MAIA Biotechnology, Inc 10-Q for FY2022 Q2
MAIA Biotechnology, Inc. (MAIA)
About this 10-Q
MAIA Biotechnology, Inc filed this 10-Q on August 22, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).
Headline figures
Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $3.31M
- compared with a net loss of $3.43M a year earlier
- Diluted EPS
- -$0.40
- compared with -$0.78 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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 ☐
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).
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 |
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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 18, 2022, the registrant had
Table of Contents
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PART I. |
FINANCIAL INFORMATION |
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Item 1. |
1 |
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1 |
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2 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) |
3 |
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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) |
4 |
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6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
Item 3. |
29 |
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Item 4. |
29 |
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PART II. |
OTHER INFORMATION |
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Item 1. |
30 |
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Item 1A. |
30 |
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Item 2. |
30 |
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Item 3. |
31 |
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Item 4. |
31 |
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Item 5. |
31 |
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Item 6. |
32 |
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33 |
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i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
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June 30, |
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December 31, |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
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$ |
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Prepaid expenses and other current assets |
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Australia research and development incentives receivable |
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Total current assets |
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Deferred offering costs |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Total current liabilities and total liabilities |
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Stockholders' equity (deficit) |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive income (loss) |
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— |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See the accompanying notes to the unaudited condensed consolidated financial statements.
1
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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Operating expenses: |
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Research and development expenses |
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$ |
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$ |
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$ |
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$ |
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General and administrative expenses |
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Total operating costs and expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Other income (expense): |
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Interest expense |
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( |
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( |
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( |
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( |
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Interest income |
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Australian research and development incentives |
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— |
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— |
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Change in fair value of embedded features |
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— |
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( |
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— |
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( |
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Change in fair value of warrant liability |
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— |
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( |
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— |
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( |
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Other income (expense), net |
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( |
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( |
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Net loss |
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( |
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( |
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( |
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( |
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Net loss attributable to noncontrolling interests |
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— |
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( |
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— |
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( |
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Deemed dividend on warrant modification |
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— |
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— |
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( |
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— |
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Net loss attributable to MAIA Biotechnology, Inc. shareholders |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share |
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Basic and diluted |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted average common shares outstanding Basic and diluted |
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See the accompanying notes to the unaudited condensed consolidated financial statements.
2
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Net loss attributable MAIA Biotechnology, Inc. |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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Foreign currency translation adjustment |
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( |
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— |
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( |
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— |
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Comprehensive loss to MAIA Biotechnology, Inc. |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
See the accompanying notes to the unaudited condensed consolidated financial statements.
3
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
For the three and six months ended June 30, 2022
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Common Stock |
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Shares |
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Amount |
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Additional Paid-In Capital |
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Accumulated Deficit |
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Accumulated other comprehensive income |
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Total MAIA Equity |
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Noncontrolling Interest |
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Total Stockholders' Equity |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
— |
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$ |
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$ |
— |
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$ |
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Issuance of common shares upon exercise of stock options |
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— |
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— |
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— |
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Issuance of common shares upon exercise of warrants |
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— |
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— |
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— |
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Issuance of common shares in connection with Equity Financing |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Modification of warrant in equity |
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— |
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— |
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— |
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— |
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— |
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Deemed dividend on modification of warrant |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
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— |
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( |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Balance at March 31, 2022 |
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( |
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— |
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Issuance of common shares upon exercise warrants |
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— |
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— |
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— |
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Issuance of common shares in connection with Equity Financing |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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( |
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( |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
— |
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$ |
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See the accompanying notes to the unaudited condensed consolidated financial statements.
4
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)
For the three and six months ended June 30, 2021
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Common Stock |
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Shares |
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Amount |
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Additional Paid-In Capital |
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Accumulated Deficit |
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Subscription Receivable |
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Total MAIA Equity (Deficit) |
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Noncontrolling Interest |
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Total Stockholders' (Deficit) Equity |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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$ |
( |
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Issuance of restricted common shares |
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— |
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— |
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— |
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Cancellation of restricted common shares |
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( |
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( |
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— |
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— |
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— |
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( |
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— |
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( |
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Issuance of common shares upon exercise of stock options |
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— |
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— |
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— |
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— |
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Receipt of stock subscription receivable |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense - MAIA |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense - DGD |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense - THIO |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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( |
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( |
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Balance at March 31, 2021 |
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( |
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— |
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( |
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( |
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Issuance of stock options to satisfy accrued bonus |
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— |
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— |
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— |
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— |
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— |
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Issuance of stock options to satisfy deferred compensation |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense - MAIA |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense - DGD |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense - THIO |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
) |
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( |
) |
Balance at June 30, 2021 |
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$ |
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$ |
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$ |
( |
) |
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$ |
— |
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$ |
( |
) |
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$ |
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$ |
( |
) |
||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
5
MAIA Biotechnology, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
Six Months Ended |
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||||||
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June 30, |
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||||||
|
2022 |
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2021 |
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|||
Cash flows from operating activities: |
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Net loss, including noncontrolling interests |
|
$ |
( |
) |
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$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation |
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Change in fair value of embedded features |
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— |
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Change in fair value of warrant liability |
|
— |
|
|
|
|
||
Amortization of debt discount |
|
— |
|
|
|
|
||
Change in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Australia research and development incentives receivable |
|
|
( |
) |
|
— |
|
|
Other assets |
|
|
|
|
|
( |
) |
|
Accounts payable |
|
|
|
|
|
|
||
Accrued expenses |
|
|
|
|
|
|
||
Due to related parties |
|
— |
|
|
|
( |
) |
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of convertible notes, warrants, and embedded conversion |
|
|
— |
|
|
|
|
|
Deferred offering costs |
|
|
( |
) |
|
— |
|
|
Proceeds from Paycheck Protection Program loan |
|
|
— |
|
|
|
|
|
Collections of subscriptions receivable |
|
|
— |
|
|
|
|
|
Proceeds from issuance of common stock, net of transaction costs |
|
|
|
|
|
— |
|
|
Proceeds from exercise of stock options |
|
|
|
|
|
|
||
Proceeds from exercise of warrants |
|
|
|
|
|
— |
|
|
Payment on loan payable to officer |
|
— |
|
|
|
( |
) |
|
Net cash provided by financing activities |
|
|
|
|
|
|
||
Cash flows from financing activities foreign currency exchange rates: |
|
|
|
|
|
|
||
Effect of foreign currency exchange on cash |
|
|
( |
) |
|
— |
|
|
Net effect of foreign currency exchange on cash |
|
|
( |
) |
|
|
— |
|
Net increase (decrease) in cash |
|
|
( |
) |
|
|
|
|
Cash at beginning of period |
|
|
|
|
|
|
||
Cash at end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Options issued for accrued bonus |
|
$ |
— |
|
|
$ |
|
|
Options issued for deferred compensation |
|
$ |
— |
|
|
$ |
|
|
Options issued for services |
|
$ |
— |
|
|
$ |
|
|
Reclassification of warrant liability to equity |
|
$ |
— |
|
|
$ |
|
|
Issuance of convertible note for payment on loan to officer |
|
$ |
— |
|
|
$ |
|
|
See the accompanying notes to the unaudited condensed consolidated financial statements.
6
MAIA Biotechnology, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
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
Liquidity
At June 30, 2022, the Company had working capital of $
On August 1, 2022, the Company sold
The Company will require significant funding to perform the necessary clinical trials, and to meet the Company’s long-term development and commercialization goals. The Company believes that its cash as of June 30, 2022, and subsequent cash proceeds from the exercise of warrants and funds received from the Company’s initial public offering will be sufficient to support operations through at least the next twelve months from the date the consolidated financial statements are issued, including funding of the THIO-101 lead-in and preliminary efficacy of the phase 2 THIO-101. The Company plans to meet its long term capital requirements primarily through issuances of equity securities. The Company cannot make any assurances that additional financings will be available, on acceptable terms or at all. If the Company is unable to raise the necessary funding, management will undertake cost
7
cutting measures, as done in the past, to reduce compensation and reduce the scope of or delay its clinical programs. This could negatively impact the Company’s business and could also lead to the reduction of the Company’s operations.
Impact of the COVID-19 Pandemic on our Operations
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 Outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 Outbreak as a pandemic, based on the rapid increase in exposure globally.
The full impact of the COVID-19 Outbreak continues to evolve as of the date of this report. As a result, we cannot estimate the full magnitude that the pandemic will have on our business. If the COVID-19 Outbreak continues, it may have a material adverse effect on our financial condition, liquidity, and future results of operations for the future. We are actively monitoring the impact of the global pandemic on our financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 Outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 Outbreak on our results of operations, financial condition, or liquidity for the future. One of our initial clinical studies is taking place in Australia, which has imposed one of the strictest COVID-19-related measures, including lock-downs. While we have not currently experienced any potential delays or increased costs as a result of these measures, we may do so in the future.
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, 2021 included in the Company’s final prospectus for its initial public offering dated July 27, 2022 and filed with the SEC on July 29, 2022. The condensed consolidated balance sheet as of December 31, 2021 was derived from the 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.
Reclassification
Certain 2021 amounts have been reclassified to conform to the 2022 presentation.
Use of Estimates
The preparation of the Company’s unaudited interim condensed 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 common stock, stock options and warrants, the embedded features in convertible notes, accruals for outsourced research and development activities, and the valuation allowance of deferred tax assets. These estimates
8
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, 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 shareholders’ 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. At June 30, 2022 and December 31, 2021, substantially all of the Company’s cash was deposited in accounts at one financial institution. 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, 2022 and December 31, 2021, cash includes cash in a depository bank account; the Company has
Fair Value Measurements
ASC 820, Fair Value Measurements, provides guidance on the development and disclosure of fair value measurements. 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:
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, 2022, and as of and during the twelve months ended December 31, 2021. The carrying amount of accounts payable approximated fair value as they are
9
short term in nature. The fair value of warrants issued for services is estimated based on the Black-Scholes model during the periods ended June 30, 2021. There were
General and Administrative
General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses, depreciation and amortization, 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 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 significant estimates in the Company’s accrued research and development expenses are related to expenses incurred with respect to CROs, 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.
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
10
available information at the time and it is included in Australian research and development incentives in the condensed consolidated statements of operations.
Under the program, a percentage of eligible research and development expenses incurred by the Company through its subsidiary in Australia are reimbursed.
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 options 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 are selected, 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. 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 initial public offering, 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.
There were
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 liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480"), depending on the specific terms of the warrant agreement.
11
When warrants are issued for services to non-employees, under ASC 718, Compensation - Stock Compensation ("ASC 718"), the warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee 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.
Deferred Offering Costs
Deferred offering costs are included in other assets and consists of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the initial public offering and that were charged to additional paid-in capital upon the completion of the initial public offering on August 1, 2022.
Leases
In February 2016, the FASB issued , as amended, Leases (“Topic 842”), which applies to all leases. Under Topic 842, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing leases, while the statement of operations will reflect lease expense for operating leases and amortization and interest expense for financing leases. Topic 842 is effective for public entities for fiscal years beginning after December 15, 2018 and periods beginning after December 15, 2021 for all other entities. Entities are required to use a modified retrospective approach of adoption for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company
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.
12
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 |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Shares issuable upon exercise of stock options |
|
|
|
|
|
|
||
Shares issuable upon exercise of warrants |
|
|
|
|
|
|
||
Unvested restricted stock awards |
|
|
— |
|
|
|
|
|
Recent Accounting Standards
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.
As of June 30, 2022 and December 21, 2021, accrued expenses consisted of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
Bonus |
|
$ |
|
|
|
|
||
Professional fees |
|
|
|
|
|
|
||
Research and development costs |
|
|
|
|
|
|
||
Deferred compensation to former employees and officers |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses |
|
$ |
|
|
$ |
|
||
In March 2020, the shareholders approved an amended and restated certificate of incorporation which authorizes MAIA to issue
Among other provisions, MAIA's shareholders agreement gave first MAIA, followed by the non-selling shareholders, the option to purchase the outstanding shares of a shareholder prior to the sale of shares to a third party. Should the non-selling shareholders decline to purchase any portion of the selling shareholders shares, MAIA had a final opportunity to repurchase the shares. The agreement also contains provisions for "drag-along" and "tag-along" rights, as described in the agreement. MAIA’s shareholders agreement, including the aforementioned provisions, terminated upon the closing of MAIA’s initial public offering on August 1, 2022.
Sales of MAIA Common Stock
During January and February 2022, the Company sold
13
MAIA Biotechnology, Inc. Restricted Stock Awards
During the six months ended June 30, 2021, MAIA recognized $
During the six months ended June 30, 2021, MAIA recognized $
|
|
Shares |
|
|
Weighted |
|
||
Unvested balance at January 1, 2022 |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
|
|
|
Unvested balance at June 30, 2022 |
|
|
— |
|
|
$ |
— |
|
MAIA Stock Warrants
In January 2022, the Company and certain warrant holders executed waivers related to the acceptance and approval of an amendment to the holders' warrant agreements originally issued between May 6, 2020 and February 26, 2021 in connection with the Company's issuance of convertible notes. The amendment removed the IPO expiration provision from the warrant agreements, and the warrants are now only be exercisable, in whole or in part, during the exercise period ending on earliest to occur of: (a) various dates in 2028 as stated within the warrant agreements; or (b) immediately prior to the closing of a change of control. The value of the warrant modification to the
During January 2022, warrants were exercised, resulting in the issuance of
|
|
Warrants |
|
|
Weighted |
|
|
Weighted |
|
|||
Balance at January 1, 2022 |
|
|
|
|
$ |
|
|
|
|
|||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
||
Balance at June 30, 2022 |
|
|
|
|
$ |
|
|
|
|
|||
14
MAIA Biotechnology, Inc. Stock Award Plans
In 2018, the Company adopted the MAIA Biotechnology, Inc. 2018 Stock Option Plan (the "MAIA 2018 Plan"). MAIA's board of directors administers the MAIA Plan, under which
In 2020, the Company adopted the MAIA Biotechnology, Inc. Amended and Restated 2020 Equity Incentive Plan (the "MAIA 2020 Plan"), also administered by the board of directors. The MAIA 2020 Plan reserved
Stock options are to be granted with an exercise price which is at least equal to the stock's estimated fair value at the date of grant, and with a contractual term of no more than
As of June 30, 2022, only stock options have been awarded pursuant to the MAIA stock award plans.
The following table summarizes the activity and information regarding MAIA's outstanding and exercisable options for the six months ended June 30, 2022:
|
|
Options |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
|
|
|
|||||
Balance at January 1, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
— |
|
|
|
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cancelled/forfeited |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 30, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
$ |
|
|||||
Options exercisable at June 30, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
$ |
|
|||||
During the six months ended June 30, 2022, the fair value of the Company's common stock was estimated for financial reporting purposes from January 1 to January 26, 2022 based on valuations of $
15
quality of the information specific to each allocation methodology to arrive at a final estimated fair value per share of the common stock before a discount for lack of marketability is applied. From January 27 to June 30, 2022 the fair value of the Company’s common stock was estimated for financial reporting purposes at $
During the six months ended June 30, 2021, the fair value of the Company’s common stock was estimated for financial reporting purposes based on valuations. From January 1, 2021 to February 28, 2021 a valuation of $
The value of option grants is calculated using the Black-Scholes option pricing model with the following assumptions for options granted during the six months ended June 30:
|
|
2022 |
|
|
2021 |
|
||
Risk-free interest rate |
|
|
|
|
||||
Expected term (in years) |
|
|
|
|
||||
Expected volatility |
|
|
|
|
||||
Expected dividend yield |
|
|
— |
|
|
|
— |
|
The weighted-average grant date fair value of stock options issued during the six months ended June 30, 2022 and 2021 was $
Stock based compensation related to the Company’s stock plans are as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
General and administrative |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Legal
From time to time, the Company is involved in legal actions and claims arising in the normal course of business. Management believes there are no matters which will have a material adverse effect on the Company's financial position, operations or cash flows.
Patent Licensing, Sponsored Research, and Patent & Technology Agreements
THIO - In November 2018 and as amended in December 2020, the Company entered into a Global Patent Licensing Agreement ("PLA") titled "Patent and Technology License Agreement AGT. NO. L2264 - MAIA Biotechnology"
16
with the University of Texas Southwestern ("UTSW") to license patent families for a specific compound ("THIO") from UTSW to MAIA. The agreement, as amended, has a term of
Also in December 2020, the Company entered into a second license agreement with UTSW titled "Patent and Technology License Agreement AGT. NO. L3648 — MAIA Biotechnology" pursuant to which UTSW is licensing an additional compound to MAIA. The agreement has a term of
The agreement requires royalties of
The Company will also pay UTSW running royalties on a yearly basis as a percentage of Net Sales of the Company or its sublicensee.
MJC13 — In January 2019, MAIA entered into a Global PLA and SRA for Collaborative Research and Jointly Owned Intellectual Property for the MJC13 Family of Compounds for the Treatment of Prostate Cancer with UTEP. The SRA requires MAIA to reimburse UTEP for research program expenditures up to $
Regeneron - In February 2021, the Company reached an agreement with Regeneron Pharmaceuticals, Inc. ("Regeneron") to perform one clinical trial for the treatment of patients with Non-Small Cell Lung Cancer (NSCLC) involving a Regeneron drug candidate that utilizes one of the Company's compounds/agents. The Company is responsible for all costs of the study with Regeneron supplying their drug cemiplimab representing a cost savings for the Company, the first phase of which is expected to take approximately two years. The overall term of the agreement is for years unless earlier terminated for certain reasons as defined in the agreement. Either party may terminate a study plan in the event that patient screening for the clinical study does not commence within twelve (12) months after (a) the Effective Date, with respect to the initial study, or (b) the execution of the applicable study plan, with respect to each other study. If either party terminates a study plan, the Company shall reimburse Regeneron for the Regeneron product it received in connection with such study plan based on the actual out-of-pocket cost to Regeneron of such Regeneron product. As of June 30, 2022 neither party has terminated the agreement.
The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of June 30, 2022, and December 31, 2021, the Company had a full valuation allowance against its deferred tax assets.
17
For the six months ended June 30, 2022 and 2021, the Company recorded
18
Initial Public Offering
On July 28, 2022 the Company’s shares of common stock began trading on the NYSE American under the symbol MAIA. On August 1, 2022, the Company sold
Approval of Ratchet Shares
In the first quarter of 2022, the Company completed a crossover round with certain investors consisting of sales of the Company’s common stock, $
Pro forma
The table below presents the Company’s balance sheet as of June 30, 2022 on an actual basis and on a pro forma basis to give effect to:
|
As of June 30, 2022 |
|
|||||
|
|
|
|
|
|
||
|
Actual |
|
|
Pro Forma |
|
||
Cash |
$ |
|
|
$ |
|
||
Total debt |
|
|
|
||||
Total Stockholders’ Equity |
|
|
|
|
|
||
Shares of Common stock issued and outstanding |
|
|
|
|
|
||
Expiration of Warrants
On August 1, 2022 at the closing of the initial public offering,
19
Issuance of Warrants
Concurrently with the closing of the Company’s initial public offering, the Company issued warrants to purchase an aggregate of up to
Approval of 2021 Equity Incentive Plan
On August 1, 2022 the Company approved the 2021 Equity Incentive Plan with
Amended and Restated Certificate and Amended and Restated Bylaws
In connection with the closing of the Company’s initial public offering, the Company amended and restated its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”) and amended and restated its Bylaws (the “Amended and Restated Bylaws”). The Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on August 1, 2022 and became effective on that date, and among other things, increased the authorized number of common stock to
Termination of Shareholders Agreement
Upon the closing of the Company’s initial public offering, the Company’s shareholders agreement terminated pursuant to its terms. The shareholders agreement gave first MAIA, followed by the non-selling shareholders, the option to purchase the outstanding shares of a shareholder prior to the sale of shares to a third party. Should the non-selling shareholders decline to purchase any portion of the selling shareholders shares, MAIA could have a final opportunity to repurchase the shares. The agreement also contained provisions for "drag-along" and "tag-along" rights, as described in the agreement. The shareholders agreement, including the aforementioned provisions, terminated upon the closing of MAIA’s initial public offering.
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion together with our financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. 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” and elsewhere in this Quarterly Report on Form 10-Q.
Overview
We are a clinical stage biotechnology company engaged in the discovery, development and commercialization of therapies targeting cancer. Our initial disease target is lung cancer, a serious medical condition with an incidence of over 235,000 new cases in the US in 2021, representing 12.4% of all cancers, and over 131,000 deaths, or 21.7% of all cancers. Worldwide, lung cancer incidence is over 2,200,000 per year (ranking second only after breast cancer), and mortality over 1,800,000 (ranking first). Specifically, we are targeting Non-Small Cell Lung Cancer (NSCLC), which represents 85% of all lung cancers.
We accomplished the following key milestones:
21
Impact of the COVID-19 Pandemic on Our Operations
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 Outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 Outbreak as a pandemic, based on the rapid increase in exposure globally.
The full impact of the COVID-19 Outbreak continues to evolve as of the date of this report. As a result, we cannot estimate the full magnitude that the pandemic will have on our business. If the COVID-19 Outbreak continues, it may have a material adverse effect on our financial condition, liquidity, and future results of operations for the future. We are actively monitoring the impact of the global pandemic on our financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 Outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 Outbreak on our results of operations, financial condition, or liquidity for the future. While we have not currently experienced any potential delays or increased costs as a result of these measures, we may do so in the future.
Impact of the War in Ukraine on Our Operations
The short and long-term implications of Russia’s invasion of Ukraine are difficult to predict at this time. The imposition of sanctions and counter sanctions may have an adverse effect on the economic markets generally and could impact our business, financial condition, and results of operations. Because of the highly uncertain and dynamic nature of these events, the Company terminated any planned research activities in Russia.
22
Financial Operations Overview and Analysis for the Three Months Ended June 30, 2022 and 2021
Comparison of the Three Months Ended June 3, 2022 and 2021
|
|
Three Months Ended |
|
|
|
|
|
|
|
|||||||
|
|
June 30, |
|
|
Change |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
Dollars |
|
|
Percentage |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
2,119,465 |
|
|
$ |
643,987 |
|
|
$ |
1,475,478 |
|
|
|
229.12 |
% |
General and administrative |
|
|
1,322,579 |
|
|
|
859,269 |
|
|
|
463,310 |
|
|
|
53.92 |
% |
Total operating costs and expenses |
|
|
3,442,044 |
|
|
|
1,503,256 |
|
|
|
1,938,788 |
|
|
|
128.97 |
% |
Loss from operations |
|
|
(3,442,044 |
) |
|
|
(1,503,256 |
) |
|
|
(1,938,788 |
) |
|
|
128.97 |
% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(104 |
) |
|
|
(313,466 |
) |
|
|
313,362 |
|
|
|
(99.97 |
)% |
Interest income |
|
|
429 |
|
|
652 |
|
|
|
(223 |
) |
|
|
(34.20 |
)% |
|
Australian research and development |
|
|
135,836 |
|
|
|
— |
|
|
|
135,836 |
|
|
|
100.00 |
% |
Change in fair value of embedded |
|
|
— |
|
|
|
(92,000 |
) |
|
|
92,000 |
|
|
|
(100.00 |
)% |
Change in fair value of warrant |
|
|
— |
|
|
|
(1,552,320 |
) |
|
|
1,552,320 |
|
|
|
(100.00 |
)% |
Other income (expense), net |
|
|
136,161 |
|
|
|
(1,957,134 |
) |
|
|
2,093,295 |
|
|
|
(106.96 |
)% |
Net loss |
|
|
(3,305,883 |
) |
|
|
(3,460,390 |
) |
|
|
154,507 |
|
|
|
(4.47 |
)% |
Net loss attributable to noncontrolling |
|
|
— |
|
|
|
(29,676 |
) |
|
|
29,676 |
|
|
|
(100.00 |
)% |
Net loss attributable to MAIA |
|
$ |
(3,305,883 |
) |
|
$ |
(3,430,714 |
) |
|
$ |
124,831 |
|
|
|
(3.64 |
)% |
Operating Expenses
Research and development expenses
Research and development expenses increased by approximately $1,475,000 or 229%, from approximately $644,000 for the three months ended June 30, 2021 to approximately $2,119,000 for the three months ended June 30, 2022. The increase was primarily related to the increase in clinical expenses related to the clinical preparation and startup of THIO trials of approximately $1,017,000, an increase in payroll and bonus expenses of approximately $561,000 related to increased headcount of five additional research and development employees during the first six months of 2022, offset by a decrease in stock-based compensation costs of approximately $103,000.
General and administrative expenses
General and administrative expenses increased by approximately $463,000 or 54% from approximately $859,000 for the three months ended June 30, 2021 to approximately $1,322,000 for the three months ended June 30, 2022. The increase was primarily related to an increase in payroll and bonus expense of approximately $222,000, an increase in professional fees of approximately $231,000, and an increase in other expenses of $99,000 offset by a decrease in stock based compensation of approximately $89,000.
Other income (expense), net
Other income (expense), net increased approximately $2,093,000 or 107% from other expense of approximately $1,957,000 for the three months ended June 30, 2021 to other income of approximately $136,000 for the three months ended June 30, 2022. The change in other income (expense), net was primarily the result of approximately $1,552,000 expense related to change in the fair value of warrant liability, expense of approximately $313,000 related to interest for convertible notes and the approximately $92,000 of expense for the change in fair value of the bifurcated embedded feature for the three months ended June 30, 2021 and by the increase of approximately
23
$136,000 of income related to the Australian research and development incentives for the three month June 30, 2022.
Comparison of the Six Months Ended June 30, 2022 and 2021
|
|
Six Months Ended |
|
|
|
|
|
|
|
|||||||
|
|
June 30, |
|
|
Change |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
Dollars |
|
|
Percentage |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
4,196,794 |
|
|
$ |
906,745 |
|
|
$ |
3,290,049 |
|
|
|
362.84 |
% |
General and administrative |
|
|
2,688,808 |
|
|
|
1,647,224 |
|
|
|
1,041,584 |
|
|
|
63.23 |
% |
Total operating costs and expenses |
|
|
6,885,602 |
|
|
|
2,553,969 |
|
|
|
4,331,633 |
|
|
|
169.60 |
% |
Loss from operations |
|
|
(6,885,602 |
) |
|
|
(2,553,969 |
) |
|
|
(4,331,633 |
) |
|
|
169.60 |
% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(104 |
) |
|
|
(376,233 |
) |
|
|
376,129 |
|
|
|
(99.97 |
)% |
Interest income |
|
|
901 |
|
|
|
793 |
|
|
|
108 |
|
|
|
13.62 |
% |
Australian research and development |
|
|
165,077 |
|
|
|
— |
|
|
|
165,077 |
|
|
|
100.00 |
% |
Change in fair value of embedded |
|
|
— |
|
|
|
(107,000 |
) |
|
|
107,000 |
|
|
|
(100.00 |
)% |
Change in fair value of warrant |
|
|
— |
|
|
|
(1,445,500 |
) |
|
|
1,445,500 |
|
|
|
(100.00 |
)% |
Other income (expense), net |
|
|
165,874 |
|
|
|
(1,927,940 |
) |
|
|
2,093,814 |
|
|
|
(108.60 |
)% |
Net loss |
|
|
(6,719,728 |
) |
|
|
(4,481,909 |
) |
|
|
(2,237,819 |
) |
|
|
49.93 |
% |
Net loss attributable to noncontrolling |
|
|
— |
|
|
|
(67,201 |
) |
|
|
67,201 |
|
|
|
(100.00 |
)% |
Deemed dividend on warrant |
|
|
(450,578 |
) |
|
|
— |
|
|
|
(450,578 |
) |
|
|
100.00 |
% |
Net loss attributable to MAIA |
|
$ |
(7,170,306 |
) |
|
$ |
(4,414,708 |
) |
|
$ |
(2,755,598 |
) |
|
|
62.42 |
% |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Operating Expenses
Research and development expenses
Research and development expenses increased by approximately $3,290,000 or 363%, from approximately $907,000 for the six months ended June 30, 2021 to approximately $4,197,000 for the six months ended June 30, 2022. The increase was primarily related to an increase in clinical expenses of approximately $2,248,000 due to an increase in payments to clinical research organizations and payments to consultants primarily related to the THIO 101 trial start-up, an increase in payroll related expenses and bonus expense of approximately $938,000 related to increased headcount of five research and development employee during the six months ending June 30, 2021, and an increase in stock-based compensation of approximately $104,000.
General and administrative expenses
General and administrative expenses increased by approximately $1,042,000 or 63% from approximately $1,647,000 for the six months ended June 30, 2021 to approximately $2,689,000 for the six months ended June 30, 2022. The increase was related to the increases in payroll and bonus expenses of approximately $361,000 related to an increase in headcount over the same period last year, increases in professional fees for approximately $656,000, and an increase in other expenses of approximately $160,000, offset by a decrease in stock based compensation expense of approximately $136,000.
24
Other income (expense), net
Other income (expense), net increased approximately $2,094,000, or 109% from approximately ($1,928,000) for the six months ended June 30, 2021 to approximately $166,000 for the six months ended June 30, 2022. The change in other income (expense), net was primarily the result of approximately $1,446,000 expense related to change in the fair value of bifurcated embedded feature, expense related to approximately $376,000 related to interest for convertible notes and the approximately $107,000 of expense for the change in fair value of the warrant liability for the six months ended June 30, 2021 and by the increase of approximately $165,000 of income related to the Australian research and development incentives for the six month June 30, 2022.
Liquidity and Capital Resources
As of June 30, 2022, our available cash totaled approximately $8,150,000 which represented a decrease of approximately $2,424,000 compared to December 31, 2021. As of June 30, 2022, we had working capital of approximately $5,512,000 which represents a decrease of approximately $3,014,000 compared to December 31, 2021. We have generated no revenues and we expect to continue to incur operating losses for the foreseeable future and may never become profitable. We are dependent on our ability to continue to raise equity and/or debt financing to continue operations, until the attainment of profitable operations.
Between April 22, 2022 and May 3,2022, warrant holders exercised warrants, resulting in the issuance of 153,000 shares of common stock for proceeds of approximately $275,400,
On May 19 , 2022, the Company sold 11,111 shares of common stock at $9.00 per share for gross proceeds of $99,999 with no transaction costs. On August 1, 2022, the Company sold 2,000,000 shares of common stock at $5 per share for gross proceeds of $10,000,000 in an initial public offering. On August 3, 2022, the Company sold an additional 300,000 shares of common stock at $5 per share for gross proceeds of $1,500,000 per the overallotment option for the underwriter.
We will need to raise additional capital to fund our operations, to develop and commercialize THIO, and to develop, acquire or in-license other products. We may seek to fund our operations through additional public equity, or debt financings, as well as other sources. We cannot make any assurances that additional financings will be available to us and, if available, on acceptable terms or at all. This could negatively impact our business and operations and could also lead to the reduction of our operations. We believe that we currently have sufficient funds to support operations through the next 24 months from the date of this filing. If the Company is unable to raise the necessary funding, management will undertake cost cutting measures, as done in the past, to reduce compensation and reduce the scope of or delay its clinical programs.
Cash Flows
Cash Flows Six Months Ended June 30, 2022 and June 30, 2021
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Net cash flows used in operating activities |
|
$ |
(4,827,231 |
) |
|
$ |
(1,204,351 |
) |
Net cash flows provided by financing activities |
|
|
2,411,027 |
|
|
|
7,321,535 |
|
Effect of foreign currency exchange rate changes on cash |
|
|
(8,076 |
) |
|
|
— |
|
Net (decrease) increase in cash and cash equivalents |
|
$ |
(2,424,280 |
) |
|
$ |
6,117,184 |
|
Operating Activities
For the six months ended June 30, 2022, net cash used in operating activities was approximately $4,827,000, which consisted of a consolidated net loss of approximately $6,720,000 offset by non-cash charges of approximately $1,298,000 in stock-based compensation. Total changes in operating assets and liabilities of approximately $594,000 were driven by an approximate $962,000 increase in accounts payable and accrued liabilities, offset by an
25
approximate $203,000 increase in prepaid expenses and other assets and an approximate increase of $165,000 in Australia research and development incentives receivables.
For the six months ended June 31, 2021, net cash used in operating activities was approximately $1,204,000, which consisted of a net loss of approximately $4,482,000 offset by non-cash charges of approximately $3,153,000 which primarily includes approximately $1,330,000 in stock-based compensation, $107,000 related to the change in fair value of embedded features, $270,000 amortization of debt discount on convertible notes and changes in the fair value of the warrant liability of approximately $1,446,000. Total changes in operating assets and liabilities of approximately $125,000 were primarily driven by an approximate $97,000 increase in accrued expenses and an approximate increase of $79,000 in accounts payable and an approximate decrease in prepaid expenses and other assets of $27,000 offset by a decreases of approximately $71,000 in other assets, and a decrease of approximately $7,000 in amounts due to related parties.
For the six months ended June 30, 2022 the effect of foreign currency exchange rate changes on cash decreased the cash balance as of June 30, 2022 by approximately $8,000.
Financing Activities
Net cash provided by financing activities was approximately $2,411,000 and $7,322,000 for the six months ended June 30, 2022 and 2021, respectively. Net cash provided by financing activities for the six months ended June 30, 2022 consisted primarily of proceeds from issuance of common stock of approximately of $2,474,000 and net proceeds from issuance of common stock upon exercise of warrants of $385,000 and stock options of approximately $48,000 offset by an approximate $496,000 increase in deferred offering costs. Net cash provided by financing activities for the six months ended June 30, 2021 consisted of proceeds from issuance of convertible notes totaling approximately $7,252,000, collections of subscriptions receivable of approximately $2,000, proceeds from the paycheck protection program loan totaling approximately $63,000, and proceeds from exercise of stock options of approximately $5,000.
Critical Accounting Policies and Significant Judgments and Estimates
Management’s discussion and analysis of our financial condition and results of our operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us 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 common stock, stock options and warrants, the embedded features in convertible notes, accruals for outsourced research and development activities, and the valuation allowance of deferred tax assets. 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.
We define our critical accounting policies as those accounting principles that require it to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. While our significant accounting policies are more fully described in Note 1 to our financial statements, we believe the following are the critical accounting policies used in the preparation of its financial statements that require significant estimates and judgments.
Fair value of common stock
For all periods prior to the initial public offering, there was no public market for our common stock. The Company sold shares of its common stock to third parties beginning in September 2018 through June 2019 at $1.80 per share. Subsequent to July 2019 the fair value of the shares of common stock underlying our stock-based awards was estimated by our board of directors based in part on valuations until we began selling shares of our common stock to third parties beginning on July 15, 2021 through October 15, 2021 at $8.00 per share and beginning on January 27, 2022 through February 27, 2022 at $9.00 per share. To determine the fair value of our common stock underlying annual option grants to officers and directors, our board of directors considered, among other things, input from management, valuations of our common stock valuation firms in accordance with the guidance provided by the American Institute of Certified Public Accountants 2013 Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, and our board of directors’ assessment of additional objective and subjective
26
factors that it believed were relevant, and factors that may have changed from the date of the most recent valuation through the date of the grant.
These factors included, but were not limited to:
Our valuation as of February 28, 2021 indicated a fair value of our common stock of $1.83 per share. For grants of stock awards and stock option awards during the period February 28, 2021 through July 12, 2021, management set the exercise prices for those awards based on the February 28, 2021 valuation until the Company initiated the sale of common stock at $8.00 per share which was first competed on July 18, 2021 and followed by additional sales through September 26, 2021. The Company set the exercise price of awards granted from July 18, 2021 through October 30, 2021 at $8.00 per share.
In evaluating the fair value of our common stock during the period March 2021 through May 2021, management evaluated events and their potential impact on the estimated fair value per share of the common stock. We considered events during this period which would have an effect on the fair value of our common stock such as milestones related to the clinical development and operations of our drug substances and advances in the production of drug substances and our drug product, however, there were no specific events that would indicate a definitive change in the value of the Company.
Given that there were no specific events that caused the change in fair value of our common stock from the indicated value of $1.83 as of February 28, 2021 to the $8.00 per share realized from the sale of common stock initiated in mid July, we performed a retrospective valuation of our common stock as of April 30, 2021. The retrospective valuation as of April 30, 2021 also indicated a fair value of our common stock of $1.83. In estimating the fair value of stock and stock option awards, we used an estimated fair value of $1.83 for awards granted from February 28, 2021 through May 31, 2021, based on the February 28, 2021 and April 30, 2021 valuations. From June 1, 2021 through October 30, 2021, we used an estimated of fair value of our common stock of $8.00 in valuing our stock and stock option awards. We believe the fair values based on the valuations materially represents the fair value of our common stock during the period February 28, 2021 through May 31, 2021 since no single intervening specific event indicated a definitive change in the value of the Company.
The February 28, 2021 and the April 30, 2021 valuations used the income approach and the market approach in estimating the fair value of our common stock. The market approach utilized guideline public companies in estimating fair value of our stock. The income approach estimates enterprise value based on the estimated present value of future cash flows the business is expected to generate over its remaining life. The estimated present value is calculated using a discount rate reflective of the risks associated with an investment in a similar company in a similar industry or having a similar history of revenue growth. The market approach measures the value of a business through an analysis of recent sales or offerings of comparable investments or assets, and in our case, focused on comparing us to a group of our peer companies. In applying this method, valuation multiples are derived from historical and projected operating data of the peer company group. We then apply the selected multiples to our operating data to arrive at a range of indicated enterprise values of the Company. We then subtracted the net debt to determine equity value.
During November 2021 and December 2021, the fair value of the Company’s common stock was determined to be $8.69 and $8.87, respectively. For our valuations of common stock performed November 2021 and December 2021,
27
we used a hybrid method of the Option Pricing Method ("OPM”) and the Probability-Weighted Expected Return Method ("PWERM”). PWERM considers various potential liquidity outcomes. Our approach included the use of an initial public offering scenario, a scenario assuming continued operation as a private entity, and a dissolution scenario. Under the hybrid OPM and PWERM, the per share value calculated under the OPM and PWERM are weighted based on expected exit outcomes and the quality of the information specific to each allocation methodology to arrive at a final estimated fair value per share of the common stock before a discount for lack of marketability is applied.
In the First Quarter of 2022, the Company made further progress in its clinical programs, which included the approval of THIO by the Bellberry Human Research Ethics Committee (HREC) in Australia to initiate the THIO-101 Phase 2 clinical study. Additionally, the Company completed its selection process for the clinical sites for its Phase 2 study in Australia and Europe and its application to start the Phase 2 study in Australia was approved. The Company also submitted a similar application in the second quarter of 2022, to conduct the same Phase 2 study in Europe.
The events above resulted in the Company being able to complete sales of its common stock to unrelated third-party investors beginning in January 27, 2022, through February 28, 2022, of 263,729 shares of common stock at a price of $9.00 per share resulting in aggregate proceeds of approximately $2.4 million. In May 2022, the Company completed additional sales of its common stock at a price of $9.00 per share resulting in aggregate proceeds of approximately $0.1 million. Due to the lack of any single specific event that would have indicated a definitive change in the value of the Company, the fair value of the
Company’s common stock from January 27, 2022 through June 6, 2022, was determined based on sales of the Company’s shares at arm’s length to unrelated third parties at $9.00 per share.
Following the initial public offering, it will not be necessary to determine the fair value of our common stock, as our shares will be traded in the public market.
Stock-based compensation
Our stock-based awards are classified as equity (restricted stock awards, stock options, and warrants). We recognize related stock-based compensation expense based on the grant date fair value of the awards. The fair value of restricted stock awards is based on our common stock price. We estimate the fair value of stock options and warrants using the Black-Scholes-Merton valuation model which requires the use of subjective assumptions that could materially impact the estimation of fair value and related compensation expense to be recognized. One of these assumptions include the expected volatility of our stock price. Developing this assumption requires the use of judgment. The Company lacks company-specific historical and implied volatility information. Therefore, we estimate our expected stock volatility based on the historical volatility of a publicly traded set of peer companies. These estimates are highly subjective and now that the initial public offering is completed these estimates will no longer be necessary since the fair value will be based on the trading value of the Company’s common stock.
Two of the assumptions used in the Black-Scholes-Merton valuation model are historical volatility and fair value of common stock, both of which are subject to uncertainty. Historical volatility is subject to uncertainty due to changes in the market over time. The fair value of our common stock is subject to uncertainty due to the possibility of changes in the results of our clinical trials, which could impact the fair value of our common stock. The total expense related to stock options is material to our financial statements on an annual basis, and significant fluctuations in the volatility assumption or the fair value of our common stock could result in material changes in related compensation expense to be recognized.
28
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures.
Management’s Evaluation of our Disclosure Controls and Procedures
Under the supervision of and with the participation of our management, including our Chief Executive Officer, who is our principal executive officer, and our Chief Financial Officer, who is our principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2022, the end of the period covered by this Quarterly Report. The term “disclosure controls and procedures,” as set forth in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level due to a material weakness in internal control over financial reporting. The material weakness was initially identified at December 31, 2021 as previously disclosed and relates to the effectiveness of controls over our review and approval procedures with respect to financial information generated to prepare our consolidated financial statements, coupled with a lack of segregation of duties. We are taking steps to remediate this material weakness including the hire of additional accounting staff.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2022, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
29
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
We are not party to any material legal proceedings. From time to time, we may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.
Item 1A. Risk Factors.
RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the final prospectus for our initial public offering dated July 27, 2022 under the heading “Risk Factors” and filed with the SEC on July 29, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our final prospectus.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Recent sales of unregistered securities
On May 19 , 2022, the Company sold 11,111 shares of common stock at $9.00 per share for gross proceeds of $99,999 with no transaction costs.
No underwriters were involved in the foregoing issuance of securities. The securities were issued in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(a)(2) under the Securities Act relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required.
Between April 22, 2022 and May 3,2022, warrant holders exercised warrants, resulting in the issuance of 153,000 shares of common stock for proceeds of approximately $275,400, another 394,501 warrants were exercised with a cashless exercise assuming the fair market value of $9 per share resulting in the issuance of 315,601 shares of common stock.
Use of Proceeds
On August 1, 2022, we consummated the initial public offering of our common stock pursuant to which we issued and sold 2,000,000 shares of our common stock at a price to the public of $5.00 per share, for aggregate approximate net proceeds of $7,787,000, after deducting underwriting discounts and commissions and estimated offering expenses. On August 3, 2022, the Company sold an additional 300,000 shares of common stock at $5.00 per share when the underwriter exercised the overallotment option in full. In connection with the underwriter’s exercise of its overallotment, we received net proceeds of $1,387,500, after deducting underwriting discounts and commissions and estimated offering expenses. All of the shares of common stock issued and sold in our initial public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-266453), which was declared effective by the SEC on July 27, 2022. None of the expenses incurred by us were direct or indirect payments to any of (i) our directors or officers or their associates, (ii) persons owning 10% or more of our common stock, or (iii) our affiliates. There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed with the SEC on July 29, 2022 pursuant to Rule 424(b)(4). ThinkEquity acted as sole book-running manager for the initial public offering.
30
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None
31
Item 6. Exhibits.
The following exhibits are included, or incorporated by reference, in this
Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (and are numbered in accordance with
Item 601 of Regulation S-K).
Exhibit Number |
|
Description |
3.1(1) |
|
Amended and Restated Certificate of Incorporation of MAIA Biotechnology, Inc. |
3.2(1) |
|
|
4.1(1) |
|
Form of Representative’s Warrant (included in Exhibit 10.1). |
10.1(1) |
|
Underwriting Agreement by and between the Company and the Representative dated July 27, 2022. |
10.2(1) |
|
|
10.3(2) |
|
|
10.4* |
|
Form of Incentive Stock Option Award under 2021 Equity Incentive Plan. |
10.5* |
|
Form of Non-qualified Stock Option Award under 2021 Equity Incentive Plan. |
10.6* |
|
Form of Director and Consultant Non-qualified Stock Option Award under 2021 Equity Incentive Plan. |
31.1* |
|
|
31.2* |
|
|
32.1* |
|
|
32.2* |
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
(1) Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 1, 2022.
(2) Filed as an exhibit to our Registration Statement on Form S-8 filed with the SEC on August 1, 2022.
32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
|
|
Company Name |
|
|
|
|
|
Date: August 22, 2022 |
|
By: |
/s/ Vlad Vitoc |
|
|
|
Vlad Vitoc |
|
|
|
Chief Executive Officer |
|
|
|
|
Date: August 22, 2022 |
|
By: |
/s/ Joseph McGuire |
|
|
|
Joseph McGuire |
|
|
|
Chief Financial Officer |
33
Exhibit 10.4
MAIA BIOTECHNOLOGY, INC.
Stock Option Award Agreement
Name of Grantee: |
|
Date of Grant: |
|
Vesting Commencement Date: |
|
Number of Option Shares: |
|
Option Price: |
$ |
Type of Option: |
Incentive Stock Option |
Applicable Plan: |
The 2021 Equity Incentive Plan (the “Plan”) |
Vesting: |
|
Purpose: |
|
|
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22519773.2 |
|
|
MAIA BIOTECHNOLOGY, INC.
2021 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT made as of ___________ __, 2021 [insert date on which Committee grants the Option] (the “Grant Date”), by and between Maia Biotechnology, Inc. (the “Company”), and ____________________ (the “Optionee”).
WITNESSETH:
WHEREAS, the Company has adopted and maintains the Maia Biotechnology, Inc. 2021 Equity Incentive Plan, effective August 1, 2022 (the “Plan”), and
WHEREAS, the Committee has authorized the grant to the Optionee of an Option under the Plan, on the terms and conditions set forth in the Plan and as hereinafter provided,
NOW, THEREFORE, in consideration of the premises contained herein, the Company and the Optionee hereby agree as follows:
DOCPROPERTY "DocID" \* MERGEFORMAT 22519773.2 |
2 |
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22519773.2 |
3 |
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22519773.2 |
4 |
|
|
MAIA BIOTECHNOLOGY, INC. |
|
|
By:______________________________ Title:____________________________
|
|
|
OPTIONEE By:______________________________ Title:____________________________
|
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22519773.2 |
5 |
|
SAMPLE
NOTICE OF EXERCISE
Maia Biotechnology, Inc. |
Date of Exercise: |
|
|
|
|
Ladies and Gentlemen:
This constitutes notice under my stock Option that I elect to purchase the number of Shares for the price set forth below.
Type of Option: |
Incentive Stock Option |
|
|
|
|
Grant Date: |
|
|
|
|
|
Number of Shares as |
|
|
|
|
|
Certificates to be |
|
|
|
|
|
Total exercise price: |
$ |
|
|
|
|
Cash payment delivered |
$ |
|
By this exercise, I agree (i) to execute or provide such additional documents as Maia Biotechnology, Inc. (“Company”) may reasonably require pursuant to the terms of this Notice of Exercise and the Company’s 2021 Equity Incentive Plan (the “Plan”), and (ii) to provide for the payment by me to the Company (in the manner designated by the Company) of the Company’s withholding obligation, if any, relating to the exercise of this Option.
Very truly yours,
___________________________________
Optionee
DOCPROPERTY "DocID" \* MERGEFORMAT 22519773.2 |
6 |
|
Exhibit 10.5
MAIA BIOTECHNOLOGY, INC.
Stock Option Award Agreement
Name of Grantee: |
|
Date of Grant: |
|
Vesting Commencement Date: |
|
Number of Option Shares: |
|
Option Price: |
$ |
Type of Option: |
Non-qualified Stock Option |
Applicable Plan: |
The 2021 Equity Incentive Plan (the “Plan”) |
Vesting: |
|
Purpose: |
|
|
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22518942.2 |
|
|
MAIA BIOTECHNOLOGY, INC.
2021 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT made as of ___________ __, 2021 [insert date on which Committee grants the Option] (the “Grant Date”), by and between Maia Biotechnology, Inc. (the “Company”), and ____________________ (the “Optionee”).
WITNESSETH:
WHEREAS, the Company has adopted and maintains the Maia Biotechnology, Inc. 2021 Equity Incentive Plan, effective August 1, 2022 (the “Plan”), and
WHEREAS, the Committee has authorized the grant to the Optionee of an Option under the Plan, on the terms and conditions set forth in the Plan and as hereinafter provided,
NOW, THEREFORE, in consideration of the premises contained herein, the Company and the Optionee hereby agree as follows:
DOCPROPERTY "DocID" \* MERGEFORMAT 22518942.2 |
2 |
|
(c) The Option price may be paid, in whole or in part, by (i) an immediate market sale or margin loan as to all or a part of the Shares which the Optionee shall be entitled to receive upon exercise of the Option, pursuant to an extension of credit by the Company to the Optionee of the Option price (or portion thereof to be so paid), (ii) the delivery of the Shares from the Company directly to a brokerage firm, and (iii) the delivery of the Option price from sale or margin loan proceeds from the brokerage firm directly to the Company.
(d) The Option price may be paid, in whole or in part, by reducing the number of Shares to be issued upon exercise of the Option by the number of Shares having an aggregate Fair Market Value equal to the Option price (or portion thereof to be so paid) as of the date of the Option’s exercise.
DOCPROPERTY "DocID" \* MERGEFORMAT 22518942.2 |
3 |
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22518942.2 |
4 |
|
|
MAIA BIOTECHNOLOGY, INC. |
|
|
By:_______________________________ Title:_____________________________
|
|
|
OPTIONEE By:_______________________________ Title:_____________________________
|
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22518942.2 |
5 |
|
SAMPLE
NOTICE OF EXERCISE
Maia Biotechnology, Inc. |
Date of Exercise: |
|
|
|
|
Ladies and Gentlemen:
This constitutes notice under my stock Option that I elect to purchase the number of Shares for the price set forth below.
Type of Option: |
Non-Qualified |
|
|
|
|
Grant Date: |
|
|
|
|
|
Number of Shares as |
|
|
|
|
|
Certificates to be |
|
|
|
|
|
Total exercise price: |
$ |
|
|
|
|
Cash payment delivered |
$ |
|
By this exercise, I agree (i) to execute or provide such additional documents as Maia Biotechnology, Inc. (the “Company”) may reasonably require pursuant to the terms of this Notice of Exercise and the Company’s 2021 Equity Incentive Plan (the “Plan”), and (ii) to provide for the payment by me to the Company (in the manner designated by the Company) of the Company’s withholding obligation, if any, relating to the exercise of this Option.
Very truly yours,
__________________________________________
Optionee
DOCPROPERTY "DocID" \* MERGEFORMAT 22518942.2 |
6 |
|
Exhibit 10.6
MAIA BIOTECHNOLOGY, INC.
[Consulting] [Director] Stock Option Award Agreement
Name of Grantee: |
|
Date of Grant: |
|
Vesting Commencement Date: |
|
Number of Option Shares: |
|
Option Price: |
$ |
Type of Option: |
Non-qualified Stock Option |
Applicable Plan: |
The 2021 Equity Incentive Plan (the “Plan”) |
Vesting: |
|
Purpose: |
|
|
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22527540.2 |
|
|
MAIA BIOTECHNOLOGY, INC.
2021 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT made as of ___________ __, 2021 [insert date on which Committee grants the Option] (the “Grant Date”), by and between Maia Biotechnology, Inc. (the “Company”), and ____________________ (the “Optionee”).
WITNESSETH:
WHEREAS, the Company has adopted and maintains the Maia Biotechnology, Inc. 2021 Equity Incentive Plan, effective August 1, 2022 (the “Plan”), and
WHEREAS, the Committee has authorized the grant to the Optionee of an Option under the Plan, on the terms and conditions set forth in the Plan and as hereinafter provided,
NOW, THEREFORE, in consideration of the premises contained herein, the Company and the Optionee hereby agree as follows:
DOCPROPERTY "DocID" \* MERGEFORMAT 22527540.2 |
2 |
|
(c) The Option price may be paid, in whole or in part, by (i) an immediate market sale or margin loan as to all or a part of the Shares which the Optionee shall be entitled to receive upon exercise of the Option, pursuant to an extension of credit by the Company to the Optionee of the Option price (or portion thereof to be so paid), (ii) the delivery of the Shares from the Company directly to a brokerage firm, and (iii) the delivery of the Option price from sale or margin loan proceeds from the brokerage firm directly to the Company.
(d) The Option price may be paid, in whole or in part, by reducing the number of Shares to be issued upon exercise of the Option by the number of Shares having an aggregate Fair Market Value equal to the Option price (or portion thereof to be so paid) as of the date of the Option’s exercise.
DOCPROPERTY "DocID" \* MERGEFORMAT 22527540.2 |
3 |
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22527540.2 |
4 |
|
|
MAIA BIOTECHNOLOGY, INC. |
|
|
By:_______________________________ Title:_____________________________
|
|
|
OPTIONEE By:_______________________________ Title:_____________________________
|
|
DOCPROPERTY "DocID" \* MERGEFORMAT 22527540.2 |
5 |
|
SAMPLE
NOTICE OF EXERCISE
Maia Biotechnology, Inc. |
Date of Exercise: |
|
|
|
|
Ladies and Gentlemen:
This constitutes notice under my stock Option that I elect to purchase the number of Shares for the price set forth below.
Type of Option: |
Non-Qualified |
|
|
|
|
Grant Date: |
|
|
|
|
|
Number of Shares as |
|
|
|
|
|
Certificates to be |
|
|
|
|
|
Total exercise price: |
$ |
|
|
|
|
Cash payment delivered |
$ |
|
By this exercise, I agree (i) to execute or provide such additional documents as Maia Biotechnology, Inc. (the “Company”) may reasonably require pursuant to the terms of this Notice of Exercise and the Company’s 2021 Equity Incentive Plan (the “Plan”), and (ii) to provide for the payment by me to the Company (in the manner designated by the Company) of the Company’s withholding obligation, if any, relating to the exercise of this Option.
Very truly yours,
___________________________________________
Optionee
DOCPROPERTY "DocID" \* MERGEFORMAT 22527540.2 |
6 |
|
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Vlad Vitoc, certify that:
Date: August 22, 2022 |
By: |
/s/ Vlad Vitoc |
|
|
Vlad Vitoc Chairman and Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Joseph F. McGuire, certify that:
Date: August 22, 2022 |
By: |
/s/ Joseph F. McGuire |
|
|
Joseph F. McGuire Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the Quarterly Report of MAIA Biotechnology, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vlad Vitoc, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
Date: August 22, 2022 |
By: |
/s/ Vlad Vitoc |
|
|
Vlad Vitoc |
|
|
Chairman and Chief Executive Officer |
|
|
(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the Quarterly Report of MAIA Biotechnology, Inc. (the “Company”)on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph F. McGuire, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
Date: August 22, 2022 |
By: |
/s/ Joseph F. McGuire |
|
|
Joseph F. McGuire |
|
|
Chief Financial Officer |
|
|
(Principal Financial Officer) |