Adjust oven rack to middle position and preheat to 475°F. Line a rimmed baking sheet with foil. In a large bowl, combine meat, egg, tomato paste, bread crumbs, 2 garlic cloves, cilantro, chili powder and 1 tsp. salt; mix with your hands to combine well. Form into 1 1/2-inch meatballs and place on prepared baking sheet. Mist with nonstick cooking spray. Bake until well-browned, 17 to 20 minutes, turning once or twice.
Warm oil in a large saucepan over medium-low heat. Add remaining garlic clove and cook until fragrant, 1 minute. Add chili and cook, stirring, for 30 seconds. Add tomatoes, bring to a simmer and cook until slightly thickened, 10 minutes. Season with salt and pepper. Transfer hot meatballs to saucepan, gently stir to coat, and serve immediately.