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~~ANGION BIOMEDICA CORP.~~

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. However, there is no assurance that we will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should we be unable to raise this amount of capital our operating plans will be limited to the amount of capital that we can access. We may also consider steps to reduce our operating expenses. There can be no assurances that we will be successful in any of the foregoing.

Summary Statement of Cash Flows

The following table sets forth a summary of our net cash flow activity for the years ended December 31, 2023 and 2022 (in thousands):


	Year Ended December 31,
	2023		2022

Net cash provided by (used in)
Operating activities	$	(32,694)	$	(22,179)
Investing activities	(32)		(654)
Financing activities	38,613		21,202
Effect of foreign currency on cash	—		—
Net (decrease) increase in cash	$	5,887	$	(1,631)

Operating activities

For the year ended December 31, 2023, net cash used in operating activities was $32.7 million, which primarily consisted of a net loss of $35.2 million and the change in net operating assets and liabilities of $0.1 million partially offset by the net non-cash charges of $2.6 million. The change in net operating assets and liabilities of $0.1 million was the result of a $0.7 million decrease in the deferred research obligation, $0.8 million decrease in prepaid assets, and $0.8 million decrease in the operating lease liability offset by an increase in accounts payable and accrued expenses of $2.2 million. The $2.6 million of net non-cash charges were related to $1.1 million of interest expense related to the accretion of promissory notes payable, $1.2 million of stock-based compensation, $0.8 million related to the amortization of the right-of-use asset, $0.4 million of depreciation, $0.1 million loss on disposal of property and equipment partially offset by $0.4 million increase in the fair value of the embedded derivative associated with the promissory notes payable and $0.6 million of gain on the extinguishment of the promissory notes payable.

For the year ended December 31, 2022, net cash used in operating activities was $22.2 million, which primarily consisted of a net loss of $28.2 million and a change in net operating assets and liabilities of $0.2 million, partially offset by net non-cash charges of $6.2 million. The change in net operating assets and liabilities of $0.2 million was the result of a $1.8 million decrease in prepaid assets and a $0.5 million decrease in the operating lease liability offset by an increase in accounts payable and accrued expenses of $0.8 million, and an increase of the deferred research obligation of $1.4 million. The net non-cash charges of $6.2 million were primarily related to $3.6 million of non-cash interest expense, $0.9 million of non-cash change in the fair value of the embedded derivative, $0.4 million of depreciation expense, $0.7 million related to amortization of the right-of-use asset associated with our operating leases and $0.6 million of stock-based compensation expense.

Investing activities

For the year ended December 31, 2023, an immaterial amount of cash was provided or used in investing activities, and for the year ended December 31, 2022, net cash used in investing activities was $0.7 million, primarily used to purchase capital equipment.

Financing activities

For the year ended December 31, 2023, net cash provided by financing activities was $38.6 million, comprised of $31.6 million of net proceeds from the Merger and $7.0 million of proceeds from the sale of common stock. For the year ended December 31, 2022, net cash provided by financing activities was $21.2 million, comprised of $21.1 million of net proceeds from the issuance of Series C preferred stock and $0.1 million of proceeds from the exercise of common stock options.

Future Cash Needs and Funding Requirements

Based on our current operating plan, we believe our cash and cash equivalents will be sufficient to fund our planned operations into the third quarter of 2024. However, we have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources

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sooner than we expect. We are unable to estimate the exact amount of our operating capital requirements. The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

▪the scope, progress, results and costs of researching and developing product candidates, and conducting preclinical studies and clinical trials;

▪the outcome of any future clinical trials, for any existing or future product candidates;

▪whether we are able to take advantage of any FDA expedited development and approval programs for any of our product candidates;

▪the outcome, costs and timing of seeking and obtaining and maintaining FDA and any foreign regulatory approvals;

▪the costs associated with any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates;

▪the number and characteristics of product candidates we pursue, including product candidates in preclinical development;

▪the ability of our product candidates to progress through clinical development successfully;

▪our need to expand our research and development activities, including to conduct additional clinical trials;

▪market acceptance of our product candidates, including physician adoption, market access, pricing and reimbursement;

▪the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies;

▪our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments potentially required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

▪our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel;

▪the effect of competing technological, market developments and government policy;

▪the costs associated with being a public company, including our need to implement additional internal systems and infrastructure, including financial and reporting systems;

▪the costs associated with securing and establishing commercialization and manufacturing capabilities, as well as those associated with packaging, warehousing and distribution;

▪the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future and timing and amount of payments thereunder; and

▪the timing, receipt and amount of sales and general commercial success of any future approved products, if any.

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 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.

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Critical Accounting Policies and Significant Judgments and Estimates

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 (“GAAP”). The preparation of these 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 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. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Going Concern

Our evaluation of our ability to continue as a going concern requires us to evaluate our future sources and uses of cash sufficient to fund our currently expected operations in conducting research and development activities one year from the date our audited consolidated financial statements are issued. We evaluate the probability associated with each source and use of cash resources in making our going concern determination. The research and development of pharmaceutical products is inherently subject to uncertainty.

Research and Development Costs

We will incur substantial expenses associated with manufacturing and clinical trials. Accounting for clinical trials relating to activities performed by contract research organizations (“CROs”) and other external vendors requires management to exercise significant estimates in regard to the timing and accounting for these expenses. We estimate costs of research and development activities conducted by service providers, which include the conduct of sponsored research, preclinical studies and contract manufacturing activities. The diverse nature of services being provided under CROs and other arrangements, the different compensation arrangements that exist for each type of service and the lack of timely information related to certain clinical activities complicates the estimation of accruals for services rendered by CROs and other vendors in connection with clinical trials. We record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and include these costs in the accrued expenses or prepaid expenses on the balance sheets and within research and development expense on the consolidated statements of operations and comprehensive loss. In estimating the duration of a clinical study, we evaluate the start-up, treatment and wrap-up periods, compensation arrangements and services rendered attributable to each clinical trial and fluctuations are regularly tested against payment plans and trial completion assumptions.

We estimate these costs based on factors such as estimates of the work completed and budget provided and in accordance with agreements established with our collaboration partners and third-party service providers. We make significant judgments and estimates in determining the accrued liabilities and prepaid expense balances in each reporting period. As actual costs become known, we adjust our accrued liabilities or prepaid expenses. We have not experienced any material differences between accrued costs and actual costs incurred since our inception.

Our expenses related to clinical trials will be based on estimates of patient enrollment and related expenses at clinical investigator sites as well as estimates for the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that may be used to conduct and manage clinical trials on our behalf. We will accrue expenses related to clinical trials based on contracted amounts applied to the level of patient enrollment and activity. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we will modify our estimates of accrued expenses accordingly on a prospective basis.

Leases

ASU No. 2016-02, Leases (ASC 842) establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the consolidated statements of operations and comprehensive loss as well as the reduction of the right of use asset.

At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and our control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we will utilize the incremental borrowing rate, which is the

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rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

We have elected to combine lease and non-lease components as a single component. Operating leases are recognized on the consolidated balance sheet as ROU lease assets, current lease liabilities and non-current lease liabilities. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis.

Stock-based Compensation

Prior to the Merger, we issued equity-based compensation awards through the granting of options, which generally vest over four years. We account for equity-based compensation in accordance with Accounting Standards Codification 718, Compensation - Stock Compensation (“ASC 718”). In accordance with ASC 718, compensation cost is measured at estimated fair value at grant date and is included as compensation expense over the vesting period during which service is provided in exchange for the award. Compensation cost of awards that contain a performance condition are recognized when success is considered probable during the performance period.

We use the Black-Scholes option pricing model (“Black-Scholes”) to determine fair value of our options. Black-Scholes includes various assumptions, including the fair value of common shares, expected life of incentive shares, the expected volatility, expected dividend yield, and the expected risk-free interest rate. These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside our control. As a result, if other assumptions had been used, equity-based compensation cost could have been materially impacted. Furthermore, if we use different assumptions for future grants, equity-based compensation cost could be materially impacted in future periods.

The risk-free interest rate is estimated using the weighted average rate of return on U.S. Treasury notes with a life that approximates the expected life of the option. The expected term of options granted to employees was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. We use the simplified method because we do not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. The contractual life of the option was used for the expected life of options granted to non-employees. Expected volatility is based on the weighted average of the historical volatility of a peer group of publicly traded companies. The assumed dividend yield is based upon our expectation of not paying dividends in the foreseeable future.

We will continue to use judgment in evaluating the assumptions utilized for our equity-based compensation expense calculations on a prospective basis. In addition to the assumptions used in the Black-Scholes model, the amount of equity-based compensation expense we recognize in our consolidated financial statements includes incentive share forfeitures as they occurred.

Subsequent to the effective date of the Merger, we determine the fair value of our common stock based on the closing price of our common stock as reported by Nasdaq on the date of grant.

Derivative Financial Instruments

The convertible notes include an embedded derivative requiring bifurcation in accordance with Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging. The valuation of this instrument is determined using widely accepted valuation technique including the probability weighted expected return model. The fair value was determined using a model with the assumptions for equity value proceeds, probability of occurrence of various liquidation scenarios, timeline to liquidity and risk-free interest rate. The fair value of this derivative instrument is measured at each reporting period with changes in fair value reported in earnings. On October 18, 2022, in conjunction with the shares of Series C preferred stock issued on this same date, the convertible notes payable totaling $14.5 million and the related accrued interest totaling $1.1 million automatically converted into 1,370,187 shares of Series C preferred stock at an 80% discount to the Series C preferred stock issuance price per share of $14.23, or $11.39 per share. Just prior to settlement, the fair value of the embedded derivative was marked to market a final time to the aggregate value of $3.9 million. We recorded an immaterial gain on extinguishment related to the difference in the total of convertible notes payable, total accrued interest and the final fair value of the embedded derivative versus the value of the Series C preferred stock shares issued based on the original issuance price of $14.23 per share.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of December 31, 2023:

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	Payments due by period
(in thousands)	Total		Less than one year		One to two years		Three to four years		Five and more years
Leases	$	8,817	$	1,427	$	1,350	$	2,808	$	3,232

We enter into contracts in the normal course of business with third-party service providers for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes. We have not included our payment obligations under these contracts in the table as these contracts generally provide for termination upon notice, and therefore, we believe that our non-cancelable obligations under these agreements are not material and we cannot reasonably estimate the timing of if and when they will occur. We could also enter into additional research, manufacturing, supplier and other agreements in the future, which may require up-front payments and even long-term commitments of cash.

In January 2016, we licensed certain intellectual property from MIT on terms that have been amended from time to time. The license term extends until terminated by either party under certain provisions. We are required to pay certain contractual maintenance and milestone payments related to clinical trials and royalties on product sales over the term of the contract, with minimum annual royalty payments commencing in the calendar year after commercialization.

Recent Accounting Pronouncements

See Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements ~~(Continued)~~set forth in Item 8 of this Annual Report on Form 10-K for a full description of recent accounting standards.

Emerging Growth Company and Smaller Reporting Company Status

We are a smaller reporting company and an emerging growth company, as defined under the JOBS Act. Under the JOBS Act, emerging growth companies can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include presentation of only two years of audited financial statements in a registration statement for an initial public offering, an exemption from the requirement to provide an auditor's report on internal controls over financial reporting pursuant to Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”) an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting standards as of public company effective dates.

We will remain an emerging growth company until the earliest of (i) December 31, 2026, (ii) the last day of our first fiscal year in which we have total annual gross revenue of $1.235 billion or more, (iii) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which means the market value of equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" and/or “non-accelerated filer” which may allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply for a period of time with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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Item 8. Financial Statements and Supplementary Data.

The financial statements of Elicio Therapeutics, Inc., listed below are set forth in Item 8 of this Annual Report for the years ended December 31, 2023 and 2022:

~~future.~~ ELICIO THERAPEUTICS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


			Page

Report of Independent Registered Public Accounting Firm (Baker Tilly US, LLP, Tewksbury, Massachusetts, PCAOB ID: 23)			97

Consolidated Balance Sheets			98

Consolidated Statements of Operations and Comprehensive Loss			99

Consolidated Statements of Convertible Pre ferred Stock and Stockholders' Equity (Deficit)			100

Consolidated Statements of Cash Flows			102

Notes to Consolidated Financial Statements			104

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Elicio Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Elicio Therapeutics, Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has ~~evaluated~~suffered losses and ~~concluded there are no conditions or events, considered in the aggregate,~~negative cash flow from operations, and has an accumulated deficit as of December 31, 2023, that ~~raise~~raises substantial doubt about its ability to continue as a going ~~concern~~concern. Management’s plans in regard to these matters are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for ~~a period of one year following the date these~~Opinion

These consolidated financial statements are ~~issued~~the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and ~~believes~~are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its ~~existing~~internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Baker Tilly US, LLP

We have served as the Company's auditor since 2019.

Tewksbury, Massachusetts

March 29, 2024

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ELICIO THERAPEUTICS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	December 31,
	2023		2022
Assets
Current assets
Cash and cash equivalents	$	12,894	$	6,156
Restricted cash, current	722		1,641
Prepaid expenses and other current assets	2,732		2,920
Total current assets	16,348		10,717
Property and equipment, net	717		1,147
Operating lease, right-of-use assets	6,563		7,350
Restricted cash, noncurrent	685		617
Other long-term prepaid assets	2,833		2,833
Total assets	$	27,146	$	22,664
Liabilities, convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities
Accounts payable	$	4,369	$	2,805
Accrued expenses	3,757		1,935
Deferred research obligation	694		1,436
Operating lease liability, current	910		692
Unvested option exercise liability, current	25		—
Warrant liability	11		—
Total current liabilities	9,766		6,868
Operating lease liability, noncurrent	6,007		6,789
Unvested option exercise liability, noncurrent	—		92
Total liabilities	15,773		13,749
Commitments and contingencies—Note 10
Convertible preferred stock:
Series A convertible preferred stock, $0.06 par value: no shares and 132,387 shares authorized, issued and outstanding at December 31, 2023 and 2022, respectively	—		7,495
Series B convertible preferred stock, $0.06 par value: no shares and 1,927,375 shares authorized, issued and outstanding at December 31, 2023 and 2022, respectively	—		62,944
Series C convertible preferred stock, $0.06 par value: no shares and 4,888,798 shares authorized at December 31, 2023 and 2022, respectively; no shares and 2,938,158 shares issued and outstanding at December 31, 2023 and 2022, respectively	—		40,621
Total convertible preferred stock	—		111,060
Stockholders' equity (deficit):

Common stock, $0.01 par value; 300,000,000 shares authorized at December 31, 2023 and 2022, respectively; 9,618,178 and 320,281 shares issued at December 31, 2023 and 2022, respectively; 9,603,723 and 320,281 shares outstanding as of December 31, 2023 and 2022, respectively	96		3
Treasury stock, at cost, 14,455 and no shares outstanding as of December 31, 2023 and 2022, respectively	(150)		—
Additional paid-in capital	153,827		4,860
Accumulated other comprehensive loss	(197)		—
Accumulated deficit	(142,203)		(107,008)
Total stockholders' equity (deficit)	11,373		(102,145)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)	$	27,146	$	22,664

The accompanying notes are an integral part of these consolidated financial statements.

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ELICIO THERAPEUTICS, INC.

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)


	Year Ended December 31,
	2023		2022
Operating expenses:
Research and development	$	23,849	$	18,103
General and administrative	11,896		5,630
Total operating expenses	35,745		23,733
Loss from operations	(35,745)		(23,733)
Other income (expense)
Change in fair value of warrant liability	(2)		—
Change in fair value of embedded derivatives	429		(945)
Gain on extinguishment of promissory notes payable	605		2

Foreign exchange transaction gain	204		—
Interest income	373		65
Interest expense	(1,059)		(3,597)
Total other income (expense)	550		(4,475)
Net loss	(35,195)		(28,208)
Other comprehensive loss:
Foreign currency translation adjustment	(197)		—
Comprehensive loss	$	(35,392)	$	(28,208)
Net loss per common share, basic and diluted	$	(6.96)	$	(89.27)
Weighted average common shares outstanding, basic and diluted	5,056,225		315,998

The accompanying notes are an integral part of these consolidated financial statements.

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ELICIO THERAPEUTICS, INC.

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)

(in thousands, except share amounts)



	Total Convertible Preferred Stock	Common Stock		Treasury Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Loss	Accumulated Deficit			Total Stockholders' Equity (Deficit)
			Shares	Amount		Shares			Par Value				Shares			Amount
Balance as of December 31, 2022			4,997,920	$	111,060	320,281	$	3		—	$	—		$	4,860	$	—	$	(107,008)	$	(102,145)
Exercise of stock options			—	—		16,349	1			—	—			126		—		—		127
Vesting of restricted common stock			—	—		5,310	—			—	—			67		—		—		67
Conversion of preferred stock			(4,997,920)	(111,060)		4,997,920	50			—	—			111,010		—		—		111,060
Issuance of common stock to Angion stockholders as a result of Merger and reset to par of $0.01, net of transaction costs of $2.4 million			—	—		3,012,854	30			—	—			19,496		—		—		19,526
Settlement of promissory notes in connection with Merger			—	—		—	—			—	—			10,027		—		—		10,027
Issuance of common stock upon accelerated vesting of restricted stock units due to Merger, net of treasury stock			—	—		26,550	—			—	—			—		—		—		—
Return of common stock to pay withholding taxes on restricted stock			—	—		—	—			(14,455)	(150)			—		—		—		(150)
Issuance of common stock related to stock purchase agreement			—	—		1,213,000	12			—	—			6,987		—		—		6,999
Issuance of common stock related to service agreement			—	—		11,459	—			—	—			75		—		—		75
Stock-based compensation			—	—		—	—			—	—			1,179		—		—		1,179
Foreign currency translation adjustment			—	—		—	—			—	—			—		(197)		—		(197)
Net loss			—	—		—	—			—	—			—		—		(35,195)		(35,195)
Balance as of December 31, 2023			—	$	—	9,603,723	$	96		(14,455)	$	(150)		$	153,827	$	(197)	$	(142,203)	$	11,373

The accompanying notes are an integral part of these consolidated financial statements.

100

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ELICIO THERAPEUTICS, INC.

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)

(in thousands, except share amounts)



	Total Convertible Preferred Stock	Common Stock		Treasury Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Loss	Accumulated Deficit			Total Stockholders' Equity (Deficit)
			Shares	Amount		Shares			Par Value				Shares			Amount
Balance as of December 31, 2021			1,408,100	$	70,439	310,200	$	3		—	$	—		$	4,261	$	—	$	(78,800)	$	(74,536)
Stock-based compensation			—	—		—	—			—	—			579		—		—		579
Issuance of common stock upon exercise of options			—	—		593	—			—	—			7		—		—		7
Vesting of restricted common stock			—	—		9,488	—			—	—			13		—		—		13
Issuance of Series C convertible preferred stock, net of issuance costs of $1.2 million			2,219,633	21,120		—	—			—	—			—		—		—		—
Issuance of Series C convertible preferred stock upon extinguishment of convertible notes payable			1,370,187	19,501		—	—			—	—			—		—		—		—
Net loss			—	—		—	—			—	—			—		—		(28,208)		(28,208)
Balance as of December 31, 2022			4,997,920	$	111,060	320,281	$	3		—	$	—		$	4,860	$	—	$	(107,008)	$	(102,145)

The accompanying notes are an integral part of these consolidated financial statements.

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ELICIO THERAPEUTICS, INC.

Consolidated Statements of Cash Flows

(in thousands)


	Year Ended December 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(35,195)	$	(28,208)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	382		390
Amortization of right-of-use assets, operating leases	788		667
Non-cash interest expense	1,061		3,596
Change in fair value of embedded derivative	(429)		945
Change in fair value of warrant liability	2		—
Stock-based compensation	1,179		579
Non-cash professional services expense	75		—
Gain on extinguishment of promissory notes	(605)		(2)
Loss on disposal of property and equipment	105		4
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(729)		(1,985)
Other long-term prepaid assets	—		114
Accounts payable	23		1,125
Accrued expenses and other current liabilities	2,216		(305)
Deferred research obligation	(742)		1,436
Operating lease liability	(825)		(535)
Net cash used in operating activities	(32,694)		(22,179)
Cash flows from investing activities
Purchases of property and equipment	(66)		(654)
Proceeds from sale of property and equipment	34		—
Net cash used in investing activities	(32)		(654)
Cash flows from financing activities
Cash acquired in connection with the reverse merger	24,001		—
Merger transaction costs	(2,364)		—
Proceeds from issuance of promissory notes payable	10,000		—
Proceeds from issuance of Series C convertible preferred stock, net of issuance costs	—		21,120
Proceeds from issuance of common stock per purchase agreement	6,999
Payment for purchase of treasury stock	(150)		—
Proceeds from exercise of stock options	127		82
Net cash provided by financing activities	38,613		21,202
Effect of foreign currency on cash	—		—
Net increase (decrease) in cash, cash equivalents and restricted cash	5,887		(1,631)
Cash, cash equivalents and restricted cash at the beginning of the year	8,414		10,045
Cash, cash equivalents and restricted cash at the end of the year	$	14,301	$	8,414

Components of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	12,894	$	6,156
Restricted cash	1,407		2,258
Total cash, cash equivalents and restricted cash	$	14,301	$	8,414

Supplemental disclosure of noncash investing and financing activities:
Loss on disposal of property and equipment	$	105	$	4
Non-cash issuance of Series C convertible preferred stock	$	—	$	19,501
Settlement of promissory notes payable	$	10,027	$	—
Accretion of promissory note discount from embedded derivative	$	130	$	—
Accretion of promissory note to face value	$	897	$	—
Non-cash vesting of restricted common stock	$	67	$	13
Non-cash issuance of common stock from conversion of preferred stock	$	111,060	$	—

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Non-cash issuance of common stock to Angion stockholders	$	19,526	$	—
Non-cash issuance of common stock related to service agreement	$	75	$	—
Accretion of convertible note discount from embedded derivative	$	—	$	2,344
Accretion of convertible note discount from issuance costs	$	—	$	328
Interest expense from convertible notes payable	$	—	$	923

The accompanying notes are an integral part of these consolidated financial statements.

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ELICIO THERAPEUTICS, INC.

Notes to Consolidated Financial Statements

Note 1—Description of the Business and Financial Condition

Elicio Therapeutics, Inc. (“Elicio” or the “Company”) was incorporated in Delaware as Vedantra Pharmaceuticals Inc., in August 2011. Elicio is a clinical-stage biotechnology company developing a pipeline of novel immunotherapies for the treatment of cancer. In December 2018, Elicio formed a wholly-owned subsidiary, Elicio Securities Corporation (“ESC”), a Massachusetts corporation. ESC is an investment company. Elicio and ESC are collectively referred to as “Elicio” throughout these consolidated financial statements.

Reverse Merger Transaction

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

On June 1, 2023, the Company completed the Merger in accordance with the terms and conditions of the Merger Agreement and Angion changed its name from “Angion Biomedica Corp.” to “Elicio Therapeutics, Inc.” Immediately following the consummation of the Merger, there were approximately 9.7 million shares of the Company’s common stock outstanding on a fully-diluted basis, with Former Elicio equity holders collectively owning approximately 65.2% of the Company and Angion equity holders collectively owning approximately 34.8% of the Company, in each case on a fully diluted basis.

The Merger was accounted for as a reverse recapitalization, with Former Elicio being treated as the acquirer for accounting purposes. See discussions of the transactions in connection with the Merger at Note 3 - Merger and Related Transactions.

Liquidity and Going Concern

The Company has experienced net losses and negative cash flows from operating activities since inception. As of December 31, 2023, the Company had an accumulated deficit of $142.2 million. The Company expects that its operating losses and negative operating cash flows will continue for the foreseeable future as the Company continues to develop its product candidates.

As of December 31, 2023, the Company had $12.9 million in cash and cash ~~equivalents~~equivalents. The Company’s 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 consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern. The Company expects to incur substantial expenditures in the foreseeable future for the development of its product candidates and will require additional financing to continue this development. The Company plans to address this condition through the sale of Company common stock 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 ~~sufficient~~completed successfully or at all.If the Company is unable to ~~meet~~obtain additional capital when and as needed to continue as a going concern, it might have to further reduce or scale back its operations and/or liquidate its assets, and the ~~projected operating requirements well into 2023.~~values it receives for its assets in liquidation or dissolution could be significantly lower than the values reflected in its financial statements.

The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The Company's consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ~~("GAAP"~~(“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

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ELICIO THERAPEUTICS, INC.

Notes to Consolidated Financial Statements (Continued)

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiary, ~~Angion Biomedica Europe Limited, which was dissolved on March 16, 2021, and its wholly owned subsidiary, Angion~~Elicio Australia Pty Ltd. (“Elicio Pty”), which was established on August 22, ~~2019.~~2019, and its wholly-owned subsidiary, ESC, which was established in Massachusetts in December 2018. The Company established ~~Angion~~Elicio Australia Pty, ~~Ltd.,~~ an Australian subsidiary, for the purpose of qualifying for research credits for studies conducted in ~~Australia.~~Australia and ESC is an investment company. All significant intercompany balances and transactions have been eliminated in consolidation.

Since Former Elicio was determined to be the accounting acquirer in connection with the Merger, for periods prior to the Merger, the consolidated financial statements were prepared on a stand-alone basis for Former Elicio and did not include the combined entities activity or financial position. Subsequent to the Merger, the consolidated financial statements as of and for the year ended December 31, 2023 include the acquired business from June 2, 2023 through December 31, 2023, and assets and liabilities at their acquisition date fair value. Historical share and per share figures of Former Elicio have been retroactively restated to reflect the impact of a reverse stock split completed in connection with and prior to the effective time of the Merger, based on the exchange ratio of 0.0181.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as 1one operating segment. The Company has determined that the chief executive officer is the CODM.

Use of Estimates

The ~~preparation of consolidated financial statements in conformity with GAAP requires~~Company’s management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the ~~date~~dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to the useful lives of long-lived assets, the measurement of stock-based compensation, change in fair value of warrant liabilities prior to IPO, accruals for research and development activities, income taxes and revenue recognition. The Company bases its estimates on historical experience and on other relevant assumptions that are reasonable under the circumstances. Actual results could materially differ from those estimates. Significant estimates reflected in these consolidated financial statements include but are not limited to, the accrual of research and development expenses, the valuation of stock-based awards, the operating right of use assets and operating lease liability, and going concern.

Foreign Currency Translation and Transactions

The ~~United States~~Australian Dollar (“~~USD”~~AUD”) is the functional currency for ~~the Company’s operations outside the United States.~~Elicio Pty. Accordingly, nonmonetary assets and liabilities originally acquired or assumed in other currencies are recorded in ~~USD at the exchange rates in effect~~AUD at the date they were acquired or assumed. ~~Monetary assets and liabilities denominated in other currencies~~As part of the consolidation process, the Elicio Pty results are translated from AUD into the reporting currency of USD ~~at the exchange~~using average rates infor profit and loss transactions and applicable spot rates for period-end balances. The effect ~~at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss) in the consolidated statements~~ of ~~operations. Gains and losses realized from non-USD transactions, including intercompany balances not considered as permanent investments, denominated in currencies other than an entity’s~~translating our functional currency ~~are included~~into our reporting currency is reported separately in ~~other income (expense) in the accompanying consolidated statements of operations.~~Accumulated Other Comprehensive Loss.

Concentrations of Credit Risk and Off-Balance Sheet Risk

~~Cash and~~Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, ~~are~~and restricted cash. At times, cash balances deposited at major financial ~~instruments that are potentially subject to concentrations of credit risk. The Company's cash and cash equivalents are deposited in accounts at large financial~~banking institutions ~~and amounts may~~ exceed the federally insured ~~limits.~~limit. The Company regularly monitors the financial condition of the institutions in which it has depository accounts and believes the risk of loss is minimal. The Company has not experienced any losses in such ~~accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held.~~

~~Additionally, the Company established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity.~~

~~Table of Contents~~

~~ANGION BIOMEDICA CORP.~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~The Company maintains its cash equivalents in securities and money market funds with original maturities less than three months.~~

~~The Company has no financial instruments with off-balance sheet risk of loss.~~accounts.

Cash and Cash Equivalents

~~The Company considers all~~Cash and cash equivalents are comprised of deposits at major financial banking institutions and highly liquid investments with an original ~~maturities~~maturity of three months or less ~~to be cash equivalents.~~at the date of purchase. As of December 31, ~~2021~~2023 and ~~2020,~~2022, the Company’s cash equivalents were held in institutions in the United States and ~~included~~include deposits in a money market fund which were unrestricted as to withdrawal or use.

~~Grants Receivable~~Restricted Cash

~~Grants receivable is comprised~~Restricted cash consists of ~~unbilled amounts due from various grants from~~cash securing a collateral letter of credit issued in connection with the ~~National Institutes of Health ("NIH")~~Company’s facility operating lease and ~~other U.S. government agencies~~a research grant. See Notes 6 and 11 for costs incurred prior to the period end under reimbursement contracts. All amounts are readily available for draw from the Federal Government Payment Management System and, accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.further discussion.

~~Deferred Offering Costs~~

Deferred offering costs consist of legal and accounting fees incurred through the balance sheet date that were directly related to the Company's IPO and were reflected as issuance costs upon the completion of the offering. Subsequent to the closing of the IPO, $2.8 million of deferred costs previously included in prepaid expenses and other current assets were netted with additional paid in capital in the consolidated balance sheets. As of December 31, 2021 and 2020, the Company recorded deferred offering costs of zero and $2.0 million, respectively.

~~Property and Equipment~~

Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over their estimated useful lives as follows:


~~Asset Classification~~						~~Estimated Useful Life~~
~~Equipment~~						~~5 years~~
~~Furniture and fixtures~~						~~3 years~~
~~Leasehold improvements~~						~~Shorter of useful life or lease term~~

~~Normal repairs and maintenance costs are expensed as incurred.~~

~~Impairment of Long-Lived Assets~~

Long-lived assets, such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The impairment losses as of December 31, 2021 and 2020 were zero and $58 thousand, respectively.

Fair Value Measurement

~~Certain assets and liabilities are carried at~~The Company follows the guidance prescribed by ASC Topic 820, Fair Value Measurements, which establishes a framework for measuring fair value, ~~under GAAP. Fair~~and expands disclosures about fair value ~~is determined using the principles~~measurements. The standard provides a consistent definition of ~~ASC 820, Fair Value Measurement. Fair~~fair value that focuses on an exit price which is ~~described as~~ the price that would be received to sell an asset or

~~Table of Contents~~

~~ANGION BIOMEDICA CORP.~~

~~Notes to Consolidated Financial Statements (Continued)~~

paid to transfer a liability in an orderly transaction between market participants at the ~~measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows:~~

~~Level 1: Observable inputs such as quoted prices in active markets.~~

~~Level 2: Inputs are observable for the asset or liability either directly or through corroboration with observable market data.~~

~~Level 3: Unobservable inputs.~~

The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement.

~~The Company's cash and cash equivalents, accounts payable and accrued expenses are carried at cost, which approximates fair value due to the short-term nature of these instruments.~~

~~Leases~~

The Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or finance leases, and are recorded on the consolidated balance sheets as both a right of use asset and a lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset results in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred.

In calculating the right of use assets and lease liabilities, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term.

~~Investments in Related Party Entities~~

The Company holds a 10% and a 2.4% interest in 2 entities, NovaPark, LLC ("NovaPark") and Ohr Cosmetics, LLC ("Ohr"), respectively. There is common ownership between the Director and Chairman Emeritus of the Company and each entity, and our Chief Executive Officer is also owns approximately 0.80% of the membership interests in Ohr. See Note 15. In accordance with ASC 323, Investments —Equity Method and Joint Ventures, the Company has significant influence but not control over NovaPark as its ownership in the limited liability company exceeds 3-5%. Accordingly, the Company records the NovaPark investment under the equity method of accounting. The Ohr investment is recorded at cost.

~~Warrant Liability~~

The Company accounts for certain common stock warrants outstanding as a liability, in accordance with ASC 815, Derivatives and Hedging, at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each reporting period until exercised, and any change in fair value is recognized in the consolidated statements of operations as a component of other income (expense). The fair value of the warrants issued by the Company has been estimated using a variant of the Black Scholes option pricing model. The underlying equity included in the Black Scholes option pricing model was valued based on the closing price of common stock at each measurement date.

~~Convertible Notes Payable at Fair Value~~

~~As permitted under ASC 825~~, Financial Instruments ("ASC 825"), the Company has elected the fair value option for recognition of its convertible notes. In accordance with ASC 825, the Company recognizes these convertible notes at fair value with changes in fair value recognized in the consolidated statements of operations. The fair value option may be applied instrument by instrument, but it is irrevocable. As a result of applying the fair value option, direct costs and fees related to the convertible notes were recognized in general and administrative

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~~ANGION BIOMEDICA CORP.~~ELICIO THERAPEUTICS, INC.

Notes to Consolidated Financial Statements (Continued)

~~expense in earnings as incurred and not deferred.~~measurement date. The ~~estimated~~standard establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the convertible notes was determined by utilizing a present value cash flow model and the values of the equity underlying the conversion options were estimated using company equity values implied from the Subject Company Transaction Method which includes the back-solve and scenario-based methods (Probability Weighted Expected Return Method). See Note 4. Accrued interestmeasurement date.

Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities at measurement.

Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the ~~notes has been included~~asset or liability. These include quoted prices for similar assets or liabilities in ~~the change~~active markets and quoted prices for identical or similar assets or liabilities in ~~fair value of convertible notes in the consolidated statements of operations. All outstanding convertible notes were converted into common stock upon the close of the IPO on February 9, 2021~~markets that are not active.

Level 3: Unobservable inputs that are supported by little or no market activity and ~~no balances remained outstanding as of December 31, 2021. See Note 6.~~

~~Convertible Preferred Stock~~

~~Series C convertible preferred stock included settlement features~~ that ~~result in liability classification. The initial carrying value of the Series C convertible preferred stock was accreted~~are significant to ~~the settlement value,~~ the fair value of the ~~securities issued upon~~assets or liabilities.

To the ~~conversion~~extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying amounts of financial instruments reflected in the consolidated balance sheets for cash and cash equivalents, current and non-current restricted cash, accounts payable, and accrued expenses approximate their respective fair values because of the ~~Series C convertible preferred stock. The discount~~short-term maturity of those financial instruments.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of the asset. Upon sale or retirement, the cost and accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is recorded in the consolidated statement of operations and comprehensive loss. Repair and maintenance expenditures are expensed as incurred. Construction in process is not depreciated until the asset is placed into service.


Asset Classification						Estimated Useful Life
Equipment						5 years
Furniture and fixtures						3 years
Leasehold improvements						Shorter of useful life or lease term

Impairment of Long-Lived Assets

Periodically, the Company evaluates its long-lived assets, which consist primarily of property and equipment, and right of use asset, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the ~~settlement~~future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the years ended December 31, 2023 and 2022, no impairments have occurred.

Derivative Financial Instruments

The convertible and promissory notes included embedded derivatives requiring bifurcation in accordance with ASC 815, Derivatives and Hedging. The valuation of the instruments was determined using widely accepted valuation techniques including the probability weighted expected return model. The fair value was ~~accreted~~determined using a model with the assumptions for equity value proceeds, probability of occurrence of various liquidation scenarios, timeline to liquidity and risk-free interest expense using the effective interest method. During 2020, certain convertible notes were exchanged for Series C convertible preferred stock. As the exchange was accounted for as a modification, the Series C convertible preferred stock that was exchanged for the convertible notes was recorded atrate. The fair value ~~and subject to re-measurement~~of the derivative instruments was measured at each reporting period prior to settlement on October 18, 2022, with ~~gains and losses~~changes in fair value reported ~~through our consolidated statements of operations. All outstanding shares of~~in earnings (loss).

Convertible Preferred Stock

Former Elicio had classified convertible preferred stock, par value $0.06 per share, (the “Preferred Stock”) as temporary equity in the accompanying consolidated balance sheets due to certain changes in control events that were ~~converted into common stock upon the close~~outside of the ~~Company’s IPO on February 9, 2021. See Note 7. As~~Former Elicio’s control, including sale or transfer of control of Former Elicio, as holders of the Preferred Stock could cause redemption of the shares in these situations. Former Elicio did not accrete the carrying values of the Preferred Stock to the redemption values since a liquidation event was not considered probable as of December 31, ~~2021, there was no convertible preferred stock outstanding.~~

~~Treasury Stock~~

~~The Company records the repurchase of shares of common stock at cost based on the settlement date~~2022. Subsequent adjustments of the ~~transaction. These shares are classified as treasury stock, which is~~carrying values to the ultimate redemption values would be made only if it becomes probable that such a ~~reduction to stockholders' equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. As of~~liquidation event will occur. During the year ended December 31, ~~2021, all outstanding treasury shares were retired~~2023 an immaterial error was discovered in ~~October 2021 upon approval by the Board of Directors.~~

~~Revenue~~

The Company does not have any products approved for sale and has not generated any revenue from product sales. The Company’s revenue to date has been primarily derived from government funding consisting of U.S. government grants and contracts, and revenue under its license agreements.

~~Contract Revenue~~

The Company accounts for revenue earned from contracts with customers under Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). Under ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps:

~~(1) Identify the contract(s) with a customer;~~

~~(2) Identify the performance obligations in the contract;~~

~~(3) Determine the transaction price;~~

~~(4) Allocate the transaction price to the performance obligations in the contract; and~~

~~(5) Recognize revenue when (or as) the Company satisfies a performance obligation.~~

At contract inception, the Company assesses the goods or services promised within each contract, whether each promised good or service is distinct, and determines those that are performance obligations. The Company then recognizes as revenueFormer Elicio's 2022 audited financial statements whereas the amount of ~~the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.~~

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~~ANGION BIOMEDICA CORP.~~ELICIO THERAPEUTICS, INC.

Notes to Consolidated Financial Statements (Continued)

~~The Company enters into agreements under which it may obtain upfront payments, milestone payments, royalty payments~~Series A and ~~other fees. Promises under these arrangements may~~Series B Preferred Stock did not include ~~research licenses, research services, including selection campaign research services for certain replacement targets,~~41,887 and 609,755 shares, respectively, that were deemed to be issued due to the ~~obligation to share information during~~antidilutive protection triggered by the ~~research and the participation of alliance managers and~~Series C shares issued in ~~joint research committees, joint patent committees and joint steering committees. The Company assesses these promises within the context~~October 2022 at a price below $1.00. As a result of the ~~agreements to determine the performance obligations.~~Merger, all Former Elicio preferred stock were converted into Company common stock on June 1, 2023. See Note 7.

~~Licenses of Intellectual Property~~: If a license to its intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, upfront payments. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

~~Milestone payments~~: The Company evaluates whether the regulatory and development milestones are considered probable of being reached and estimate the amounts to be included in the transaction price using the most likely amount method. The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones and any related constraint, and if necessary, adjust the estimate of the overall transaction price.

~~Sales-based milestones and royalties~~: For sales-based royalties, including milestone payments based on the level of sales, the Company determines whether the sole or predominant item to which the royalties relate is a license. When the license is the sole or predominant item to which the sales-based royalty relates, the Company recognize revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any sales-based royalty revenue resulting from any license agreement.

~~Deferred revenue~~, which is a contract liability, represents amounts received by the Company for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The current portion of deferred revenue represents the amount expected to be recognized within one year from the consolidated balance sheet date based on the estimated performance period of the underlying performance obligation. The noncurrent portion of deferred revenue represents amounts expected to be recognized after one year through the end of the performance period of the performance obligation.

~~Grant Revenue~~Income Taxes

The Company concluded that the Company's government grants are not within the scope of ASC Topic 606 as they do not meet the definition of a contract with a customer. The Company has concluded that the grants meet the definition of a contribution and are non-reciprocal transactions, and has also concluded that Subtopic 958-605, ~~Not-for-Profit-Entities-Revenue Recognition, does not apply, as the Company is a business entity and the grants are with governmental agencies.~~

~~In the absence of applicable guidance under GAAP, the Company developed a policy~~provides for ~~the recognition of grant revenue when the allowable costs are incurred and the right to payment is realized.~~

The Company believes this policy is consistent with the overarching premise in ASC Topic 606, to ensure that revenue recognition reflects the transfer of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services, even though there is no exchange as defined in ASC Topic 606. The Company believes the recognition of revenue as costs are incurred and amounts become realizable is analogous to the concept of transfer of control of a service over time under ASC Topic 606.

~~Table of Contents~~

~~ANGION BIOMEDICA CORP.~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~Research and Development~~

Research and development costs include, but are not limited to, payroll and personnel expenses, laboratory supplies, preclinical studies, compound manufacturing costs, consulting costs and allocated overhead, including rent, equipment, depreciation and utilities. Research and development cost maybe offset by research and development refundable tax rebates received by our wholly-owned Australian subsidiary.

The Company has agreements with various Contract Research Organizations ("CROs") and third-party vendors. Research and development accruals of amounts due to the CRO are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on the consolidated balance sheet. Payments made to CROs under such arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. The Company makes judgments and estimates in determining the accrued expenses balance in each reporting period. As actual costs become known, the Company adjusts its accrued expenses. For the years ended December 31, 2021 and 2020, the Company has not experienced any material differences between accrued costs and actual costs incurred.

~~Advertising Costs~~

~~Advertising costs are expensed as incurred. For the years ended December 31, 2021 and 2020, advertising costs were not significant.~~

~~Stock-Based Compensation~~

The Company accounts for all stock-based payments to employees and non-employees, including grants of stock options, RSAs, RSUs, including "PSUs" to be recognized in the financial statements, based on their respective grant date fair values. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model. The RSAs, RSUs and PSUs are valued based on the fair value of the Company's common stock on the date of grant. The assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. The Company records expense for stock-based compensation related to stock options, RSAs and RSUs over the requisite service period. As the PSUs have a performance condition, compensation expense is recognized for each vesting tranche over the respective requisite service period of each tranche if and when the Company's management deems probable that the performance conditions will be satisfied. The Company may recognize a cumulative true-up adjustment related to PSUs once a condition becomes probable of being satisfied if the related service period had commenced in a prior period. All share-based compensation costs are recorded in general and administrative or research and development costs in the consolidated statements of operations based upon the respective employees or non-employee's roles within the Company. Forfeitures are recorded as they occur.

~~Income Taxes~~

~~Income~~income taxes ~~are recorded~~ in accordance with ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.. Deferred tax assets and liabilities are determined based on the difference between the financial ~~statement~~reporting and tax bases of assets and liabilities using enacted tax rates and laws in effect ~~for~~in the ~~year~~years in which the differences are expected to reverse. ~~Valuation allowances are~~A valuation allowance is provided if, based upon the ~~weight of~~weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions when the Company management determines that it is probable that a loss will be incurred related to these matters and the amount of the loss is reasonably determinable. The Company has not identified any significant uncertain tax positions as of December 31, 2023.

Research and Development

Research and development costs are charged to expense as incurred and consist of expenses incurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical expenses, stock-based compensation expense, depreciation of equipment, contract services, and other outside expenses. The Company accrues for costs incurred by external service providers, based on estimates of services performed and costs.These estimates include the level of services performed by the third parties, and other indicators of the services completed.Based on the timing of payments to service providers, the Company may also record prepaid expenses for those service providers that will be recognized as expenses in future periods as the related services are rendered. Research and development costs may be offset by research and development refundable tax rebates received by the Company’s wholly-owned Australian subsidiary.

Leases

ASU No. 2016-02, Leases (“ASC 842”) establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the consolidated statements of operations as well as the reduction of the ROU asset.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The Company has elected to combine lease and non-lease components as a single component. Operating leases are recognized on the consolidated balance sheet as ROU lease assets, current lease liabilities and non-current lease liabilities. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis.

Research Grant

The Company analogizes to the guidance provided by International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”) for funds received from grants from entities that are not customers nor government agencies. The Company recognizes the amount of grant income based on the activity in allowable expenses covered under the grant and has elected to recognize the funds earned as an offset to the related research expenses recorded in operations. Advances from the grant that have yet to be recognized are recorded as restricted cash if the grant requires the funds to be isolated from general cash and cash equivalents. The Company records a liability for any research activity that is required under the grant but has not yet been performed. The liability is recorded as deferred research obligation on the consolidated balance sheets.

Stock-Based Compensation

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Notes to Consolidated Financial Statements (Continued)

The Company issues stock-based awards to employees and non-employees, generally in the form of stock options. The Company accounts for ~~uncertain tax positions~~stock-based awards in accordance with ASC 718, Compensation—Stock Compensation, which requires all stock-based payments, to be recognized in the consolidated statements of operations based on their fair values. The expense is recognized on a straight line basis over the requisite service period, which is generally the vesting period. The Company has elected to account for option forfeitures as they occur.

The Company uses the Black-Scholes option-pricing model (“Black-Scholes”) to determine the weighted-average fair value of options granted, which uses as inputs the fair value of the Company common stock, assumptions the Company makes for the volatility of its Company common stock, the expected term of its stock options, the risk-free interest rate for a period that approximates the expected term of its stock options and its expected dividend yield.

Compensation cost of awards that contain a performance condition are recognized when success is considered probable during the performance period.

Prior to the Merger, there was no public market for Former Elicio’s common stock. The estimated fair value of the Company’s common stock underlying Former Elicio’s stock-based awards was determined by Former Elicio’s board of directors as of the grant date of each option grant. To determine the fair value of Former Elicio’s common stock underlying option grants, Former Elicio’s board of directors considered, among other things, input from management and valuations of Former Elicio's common stock prepared by third-party valuation firms performed in accordance with the ~~provisions~~guidance outlined in the American Institute of ~~ASC 740. When uncertain tax positions exist,~~Certified Public Accountants' Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Following the ~~Company recognizes~~Merger, the ~~tax benefit~~fair value of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realizedCompany’s common stock is based ~~upon~~on the ~~technical merits~~closing stock price on the date of grant as reported on the ~~tax position as well as consideration of the available facts and circumstances. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.~~Nasdaq Global Select Market.

Net Loss Per Share

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~~ANGION BIOMEDICA CORP.~~

~~Notes to Consolidated Financial Statements (Continued)~~

Basic net loss per share of Company common stock is computed by dividing net loss attributable to Company common stockholders by the weighted average number of shares of Company common stock outstanding for the period. Diluted net loss per share excludes the potential impact of ~~convertible preferred stock,~~Company common stock options, warrants and unvested shares of restricted stock ~~and restricted stock units~~ because their effect would be anti-dilutive due to the Company's net loss. Since the Company had net losses for the years ended December 31, ~~2021~~2023 and ~~2020,~~2022, basic and diluted net loss per common share are the same.

Comprehensive Loss

Comprehensive loss ~~represents the net loss for the~~is defined as a change in equity during a period from transactions and other ~~comprehensive income. Other comprehensive income reflects certain gains~~events and losses that are recorded as a component of stockholders’ deficit and are not reflected in the statements of operations. The Company’s other comprehensive income consists of foreign currency translation adjustments.circumstances from non-owner sources.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU No. 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this standard as of January 1, 2021, which did not have material impact on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12), which is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 was effective for the Company for fiscal years beginning after December 15, 2020, including interim periods therein. The Company adopted this standard as of January 1, 2021, which did not have material impact on its consolidated financial statements and related disclosures.

In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). This update clarifies whether an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative and how to account for certain forward contracts and purchased options to purchase securities. For public entities, this guidance was effective for fiscal years beginning after December 15, 2020. The Company adopted this standard as of January 1, 2021, which did not have material impact on its consolidated financial statements and related disclosures.

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements. ASU 2020-10 provides amendments to a wide variety of topics in the FASB’s Accounting Standards Codification, which applies to all reporting entities within the scope of the affected accounting guidance. ASU 2020-10 was effective for the Company for fiscal years beginning after December 15, 2020, including interim periods therein. The Company adopted this standard as of January 1, 2021, which did not have material impact on its consolidated financial statements and related disclosures.

In November 2021, the FASB issued Accounting Standards Update (ASU) 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. ASU 2021-10 requires business entities to disclose, in notes to their financial statements, information about certain types of government assistance they receive. ASU 2021-10 also adds a new Topic 832, Government Assistance, to the FASB’s Codification. ASU 2021-10 is effective for financial statements of all entities, including private companies, for annual periods beginning

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~~ANGION BIOMEDICA CORP.~~

~~Notes to Consolidated Financial Statements (Continued)~~

after December 15, 2021, with early application permitted. The Company adopted this standard as of January 1, 2021, which did not have material impact on its consolidated financial statements and related disclosures.

~~Recently Issued Accounting Pronouncements Not Yet Adopted~~

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments ~~(ASU~~ (“ASU No. ~~2016-13)~~2016-13”), which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial assets and certain other instruments, including but not limited to, available-for-sale debt securities. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. ~~As an emerging growth company, ASU No. 2016-13 is effective for the Company for fiscal years beginning after December 15, 2022, with early adoption permitted.~~ The Company ~~is currently evaluating the impact of the adoption of~~adopted ASU No. 2016-13 on January 1, 2023 and the adoption of the standard had no material impact on its consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06,

~~Note 3—Revenue~~Debt - Debt with Conversion and ~~Deferred Revenue~~

~~Grant Revenue~~

~~Our grants~~Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU No. 2020-16”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts ~~reimburse us for direct~~on an entity’s own equity. The Company adopted ASU No. 2020-06 on January 1, 2023 and ~~indirect costs relating to~~ the ~~grant projects and also provide us with a pre-negotiated profit margin on total direct and indirect costs~~adoption of the ~~grant award, excluding subcontractor costs, after giving effect~~standard had no material impact on its consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

From time to ~~directly attributable costs~~time, new accounting pronouncements are issued by the FASB or other standard setting bodies and allowable overhead costs. Funds received from grants and contracts are generally deemed to be earned and recognized as revenue as allowable costs are incurred during the grant or contract period and the right to payment is realized.

~~For the years ended December 31, 2021 and 2020,~~adopted by the Company ~~recognized grant revenue~~as of ~~$0.8 million and $2.7 million, respectively.~~

~~Contract Revenue~~

The Company’s contract revenue has been generated from payments received pursuant to a license agreement (the "Vifor License") with Vifor International, Ltd. ("Vifor Pharma") with headquarters located in Switzerland. The Company recognized revenue from upfront payments over the term of our estimated period of performance using a cost-based input method under Topic 606. The Company expects to continue recognizing revenue from upfront payments related to the Vifor License using the cost-based input method.

~~Vifor License Agreement~~

~~In November 2020,~~specified effective date. Except as noted below, the Company ~~entered into~~believes that the impact of recently issued standards that are not yet effective will not have a ~~license agreement with Vifor Pharma, granting Vifor Pharma global rights (excluding China, Taiwan, Hong Kong~~material impact on its consolidated financial statements and Macau) to develop, manufacture and commercialize ANG-3777 in all therapeutic, prophylactic and diagnostic uses for renal indications, including forms of acute kidney injury (AKI), and congestive heart failure (collectively, the Renal Indications). Pursuant to the Vifor License, the Company received $60 million in upfront and equity payments, including $30 million in up-front cash received in November 2020, and a $30 million equity investment, $5 million of which was a convertible note that subsequently converted into common stock with the IPO and $25 million of which was received in the Concurrent Private Placement with the Company’s IPO. The Company is also eligible to receive post-approval milestones of up to approximately $260.0 million and sales-related milestones of up to $1.585 billion, providing a total potential deal value of up to $1.925 billion (subject to certain specified reductions and offsets), plus tiered royalties on net sales of ANG-3777 at royalty rates of up to 40%. Under the Vifor License, the Company is responsible for executing a pre-specified clinical development plan designed to obtain regulatory approvals of ANG-3777 for delayed graft function (DGF) and AKI associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI). Based on the ANG-3777 clinical trial data disclosed in the fourth quarter of 2021, the Company does not expect to receive anydisclosures.

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~~ANGION BIOMEDICA CORP.~~ELICIO THERAPEUTICS, INC.

Notes to Consolidated Financial Statements (Continued)

In November 2023, the FASB issued No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU broadens the disclosure requirements by requiring disclosures of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss. The standard also requires entities to disclose, on an interim and annual basis, the amount and description, including the nature and type, of the other segment items. Additionally, entities are required to disclose the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. These enhanced disclosure obligations apply to entities that operate with one reportable segment as well. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. Early adoption is permitted. We are currently assessing the impact that this new accounting standard will have on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional ~~clinical, post-approval, or sales milestones, or royalties, as~~information on income taxes paid. The standard requires entities to disclose federal, state, and foreign income taxes in their rate reconciliation tables and elaborate on reconciling items that exceed a quantitative threshold. Additionally, it ~~does not intend to continue to pursue the clinical development plan~~requires an annual disclosure of income taxes paid, net of refunds, categorized by jurisdiction based on a quantitative threshold. The ASU is effective on a prospective basis for ~~ANG-3777 set forth~~annual periods beginning after December 15, 2024. Early adoption is permitted. This ASU will result in the ~~Vifor License.~~required additional disclosures being included in our consolidated financial statements, once adopted.

Note 3—Merger and Related Transactions

~~On October 26, 2021,~~As described in Note 1, Former Elicio merged with a wholly owned subsidiary of Angion on June 1, 2023. The Merger was accounted for as a reverse recapitalization under U.S. GAAP. Former Elicio was considered the ~~Company announced~~accounting acquirer for financial reporting purposes. This determination was based on the facts that, ~~its Phase 3 trial of ANG-3777 in DGF did not achieve its primary endpoint and~~immediately following the data from the Phase 3 trial was not expected to provide sufficient evidence to support an indication in the studied DGF population. On December 9, 2021, the Company announced its Phase 2 trial of ANG-3777 in CSA-AKI did not achieve its primary endpoint and the data from the Phase 2 trial was not expected to provide sufficient evidence to supportMerger: (i) Former Elicio stockholders own a Phase 3 trial in the studied CSA-AKI population. Angion and Vifor continue to analyze data from the CSA-AKI trial. The Company does not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License, which had included a Phase 3 study in CSA-AKI and a Phase 4 confirmatory study in DGF. In 2022, we and Vifor Pharma continue to work to complete the planned analysessubstantial majority of the ~~results~~voting rights; (ii) Former Elicio designated a majority (six of nine) of the ~~clinical trials announced in the fourth quarter of 2021 and to discuss the future of the collaboration based upon such analyses.~~

Vifor Pharma may terminate the Vifor License at its sole discretion upon the earlier of (i) the acceptance for filing of an NDA covering products incorporating ANG-3777 filed with the FDA (after completion of the relevant Phase 3 clinical trial for such products), or (ii) the third anniversary of the effective date of the Vifor License. Both the Company and Vifor Pharma may terminate the Vifor License in its entirety if the other is in material breach of the Vifor License and has not cured the breach (if curable) within 60 days, or 90 days for incurable breach. In certain circumstances, in the eventinitial members of the Company’s ~~material breach~~board of directors of the ~~Vifor License, Vifor Pharma may terminate~~combined company; (iii) Former Elicio’s executive management team became the ~~Vifor License~~management team of the combined company; and (iv) the Company was named Elicio Therapeutics, Inc. and is headquartered in Boston, Massachusetts. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Former Elicio issuing stock to acquire the net assets of Angion. As a result of the Merger, the net assets of Angion were recorded at their acquisition-date fair value, which approximated book value due to the short-term nature of the instruments, in the financial statements of Former Elicio and the reported operating results prior to the Merger were those of Former Elicio. Historical common share amounts of Former Elicio have been retroactively restated based on the exchange ratio of 0.0181 (the “Exchange Ratio”). It was concluded that any in-process research and development assets that remained as of the Merger would be de minimis when compared to the cash and investments obtained through the Merger.

Prior to the effective time of the Merger, on June 1, 2023, in connection with ~~respect~~the transactions contemplated by the Merger Agreement, the Company effected a reverse stock split of Angion’s common stock, par value $0.01 per share (“Angion common stock”), at a ratio of 10:1 (the “Reverse Stock Split”). At the effective time of the Merger, each outstanding share of Former Elicio capital stock (after giving effect to ~~certain major markets. In addition, both parties have~~the automatic conversion of all shares of Former Elicio preferred stock into shares of Former Elicio common stock and excluding any shares held as treasury stock by Former Elicio or held or owned by Angion or any subsidiary of Angion or Former Elicio and any dissenting shares) was converted into the right to ~~terminate~~receive 0.0181 shares of Angion common stock, which resulted in the ~~Vifor License upon insolvency~~issuance by Angion of an aggregate of 5,375,751 shares of Angion common stock to the stockholders of Former Elicio (the “Exchange Shares”), and a total of 8,387,025 shares of the ~~other party.~~

~~The~~ Company ~~identified~~common stock being issued and outstanding immediately following the following performance obligations in the Vifor License based upon the clinical development plan for ANG-3777: (1) the global license (excluding greater China), (2) the development services, including the clinical development services including a post-approval confirmatory study, the technical development services and regulatory services and (3) the required participation on Joint Committees for coordination and oversight. The Company determined that the license is not capable of being distinct due to the specialized natureeffective time of the ~~development services~~Merger. In addition, Angion assumed the Elicio 2022 Equity Incentive Plan and the Elicio 2012 Equity Incentive Plan (the “Elicio Plans”) and each outstanding and unexercised option to ~~be provided by~~purchase Former Elicio common stock and each outstanding and unexercised warrant to purchase Former Elicio capital stock were adjusted with such stock options and warrants henceforth representing the ~~Company, and, accordingly, this promise was combined with the development services and participation in the joint committees as one single performance obligation.~~

~~In order~~right to ~~determine the transaction price, the Company evaluated all the payments to be received during the duration~~purchase a number of the contract. Certain milestones and additional fees were considered variable consideration, which were not included in the transaction price at contract inception. The Company determined that the transaction price at the inception of the Vifor License is $15.0 million, which is 50% of the $30.0 million upfront payment due to the potential setoff defined in the contract. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

In the fourth quarter of 2021, the Company reported topline results from two ANG-3777 clinical trials under the Vifor License. The Company determined it will no longer continue the current clinical development plan for ANG 3777 DGF and CSA-AKI, which had included a Phase 3 study for CSA-AKI and a Phase 4 confirmatory study in DGF, given neither trial achieved statistical significance on its primary endpoint. In connection therewith, the Company adjusted the transaction price to include $15.0 million in previously constrained variable consideration. As of December 31, 2021, the Company concluded that it has significantly satisfied the performance obligation under Vifor License and will fully conclude the ANG-3777 project by the end of 2022.

Using the cost-based input method, the Company recognizes revenue based on actual costs incurred as a percentage of total estimated costs as the Company completes its performance obligation. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligation will be recorded in the period in which changes are identified and amounts can be reasonably estimated. These actual costs consist primarily of internal full time equivalent (FTE) efforts and third-party contract costs related to the Vifor License.

The Company reassessed the performance period as the Company is currently closing out the planned analyses from both trials but does not intend to continue the clinical development plan for ANG-3777 set forth in the Vifor License, which had included a Phase 3 study for CSA-AKI and a Phase 4 confirmatory study in DGF, given these clinical results. As such, the estimated date to fully conclude ANG-3777 by the end of December 2022 was determined to represent the completionshares of the Company’s ~~performance obligation under~~common stock equal to the ~~Vifor License. Additionally,~~Exchange Ratio multiplied by the ~~Company revised~~number of shares of Former Elicio common stock previously represented by such options, and warrants at an exercise price equal to the ~~total estimated costs for completion~~exercise price of Former Elicio capital stock divided by the Exchange Ratio.

In connection with execution of the ~~performance obligation~~Merger Agreement, Angion made a bridge loan to ~~reflect~~Former Elicio pursuant to a note purchase agreement and promissory notes up to an aggregate principal amount of $12.5 million, issued with a 20% original issue discount, with an initial closing held substantially concurrently with the execution of the Merger Agreement for a principal amount of $6.25 million on account of a $5.0 million loan and an additional closing for a

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Notes to Consolidated Financial Statements (Continued)

~~the winding down~~principal amount of ~~ANG-3777-related studies. The performance period is expected~~$6.25 million on account of a $5.0 million loan upon delivery by Former Elicio to ~~end in the fourth quarter~~Angion of 2022 instead of the fourth quarter of 2026. The effect of this change in estimate was an increase in contract revenue by $24.2 million, a reduction in net loss by $24.2 million and an increase in basic and diluted earnings per share by $0.86Former Elicio’s audited financial statements for the year ended December 31, ~~2021.~~2022.

~~For~~As part of the ~~years~~recapitalization, the Company obtained the assets and liabilities listed below (in thousands):


Cash and cash equivalents	$	24,001
Other current assets	540
Promissory notes	10,027
Accrued liabilities	(2,438)
Net assets acquired	$	32,130

Per the terms of the Merger Agreement, upon completion of the Merger, all obligations owed by Former Elicio related to the promissory notes were automatically forgiven and the amount advanced by Angion, along with any accrued and unpaid interest, was credited towards the net cash balance used to calculate the assets and liabilities listed above. Upon settlement of the promissory notes, the Company recognized a gain of $0.6 million related to extinguishment of the promissory notes.

The Company recognized the net assets acquired, excluding the promissory notes and transaction costs of $2.9 million, as an increase to additional paid-in capital in the consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for the year ended December 31, 2021 and 2020, the Company recognized license revenue related to the Vifor License of $27.5 million and $0.2 million. As of December 31, 2021, $2.3 million was recorded as the current portion of deferred revenue on the consolidated balance sheet related to the Vifor License. As of December 31, 2020, $29.8 million was recorded as deferred revenue on the consolidated balance sheet related to the Vifor License.

2023.

Note 4—Fair Value Measurements

The following ~~table classifies~~tables present the Company's financial assets and liabilities measured at fair value on a recurring basis ~~into~~and their assigned levels within the fair value hierarchy ~~as of December 31, 2021 and 2020~~ (in thousands):

Fair Value Measured at December 31, 2021
Quoted Prices in
Active Markets for
Identical
Assets (Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Assets included in:
Cash and cash equivalents—Money market securities (1)
$ 87,252 $ — $ — $ 87,252
Total fair value $ 87,252 $ — $ — $ 87,252
Liabilities included in:
Warrants $ — $ — $ 114 $114
Total fair value $ — $ — $ 114 $ 114


	Fair Value Measured at December 31, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Money market funds (1)	$	5,973	$	—	$	—	$	5,973
Total assets	$	5,973	$	—	$	—	$	5,973

Warrant liabilities	$	—	$	—	$	11	$	11
Total Liabilities	$	—	$	—	$	11	$	11

Fair Value Measured at December 31, 2020
Quoted Prices in
Active Markets for
Identical
Assets (Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Assets included in:
Cash and cash equivalents—Money market securities (1)
$ 1 $ — $ — $ 1
Total fair value $ 1 $ — $ — $ 1
Liabilities included in:
Convertible notes $ — $ — $ 51,170 $ 51,170
Warrants — — 10,704 10,704
Series C convertible preferred stock — — 2,518 2,518
Total fair value $ — $ — $ 64,392 $ 64,392


	Fair Value Measured at December 31, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Money market funds (1)	$	5,340	$	—	$	—	$	5,340
Total assets	$	5,340	$	—	$	—	$	5,340

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Notes to Consolidated Financial Statements (Continued)

___________________

(1) Included in cash and cash equivalents on the consolidated balance sheets. This balance includes cash requirements settled on a nightly basis.

~~Table of Contents~~

~~ANGION BIOMEDICA CORP.~~

~~Notes to Consolidated Financial Statements (Continued)~~

Cash equivalents at December 31, 2023 and 2022 were held in U.S. Treasury Securities.

There were no transfers made among the three levels in the fair value hierarchy during periods presented.

As part of the Merger transaction, Former Elicio adopted Angion’s warrant liabilities. The following table presents a summary of changes in Level 3 ~~liabilities measured at~~in the fair value of the Company’s common stock warrant liability (in thousands):

Warrant
Liability Convertible
Notes Series C Convertible Preferred Stock at Fair Value Total
Balance—December 31, 2020 $ 10,704 $ 51,170 $ 2,518 $ 64,392
Conversion of convertible Series C convertible preferred stock into common stock (6,110) (6,110)
Conversion of convertible notes into common stock (58,639) (58,639)
Net exercise of warrants (13,509) (13,509)
Change in fair value 2,919 7,469 3,592 13,980
Balance—December 31, 2021 $ 114 $ — $ — $ 114


	As of December 31, 2023		As of December 31, 2022
Balance, beginning of year	$	—	$	—
Existing Angion Warrant Liability	9		—
Change in fair value	2		—
Balance, end of year	$	11	$	—

Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with assets and liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable ~~long- dated~~long-dated volatilities) inputs.

The Company used an option model to measure the fair value of the Notes (on conversion date). The values of the equity underlying the conversion options in the model were estimated using equity values implied from sales of convertible preferred stock. The fair value of the Notes was impacted by the model selected as well as assumptions surrounding unobservable inputs. Key unobservable inputs include the expected volatility of the underlying equity, and the timing of an expected liquidity event.

The fair value of the warrants issued by the Company has been estimated using a variant of ~~the Black Scholes option pricing model.~~Black-Scholes. The underlying equity included in ~~the Black Scholes option pricing model~~Black-Scholes was valued based on the equity value implied from sales of preferred and common stock at each measurement date. The fair value of the warrants was impacted by the model selected as well as assumptions surrounding unobservable inputs including the underlying equity value, expected volatility of the underlying equity, risk free interest rate, and the expected term.

~~Convertible Notes~~The Company records the change in the fair value of common stock warrants in change in fair value of warrant liability in the consolidated statements of operations.

The fair value ~~adjustment during the year ended December 31, 2021 was based on the final settlement amount using a conversion price of $11.57 per share on February 9, 2021. Subsequent to the closing~~ of the ~~IPO, there~~common stock warrant liability was estimated using the following assumptions:


	December 31, 2023			June 1, 2023
Strike price	$	76.00		$	76.00
Contractual term (years)	4.7			5.2
Volatility (annual)	94.0		%	100.0		%
Risk-free rate	3.9		%	3.9		%
Dividend yield (per share)	0.0		%	0.0		%

Note 5—Balance Sheet Components

Prepaid and Other Current Assets

Prepaid and other current assets were ~~no convertible notes outstanding.~~

~~Series C Preferred Stock~~

~~The fair value adjustment during the year ended December 31, 2021 was based on the final settlement amount using a conversion price of $11.57 per share on February 9, 2021. Subsequent to the closing~~comprised of the ~~IPO, there were no shares of convertible preferred stock outstanding.~~following (in thousands):

~~Warrant Liability~~

The fair value adjustment for the net exercise of warrants with an exercise price of $6.43 during the year ended December 31, 2021 was based on the final settlement amount using the IPO price on February 9, 2021. Subsequent to the closing of the IPO, the fair value of the warrants issued by the Company were estimated using a variant of the Black Scholes option pricing model. The underlying equity included in the Black Scholes option pricing model was valued based on the closing price of common stock at each measurement date.


	December 31,
	2023		2022
Prepaid research and development contract services	$	1,883	$	2,132
Advanced professional fees	300		648
Prepaid insurance	376		104

Other prepaid expenses and other current assets	173		36
Total prepaid and other current assets	$	2,732	$	2,920

98111

Table of Contents

~~ANGION BIOMEDICA CORP.~~ELICIO THERAPEUTICS, INC.

Notes to Consolidated Financial Statements (Continued)

During the years ended December 31, 2021 and 2020, the fair value of the warrants increased by $2.9 million and $4.9 million, respectively. The change in fair value of warrant liability in both periods was recognized in the consolidated statements of operations.

A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company's warrant liabilities that were categorized within Level 3 of the fair value hierarchy as of December 31, 2021 and 2020 was as follows:

December 31,
2021 2020
Strike price $ 8.01 $ 9.18
Contractual term (years) 1.2 4.9
Volatility (annual) 74.6 % 86.8 %
Risk-free rate 0.7 % 0.1 %
Dividend yield (per share) 0.0 % 0.0 %

~~Note 5—Balance Sheet Components~~

~~R&D tax credit receivable~~

The Company also recorded an Australian tax credit as provided by the Australian Taxation Office for qualified research and development expenditures incurred through its subsidiary, Savara Australia Pty. Limited. Under Australian tax law, Australia remits a research and development tax credit equal to 43.5% of qualified research and development expenditures, not to exceed established thresholds. During the year ended December 31, 2021, the Company generated an Australian tax credit of $0.8 million which was included in prepaid expenses and other current assets on the consolidated balance sheets and the Company received the tax credit in January 2022.

Property and Equipment, Net

The Company's property and equipment, net was comprised of the following (in thousands):


			December 31,
			2021		2020
		December 31,						December 31,
		2023					2023		2022
Equipment	Equipment		$	866	$	512
Furniture and fixtures	Furniture and fixtures		34		27
Leasehold improvements	Leasehold improvements		68		43
Total property and equipment	Total property and equipment		968		582
Less: accumulated depreciation	Less: accumulated depreciation		(517)		(426)
Property and equipment, net	Property and equipment, net		$	451	$	156


Delaware									11-3430072
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

~~51 Charles Lindbergh Boulevard, Uniondale, New York~~451 D Street, 5th Floor, Boston, Massachusetts									~~11553~~02210
(Address of Principal Executive Offices)									(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	~~ANGN~~ELTX	The Nasdaq Global Select Market


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


~~PART I~~			~~Page~~
~~Item 1. Business~~			6
~~Item 1A. Risk Factors~~			33
~~Item 1B. Unresolved Staff Comments~~			64
~~Item 2. Properties~~			64
~~Item 3. Legal Proceedings~~			64
~~Item 4. Mine Safety Disclosures~~			64
~~PART II~~
~~Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issue Purchases of Equity Securities~~			65
~~Item 6. Reserved~~			65
~~Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations~~			65
~~Item 7A. Quantitative and Qualitative Disclosures~~			78
~~Item 8. Financial Statements and Supplementary Data~~			79
~~Item 9. Changes in and Disagreements with Accountants~~			~~115~~
~~Item 9A. Controls and Procedures~~			~~115~~
~~Item 9B. Other Information~~			~~116~~
~~Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections~~			~~116~~
~~PART III~~
~~Item 10. Directors, Executive Officers and Corporate Governance~~			~~117~~
~~Item 11. Executive Compensation~~			~~121~~
~~Item 12. Security ownership of certain beneficial owners and management and related stockholder matters~~			~~125~~
~~Item 13. Certain Relationships and Related Transactions, and Director Independence~~			~~127~~
~~Item 14. Principal Accountant Fees~~			~~129~~
~~PART IV~~
~~Item 15. Exhibits~~			~~130~~
~~Item 16. Form 10-K Summary~~			~~131~~
~~Signature~~			~~132~~


		Year Ended December 31,
		2021		2020		$ Change		% Change
		(In thousands, except percentages)
Revenue:
Contract revenue		$	27,506	$	193	$	27,313	*
Grant revenue		806		2,687		(1,881)		(70.0)	%
Total revenue		28,312		2,880		25,432		883.1	%
	Year Ended December 31,
		2023
		2023
		2023																2022							$ Change							% Change
	(In thousands, except percentages)																												(In thousands, except percentages)
Operating expenses:	Operating expenses:
Cost of grant revenue		433		1,190		(757)		(63.6)	%
Research and development
Research and development
Research and development	Research and development	48,698		38,977		9,721		24.9	%	$	23,849			$		$	18,103			$			$	5,746			31.7				31.7		%
General and administrative	General and administrative	18,488		17,986		502		2.8	%	General and administrative		11,896			5,630				5,630			6,266					6,266			111.3				111.3	%
Total operating expenses	Total operating expenses	67,619		58,153		9,466		16.3	%	Total operating expenses		35,745			23,733				23,733			12,012					12,012			50.6				50.6	%
Loss from operations	Loss from operations	(39,307)		(55,273)		15,966		(28.9)	%	Loss from operations		(35,745)			(23,733)				(23,733)			(12,012)					(12,012)			50.6				50.6	%
Other income (expense), net	Other income (expense), net	(15,266)		(24,834)		9,568		*		Other income (expense), net		550			(4,475)				(4,475)			5,025					5,025			(112.3)				(112.3)	%
Net loss	Net loss	$	(54,573)	$	(80,107)	$	25,534	(31.9)	%	Net loss		$	(35,195)		$			$	(28,208)		$				$	(6,987)		24.8					24.8	%


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	For the Year Ended Payments due by period
(in thousands)	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
Operating lease obligations	$	1,289	$	3,618	$	516	$	—	$	5,423
Financing obligations	$	94	$	219	$	—	$	—	$	313


			Page

Report of Independent Registered Public Accounting Firm ~~(Moss Adams~~(Baker Tilly US, LLP, ~~Seattle, Washington,~~Tewksbury, Massachusetts, PCAOB ID: ~~659)~~23)			8097

Consolidated Balance Sheets			8198

Consolidated Statements of Operations and Comprehensive Loss			8299

Consolidated Statements of Convertible Pre ferred Stock and Stockholders' Equity (Deficit)			83100

Consolidated Statements of Cash Flows			85102

Notes to Consolidated Financial Statements			87104


Conversion of convertible notes to common stock	$	58,639	$	—
Conversion of Series C preferred stock to common stock upon IPO	$	35,754	$	—
Net exercise of warrants upon IPO	$	13,509	$	—
Issuance of broker warrants with Series C convertible preferred stock	$	—	$	1,412
Conversion of convertible notes to Series C convertible preferred stock	$	—	$	2,254
Accrued interest premium for Series C convertible preferred stock	$	—	$	295
Right of use assets exchanged for operating lease liabilities	$	624	$	88
Convertible notes issued in receivable	$	—	$	5,000
Deferred offering costs in accrued expenses or accounts payable	$	—	$	1,443
Fixed assets purchased in accrued expenses or accounts payable	$	4	$	4


	Warrant Liability		Convertible Notes		Series C Convertible Preferred Stock at Fair Value		Total
Balance—December 31, 2020	$	10,704	$	51,170	$	2,518	$	64,392
Conversion of convertible Series C convertible preferred stock into common stock					(6,110)		(6,110)
Conversion of convertible notes into common stock			(58,639)				(58,639)
Net exercise of warrants	(13,509)						(13,509)
Change in fair value	2,919		7,469		3,592		13,980
Balance—December 31, 2021	$	114	$	—	$	—	$	114


	Authorized Shares	Shares Issued and Outstanding	Aggregate Liquidation Amount	Proceeds Net of Liquidation Costs
Series A Convertible Preferred Shares	132,387	132,387	$7,495	$7,495
Series B Convertible Preferred Shares	1,927,375	1,927,375	$72,803	$62,944
Series C Convertible Preferred Shares	4,888,798	2,938,158	$41,816	$40,621
Total Preferred Shares	6,948,560	4,997,920


	At issuance		December 31, 2020
Series C convertible preferred stock recorded at amortized cost
Principal	$	22,308	$	22,308
Settlement premium	5,577		5,577
Unamortized discounts and fees	(9,250)		(1,884)
Net carrying amount	$	18,635	26,001
Series C convertible preferred stock recorded at fair value
Series C convertible preferred stock issued in exchange for convertible notes			2,254
Change in fair value of Series C convertible preferred stock exchanged for convertible notes			264
Total Series C convertible preferred stock			$	28,519


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Total Intrinsic Value (in thousands)



Outstanding as of December 31, 2020	3,479,731	$	6.97	8.4	$	15,140
Options granted	1,103,721	15.44
Options forfeited	(189,388)	13.24
Options exercised	(152,939)	6.40
Options expired	(10,963)	7.67
Outstanding as of December 31, 2021	4,230,162	$	8.92	7.8	$	—
Options vested and exercisable	2,499,165	$	7.11	7.1	$	—


	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Total Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	854,076	$	5.24	7.72
Options granted	219,672	9.68
Existing Angion options outstanding	351,656	61.99
Options exercised	(16,349)	7.74
Forfeited (unvested)	(103,131)	5.83
Outstanding as of December 31, 2023	1,305,924	$	21.27	7.43	$	2,510,341
Options vested and exercisable	871,564	$	41.91	5.25	$	860,479


	Shares of Restricted Stock	Weighted Average Grant Date Fair Value Per Share		Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share



Outstanding at December 31, 2020	14,586	$	6.05	74,144	$	7.78

Vested	(14,586)	6.05		(43,875)	$	8.16
Forfeited	0	0		(12,764)	$	6.12
Outstanding at December 31, 2021	—	0		17,505	$	9.51
Vested as of December 31, 2021	—	0		43,875	$	8.16


Options	December 31,
	2023	2022
Risk-free interest rate	3.68 - 4.49%	1.64 - 3.88%
Expected dividend yield	0.0%	0.0%
Expected volatility	71.70 - 75.50%	60.30 - 73.20%
Expected term in years (employees)	5.5 - 6.1	5.5 - 10


	Classification	Exercise Price		Expiration Date	Warrants at December 31,
					2021	2020
Warrants issued with 2015 Notes	Liability	$	6.43	7/5/28	—	388,396
Warrants issued with 2016 Notes	Liability	$	6.43	7/5/28	—	538,933
Warrants issued with 2017 Notes	Liability	$	6.43	7/5/28	—	79,265
Warrants issued with 2018 Notes	Liability	$	6.43	7/5/28	—	498,567
Warrants issued with Conversion of Notes to Common Stock	Equity	$	8.03	8/31/28	232,287	238,779
Warrants issued with Units in the Equity Offering	Equity	$	8.03	8/31/28	875,034	907,860
Broker Warrants issued with Equity Offering	Equity	$	0.01	8/31/25	1,297	48,485
Broker Warrants issued with 2019 Notes	Equity	$	0.01	1/30/20	—	—

Consultant Warrants	Liability	$	7.60	8/31/28	39,505	39,506
Total Warrants					1,148,123	2,739,791


	Warrants	Weighted Average Exercise Price		Weighted Average Life (years)
Outstanding at December 31, 2022	144,814	$	53.59	6.5


Angion warrants assumed	3,950	76.00		4.7
Outstanding at December 31, 2023	148,764	$	54.19	5.5


	For the Year Ended December 31,
	2021		2020
Operating leases
Operating lease cost	$	1,142	$	1,099
Variable cost	473		646
Operating lease expense	1,615		1,745
Short-term lease rent expense	44		91
Total rent expense	$	1,659	$	1,836


Year Ended December 31,	Amounts
2022	$	1,289
2023	1,305
2024	1,209
2025	1,104
2026	516
Thereafter	—
Total	5,423
Less present value discount	(1,054)
Operating lease liabilities	$	4,369


	For the Year Ended December 31,
	2023		2022
Research and development	$	552	$	291
General and administrative	627		288
Total	$	1,179	$	579


Name and Principal Position	Year	Salary ($)	Bonus(1) ($)	Option Awards(2) ($)	Total (3) ($)
Jay R. Venkatesan, M.D., President and Chief Executive Officer and Chairman of the Board(4)	2021	587,100	—	1,952,099	2,539,199
	2020	570,000	194,800	629,598	1,394,398
Itzhak D. Goldberg, M.D., Executive Chairman and Chief Scientific Officer(5)	2021	484,018	—	763,863	1,247,881

John F. Neylan, M.D., Executive Vice President, Chief Medical Officer and Head of Research (6)	2021	468,650	—	763,863	1,232,513


		Option Awards				Stock Awards
Name	Vesting Commencement Date(1)	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares that Have Not Vested (#)	Market Value of Shares or Units of Shares that Have Not Vested ($)(2)
Jay R. Venkatesan, M.D.	5/1/2018 (3)	934,400	—	5.89	5/1/2028	—	—
	6/24/2019 (4)	—	—	—	6/24/2022	92,755	268,990
	6/18/2020(1)	46,674	77,792	7.77	6/17/2030	—	—
	2/5/2021(1)	37,275	141,645	16.00	2/4/2031	—	—
Itzhak Goldberg	12/19/2018	40,600	—	6.05	1/21/2029	—	—
	6/24/2019 (4)	—	—	—	6/24/2022	92,755	268,990
	6/18/2020(1)	23,337	38,896	7.77	6/17/2030	—	—
	2/5/2021(1)	14,585	55,427	16.00	2/4/2031	—	—
John Neylan	12/17/2018 (5)	116,687	—	6.43	12/18/2028	—	—
	6/18/2020(1)	35,005	58,344	7.77	8/30/2030	—	—
	2/5/2021(1)	14,585	55,427	16.00	12/8/2030	—	—


Name	Fees Earned or Paid in Cash ($)	Option Awards(1) ($)	Total(2) ($)
Victor Ganzi	77,500	138,029	215,529
Allen Nissenson	62,500	138,029	200,529
Gilbert Omenn	60,500	138,029	198,529
Karen Wilson	65,000	138,029	203,029


	Beneficiary Ownership Table as of March 1, 2022
	Number	Percentage
5% and Greater Stockholders:
Jay R. Venkatesan (1)	2,880,898	9.2	%
Itzhak D. Goldberg (2)	1,995,121	6.6	%
Vifor International, Ltd	1,995,643	6.7	%
EISA-ABC, LLC (3)	1,722,237	5.7	%
Named Executive Officers and Directors:
Jay R. Venkatesan (4)	2,880,898	9.2	%
Itzhak D. Goldberg (5)	1,995,121	6.6	%


Victor F. Ganzi (6)	1,019,628	3.4	%
John Neylan(7)	257,567	*
Gilbert S. Omenn (8)	121,256	*
Allen R. Nissenson (9)	40,930	*
Karen J. Wilson (10)	59,648	*
All directors and executive officers as a group (9 persons) (11)	6,671,978	20.8	%


Name	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)	Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(2)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity compensation plans approved by stockholders	4,433,177	$	8.51	4,168,609
Equity compensation plans not approved by stockholders	—	—		—
Total	4,433,177	$	8.51	4,168,609


Name	Convertible Note Issued and Outstanding as of December 31, 2020 ( Principal Amount)		Number of Shares of Our Common Stock Issuable Upon Conversion(2)
Gilbert S. Omenn, M.D., Ph.D.(2)	$	661,540	61,657
Jay R. Venkatesan, M.D.(3)(4)	$	2,965	262
Victor F. Ganzi(3)(5)	$	747,671	68,863
Karen Wilson(6)	$	200,000	18,718
Vifor (International) Ltd.(7)	$	5,000,000	433,143


~~ANGION BIOMEDICA CORP.~~

~~By:~~						~~/s/ JAY R. VENKATESAN, M.D.~~
						~~Jay R. Venkatesan, M.D.~~ ~~President and Chief Executive Officer and Chairman~~