MAIA Biotechnology, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations . You should read the following discussion together with our financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those which we discuss under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Overview We are a clinical stage biotechnology company engaged in the discovery, development and commercialization of therapies targeting cancer. Our initial disease target is lung cancer, a serious medical condition with an incidence of over 236,000 new cases in the US in 2022, representing 12.3% of all cancers, and over 130,000 deaths, or 21.4% of all cancers. Worldwide, lung cancer incidence is over 2,200,000 per year (ranking second only after breast cancer), and mortality over 1,800,000 (ranking first). Specifically, we are targeting Non-Small Cell Lung Cancer (NSCLC), which represents 85% of all lung cancers. THIO (6-thio-dG or 6-thio-2 ‘-deoxyguanosine), our lead asset, is an investigational dual mechanism of action drug candidate incorporating telomere targeting and immunogenicity. We have accomplished the following key milestones: • In November 2018, we in-licensed THIO from UTSW, in Dallas. The patent license is global and exclusive for the duration of the patients’ lives. • In 2019, we generated the first data for THIO demonstrating complete regression with no recurrence when administered in advance of atezolizumab (TecentriQ®; Genentech), in colorectal and lung cancer preclinical models. • In the first quarter 2020, we filed a provisional patent application for THIO in sequential combination with checkpoint inhibitors, covering all tumor types. The patent has been allowed as of March 12, 2021, but has not been issued to date. The patent will have an expiration date in 2041, excluding any patent term adjustment or patent extension. • In the first quarter 2021, we entered into the Drug Supply Agreement with Regeneron. Under the Drug Supply Agreement, Regeneron will provide cemiplimab (Libtayo Ò ; anti-PD-1 checkpoint inhibitor) at no charge for the THIO-101 trials, testing THIO administration for immune activation followed by cemiplimab in NSCLC. The Drug Supply Agreement replaces direct drug purchase expense that we would be otherwise required to incur. In exchange, Regeneron received development exclusivity in NSCLC for the duration of the trial meaning we cannot conduct trials in NSCLC with another checkpoint inhibitor during the time of the trial. All other areas of study and development in any other tumor types remain open. • In the first quarter 2021, we initiated our clinical supply manufacturing under Good Manufacturing Practices conditions to provide clinical supply for THIO-101 and other development needs. • In the first half of 2022, we completed a crossover round consisting of sales of 274,840 shares of our Common Stock at a price of $9.00 per shares for gross proceeds of approximately $2.5 million. • In the first quarter 2022, THIO received approval by the Bellberry Human Research Ethics Committee (”HREC”) in Australia to initiate the THIO-101 Phase 2 clinical study. • In March 2022, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation (ODD) to THIO for the treatment of Hepatocellular Carcinoma (“HCC”) (liver cancer), and in May 2022, the FDA granted ODD to THIO for the treatment of small-cell lung cancer. The FDA’s Office of Orphan Products 23 Development may grant orphan designation status to drugs and biologics that are intended for the treatment, diagnosis or prevention of rare diseases, or conditions that affect fewer than 200,000 people in the U.S. ODD provides certain benefits, including financial incentives, to support clinical development and the potential for up to seven years of market exclusivity for the drug for the designated orphan indication in the U.S. if the drug is ultimately approved for its designated indication. • In May 2022, we entered into a research and collaboration agreement with the Nationwide Children’s Hospital to evaluate the potential of THIO in combination with current standard-of-care therapies for brain cancer. The organizations are conducting preclinical studies to assess the efficacy and safety of THIO in combination with radiotherapy and immune checkpoint inhibitors in vitro and in vivo models. • In July 2022, we completed our selection process for the clinical sites for our Phase 2 study in Australia and Europe and our application to start the Phase 2 study in Australia has been approved. In July 2022, the first patient was administered with THIO in our Phase 2 human trial (“THIO-101”) in Australia. We have also submitted a similar application to conduct the same Phase 2 study in Europe. • On July 28, 2022, the Company’s 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 IPO, prior to deducting underwriting discounts, commissions, and other offering expenses. On August 3, 2022, the Company sold an additional 300,000 shares of Common Stock at $5.00 per share when the underwriter exercised the overallotment for net proceeds of $1,500,000 prior to deducting underwriting discounts, commissions, and other offering expenses. We believe we have raised sufficient capital to fund the THIO-101 lead-in and preliminary efficacy of the phase 2 THIO-101 trial. • In November 2022, we completed a pre-investigational new drug meeting with the FDA for the planned U.S. expansion of the THIO-101 Phase 2 trial evaluating THIO, an investigational telomere-targeting agent, in patients with advanced NSCLC. • In December 2022, regulatory authorities in three European countries, Hungary, Poland, and Bulgaria, approved the implementation of THIO-101, MAIA’s Phase 2 clinical trial. THIO-101 is a critical component of THIO’s clinical development process and it is of the utmost importance that we collaborate with leading cancer institutes in Australia and now in Europe, for a target total of 30 clinical trial sites in six countries. • In the first week of March 2023, the first two patients were dosed in Europe in MAIA’s Phase 2 clinical trial, THIO-101 evaluating THIO in patients with advanced NSCLC. Following regulatory clearances in Hungary, Poland, and Bulgaria, nine clinical sites have been activated in these three European countries. • On April 11, 2023, we announced positive topline data related to the completion of Part A, safety lead-in portion of the THIO-101 trial which showed that administration of THIO, at the highest dose of 360 mg/cycle in sequential combination with Regeneron’s anti-PD-1 therapy, Libtayo Ò was well tolerated with no dose-limiting toxicities or significant treatment-related adverse events reported. • On April 18, 2023, we published data in HCC models: as monotherapy, THIO achieved complete and durable responses in HCC, the dominant histology in primary liver cancer (90%), in in vivo models. When combined with Libtayo®, duration of response was further potentiated. Upon rechallenge with two times more cancer cells and no additional treatment, tumor growth was completely prevented. Administration of THIO alone and in combination with Libtayo® generated anti-cancer immune memory. 24 • On April 20, 2023, we announced preliminary survival data from Part A of THIO-101. The first two patients enrolled in Part A of the study continue to be alive, approximately 10 and 9 months respectively, from treatment initiation. Both patients have advanced Stage IV metastatic disease and are heavily pretreated, receiving third and fourth line of therapy respectively after previously failing treatment with an immune checkpoint inhibitor. They continue to be progression free following their last dose of THIO, 7 and 6 months respectively, with no new treatment. The current treatment options in patients with advanced relapsed or refractory NSCLC who failed two or more therapy regimens are limited and show minimal benefit. Furthermore, discontinuation of treatment is rapidly followed by physical decline and death, therefore seeing patients with such survival and no disease progression in this clinical setting, is noteworthy. In real-world clinical practice, observed survival in such heavily pretreated patients is typically 3-4 months. • On April 27, 2023 we closed a follow-on offering and sold 2,555,500 shares of Common Stock at a public offering price of $2.25 per share, for gross proceeds of approximately $5.75 million, before deducting underwriting discounts and offering expenses. The shares sold in the offering include the exercise in full by the underwriter of its option to purchase an additional 333,300 shares of Common Stock, in addition to the 2,222,200 shares of Common Stock which the underwriters initially agreed to purchase. • On June 20, 2023, we announced updates in enrollment in THIO-101 in Europe. To that date, 29 patients had been dosed in THIO-101. With the addition of sites in Hungary, Poland, and Bulgaria in March 2023, THIO-101 has rapidly increased the number of patients enrolled and dosed with THIO. Thirteen sites were activated with another two new additional sites ready to open shortly afterward. • In July 2023, we announced that the first 2 patients dosed with THIO continue to be alive for approximately 12.2 and 11.5 months respectively, from treatment initiation. They have remained free of disease progression for 10.2 and 8.5 months, respectively, without requiring any additional therapy. We also highlighted that out of the first 11 patients with post-baseline scans, 82% (9 patients) met the disease control primary endpoint at first response assessment. For contrast, in similar heavily treated NSCLC patients, typical disease control rates are in the 25-35% range. • On August 23, 2023, our universal shelf registration statement on Form S-3 (File No. 333-273984) (“Form S-3”) for possible future offerings was declared effective by the SEC. • On September 1, 2023, we 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 of 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, filed September 1, 2023 with the SEC to the prospectus forming a part of the Form S-3. We terminated the Sales Agreement on November 15, 2023. We sold 758,388 shares of our Common Stock through the Sales Agent for which the Company received net proceeds of approximately $1,238,688. • On September 28, 2023, we announced that the Company’s board of directors approved a share repurchase program pursuant to which the Company may repurchase up to $800,000 of the Company’s issued and outstanding shares of Common Stock through September 2024. The Company expects to fund repurchases by using cash on hand and expected cash flow to be generated in the future. As of September 30, 2023, no repurchases under the program have been executed. • On October 3, 2023, we announced that the FDA has cleared its investigational new drug application for THIO to be evaluated in the U.S. as part of THIO-101, the Company’s ongoing global phase 2 clinical study in patients with advanced NSCLC. THIO is being tested in sequential combination with Regeneron’s anti PD-1 monoclonal antibody cemiplimab (Libtayo®) to evaluate anti-tumor activity and immune response in NSCLC patients. • On October 10, 2023, we announced that 49 patients have been dosed in MAIA’s Phase 2 clinical trial, THIO-101, evaluating THIO in sequential combination with an immune checkpoint inhibitor in patients with advanced NSCLC. • On October 24, 2023, we announced the unprecedented interim disease control rate (“DCR”) of 100% in second-line treatment that far surpasses standard of care (“SoC”) DCR of 53-64%, presented at the 25 European Society for Medical Oncology Congress 2023. DCR is far stronger than overall response rate (“ORR”) in predicting overall survival benefit, as shown in a recent meta-analysis of 74 clinical trials worldwide in NSCLC. • On November 10, 2023, we announced that the FDA granted THIO ODD as a treatment for glioblastoma. This is the third orphan drug designation granted to THIO following the receipt of orphan drug designations for HCC and small cell lung cancer (“SCLC”) in 2022. • On November 17, 2023, we announced the closing of a $4 million registered direct offering for the issuance and sale of an aggregate of 2,424,243 of its shares of Common Stock at a purchase price of $1.65 per share. In a concurrent private place, MAIA also issued and sold unregistered warrants to purchase up to an aggregate of 2,424,243 share of its Common Stock. • On December 19, 2023, we announced dose selection for THIO-101, a Phase 2 clinical trial evaluating its lead asset, THIO, in sequential combination with Regeneron’s anti-PD-1 cemiplimab (Libtayo®) in patients with advanced NSCLC. During the dose-finding stage of THIO-101, patients were administered either 60mg, 180mg, or 360mg of THIO per cycle, followed by 350mg of cemiplimab (Libtayo®). The selected dose, 180mg/cycle, presented better safety profile and outperformed the other doses in the key measures of efficacy for NSCLC trials. Subsequently, all future trial participants will be treated with THIO 180mg/cycle. • On January 17, 2024, we announced new interim data for our ongoing THIO-101 Phase 2 trial in non-small cell lung cancer (NSCLC). In the latest available data from THIO-101 (November 13, 2023), 60 patients had been dosed with THIO in sequential combination with Libtayo®. The patients received either 60mg, 180mg, or 360mg of THIO per dose, and 42 had at least one post baseline assessment completed. The observed disease control was well sustained compared to previous scans. • On February 7, 2024, we announced publication of international Patent Cooperation Treat (PCT) application titled “Dinucleotides and Their Use in Treating Cancer.” The new dinucleotides disclosed in the patent application are telomere-targeting molecules, such as THIO fragments or other THIO analogues. These compounds are key next-generation telomere-targeting agents, an important extension of MAIA’s innovative cancer treatment platform. The PCT system streamlines the process for obtaining patent protection globally. Under the PCT, applicants can seek patent protection in a large number of countries. • On February 14, 2024, we entered into the ATM Agreement with Wainwright, to sell 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. Effective March 25, 2024, the Company filed a prospectus supplement to amend, supplement and supersede certain information contained in the earlier prospectus and prospectus supplement, which increased the number of shares of Common Stock the Company may offer and sell under the ATM Agreement to an aggregate offering price of up to $4,950,000 from time to time. Effective May 15, 2024, the Company filed a prospectus supplement to amend, supplement and supersede certain information contained in the earlier prospectus and prospectus supplement, which increased the number of Shares the Company may offer and sell under the ATM Agreement to an aggregate offering price of up to $11,280,000 from time to time. As of the date of this Quarterly Report, we have sold 2,675,482 shares of our Common Stock under the ATM Agreement at an average price of $3.15 per share, resulting in aggregate gross proceeds of approximately $8,439,224, for which we paid Wainwright approximately $253,177 in commissions. • On February 22, 2024, we announced completion of enrollment in Phase 2 THIO-101 go-to-market clinical trial. The trial reached the enrollment target of 41 patients for the 180mg/dose on February 19, 2024. As of the latest data available for the trial, 79 patients had received either 60mg (24 patients), 180mg (41 patients) or 360mg (14 patients). The original trial design targeted up to 182 patients, including all patients in the safety lead-in and 41 patients in each of the 3 tested doses (60mg, 180mg, and 360mg). Following the selection of 180 mg/cycle as the optimal dose in December 2023, all patients were subsequently enrolled at the 180mg/cycle dose and trial enrollment was completed ahead of schedule. • On March 6, 2024, we announced interim efficacy data for THIO-101 Phase 2 trial in NSCLC. In the latest data available (as of January 8, 2024), the ORR, characterized as partial or complete response to therapy, was 38% (3 out of 8 patients) in the efficacy evaluable population for combination THIO 180mg + 26 cemiplimab in third-line treatment for NSCLC patients who failed treatment with immune checkpoint inhibitors in prior lines of therapy, with or without chemotherapy. • On March 14, 2024, we issued and sold 2,496,318 shares of our Common Stock and warrants to purchase 2,496,318 shares of our Common Stock in a private placement to certain accredited investors and certain of our directors pursuant to securities purchase agreements dated March 11, 2024 at a price per share of $1.17 for which we received gross proceeds of approximately $2.92 million. The securities sold to our directors participating in the March 14, 2024 private placement were issued pursuant to the MAIA 2021 Plan. • On March 28, 2024, we issued and sold 578,643 shares of our Common Stock and warrants to purchase 578,643 shares of our Common Stock in a private placement to certain accredited investors pursuant to securities purchase agreements dated March 25, 2024 at a price per share of $2.295 for which we received gross proceeds of approximately $1.33 million. • On March 27, 2024, MAIA evaluated additional clinical data from its Phase 2 clinical trial, THIO-101. At such time, a total of 68 patients have been dosed and had a post-baseline scan in MAIA’s Phase 2 clinical trial, THIO-101, evaluating THIO in sequential combination with an immune checkpoint inhibitor in patients with advanced NSCLC. Preliminary efficacy across all lines of therapy in this March 2024 data cut were consistent with previous reports including: (i) 75% of patients receiving THIO 180mg as third-line therapy for NSCLC have surpassed the overall survival (“OS”) threshold of 5.8 months; (ii) 88% of patients in the same setting (3L, 180mg) also crossed the 2.5 months progression free survival (“PFS”) threshold and have shown ORR of 38%, greatly improving on current chemo treatment that have ORRs of around 6-10%; and (iii) across all third-line patients, DCR of 85% remained superior to current chemotherapy options, which ranges from 25-35% DCR. • On April 25, 2024, we issued and sold 494,096 shares of our Common Stock and warrants to purchase 494,096 shares of our Common Stock in a private placement to certain accredited investors and Company directors pursuant to securities purchase agreements dated April 22, 2024 at a price per share of $2.034, for which we received gross proceeds of approximately $1.0 million. The securities sold to our directors participating in the April 25, 2024 private placement were issued pursuant to the MAIA 2021 Plan. • On May 16, 2024, we announced that an abstract about the THIO-101 clinical trial was accepted for poster presentation at the American Society of Clinical Oncology (“ASCO”) 2024 Annual Meeting, which took place May 31-June 4, 2024, in Chicago, Illinois. In addition, on May 17, 2024, MAIA announced participation at BIO International Convention, which took place June 3-6, 2024, in San Diego, California. • On June 4, 2024, we announced new preliminary efficacy data from the Phase 2 THIO-101 clinical trial. The latest data available (April 30, 2024) was presented in a poster session at the ASCO 2024 Annual Meeting on June 3, 2024, and included: (i) all evaluable patients had completed ≥1 post-baseline assessment; (ii) third-line treatment across all doses had shown DCR of 85% for THIO, 65% of patients crossed the 5.8-month OS threshold identified in literature, 85% of patients crossed the 2.5-month PFS threshold, median survival follow-up time was 9.1 months; and (iii) third-line treatment with THIO 180mg had shown median PFS of 5.5 months, 78% OS rate at 6 months, 38% ORR, 75% of patients crossed the 5.8-month OS threshold, 88% of patients crossed the 2.5-month PFS threshold and median survival follow-up time observed was 9.1 months. • On June 6, 2024, we announced Company highlights and key achievements year-to-date, including: (i) exceptional measures of efficacy by lead drug THIO in Phase 2 clinical trial, with 38% ORR in third-line (3L) setting (THIO 180mg) compared to ~6% for currently available treatments in a similar population and 5.5 months median progression-free survival (PFS) (3L, THIO 180mg); and (ii) secured continued insider investment through independent board members’ participation in private placement equity financings, with funding of more than $12M year-to-date. • On June 7, 2024, MAIA announced the validation of clinical and regulatory pathways for viable therapies leveraging the cell’s telomeric functions as evidenced by the FDA approval of imetelstat, a treatment for low- to intermediate-risk hematologic malignancies (myelodysplastic syndromes) from Geron Corporation, illuminating the role of telomere targeting as a viable therapeutic strategy for cancer treatment. • On July 23, 2024, MAIA announced treatment updates from its Phase 2 clinical trial of THIO as of June 12, the latest clinical cut-off date: (i) 6 patients remain on treatment following at least 12 months of 27 therapy; (ii) treatment with THIO followed by cemiplimab has been well tolerated throughout the trial, with lower toxicity compared to standard-of-care treatments; and (iii) the longest-treated patients have completed 21 cycles of THIO sequenced with cemiplimab. • In addition to NSCLC, MAIA plans to conduct clinical trials evaluating THIO in sequential combination with an immune checkpoint inhibitor in several other cancer indications. THIO-102 is a Phase 2 clinical trial planned to target: (i) colorectal cancer (CRC), in which THIO demonstrated 100% complete response in pre-clinical setting, with no tumor recurrence after long-term follow-up; (ii) HCC (90% of primary liver cancers), a deadly cancer indication to which MAIA holds an ODD awarded by the FDA in April 2022; (iii) SCLC, the deadliest type of lung cancer, MAIA was also awarded ODD for this indication in August 2022; and (iv) solid tumors, such as breast, prostate, gastric, pancreatic and ovarian cancers. THIO-103 is a Phase 2 clinical trial planned to evaluate treatment with THIO in first-line patients for both NSCLC and SCLC. 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. Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023 Comparison of Three Months ended June 30, 2024 and 2023 Three Months Ended June 30, Change 2024 2023 Dollars Percentage Operating expenses: Research and development expenses $ 2,052,233 $ 2,599,315 $ (547,082 ) (21)% General and administrative expenses 1,763,029 2,065,331 (302,302 ) (15)% Total operating costs and expenses 3,815,262 4,664,646 (849,384 ) (18)% Loss from operations (3,815,262 ) (4,664,646 ) 849,384 (18)% Other (expense) income: Interest expense — (1,715 ) 1,715 (100)% Interest income 88,383 172 88,211 51285% Australian research and development incentives 18,048 39,766 (21,718 ) (55)% Change in fair value of warrant liability (5,157,493 ) 102,799 (5,260,292 ) (5117)% Loss on fair value of warrants over proceeds (12,952 ) — (12,952 ) 100% Other income, net (5,064,014 ) 141,022 (5,205,036 ) (3691)% Net loss (8,879,276 ) (4,523,624 ) (4,355,652 ) 96% Net loss attributable to MAIA Biotechnology, Inc. shareholders $ (8,879,276 ) $ (4,523,624 ) $ (4,355,652 ) 96% Operating Costs and Expenses Research and development expenses Research and development expenses decreased by approximately $547,000 (or approximately 21%), from approximately $2,599,000 for the three months ended June 30, 2023 compared to approximately $2,052,000 for the 28 three months ended June 30, 2024. The decrease was primarily related to a decrease in payroll and bonus expenses of approximately $634,000 related to the decreased headcount of research and development employees and the reversal of the accrued bonus, a decrease in stock-based compensation costs of approximately $128,000, and decrease in other expenses of approximately $33,000, offset by an increase in scientific research and clinical research of approximately $248,000. General and administrative expenses General and administrative expenses decreased by approximately $302,000 (or approximately 15%) from approximately $2,065,000 for the three months ended June 30, 2023 compared to approximately $1,763,000 for the three months ended June 30, 2024. The decrease was primarily related to a decrease in payroll expense of approximately $413,000 relating to the reversal of the accrued bonus and a decrease in stock-based compensation of approximately $77,000, offset by an increase in professional fees of approximately $139,000 and an increase in other expenses of approximately $49,000. Other expense, net Other expense, net increased by approximately $5,205,000 (or approximately 3691%) from other income of approximately $141,000 for the three months ended June 30, 2023 compared to other expense of approximately $5,064,000 for the three months ended June 30, 2024. The increase was primarily related to the change in the fair value of the warrant liability of approximately $5,260,000, a loss on the fair value of warrants over proceeds of approximately $13,000, a reduction in the Australian research and development incentives of approximately $22,000 and a net increase of interest income of approximately $90,000. Comparison of the Six Months ended June 30, 2024 and 2023 Six Months Ended June 30, Change 2024 2023 Dollars Percentage Operating expenses: Research and development expenses $ 4,372,975 $ 4,795,306 $ (422,331 ) (9)% General and administrative expenses 3,391,163 4,053,590 (662,427 ) (16)% Total operating costs and expenses 7,764,138 8,848,896 (1,084,758 ) (12)% Loss from operations (7,764,138 ) (8,848,896 ) 1,084,758 (12)% Other (expense) income: Interest expense — (6,862 ) 6,862 (100)% Interest income 132,501 508 131,993 25983% Australian research and development incentives 36,649 91,009 (54,360 ) (60)% Change in fair value of warrant liability (9,338,791 ) 123,741 (9,462,532 ) (7647)% Loss on fair value of warrants over proceeds (12,952 ) — (12,952 ) 100% Other income, net (9,182,593 ) 208,396 (9,390,989 ) (4506)% Net loss (16,946,731 ) (8,640,500 ) (8,306,231 ) 96% Net loss attributable to MAIA Biotechnology, Inc. shareholders $ (16,946,731 ) $ (8,640,500 ) $ (8,306,231 ) 96% Operating Costs and Expenses Research and development expenses Research and development expenses decreased by approximately $422,000 (or approximately 9%) from approximately $4,795,000 for the six months ended June 30, 2023 compared to approximately $4,373,000 for the six 29 months ended June 30, 2024. The decrease was primarily related to a decrease in payroll expense of approximately $949,000 related to the decreased headcount of research and development employees and the reversal of the accrued bonus, decrease in stock-based compensation costs of approximately $290,000, and a decrease in other expenses of approximately $34,000, offset by an increase in scientific research and clinical research of approximately $851,000. General and administrative expenses General and administrative expenses decreased by approximately $662,000 (or approximately 16%) from approximately $4,053,000 for the six months ended June 30, 2023 compared to approximately $3,391,000 for the six months ended June 30, 2024. The decrease was primarily related to a decrease in payroll expense of approximately $525,000 relating to the reversal of the accrued bonus, a decrease in other expenses of approximately $123,000 related to lower insurance expenses, and a decrease in stock-based compensation of approximately $97,000, offset by an increase in professional fees of approximately $83,000 relating to higher usage of consultants. Other expense, net Other expense, net increased by approximately $9,391,000 (or approximately 4506%) from other income of approximately $208,000 for the six months ended June 30, 2023 compared to other expense of approximately $9,183,000 for the six months ended June 30, 2024. The increase was primarily related to the change in the fair value of the warrant liability of approximately $9,462,000, a loss on fair value of warrants over proceeds of approximately $13,000, a reduction in the Australia research and development incentives of approximately $54,000 and a net increase of interest income of approximately $138,000. Liquidity and Capital Resources Our Ability to Continue as a Going Concern As of June 30, 2024, our cash totaled approximately $11,579,000 which represented an increase of approximately $4,428,000 compared to December 31, 2023. As of June 30, 2024, we had working capital of approximately $8,506,000 which represents an increase of approximately $5,879,000 compared to December 31, 2023. We have generated no revenues as of June 30, 2024. Our current operating plan indicates that it will continue to incur losses from operations and generate negative cash flows from operating activities given ongoing expenditures related to the completion of its ongoing clinical trials and our lack of revenue generating activities. Based on our cash reserves as of June 30, 2024 of $11,579,000 and current financial condition as of the date of this Quarterly Report, the accompanying condensed 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 condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. To meet the Company’s future working capital needs, we will need to raise additional equity or enter into debt financing. While we have historically been able to raise additional capital through issuance of equity and/or debt financing, and we have 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, we cannot guarantee that it will be able to raise additional equity, raise debt, or contain expenses. Accordingly, there is substantial doubt about our ability to continue as a going concern within one year after these financial statements are issued. Sales of Common Stock On March 14, 2024, we issued and sold 2,496,318 shares of our Common Stock and warrants to purchase 2,496,318 shares of our Common Stock in a private placement to certain accredited investors and to our participating directors pursuant to securities purchase agreements dated March 11, 2024 at a price $1.17 per share, for which we received gross proceeds of approximately $2.92 million. The securities sold to our directors participating in the March 14, 2024 private placement were issued pursuant to the MAIA 2021 Plan. On March 28, 2024, we issued and sold 578,643 shares of our Common Stock and warrants to purchase 578,643 shares of our Common Stock in a private placement to certain accredited investors pursuant to securities purchase 30 agreements dated March 25, 2024 at a price of $2.295 per share, for which we received gross proceeds of approximately $1.33 million. Between February 14, 2024, we have sold 507,754 shares of Common Stock at an average price of approximately $1.47 per share, resulting in aggregate gross proceeds of approximately $745,228 under the ATM Agreement dated February 14, 2024, for which we paid Wainwright approximately $22,357 in commissions. Between April 1, 2024 and June 30, 2024, we have sold 2,015,122 shares of our Common Stock at an average price of $3.53 per share, resulting in aggregate gross proceeds of approximately $7,117,000 under the ATM Agreement dated February 14, 2024 with Wainwright, for which we paid Wainwright $213,509 in commissions. During the six months ended June 30, 2024, we have sold 2,522,876 shares of Common Stock at an average price of approximately $3.12 per share, resulting in aggregate gross proceeds of approximately $7,862,228 under the ATM Agreement dated February 14, 2024, for which we paid Wainwright approximately $235,867 in commissions. On April 25, 2024, we issued and sold 494,096 shares of our Common Stock and warrants to purchase 494,096 shares of our Common Stock in a private placement to certain accredited investors and to our participating directors pursuant to securities purchase agreements dated April 25, 2024 at a price of $2.034 per share, for which we received gross proceeds of approximately $1.0 million. The securities sold to our directors participating in the April 25, 2024 private placement were issued pursuant to the MAIA 2021 Plan. We will need to raise additional capital to fund our operations, to develop and commercialize THIO, and to develop, acquire or in-license other products. We may seek to fund our operations through public equity, private equity, or debt financings, as well as other sources. We cannot make any assurances that additional financings will be available to us and, if available, on acceptable terms or at all. This could negatively impact our business and operations and could also lead to the reduction of our operations. Cash Flows Cash Flows for the Six Months ended June 30, 2024 and 2023 Six Months Ended June 30, 2024 2023 Net cash flows used in operating activities (8,271,571 ) $ (5,921,281 ) Net cash flows provided by financing activities 12,704,327 4,119,522 Effect of foreign currency exchange rate changes on cash (4,060 ) (3,012 ) Net increase in cash and cash equivalents 4,428,696 $ (1,804,771 ) Operating Activities For the six months ended June 30, 2024, net cash used in operating activities was approximately $8,272,000, which consisted of a consolidated net loss of approximately $16,947,000 offset by non-cash charges of approximately $764,000 in stock-based compensation, approximately $12,000 of non-cash expense to issue stock to consultants, the remeasurement of the warrant liability of approximately $9,339,000, and the loss on fair value of warrants over proceeds of approximately $13,000. Total changes in operating assets and liabilities of approximately $1,452,000 were driven by an approximate $1,423,000 net decrease in accounts payable and accrued expenses, an approximate $37,000 decrease in the Australia research and development incentives receivable, an approximate $73,000 decrease in other receivables, and an approximate $81,000 increase in prepaid expense and other assets. For the six months ended June 30, 2023, net cash used in operating activities was approximately $5,921,000, which consisted of a net loss of approximately $8,641,000 offset by non-cash charges of approximately $1,156,000 in stock-based compensation, approximately $488,000 of non-cash expense to issue stock to consultants, and the remeasurement of the warrant liability of approximately $124,000. Total changes in operating assets and liabilities of approximately $1,198,000 were driven by an approximate $980,000 increase in accounts payable and accrued liabilities, an approximate increase of $309,000 in prepaid expenses and other assets and an approximate decrease of $91,000 in Australia research and development incentives receivables. 31 For the six months ended June 30, 2024 the effect of foreign currency exchange rate changes on cash decreased the cash balance as of June 30, 2024 by approximately $4,000 versus approximately $3,000 for the six months ended June 30, 2023. Financing Activities Net cash provided by financing activities was approximately $12,704,000 and $4,120,000 for the six months ended June 30, 2024 and 2023, respectively. Total net cash provided by financing activities for the six months ended June 30, 2024 consisted primarily of approximately $5,254,000 gross proceeds from private placement offerings, proceeds from the at-the-market offering of approximately $7,862,000, proceeds from the exercise of stock options of $185,000, and offset by approximately $597,000 of offering costs. Net cash provided by financing activities for the six months ended June 30, 2023 consisted primarily of approximately $5,750,000 of gross proceeds from the sales of Common Stock in a follow-on offering, offset by approximately $1,352,000 of offering costs and approximately $278,000 of deferred offering costs. Off-Balance Sheet Arrangements None. Critical Accounting Policies and Significant Judgments and Estimates Our condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements. We believe that the estimates, judgments and assumptions are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. For a discussion of our critical accounting estimates, please read Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 21, 2024. There have been no material changes to the critical accounting estimates previously disclosed in such report. Recently Issued Accounting Standards Not Yet Effective or Adopted Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying unaudited condensed consolidated financial statements. 32 Item 3 . Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company and are not required to provide the information otherwise required under this item.