PART I FINANCIAL INFORMATION This section presents unaudited interim financial statements and management's analysis of financial condition and operations Item 1. Financial Statements Financial statements reveal significant net losses and negative operating cash flows, raising substantial doubt about going concern - The Company has experienced net losses and negative cash flows from operating activities since inception, with an accumulated deficit of $215.9 million as of June 30, 2025. This, along with the need for additional capital, raises substantial doubt about its ability to continue as a going concern3233 Key Financial Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Research and development expenses | $7,006 | $8,180 | $14,784 | $15,739 | | General and administrative expenses | $3,085 | $2,744 | $6,043 | $5,426 | | Total operating expenses | $10,091 | $10,924 | $20,827 | $21,165 | | Loss from operations | $(10,091) | $(10,924) | $(20,827) | $(21,165) | | Total other (expense) income, net | $(470) | $3,695 | $(943) | $2,109 | | Net loss | $(10,561) | $(7,229) | $(21,770) | $(19,056) | | Net loss per common share, basic and diluted | $(0.66) | $(0.64) | $(1.50) | $(1.77) | Condensed Consolidated Balance Sheets (unaudited) Cash and equivalents increased, liabilities decreased from debt conversion, shifting stockholders' equity to positive Condensed Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $22,088 | $17,618 | | Total current assets | $22,598 | $20,693 | | Total assets | $29,528 | $28,178 | | Total current liabilities | $9,923 | $11,523 | | Long-term debt, net | $9,337 | $20,034 | | Total liabilities | $27,694 | $39,490 | | Total stockholders' equity (deficit) | $1,834 | $(11,312) | Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) Net loss increased for both periods, driven by decreased R&D, increased G&A, and a shift in other expense, net Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development | $7,006 | $8,180 | $14,784 | $15,739 | | General and administrative | $3,085 | $2,744 | $6,043 | $5,426 | | Total operating expenses | $10,091 | $10,924 | $20,827 | $21,165 | | Loss from operations | $(10,091) | $(10,924) | $(20,827) | $(21,165) | | Change in fair value of warrant liabilities | $(859) | $3,616 | $(1,366) | $2,338 | | Grant income | $415 | — | $415 | — | | Net loss | $(10,561) | $(7,229) | $(21,770) | $(19,056) | | Net loss per common share, basic and diluted | $(0.66) | $(0.64) | $(1.50) | $(1.77) | Condensed Consolidated Statements of Stockholders' Equity (Deficit) (unaudited) Stockholders' equity improved from deficit to positive, driven by debt conversion and equity offerings, despite net loss Changes in Stockholders' Equity (Deficit) (in thousands) | Item | Six Months Ended June 30, 2025 Impact | | :---------------------------------------------------- | :----------------------------------- | | Balance as of December 31, 2024 | $(11,312) | | Conversion of senior note payable into common stock | $20,176 | | Issuance of common stock and warrants (January 2025 Offering) | $9,143 | | Issuance of common stock (At-the-Market offering) | $2,016 | | Issuance of common warrants (June 2025 Promissory Note) | $641 | | Stock-based compensation | $1,227 | | Net loss | $(21,770) | | Balance as of June 30, 2025 | $1,834 | Condensed Consolidated Statements of Cash Flows (unaudited) Financing activities significantly increased cash, offsetting operating outflows and leading to a net increase in cash and equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(19,069) | $(21,050) | | Net cash used in investing activities | — | $(39) | | Net cash provided by financing activities | $22,260 | $11,340 | | Net increase (decrease) in cash | $3,296 | $(9,790) | | Cash, cash equivalents and restricted cash at end of period | $22,788 | $4,511 | - Key financing activities for the six months ended June 30, 2025, included $9.1 million from the January 2025 Offering, $9.9 million from the June 2025 Promissory Note Financing, and $2.9 million from At-the-Market offerings154 Notes to Unaudited Interim Condensed Consolidated Financial Statements Notes disclose business, accounting policies, and financial instruments, highlighting going concern uncertainty and recent debt activities - The Company's accumulated deficit of $215.9 million and negative operating cash flows raise substantial doubt about its ability to continue as a going concern, necessitating additional financing3233 - In March 2025, the Company converted a $20.0 million Senior Secured Convertible Promissory Note into 3,500,573 shares of common stock100114 - In June 2025, the Company issued a new $10.0 million Senior Secured Promissory Note to GKCC, along with warrants to purchase 103,225 shares of common stock, generating net proceeds of $9.9 million101102103115116 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, emphasizing significant net losses, negative cash flows, and ongoing going concern uncertainty - Elicio Therapeutics is a clinical-stage biotechnology company developing immunotherapies for cancer, with its lead candidate ELI-002 7P in a Phase 2 study for mKRAS-driven pancreatic cancer119122 - The Company's cash on hand is projected to fund operations only into the first quarter of 2026, necessitating additional capital through equity, debt, or strategic transactions to continue as a going concern124127149 Operating Expense and Net Loss Trends (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Research and Development | $7,006 | $8,180 | (14)% | $14,784 | $15,739 | (6)% | | General and Administrative | $3,085 | $2,744 | 12% | $6,043 | $5,426 | 11% | | Total Operating Expenses | $10,091 | $10,924 | (8)% | $20,827 | $21,165 | (2)% | | Net Loss | $(10,561) | $(7,229) | 46% | $(21,770) | $(19,056) | 14% | Overview Elicio Therapeutics, a clinical-stage biotech, develops cancer immunotherapies, with lead candidate ELI-002 7P in Phase 2, facing going concern doubts - Elicio's AMP technology aims to generate robust anti-tumor T cell responses by preferentially targeting lymph nodes, addressing limitations of current immunotherapies119120 - ELI-002 7P, a lead cancer immunotherapy vaccine, is in a Phase 2 study for mKRAS-driven pancreatic cancer, targeting seven KRAS mutations in 88% of PDAC patients. An interim review confirmed a favorable safety profile, and the trial will continue to final analysis in Q4 2025122 - The Company's net loss was $10.6 million and $21.8 million for the three and six months ended June 30, 2025, respectively, with an accumulated deficit of $215.9 million and $22.1 million in cash and cash equivalents as of June 30, 2025123 - Substantial doubt exists about the Company's ability to continue as a going concern, with current cash expected to fund operations only into the first quarter of 2026, necessitating additional financing124127 Components of Results of Operations Operating expenses (R&D, G&A) are expected to increase with clinical trials and public company operations, impacting other income/expense - Research and development expenses include personnel costs, consultant fees, sponsored research, manufacturing of clinical materials, and laboratory expenses, all expensed as incurred132135 - R&D expenses are expected to increase substantially due to ongoing clinical trials, manufacturing, and advancing product candidates, with significant uncertainties regarding timing and costs to complete development134136137 - General and administrative expenses are projected to increase due to additional personnel, legal, regulatory, accounting, and investor relations costs associated with operating as a public company138 Results of Operations R&D decreased, G&A increased, and other income shifted to expense for both periods, contributing to a higher net loss Operating Expenses and Other Income/Expense (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | :------- | | Research and development | $7,006 | $8,180 | $(1,174) | (14)% | | General and administrative | $3,085 | $2,744 | $341 | 12% | | Total other (expense) income, net | $(470) | $3,695 | $(4,165) | (113)% | | Net loss | $(10,561) | $(7,229) | $(3,332) | 46% | Operating Expenses and Other Income/Expense (Six Months) (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | $ Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | :------- | | Research and development | $14,784 | $15,739 | $(955) | (6)% | | General and administrative | $6,043 | $5,426 | $617 | 11% | | Total other (expense) income, net | $(943) | $2,109 | $(3,052) | (145)% | | Net loss | $(21,770) | $(19,056) | $(2,714) | 14% | - The decrease in R&D expenses was primarily due to less clinical trial manufacturing for ELI-002 7P, while the increase in G&A expenses was driven by higher professional fees related to the June 2025 Promissory Note Financing and January 2025 Offering141142145146 - The significant decrease in other (expense) income was mainly due to the change in fair value of liability-classified common warrants and the one-time grant income recognized in the prior year143147 Liquidity and Capital Resources The Company raised $205.2 million since inception but faces going concern doubts, with cash funding operations only into Q1 2026, requiring future financing - Since inception, the Company has raised $205.2 million from various financing activities, including common stock, warrants, convertible notes, and promissory notes148 - Net cash used in operating activities was $19.1 million for the six months ended June 30, 2025, an improvement from $21.1 million in the prior year, primarily due to non-cash charges and changes in operating assets and liabilities151152 - Net cash provided by financing activities was $22.3 million for the six months ended June 30, 2025, driven by proceeds from the January 2025 Offering ($9.1 million), June 2025 Promissory Note Financing ($9.9 million), and At-the-Market offerings ($2.9 million)154 - The Company anticipates significant future expenditures for product candidate development and will require additional financing, with no assurance of availability on acceptable terms, which could lead to delays or termination of development efforts149157 Critical Accounting Policies and Significant Judgments and Estimates Financial statements adhere to U.S. GAAP, relying on estimates, with no material changes to critical accounting policies since the last Form 10-K - The preparation of financial statements requires management to make estimates and assumptions that impact reported asset and liability amounts and expenses158 - No material changes occurred in the Company's critical accounting policies and estimates during the six months ended June 30, 2025, compared to those in the Form 10-K159 Emerging Growth Company and Smaller Reporting Company Status Elicio qualifies as an emerging growth and smaller reporting company, benefiting from reduced JOBS Act reporting and extended accounting transition - The Company is an emerging growth company and a smaller reporting company, benefiting from reduced reporting requirements under the JOBS Act160 - Elicio has elected to use the extended transition period for complying with new or revised accounting standards, which may result in financial statements not being comparable to companies that adopt standards earlier161 - The Company will remain an emerging growth company until the earliest of December 31, 2026, achieving $1.235 billion in annual gross revenue, becoming a large accelerated filer, or issuing over $1.0 billion in non-convertible debt162 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Elicio Therapeutics is exempt from market risk disclosures - The Company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company164 Item 4. Controls and Procedures Management concluded disclosure controls were effective, having remediated prior material weaknesses in complex transaction evaluation and financial reporting - The Company's disclosure controls and procedures were evaluated as effective as of June 30, 2025166167 - Previously identified material weaknesses related to insufficient resources for complex transactions and financial reporting controls have been fully remediated as of June 30, 2025168171 - Remediation measures included engaging SEC compliance and technical accounting consultants, hiring additional finance and accounting personnel, and strengthening financial reporting and expense accrual processes with enhanced data capture and review procedures169170 PART II OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, equity sales, defaults, and exhibits Item 1. Legal Proceedings The Company is not involved in legal proceedings expected to have a material adverse effect on its business - As of the report date, the Company does not believe it is a party to any claim, proceeding, or litigation that would individually or in aggregate have a material adverse effect on its business173 Item 1A. Risk Factors Investing in the Company's common stock involves high risk, with no material changes to risk factors since the Form 10-K - Investing in the Company's common stock carries a high degree of risk175 - No material changes to risk factors have occurred since the Form 10-K, except as noted in the prior quarterly report175 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported - No unregistered sales of equity securities or use of proceeds occurred177 Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities - No defaults upon senior securities were reported178 Item 4. Mine Safety Disclosures The Company has no mine safety disclosures to report - No mine safety disclosures are applicable179 Item 5. Other Information No Rule 10b5-1(c) trading arrangements were adopted, modified, or terminated by directors or executive officers - No Rule 10b5-1(c) trading arrangements were adopted, modified, or terminated by directors or executive officers during the quarter180 Item 6. Exhibits This section lists all exhibits filed, including June 2025 Promissory Note Financing agreements and executive officer certifications - Key exhibits include the Senior Secured Promissory Note, Note Purchase Agreement, Security Agreement, IP Security Agreement, and Subsidiary Guarantee related to the June 2025 Promissory Note Financing181 - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Act Sections 302 and 906 are included181 Signatures The report was duly signed by the President and CEO, and the Chief Strategy and Financial Officer - The report was signed by Robert Connelly, President and CEO, and Preetam Shah, Chief Strategy and Financial Officer, on August 7, 2025186
Elicio Therapeutics(ELTX) - 2025 Q2 - Quarterly Report