MAIA Biotechnology(MAIA) - 2023 Q3 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements For the nine months ended September 30, 2023, MAIA Biotechnology reported a net loss of $13.5 million and $9.1 million net cash used in operations, with cash decreasing to $6.1 million, leading to substantial doubt about its going concern ability without additional capital Condensed Consolidated Financial Statements The company's financial statements reflect a deteriorating financial position, with total assets decreasing to $7.0 million from $12.0 million at year-end 2022, and net loss widening to $13.5 million from $11.6 million due to increased operating expenses, while financing activities provided only $4.2 million in 2023 compared to $12.7 million in 2022 Condensed Consolidated Balance Sheet Data (Unaudited) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash | $6,104,587 | $10,950,927 | | Total Current Assets | $6,633,133 | $11,808,037 | | Total Assets | $7,001,073 | $12,022,040 | | Total Current Liabilities | $4,149,954 | $3,268,906 | | Total Liabilities | $4,253,361 | $3,514,247 | | Total Stockholders' Equity | $2,747,712 | $8,507,793 | Condensed Consolidated Statements of Operations (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Research and development expenses | $7,394,884 | $6,539,948 | | General and administrative expenses | $6,409,655 | $4,341,880 | | Loss from operations | $(13,804,539) | $(11,981,188) | | Net loss | $(13,516,243) | $(11,623,541) | | Net loss per share (Basic and diluted) | $(1.08) | $(1.39) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,078,570) | $(9,146,390) | | Net cash provided by financing activities | $4,245,463 | $12,670,074 | | Net decrease/increase in cash | $(4,846,340) | $3,489,350 | | Cash at end of period | $6,104,587 | $14,063,642 | Notes to Unaudited Condensed Consolidated Financial Statements The notes highlight significant risks and corporate actions, including substantial doubt about going concern with an accumulated deficit of $57.7 million, a $4.4 million follow-on offering, establishment of an ATM program and share repurchase program, subsequent $1.05 million ATM proceeds, and potential $112 million milestone payments - The company has incurred recurring losses, with an accumulated deficit of $57.7 million as of September 30, 2023, and management has concluded there is substantial doubt about its ability to continue as a going concern[32][33] - In April 2023, the company completed a follow-on offering, selling 2,555,500 shares at $2.25 per share for net proceeds of approximately $4.4 million[74] - In September 2023, the company established an "at-the-market" (ATM) sales agreement to sell up to $7.0 million of common stock and a share repurchase program to buy back up to $800,000 of its stock. No transactions occurred under these programs as of September 30, 2023[75][76] - Subsequent to the quarter end, the company sold 452,388 shares under its ATM program at an average price of $2.32 per share, raising gross proceeds of approximately $1.05 million[103] - The company has licensing agreements with UT Southwestern for its THIO compound that include potential future milestone payments up to $112 million and sales-based royalties[96][97] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on developing its lead cancer therapy, THIO, for NSCLC, highlighting positive safety and preliminary survival data from the THIO-101 Phase 2 trial and FDA clearance for U.S. expansion, while financially, the net loss increased to $13.5 million due to rising R&D and G&A expenses, reiterating substantial doubt about going concern with only $6.1 million in cash Overview and Key Milestones MAIA, a clinical-stage biotech, focuses on its lead candidate THIO for NSCLC, achieving key milestones including FDA Orphan Drug Designation, positive topline safety data, encouraging preliminary survival data, FDA clearance for U.S. expansion of the THIO-101 Phase 2 trial, and dosing 49 patients as of October 2023 - Announced positive topline safety data from Part A of the THIO-101 trial in April 2023, with the highest dose being well tolerated[110] - In July 2023, reported that the first two patients in the trial remained alive and progression-free for approximately 12.2/10.2 months and 11.5/8.5 months, respectively, without additional therapy[112] - In October 2023, the FDA cleared the company's IND application for THIO, allowing for the U.S. expansion of the THIO-101 Phase 2 trial[112] - As of October 10, 2023, 49 patients have been dosed in the THIO-101 Phase 2 clinical trial[112] Results of Operations Operating expenses increased by 15% to $13.8 million for the nine months ended September 30, 2023, driven by a 13% rise in R&D expenses to $7.4 million and a 48% surge in G&A expenses to $6.4 million, resulting in a higher net loss of $13.5 million Comparison of Operating Expenses (Nine Months Ended Sep 30) | Expense Category | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $7,394,884 | $6,539,948 | $854,936 | 13% | | General and administrative | $6,409,655 | $4,341,880 | $2,067,775 | 48% | | Total operating expenses | $13,804,539 | $11,981,188 | $1,823,351 | 15% | - The increase in R&D expenses was primarily due to a $1.2 million increase in scientific research and a $538,000 increase in payroll and bonus expenses[119] - The increase in G&A expenses was driven by a $1.5 million increase in other expenses (investor relations, insurance) and a $418,000 increase in payroll and benefits due to higher headcount[120][121] Liquidity and Capital Resources The company's ability to continue as a going concern is in substantial doubt, with cash totaling $6.1 million as of September 30, 2023, a decrease of $4.8 million from year-end 2022, and net cash used in operating activities of $9.1 million, necessitating additional capital to fund operations and clinical development - As of September 30, 2023, the company had cash of $6,104,587 and working capital of approximately $2,483,000[124] - Management reiterates that there is substantial doubt about the Company's ability to continue as a going concern and that it will need to raise additional equity or debt financing[125] Cash Flow Summary (Nine Months Ended Sep 30) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,078,570) | $(9,146,390) | | Net cash provided by financing activities | $4,245,463 | $12,670,074 | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, MAIA Biotechnology is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide the information otherwise required under this item[138] Controls and Procedures Based on an evaluation as of September 30, 2023, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective at a reasonable assurance level, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2023, the company's disclosure controls and procedures were effective at the reasonable assurance level[139] - No changes in internal control over financial reporting were identified during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[140] PART II—OTHER INFORMATION Legal Proceedings The company reports that it is not currently a party to any material legal proceedings - The company is not party to any material legal proceedings[142] Risk Factors The company directs investors to its Annual Report on Form 10-K for risk factors and adds a new risk concerning its recently authorized share repurchase program, highlighting that the program is not guaranteed to be fully utilized, may not enhance long-term stockholder value, and could increase stock price volatility or negatively impact cash balance - A new risk factor has been added regarding the company's share repurchase program, which was authorized for up to $800,000 through September 2024[144] - The new risk states that the repurchase program is not obligatory, may not enhance stockholder value, and could increase stock price volatility or reduce available cash[144] Unregistered Sales of Equity Securities and Use of Proceeds During the quarter, the company issued unregistered restricted common stock for investor relations services and confirmed no material change in the planned use of proceeds from its July 2022 IPO and April 2023 follow-on offering - In August and September 2023, the company issued shares of restricted common stock for investor services under an exemption from registration requirements[145][146][147] - There has been no material change in the planned use of proceeds from the company's initial public offering or its April 2023 underwritten public offering[148][149] Other Items (Items 3, 4, 5, 6) The company reports no defaults upon senior securities, no mine safety disclosures, and no other material information to disclose for the period, with a list of exhibits filed with the report - Item 3 (Defaults Upon Senior Securities), Item 5 (Other Information): None[151][153] - Item 4 (Mine Safety Disclosures): Not applicable[151] - Item 6 (Exhibits): A list of exhibits filed with the Form 10-Q is provided, including certifications and an at-the-market sales agreement[155]