,015,122 |
|
|
|
202 |
|
|
|
6,801,462 |
|
|
|
— |
|
|
|
— |
|
|
|
6,801,664 |
|
Issuance of common shares in connection with the Private Placement Offering #3, net of $5,030 of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
494,096 |
|
|
|
49 |
|
|
|
162,028 |
|
|
|
— |
|
|
|
— |
|
|
|
162,077 |
|
Issuance of warrants in connection with the Private Placement Offering #3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
172,925 |
|
|
|
— |
|
|
|
— |
|
|
|
172,925 |
|
Exercise of warrants |
|
|
— |
|
|
|
— |
|
|
|
545,309 |
|
|
|
54 |
|
|
|
3,191,621 |
|
|
|
— |
|
|
|
— |
|
|
|
3,191,675 |
|
Reclassification of liability classified warrants to equity |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,870,296 |
|
|
|
— |
|
|
|
— |
|
|
|
6,870,296 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,868 |
|
|
|
7,868 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,879,276 |
) |
|
|
— |
|
|
|
(8,879,276 |
) |
Balance at June 30, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
23,737,833 |
|
|
$ |
2,374 |
|
|
$ |
84,108,607 |
|
|
$ |
(80,926,908 |
) |
|
$ |
(22,178 |
) |
|
$ |
3,161,895 |
|
See the accompanying notes to the unaudited condensed consolidated financial statements.
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three and Six Months Ended |
|
June 30, 2023 |
|
|
|
Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Additional Paid-In Capital |
|
|
Accumulated Deficit |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Total Stockholders' Equity |
|
Balance at December 31, 2022 |
|
|
— |
|
|
$ |
— |
|
|
|
10,955,904 |
|
|
$ |
1,096 |
|
|
$ |
52,729,942 |
|
|
$ |
(44,207,272 |
) |
|
$ |
(15,973 |
) |
|
$ |
8,507,793 |
|
Issuance of restricted stock |
|
|
— |
|
|
|
— |
|
|
|
40,500 |
|
|
|
4 |
|
|
|
164,066 |
|
|
|
— |
|
|
|
— |
|
|
|
164,070 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
537,522 |
|
|
|
— |
|
|
|
— |
|
|
|
537,522 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,301 |
) |
|
|
(9,301 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,116,876 |
) |
|
|
— |
|
|
|
(4,116,876 |
) |
Balance at March 31, 2023 |
|
|
— |
|
|
$ |
— |
|
|
|
10,996,404 |
|
|
$ |
1,100 |
|
|
$ |
53,431,530 |
|
|
$ |
(48,324,148 |
) |
|
|
(25,274 |
) |
|
$ |
5,083,208 |
|
Issuance of restricted stock |
|
|
— |
|
|
|
— |
|
|
|
96,521 |
|
|
|
9 |
|
|
|
324,251 |
|
|
|
— |
|
|
|
— |
|
|
|
324,260 |
|
Issuance of common shares in connection with follow-on offering, net of $1,593,016 of issuance costs |
|
|
— |
|
|
|
— |
|
|
|
2,555,500 |
|
|
|
256 |
|
|
|
4,156,603 |
|
|
|
— |
|
|
|
— |
|
|
|
4,156,859 |
|
Issuance of warrants to underwriter in connection with follow-on offering |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
241,109 |
|
|
|
— |
|
|
|
— |
|
|
|
241,109 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
618,932 |
|
|
|
— |
|
|
|
— |
|
|
|
618,932 |
|
Issuance of stock options to satisfy accrued bonus |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
974,224 |
|
|
|
— |
|
|
|
- |
|
|
|
974,224 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(634 |
) |
|
|
(634 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,523,624 |
) |
|
|
— |
|
|
|
(4,523,624 |
) |
Balance at June 30, 2023 |
|
|
— |
|
|
$ |
— |
|
|
|
13,648,425 |
|
|
$ |
1,365 |
|
|
$ |
59,746,649 |
|
|
$ |
(52,847,772 |
) |
|
|
(25,908 |
) |
|
$ |
6,874,334 |
|
See the accompanying notes to the unaudited condensed consolidated financial statements.
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(16,946,731 |
) |
|
$ |
(8,640,500 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Stock-based compensation |
|
|
763,913 |
|
|
|
1,156,453 |
|
Consulting expense for restricted shares issued |
|
|
11,500 |
|
|
|
488,330 |
|
Change in fair value of warrant liability |
|
|
9,338,791 |
|
|
|
(123,741 |
) |
Loss on fair value of warrants over proceeds |
|
|
12,952 |
|
|
|
— |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
8,198 |
|
|
|
309,089 |
|
Australia research and development incentives receivable |
|
|
(36,650 |
) |
|
|
(91,009 |
) |
Accounts payable |
|
|
(372,786 |
) |
|
|
384,667 |
|
Accrued expenses |
|
|
(1,050,758 |
) |
|
|
595,430 |
|
Net cash used in operating activities |
|
|
(8,271,571 |
) |
|
|
(5,921,281 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
185,646 |
|
|
|
— |
|
Deferred offering costs |
|
|
— |
|
|
|
(278,446 |
) |
Proceeds from sale of common stock in follow-on offering |
|
|
— |
|
|
|
5,749,875 |
|
Proceeds from sale of common stock in private placement offering #1 |
|
|
2,920,696 |
|
|
|
— |
|
Proceeds from sale of common stock in private placement offering #2 |
|
|
1,327,990 |
|
|
|
— |
|
Proceeds from sale of common stock in private placement offering #3 |
|
|
1,004,999 |
|
|
|
— |
|
Proceeds from At-The-Market offering |
|
|
7,862,229 |
|
|
|
— |
|
Payment of offering transactions costs |
|
|
(597,233 |
) |
|
|
(1,351,907 |
) |
Net cash provided by financing activities |
|
|
12,704,327 |
|
|
|
4,119,522 |
|
Net effect of foreign currency exchange on cash |
|
|
(4,060 |
) |
|
|
(3,012 |
) |
Net increase (decrease) in cash |
|
|
4,428,696 |
|
|
|
(1,804,771 |
) |
Cash at beginning of period |
|
|
7,150,695 |
|
|
|
10,950,927 |
|
Cash at end of period |
|
$ |
11,579,391 |
|
|
$ |
9,146,156 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
Options issued for accrued bonus |
|
|
— |
|
|
$ |
974,224 |
|
Warrants issued to underwriters in connection with the follow-on offering |
|
|
— |
|
|
$ |
241,109 |
|
Warrants issued in connection with private placement offering #1 |
|
$ |
2,049,600 |
|
|
|
— |
|
Warrants issued in connection with private placement offering #2 |
|
$ |
1,190,111 |
|
|
|
— |
|
Warrants issued in connection with private placement offering #3 |
|
$ |
677,919 |
|
|
|
— |
|
See the accompanying notes to the unaudited condensed consolidated financial statements.
MAIA Biotechnology, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
1.NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business, Organization, and Principles of Consolidation
MAIA Biotechnology, Inc. and subsidiaries (collectively, “the Company”) is a biopharmaceutical company that develops oncology drug candidates to improve and extend the lives of people with cancer. MAIA Biotechnology, Inc. (“MAIA”) was incorporated in the state of Delaware on August 3, 2018. These consolidated financial statements include the accounts of MAIA and its subsidiaries, as follows:
•In July 2021, the Company established a wholly owned Australian subsidiary, MAIA Biotechnology Australia Pty Ltd., to conduct various pre-clinical and clinical activities for the development of the Company's product candidates.
•In April 2022, the Company established a wholly owned Romanian subsidiary, MAIA Biotechnology Romania S.R.L., to conduct various pre-clinical and clinical activities for the development of the Company's product candidates.
Going Concern Considerations
The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
To date, the Company has incurred recurring losses, negative cash flow from operations and has accumulated a deficit of $80,926,908 from the Company’s inception through June 30, 2024. As of June 30, 2024, the Company had $11,579,391 in cash and cash equivalents and working capital of approximately $8,505,733.
To meet the Company’s future working capital needs, the Company will need to raise additional equity or enter into debt financing. While the Company has historically been able to raise additional capital through issuance of equity and/or debt financing, and while the Company has implemented a plan to control its expenses in order to satisfy its obligations due within one year from the date of issuance of these financial statements, the Company cannot guarantee that it will be able to raise additional equity, raise debt, or contain expenses. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued.
Basis of Presentation
Basis of Presentation and Consolidation Principles
The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 21, 2024. The condensed consolidated balance sheet as of December 31, 2023 was derived from such audited financial statements.
In the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made.
The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods.
The unaudited interim condensed consolidated financial statements include the accounts of the Company's wholly owned subsidiaries. All transactions and accounts between and among its subsidiaries have been eliminated. All adjustments and disclosures necessary for a fair presentation of these unaudited interim condensed consolidated financial statements have been included.
Segment Information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision-maker, the Company’s Chief Executive Officer, view the Company’s operations and manage its business as a single operating segment, which is the business of discovering and developing products for the treatment of immunotherapies for cancer.
Use of Estimates
The preparation of the Company’s unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to the valuation of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), stock options and warrants, the embedded features in convertible notes, and accruals for outsourced research and development activities. 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 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.
Certain Risks and Uncertainties
The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the pharmaceutical industry, including, but not limited to, the development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements.
Foreign Currency Translation
The financial statements of the Company’s foreign subsidiaries, where the local currency is the functional currency, are translated using exchange rates in effect as of the applicable balance sheet dates for assets and liabilities and average exchange rates during the period for results of operations. The resulting foreign currency translation adjustment is included in stockholders’ equity as accumulated other comprehensive loss.
Off-Balance Sheet Risk and Concentrations of Credit Risk
The Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Cash accounts are maintained at financial institutions that potentially subject the Company to concentrations of credit risk. As of June 30, 2024 and December 31, 2023, substantially all of the Company’s cash was deposited in accounts at two financial institutions. The Company maintains its cash deposits, which at times may exceed the federally insured limits, with a reputable financial institution, and accordingly, the Company believes such funds are subject to minimal credit risk.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents. As of June 30, 2024 and December 31, 2023, cash includes cash in depository bank accounts. The Company had no cash equivalents as of June 30, 2024 or December 31, 2023.
Fair Value Measurements
The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available.
Under this accounting guidance, 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 at the measurement date. 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 a liability. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:
•Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets.
•Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
•Level 3 - Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.
Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the six months ended June 30, 2024, and as of and during the twelve months ended December 31, 2023. The carrying amount of accounts payable approximated fair value, as they are short term in nature. The fair value of warrants issued for services is estimated based on the Black-Scholes-Merton model during the six months ended June 30, 2024. The estimated fair value of warrants issued to underwriters represented Level 3 measurements.
General and Administrative
General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses, rent, outside legal expenses, insurance costs, and other general and administrative costs.
Research and Development
The Company’s research and development expenses consist primarily of costs associated with the Company’s clinical trials, salaries, payroll taxes, employee benefits, and stock-based compensation charges for those individuals involved in ongoing research and development efforts. Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received.
As part of the process of preparing the condensed consolidated financial statements, the Company is required to estimate its accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice the Company monthly in arrears for services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to the Company at that time. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. The estimates in the Company’s accrued research and development expenses are related to
expenses incurred with respect to contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other vendors in connection with research and development and manufacturing activities.
The Company bases its expense related to CROs and CMOs on its estimates of the services received and efforts expended pursuant to quotations and contracts with such vendors that conduct research and development and manufacturing activities on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of the applicable research and development or manufacturing expense. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from its estimate, the Company adjusts the accrual or prepaid expense accordingly. Although the Company does not expect its estimates to be materially different from amounts actually incurred, the Company’s understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. There have been no material changes in estimates for the periods presented.
Research and Development Incentive
The Company recognizes other income from Australian research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The research and development incentive is one of the key elements of the Australian government’s support for Australia’s innovation system and is supported by legislative law primarily in the form of the Australian Income Tax Assessment Act 1997, as long as eligibility criteria are met. Under the program, a percentage of eligible research and development expenses incurred by the Company through its subsidiary in Australia are reimbursed.
Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive regime described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time, and it is included in Australian research and development incentives in the condensed consolidated statements of operations.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments contain features that qualify as embedded derivatives.
Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statement of operations each period.
Stock-Based Compensation
The Company records share-based compensation for awards granted to employees, non-employees, and to members of the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur.
The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options and warrants. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific
historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards, are selected. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its Common Stock.
Prior to the Company’s initial public offering (“IPO”) in order to estimate the fair value of shares of the Common Stock, the Company's board of directors considered, among other things, sales of Common Stock to third party investors and valuations of Common Stock, business, financial condition and results of operations, including related industry trends affecting operations; the likelihood of achieving a liquidity event, such as an initial public offering, or sale, given prevailing market conditions; the lack of marketability of our Common Stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions.
During the six months ended June 30, 2024, 12,500 restricted shares of Common Stock were issued for consulting services. During the six months ended June 30, 2023, 137,021 restricted shares of Common Stock were issued for consulting services. The fair value of restricted stock awards is based on the Common Stock price.
All stock-based compensation costs are recorded in general and administrative or research and development costs in the condensed consolidated statements of operations based upon the underlying individual’s role at the Company.
Common Stock Warrants
The Company accounts for Common Stock warrants as either equity instruments or as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), depending on the specific terms of the warrant agreement.
When warrants are issued for services provided by non-employees, under ASC 718, Compensation – Stock Compensation (“ASC 718”), the warrants shall be classified as a liability if: (i) the underlying shares are classified as liabilities; or (ii) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified non-employee share-based payments is generally fixed on the grant date and are considered compensatory, as defined by ASC 718.
Income Taxes
Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized, assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.
Net Loss Per Share
Basic loss per share of Common Stock is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of Common Stock outstanding for the period. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of Common Stock equivalents outstanding for the period, determined using the treasury-stock method. Diluted loss per share excludes, when applicable, the potential impact of stock options, unvested shares of restricted stock awards, and common
stock warrants because their effect would be anti-dilutive due to our net loss. Gains on warrant liabilities are only considered dilutive when the average market price of the Common Stock during the period exceeds the exercise price of the warrants. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same.
The following table summarizes the Company’s potentially dilutive securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
2024 |
|
|
2023 |
|
Shares issuable upon exercise of stock options |
|
|
9,322,448 |
|
|
|
7,781,325 |
|
Shares issuable upon exercise of warrants |
|
|
5,442,246 |
|
|
|
924,760 |
|
Recent Accounting Standards
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures (“ASU No. 2023-07”), which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. We do not expect the amendments in ASU No. 2023-07 to have a material impact on our consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU No. 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. We do not expect the amendments in ASU No. 2023-09 to have a material impact on our consolidated financial statements.
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported statement of cash flows.
2. RELATED PARTY TRANSACTIONS
10b5-1 Plan
Certain of our directors and executive officers previously adopted written plans, known as Rule 10b5-1 plans, in which they contracted with a broker to buy shares of our Common Stock on a periodic basis. Each of these plans have expired as of the date of this Quarterly Report. Our directors and executive officers may, in the future, adopt Rule 10b5-1 plans in which they contract with a broker to buy or sell shares of our Common Stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer at the time was entered into, without further direction from the director or officer. The director or officer may amend or terminate the plan in limited circumstances. Our directors and executive officers may also buy or sell additional shares of our Common Stock outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information.
Private Placement
The following Company directors participated in the March 2024 private placement as follows: (i) Stan Smith purchased 170,940 shares of our Common Stock and warrants to purchase up to 170,940 shares of our Common Stock for an aggregate purchase price of $200,000; (ii) Louie Ngar Yee purchased 170,940 shares of our Common Stock and warrants to purchase up to 170,940 shares of our Common Stock for an aggregate purchase price of $200,000; (iii) Cristian Luput purchased 69,282 shares of our Common Stock and warrants to purchase up to 69,282 shares of our Common Stock for an aggregate purchase price of $81,060; (iv) Steven Chaouki purchased 34,641 shares of our Common Stock and warrants to purchase up to 34,641 shares of our Common Stock for an aggregate purchase price of $40,530; and (v) Ramiro Guerrero purchased 6,928 shares of our Common Stock and warrants to purchase up to 6,928 shares of our Common Stock for an aggregate purchase price of $8,106.
The following Company directors participated in the April 2024 private placement as follows: (i) Stan Smith purchased 147,492 shares of our Common Stock and warrants to purchase up to 147,492 shares of our Common Stock for an aggregate purchase price of $300,000; (ii) Louie Ngar Yee purchased 19,665 shares of our Common Stock and warrants to purchase up to 19,665 shares of our Common Stock for an aggregate purchase price of $40,000.
3. ACCRUED EXPENSES
As of June 30, 2024 and December 31, 2023 accrued expenses consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
Bonus |
|
$ |
448,443 |
|
|
$ |
786,999 |
|
Professional fees |
|
|
85,621 |
|
|
|
77,942 |
|
Research and development costs |
|
|
991,260 |
|
|
|
998,838 |
|
Accrued severance |
|
|
404,834 |
|
|
|
824,435 |
|
Other |
|
|
317,129 |
|
|
|
610,393 |
|
Total accrued expenses |
|
$ |
2,247,287 |
|
|
$ |
3,298,607 |
|
4.FAIR VALUE OF FINANCIAL LIABILITIES
Derivative Liability
Financial liabilities consisting of warrant liabilities measured at fair value on a recurring basis are summarized below. The fair value of the warrant liabilities recorded are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value at December 31, 2023 |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
|
2,152,188 |
|
|
|
— |
|
|
|
— |
|
|
|
2,152,188 |
|
Total liabilities |
|
$ |
2,152,188 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,152,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value at June 30, 2024 |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
|
5,346,638 |
|
|
|
— |
|
|
|
— |
|
|
|
5,346,638 |
|
Total liabilities |
|
$ |
5,346,638 |
|