Elicio Therapeutics Inc

Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors, described in the Form 10-K as well as the other information in this Quarterly Report on Form 10-Q, before deciding whether to invest in shares of our common stock. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K other than the updates to the risk factors set forth below.

Our largest stockholder has significant influence over us, including influence over decisions that require the approval of stockholders, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control.

GKCC, LLC (“GKCC”), an entity controlled by a member of our board of directors, beneficially owns 19.99% of our outstanding common stock. Additionally, GKCC holds pre-funded warrants to purchase approximately 4.0 million shares of common stock and a convertible note that is convertible into approximately 3.0 million shares of common stock, neither of which are currently convertible into shares of common stock due to a 19.99% beneficial ownership limitation. Although we are not a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Stock Market LLC, GKCC is able to significantly influence our decisions. Furthermore, should the convertible securities held by GKCC no longer be subject to the 19.99% beneficial ownership limitation and should they be converted into shares of our common stock, GKCC could own an even greater percentage of our outstanding common stock. Additionally, GKCC’s interests may not align with the interests of our other stockholders. GKCC may make investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. GKCC may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

The terms of our convertible note arrangement with GKCC, an entity controlled by a member of our board of directors, places certain restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.

On August 12, 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which we issued a 3.0% Senior Secured Convertible Promissory Note due February 15, 2026 (the “Convertible Note”) in the principal amount of $20.0 million (the “Note Financing”). The purchaser of the Convertible Note was GKCC. If we raise any additional debt through a financing, the terms of such additional debt could further restrict our operating and financial flexibility. These restrictions may include, among other things, limitations on borrowing and specific restrictions on the use of the proceeds of such additional debt financing, as well as prohibitions on our ability to incur further debt financing, create liens, pay dividends, redeem capital stock or make investments.

If we default under the terms of the Convertible Note beyond the applicable grace period, if any, GKCC may declare all amounts outstanding under the Convertible Note to be immediately due and payable. If we are unable to repay the amounts due under the Convertible Note upon GKCC’s declaration, GKCC could proceed against the collateral granted to it to secure the obligations under the Securities Purchase Agreement (including, but not limited to taking control of our pledged assets and foreclosing on other collateral, including those of our subsidiaries, Elicio Operating Company, Inc. and Elicio Securities Corp.). The enforcement by GKCC upon its declaration to accelerate the obligations under the Convertible Note, as mentioned above, could adversely affect our operations. Further, if we are liquidated, GKCC’s right to repayment, as well as the right to repayment of other lenders under any additional debt financing, would be senior to the rights of the holders of our common stock.