Elicio Therapeutics Inc

Previous wording

We have developed our cancer vaccine product candidates to target biologically validated tumor mutation drivers using known neoantigens. This strategy results in an “off-the-shelf” therapeutic option allowing patients to receive treatment without delay due to manufacturing timelines and costs associated with personalized vaccine approaches.

Current wording

Our lead programs focus on our cancer vaccine product candidates, which target biologically validated tumor mutation drivers using known neoantigens. This strategy results in an “off-the-shelf” therapeutic option allowing patients to receive treatment without delay due to manufacturing timelines and costs associated with personalized vaccine approaches.

Previous wording

Our clinical and preclinical pipeline includes the lymph node targeted therapeutic cancer vaccines ELI-002, currently being evaluated in a Phase 2 clinical program, designed to stimulate an immune response against mutant KRAS cancers, ELI-007, currently being evaluated in a preclinical study for the treatment of mutant v-raf murine sarcoma viral oncogene homolog B1 (“BRAF”)-driven cancers, and ELI-008, currently being evaluated in a preclinical study for use in the treatment of mutated tumor protein p53 (“TP53”) expressing cancers. We believe that each of our cancer vaccine product candidates, if approved, have the potential to improve the lives of patients suffering from solid tumors arising due to specific oncogenic driver mutations.

Current wording

Our clinical and preclinical pipeline includes the lymph node targeted therapeutic cancer vaccines ELI-002, currently being evaluated in a Phase 2 clinical program, designed to stimulate an immune response against mutant KRAS cancers, ELI-007, currently being evaluated in a preclinical study for the treatment of mutant v-raf murine sarcoma viral oncogene homolog B1 (“BRAF”)-driven cancers, and ELI-008, currently being evaluated in a preclinical study for use in the treatment of mutated tumor protein p53 (“TP53”) expressing cancers. We believe that each of our immunotherapy product candidates, if approved, have the potential to improve the lives of patients suffering from solid tumors arising due to specific oncogenic driver mutations.

Previous wording

Our operations to date have been financed primarily by aggregate net proceeds of $152.0 million from the issuance of common stock, pre-funded warrants, convertible preferred stock, convertible notes, the exercise of stock options and common stock warrants, the private placement of our securities, an at-the-market offering, and proceeds from the Merger. Since inception, we have had significant annual operating losses. Our net loss was $7.2 million and $19.1 million for the three and six months ended June 30, 2024, respectively, and $7.6 million and $15.6 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $161.3 million and $3.4 million in cash and cash equivalents.

Current wording

Our operations to date have been financed primarily by aggregate net proceeds of $182.7 million from the issuance of common stock, pre-funded warrants, convertible preferred stock, convertible notes, the exercise of stock options and common stock warrants, the private placement of our securities, at-the-market offerings, and proceeds from the Merger. Since inception, we have had significant annual operating losses. Our net loss was $18.8 million and $37.9 million for the three and nine months ended September 30, 2024, respectively, and $10.7 million and $26.2 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $180.1 million and $26.0 million in cash and cash equivalents.

Previous wording

On January 17, 2023, Former Elicio entered into a definitive merger agreement (the “Merger Agreement”) with Angion Biomedica Corp (“Angion”), a clinical-stage biotechnology company, and Arkham Merger Sub, Inc., a wholly owned subsidiary of Angion (“Merger Sub”), 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”).

Current wording

On January 17, 2023, Former Elicio entered into a definitive merger agreement (the “Merger Agreement”) with Angion Biomedica Corp (“Angion”), a clinical-stage biotechnology company, and Arkham Merger Sub, Inc., a wholly owned subsidiary of Angion (“Merger Sub”), 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”). Following the Merger, Former Elicio and Elicio Australia Pty Ltd. (“Elicio Pty”), an Australian subsidiary established in August 2019 for the purpose of qualifying for research credits for studies conducted in Australia, became our wholly owned subsidiaries.

Previous wording

We are currently facing substantial doubt about our ability to continue as a going concern, given our cash position and cash runway. As of the filing date of this Quarterly Report on Form 10-Q, we believe that our cash on hand will enable us to fund our operations into the second quarter of calendar year 2025 based on our current plan. This period could be shortened if there are any significant increases in planned or actual spending on development programs or more rapid progress of development programs than anticipated. There is no assurance that financing will be available when needed to allow us to continue as a going concern. Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations for at least twelve months following the issuance of the condensed consolidated financial statements, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. We plan to address this condition through the sale of common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions, but there is no assurance these plans will be completed successfully or at all. If we are unable to obtain additional capital when and as needed to continue as a going concern, we might have to further reduce or scale back our operations and/or liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

Current wording

We are currently facing substantial doubt about our ability to continue as a going concern, given our cash position and cash runway. As of the filing date of this Quarterly Report on Form 10-Q, we believe that our cash on hand will enable us to fund our operations into the second quarter of calendar year 2025 based on our current financial operating plan. This period could be shortened or lengthened if there are any significant increases or decreases in planned or actual spending on development programs or more rapid progress of development programs than anticipated. There is no assurance that financing will be available when needed to allow us to continue as a going concern. Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations for at least twelve months following the issuance of the condensed consolidated financial statements, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. We plan to address this condition through the sale of common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions, but there is no assurance these plans will be completed successfully or at all. If we are unable to obtain additional capital when and as needed to continue as a going concern, we might have to further reduce or scale back our operations and/or liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

Previous wording

Our general and administrative expenses consist primarily of personnel costs, including equity-based compensation, and other expenses for outside professional services, including marketing, legal, audit and accounting, and facility-related costs not otherwise included in research and development expenses, and recruiting. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory and other fees and services associated with maintaining compliance with Nasdaq Stock Market LLC (“Nasdaq”) Marketplace Rules, or the Nasdaq Listing Rules, and Securities and Exchange Commission (“SEC”) requirements, accounting and audit fees, director and officer insurance costs and investor relations costs associated with being a public company.

Current wording

Our general and administrative expenses consist primarily of personnel costs, including equity-based compensation, and other expenses for outside professional services, including marketing, legal, audit and accounting, and facility-related costs not otherwise included in research and development expenses, and recruiting. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory and other fees and services associated with maintaining compliance with the Nasdaq Stock Market LLC (“Nasdaq”) Marketplace Rules, or the Nasdaq Listing Rules, and Securities and Exchange Commission (“SEC”) requirements, accounting and audit fees, director and officer insurance costs and investor relations costs associated with being a public company.

Previous wording

For the three and six months ended June 30, 2024 and 2023, other income and expense consisted primarily of interest income, foreign exchange transaction gains and losses, gain on sale of equipment, interest expense, changes in fair value of the embedded derivative, gain on extinguishment of the promissory note payable, and gains and losses related to the re-measurement of our warrant liabilities.

Current wording

For the three and nine months ended September 30, 2024 and 2023, other income and expense consisted primarily of interest income, foreign exchange transaction gains and losses, gain on sale of equipment, interest expense, gain on extinguishment of the promissory note payable, and gains and losses related to the re-measurement of our warrant liabilities.

Previous wording

Other income (expense), net for the three months ended June 30, 2024 was expense of $3.7 million compared to expense of $0.2 million for the three months ended June 30, 2023. The increase of $3.5 million was primarily due to the change in fair value associated with the Pre-Funded Warrants, as defined in our condensed consolidated financial statements for the three and six months ended June 30, 2024.

Current wording

Other (expense) income for the three months ended September 30, 2024 was expense of $8.5 million compared to income of $0.1 million for the three months ended September 30, 2023. The increase of $8.6 million was primarily due to the change in fair value and loss on issuance associated with the pre-funded warrants and common warrants as defined in our condensed consolidated financial statements for the three and nine months ended September 30, 2024.

Previous wording

Research and development expenses were $15.7 million for the six months ended June 30, 2024, compared to $10.4 million for the six months ended June 30, 2023. The increase of $5.3 million was primarily due to an increase in external costs associated with ELI-002 manufacturing and clinical trials.

Current wording

Research and development expenses were $22.9 million for the nine months ended September 30, 2024, compared to $17.7 million for the nine months ended September 30, 2023. The increase of $5.3 million was primarily due to an increase in external costs associated with ELI-002 manufacturing and clinical trials.

Previous wording

Other expense for the six months ended June 30, 2024 was income of $2.1 million compared to expense of $0.0 million for the six months ended June 30, 2023. The increase of $2.1 million was primarily due to the change in fair value associated with the Pre-Funded Warrants.

Current wording

Other expense for the nine months ended September 30, 2024 was expense of $6.4 million compared to income of $0.1 million for the nine months ended September 30, 2023. The increase of $6.5 million was primarily due to the change in fair value and loss on issuance associated with the pre-funded warrants and common warrants.

Previous wording

Our operations through June 30, 2024 have been financed primarily by aggregate net proceeds of $152.0 million from the issuance of common stock, pre-funded warrants, convertible preferred stock, convertible notes, the exercise of stock options and common stock warrants, the private placement of our securities, an at-the-market offering, and proceeds from the Merger. Since inception, we have had significant operating losses. Our net loss was $19.1 million and $15.6 million for the six months ended June 30, 2024 and six months ended June 30, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $161.3 million and $3.4 million in cash and cash equivalents. Cash and cash equivalents as of June 30, 2024 did not include $9.9 million of net proceeds from the public offering that was received on July 1, 2024 or $19.7 million of net proceeds from the convertible note financing that was received on August 12, 2024. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Current wording

Our operations through September 30, 2024 have been financed primarily by aggregate net proceeds of $182.7 million from the issuance of common stock, pre-funded warrants, convertible preferred stock, convertible notes, the exercise of stock options and common stock warrants, the private placement of our securities, at-the-market offerings, and proceeds from the Merger. Since inception, we have had significant operating losses. Our net loss was $37.9 million and $26.2 million for the nine months ended September 30, 2024 and nine months ended September 30, 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $180.1 million and $26.0 million in cash and cash equivalents. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Previous wording

The following table sets forth a summary of our net cash flow activity for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table sets forth a summary of our net cash flow activity for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities was $21.1 million, which consisted of a net loss of $19.1 million, changes in our assets and liabilities of $1.5 million, and non-cash charges of $0.5 million. The non-cash charges were related to $2.3 million of change in the fair value of warrant liability offset by $0.7 million of stock-based compensation, $0.6 million loss on the issuance of the Pre-Funded Warrants, $0.4 million amortization of the right of use asset, and $0.2 million of depreciation.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities was $28.3 million, which consisted of a net loss of $37.9 million, changes in our assets and liabilities of $0.3 million, and non-cash charges of $9.3 million. The non-cash charges were related to $3.5 million loss on the issuance of the pre-funded warrants and common warrants, $3.3 million of change in the fair value of warrant liability, $1.0 million of stock-based compensation, $0.6 million amortization of the right of use asset, $0.5 million related to issuance costs for the pre-funded warrants and common warrants, $0.1 million of non-cash interest expense, and $0.2 million of depreciation.

Previous wording

For the six months ended June 30, 2023, net cash used in operating activities was $17.6 million, which consisted of a net loss of $15.6 million and changes in our assets and liabilities of $3.2 million which was partially offset by non-cash charges of $1.2 million. The non-cash charges were related to $1.1 million of interest expense related to promissory notes, $0.5 million of stock-based compensation, $0.4 million decrease in the right of use asset, $0.2 million of depreciation, partially offset by a $0.6 million of gain on the settlement of the promissory note payable and $0.4 million decrease in the fair value of the embedded derivative associated with the convertible note.

Current wording

For the nine months ended September 30, 2023, net cash used in operating activities was $22.8 million, which primarily consisted of a net loss of $26.2 million, which was partially offset by the change in net operating assets and liabilities of $1.6 million and net non-cash charges of $1.9 million. The cash provided by the change in net operating assets and liabilities was due to a $0.2 million increase in deferred research obligation, a $2.0 million increase in accrued expense and accounts payable, and a $0.6 million decrease in the right of use asset. The net non-cash charges were primarily related to the $1.1 million of interest expense related to promissory notes, $0.8 million of stock-based compensation, $0.3 million of depreciation, partially offset by a $0.6 million of gain on the settlement of the promissory note payable and $0.4 million decrease in the fair value of the embedded derivative associated with the convertible note.

Previous wording

For the six months ended June 30, 2024 and 2023, net cash provided by or used in investing activities was immaterial.

Current wording

For the nine months ended September 30, 2024 and 2023, net cash provided by or used in investing activities was immaterial.

Previous wording

For the six months ended June 30, 2024, net cash provided by financing activities was $11.3 million as a result of the issuance of $5.4 million of our common stock under the 2022 ATM program and $6.0 million of our pre-funded warrants in a private placement.

Current wording

For the nine months ended September 30, 2024, net cash provided by financing activities was $42.1 million as a result of the issuance of the convertible note for $19.7 million,$10.9 million from the July Public Offering, the issuance of $5.5 million of our common stock under the 2022 ATM and 2024 ATM programs and stock-based compensation exercises, and $6.0 million from the issuance of our pre-funded warrants in a private placement.

Previous wording

For the six months ended June 30, 2023, net cash provided by financing activities was $31.6 million, primarily as a result of the Merger Agreement.

Current wording

For the nine months ended September 30, 2023, net cash provided by financing activities was $31.6 million, primarily as a result of the Merger Agreement.

Previous wording

Until such time as we can generate significant revenue from sales of product candidates, if ever, we expect to finance our operations through the sale of common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. To the extent we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Current wording

Until such time as we can generate significant revenue from sales of product candidates, if ever, we expect to finance our operations through the sale of common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. To the extent we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through additional collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Form 10-K. There have been no material changes in our critical accounting policies and estimates in the preparation of our condensed consolidated financial statements during the six months ended June 30, 2024 compared to those disclosed in the Form 10-K, other than as set forth in Footnotes 4 and 9, with respect to our accounting policy related to pre-funded warrants.

Current wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Form 10-K. There have been no material changes in our critical accounting policies and estimates in the preparation of our condensed consolidated financial statements during the nine months ended September 30, 2024 compared to those disclosed in the Form 10-K, other than as set forth in Footnotes 4 and 9, with respect to our accounting policy related to warrants and derivatives.

Previous wording

The Pre-Funded Warrants, as defined in our condensed consolidated financial statements for the six months ended June 30, 2024, did not meet the equity classification requirements under ASC 815, Derivative and Hedging; specifically, the Pre-Funded Warrants do not meet the condition of index to its own stock and because the Pre-Funded Warrants were pre-funded and proceeds were received before exercise, these Pre-Funded Warrants do not meet the definition of a derivative. The Pre-Funded Warrants could not be exercised in an amount that would cause the holder to exceed 19.99% beneficial ownership of our shares unless we obtained stockholder approval pursuant to the rules and regulations of the Nasdaq Stock Market LLC, which limited our ability to issue common stock to settle the Pre-Funded Warrants beyond such 19.99% ownership blocker. Consequently, the Pre-Funded Warrants were classified as liabilities and measured at fair value as of the grant date. Subsequent to the grant date, we remeasured the Pre-Funded Warrants at fair value and recognized a gain from change in fair value of the Pre-Funded Warrants on the condensed consolidated financial statements during the six months ended June 30, 2024.

Current wording

The Pre-Funded Warrants, as defined in our condensed consolidated financial statements for the nine months ended September 30, 2024, did not meet the equity classification requirements under ASC 815, Derivative and Hedging; specifically, the Pre-Funded Warrants do not meet the condition of index to its own stock and because the Pre-Funded Warrants were pre-funded and proceeds were received before exercise, these Pre-Funded Warrants do not meet the definition of a derivative. The Pre-Funded Warrants could not be exercised in an amount that would cause the holder to exceed 19.99% beneficial ownership of our shares unless we obtain stockholder approval pursuant to the rules and regulations of the Nasdaq Stock Market LLC, which limits our ability to issue common stock to settle the Pre-Funded Warrants beyond such 19.99% ownership blocker. Consequently, the Pre-Funded Warrants were classified as liabilities and measured at fair value as of the grant date. Subsequent to the grant date, we remeasured the Pre-Funded Warrants at fair value and recognized a loss from change in fair value of the Pre-Funded Warrants on the condensed consolidated financial statements during the nine months ended September 30, 2024. We will re-assess the liability classification in the fourth quarter of 2024.