PART I FINANCIAL INFORMATION Financial Statements This section presents Elicio Therapeutics, Inc.'s unaudited condensed consolidated financial statements for Q1 2024, including balance sheets, statements of operations, equity, and cash flows, along with explanatory notes Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Account | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $11,853 | $12,894 | | Total current assets | $14,130 | $16,348 | | Total assets | $24,480 | $27,146 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $5,951 | $9,755 | | Warrant liability | $7,868 | $11 | | Total liabilities | $19,610 | $15,773 | | Total stockholders' equity | $4,870 | $11,373 | - Total assets decreased from $27.1 million to $24.5 million, while total liabilities increased from $15.8 million to $19.6 million, primarily due to a significant increase in warrant liability. This resulted in a decrease in total stockholders' equity from $11.4 million to $4.9 million19 Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Research and development | $7,559 | $5,484 | | General and administrative | $2,682 | $2,321 | | Loss from operations | ($10,241) | ($7,805) | | Net loss | ($11,827) | ($8,029) | | Net loss per common share | ($1.15) | ($24.77) | - Net loss increased to $11.8 million in Q1 2024 from $8.0 million in Q1 2023, driven by higher operating expenses and a $1.3 million charge for the change in fair value of warrant liability21 Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - Stockholders' equity decreased from $11.4 million at the end of 2023 to $4.9 million as of March 31, 2024. The decrease was primarily driven by a net loss of $11.8 million, partially offset by $5.1 million in net proceeds from an At-the-Market (ATM) common stock offering23 Condensed Consolidated Statements of Cash Flows Cash Flow Summary (in thousands) | Activity | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($12,122) | ($8,139) | | Net cash provided by (used in) investing activities | $3 | ($17) | | Net cash provided by financing activities | $11,024 | $10,040 | - Cash used in operations increased to $12.1 million. The company generated $11.0 million from financing activities, primarily from the issuance of common stock warrants ($6.0 million) and common stock ($5.1 million)27 Notes to Unaudited Interim Condensed Consolidated Financial Statements - Going Concern: The company's operating losses, negative cash flows, and an accumulated deficit of $154.0 million raise substantial doubt about its ability to continue as a going concern. Additional financing is required to fund operations for at least the next twelve months3233 - Reverse Merger: On June 1, 2023, the company completed a reverse merger with Angion Biomedica Corp., which was accounted for as a reverse recapitalization with Former Elicio as the accounting acquirer293031 - At-The-Market (ATM) Program: During Q1 2024, the company sold 615,363 shares of common stock under its ATM Program, generating net proceeds of approximately $5.1 million95 - Private Placement: In March 2024, the company sold pre-funded warrants to purchase 1,032,702 shares in a private placement, raising gross proceeds of approximately $6.0 million. These warrants are classified as a liability96109130 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical-stage biotechnology focus, Q1 2024 financial results showing increased net loss, and critical liquidity concerns raising substantial doubt about its going concern ability - The company is a clinical-stage biotechnology company developing immunotherapies for cancer and infectious diseases using its proprietary Amphiphile (AMP) technology to target lymph nodes and generate robust T cell responses. Its lead candidate is ELI-002 for KRAS-mutated cancers133134136 - Going Concern and Liquidity: The company has substantial doubt about its ability to continue as a going concern. As of March 31, 2024, it had $11.9 million in cash and cash equivalents, which is expected to fund operations only into the third quarter of 2024142145147 Results of Operations Comparison (in thousands) | Expense Category | Q1 2024 (in thousands) | Q1 2023 (in thousands) | $ Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $7,559 | $5,484 | $2,075 | 38% | | General and administrative | $2,682 | $2,321 | $361 | 16% | | Loss from operations | ($10,241) | ($7,805) | ($2,436) | 31% | - The $2.1 million increase in R&D expenses was primarily due to advancing the ELI-002 clinical development. The $0.4 million increase in G&A expenses was due to higher personnel costs and professional fees associated with being a public company160161 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Elicio Therapeutics is not required to provide the information for this item - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item182 Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective as of March 31, 2024, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2024, due to material weaknesses in internal control over financial reporting186 - The identified material weaknesses relate to: (i) insufficient resources with U.S. GAAP expertise for complex transactions, (ii) insufficient financial reporting and closing controls, and (iii) insufficient review of financial reporting calculations like EPS189 - A remediation plan is underway, including engaging consultants and hiring additional finance personnel, but the material weaknesses were not fully remediated as of March 31, 2024190191 PART II OTHER INFORMATION Legal Proceedings The company reports no awareness of any material legal proceedings as of the filing date - The Company is not aware of any material legal matters as of the filing date114194 Risk Factors This section indicates no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those described in the Annual Report on Form 10-K filed on March 29, 2024196 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - None reported for the quarter198 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None reported199 Mine Safety Disclosures This item is not applicable to the company - Not applicable200 Other Information No directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading plans during the fiscal quarter ended March 31, 2024 - During the quarter ended March 31, 2024, no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans201 Exhibits This section lists the exhibits filed with the Form 10-Q, including the Subscription Agreement, Pre-Funded Warrant form, and officer certifications - Exhibits filed include the Subscription Agreement dated March 18, 2024, the Form of Pre-Funded Warrant, and certifications from the Principal Executive Officer and Principal Financial Officer203
ANGION BIOMEDICA(ANGN) - 2024 Q1 - Quarterly Report