MAIA Biotechnology, Inc. 10-K

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 Head of Finance, who is our principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2023, 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, 2023, our Chief Executive Officer and Head of Finance concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. As of December 31, 2023, our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework – 2013 (1992 Framework). Based on this assessment and implementation of our remediation plans, management concluded that, as of December 31, 2023, our internal controls over financial reporting were effective. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting 91 This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to rules of the SEC. Item 9B . Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 92 PA RT 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 2024 annual meeting of stockholders to be filed not later than 120 days after the end of the 2023 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 2024 annual meeting of stockholders to be filed not later than 120 days after the end of the 2023 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 2024 annual meeting of stockholders to be filed not later than 120 days after the end of the 2023 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 2024 annual meeting of stockholders to be filed not later than 120 days after the end of the 2023 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 2024 annual meeting of stockholders to be filed not later than 120 days after the end of the 2023 fiscal year, and is incorporated herein by reference. 93 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. 94 Exhibit Index Exhibit Number Description 1.1 At The Market Offering Agreement dated February 14, 2024 between MAIA Biotechnology, Inc. and H.C. Wainwright & Co., LLC, filed as Exhibit 1.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 14, 2024 and incorporated herein by reference. 3.1 (1) Amended and Restated Certificate of Incorporation of MAIA Biotechnology, Inc 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 4.5 Common Stock Purchase Warrant, filed as Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2023 and incorporated herein by reference. 4.6 Form of Warrant, filed as Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 17, 2023 and incorporated herein by reference. 4.7 Form of Wainwright Warrant, filed as Exhibit 4.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 17, 2023 and incorporated herein by reference. 4.8 Form of Investor Warrants, filed as Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 13, 2024 and incorporated herein by reference. 4.9 Form of Director Warrants, filed as Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 13, 2024 and incorporated herein by reference. 10.1 (1) Form of Indemnification Agreement. 10.2 (2) Employment Agreement, dated as of September 16, 2022, between the Company and Vlad Vitoc. 10.3 (2) Employment Agreement, dated as of September 16, 2022, between the Company and Mihail Obrocea. 10.4 (2) Employment Agreement, dated as of September 16, 2022, between the Company and Sergei Gryaznov. 10.5 (2) Employment Agreement, dated as of September 16, 2022, between the Company and Joseph McGuire. 10.6† (3) Supply and Non-Exclusive License Agreement between the Company and Regeneron Pharmaceuticals, Inc. dated February 1, 2021. 10.7† (3 Patent & Technology License Agreement between the Company and The Board of Regents of The University of Texas System on behalf of The University of Texas Southwestern Medical Center dated December 8, 2020. 10.8† (3) Patent & Technology License Agreement between the Company and The Board of Regents of The University of Texas System on behalf of The University of Texas Southwestern Medical Center dated December 23, 2020. 10.9+ (4) MAIA Biotechnology, Inc. 2018 Stock Option Plan. 10.10+ (4) MAIA Biotechnology, Inc. Amended & Restated 2020 Equity Incentive Plan. 10.11+ (5) MAIA Biotechnology, Inc. 2021 Equity Incentive Plan. 10.12+ (6) Form of Director Stock Option Award under Amended & Restated 2020 Equity Incentive Plan. 10.13+ (6) Form of Compensatory Management Stock Option Award Agreement under Amended & Restated 2020 Equity Incentive Plan. 10.14+ (6) Form of Consulting Stock Option Award Agreement under Amended & Restated 2020 Equity Incentive Plan. 10.15+ (6) Form of Employee Stock Option Award Agreement under Amended & Restated 2020 Equity Incentive Plan. 10.16+ (7) Form of Incentive Stock Option Award under 2021 Equity Incentive Plan. 10.17+ (7) Form of Non-qualified Stock Option Award under 2021 Equity Incentive Plan. 10.18+ (7) Form of Director and Consultant Non-qualified Stock Option Award under 2021 Equity Incentive Plan. 10.19 (1) Underwriting Agreement dated as of July 27, 2022 between the Company and ThinkEquity, LLC 10.20 Sales Agreement dated September 1, 2023 by and between MAIA Biotechnology, Inc. and ThinkEquity LLC filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 1, 2023 and incorporated herein by reference. 10.21 Employment Agreement dated August 30, 2023 between Jeffrey Himmelreich and MAIA Biotechnology, Inc., filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 15, 2023 and incorporated herein by reference. 10.22 Form of Securities Purchase Agreement, filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 17, 2023 and incorporated herein by reference. 10.23 Form of Lock-Up Agreement, filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 17, 2023 and incorporated herein by reference. 95 10.24 Form of Securities Purchase Agreement, incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 13, 2024 and incorporated herein by reference. 16.1 (8) Letter from EisnerAmper LLP regarding the change in the Registrant’s certifying accountant, dated November 21, 2022. 21.1* List of Subsidiaries of the Registrant. 23.1* Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm. 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* Clawback Policy 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. (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. 96 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 21, 2024. 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 21, 2024 Vlad Vitoc (Principal Executive Officer) /s/ Jeffrey C. Himmelreich Head of Finance March 21, 2024 Jeffrey C. Himmelreich (Principal Financial Officer) /s/ Steven Chaouki Director March 21, 2024 Steven Chaouki /s/ Ramiro Guerrero Director March 21, 2024 Ramiro Guerrero /s/ Louie Ngar Yee Director March 21, 2024 Louie Ngar Yee /s/ Cristian Luput Director March 21, 2024 Cristian Luput /s/ Stan V. Smith Director March 21, 2024 Stan V. Smith /s/ Jean-Manassé Theagène Director March 21, 2024 Jean-Manassé Theagène 97 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (Grant Thornton, LLP PCAOB ID 248 ) F- 2 Consolidated Balance Sheets F- 3 Consolidated Statements of Operations F- 4 Consolidated Statements of Comprehensive Loss F- 5 Consolidated Statements of Changes in Stockholders’ Equity F- 6 Consolidated Statements of Cash Flows F- 8 Notes to Consolidated Financial Statements F- 9 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 consolidated balance sheets of MAIA Biotechnology, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, 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 $63,980,177 as of December 31, 2023. 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 audits. 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 audits 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 audits 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 audits 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 audits 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 audits provide a reasonable basis for our opinion. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2022. Charlotte, North Carolina March 21, 2024 F- 2 MAIA Biotechnology, Inc . and Subsidiaries Consolidated Balance Sheets December 31, 2023 December 31, 2022 ASSETS Current assets: Cash $ 7,150,695 $ 10,950,927 Prepaid expenses and other current assets 268,677 554,321 Australia research and development incentives receivable 144,680 302,789 Total current assets 7,564,052 11,808,037 Deferred offering costs — 211,203 Other assets 2,800 2,800 Total assets $ 7,566,852 $ 12,022,040 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,638,546 $ 1,165,505 Accrued expenses 3,298,607 2,103,401 Total current liabilities 4,937,153 3,268,906 Long term liabilities: Warrant liability 2,152,188 245,341 Total liabilities 7,089,341 3,514,247 Commitments and contingencies (Note 7) Stockholders' equity (deficit) Preferred stock, $ 0.0001 par value, 30,000,000 shares authorized at December 31, 2023 and December 31, 2022, 0 shares issued and outstanding — — Common stock, $ 0.0001 par value, 70,000,000 shares authorized at December 31, 2023 and December 31, 2022, 16,986,254 and 10,955,904 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 1,699 1,096 Additional paid-in capital 64,472,249 52,729,942 Accumulated deficit ( 63,980,177 ) ( 44,207,272 ) Accumulated other comprehensive loss ( 16,260 ) ( 15,973 ) Total stockholders' equity 477,511 8,507,793 Total liabilities and stockholders' equity $ 7,566,852 $ 12,022,040 See the accompanying notes to the consolidated financial statements. F- 3 MAIA Biotechnology, Inc. and Subsidiaries Consolidated Statements of Operations Years Ended December 31, 2023 2022 Operating expenses: Research and development expenses $ 11,112,257 $ 8,933,314 General and administrative expenses 9,070,124 6,143,527 Ratchet share expense — 1,099,360 Total operating expenses 20,182,381 16,176,201 Loss from operations ( 20,182,381 ) ( 16,176,201 ) Other income (expense): Interest expense ( 6,863 ) ( 6,967 ) Interest income 34,490 1,870 Australian research and development incentives 176,719 313,625 Change in fair value of warrant liability 205,130 98,394 Other income (expense) net: 409,476 406,922 Net loss ( 19,772,905 ) ( 15,769,279 ) Deemed dividend on warrant modification — ( 450,578 ) Net loss attributable to MAIA Biotechnology, Inc. shareholders $ ( 19,772,905 ) $ ( 16,219,857 ) Net loss per share Basic and diluted $ ( 1.49 ) $ ( 1.75 ) Weighted average common shares outstanding basic and diluted 13,261,572 9,276,761 See accompanying notes to the consolidated financial statements. F- 4 MAIA Biotechnology, I nc. and Subsidiaries Consolidated Statements of Comprehensive Loss Years Ended December 31, 2023 2022 Net loss $ ( 19,772,905 ) $ ( 16,219,857 ) Foreign currency translation adjustment ( 287 ) ( 15,973 ) Comprehensive loss $ ( 19,773,192 ) $ ( 16,235,830 ) See accompanying notes to the consolidated financial statements. F- 5 MAIA Biote chnology, Inc. Consolidated Statements of Changes in Stockholders’ Equity for the Year ended December 31, 2023 Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Balance at December 31, 2022 — $ — 10,955,904 $ 1,096 $ 52,729,942 $ ( 44,207,272 ) $ ( 15,973 ) $ 8,507,793 Issuance of common shares upon exercise of stock options — — 750 1 1,432 — — 1,433 Issuance of restricted stock — — 291,469 28 731,633 — — 731,661 Stock-based compensation expense — — — — 3,089,304 — — 3,089,304 Issuance of common shares in connection with At-The-Market financing, net of $ 428,396 of issuance costs — — 758,388 76 1,154,361 — — 1,154,437 Issuance of common shares in connection with follow-on offering, net of $ 1,593,016 of issuance costs — — 2,555,500 256 4,156,603 — — 4,156,859 Issuance of warrants to underwriter in connection with follow-on offering — — — — 241,109 — — 241,109 Issuance of stock options to satisfy accrued bonus — — — — 974,224 — — 974,224 Issuance of common shares in connection with direct offering, net of $ 702,202 of issuance costs — — 2,424,243 242 1,393,641 — — 1,393,883 Foreign currency translation adjustment — — — — — — ( 287 ) ( 287 ) Net loss — — — — — ( 19,772,905 ) — ( 19,772,905 ) Balance at December 31, 2023 — $ — 16,986,254 $ 1,699 $ 64,472,249 $ ( 63,980,177 ) $ ( 16,260 ) $ 477,511 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 Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Balance at December 31, 2021 — $ — 7,584,980 $ 758 $ 37,618,438 $ ( 28,437,993 ) $ — $ 9,181,203 Issuance of common shares upon exercise of stock options — — 46,500 5 83,995 — — 84,000 Issuance of common shares upon exercise of warrants — — 529,712 53 385,347 — — 385,400 Stock-based compensation — — — — 2,319,427 — — 2,319,427 Issuance of common shares in connection with equity financing — — 274,840 28 2,473,532 — — 2,473,560 Issuance of common shares in connection with initial public offering, net of $ 2,749,905 issuance cost — — 2,300,000 230 8,749,865 — — 8,750,095 Issuance of ratchet shares — — 219,872 22 1,099,338 — — 1,099,360 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 ) Net loss — — — — — ( 15,769,279 ) — ( 15,769,279 ) Balance at December 31, 2022 — $ — 10,955,904 $ 1,096 $ 52,729,942 $ ( 44,207,272 ) ( 15,973 ) $ 8,507,793 See accompanying notes to the consolidated financial statements. F- 7 MAIA Biotechnology, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2023 2022 Cash flows from operating activities: Net loss $ ( 19,772,905 ) $ ( 15,769,279 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 3,089,304 2,319,427 Issuance of ratchet shares — 1,099,360 Consulting expense for restricted shares issued 731,661 — Change in fair value of warrant liability ( 205,130 ) ( 98,394 ) Change in operating assets and liabilities: Prepaid expenses and other current assets 285,831 ( 505,233 ) Australia research and development incentives receivable 158,405 ( 269,395 ) Other assets — 322 Accounts payable 471,897 211,346 Accrued expenses 2,169,921 915,742 Net cash used in operating activities ( 13,071,016 ) ( 12,096,104 ) Cash flows from financing activities: Proceeds from issuance of common stock, net of transaction costs — 2,473,560 Deferred offering costs — 440,379 Proceeds from exercise of stock options 1,432 84,000 Proceeds from exercise of warrants — 385,400 Proceeds from sale of common stock in initial public offering — 11,500,000 Payment of initial public offering transaction costs — ( 2,406,170 ) Proceeds from sale of common stock in follow-on offering 5,749,875 — Proceeds from direct offering 4,000,001 — Proceeds from At-The-Market offering 1,667,084 — Payment of 2023 offering transactions costs ( 2,147,491 ) — Net cash provided by financing activities 9,270,901 12,477,169 Net effect of foreign currency exchange on cash ( 117 ) ( 4,430 ) Net decrease in cash ( 3,800,232 ) 376,635 Cash at beginning of period 10,950,927 10,574,292 Cash at end of period $ 7,150,695 $ 10,950,927 Supplemental disclosure of cash flow information: Previously paid issuance costs in connection with the initial public offering — 651,582 Warrants issued to underwriters in connection with the initial public offering — 343,735 Options issued for accrued bonus $ 974,224 — Warrants issued to underwriters in connection with the follow-on offering $ 241,109 — Warrants issued in connection with the At-The-Market offering $ 84,251 — Warrants issued in connection with the direct offering 1,903,915 — Warrants issued to underwriters in connection with the direct offering $ 123,811 — See accompanying notes to the consolidated financial statements. F- 8 MAIA Biotechnology, In c. and Subsidiaries Notes to Consolidated Financial Statements For the Years Ended December 31, 2023 and 2022 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business, Organization, and Principles of Consolidation MAIA Biotechnology, Inc. and Subsidiaries (collectively, “the Company”) is a biopharmaceutical company that develops oncology drug candidates to improve and extend the lives of people with cancer. MAIA Biotechnology, Inc. (“MAIA”) was incorporated in the state of Delaware on August 3, 2018 . These consolidated financial statements include the accounts of MAIA and its subsidiaries, as follows: • 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. • 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, 2023 , the Company had working capital of $ 2,626,899 , an accumulated deficit of $ 63,980,177 cash of $ 7,150,695 and current liabilities of $ 4,937,153 . Since its 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. On April 27, 2023, the Company sold 2,555,500 shares of common stock at $ 2.25 per share in an underwritten public offering. The aggregate net proceeds of the offering were approximately $ 4.2 million, after deducting underwriting discounts and expenses. During October and November 2023, the Company sold an aggregate of 758,388 shares of common stock pursuant to the terms of an “at-the-market" Sales Agreement. The aggregate net proceeds of the combined sales were approximately $ 1.2 million, after deducting sales commissions. On November 17, 2023, the Company sold an aggregate of 2,424,243 shares of common stock in a registered direct offering pursuant to securities purchase agreements. The aggregate net proceeds from the sale were $ 1.4 million, after deducting underwriting discounts, expenses, and warrants issued as a liability of $ 1.9 million. 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 $ 63,980,177 from the Company’s inception through December 31, 2023. As of December 31, 2023 , the Company had $ 7,150,695 in cash and cash equivalents. 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. F- 9 Impact of the War in Ukraine and War in Israel on Our Operations The short and long-term implications of war in Ukraine and war in Israel 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 the impacted areas . 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 stock options and warrants, and prepaids or accruals for outsourced research and development activities. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Certain Risks and Uncertainties The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the pharmaceutical industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements. Foreign Currency Translation The financial statements of the Company’s foreign subsidiaries, where the local currency is the functional currency, are translated using exchange rates in effect as of the applicable balance sheet dates for assets and liabilities and average exchange rates during the period for results of operations. The resulting foreign currency translation adjustment is included in stockholders’ equity as accumulated other comprehensive loss. Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Cash accounts are maintained at financial institutions that potentially subject the Company to concentrations of credit risk. At December 31, 2023 and 2022, substantially all of the Company’s cash was deposited in accounts at two financial institutions. The Company maintains its cash deposits, which at times may exceed the federally insured limits, with a reputable financial institutions and, accordingly, the Company believes such funds are subject to minimal credit risk. F- 10 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, 2023 and 2022, the Company has no cash equivalents as of December 31, 2023 and 2022. 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, 2023 and 2022. 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, 2023 and 2022. 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 prepaid or 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 prepaid or accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to the Company at that time. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. The significant estimates in the Company’s prepaid or accrued research and development expenses are related to expenses incurred with respect to CROs and other vendors in connection with research and development and manufacturing activities. The Company bases its expense related to CROs and Contract Manufacturing Organizations (CMOs) on its estimate s 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 F- 11 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 and there were no derivative instruments for the years ended December 31, 2023 and December 31, 2022. 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. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Prior to the 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. F- 12 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. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of the warrants. 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 consists of legal, accounting, underwriting fees and other costs 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. The Company had $ 211,203 costs as of December 31, 2022 and no costs as of December 31, 2023. Net Loss Per Share Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Diluted loss per share excludes, when applicable, the potential impact of stock options, unvested shares of restricted stock awards, and common stock warrants because their effect would be anti-dilutive due to our net loss. Gains on warrant liabilities are only considered dilutive when the average market price of the common stock during the period exceeds the exercise price of the warrants. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same. The following table summarizes the Company’s potentially dilutive securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: Years Ended December 31, 2023 2022 Shares issuable upon exercise of stock options 7,750,152 6,545,628 Shares issuable upon exercise of warrants 3,650,278 796,985 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. 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 F- 13 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). Recent Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Subsequently, in November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses. This ASU is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this guidance had no impact on our financial statements and disclosures. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures, which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. We do not expect the amendments in this ASU to have a material impact on our consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. We do not expect the amendments in this ASU to have a material impact on our consolidated financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. 2. RELATED PARTY TRANSACTIONS Consulting Services Radu Vitoc, a shareholder and brother of the CEO, provided consulting services to the Company through July 2022 for which the Company incurred $ 39,900 for such services. 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. 3. ACCRUED EXPENSES As of December 31, 2023 and 2022, accrued expenses consisted of the following: December 31, December 31, 2023 2022 Bonus $ 786,999 $ 1,094,582 Professional fees 77,942 332,589 Research and development costs 998,838 516,961 Accrued severance 824,435 — Other 610,393 159,269 Total accrued expenses $ 3,298,607 $ 2,103,401 Accrued Bonus F- 14 During the years ended December 31, 2023 and 2022, the Company accrued $ 786,999 and $ 1,094,582 , respectively, in bonus expense relating to employees and officers of the Company. On May 31, 2023, the 2022 accrued bonus balance was settled by issuance of 974,046 stock options with a total fair value of $ 977,123 . The fair value of the options issued was less than the accrued bonus balance by $ 117,459 due to payroll taxes accrued for related to the 2022 bonuses and not payable with the issuance of the stock options and for employees who were terminated after December 31, 2022 and not eligible for the bonus payout. This difference was recorded against payroll expense and is presented within general and administrative expenses and research and development expenses on the statement of operations for the year ended December 31, 2023. Accrued Severance On November 10, 2023, Joseph McGuire and Dr. Mihail Obrocea were terminated from their positions as Chief Financial Officer (and principal financial and accounting officer) and Chief Medical Officer, respectively, of the Company, effective immediately, as part of the Company’s effort to streamline operations. Mr. McGuire’s and Dr. Obrocea’s terminations were not based on any disagreement with the Company’s operations, policies or practices. As of December 31, 2023, the Company has accrued severance balance of $ 824,435 . 4 . FAIR VALUE OF FINANCIAL LIABILITIES Derivative Liability Financial liabilities consisting of warrant liabilities measured at fair value on a recurring basis are summarized below. The fair value of the warrant liabilities recorded are as follows: Fair value at December 31, 2023 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability 2,152,188 — — 2,152,188 Total liabilities $ 2,152,188 $ — $ — $ 2,152,188 Fair value at December 31, 2022 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability 245,341 — — 245,341 Total liabilities $ 245,341 $ — $ — $ 245,341 During the years ended December 31, 2023 and 2022, the Company had warrant liabilities of $ 2,152,188 and $ 245,341 , respectively. 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, Warrant liabilities: 2023 2022 Balance, beginning of period $ 245,341 $ — Issuance of Warrants 2,111,977 343,735 Gain on fair value of warrant liability ( 205,130 ) ( 98,394 ) Balance, end of period $ 2,152,188 $ 245,341 5. 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 F- 15 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 $ 5.00 price of the initial public offering and were recorded as expense included in operating expenses. 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 . Follow-on Offering On April 27, 2023 the Company sold 2,555,500 shares of the Company’s common stock at a public offering price of $ 2.25 per share in an underwritten public offering, including the full exercise of the overallotment option. ThinkEquity LLC served as the underwriter in the offering. The total net proceeds of $ 4,156,859 after deducting underwriting discounts and other offering expenses payable by the Company. At-the-Market Equity Offering On September 1, 2023, the Company entered into an “at-the-market" Sales Agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time, through the Sales Agent, shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $ 7,000,000 , subject to the terms and conditions of the Sales Agreement. The Shares will be offered and sold pursuant to the Company’s prospectus supplement (the “Prospectus Supplement”), filed September 1, 2023 with the Securities and Exchange Commission (the “SEC”), to the prospectus forming a part of the Company’s shelf Registration Statement on Form S-3 (File No. 333-273984) filed by the Company with the SEC on August 15, 2023 and declared effective by the SEC on August 23, 2023. In October and November 2023, the Company sold 758,388 shares of common stock through the Sales Agreement for net proceeds of $ 1,238,688 after deducting underwriting discounts and other offering expenses payable by the Company. The Sales Agreement was terminated on November 15, 2023. Of the $ 1,238,688 , $ 84,251 was allocated and classified as a warrant liability. Registered Direct Offering On November 17, 2023, the Company entered into a registered direct offering pursuant to the Company’s prospectus supplement (the “Prospectus Supplement”), filed September 1, 2023 with the Securities and Exchange Commission (the “SEC”), to the prospectus forming part of the Company’s shelf Registration Statement on Form S-3 (File No. 333-273984) filed by the Company with the SEC on August 15, 2023 and declared effective by the SEC on August 23, 2023, and a prospectus supplement dated as of November 15, 2023, (the “Offering”) by the Company for an aggregate of 2,424,243 shares of common stock, par value $ 0.0001 per share (“the Common Stock”) pursuant to an Engagement Agreement dated as of November 4, 2023, by and between the Company and H.C. Wainwright & Co., LLC (“Wainwright”) for net proceeds of $ 3.4 million after deducting underwriting discounts and other offering expenses payable by the Company. Of the $ 3.4 million, $ 2.0 million was allocated and classified as warrant liability. MAIA Biotechnology, Inc. Restricted Stock Awards During the year ended December 31, 2022, MAIA recognized $ 52,500 of stock compensation related to 29,168 of MAIA’s restricted shares granted to the founders. During the year ended December 31, 2023, the Company expensed $ 731,661 for investor and media relation services related to the grant of 291,469 restricted shares of common stock. There are no unvested restricted shares as of December 31, 2023. MAIA Stock Warrants F- 16 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-Merton method using a term of five years , risk free interest rate of 2.82 % and volatility of 77.5 %. As of December 31, 2023 the Company remeasured the warrant liability resulting in a value of $ 40,211 . The loss on remeasurement of the warrant liability in the amount of $ 205,130 was included in other (expense) income. Concurrently with the closing of the Company’s follow-on offering, the Company issued warrants to purchase an aggregate of up to 127,775 shares of its common stock to the Representative or its designees, at an exercise price of $ 2.81 per share (the “Follow-On Representative’s Warrants”). The Follow-On Representative’s Warrants are exercisable beginning on October 24, 2023 , and expire on April 24, 2028 , pursuant to the terms and conditions of the Follow-On Representative’s Warrants. The Follow-On Representative’s Warrants are equity classified instruments and the value of the Follow-On Representative’s Warrants determined using the Black-Scholes-Merton method was $ 241,109 using the term of five years , risk free interest rate of 4.09 % and volatility of 86.3 %. On November 9, 2023, the Company issued warrants to purchase an aggregate of up to 239,234 shares of its common stock to Alumni Capital LP, at an exercise price of $ 2.09 per share. The warrants are exercisable beginning on November 10, 2023 , and expire on November 10, 2027 , pursuant to the terms and conditions of the warrants. The warrants are not indexed to the Company’s own stock and therefore meet the definition of a derivative liability. On November 13, 2023, 131,578 warrant shares vested in accordance with the terms. The warrants are liability classified instruments and were initially recorded as $ 84,251 , which was the value determined using the Black-Scholes-Merton method using a term of 3.87 years, risk free interest rate of 3.93 % and volatility of 90.0 %. Laidlaw & Company Ltd. acted as the financial advisor to the Company in connection with the warrant and were paid a cash fee of $ 13,750 . Concurrently with the Company’s registered direct offering, the Company issued warrants to purchase an aggregate of up to 2,424,243 shares of its common stock to the Representative or its designees, at an exercise price of $ 1.86 per share (the “Representative’s Warrants”). The Representative’s Warrants are exercisable beginning on November 15, 2023 , and expire on May 17, 2029 , pursuant to the terms and conditions of the Representative’s Warrants. 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 $ 1,903,915 , which was the value determined using the Black-Scholes-Merton method using a term of 5.38 years, risk free interest rate of 3.85 % and volatility of 90.0 %. On November 15, 2023, concurrently with the closing of the offering, the Company issued warrants to purchase an aggregate of 169,697 shares of its common stock to the Representative or its designees, at an exercise price of $ 2.06 per share. The Representative’s Warrants are exercisable beginning November 15, 2023 , and expire on November 15, 2028 , pursuant to the terms and conditions of the Representative’s Warrants. 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 $ 123,811 , F- 17 which was determined using the Black-Scholes-Merton method using a term of 4.88 years, risk free interest rate of 3.84 % and volatility of 90.0 %. Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Balance at January 1, 2023 796,985 $ 6.04 5.16 Issued 2,853,293 1.93 — Exercised — — — Expired — — — Balance at December 31, 2023 3,650,278 $ 2.82 5.00 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, 2023 and 2022: 2023 2022 Risk-free interest rate 3.8 % - 4.6 % 2.8 % - 4.1 % Expected term (in years) 3.6 - 5.4 4.6 - 5 Expected volatility 85 % - 92 % 78 % - 92 % 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, 2023. 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 3,852,187 options outstanding in the plan as of December 31, 2023 . 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. On May 25, 2023, after receiving shareholder approval, the MAIA 2021 Plan was amended to include an automatic increase in the aggregate number of shares reserved for awards under the 2021 Plan, commencing on the date of shareholder approval of the amendment, and then each January 1 following thereafter, and ending on (and including) January 1, 2032 (each an “Increase Date”) in an amount equal to ten percent ( 10 %) of the total number of shares of stock outstanding on a fully diluted basis on December 31 of the preceding calendar year (the “Increase Date”); provided that, the board of directors may act prior to any Increase Date to provide that there will be no increase for such year or that the increase for such year will be a lesser number of shares of stock. Pursuant to the automatic increase provision, on May 25, 2023, the amount reserved for issuance under the MAIA 2021 Plan increased by 1,956,993 based on the fully diluted shares outstanding as of December 31, 2022. As of December 31, 2023 there were 2,023,132 shares of common stock available for future issuance under the MAIA 2021 Plan and 1,973,465 options outstanding in the MAIA 2021 Plan. In addition, pursuant to the automatic increase provision, on January 1, 2024, the amount reserved for issuance under the MAIA 2021 Plan increased by 2,838,668 shares based on the fully diluted shares outstanding as of December 31, 2023. 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. F- 18 As of December 31, 2023, stock options and restricted stock 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, 2023: Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance at January 1, 2023 6,545,628 $ 2.55 7.59 — Granted 1,607,027 2.55 Exercised ( 750 ) 1.91 Cancelled/forfeited ( 401,753 ) 4.53 Balance at December 31, 2023 7,750,152 $ 2.53 7.29 16,329 Options exercisable at December 31, 2023 7,071,064 $ 2.38 7.12 16,229 During the year ended December 31, 2023, the fair value of the Company’s common stock is based on the closing price of the common stock in the public market. 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, 2022 . 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 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. 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, 2023 and 2022. 2023 2022 Risk-free interest rate 3.64 % - 4.89 % 2.14 % - 4.45 % Expected term (in years) 5 - 6.25 5 - 6.25 Expected volatility 99.6 % - 117.4 % 71.9 % - 87.9 % Expected dividend yield — — The weighted-average grant date fair values of stock options issued during the years ended December 31, 2023 and 2022 w ere $ 2.55 and $ 3.75 , respectively. As of December 31, 2023 , the total unrecognized compensation related to unvested employee and non-employee stock option awards granted was $ 1,790,683 which the Company expects to recognize over a weighted average period of approximately 2.98 years. Stock based compensation related to the Company’s stock plans are as follows: Years Ended December 31, 2023 2022 General and administrative $ 1,496,383 $ 1,422,799 Research and development 1,592,920 896,628 Total stock-based compensation $ 3,089,303 $ 2,319,427 6. EMPLOYEE RETIREMENT PLAN F- 19 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 2023 Company match is immaterial. 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. 7. 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, 2023 , 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, 2023 , 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, and 2.5 - 5 % on net sales above $1,000,000,000. The Company will also pay UTSW running royalties on a yearly basis as a percentage of Net Sales of the Company or its sublicensee. There are single digit royalty rates for licensed products and licensed services covered by a Valid Claim (as defined in the agreement) and dependent on whether Net Sales are greater than or less than/equal to $1,000,000,000, with Net Sales above that amount commanding a slightly higher percentage. In each case, the royalty percentage is lower before patent issuance in each jurisdiction. In the event that the licensed product or licensed service is not covered by a Valid Claim, the running royalty rates are reduced by fifty percent (50%). The royalty obligations continue on a country-by-country basis until the later of expiration of the last Valid Claim in each country or ten ( 10 ) years after the First Commercial Sale (as defined in UTSW2 Agreement) in each country. Regeneron - In February 2021, the Company reached an agreement with Regeneron Pharmaceuticals, Inc. ("Regeneron") to perform one clinical trial for the treatment of patients with Non-Small Cell Lung Cancer (NSCLC) involving a Regeneron drug candidate that utilizes one of the Company's compounds/agents. The Company is responsible for all costs of the study with Regeneron supplying their drug cemiplimab representing a cost savings for the Company, the first phase of which is expected to take approximately two years. The overall term of the agreement is for five years unless earlier terminated for certain reasons as defined in the agreement. Either party may terminate a study plan in the event that patient screening for the clinical study does not commence within twelve (12) months after (a) the Effective Date, with respect to the initial study, or (b) the execution of the applicable study plan, with respect to each other study. If either party terminates a study plan, the Company shall reimburse Regeneron for the Regeneron product it F- 20 received in connection with such study plan based on the actual out-of-pocket cost to Regeneron of such Regeneron product. As of December 31, 2023 neither party has terminated the agreement. 8. INCOME TAXES The Company's net deferred tax assets consist of the following components: December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 5,226,712 $ 3,294,955 Stock-based compensation 1,378,351 1,183,941 Research and development 3,183,980 1,499,300 Accrued compensation 584,001 244,848 Other — 6,724 Total net deferred tax assets before valuation allowance 10,373,044 6,229,768 Valuation allowance ( 10,373,044 ) ( 6,229,768 ) Net deferred tax asset $ — $ — At December 31, 2023 , the Company has unused U.S. federal and state net operating loss (“NOL”) carryforwards of $ 24.2 million that may be applied against future taxable income. The state NOL carryforwards begin to expire in 2030 . The U.S. federal NOL carryforwards may be carried forward indefinitely, however are limited to 80 percent of taxable income. The Company has unused Australian NOL carryforwards of $ 0.2 million that may be carried forward indefinitely. The Company has unused U.S. federal research and experimentation (“R & E”) tax credits of $ 0.5 million that begin to expire in 2041 . The use of the Company’s NOL and R & E credit carryforwards may, however, be subject to limitations as a result of an ownership change. A corporation undergoes an “ownership change,” in general, if a greater than 50% change (by value) in its equity ownership by one or more five‑percent stockholders (or certain groups of non-five-percent stockholders) over a three-year period occurs. After such an ownership change, the corporation’s use of its pre-change NOL carryforwards and other pre‑change tax attributes to offset its post-change income is subject to an annual limitation determined by the equity value of the corporation on the date the ownership change occurs multiplied by a rate determined monthly by the Internal Revenue Service. If an ownership change occurs and if the Company earns net taxable income, the Company’s ability to use its pre-change NOLs to offset U.S. federal and taxable income would be subject to these limitations, which could potentially result in increased future tax liability compared to the tax liability the Company would incur if its use of NOL carryforwards were not so limited. In addition, for state income, franchise and similar tax purposes, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase the Company’s state income, franchise, or similar taxes. In accordance with ASC 740, “Income Taxes,” the Company recorded a valuation allowance to fully offset its deferred tax assets, because it is not more likely than not that the Company will realize future benefits associated with these deferred tax assets at December 31, 2023 and 2022.The valuation allowance increased by approximately $ 4.1 million and $ 1.2 million during the years ended December 31, 2023 and 2022, respectively, mainly due to increases in the NOL carryforward and other deferred tax assets. The Company will continue to assess the realizability of the deferred tax assets at each interim and annual balance sheet date based upon actual and forecasted operating results. The Company incurred a pretax book loss of approximately $ 19.8 million for the year ended December 31, 2023, which consisted of a U.S. loss of approximately $ 19.6 million and a foreign loss of approximately $ 0.2 million. The Company incurred a pretax book loss of approximately $ 15.8 million for the year ended December 31, 2022, which consisted of a U.S. loss of approximately $ 15.3 million and a foreign loss of approximately $ 0.5 million. No provision or benefit for U.S. federal, state, or foreign income taxes has been recorded for the years ended December 31, 2023 and 2022, mainly due to net losses incurred by the Company in all jurisdictions other than Romania, which provides for a tax exemption. The income tax benefit differs from the benefit that would result from applying federal statutory rates to loss before income taxes as follows: F- 21 December 31, 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal tax benefit 1.1 % ( 7.7 )% Stock-based compensation ( 2.2 )% ( 1.2 )% Loss on extinguishment of debt — % ( 1.5 )% Other nondeductible expenses/(nontaxable income) 1.0 % ( 3.0 )% Change in valuation allowance ( 20.9 )% ( 7.6 )% Income tax benefit — % — % 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. The Company did not have any significant unrecognized tax benefits during the years ended December 31, 2023 and 2022. The Company files income tax returns in the U.S. federal jurisdiction, several U.S. States, Australia, and Romania. The Company’s tax returns since inception remain open to examination by the taxing authorities. 9. SUBSEQUENT EVENTS Issuance of Common Stock On March 18, 2024, the Company issued 12,500 shares of common stock for investor relation services to Laidlaw & Company as part of the agreement signed on August 15, 2023. Issuance of Options From January 1 to March 21, 2024, the Company issued 456,545 options at a weighted exercise price of $ 1.41 to employees and consultants. At-The-Market Offering with H.C. Wainwright On February 14, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), to sell shares of its common stock, par value $ 0.0001 per share, (the “Shares”) having an aggregate sales price of up to $ 1,445,000 , from time to time, through an “at the market offering” program under which Wainwright will act as sales agent. The sales, if any, of the Shares made under the ATM Agreement will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The Company will pay Wainwright a co mmission rate equal to 3.0 % of the aggregate gross proceeds from each sale of Shares. As of the date of this filing, the Company has sold 507,754 shares of common stock at an average price of $ 1.47 per share, resulting in aggregate gross proceeds of approximately $ 745,250 . The Company anticipates that the at-the-market offering will continue throughout the next reporting period. Private Placement On March 11, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”) for the issuance and sale in a private placement (the “Private Placement”) of (i) 2,043,587 shares (the “Investor Shares”) of the Company’s common stock, par value $ 0.0001 per share (“Common Stock”), and (ii) warrants (the “Investor Warrants”) to purchase up to 2,043,587 shares of the Company’s Common Stock, at a price per share of $ 1.17 for an aggregate purchase price of approximately $ 2.4 million. The Shares and the Warrants (and the shares of common stock underlying the Warrants) sold in the Private Placement are being issued as restricted securities as defined in Rule 144 of the Securities Act of 1933, as amended and do not contain any registration rights. The Common Warrants are exercisable at a price per Share of $ 1.30 , which price represents the greater of the book or market value of the stock on the date the Purchase Agreement was executed (subject to customary adjustments as set forth in the Investor Warrants, which do not include any provisions relating to price protection), are exercisable commencing six months following issuance and have a term of five years from the initial exercise date. In addition, in recognition of the past and continued future services provided by members of the Company’s board of directors (the “Board”) and to further align the interests of directors with those of the Company’s stockholders, the Board has determined it advisable and in the best interests of the Company and its stockholders to allow members of the Board to participate in the Private Placement and directors of the Company executed the Purchase Agreement to subscribe for (i) 452,731 shares of Common Stock (the F- 22 “Director Shares,” together with the Investor Shares, the “Shares”) and (ii) common stock purchase warrants to purchase up to 452,731 shares of the Company’s Common Stock (the “Director Warrants,” together with the Investor Warrants, the “Warrants”) at a price per share of $ 1.17 for an aggregate purchase price of $ 529,695 The Director Warrants are exercisable at a price of $ 1.30 per share, which price represents the greater of the book or market value of the stock on the date the Purchase Agreement was executed (subject to customary adjustments as set forth in the Director Warrants), are exercisable commencing six months following issuance and will have a term of five years from the initial exercise date. The Director Shares and Director Warrants (and any shares of Common Stock issuable upon exercise thereof) are being issued under the Company’s 2021 Equity Incentive Plan (the “Plan”) as an Unrestricted Stock Award (as defined in the Plan) and an Award of Options (as such terms are defined in the Plan), respectively. The Private Placement closed on March 14, 2024 and the combined gross proceeds from the Private Placement was approximately $ 2.92 million, prior to deducting offering expenses payable by the Company. Related Party Participation in Private Placement The following Company directors participated in the aforementioned March 2024 private placement as follows: (i) Stan Smith purchased 170,940 shares of common stock and warrants to purchase up to 170,940 shares of common stock for an aggregate purchase price of $ 200,000 ; (ii) Louie Ngar Yee purchased 170,940 shares of common stock and warrants to purchase up to 170,940 shares of common stock for an aggregate purchase price of $ 200,000 ; (iii) Cristian Luput purchased 69,282 shares of common stock and warrants to purchase up to 69,282 shares of common stock for an aggregate purchase price of $ 81,060 ; (iv) Steven Chaouki purchased 34,641 shares of common stock and warrants to purchase up to 34,641 shares of common stock for an aggregate purchase price of $ 40,530 and (v) Ramiro Guerrero purchased 6,928 shares of common stock and warrants to purchase up to 6,928 shares of common stock for an aggregate purchase price of $ 8,106 . These subsequent events may have a material impact on the Company’s financial position, results of operations, and cash flows in future periods, and they are disclosed here for informational purposes. Investors should consider the potential impact of these events on their assessments of the Company’s financial condition and performance. F- 23