PART I FINANCIAL INFORMATION Financial Statements Q3 2023 financial statements reveal significant net losses, an accumulated deficit, and substantial doubt about going concern, influenced by R&D and a reverse merger Condensed Consolidated Balance Sheets Balance sheets show total assets increased to $31.0 million by September 30, 2023, driven by cash from a reverse merger, shifting from a stockholders' deficit to equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $14,841 | $6,156 | | Total current assets | $19,931 | $10,717 | | Total assets | $30,987 | $22,664 | | Liabilities & Equity | | | | Total current liabilities | $11,486 | $6,868 | | Total liabilities | $17,701 | $13,749 | | Total convertible preferred stock | $0 | $111,060 | | Total stockholders' equity (deficit) | $13,286 | $(102,145) | Condensed Consolidated Statements of Operations and Comprehensive Loss Net loss increased to $10.7 million in Q3 2023 and $26.2 million for the nine months, primarily due to higher R&D and G&A expenses Operating Results (in thousands) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $7,264 | $4,593 | $17,692 | $13,813 | | General and administrative | $3,507 | $1,177 | $8,661 | $3,959 | | Loss from operations | $(10,771) | $(5,770) | $(26,353) | $(17,772) | | Net loss | $(10,658) | $(7,198) | $(26,246) | $(21,557) | | Net loss per share | $(1.27) | $(22.67) | $(3.19) | $(68.52) | Condensed Consolidated Statements of Cash Flows Net cash used in operations was $22.8 million for nine months, offset by $31.6 million from financing, primarily from a reverse merger and promissory notes Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,798) | $(14,903) | | Net cash used in investing activities | $(32) | $(559) | | Net cash provided by financing activities | $31,611 | $10,026 | | Net increase (decrease) in cash | $8,781 | $(5,436) | - Financing activities in 2023 were dominated by the reverse merger, which provided $24.0 million in cash, and proceeds from promissory notes of $10.0 million28 Notes to Unaudited Interim Condensed Consolidated Financial Statements Notes detail the reverse merger, going concern doubt due to recurring losses, research grants, preferred stock conversion, and significant operating lease commitments - The company's financial condition, including an accumulated deficit of $133.3 million as of September 30, 2023, and the need for additional capital, raises substantial doubt about its ability to continue as a going concern3334 - On June 1, 2023, the company completed a reverse merger with Angion Biomedica Corp., accounted for as a reverse recapitalization, acquiring net assets of $32.1 million, including $24.0 million in cash317074 - The company received research grant funding from the GI Research Foundation, including a $2.8 million award in 2022 and a new $3.1 million award in September 2023, with $1.7 million in grant funds available8687 - A significant operating lease for office and laboratory space in Boston, expiring in January 2030, has total aggregate payments of $11.1 million and a liability of $7.2 million as of September 30, 2023111114 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses ELI-002 clinical trials, increased operating expenses from R&D and G&A, and critical liquidity issues raising substantial doubt about going concern - The lead clinical program, ELI-002, a therapeutic cancer vaccine targeting KRAS mutations, plans to initiate a randomized phase 2 trial for the 7-peptide formulation (ELI-002 7P) in early 2024126 Comparison of Operating Expenses (in thousands) | Expense Category | Q3 2023 | Q3 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $7,264 | $4,593 | $2,671 | 58% | | General and administrative | $3,507 | $1,177 | $2,330 | 198% | | Total operating expenses | $10,771 | $5,770 | $5,001 | 87% | - The company has substantial doubt about its ability to continue as a going concern, with current cash of $14.8 million projected to fund operations only into the first quarter of 2024, requiring additional financing130155157 - Net cash used in operating activities increased to $22.8 million for the first nine months of 2023 from $14.9 million in the same period of 2022, driven by a higher net loss159160 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Elicio Therapeutics, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company, as a smaller reporting company per Rule 12b-2 of the Exchange Act, is not required to provide market risk disclosures171 Controls and Procedures Management concluded disclosure controls and procedures were ineffective as of September 30, 2023, due to an un-remediated material weakness in internal control over financial reporting - Management concluded that as of September 30, 2023, the company's disclosure controls and procedures were not effective172 - The ineffectiveness stems from a material weakness in internal control over financial reporting, identified during the 2022 audit, related to accounting for complex transactions173174 - Remediation efforts have been initiated but were not complete as of September 30, 2023175 PART II OTHER INFORMATION Legal Proceedings The company is not currently aware of any material legal proceedings, though it may be involved in routine legal matters - The company is not aware of any material legal proceedings116182 Risk Factors Updated risk factors highlight significant challenges in raising capital for going concern issues and the material weakness in internal control over financial reporting - The company faces significant challenges in raising capital for going concern issues due to difficult market conditions, early-stage programs, and limited stock trading volume, with potential for highly dilutive financing185188 - A material weakness in internal controls over financial reporting, due to insufficient technical expertise for complex transactions, could lead to inaccurate financial reporting186187 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - There were no unregistered sales of equity securities in the reported period192 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None193 Mine Safety Disclosures This item is not applicable to the company - None194 Other Information No directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading plans during Q3 2023 - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the quarter ended September 30, 2023195 Exhibits This section lists exhibits filed with Form 10-Q, including officer certifications, a separation agreement, and XBRL data files - Exhibits filed include officer certifications (31.1, 31.2, 32.1, 32.2), a separation agreement, the director compensation program, and XBRL interactive data files196
ANGION BIOMEDICA(ANGN) - 2023 Q3 - Quarterly Report