Item 7. 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 Annual Report on Form 10-K. 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 Annual Report on Form 10-K. See “Cautionary Note Regarding Forward-Looking Statements.”

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:

•

In November 2018, we in-licensed THIO from University of Texas Southwestern, in Dallas. The patent license is global and exclusive for the duration of the patients’ lives.

•

In 2019, we completed a common stock seed round in the amount of $2 million.

•

In 2019, we generated the first data for THIO demonstrating complete regression with no recurrence when administered in advance of atezolizumab (TecentriQ®; Genentech), in colorectal and lung cancer preclinical models.

•

In the First Quarter 2020, we filed a provisional patent application for THIO in sequential combination with checkpoint inhibitors, covering all tumor types. The patent was allowed in the US in the First Quarter 2021 and expires in 2041.

•

In the First Quarter 2021, we entered into a Drug Supply Agreement with Regeneron Pharmaceuticals, Inc. Under this agreement, Regeneron will provide cemiplimab (LIBTAYO; anti-PD-1 checkpoint inhibitor) at no charge for the THIO-101 trials, testing THIO administration for immune activation followed by cemiplimab in NSCLC. This drug supply agreement replaces direct drug purchase expense that we would be otherwise required to incur. In exchange, Regeneron received development exclusivity in NSCLC for the duration of the trial which is expected to be two years, meaning we cannot conduct trials in NSCLC with another checkpoint inhibitor during the time of the trial. All other areas of study and development in any other tumor types remain open.

•

In the First Quarter 2021, we initiated our clinical supply manufacturing (CMC) under Good Manufacturing Practices (GMP) conditions to provide clinical supply for THIO-101 and other development needs.

•

In the Second Quarter 2021, we completed a convertible note funding round in the amount of approximately $8 million.

•

In the Third Quarter 2021 and Fourth Quarter 2021, we sold common shares of MAIA for total proceeds of approximately $6.2 million.

•

In the First Quarter 2022, we completed the Crossover Round for total proceeds of approximately $2.4 million.

•

In the First Quarter 2022, THIO received approval by the Bellberry Human Research Ethics Committee (HREC) in Australia to initiate the THIO-101 Phase 2 clinical study.

•

In March 2022, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation (ODD) to THIO for the treatment of hepatocellular carcinoma, and in May 2022, the FDA granted ODD to THIO for the treatment of small-cell lung cancer. The FDA’s Office of Orphan Products Development may grant orphan designation status to drugs and biologics that are intended for the treatment, diagnosis or prevention of rare diseases, or conditions that affect fewer than 200,000 people in the U.S. Orphan Drug Designation provides certain benefits, including financial incentives, to support clinical development and the potential for up to seven years of market exclusivity for the drug for the designated orphan indication in the U.S. if the drug is ultimately approved for its designated indication.

•

In May 2022, we completed the Additional Round for total proceeds of approximately $99,999.

•

In May 2022, we entered into a research and collaboration agreement with the Nationwide Children’s Hospital to evaluate the potential of THIO in combination with current standard-of-care therapies for brain cancer. The organizations is conducting preclinical studies to assess the efficacy and safety of THIO in combination with radiotherapy and immune checkpoint inhibitors in vitro and in vivo models.

•

In July 2022, we completed our selection process for the clinical sites for our Phase 2 study in Australia and Europe and our application to start the Phase 2 study in Australia has been approved. In July 2022, the first patient was administered with THIO in our Phase 2 human trial (THIO-101) in Australia. We have also submitted a similar application to conduct the same Phase 2 study in Europe.

•

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 2,000,000 shares of common stock at $5.00 per share for net proceeds of $10,000,000 in an initial public offering prior to deducting underwriting discounts, commissions, and other 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 for net proceeds of $1,500,000 prior to deducting underwriting discounts, commissions, and other offering expenses. We believe we have raised sufficient capital to fund the THIO-101 lead-in and preliminary efficacy of the phase 2 THIO-101 trial.

•

In December 2022, regulatory authorities in three European countries, Hungary, Poland, and Bulgaria, approved the implementation of THIO-101, MAIA’s Phase 2 clinical trial. THIO-101 is a critical component of THIO’s clinical development process and it is of the utmost importance that we collaborate with leading cancer institutes in Australia and now in Europe, for a target total of 30 clinical trial sites in six countries.

•

In December 2022, we completed a pre-Investigational New Drug (pre-IND) meeting with the U.S. Food and Drug Administration (FDA) for the planned U.S. expansion of the THIO-101 Phase 2 trial evaluating THIO, an investigational telomere-targeting agent, in patients with advanced non-small cell lung cancer (NSCLC).

•

In the first week of March 2023, the first two patients were dosed in Europe in MAIA’s Phase 2 clinical trial, THIO-101 evaluating THIO in patients with advanced Non-Small Cell Lung Cancer (NSCLC). Following regulatory clearances in Hungary, Poland, and Bulgaria, five clinical sites have been activated in these three European countries.

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 initially imposed one of the strictest COVID-19-related measures, including lock-downs. While we are not currently experiencing any 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.

Financial Operations Overview and Analysis For the Years Ended December 31, 2022 and 2021

Comparison of the Years Ended December 31, 2022 and 2021

Year EndedDecember 31,

Change

Operating expenses:

Other income (expense):

Paycheck protection program loan forgiveness — 62,500 (62,500 ) (100)%

Net loss attributable to noncontrolling interests — (74,331 ) 74,331 (100)%

Operating Expenses

Research and development expenses

Research and development expenses increased by approximately $5,437,000 or 155%, from approximately $3,497,000 for the year ended December 31, 2021 to approximately $8,933,000 for the year ended December 31, 2022. The increase was primarily related to an increase in payroll and bonus expense of approximately $2,244,000 related to increased headcount of nine additional employees during the fiscal year 2022, the increase in clinical expenses related to the clinical trial startup of THIO of approximately $1,979,000, an increase in Scientific pre-clinical research of approximately $1,127,000, an increase in professional fees of approximately $18,000, and an increase in other expenses related to research and development of approximately $116,000 offset by a decrease in stock based compensation costs of approximately $47,000 related to employee options granted during fiscal year 2022.

General and administrative expenses

General and administrative expenses increased by approximately $1,854,000 or 43% from approximately $4,290,000 for the year ended December 31, 2021 to approximately $6,144,000 for the year ended December 31, 2022. The increase was primarily attributable to the increased costs to create additional infrastructure to support our operations as a public company. Increases included an increases in payroll and bonus expense of approximately $929,000 related to the increase in head count over the same period last

year, the approximate increase in other expenses of $896,000 and an increase of approximately $358,000 in professional fees offset by decrease in stock based compensation expense of approximately $329,000 primarily due to the 2021 expense related to founder's stock-based compensation expense.

Ratchet Expense

Ratchet expense increased by approximately $1,099,000 or 100% for the year ended December 31, 2022 due to the issuance of ratchet shares to certain private investors that purchased shares of our common stock prior to our initial public offering.

Other income (expense), net

Other income (expense), net increased approximately $5,199,000 from other expense of approximately $4,792,000 for the year ended December 31, 2021 to other income of approximately $407,000 for the year ended December 31, 2022. The increase in other income (expense), net was primarily the result of a loss on extinguishment of convertible notes and convertible notes of approximately $2,323,000 in 2021, approximately $1,645,000 of expense for the change in fair value of the warrant liability, the change in the fair value of bifurcated embedded feature of $203,000, expense related to approximately $828,000 of interest for convertible notes for the year ended December 31, 2021, and other income increased by approximately $270,000 of income related to the Australian research and development incentives for the year ended December 31, 2022 offset by a decrease in other income of approximated $63,000 for the paycheck protection loan forgiveness for the year ended December 31, 2021 and offset by the approximate $7,000 of interest expense for the year ended December 31, 2022.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of and for the years ended December 31, 2022 and 2021:

Years Ended December 31, 2022 and 2021

As of December 31,

Balance Sheet Data:

Deferred compensation — 111,271

(1) We define working capital as current assets less current liabilities.

Capital Resources

Our Ability to Continue as a Going Concern

As of December 31, 2022, our available cash totaled approximately $10,951,000 which represented an increase of approximately $376,000 compared to December 31, 2021. As of December 31, 2022, we had working capital of approximately $8,539,000 which represents an increase of approximately $13,000 compared to December 31, 2021. We have generated no revenues as of December 31, 2022. The Company’s current operating plan indicates that it will continue to incur losses from operations and generate negative cash flows from operating activities given ongoing expenditures related to the completion of its ongoing clinical trials and the Company’s lack of revenue generating activities. Based on the Company’s cash reserves as December 31, 2022 of $10.95 million and current financial condition as of the date of the Annual Report on Form 10-K, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

To meet the Company’s future working capital needs, the Company will need to raise additional equity or enter into debt financing. While the Company has historically been able to raise additional capital through issuance of equity and/or debt financing, and while the Company has implemented a plan to control its expenses in order to satisfy its obligations due within one year from the date of issuance of these financial statements, the Company cannot guarantee that it will be able to raise additional equity, raise debt, or contain expenses. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued.

Sale of Common Stock

During January and February 2022, the Company sold 263,729 shares of common stock at $9 per share for gross proceeds of $2,373,561 before transaction costs and expenses.

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 public equity, private 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.

Cash Flows

Cash Flows years ended December 31, 2022 and 2021

Years Ended December 31,

Effect of foreign currency exchange rate changes on cash (4,430 ) —

Operating Activities

For the year ended December 31, 2022, net cash used in operating activities was approximately $11,657,000, which consisted of a consolidated net loss of approximately $15,769,000 offset by non-cash charges of approximately $3,320,000 which primarily includes approximately $2,319,000 in stock-based compensation, approximately $1,099,000 of expense related to the ratchet share issuance, offset by a gain of approximately $98,000 related to the changes in fair value of the warrant liability. Total changes in operating assets and liabilities of approximately $793,000 were primarily driven by an approximate $211,000 increase in accounts payable, and an approximate $1,027,000 increase in accrued expenses and an approximate $440,000 decrease in deferred offering costs offset by an approximate $111,000 decrease in deferred compensation, an approximate increase of $269,000 in Australian research and development incentives receivable and an approximate $505,000 increase in prepaid expenses and other current assets.

For the year ended December 31, 2021, net cash used in operating activities was approximately $4,123,000, which consisted of a consolidated net loss of approximately $12,578,000 offset by non-cash charges of approximately $7,330,000 which primarily includes approximately $2,723,000 in stock-based compensation, a loss of approximately $203,000 related to the change in fair value of embedded features related to convertible notes, a loss of approximately $1,546,000 related to the changes in the fair value of the warrant liability, and amortization of debt discount on convertible notes of approximately $597,000, offset by a gain from forgiveness of Payroll Protection Plan loan of approximately $63,000. Total changes in operating assets and liabilities of approximately $1,126,000 were primarily driven by an approximate $806,000 increase in accounts payable, and an approximate $1,261,000 increase in accrued expenses, offset by an approximate $7,000 decrease in related party payables, an approximate $15,000 increase in prepaid expenses and other current assets, an approximate $264,000 increase in deferred compensation, and an approximate $652,000 increase in deferred offering costs.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2022 was approximately 12,037,000 consisted primarily of gross proceeds from the sale of common stock in the initial public offering of approximately $11,500,000, net proceeds from issuance of common stock of approximately of $2,474,000 in a crossover round, and proceeds from issuance of common stock upon exercise of warrants of approximately $385,000 and stock options of approximately $84,000 offset by approximately $2,406,000 of the offering costs paid in the year ended December 31, 2022.

Net cash provided by financing activities for the year ended December 31, 2021 was approximately $14,034,000 which consisted primarily of proceeds from issuance of convertible notes totaling approximately $7,369,000, collections of subscriptions receivable of approximately $322,000 for MAIA, proceeds from issuance of common stock (net of transaction costs) of approximately $5,742,000, proceeds from the paycheck protection program loan totaling $63,000, proceeds from exercise of warrants of approximately $529,000 for MAIA, and proceeds from exercise of stock options of approximately $9,000 for MAIA.

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 stock options and warrants and accruals for outsourced research and development activities. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. 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.

Stock-based compensation

Our stock-based awards are classified as equity (restricted stock awards, and 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 the trading value of the Company's common stock. 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.

Two of the assumptions used in the Black-Scholes-Merton valuation model are historical volatility and fair value of common stock. 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.

Prepaid and Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our prepaid and accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our prepaid and accrued research and development expenses as of each balance sheet date in our financial statements based on facts and circumstances

known to us at the time. We confirm the accuracy of estimates with the service providers and make adjustments if necessary. Examples of estimated prepaid and accrued research and development expenses include expenses for:

•

Clinical Research Organizations (CROs) in connection with clinical studies;

•

Investigative sites in connection with clinical studies;

•

Vendors in connection with preclinical development activities; and

•

Vendors related to product manufacturing, development and distribution of clinical materials.

We base our expenses related to clinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical studies on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. The scope of services under these contracts can be modified and some of the agreements may be canceled by either party upon written notice. There may be instances in which

payments made to our vendors will exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical study

milestones. In accruing service fees, we estimate 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 our estimate, we adjust the accrual or prepaid accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed we may report amounts that are too high or too low in any particular period. To date, there have been no material differences between our estimates and the amount actually incurred.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data.

Beginning on page F-2 are the consolidated financial statements with applicable notes and the related Report of Independent Registered Public Accounting Firm.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. 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 December 31, 2022, the end of the period covered by this Annual 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 December 31, 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 material weaknesses in internal control over financial reporting.

The Company noted 1) insufficient segregation of duties within the Company’s control activities and procedures throughout the year, and 2) an insufficient level of detail to identify all relevant risks of material misstatement including the risks associated with the accounting treatment and financial reporting of non-recurring complex transactions. These factors contributed to a material weaknesses in the application U.S. GAAP to effectively evaluate the accounting treatment for certain non-recurring complex transactions during the quarter ended September 30, 2022.

Although the material weaknesses described above have not yet been fully remediated as of December 31, 2022, our management is committed to remediating identified control deficiencies, fostering continuous improvement in our internal controls and enhancing our overall internal controls environment. Our management believes that these actions, when fully implemented, will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. Our remediation efforts are ongoing and additional initiatives may be necessary.

As we work towards remediating these material weaknesses, we will design and implement controls to properly address the risks associated with segregation of duties and to account for non-recurring complex transactions in accordance with U.S. GAAP. To assist us in the remediation and performance of remediated controls we hired a Corporate Controller, and we will expand the nature and extent of our review of technical accounting treatment internally and continue to utilize an accounting and financial reporting advisory firm with significant experience with publicly held companies to assist our management in evaluating the accounting treatment for complex transactions.

We may identify future material weaknesses in our internal controls over financial reporting or fail to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley, and we may be unable to accurately report our financial results, or report them within the timeframes required by law or stock exchange regulations. We cannot assure that our existing material weakness will be remediated or that additional material weaknesses will not exist or otherwise be discovered, any of which could adversely affect our reputation, financial condition and results of operations.

Changes in Internal Control over Financial Reporting

We monitor our internal control over financial reporting on a continuous basis. During the year ended December 31, 2021, we identified a material weakness in our internal control over financial reporting related valuation of our common stock, the calculation of earnings per share in accordance with U.S. GAAP, the reconciliation of significant account balances, and authorization over cash disbursements.

•

We have refined our entity-level controls to ensure that they adequately address above material weaknesses and the focal points of the COSO framework as they relate to our business and organization, the precision, sufficiency, review and approval of the reconciliation and review of significant account balances, authorization over cash disbursements, and Stock-based compensation or valuation of common stock calculations to address these material weaknesses. We have determined these material weaknesses have been remediated.

In addition to the measures taken in response to the material weakness defined above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, during the period ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Controls Over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over

financial reporting or an attestation report of our independent registered public accounting firm due to a transition period

established by rules of the SEC for newly public companies.

Item 9B. Other Information.

None.

Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all our employees, officers and directors, including those officers responsible for financial reporting. Our code of business conduct and ethics is available on the investor relations section of our website. We intend to disclose any amendments to the code, or any waivers of its requirements, on our website or in a Current Report on Form 8-K.

The information required by this Item will be set forth in our definitive proxy statement with respect to our 2023 annual

meeting of stockholders to be filed not later than 120 days after the end of the 2022 fiscal year, and is incorporated herein by

reference.

Item 11. Executive Compensation.

The information required by this Item will be set forth in our definitive proxy statement with respect to our 2023 annual

meeting of stockholders to be filed not later than 120 days after the end of the 2022 fiscal year, and is incorporated herein by

reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item will be set forth in our definitive proxy statement with respect to our 2023 annual

meeting of stockholders to be filed not later than 120 days after the end of the 2022 fiscal year, and is incorporated herein by

reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item will be set forth in our definitive proxy statement with respect to our 2023 annual

meeting of stockholders to be filed not later than 120 days after the end of the 2022 fiscal year, and is incorporated herein by

reference.

Item 14. Principal Accounting Fees and Services.

The information required by this Item will be set forth in our definitive proxy statement with respect to our 2023 annual

meeting of stockholders to be filed not later than 120 days after the end of the 2022 fiscal year, and is incorporated herein by

reference.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements.

The consolidated financial statements required by this item are submitted in a separate section beginning on page F2 of this Annual Report on Form10-K.

(a)(2) Exhibits.

The exhibits filed as part of this Annual Report on Form 10-K are set forth on the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K. The Exhibit Index is incorporated herein by reference.

Item 16. Form 10-K Summary

None.

Exhibit Index

ExhibitNumber Description

3.2(1) Amended and Restated Bylaws of MAIA Biotechnology, Inc.

4.1* Description of Registrant’s Securities.

4.2(1) Form of Representative’s Warrant (Included in Exhibit 10.19)

4.3(4) Form of Warrant

4.4(4) Specimen certificate representing shares of common stock

10.1(1) Form of Indemnification Agreement.

10.9+(4) MAIA Biotechnology, Inc. 2018 Stock Option Plan.

10.11+(5) MAIA Biotechnology, Inc. 2021 Equity Incentive Plan.

10.16+(7) Form of Incentive Stock Option Award under 2021 Equity Incentive Plan.

21.1(4) List of Subsidiaries of the Registrant.

23.2* Consent of EisnerAmper LLP, Independent Registered Public Accounting Firm.

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.

(1) Filed as an exhibit to the registrant’s Current Report on Form 8-K filed with the SEC on August 1, 2022.

(2) Filed as an exhibit to the registrant’s Current Report on Form 8-K filed with the SEC on September 21, 2022.

(3) Filed as an exhibit to the registrant’s Registration Statement on Form S-1 filed with the SEC on May 31, 2022.

(4) Filed as an exhibit to the registrant’s Registration Statement on Form S-1 filed with the SEC on April 11, 2022.

(5) Filed as an exhibit to the registrant’s Registration Statement on Form S-8 filed with the SEC on August 1, 2022.

(6) Filed as an exhibit to the registrant’s Registration Statement on Form S-1 filed with the SEC on June 29, 2022.

(7) Filed as an exhibit to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 22, 2022.

(8) Filed as an exhibit to the registrant’s Current Report on Form 8-K filed with the SEC on November 22, 2022.

+ Indicates management contract or compensatory plan.

† Pursuant to Item 601(b)(10) of Regulation S-K, certain portions of this exhibit have been omitted (indicated by “[***]”) because the Registrant has determined that the information is not material and is the type that the Registrant treats as private or confidential.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 24, 2023.

MAIA BIOTECHNOLOGY, INC.

By: /s/ Vlad Vitoc

Name: Vlad Vitoc

Title: Chief Executive Officer and Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name Title Date

/s/ Vlad Vitoc Chairman and Chief Executive Officer March 24, 2023

Vlad Vitoc (Principal Executive Officer)

/s/ Joseph F. McGuire Chief Financial Officer March 24, 2023

Joseph F. McGuire (Principal Financial Officer)

/s/ Steven Chaouki Director March 24, 2023

Steven Chaouki

/s/ Ramiro Guerrero Director March 24, 2023

Ramiro Guerrero

/s/ Louie Ngar Yee Director March 24, 2023

Louie Ngar Yee

/s/ Cristian Luput Director March 24, 2023

Cristian Luput

/s/ Stan V. Smith Director March 24, 2023

Stan V. Smith

/s/ Jean-Manassé Theagène Director March 24, 2023

Jean-Manassé Theagène

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets F-4

Consolidated Statements of Operations F-5

Consolidated Statements of Comprehensive Loss F-6

Consolidated Statements of Changes in Stockholders’ Equity F-7

Consolidated Statements of Cash Flows F-9

Notes to Consolidated Financial Statements F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

MAIA Biotechnology, Inc.

Opinion on the financial statements

We have audited the accompanying consolidatedbalance sheet of MAIA Biotechnology, Inc. (a Delaware corporation)and subsidiaries (the “Company”) as of December 31, 2022, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Companyas of December 31, 2022, and the results of itsoperations and itscash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred recurring losses, has negative cash flows from operations, and has an accumulated deficit of $44,207,272 as of December 31, 2022. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2022.

Charlotte, North Carolina

March 24, 2023

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

MAIA Biotechnology, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of MAIA Biotechnology, Inc. and Subsidiaries (the “Company”) as of December 31, 2021, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

/s/ EisnerAmper LLP

We have served as the Company’s auditor from 2021 to 2022.

EISNERAMPER LLP

Iselin, New Jersey

April 8, 2022

F-3

MAIA Biotechnology, Inc. and Subsidiaries

Consolidated Balance Sheets

ASSETS

Current assets:

Prepaid expenses and other current assets 554,321 54,537

Australia research and development incentives receivable 302,789 43,666

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Long term liabilities:

Commitments and contingencies (Note 5)

Stockholders' equity (deficit)

Accumulated other comprehensive loss (15,973 ) —

See the accompanying notes to the consolidated financial statements.

F-4

MAIA Biotechnology, Inc. and Subsidiaries

Consolidated Statements of Operations

Years Ended December 31,

Operating expenses:

Other income (expense):

Australian research and development incentives 313,625 43,666

Paycheck protection program loan forgiveness — 62,500

Change in fair value of embedded features — (203,000 )

Change in fair value of warrant liability 98,394 (1,546,280 )

Net loss attributable to noncontrolling interests — (74,331 )

Deemed dividend on warrant modification (450,578 ) —

Net loss per share

Basic and diluted $ (1.75 ) $ (2.37 )

Weighted average common shares outstanding basic and diluted 9,276,761 5,278,435

See accompanying notes to the consolidated financial statements.

F-5

MAIA Biotechnology, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Loss

Years Ended December 31,

Foreign currency translation adjustment (15,973 ) —

See accompanying notes to the consolidated financial statements.

F-6

MAIA Biotechnology, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

for the Year ended December 31, 2022

Preferred Stock Common Stock

Modification of warrant in equity — — — — 450,578 — — 450,578

Deemed dividend on modification of warrant — — — — (450,578 ) — — (450,578 )

Foreign currency translation adjustment — — — — — — (15,973 ) (15,973 )

See accompanying notes to the consolidated financial statements.

F-7

MAIA Biotechnology, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

for the Year ended December 31, 2021

Preferred Stock Common Stock

Cancellation of restricted common shares — — (5,557 ) (1 ) — — — (1 ) — (1 )

Stock-based compensation expense - DGD — — — — — — — — 161,460 161,460

Stock-based compensation expense - THIO — — — — — — — — 104,999 104,999

See accompanying notes to the consolidated financial statements.

F-8

MAIA Biotechnology, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Years Ended December 31,

Cash flows from operating activities:

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

Loss on extinguishment of convertible notes — 2,322,943

Gain from forgiveness of Paycheck Protection Program loan — (62,500 )

Change in fair value of embedded features — 203,000

Issuance of ratchet shares 1,099,360

Change in fair value of warrant liability (98,394 ) 1,546,280

Amortization of debt discount — 596,953

Change in operating assets and liabilities:

Prepaid expenses and other current assets (505,233 ) (15,155 )

Australia research and development incentives receivable (269,395 ) —

Due to related parties — (7,037 )

Cash flows from financing activities:

Proceeds from Paycheck Protection Program loan — 62,500

Collections of subscriptions receivable — 322,002

Proceeds from exercise of stock options 84,000 9,000

Proceeds from sale of common stock in initial public offering 11,500,000 —

Payment of initial public offering transaction costs (2,406,170 ) —

Payment on loan payable to officer — (367 )

Net effect of foreign currency exchange on cash (4,430 ) —

Supplemental disclosure of cash flow information:

Conversion of SAFE into MAIA common stock $ — $ 25,000

Options issued for accrued bonus $ — $ 786,531

Options issued for deferred compensation $ — $ 285,418

Reclassification of warrant liability to equity $ — $ 1,952,000

Issuance of convertible note for payment on loan to officer $ — $ (21,000 )

See accompanying notes to the consolidated financial statements.

F-9

MAIA Biotechnology, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business, Organization, and Principles of Consolidation

MAIA Biotechnology, Inc. and Subsidiaries (collectively, “the Company”) is a biopharmaceutical company that develops oncology drug candidates to improve and extend the lives of people with cancer. MAIA Biotechnology, Inc. (“MAIA”) was incorporated in the state of Delaware on August 3, 2018. These consolidated financial statements include the accounts of MAIA and its subsidiaries, as follows:

•

THIO Therapeutics, Inc. (“THIO”), incorporated in the state of Delaware on November 26, 2018. On August 13, 2021, MAIA and THIO completed a plan of reorganization in which THIO merged with and into MAIA. Prior to the merger, MAIA owned 93.3% of the outstanding shares of THIO common stock, which were canceled in connection with the merger. The remaining 6.7% minority stockholder of THIO received one share of MAIA common stock for each share of THIO common stock owned prior to the merger.

•

DGD Pharmaceuticals Corporation (“DGD”), incorporated in the state of Delaware of April 1, 2019. In July 2020, the board of directors approved the dissolution of DGD, and shortly thereafter also approved a special dividend/return of capital to its stockholders. On August 13, 2021, DGD was officially dissolved via a filing of a Certificate of Dissolution with the state of Delaware.

•

MAIA Drug Development Corporation (“MAIA DD”) incorporated in the state of Texas on September 10, 2018, and was 100% owned by MAIA, until MAIA DD was legally dissolved in July 2021. The operations of MAIA DD were nominal.

•

In July 2021, the Company established a wholly owned Australian subsidiary, MAIA Biotechnology Australia Pty Ltd, to conduct various pre-clinical and clinical activities for the development of the Company's product candidates.

•

In April 2022, the Company established a wholly owned Romanian subsidiary, MAIA Biotechnology Romania S.R.L., to conduct various pre-clinical and clinical activities for the development of the Company's product candidates.

Liquidity

At December 31, 2022, the Company had working capital of $8,539,131, an accumulated deficit of $44,207,272, cash of $10,950,927 and current liabilities of $3,268,906. Since inception the Company has experienced net losses and negative cash flows from operations each fiscal year. The Company has no revenues and expects to continue to incur operating losses for the foreseeable future, and may never become profitable. The Company is dependent on its ability to continue to raise equity and/or debt financing to continue operations, and the attainment of profitable operations.

During January and February 2022, the Company sold 263,729 shares of common stock at $9 per share for gross proceeds of $2,373,561 before transaction costs and expenses. During May 2022, the company sold 11,111 shares of common stock at $9 per share for gross proceeds of $99,999. The Company commenced trading on July 28, 2022on the NYSE American under the ticker symbol "MAIA.” The Company sold 2,000,000 shares of common stock at $5 per share for gross proceeds of $10,000,000 in the 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. After deducting $2,406,170 for cash issuance costs, net proceeds from the offering and overallotment were $9,093,830.

Going Concern Considerations

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

To date the Company has incurred recurring losses, negative cash flow from operations and has accumulated a deficit of $44,207,272 from the Company’s inception through December 31, 2022. As of December 31, 2022, the Company had approximately $10,951,000 million in cash and cash equivalents.

F-10

issuance of these financial statements, the Company cannot guarantee that it will be able to raise additional equity, raise debt, or contain expenses. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued.

Impact of the COVID-19 Pandemic on our Operations

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 clinical studies is taking place in Australia, which initially imposed one of the strictest COVID-19-related measures, including lock-downs. While we are not currently experiencing any delays or increased costs as a result of these measures, we may do so in the future.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”). You should read the discussion and analysis together with such consolidated financial statements and the related notes thereto.

The 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 audited consolidated financial statements have been included.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision-maker, the Company’s Chief Executive Officer, views the Company’s operations and manages its business as a single operating segment, which is the business of discovering and developing products for the treatment of immunotherapies for cancer.

Use of Estimates

The preparation of the Company’s audited consolidated financial statements in conformity with U.S. 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, 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.

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

F-11

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 December 31, 2022 and 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 December 31, 2022 and 2021, cash includes cash in a depository bank account; the Company has no cash equivalents as of December 31, 2022 and 2021.

Fair Value Measurements

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. “Accounting Standards Codification (ASC) Topic 820”, Fair Value Measurements and Disclosures (“ASC 820”) establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available.

Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

•

Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets.

•

Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 - Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended December 31, 2022 and 2021. The carrying amount of accounts payable approximated fair value as they are short term in nature. The fair value of warrants issued for services is estimated based on the Black-Scholes model during the years ended December 31, 2022 and 2021. The estimated fair value of the warrants issued with the convertible notes, warrants issued to underwriters and embedded features, represented Level 3 measurements.

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

F-12

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. Under the program, a percentage of eligible research and development expenses incurred by the Company through its subsidiary in Australia are reimbursed.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive regime described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time and it is included in Australian research and development incentives in the consolidated statements of operations.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, to determine if such instruments contain features that qualify as embedded derivatives.

Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statement of operations each period.

Stock-Based Compensation

The Company records share-based compensation for awards granted to employees, non-employees, and to members of the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur.

The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options and warrants. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics 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.

F-13

Prior to the 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 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.

All stock-based compensation costs are recorded in general and administrative or research and development costs in the 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.

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 non-employee share-based payments is generally fixed on the grant date and are considered compensatory, as defined by ASC 718.

Income Taxes

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Deferred Offering Costs

Deferred offering costs were included in other assets and consisted of legal, accounting, underwriting fees and other costs incurred through the December 31, 2021 balance sheet date that are directly related to the initial public offering and were charged to additional paid-in capital upon the completion of the initial public offering on August 1, 2022.

Deferred offering costs were included in other assets and consisted of legal, accounting, underwriting fees and other costs incurred through the December 31, 2022 balance sheet date that are directly related to a planned follow on offering and will be charged to additional paid-in capital upon the completion of the follow on offering.

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.

F-14

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:

Years Ended December 31,

Unvested restricted stock awards — 58,333

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.

Leases

In February 2016, the FASB issued ASU No. 2016-02, 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 adopted this new standard as of January 1, 2022. At the inception of an arrangement the Company determines whether the arrangement is or contains a lease based on the circumstances present. All leases with a term greater than one year are recognized on the condensed consolidated balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the consolidated balance sheet leases with terms of one-year or less if entered into. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. At the inception of an arrangement the Company determines whether the arrangement is or contains a lease based on the circumstances present. Currently none of the Company’s operating lease commitments are subject to the new standard as its leases are short-term in nature (i.e., less than twelve months).

2. RELATED PARTY TRANSACTIONS

Consulting Services

Leigh-Ann Durant, a former member of the Company’s board of directors prior to her stepping down in November 2021, provided consulting services to the Company for which the Company incurred $88,994 for consulting services provided by Ms. Durant during the year ended December 31, 2021. The Company paid Ms. Durant $34,560 in cash and issued her options to purchase 23,964 shares of common stock with a total fair value of $54,434 during the year ended December 31, 2021. Ms. Durant was no longer considered a related party in 2022.

Radu Vitoc, a shareholder and brother of the CEO, provides consulting services to the Company for which the Company incurred $4,700 for services provided during the year ended December 31, 2021. The Company paid Mr. Vitoc $2,350 in cash and issued him options to purchase 184 shares of common stock with a total fair value of $1,100. The remaining $1,250 for services provided in fiscal 2021 were settled in March, 2022 for 226 options issued to Mr. Vitoc. The Company also issued him a convertible note in the amount of $50,000 during April 2021, which was converted into 8,557 shares of common stock on September 30, 2021 at a conversion price of $6.00 per share, and also received 4,278 warrants to purchase shares of common stock at an exercise price of $6.00 per share. In 2022, Mr. Vitoc provided consulting services to the Company through July 2022 for which the Company incurred $36,900 for services provided during the year ended December 31, 2022. The Company paid Mr. Vitoc $19,950 in cash and issued him options to purchase 4,690 shares of common stock with a total fair value of $19.950. In August 2022, Mr. Vitoc became an employee of the Company.

F-15

CEO Loan Agreement

The Company's chief executive officer lent the Company a total of $25,000 in August and September of 2018. These amounts, were unsecured, had no stated interest rate, and no stated repayment terms. The Company repaid $3,633 of the loan to the CEO during 2020 and $367 during 2021. The Company paid these loans in full in March 2021, by issuing the CEO a convertible note in the amount of $21,000. The convertible note issued to the CEO was converted into 3,621 shares of common stock on September 30, 2021 at a conversion price of $6.00 per share. No further notes to the CEO were incurred in the year ended December 31, 2022.

3. ACCRUED EXPENSES

As of December 31, 2022 and 2021, accrued expenses consisted of the following:

December 31, December 31,

Deferred compensation to former officers — 111,271

Deferred Compensation Agreements

As of December 31, 2022 and December 31, 2021, the Company had $0 and $111,271, respectively, of deferred compensation due to certain employees and officers of the Company pursuant to deferred compensation agreements executed during fiscal 2020 and 2019 as part of a non-qualified deferred compensation plan. Pursuant to the deferred compensation agreements, the employees had deferred a portion of their annual base salary to be paid upon a Qualified Fund Raising. The Qualified Fund Raising was achieved during July 2021. Upon this event, the employees' salaries were increased up to the market rates set forth in their respective agreements, and all amounts were paid to the employees. The remaining deferred compensation balance as of December 31, 202l relates to amounts incurred for employees who were no longer with the Company as of the payout date. During the year ended December 31, 2021, the Company accrued $193,379 in deferred compensation. The Company paid $457,749 in cash and issued 268,769 options with a total fair value of $296,264 during the year ended December 31, 2021, to settle a portion of the deferred compensation balance totaling $743,167. The fair value of the options issued in excess of the deferred compensation balance settled totaling $10,846 was recorded as stock-based compensation expense which is presented within general and administrative expenses on the statement of operations for the year ended December 31, 2021.

Accrued Bonus

During the year ended December 31, 2022 and 2021, the Company accrued $1,094,582 and $384,750, respectively, in bonus expense relating to employees and officers of the Company. On April 16, 2021, the 2020 accrued bonus balance was settled by issuance of 713,536 stock options with a total fair value of $786,531. The fair value of the options issued in excess of the accrued bonus balance totaled $6,531 and was recorded as stock-based compensation expense which is presented within general and administrative expenses on the statement of operations for the year ended December 31, 2021. The 2021 accrued bonus was paid in cash in August of 2022.

4. PAYCHECK PROTECTION PROGRAM

On January 31, 2021, the Company received a second PPP Loan in the amount of $62,500. Under the terms of PPP Loan, interest accrues on the outstanding principal at the rate of 0.98% per annum. The term of the PPP Loan is two years. To the extent that the loan amount is not forgiven by the SBA, the Company is obligated to make equal monthly payments of principal and interest, beginning seven months from the date of the PPP Loan, until the maturity date. The loan amount may be eligible for forgiveness if used for qualifying expenses and other qualifying criteria are met. The Company used the entire PPP Loan for qualifying expenses.

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The Company received full forgiveness of all outstanding principal and accrued and unpaid interest on the PPP Loan in November 2021. The forgiveness of the PPP Loan qualified for debt extinguishment in accordance with ASC 470-50, Debt Modifications and Extinguishments, and as a result, the outstanding principal and interest was written off in the amount of $62,500, and the Company recorded a gain on extinguishment totaling $62,500 for the year ended December 31, 2021.

5. CONVERTIBLE NOTES PAYABLE

Convertible Notes Payable issued in 2019

In July 2019, the Company issued a Convertible Promissory Note totaling $10,000 to one individual (the "2019 Convertible Note"). The 2019 Convertible Note bore interest at 8% per annum, was unsecured, with a scheduled maturity date of December 31, 2021. The 2019 Convertible Note contained an automatic conversion feature, such that in the event the Company consummated an Equity Financing, as defined in the agreement, prior to the 2019 Convertible Note's scheduled maturity, the outstanding principal and interest would automatically converted into Preferred Stock (the shares of a class or series of preferred stock of the Company issued in connection with an Equity Financing) of the Company issued in connection with the Equity Financing. The Equity Financing is defined as a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company receives gross aggregate proceeds of not less than $5,000,000 (before any transaction related expenses and costs). The conversion price will be set at 65% of the price of the preferred stock issued in the aforementioned Equity Financing.

Embedded Put Feature

The Company determined that the terms related to the Equity Financing conversion, (the “Embedded Put Feature”) were not clearly and closely related to the 2019 Convertible Note host instrument and meets the definition of a derivative. Therefore, the Embedded Put Feature was bifurcated from the 2019 Convertible Note and separately measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations.

The Embedded Put Feature was initially recorded as a debt discount and a related derivative liability at fair value. The debt discount is amortized using the effective interest rate over the original term of the 2019 Convertible Note.

Interest expense on the 2019 Convertible Note totaled $0 and $607 for the year ended December 31, 2022 and 2021, respectively.

The debt discount and value of the Embedded Put Feature in the 2019 Convertible Note totaled $1,000 at issuance. The balance of the debt discount was $0 as of December 31, 2022 and 2021. During the year ended December 31, 2022 and 2021, amortization of debt discount amounted to $0 and $310, respectively.

Convertible Notes Payable issued in 2020

During 2020, the Company issued Convertible Promissory Notes totaling $610,000 to various investors or holders, including $110,000 of Convertible Promissory Notes to related parties (collectively, the "2020 Convertible Notes") throughout fiscal 2020. The 2020 Convertible Notes bore interest at 6% per annum, was unsecured, with a scheduled maturity date of May 31, 2022.

The 2020 Convertible Notes are automatically convertible into shares of the Company's Equity Financing Shares (shall mean the shares of any class or series of preferred stock of the Company issued in connection with an Equity Financing), upon the closing of an Equity Financing yielding gross proceeds of in excess of $5,000,000 (before any transaction related expenses and costs). The 2020 Convertible Notes also are convertible into common shares of the Company at the holders' election upon (i) a Change in Control whereby any person or group becomes a beneficial owner of more than 50% of the Company's outstanding voting securities in connection with a merger or reorganization, or (ii) at the time of maturity.

Common stock issued on conversion shall be shares of the Company’s stock that have substantially the same rights and preferences as the shares issued in such Equity Financing.

Conversion Prices

The conversion price is set at 75% of the price of the preferred stock issued in the aforementioned Equity Financing. The 2020 Convertible Notes also contain a clause that accelerates their maturity upon a change in control of the Company, as defined above.

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Embedded Put Features

The Company has determined that the terms related to the Equity Financing conversion, Change in Control, and maturity conversion features (collectively, the “Embedded Put Features”) included within the 2020 Convertible Notes were not clearly and closely related to the 2020 Convertible Note host instrument and meet the definition of a derivative. Therefore, the Embedded Put Features were bifurcated from the 2020 Convertible Notes and measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations.

The Embedded Put Features were initially recorded as a debt discount and a related derivative liability at fair value in the amount of $131,000 at issuance of the 2020 Convertible Notes (see Note 8). The debt discount is amortized using the effective interest rate over the original term of the 2020 Convertible Notes.

Maturity Date

The maturity date on the 2020 Convertible Notes is the earliest occurrence of (i) the closing of a Qualified Equity Financing, or (ii) the date upon which the Convertible Notes are otherwise converted into equity securities, or (iii) May 31, 2022.

Interest expense on the 2020 Convertible Notes totaled $27,375 and $11,523 for the year ended December 31, 2021 and 2020, respectively.

Debt discounts on the 2020 Convertible Notes totaled $0 and $0 as of December 31, 2022 and 2021, respectively. During the year ended December 31, 2021 amortization of debt discounts amounted to $83,608. There was no amortization of debt discounts for the year ended December 31, 2022.

Warrants

In connection with each of the 2020 Convertible Notes, the Company issued each holder warrants (the 2020 Warrants) to acquire additional shares of common stock of the Company. Each holder of a 2020 Convertible Note received a warrant to purchase that number of shares of common stock as determined by multiplying the number of Equity Financing Shares which are issuable upon conversion of the holder's Convertible Note by 50%, at an exercise price equal to the conversion price per share used in the conversion of the Convertible Note.

The 2020 Warrants were initially recorded as a debt discount and a related warrant liability at fair value in the amount of $65,660 (see Note 8) at issuance of the 2020 Convertible Notes. Subsequent to issuance, the 2020 Warrants have been marked-to-market each reporting period with changes in fair value recognized in the statement of operations. The debt discount is amortized using the effective interest rate over the original term of the 2020 Convertible Notes.

Convertible Notes Payable issued in 2021

During the year ended December 31, 2021, the Company issued Convertible Promissory Notes totaling $7,390,000 to various investors or holders, including $1,863,300 of Convertible Promissory Notes to related parties (collectively, the "2021 Convertible Notes") which included a $21,000 Convertible Promissory Note to settle a loan to the Company's CEO (see Note 2) . The 2021 Convertible Notes bear interest at 6% per annum, are unsecured, and have scheduled maturity dates ranging from February 15, 2023 through June 28, 2023.

The 2021 Convertible Notes are automatically convertible into shares of the Company's Equity Financing Shares (shall mean the shares of any class or series of preferred stock of the Company issued in connection with an Equity Financing), upon the closing of an Equity Financing yielding gross proceeds of in excess of $5,000,000 (before any transaction related expenses and costs). The 2021 Convertible Notes also are convertible into common shares of the Company at the holders' election upon (i) a Change in Control whereby any person or group becomes a beneficial owner of more than 50% of the Company's outstanding voting securities in connection with a merger or reorganization, or (ii) at the time of maturity.

Common stock issued on conversion shall be shares of the Company’s stock that have substantially the same rights and preferences as the shares issued in such Equity Financing.

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Conversion Prices

The conversion price was set at 75% of the price of the common stock issued in the aforementioned Equity Financing. The 2021 Convertible Notes also contain a clause that accelerates their maturity upon a change in control of the Company, as defined above.

Embedded Put Features

The Company has determined that the terms related to the Equity Financing conversion, Change in Control, and maturity conversion features (collectively, the “Embedded Put Features”) included within the 2021 Convertible Notes were not clearly and closely related to the 2021 Convertible Note host instrument and meet the definition of a derivative. Therefore, the Embedded Put Features were bifurcated from the 2021 Convertible Notes and measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations.

The Embedded Put Features were initially recorded as a debt discount and a related derivative liability at fair value in the amount of $2,821,000 at issuance of the 2021 Convertible Notes (see Note 6). The debt discount is amortized using the effective interest rate over the original term of the 2021 Convertible Notes.

Maturity Date

The maturity date on the 2021 Convertible Notes is the earliest occurrence of (i) the closing of a Qualified Equity Financing, or (ii) the date upon which the Convertible Notes are otherwise converted into equity securities, or (iii) maturity dates ranging from February 15, 2023 through June 28, 2023.

Interest expense on the 2021 Convertible Notes totaled $199,049 and $0 for the year ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2022 and 2021, amortization of debt discounts amounted to $0 and $513,035, respectively.

Warrants

In connection with each of the 2021 Convertible Notes, the Company issued each holder warrants (the 2021 Warrants) to acquire additional shares of common stock of the Company. Each holder of a 2021 Convertible Note received a warrant to purchase that number of shares of common stock as determined by multiplying the number of Equity Financing Shares which are issuable upon conversion of the holder's Convertible Note by 50%, at an exercise price equal to the conversion price per share used in the conversion of the Convertible Note.

The 2021 Warrants were initially recorded as a debt discount and a related warrant liability at fair value in the amount of $320,460 (see Note 6) at issuance of the 2021 Convertible Notes. Subsequent to issuance, the 2021 Warrants have been marked-to-market each reporting period with changes in fair value recognized in the statement of operations. The debt discount is amortized using the effective interest rate over the original term of the 2021 Convertible Notes.

Conversion of Convertible Notes Upon Equity Financing

Convertible Notes

In connection with the sale of common stock in fiscal 2021, an Equity Financing of gross proceeds in excess of $5 million, the Company converted all $8,010,000 of its outstanding principal and all accrued and unpaid interest of approximately $240,000 related to the Company’s 2019 Convertible Note, 2020 Convertible Notes, and 2021 Convertible Notes into 1,375,228 shares of the Company’s common stock on September 30, 2021 at a conversion price of $6.00 per share.

The Company accounted for the conversion of the Convertible Notes as an extinguishment. The Company recorded an approximate $2.3 million loss on extinguishment, upon conversion, year ended December 31, 2021. The loss on extinguishment of the Convertible Notes included a write-off of the unamortized debt discount of approximately $3.3 million.

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As of December 31, 2021 there were no Convertible Notes outstanding.

Warrants

On September 30, 2021, in connection with conversion of the 2020 and 2021 Convertible Notes, the terms of the warrants issued with the 2020 and 2021 Convertible notes became fixed such that the warrants are exercisable for a fixed number of shares of common stock at a fixed exercise price per share based on the amount of shares issuable upon conversion of the Convertible Notes and an exercise price equal to the conversion price per share used in the conversion of the Convertible Notes. The warrants are exercisable for 686,489 shares of common stock with an exercise price of $6.00 and expire at various dates throughout fiscal 2028.

As of December 31, 2021, 4,504 of these warrants have been exercised.

6. SIMPLE AGREEMENT FOR FUTURE EQUITY

In October 2019, the Company issued a simple agreement for future equity ("SAFE Agreement") for $25,000. 'The SAFE Agreement requires automatic conversion to preferred stock in the event of an equity financing. If the Company experiences a liquidity event, as defined, the holder may opt for either conversion or repayment in cash, with repayment based upon a valuation at the time of such event. Upon a dissolution event, as defined, the SAFE Agreement requires repayment in cash. The conversion price will be set at 60% of the price of the preferred stock issued in the aforementioned equity financing. The SAFE Agreement shall terminate upon either the issuance of shares or repayment in cash as per the agreement's terms. Due to the contingencies associated with the potential conversion and conversion price as well as the valuation upon a future liquidity event should one occur, no discount associated with these features has been recorded in the accompanying consolidated financial statements.

In connection with the sale of common stock in 2021, an Equity Financing, the SAFE in the amount of $25,000 was converted into 5,208 shares of the Company's common stock on September 30, 2021. The price of the common shares issued in the equity financing was $8.00. 'The conversion price was equal to 60% of $8.00 per share, or $4.80 per share.

7. FAIR VALUE OF FINANCIAL LIABILITIES

Derivative Liability

The table below provides a summary of the changes in fair value of the derivative liabilities related to Convertible notes using significant unobservable inputs (level 3):

Year Ended December 31,

Balance, beginning of period $ — $ 127,000

Derivative liability on convertible notes payable — 2,821,000

Loss (Gain) on fair value of embedded features — 203,000

Balance, end of period $ — $ —

The Embedded Put Features were separately measured at fair value, with changes in fair value recognized in current operations. The scenario-based analysis estimates the fair value of the Convertible Notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the holders, including various settlement, equity financing, and corporate transaction and dissolution scenarios. Estimating fair values of Embedded Put Features required the development of significant and subjective estimates that changed over the duration of the instrument with related changes in internal and external market factors. Because the Embedded Put Features are initially and subsequently carried at fair values, the Company’s income reflected the volatility in these estimate and assumption changes.

Immediately prior to the conversion of the convertible notes, the derivative liability was marked to fair value resulting in a loss of $203,000 for the year ended December 31, 2021. The recurring Level 3 fair value measurements of the embedded derivative liability included the following significant unobservable inputs as of the conversion. The probability of the Convertible Notes outstanding at maturity was estimated to be approximately 0%; the probability of an equity financing was estimated to be approximately 100%; and the probability of default, change in control or dissolution was estimated to be approximately 0%. On September 30, 2021 the embedded derivative liability was extinguished in connection with the conversion of the convertible notes.

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Financial liabilities consisting of warrant liabilities measured at fair value on a recurring basis are summarized below. The fair value of the warrant liabilities recorded are as follows:

Fair value at December 31, 2022

Total Level 1 Level 2 Level 3

Liabilities:

There was no warrant liabilities measured at fair value on a recurring basis at December 31, 2021. The table below provides a summary of the changes in fair value of the warrant liabilities measured on a recurring basis using significant unobservable inputs (Level 3):

Years Ended December 31,

Balance, beginning of period $ — $ 85,260

(Gain) loss on fair value of warrant liability (98,394 ) 1,546,280

Reclassification of warrant liability to equity — (1,952,000 )

Balance, end of period $ 245,341 $ —

8. STOCKHOLDERS’ EQUITY

Upon the closing of the Company’s initial public offering, the Company’s shareholders agreement terminated pursuant to its terms. 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 70,000,000 shares and decreased the authorized number of preferred stock to 30,000,000 shares.

Sales of MAIA Common Stock

During January and February 2022, the Company sold 263,729 shares of common stock at $9.00 per share for gross proceeds of $2,373,561 with no transaction costs. During May 2022, the Company sold 11,111 shares of common stock at $9 per share for gross proceeds of $99,999 with no transaction costs. The Company issued these shareholders additional shares upon the closing of the Company's initial public offering such that the $9.00 price per share they paid was equal to the price per share in the Company's initial public offering of $5.00. The number of Ratchet Shares were calculated using the $5.00 per share price in the Company's initial public offering and 219,872 shares of common stock were issued on August 1, 2022 to the investors in the Recent Private Rounds. The Ratchet shares were determined to be a freestanding instrument that was classified as a liability when the right was granted and subsequently reclassified to equity when shares were issued. The Ratchet Shares were valued at $1,099,360, based on the $5 price of the initial public offering and were recorded as expense included in operating expense.

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 2,000,000 shares of common stock at $5.00 per share for gross proceeds of $10,000,000 in an initial public offering prior to deducting underwriting discounts, commissions, and other 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 for gross proceeds of $1,500,000 prior to deducting underwriting discounts, commissions, and other offering expenses. After deducting the underwriting discount and other offering expenses payable by the Company, the total net proceeds for the initial public offering and the overallotment were approximately $9,100,000.

MAIA Biotechnology, Inc. Restricted Stock Awards

During the year ended December 31, 2021, MAIA recognized $202,500 of stock compensation expense related to 112,500 of MAIA’s restricted shares granted to the founders. On August 13, 2021, upon the dissolution of THIO and merger into MAIA (see Note 1), a founder’s 612,500 fully vested THIO restricted shares were canceled and the founder was issued 612,500 MAIA restricted shares.

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Additionally, in accordance with the founder's original award, the founder was also issued 87,500 MAIA restricted shares which vested ratably each quarter through April 1, 2022 to replace the equivalent number of unvested THIO restricted shares. There are no unvested shares as of December 31, 2022 related to the founder's restricted shares. During the 12 months ended December 31, 2022, MAIA recognized $52,500 of expense related to restricted stock for the year ended 2022.

Shares WeightedAverageGrantDate FairValue

Unvested balance at December 31, 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 to be exercisable, in whole or in part, during the exercise period ending on the 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 144,497 warrants was calculated using the Black-Scholes-Merton option pricing model. The incremental fair value attributable to the modified awards compared to the original awards immediately prior to the modification was calculated at $450,578 and was treated as a deemed dividend and is reflected as “Deemed dividend on warrant modification” in the accompanying statement of operations.

During January 2022, warrants were exercised, resulting in the issuance of 61,111 shares of MAIA common stock for proceeds of $110,000. During May 2022, warrants were exercised, 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 $9.00 per share resulting in the issuance of 315,601 shares of common stock.

At the closing of the initial public offering, 20,520 warrants with an exercise price of $5.00 per share expired.

Concurrently with the closing of the Company’s initial public offering, the Company issued warrants to purchase an aggregate of up to 100,000 shares of its common stock to the Representative or its designees, at an exercise price of $6.25 per share (the “Representative’s Warrants”). The Representative’s Warrants are exercisable beginning on January 23, 2023, and expire on July 27, 2027, pursuant to the terms and conditions of the Representative’s Warrants. On August 3, concurrently with the full exercise of the Underwriter’s over-allotment option, the Company issued additional warrants to purchase an aggregate of up to 15,000 shares of its common stock to the Representative or its designees on the same terms. The warrants are not indexed to the Company’s own stock and therefore meet the definition of a derivative liability. The warrants are liability classified instruments and were initially recorded as $343,735, which was the value determined using the Black-Scholes method using a term of five years, risk free interest rate of 2.82% and volatility of 77.5%. As of December 31, 2022 the Company remeasured the warrant liability resulting in a value of $245,341. The gain on remeasurement of the warrant liability in the amount of $98,394 was included in other income. Only the 115,000 warrants issued in 2022 are classified as a liability, all other outstanding warrants are equity classified.

The value of the warrants are calculated using the Black-Scholes-Merton option pricing model with the following assumptions for warrants granted during the years ended December 31, 2022 and 2021:

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Risk-free interest rate 2.8% - 4.1% 0.6% - 1.3%

Expected term (in years) 4.6 - 5 5 - 7

Expected dividend yield —% —%

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 for the purposes of attracting, retaining, and motivating key employees, directors, and consultants of MAIA. The terms of the MAIA 2018 Plan continue to govern the 1,924,500 options outstanding in the plan of December 31, 2022.

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 permitted awards to take the form of stock options, restricted stock and restricted stock units. The terms of the MAIA 2020 Plan continue to govern the 3,983,023 options outstanding in the plan as of December 31, 2022. There are no shares reserved for future issuance in the MAIA 2018 Plan or the MAIA 2020 Plan .

On August 1, 2022 the Company approved the MAIA Biotechnology, Inc. 2021 Equity Incentive Plan (the “MAIA 2021 Plan’’) with 1,909,518 shares of common stock reserved for issuance. As of December 31, 2022 there were 1,271,413 shares of common stock available for future issuance under the MAIA 2021 Plan and 638,105 options outstanding in the MAIA 2021 Plan.

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 ten years from the date of grant. In the case of an option granted to a 10% stockholder, the exercise price shall be generally no less than 110% of the fair market value per share on the date of grant, and the contractual term shall be seven years. Outstanding options awarded under the MAIA 2021 Plan may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The option may be subject to other terms and conditions as to the time or times when it may be exercised (which may be based on performance or other criteria) as the board of directors may deem appropriate. Unexercised options are canceled ninety days after termination of an employee, director, founder, or consultant. Unexercised options are canceled immediately if an employee, director, founder, or consultant is terminated for cause; under certain other circumstances, the period to cancellation may differ as described in the respective plan documents. Certain clauses in the Plans also govern the Company’s exercise repurchase rights and various other features of awards granted under the plans.

As of December 31, 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 classified as equity awards as of December 31, 2022:

During the year ended December 31, 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 $8.87 per share as of December 31, 2021. For our valuations of common stock performed, 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 values 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. From January 27 to May 31, 2022 the fair value of the Company’s common stock was estimated for financial reporting purposes at $9 per share based on the sale of common stock from

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January 27, 2022 to May 19, 2022. From June 1, 2022 to August 1, 2022 the fair value of the Company's common stock was estimated for financial reporting purpose at $5 per share based on the price paid in the initial public offering. Following the initial public offering, the fair value of common stock, is based on the closing price of the common stock in the public market.

During the year ended December 31, 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 $1.80 was used. During the period of March 1, 2021 to June 6, 2021, the fair value of the Company’s common stock was estimated for financial reporting purposes based on valuations of $1.83 per share in February and April 2021 due to the lack of any single specific event that would have indicated a definitive change in the value of the Company. The February and April 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 not be necessary to determine the fair value of our common stock.

The value of option grants are calculated using the Black-Scholes-Merton option pricing model with the following assumptions for options granted during the years ended December 31, 2022 and 2021.

Expected term (in years) 5 - 6.25 5 - 6.50

Expected dividend yield — —

The weighted-average grant date fair values of stock options issued during the years ended December 31, 2022 and 2021 were $3.75 and $3.55, respectively. At December 31, 2022, the total unrecognized compensation related to unvested employee and non-employee stock option awards granted was $3,447,367 which the Company expects to recognize over a weighted average period of approximately 3.26 years.

Stock based compensation related to the Company’s stock plans are as follows:

Years Ended December 31,

9.EMPLOYEE RETIREMENT PLAN

Our eligible employees have been permitted to participate in our 401(k) beginning October 1, 2022. Participation in the 401(k) plan is offered for the benefit of our employees, including our named executive officers, who remain employed with us, and who satisfy certain eligibility requirements. We match employee contributions using a benchmark to industry standards. The Company will make a safe harbor matching contribution equal to 100% of employee salary deferrals that do not exceed 1% of their compensation plus 50% of their salary deferrals between 1% and 6% of their compensation.The 2022 Company match is immaterial. The Under the 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code, on a pre-tax or after-tax (Roth) basis, through contributions to the 401(k) plan. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan.

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10. COMMITMENTS AND CONTINGENCIES

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” 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 20 years. The agreement requires MAIA to reimburse UTSW for agreed-upon expenses related to THIO. The agreement requires certain payments upon assignment of the license to a third party as well as upon reaching specific milestones, ranging between $1,000,000 and $50,000,000, not to exceed a combined milestone payment total of $112,000,000. As of December 31, 2022, no assignment has occurred and none of the defined milestones have been completed and therefore no payments are due to UTSW related to the milestones. The agreement requires royalties of 2-4% (depending on THIO reaching specified sales levels in the respective jurisdictions) royalty payments on net sales up to $1,000,000,000, and 2.5-5% on net sales above $1,000,000,000.

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 20 years and requires the Company to reimburse UTSW for certain agreed-upon expenses. The agreement requires certain payments upon assignment of the license to a third party as well as upon reaching specific milestones, ranging between $1,000,000 and $50,000,000, not to exceed a combined milestone payment total of $112,000,000. As of December 31, 2022, no assignment has occurred and none of the defined milestones have been completed and therefore no payments are due to UTSW related to the milestones.

MAIA US Equity

MAIA · 10-K · period ended 2022-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

Item 15. Exhibits, Financial Statement Schedules.

Item 16. Form 10-K Summary

MAIA US Equity☆

MAIA · 10-K · period ended 2022-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

Item 15. Exhibits, Financial Statement Schedules.

Item 16. Form 10-K Summary

MAIA US Equity