angn-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-Q

_____________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39990

Elicio Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware									11-3430072
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

451 D Street, 5th Floor Boston, Massachusetts									02210
(Address of Principal Executive Offices)									(Zip Code)

(857) 209-0050

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	ELTX	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of the issuer’s common stock outstanding as of August 10, 2023 was 8,388,457.


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PART I FINANCIAL INFORMATION			Page
Item 1. Financial Statements			6
Condensed Consolidated Balance Sheets (unaudited)			6
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)			7
Condensed Consolidated Statements Convertible Preferred Stock and Stockholders’ Deficit (unaudited)			8
Condensed Consolidated Statements of Cash Flows (unaudited)			10
Notes to Unaudited Interim Condensed Consolidated Financial Statements			11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures			33
Item 4. Controls and Procedures			33
PART II OTHER INFORMATION
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			37
Item 3. Defaults Upon Senior Securities			37
Item 4. Mine Safety Disclosures			37
Item 5. Other Information			37
Item 6. Exhibits			38
Signatures			40

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Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;

•our ability to utilize our platform to develop a pipeline of product candidates to address unmet needs in cancer and infectious disease;

•the timing, progress and results of clinical trials for ELI-002, and other product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the studies or trials will become available, and research and development programs;

•the timing, scope and likelihood of regulatory filings and approvals, including timing of INDs (as defined below) and U.S. Food and Drug Administration (“FDA”) approval of ELI-002 and any other future product candidates;

•the timing, scope or likelihood of foreign regulatory filings and approvals;

•our ability to develop and advance current product candidates and programs into, and successfully complete, clinical studies;

•our manufacturing, commercialization, and marketing capabilities and strategy;

•plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy;

•the need to hire additional personnel and our ability to attract and retain such personnel;

•the size of the market opportunity for our product candidates, including estimates of the number of patients who suffer from the diseases we are targeting;

•expectations regarding the approval and use of our product candidates in combination with other drugs;

•our ability to secure drug product for combination studies;

•expectations regarding potential for accelerated approval or other expedited regulatory designation;

•our competitive position and the success of competing therapies that are or may become available;

•estimates of the number of patients that we will enroll in our clinical trials;

•the beneficial characteristics and the potential safety, efficacy and therapeutic effects of our product candidates;

•our ability to obtain and maintain regulatory approval of our product candidates and our expectations regarding particular lines of therapy;

•plans relating to the further development of our product candidates, including additional indications we may pursue;

•existing regulations and regulatory developments in the United States, Europe and other jurisdictions;

•the effects of the ongoing COVID-19 pandemic, the ongoing conflict between the Ukraine and Russia and the recent and potential future bank failures or other geopolitical events;

•our expectations regarding the impact of instability in the banking and financial services sector and other macroeconomic trends;

•our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering ELI-002, other product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•our continued reliance on third parties to conduct additional clinical trials of our product candidates, and for the manufacture of our product candidates for clinical trials;

•our relationships with patient advocacy groups, key opinion leaders, regulators, the research community and payors;

•our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;

•the pricing and reimbursement of ELI-002, and other product candidates we may develop, if approved;

•the rate and degree of market acceptance and clinical utility of ELI-002 and other product candidates we may develop;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•our financial performance;

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•the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our planned operating expenses and capital expenditure requirements;

•the impact of laws and regulations; and

•expectations regarding the period during which we will qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 and a smaller reporting company under the Exchange Act (as defined below).

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires.

EXPLANATORY NOTE

On June 1, 2023, the Delaware corporation formerly known as “Angion Biomedica Corp.” completed its previously announced merger transaction in accordance with the terms and conditions of the Agreement and Plan of Merger and Reorganization, dated as of January 17, 2023 (the “Merger Agreement”), by and among Angion Biomedica Corp. (“Angion”), Arkham Merger Sub, Inc., a wholly owned subsidiary of Angion (“Merger Sub”), and Elicio Operating Company, Inc. (“Former Elicio”), pursuant to which Merger Sub merged with and into Former Elicio, with Former Elicio surviving the merger as a wholly owned subsidiary of Angion (the “Merger”). Additionally, on June 1, 2023, Angion changed its name from “Angion Biomedica Corp.” to “Elicio Therapeutics, Inc.” (the “Company”).

Prior to the effective time of the Merger, on June 1, 2023, in connection with the transactions contemplated by the Merger Agreement, the Company effected a reverse stock split of the Company’s common stock, par value $0.01 per share (“Company common stock”), at a ratio of 10:1 (the “Reverse Stock Split”). At the effective time of the Merger, each outstanding share of Former Elicio capital stock (after giving effect to the automatic conversion of all shares of Former Elicio preferred stock into shares of Former Elicio common stock and excluding any shares held as treasury stock by Former Elicio or held or owned by Angion or any subsidiary of Angion or Former Elicio and any dissenting shares) was converted into the right to receive 0.0181 shares of Company common stock. The information in this Quarterly Report on Form 10-Q as of and for the periods prior to the effective date of the Merger gives effect to the Reverse Stock Split.

Since Former Elicio was determined to be the accounting acquirer in connection with the Merger, for periods prior to the Merger, the condensed consolidated financial statements were prepared on a stand-alone basis for Former Elicio and did not include the combined entities’ activity or financial position. Subsequent to the Merger,

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the condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 include the acquired business from June 2, 2023 through June 30, 2023, and assets and liabilities at their acquisition date fair value. Historical share and per share figures of Former Elicio have been retroactively restated based on the exchange ratio of 0.0181.

In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, the terms “Company,” “we,” “us,” and “our” refer to (i) Angion for periods prior to the effectiveness of the Merger and (ii) Elicio Therapeutics, Inc. (as a combined company) for periods following the effectiveness of the Merger. Following the completion of the Merger, the business conducted by the Company became primarily the business conducted by Former Elicio.

This report contains references to trademarks belonging to other entities, which are the property of their respective holders. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Trademarks

This Quarterly Report on Form 10-Q includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this Quarterly Report on Form 10-Q are the property of their respective owners.

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Part I FINANCIAL INFORMATION

Item 1. Financial Statements

ELICIO THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)


	June 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	21,682	$	6,156
Restricted cash, current	—		1,641
Prepaid expenses and other current assets	4,543		2,920
Total current assets	26,225		10,717
Property and equipment, net	919		1,147
Operating lease, right-of-use assets	6,952		7,350
Restricted cash, noncurrent	681		618
Other long-term prepaid assets	2,842		2,834
Total assets	$	37,619	$	22,664
Liabilities, convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities
Accounts payable	$	4,265	$	2,805
Accrued expenses	2,315		1,935


Deferred research obligation	—		1,436
Operating lease liability, current	985		692
Warrant liability	32		—
Total current liabilities	7,597		6,868
Operating lease liability, noncurrent	6,419		6,789
Unvested option exercise liability	46		92
Total liabilities	14,062		13,749
Commitments and contingencies - Note 10
Convertible preferred stock:
Series A convertible preferred stock, $0.06 par value: no shares and 132,387 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022, respectively	—		7,495
Series B convertible preferred stock, $0.06 par value: no shares and 1,927,375 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022, respectively	—		62,944
Series C convertible preferred stock, $0.06 par value: no shares and 4,888,798 shares authorized at June 30, 2023 and December 31, 2022, respectively; no shares and 2,938,158 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	—		40,621
Total convertible preferred stock	—		111,060
Stockholders' equity (deficit):
Common stock, $0.01 par value; 300,000,000 shares authorized at June 30, 2023 and December 31, 2022; 8,384,723 shares and 320,281 shares issued at June 30, 2023 and December 31, 2022, respectively; 8,370,268 and 320,281 outstanding as of June 30, 2023 and December 31, 2022, respectively	84		3
Treasury stock, at cost, 14,454 shares and no shares outstanding as of June 30, 2023 and December 31, 2022, respectively	(150)		—
Additional paid-in capital	146,221		4,860
Accumulated other comprehensive income	(2)		—
Accumulated deficit	(122,596)		(107,008)
Total stockholders' equity (deficit)	23,557		(102,145)
Total liabilities, convertible preferred stock, and stockholders' equity (deficit)	$	37,619	$	22,664

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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ELICIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022




Operating expenses:


Research and development	4,944		5,041		10,428		9,220
General and administrative	2,833		1,191		5,154		2,782
Total operating expenses	7,777		6,232		15,582		12,002
Loss from operations	(7,777)		(6,232)		(15,582)		(12,002)
Other income (expense)
Change in fair value of warrant liability	(23)		—		(23)		—
Change in fair value of embedded derivatives	321		—		429		74


Gain on extinguishment of promissory notes payable	604		—		604		—
Foreign exchange transaction gain	(9)		—		(9)		—
Interest income	39		—		51		1
Interest expense	(714)		(1,067)		(1,056)		(2,432)
Total other income (expense)	218		(1,067)		(4)		(2,357)
Net loss	(7,559)		(7,299)		(15,586)		(14,359)
Other comprehensive loss:
Foreign currency translation adjustment	(2)		—		(2)		—
Comprehensive loss	$	(7,561)	$	(7,299)	$	(15,588)	$	(14,359)
Net loss per common share, basic and diluted	$	(2.44)	$	(23.20)	$	(9.06)	$	(45.85)
Weighted average common shares outstanding, basic and diluted	3,100,957		314,572		1,720,202		313,148

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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ELICIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity

(in thousands, except share amounts)

(unaudited)


	Convertible Preferred Stock			Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity (Deficit)
	Shares	Amount		Shares	Par Value		Shares	Amount
Balance as of December 31, 2022 (1)	4,997,920	$	111,060	320,281	$	3	—	$	—	$	4,860	$	—	$	(107,008)	$	(102,145)
Exercise of stock options	—	—		4,699	—		—	—		40		—		—		40
Issuance of common stock upon net settlement of restricted stock units	—	—		2,601	—		—	—		34		—		—		34
Stock-based compensation	—	—		—	—		—	—		224		—		—		224

Net loss	—	—		—	—		—	—		—		—		(8,029)		(8,029)
Balance as of March 31, 2023	4,997,920	111,060		327,581	3		—	—		5,158		—		(115,037)		(109,876)
Exercise of stock options	—	—		4,460	—		—	—		—		—		—		—
Issuance of common stock upon net settlement of restricted stock units	—	—		903	—		—	—		11		—		—		11
Conversion of preferred stock	(4,997,920)	(111,060)		4,997,920	50		—	—		111,010		—		—		111,060
Issuance of common stock to Angion stockholders as result of Merger and reset to par of $0.01, net of transaction cost of $2.4 million	—	—		3,012,854	30		—	—		19,709		—		—		19,739
Settlement of promissory notes in connection with Merger	—	—		—	—		—	—		10,028		—		—		10,028
Issuance of common stock upon accelerated vesting of restricted stock units due to Merger, net of treasury stock	—	—		26,550	1		—	—		26		—		—		27
Return of common stock to pay withholding taxes on restricted stock	—	—		—	—		(14,455)	(150)		—		—		—		(150)
Stock-based compensation	—	—		—	—		—	—		279		—		—		279
Foreign currency translation adjustment	—	—		—	—		—	—		—		(2)		—		(2)
Net loss	—	—		—	—		—	—		—		—		(7,559)		(7,559)
Balance as of June 30, 2023	—	$	—	8,370,268	$	84	(14,455)	$	(150)	$	146,221	$	(2)	$	(122,596)	$	23,557

(1) Retroactively restated for the reverse recapitalization as described in Note 3.

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	Convertible Preferred Stock			Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity (Deficit)
	Shares	Amount		Shares	Par Value		Shares	Amount
Balance as of December 31, 2021 (1)	1,408,100	$	70,439	310,200	$	3	—	$	—	$	4,261	$	—	$	(78,801)	$	(74,537)

Exercise of stock options	—	—		71	—		—	—		1		—		—		1
Vesting of restricted common stock	—	—		2,775	—		—	—		3		—		—		3
Stock-based compensation	—	—		—	—		—	—		157		—		—		157

Net loss	—	—		—	—		—	—		—		—		(7,060)		(7,060)
Balance as of March 31, 2022	1,408,100	70,439		313,046	3		—	—		4,422		—		(85,861)		(81,436)
Vesting of restricted common stock	—	—		2,775	—		—	—		3		—		—		3
Exercise of stock options	—	—		181	—		—	—		3		—		—		3
Issuance of Series C convertible preferred stock, net of issuance costs of approximately $0.3 million	103,637	1,169		—	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		—	—		113		—		—		113
Net loss	—	—		—	—		—	—		—		—		(7,299)		(7,299)
Balance as of June 30, 2022	1,511,737	$	71,608	316,002	$	3	—	$	—	$	4,541	$	—	$	(93,160)	$	(88,616)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(1) Retroactively restated for the reverse recapitalization as described in Note 3.

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ELICIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(15,586)	$	(14,359)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	214		186
Amortization of right-of-use assets, operating leases	397		283
Non-cash interest expense	1,061		2,431
Change in fair value of embedded derivative	(429)		(74)
Change in fair value of warrant liability	23		—
Stock-based compensation	503		270
Gain on extinguishment of promissory note payable	(604)		—
Loss on disposal of property and equipment, net	1		4
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(1,083)		(16)
Other long-term prepaid assets	(8)		114
Accounts payable	(79)		1,759
Accrued expenses	(

SEC Form 10-Q filed by Angion Biomedica Corp.