UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31,June 30, 2023
OR
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| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-39990
ANGION BIOMEDICA CORPElicio Therapeutics, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | |
| Delaware | | | 11-3430072 |
(State or other jurisdiction of
incorporation or organization) | | | (I.R.S. Employer Identification No.) |
| | | |
7-57 Wells Avenue Newton,451 D Street, 5th Floor Boston, Massachusetts | | | 0245902210 |
| (Address of Principal Executive Offices) | | | (Zip Code) |
(415) 655-4899(857) 209-0050
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.01 | ANGNELTX | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | |
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The number of shares of the issuer’s common stock outstanding as of May 5,August 10, 2023 was 30,113,703.8,388,457.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
•the ability of our expectations regarding the announced reverse merger transaction with Elicio Therapeutics, Inc.clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;
•;our ability to utilize our platform to develop a pipeline of product candidates to address unmet needs in cancer and infectious disease;
•the timing, progress and results of clinical trials for ELI-002, and other product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the studies or trials will become available, and research and development programs;
•the timing, scope and likelihood of regulatory filings and approvals, including timing of INDs (as defined below) and U.S. Food and Drug Administration (“FDA”) approval of ELI-002 and any other future product candidates;
•the timing, scope or likelihood of foreign regulatory filings and approvals;
•our ability to develop and advance current product candidates and programs into, and successfully complete, clinical studies;
•our manufacturing, commercialization, and marketing capabilities and strategy;
•plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy;
•the need to hire additional personnel and our ability to attract and retain such personnel;
•the size of the market opportunity for our product candidates, including estimates of the number of patients who suffer from the diseases we are targeting;
•expectations regarding the approval and use of our product candidates in combination with other drugs;
•our ability to secure drug product for combination studies;
•expectations regarding potential benefits, activity, effectivenessfor accelerated approval or other expedited regulatory designation;
•our competitive position and the success of competing therapies that are or may become available;
•estimates of the number of patients that we will enroll in our clinical trials;
•the beneficial characteristics and the potential safety, efficacy and therapeutic effects of our product candidates;
•our ability to obtain and maintain regulatory approval of our product candidates and our expectations regarding particular lines of therapy;
•plans relating to the further development of our product candidates, including additional indications we may pursue;
•existing regulations and regulatory developments in the United States, Europe and other jurisdictions;
•the effects of the ongoing COVID-19 pandemic, the ongoing conflict between the Ukraine and Russia and the recent and potential future bank failures or other geopolitical events;
•our expectations regarding the impact of instability in the banking and financial services sector and other macroeconomic trends;
•our intellectual property position, including the scope progress, expansion,of protection we are able to establish and costsmaintain for intellectual property rights covering ELI-002, other product candidates we may develop, including the extensions of developingexisting patent terms where available, the validity of intellectual property rights held by third parties, and commercializingour ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;
•our continued reliance on third parties to conduct additional clinical trials of our product candidates, and for the manufacture of our product candidates for clinical trials;
•our relationships with patient advocacy groups, key opinion leaders, regulators, the research community and payors;
•our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;
•our dependence on existingthe pricing and future collaborators for commercializingreimbursement of ELI-002, and other product candidates in the collaboration;
•our receipt and timing of any milestone payments or royalties under any existing or future research collaboration and license agreements or arrangements;
•the potential effects of the COVID-19 pandemic on our business and operations, results of operations and financial performance;
•the potential adverse effects of any regional armed conflicts on our business and operations, results of operations and financial performance;
•the size and growth of the potential markets for our product candidates and the ability to serve those markets;
•our expectations regarding our expenses, the sufficiency of our cash resources, and needs for additional financing;
•regulatory developments in the United States and other countries;we may develop, if approved;
•the rate and degree of market acceptance and clinical utility of anyELI-002 and other product candidates we may develop;
•our estimates regarding expenses, future products;revenue, capital requirements and needs for additional financing;
•our financial performance;
•the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our planned operating expenses and capital expenditure requirements;
•the implementationimpact of our business modellaws and strategic plans for our business and product candidates, including additional indications which we may pursue;
•our expectations regarding competition;
•our anticipated business strategies;
•the performance of third-party manufacturers;
•our ability to establish and maintain development partnerships;
•our expectations regarding federal, state, and foreign regulatory requirements;
•our ability to obtain and maintain intellectual property protection for our product candidates;
•the successful development for our sales and marketing capabilities;
•the hiring, retention, or separation of key scientific or management personnel;regulations; and
•expectations regarding the anticipated trends and challenges in our business and the market inperiod during which we operate.will qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 and a smaller reporting company under the Exchange Act (as defined below).
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.
This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires.
EXPLANATORY NOTE
On June 1, 2023, the Delaware corporation formerly known as “Angion Biomedica Corp.” completed its previously announced merger transaction in accordance with the terms and conditions of the Agreement and Plan of Merger and Reorganization, dated as of January 17, 2023 (the “Merger Agreement”), by and among Angion Biomedica Corp. (“Angion”), 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”). Additionally, on June 1, 2023, Angion changed its name from “Angion Biomedica Corp.” to “Elicio Therapeutics, Inc.” (the “Company”).
Prior to the effective time of the Merger, on June 1, 2023, in connection with the transactions contemplated by the Merger Agreement, the Company effected a reverse stock split of the Company’s common stock, par value $0.01 per share (“Company 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 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 receive 0.0181 shares of Company common stock. The information in this Quarterly Report on Form 10-Q as of and for the periods prior to the effective date of the Merger gives effect to the Reverse Stock Split.
Since Former Elicio was determined to be the accounting acquirer in connection with the Merger, for periods prior to the Merger, the condensed 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 condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 include the acquired business from June 2, 2023 through June 30, 2023, and assets and liabilities at their acquisition date fair value. Historical share and per share figures of Former Elicio have been retroactively restated based on the exchange ratio of 0.0181.
In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, the terms “Company,” “we,” “us,” and “our” refer to (i) Angion for periods prior to the effectiveness of the Merger and (ii) Elicio Therapeutics, Inc. (as a combined company) for periods following the effectiveness of the Merger. Following the completion of the Merger, the business conducted by the Company became primarily the business conducted by Former Elicio.
This report contains references to trademarks belonging to other entities, which are the property of their respective holders. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Trademarks
This Quarterly Report on Form 10-Q includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this Quarterly Report on Form 10-Q are the property of their respective owners.
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
| | | | | | | | | | | |
| March 31,
2023 | | December 31,
2022 |
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 29,219 | | | $ | 50,487 | |
| | | |
| Prepaid expenses and other current assets | 1,730 | | | 943 | |
| Notes receivable | 9,678 | | | — | |
| Total current assets | 40,627 | | | 51,430 | |
| Property and equipment, net | — | | | 273 | |
| Operating lease right-of-use assets | 126 | | | 152 | |
| Investments in related parties | 150 | | | 874 | |
| Other assets | 864 | | | 61 | |
| Total assets | $ | 41,767 | | | $ | 52,790 | |
| Liabilities and stockholders’ equity | | | |
| Current liabilities | | | |
| Accounts payable | $ | 692 | | | $ | 2,720 | |
| Accrued expenses | 1,103 | | | 2,569 | |
| Operating lease liabilities, current | 227 | | | 994 | |
| Financing obligation, current | — | | | 67 | |
| | | |
| Warrant liability | 9 | | | 19 | |
| Total current liabilities | 2,031 | | | 6,369 | |
| Operating lease liabilities, noncurrent | 70 | | | 2,481 | |
| Financing obligation, noncurrent | — | | | 168 | |
| | | |
| | | |
| | | |
| Total liabilities | 2,101 | | | 9,018 | |
| Commitments and contingencies - Note 10 | | | |
| Stockholders' equity | | | |
| | | |
| | | |
| Common stock, $0.01 par value per share; 300,000,000 shares authorized; 30,114,190 and 30,113,946 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 301 | | | 301 | |
| | | |
| Additional paid-in capital | 297,679 | | | 297,327 | |
| Accumulated other comprehensive income | 165 | | | 86 | |
| Accumulated deficit | (258,479) | | | (253,942) | |
| Total stockholders' equity | 39,666 | | | 43,772 | |
| Total liabilities and stockholders' equity | $ | 41,767 | | | $ | 52,790 | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
ANGION BIOMEDICA CORP.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31, |
| | | | | 2023 | | 2022 |
| Revenue: | | | | | | | |
| Contract revenue | | | | | $ | — | | | $ | 1,648 | |
| | | | | | | |
| Total revenue | | | | | — | | | 1,648 | |
| Operating expenses: | | | | | | | |
| | | | | | | |
| | | | | | | |
| Research and development | | | | | 326 | | | 11,667 | |
| General and administrative | | | | | 4,281 | | | 4,466 | |
| | | | | | | |
| Total operating expenses | | | | | 4,607 | | | 16,133 | |
| Loss from operations | | | | | (4,607) | | | (14,485) | |
| Other income (expense) | | | | | | | |
| Change in fair value of warrant liability | | | | | 10 | | | 39 | |
| Change in fair value of notes receivable | | | | | (322) | | | — | |
| | | | | | | |
| | | | | | | |
| Foreign exchange transaction gain (loss) | | | | | (87) | | | 111 | |
| Earnings from equity method investment | | | | | — | | | 9 | |
| Interest income, net | | | | | 469 | | | 86 | |
| Total other income | | | | | 70 | | | 245 | |
| Net loss | | | | | (4,537) | | | (14,240) | |
| Other comprehensive income: | | | | | | | |
| Foreign currency translation adjustment | | | | | 79 | | | (96) | |
| Comprehensive loss | | | | | $ | (4,458) | | | $ | (14,336) | |
| Net loss per common share, basic and diluted | | | | | $ | (0.15) | | | $ | (0.48) | |
| Weighted average common shares outstanding, basic and diluted | | | | | 30,114,113 | | | 29,959,251 | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | |
| June 30,
2023 | | December 31,
2022 |
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 21,682 | | | $ | 6,156 | |
| Restricted cash, current | — | | | 1,641 | |
| Prepaid expenses and other current assets | 4,543 | | | 2,920 | |
| Total current assets | 26,225 | | | 10,717 | |
| Property and equipment, net | 919 | | | 1,147 | |
| Operating lease, right-of-use assets | 6,952 | | | 7,350 | |
| Restricted cash, noncurrent | 681 | | | 618 | |
| Other long-term prepaid assets | 2,842 | | | 2,834 | |
| Total assets | $ | 37,619 | | | $ | 22,664 | |
| Liabilities, convertible preferred stock, and stockholders’ equity (deficit) | | | |
| Current liabilities | | | |
| Accounts payable | $ | 4,265 | | | $ | 2,805 | |
| Accrued expenses | 2,315 | | | 1,935 | |
| | | |
| | | |
| Deferred research obligation | — | | | 1,436 | |
| Operating lease liability, current | 985 | | | 692 | |
| Warrant liability | 32 | | | — | |
| Total current liabilities | 7,597 | | | 6,868 | |
| Operating lease liability, noncurrent | 6,419 | | | 6,789 | |
| Unvested option exercise liability | 46 | | | 92 | |
| Total liabilities | 14,062 | | | 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 June 30, 2023 and December 31, 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 June 30, 2023 and December 31, 2022, respectively | — | | | 62,944 | |
Series C convertible preferred stock, $0.06 par value: no shares and 4,888,798 shares authorized at June 30, 2023 and December 31, 2022, respectively; no shares and 2,938,158 shares issued and outstanding at June 30, 2023 and December 31, 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 June 30, 2023 and December 31, 2022; 8,384,723 shares and 320,281 shares issued at June 30, 2023 and December 31, 2022, respectively; 8,370,268 and 320,281 outstanding as of June 30, 2023 and December 31, 2022, respectively | 84 | | | 3 | |
| Treasury stock, at cost, 14,454 shares and no shares outstanding as of June 30, 2023 and December 31, 2022, respectively | (150) | | | — | |
| Additional paid-in capital | 146,221 | | | 4,860 | |
| Accumulated other comprehensive income | (2) | | | — | |
| Accumulated deficit | (122,596) | | | (107,008) | |
| Total stockholders' equity (deficit) | 23,557 | | | (102,145) | |
| Total liabilities, convertible preferred stock, and stockholders' equity (deficit) | $ | 37,619 | | | $ | 22,664 | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders' EquityOperations and Comprehensive Loss
(in thousands, except share and per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | | | Additional Paid-in Capital | | Accumulated Other
Comprehensive Income | | Accumulated Deficit | | Total Stockholders' Equity | | | | | | | | |
| Shares | | Amount | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | |
| Balance as of December 31, 2022 | 30,113,946 | | | $ | 301 | | | | | | | $ | 297,327 | | | $ | 86 | | | $ | (253,942) | | | $ | 43,772 | | | | | | | | | |
| Issuance of common stock upon net settlement of restricted stock units and performance stock units | 244 | | | — | | | | | | | — | | | — | | | — | | | — | | | | | | | | | |
| Stock-based compensation | — | | | — | | | | | | | 352 | | | — | | | — | | | 352 | | | | | | | | | |
| Foreign currency translation adjustment | — | | | — | | | | | | | — | | | 79 | | | — | | | 79 | | | | | | | | | |
| Net loss | — | | | — | | | | | | | — | | | — | | | (4,537) | | | (4,537) | | | | | | | | | |
| Balance as of March 31, 2023 | 30,114,190 | | | $ | 301 | | | | | | | $ | 297,679 | | | $ | 165 | | | $ | (258,479) | | | $ | 39,666 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Treasury Stock | | Additional Paid-in Capital | | Accumulated Other
Comprehensive Loss | | Accumulated Deficit | | Total Stockholders' Equity (Deficit) | | | | | | | | |
| Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | |
| Balance as of December 31, 2021 | 29,959,060 | | | $ | 300 | | | — | | | $ | — | | | $ | 296,445 | | | $ | (103) | | | $ | (215,135) | | | $ | 81,507 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Issuance of common stock upon net settlement of restricted stock units and performance stock units | 365 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | |
| Stock-based compensation | — | | | — | | | — | | | — | | | 31 | | | | | — | | | 31 | | | | | | | | | |
| Foreign currency translation adjustment | — | | | — | | | — | | | — | | | — | | | (96) | | | — | | | (96) | | | | | | | | | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | (14,240) | | | (14,240) | | | | | | | | | |
| Balance as of March 31, 2022 | 29,959,425 | | | $ | 300 | | | — | | | $ | — | | | $ | 296,476 | | | $ | (199) | | | $ | (229,375) | | | $ | 67,202 | | | | | | | | | |
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| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
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| Operating expenses: | | | | | | | |
| | | | | | | |
| | | | | | | |
| Research and development | 4,944 | | | 5,041 | | | 10,428 | | | 9,220 | |
| General and administrative | 2,833 | | | 1,191 | | | 5,154 | | | 2,782 | |
| Total operating expenses | 7,777 | | | 6,232 | | | 15,582 | | | 12,002 | |
| Loss from operations | (7,777) | | | (6,232) | | | (15,582) | | | (12,002) | |
| Other income (expense) | | | | | | | |
| Change in fair value of warrant liability | (23) | | | — | | | (23) | | | — | |
| Change in fair value of embedded derivatives | 321 | | | — | | | 429 | | | 74 | |
| | | | | | | |
| | | | | | | |
| Gain on extinguishment of promissory notes payable | 604 | | | — | | | 604 | | | — | |
| Foreign exchange transaction gain | (9) | | | — | | | (9) | | | — | |
| Interest income | 39 | | | — | | | 51 | | | 1 | |
| Interest expense | (714) | | | (1,067) | | | (1,056) | | | (2,432) | |
| Total other income (expense) | 218 | | | (1,067) | | | (4) | | | (2,357) | |
| Net loss | (7,559) | | | (7,299) | | | (15,586) | | | (14,359) | |
| Other comprehensive loss: | | | | | | | |
| Foreign currency translation adjustment | (2) | | | — | | | (2) | | | — | |
| Comprehensive loss | $ | (7,561) | | | $ | (7,299) | | | $ | (15,588) | | | $ | (14,359) | |
| Net loss per common share, basic and diluted | $ | (2.44) | | | $ | (23.20) | | | $ | (9.06) | | | $ | (45.85) | |
| Weighted average common shares outstanding, basic and diluted | 3,100,957 | | | 314,572 | | | 1,720,202 | | | 313,148 | |
| | | | | | | |
| | | | | | | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Preferred Stock | | Common Stock | | Treasury Stock | | Additional Paid-in Capital | | Accumulated Other
Comprehensive Income | | Accumulated Deficit | | Total Stockholders' Equity (Deficit) | | | | | | | | |
| Shares | | Amount | | Shares | | Par Value | | Shares | | Amount | | | | | | | | | | | | |
Balance as of December 31, 2022 (1) | 4,997,920 | | | $ | 111,060 | | | 320,281 | | | $ | 3 | | | — | | | $ | — | | | $ | 4,860 | | | $ | — | | | $ | (107,008) | | | $ | (102,145) | | | | | | | | | |
| Exercise of stock options | — | | | — | | | 4,699 | | | — | | | — | | | — | | | 40 | | | — | | | — | | | 40 | | | | | | | | | |
| Issuance of common stock upon net settlement of restricted stock units | — | | | — | | | 2,601 | | | — | | | — | | | — | | | 34 | | | — | | | — | | | 34 | | | | | | | | | |
| Stock-based compensation | — | | | — | | | — | | | — | | | — | | | — | | | 224 | | | — | | | — | | | 224 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (8,029) | | | (8,029) | | | | | | | | | |
| Balance as of March 31, 2023 | 4,997,920 | | | 111,060 | | | 327,581 | | | 3 | | | — | | | — | | | 5,158 | | | — | | | (115,037) | | | (109,876) | | | | | | | | | |
| Exercise of stock options | — | | | — | | | 4,460 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | |
| Issuance of common stock upon net settlement of restricted stock units | — | | | — | | | 903 | | | — | | | — | | | — | | | 11 | | | — | | | — | | | 11 | | | | | | | | | |
| 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 result of Merger and reset to par of $0.01, net of transaction cost of $2.4 million | — | | | — | | | 3,012,854 | | | 30 | | | — | | | — | | | 19,709 | | | — | | | — | | | 19,739 | | | | | | | | | |
| Settlement of promissory notes in connection with Merger | — | | | — | | | — | | | — | | | — | | | — | | | 10,028 | | | — | | | — | | | 10,028 | | | | | | | | | |
| Issuance of common stock upon accelerated vesting of restricted stock units due to Merger, net of treasury stock | — | | | — | | | 26,550 | | | 1 | | | — | | | — | | | 26 | | | — | | | — | | | 27 | | | | | | | | | |
| Return of common stock to pay withholding taxes on restricted stock | — | | | — | | | — | | | — | | | (14,455) | | | (150) | | | — | | | — | | | — | | | (150) | | | | | | | | | |
| Stock-based compensation | — | | | — | | | — | | | — | | | — | | | — | | | 279 | | | — | | | — | | | 279 | | | | | | | | | |
| Foreign currency translation adjustment | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (2) | | | — | | | (2) | | | | | | | | | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,559) | | | (7,559) | | | | | | | | | |
| Balance as of June 30, 2023 | — | | | $ | — | | | 8,370,268 | | | $ | 84 | | | (14,455) | | | $ | (150) | | | $ | 146,221 | | | $ | (2) | | | $ | (122,596) | | | $ | 23,557 | | | | | | | | | |
(1) Retroactively restated for the reverse recapitalization as described in Note 3.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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) | 1,408,100 | | | $ | 70,439 | | | 310,200 | | | $ | 3 | | | — | | | $ | — | | | $ | 4,261 | | | $ | — | | | $ | (78,801) | | | $ | (74,537) | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exercise of stock options | — | | | — | | | 71 | | | — | | | — | | | — | | | 1 | | | — | | | — | | | 1 | | | | | | | | | |
| Vesting of restricted common stock | — | | | — | | | 2,775 | | | — | | | — | | | — | | | 3 | | | — | | | — | | | 3 | | | | | | | | | |
| Stock-based compensation | — | | | — | | | — | | | — | | | — | | | — | | | 157 | | | — | | | — | | | 157 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,060) | | | (7,060) | | | | | | | | | |
| Balance as of March 31, 2022 | 1,408,100 | | | 70,439 | | | 313,046 | | | 3 | | | — | | | — | | | 4,422 | | | — | | | (85,861) | | | (81,436) | | | | | | | | | |
| Vesting of restricted common stock | — | | | — | | | 2,775 | | | — | | | — | | | — | | | 3 | | | — | | | — | | | 3 | | | | | | | | | |
| Exercise of stock options | — | | | — | | | 181 | | | — | | | — | | | — | | | 3 | | | — | | | — | | | 3 | | | | | | | | | |
| Issuance of Series C convertible preferred stock, net of issuance costs of approximately $0.3 million | 103,637 | | | 1,169 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | |
| Stock-based compensation | — | | | — | | | — | | | — | | | — | | | — | | | 113 | | | — | | | — | | | 113 | | | | | | | | | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,299) | | | (7,299) | | | | | | | | | |
| Balance as of June 30, 2022 | 1,511,737 | | | $ | 71,608 | | | 316,002 | | | $ | 3 | | | — | | | $ | — | | | $ | 4,541 | | | $ | — | | | $ | (93,160) | | | $ | (88,616) | | | | | | | | | |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
(1) Retroactively restated for the reverse recapitalization as described in Note 3.
ELICIO THERAPEUTICS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| 2023 | | 2022 |
| Cash flows from operating activities: | | | |
| Net loss | $ | (4,537) | | | $ | (14,240) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | |
| Depreciation | 22 | | | 32 | |
| Amortization of right-of-use assets | 26 | | | 196 | |
| | | |
| Stock-based compensation | 352 | | | 31 | |
| | | |
| Change in fair value of notes receivable | 322 | | | — | |
| | | |
| Change in fair value of warrant liability | (10) | | | (39) | |
| Loss on disposal of property and equipment, net | 251 | | | — | |
| Earnings from equity investment | — | | | (9) | |
| Loss on termination of lease obligation | 52 | | | — | |
| Loss on termination of financing obligation | 23 | | | — | |
| Changes in operating assets and liabilities: | | | |
| Grants receivable | — | | | 806 | |
| Prepaid expenses and other current assets | (766) | | | (1,515) | |
| Other assets | (851) | | | 28 | |
| Accounts payable | (1,834) | | | (1,323) | |
| Accrued expenses | (1,074) | | | 2,023 | |
| Lease liabilities | (55) | | | (215) | |
| | | |
| Deferred revenue | — | | | (1,648) | |
| Other liabilities, noncurrent | — | | | 220 | |
| Net cash used in operating activities | (8,079) | | | (15,653) | |
| Cash flows from investing activities: | | | |
| | | |
| Issuance of notes receivable | (10,000) | | | — | |
| Net cash used in investing activities | (10,000) | | | — | |
| Cash flows from financing activities: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Payment of financing obligation | (15) | | | (14) | |
| Payment to terminate lease obligation | (3,025) | | | — | |
| Payment to terminate financing obligation | (228) | | | — | |
| | | |
| | | |
| Net cash used in financing activities | (3,268) | | | (14) | |
| Effect of foreign currency on cash | 79 | | | (87) | |
| Net decrease in cash and cash equivalents | (21,268) | | | (15,754) | |
| Cash and cash equivalents at the beginning of the period | 50,487 | | | 88,756 | |
| Cash and cash equivalents at the end of the period | $ | 29,219 | | | $ | 73,002 | |
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| Six Months Ended
June 30, |
| 2023 | | 2022 |
| Cash flows from operating activities: | | | |
| Net loss | $ | (15,586) | | | $ | (14,359) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | |
| Depreciation | 214 | | | 186 | |
| Amortization of right-of-use assets, operating leases | 397 | | | 283 | |
| Non-cash interest expense | 1,061 | | | 2,431 | |
| Change in fair value of embedded derivative | (429) | | | (74) | |
| Change in fair value of warrant liability | 23 | | | — | |
| Stock-based compensation | 503 | | | 270 | |
| Gain on extinguishment of promissory note payable | (604) | | | — | |
| Loss on disposal of property and equipment, net | 1 | | | 4 | |
| Changes in operating assets and liabilities: | | | |
| Prepaid expenses and other current assets | (1,083) | | | (16) | |
| Other long-term prepaid assets | (8) | | | 114 | |
| Accounts payable | (79) | | | 1,759 | |
| Accrued expenses | (251) | | | 109 | |
| Deferred research obligation | (1,436) | | | — | |
| Operating lease liabilities | (337) | | | (224) | |
| | | |
| Net cash used in operating activities | (17,614) | | | (9,517) | |
| Cash flows from investing activities: | | | |
| Purchases of property and equipment | (21) | | | (559) | |
| Proceeds from sale of property and equipment | 34 | | | — | |
| Net cash provided by (used in) investing activities | 13 | | | (559) | |
| Cash flows from financing activities: | | | |
| Cash acquired in connection with the reverse merger | 24,001 | | | — | |
| Merger transaction costs | (2,366) | | | |
| Proceeds from issuance of promissory notes payable | 10,000 | | | — | |
| Proceeds from issuance of Series C-1 convertible preferred stock, net of issuance costs | — | | | 1,169 | |
| Payment for purchase of treasury stock | (150) | | | — | |
| Exercise of stock options | 67 | | | 78 | |
| Net cash provided by financing activities | 31,552 | | | 1,247 | |
| Effect of foreign currency on cash | (2) | | | — | |
| Net increase (decrease) in cash and cash equivalents | 13,949 | | | (8,829) | |
| Cash, cash equivalents and restricted cash at beginning of period | 8,414 | | | 10,045 | |
| Cash, cash equivalents and restricted cash at the end of the period | $ | 22,363 | | | $ | 1,216 | |
| | | |
| Components of cash, cash equivalents and restricted cash: | | | |
| Cash and cash equivalents | $ | 21,682 | | | $ | 598 | |
| Restricted cash | 681 | | | 618 | |
| Total cash, cash equivalents and restricted cash | $ | 22,363 | | | $ | 1,216 | |
| | | |
| Supplemental disclosure of noncash investing and financing activities: | | | |
| Loss on disposal of property and equipment | $ | 1 | | | $ | 4 | |
| Accretion of promissory note discount from embedded derivative | $ | 130 | | | $ | — | |
| Accretion of promissory note to face value | $ | 897 | | | $ | — | |
| Settlement of promissory notes payable | $ | 10,028 | | | $ | — | |
| Interest expense from convertible notes payable | $ | 34 | | | $ | — | |
| Accretion of convertible notes discount from embedded derivative | $ | — | | | $ | 1,639 | |
| Accretion of convertible notes discount from issuance costs | $ | — | | | $ | 219 | |
| Interest expense from convertible notes payable | $ | — | | | $ | 574 | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
Note 1—Description of the Business and Financial Condition
Angion Biomedica Corp.Elicio Therapeutics, Inc. (“Angion”Elicio” or the “Company”) had been a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel small molecule therapeutics to address chronic and progressive fibrotic diseases, prior to its 2022 Strategic Realignment announced in July 2022 whereby the Company announced its process to explore strategic options for enhancing and preserving shareholder value (“2022 Strategic Realignment”)(See Note 11). The Company was incorporated in Delaware as Vedantra Pharmaceuticals Inc., in 1998.August 2011. Elicio is a clinical-stage biotechnology company pioneering the development of therapeutic cancer vaccines for patients with limited treatment options and poor outcomes. 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 unaudited consolidated financial statements.
Reverse Merger Transaction
On January 17, 2023, the Company entered into a definitive merger agreement (the “Merger Agreement”) with Elicio Therapeutics,Angion Biomedica Corp. (“Angion”), a clinical development corporation. In accordance with the terms and conditions of the Agreement and Plan of Merger and Reorganization, by and among Angion, Arkham Merger Sub, Inc. (“Elicio”) under which Elicio will merge with, a wholly-ownedwholly owned subsidiary of Angion in an all-stock transaction(“Merger Sub”), Angion Pty Ltd., a wholly owned subsidiary of Angion, 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”). Upon completion
On June 1, 2023, the Company completed the Merger in accordance with the terms and conditions of the Merger Agreement and changed its name from “Angion Biomedica Corp.” to “Elicio Therapeutics, Inc.” Immediately following the combined company will focus on advancing Elicio’s proprietary lymph node AMP technology to develop immunotherapies, with a focus on ELI-002, a therapeutic cancer vaccine targeting mKRAS-driven tumors.
Angion has suspended clinical development activities in anticipation of completionconsummation of the announcedMerger, 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 does not have any products approved for sale.Related Transactions.
Liquidity and Capital ResourcesGoing Concern
Since inception, the Company has devoted substantially all of its efforts and financial resources to conducting research and development activities, including drug discovery and pre-clinical studies and clinical trials, establishing and maintaining its intellectual property portfolio, organizing and staffing the Company, business planning, raising capital and providing general and administrative support for these operations. The Company has incurredexperienced net losses from operations and negative cash flows from operating activities since inception. As of March 31,June 30, 2023, the Company had $29.2an accumulated deficit of $122.6 million. The Company expects that its operating losses and operating cash flows will continue for the foreseeable future as the Company continues to develop its product candidates.
As of June 30, 2023, the Company had $21.7 million in cash and cash equivalentsequivalents. The Company’s losses from operations, negative operating cash flows and an accumulated deficit, as well as the additional capital needed to fund operations for at least twelve months following the issuance of $258.5 million.
The Company has evaluated and concluded there are no conditions or events, considered in the aggregate, thatcondensed consolidated financial statements, raise substantial doubt about itsthe Company’s ability to continue as a going concernconcern. The Company expects to incur substantial expenditures in the foreseeable future for a periodthe development of one year following the date theseits product candidates and will require additional financing to continue this development. The accompanying unaudited condensed consolidated financial statements are issuedhave been prepared on a basis that assumes that the Company will continue as a going concern, which contemplates the realization of assets and believes its existing cash and cash equivalents will be sufficient to meetsatisfaction of liabilities in the projected operating requirements for at least 12 months following the issuance datenormal course of itsbusiness. The unaudited condensed consolidated financial statements.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 unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting, consistent in all material respects with those applied in the Company’s audited financial statements and accompanying notes for the year ended December 31, 2022 and 2021 included in the Company’s proxy statement/prospectus/information statement on Form S-4 filed April 26, 2023, as amended (the “Form S-4”). Any reference in these notes to
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
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”). This report should be read in conjunction with the audited consolidated financial statements in the Form S-4.
The condensed 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 Pty Ltd., 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 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.
The Company’s significant accounting policies are described in Note 2 to its consolidated financial statements for the year ended December 31, 2022, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2023 (the “Annual Report on Form 10-K”).S-4. There have been no material changes to the Company’s significant accounting policies during the threesix months ended March 31,June 30, 2023.
Unaudited Interim Financial Information
TheSince Former Elicio was determined to be the accounting acquirer in connection with the Merger, for periods prior to the Merger, the condensed consolidated financial statements ofwere prepared on a stand-alone basis for Former Elicio and did not include the Company included herein have been prepared, without audit, pursuantcombined entities activity or financial position. Subsequent to the rules and regulations ofMerger, the SEC. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the yearthree and six months ended December 31, 2022June 30, 2023 include the acquired business from June 2, 2023 through June 30, 2023, and inassets and liabilities at their acquisition date fair value. Historical share and per share figures of the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position, results of operations and comprehensive loss, and cash flows. The condensed consolidated balance sheet
Table of Contents
ANGION BIOMEDICA CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
as of December 31, 2022 was derived from the audited financial statements as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAPFormer Elicio have been condensed or omitted from this Quarterly Report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction withretroactively restated based on the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K. The results for any interim period are not necessarily indicativeexchange ratio of results for any future period.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 one operating segment. The Company has determined that the chief executive officer is the CODM.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requiresCompany’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 datedates of the condensed 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, accruals for research and development activities, the valuation of its notes receivable, 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 condensed 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 Dollar (“USD”) is the functional currency for the Company’s operations outside the United States. Accordingly, nonmonetary assets and liabilities originally acquired or assumed in other currencies are recorded in USD at the exchange rates in effect at the date they were acquired or assumed. Monetary assets and liabilities denominated in other currencies are translated into USD at the exchange rates in effect at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss. Gains and losses realized from non-USD transactions, including intercompany balances not considered as permanent investments, denominated in currencies other than an entity’s functional currency are included in other income (expense) in the accompanying condensed consolidated statements of operations and comprehensive loss.
Concentrations of Credit Risk and Off-Balance Sheet Risk
Cash and cash equivalents are financialFinancial instruments that are potentially subject to concentrations of credit risk. The Company maintains its cash equivalents in securities and money market funds with original maturities less than three months. On March 10, 2023, Silicon Valley Bank (SVB), at which the Company maintained substantially all of its cash and cash equivalents in multiple accounts and in amounts exceeding federally insured limits, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The failure of SVB exposed the Company to liquidity andconcentration of credit risk prior toconsist primarily of cash, cash equivalents, and restricted cash. At times, cash balances deposited at major financial banking institutions exceed the completionfederally insured limit. The Company regularly monitors the financial condition of the FDIC resolutioninstitutions in which it has depository accounts and believes the risk of SVB in a manner that fully protects all depositors. At the end of March 2023, Angion transferred substantially all of its cash and cash equivalents from SVB to an asset manager. If the Companyloss is unable to access its cash and cash equivalents as needed, its financial position and ability to operate its business will be adversely affected.
minimal. The Company has no financial instruments with off-balance sheet risknot experienced any losses in such accounts.
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
Cash and Cash Equivalents
The Company considers allCash and cash equivalents are comprised of deposits at major financial banking institutions and highly liquid investments with an original maturitiesmaturity of three months or less to be cash equivalents.at the date of purchase. As of March 31,June 30, 2023 and December 31, 2022, the Company’s cash equivalents were held in institutions in the United States and include deposits in a money market fund which were unrestricted as to withdrawal or use.
Restricted Cash
Restricted cash consists of cash securing a collateral letter of credit issued in connection with the Company’s facility operating lease and a research grant. See notes 6 and 10 for further discussion.
Fair Value Measurement
Certain assets and liabilities are carried at fair value under GAAP. Fair value is determined usingThe Company follows the principles ofguidance prescribed by ASC Topic 820, Fair Value MeasurementMeasurements. Fair, which establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value that focuses on an exit price which is described as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard establishes a three-level hierarchy for fair value hierarchy prioritizes and definesmeasurements based on the nature of inputs toused in the valuation techniquesof an asset or liability as follows:of the measurement date.
Level 1: Observable inputs such as unadjusted quoted prices in active markets.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 asset or liability either directlyliability. These include quoted prices for similar assets or through corroboration withliabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, data.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 condensed 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 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 charged to expense as incurred.
| | | | | | | | | | | | | | |
| Asset Class | | | Estimated Useful Lives |
| Equipment | | | 5 years |
| Furniture and fixtures | | | 3 years |
| Leasehold improvements | | | Term of the lease |
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
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
Level 3: Unobservable inputs.
The inputs usedcomparison of the carrying amount of an asset to measurethe 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 an asset or a liability are categorized within levelsthe asset. During the three and six months ended June 30, 2023 and 2022, no impairments have occurred.
Derivative Financial Instruments
The convertible and promissory notes include embedded derivatives requiring bifurcation in accordance with ASC 815, Derivatives and Hedging. The valuation of the fair value hierarchy.instruments are determined using widely accepted valuation techniques including the probability weighted expected return model. The fair value measurement is categorized in its entirety inwas determined using a model with the same levelassumptions for equity value proceeds, probability of occurrence of various liquidation scenarios, timeline to liquidity and risk-free interest rate. The fair value 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 expensesderivative instruments are carriedmeasured at cost, which approximates fair value due to the short-term nature of these instruments.
Notes Receivable at Fair Value
As permitted under ASC 825, Financial Instruments ("ASC 825"), the Company has elected the fair value option for the notes receivable (“Notes”) issued to Elicio. In accordance with ASC 825, the Company recognizes these Notes at fair valueeach reporting period with changes in fair value recognizedreported 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 condensedaccompanying consolidated statementbalance sheets due to certain changes in control events that are outside of operations. The fair value option maythe 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, 2022. Subsequent adjustments of the carrying values to the ultimate redemption values would be applied instrumentmade only if it becomes probable that such a liquidation event will occur. During this reporting period an immaterial error was discovered in Former Elicio's 2022 audited financial statements whereas the amount of Series A and Series B Preferred Stock did not include 41,887 and 609,755 shares, respectively, that were issued due to the antidilutive protection triggered by instrument, but it is irrevocable.the Series C shares issued in October 2022 at a price below $1.00. As a result of applying the fair value option, direct costsMerger, all Former Elicio preferred stock were converted into common stock on June 1, 2023. See Note 7.
Income Taxes
The Company provides for income taxes in accordance with ASC Topic 740, Income Taxes. Deferred tax assets and feesliabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws in effect in the years in which the differences are expected to reverse. A valuation allowance is provided if, based upon the 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 issuanceCompany management determines that it is probable that a loss will be incurred related to these matters and the amount of the Notes were recognized in the condensed consolidated statementloss is reasonably determinable. The Company has not identified any significant uncertain tax positions as of operations as incurred and not deferred. The estimated fair value of the Notes is determined by utilizing a scenario-based analysis considering possible outcomes available to the holders of the Notes. See Note 4. Accrued interest receivable for the Notes has been included in the change in fair value of the Notes in the condensed consolidated statement of operations.June 30, 2023.
Research and Development
Research and development costs include, but are not limitedcharged to payrollexpense as incurred and personnelconsist of expenses laboratoryincurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical studies, compound manufacturingexpenses, stock-based compensation expense, depreciation of equipment, contract services, and other outside expenses. The Company accrues for costs consulting costsincurred by external service providers, based on estimates of services performed and allocated overhead, including rent, equipment, depreciationcosts.These estimates include the level of services performed by the third parties, and utilities.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 statement of operations as well as the reduction of the ROU asset.
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
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 agreements with various Contract Research Organizations (“CROs")elected to combine lease and third-party vendors. Research and development accruals of amounts due to the CROnon-lease components as a single component. Operating leases 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 expensesrecognized on the condensed consolidated balance sheet. Payments made to CROs under such arrangementssheet as ROU lease assets, current lease liabilities and non-current lease liabilities. Fixed rents are included in advancethe calculation of the performancelease 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 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 servicesresearch expenses recorded in operations. Advances from the grant that have yet to be recognized are recorded as prepaid expensesrestricted cash if the grant requires the funds to be isolated from general cash and other current assets until the services are rendered. cash equivalents.
Stock-based Compensation
The Company makes judgmentsissues stock-based awards to employees and estimatesnon-employees, generally in determining the accrued expenses balanceform of stock options. The Company accounts for stock-based awards in each reportingaccordance with ASC 718, Compensation—Stock Compensation, which requires all stock-based payments, to be recognized in the condensed 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. As actual costs become known,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 Common Stock, assumptions the Company adjustsmakes for the volatility of its accrued expenses. ForCommon Stock, the three months ended March 31, 2023expected term of its stock options, the risk-free interest rate for a period that approximates the expected term of its stock options and 2022,its expected dividend yield.
Compensation cost of awards that contain a performance condition are recognized when success is considered probable during the Company has not experienced any material differences between accrued costsperformance period.
Prior to the merger, there was no public market for Former Elicio’s Common Stock. The estimated fair value of the 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, the board of directors considered, among other things, input from management and actual costs incurred.valuations of Former Elicio's common stock prepared by third-party valuation firms performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants' Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Following the Merger, the fair value of common stock is based on the closing stock price on the date of grant as reported on the Nasdaq Global Select Market.
Net Loss Per Share
Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share excludes the potential impact of 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 three and six months ended March 31,June 30, 2023 and 2022, basic and diluted net loss per common share are the same.
Recently IssuedAdopted Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (ASU No. 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
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
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. The Company adopted ASU No. 2016-13 on January 1, 2023 and the adoption of the standard had no material impact on its condensed consolidated financial statements.
Note 3—Merger and Related Transactions
As described in Note1, 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 accounting acquirer for financial reporting purposes. This determination was based on the facts that, immediately following the Merger: (i) Former Elicio stockholders own a substantial majority of the voting rights; (ii) Former Elicio designated a majority (six of nine) of the initial members of the board of directors of the combined company; (iii) Former Elicio’s executive management team became the 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 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 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 receive 0.0181 shares of Angion common stock, which resulted in the 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 Company common stock being issued and outstanding immediately following the effective time of the 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 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 right to purchase a number of shares of the Company’s common stock equal to Exchange Ratio multiplied by the number of shares of Former Elicio common stock previously represented by such options and warrants.
In connection with execution of the Merger Agreement, Angion made a bridge loan to 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 principal amount of $6.25 million on account of a $5.0 million loan upon delivery by Former Elicio to Angion of Former Elicio’s audited financial statements for the year ended December 31, 2022.
As part of the recapitalization, the Company obtained the assets and liabilities listed below (in thousands):
| | | | | | | | |
| Cash and cash equivalents | $ | 24,000 | |
| Other current assets | 539 | |
| Promissory Notes | 10,028 | |
| Accrued liabilities | (2,438) | |
| Net assets acquired | $ | 32,129 | |
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
Note 3—RevenuePer the terms of the Merger Agreement, upon completion of the Merger, all obligations owed by Former Elicio related to the bridge loan were automatically forgiven and Deferred Revenuethe amount advanced by Angion, along with any accrued and unpaid interested, was credited towards the net cash balance used to calculate the assets and liabilities listed above. Upon settlement of the bridge loan, the Company recognized a gain of $0.6 million related to the fair value of the embedded derivatives associated with the bridge loan.
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 termnet assets acquired, excluding the promissory notes and transaction costs of its estimated period$2.9 million, as a reduction to additional paid-in capital in the condensed consolidated statements of performance using a cost-based input method under Topic 606.
Vifor License Agreement
In November 2020, the Company granted Vifor Pharma, an exclusive, global (excluding Greater China), royalty-bearing licenseconvertible preferred stock and stockholders’ equity (deficit) for the commercialization of ANG-3777 in all Renal Indications, beginning with delayed graft function (DGF)three and AKI associated with cardiac surgery involving cardiopulmonary bypass (CSA-AKI). The Vifor License also grants Vifor Pharma exclusive rights, with a right to sublicense subject to Company’s consent for certain specified conditions, to develop and manufacture ANG-3777 for commercialization in Renal Indications worldwide (excluding Greater China) in cooperation with Angion or independently. The Company retains the right to develop and commercialize combination therapy products combining ANG-3777 with its other proprietary molecules, subject to Vifor Pharma's right of first negotiation with respect to global (excluding Greater China) rights to such combination therapy products in the Renal Indications.
Pursuant to the Vifor License and specifically based upon the clinical development plan for ANG-3777 set forth in the Vifor License, the Company was entitled to receive $80 million in upfront and near-term clinical milestone payments. The Company received $60.0 million in upfront and equity payments, including $30.0 million in up-front cash received in November 2020, and a $30.0 million equity investment, $5.0 million of which was a convertible note that subsequently converted into common stock with the IPO and $25.0 million of which was received in the Concurrent Private Placement with the Company’s IPO. The Company was 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 DGF and CSA-AKI. For the threesix months ended March 31, 2022, the Company recognized $1.6 million contract revenue related to the Vifor License. The Company completed its performance obligations under the Vifor License agreement and recognized all deferred revenue in 2022.
On October 26, 2021, the Company announced that its Phase 3 trial of ANG-3777 in DGF did not achieve its primary endpoint and 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 14, 2021, the Company announced its Phase 2 trial of ANG-3777 in CSA-AKI did not achieve its primary endpoint. The Vifor License included additional milestone and royalty objectives related to the clinical development plan for ANG-3777 which had included a Phase 3 study for CSA-AKI and a Phase 4 confirmatory study in DGF. The Company does not expect to receive any clinical, post-approval, or sales milestones, or royalties, as it does not intend to continue to pursue the current clinical development plan for ANG-3777. The Company continues to discuss with Vifor Pharma the analyses of the results of the clinical trials announced in the fourth quarter of 2021 and the future of the collaboration with Vifor.June 30, 2023.
Note 4—Fair Value Measurements
The following tables present the Company's financial assets and liabilities measured at fair value on a recurring basis and their assigned levels within the fair value hierarchy (in thousands):
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| June 30, 2023 |
| Level 1 | | Level 2 | | Level 3 | | Total |
Money market funds(1) | $ | 18,634 | | | $ | — | | | $ | — | | | $ | 18,634 | |
| | | | | | | |
| Total assets | $ | 18,634 | | | $ | — | | | $ | — | | | $ | 18,634 | |
| Warrant liabilities | $ | — | | | $ | — | | | $ | 32 | | | $ | 32 | |
| | | | | | | |
| Total liabilities | $ | — | | | $ | — | | | $ | 32 | | | $ | 32 | |
ANGION BIOMEDICA CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
| | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2023 |
| Level 1 | | Level 2 | | Level 3 | | Total |
Money market funds(1) | $ | 28,284 | | | $ | — | | | $ | — | | | $ | 28,284 | |
| Notes receivable | — | | | — | | | 9,678 | | | 9,678 | |
| Total assets | $ | 28,284 | | | $ | — | | | $ | 9,678 | | | $ | 37,962 | |
| Warrant liabilities | $ | — | | | $ | — | | | $ | 9 | | | $ | 9 | |
| Total liabilities | $ | — | | | $ | — | | | $ | 9 | | | $ | 9 | |
| | | December 31, 2022 | | December 31, 2022 |
| | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
Money market funds(1) | Money market funds(1) | $ | 9,860 | | | $ | — | | | $ | — | | | $ | 9,860 | | Money market funds(1) | $ | 5,340 | | | $ | — | | | $ | — | | | $ | 5,340 | |
| Total assets | Total assets | $ | 9,860 | | | $ | — | | | $ | — | | | $ | 9,860 | | Total assets | $ | 5,340 | | | $ | — | | | $ | — | | | $ | 5,340 | |
| Warrant liabilities | $ | — | | | $ | — | | | $ | 19 | | | $ | 19 | | |
| Total liabilities | $ | — | | | $ | — | | | $ | 19 | | | $ | 19 | | |
|
_________________
(1) Included in cash and cash equivalents on the condensed consolidated balance sheets. This balance includes cash requirements settled on a nightly basis.
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 assets and liabilities measured atin the fair value of the Company’s common stock warrant liability (in thousands):
| | | | | | | | | | | | | | | |
| Warrants Liability | | Notes Receivable | | |
| Balance, beginning of the period | $ | 19 | | | $ | — | | | |
| Issuance of Notes receivable | — | | | 10,000 | | | |
| Change in fair value | (10) | | | (322) | | | |
| Balance, end of the period | $ | 9 | | | $ | 9,678 | | | |
| | | | | | | | | |
| June 30,
2023 | June 1,
2023 | |
| Balance, beginning of the period | $ | — | | $ | — | | |
| Existing Angion Warrant Liability | 9 | | — | | |
| Change in fair value | 23 | | — | | |
| Balance, end of the period | $ | 32 | | $ | — | | |
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- datedlong-dated volatilities) inputs.
The change in the fair value of the notes receivable for which the fair value option was elected (see Note 6) for the three months ended March 31, 2023, was related to the changes in market rates and probabilities related to certain scenarios, as well as the passage of time from the original issuance date.
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 modelBlack-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.
The Company records the change in the fair value of common stock warrants in change in fair value of warrant liability in the condensed consolidated statements of operations.
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
The fair value of the common stock warrant liability was estimated using the following assumptions:
| | | March 31,
2023 | | December 31,
2022 | | June 30,
2023 | | June 1,
2023 |
| Weighted average strike price | Weighted average strike price | $7.60 | | $7.60 | Weighted average strike price | $76.00 | | $76.00 |
| Contractual term (years) | Contractual term (years) | 5.4 | | 5.7 | Contractual term (years) | 5.2 | | 5.2 |
| Volatility (annual) | Volatility (annual) | 100.0% | | 112.4% | Volatility (annual) | 164.1% | | 100.0% |
| Risk-free rate | Risk-free rate | 3.9% | | 4.3% | Risk-free rate | 4.1% | | 3.9% |
| Dividend yield (per share) | Dividend yield (per share) | 0.0% | | 0.0% | Dividend yield (per share) | 0.0% | | 0.0% |
Note 5—Balance Sheet Components
Prepaid and Other Current Assets
Prepaid and other current assets consisted of the following (in thousands):
| | | | | | | | | | | |
| March 31,
2023 | | December 31,
2022 |
| Angion Pty tax receivable | $ | 305 | | | $ | 305 | |
| | | |
| Prepaid insurance | 967 | | | 291 | |
| Security deposit | 53 | | | 101 | |
| Other | 405 | | | 246 | |
| Total prepaid and other current assets | $ | 1,730 | | | $ | 943 | |
| | | | | | | | | | | |
| June 30,
2023 | | December 31,
2022 |
| Prepaid research and development contract services | $ | 2,278 | | | $ | 2,132 | |
| Advanced professional fees | 241 | | | 648 | |
| Prepaid insurance | 714 | | | 104 | |
| Return of collateral for letter of credit | 618 | | | — | |
| Miscellaneous receivables | 557 | | | — | |
| | | |
| Other prepaid expenses and other current assets | 135 | | | 36 | |
| Total prepaid and other current assets | $ | 4,543 | | | $ | 2,920 | |
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
| | | | | | | | | | | |
| March 31,
2023 | | December 31,
2022 |
Equipment | $ | — | | | $ | 866 | |
Furniture and fixtures | — | | | 34 | |
Leasehold improvements | — | | | 68 | |
Total property and equipment | — | | | 968 | |
Less: accumulated depreciation | — | | | (695) | |
Property and equipment, net | $ | — | | | $ | 273 | |
| | | | | | | | | | | |
| June 30,
2023 | | December 31,
2022 |
| Equipment | $ | 1,643 | | | $ | 1,787 | |
| Furniture and fixtures | 374 | | | 359 | |
| Leasehold improvements | 124 | | | 124 | |
| | | |
| Total property and equipment | 2,141 | | | 2,270 | |
| Less: accumulated depreciation | (1,222) | | | (1,123) | |
| Property and equipment, net | $ | 919 | | | $ | 1,147 | |
Depreciation expense for each of the three and six months ended March 31,June 30, 2023 and 2022 was immaterial. All property and equipment was disposed as of March 31, 2023 and the Company recognized a loss on disposal of $0.3 million in the condensed consolidated statements of operations.
Accrued ExpensesOther long-term prepaid assets
Accrued expensesOther long-term prepaid assets consisted of the following (in thousands):
| | | | | | | | | | | |
| March 31,
2023 | | December 31,
2022 |
| Accrued compensation | $ | 130 | | | $ | 112 | |
| Accrued restructuring (Note 11) | 242 | | | 1,572 | |
| Accrued direct research costs | 236 | | | 774 | |
| Accrued operating expenses | 495 | | | 111 | |
| Total accrued expenses | $ | 1,103 | | | $ | 2,569 | |
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
Accrued Expenses
Accrued expenses consisted of the following (in thousands):
| | | | | | | | | | | |
| June 30,
2023 | | December 31,
2022 |
| Accrued professional fees | $ | 709 | | | $ | 180 | |
| Accrued compensation and benefits | 1,489 | | | 1,491 | |
| Accrued research and development | 112 | | | 260 | |
| Other operating expenses | 5 | | | 4 | |
| Total accrued expenses | $ | 2,315 | | | $ | 1,935 | |
Note 6—Notes Receivable6 — Research Grant
In September 2022, Former Elicio entered into a grant agreement with The Gastro-Intestinal Research Foundation (“GIRF”), a not-for-profit organization focused on supporting research to treat, cure and prevent digestive diseases. Of the $2.8 million award, $2.3 million was received in September 2022 and the remaining $0.5 million was received in June 2023 with the completion of the development efforts as defined in the agreement.
For the three and six months ended June 30, 2023, the Company incurred $1.4 million and $1.9 million, respectively, in research and development expenses related to this project. The award money was earned and recognized as a contra research and development expense as the expenses were incurred.
Note 7—Convertible Preferred Stock, Common Stock and Stockholders' Equity
Authorized Shares
The Company's current Amended and Restated Certificate of Incorporation authorizes 300,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share.
Convertible Preferred Stock
Former Elicio’s convertible preferred stock consisted of Series A preferred stock (“Series A Preferred Shares”), Series B preferred stock (“Series B Preferred Shares”) and Series C preferred stock (“Series C Preferred Shares”).
Series C Convertible Preferred Stock
In May 2022, Elicio authorized the sale and issuance of up to 760,200 shares of $0.06 par value Series C Preferred Shares at an original issuance price of $66.30 per share and up to 325,800 shares of Series C Preferred for the settlement of the Convertible Notes Payable. The Series C Preferred Shares financing was structured to be issued in rolling closes in 2022.
From the period May through June 2022, Elicio issued 103,637 shares of Series C Preferred Shares for gross proceeds of approximately $1.5 million.Elicio incurred cash issuance costs of approximately $0.3 million in connection with executionthese shares.
Conversion of Convertible Preferred Stock
On June 1, 2023, Former Elicio completed the Merger with Angion in accordance with the Merger Agreement. Under the terms of the Merger Agreement, Angion made a bridge loanimmediately prior to Elicio pursuant to a note purchase agreement (Note Purchase Agreement) and Notes up to an aggregate principal amount of $12.5 million. The Notes were issued at a 20% original issue discount, with an initial closing held substantially concurrently with the executioneffective time of the Merger, Agreementeach share of Former Elicio’s preferred stock was converted into a share of Former Elicio’s common stock. At closing of the merger, the Company issued an aggregate of 5,375,751 shares of its common stock to Former Elicio stockholders, based on an exchange ratio of 0.0181 shares of the Company’s common stock for a principal amounteach share of $6.25 million on accountFormer Elicio’s common stock outstanding immediately prior to the Merger, including those shares of a $5.0 million loan in Januarycommon stock issued upon
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
conversion of the Former Elicio preferred stock. No shares and 103,637 shares of convertible preferred stock were issued during the six months ended June 30, 2023 and an additional closing for a principal amount2022, respectively.
The authorized, issued and outstanding shares of $6.25 million on accountthe convertible preferred stock and liquidation preferences of a $5.0 million loan upon delivery byFormer Elicio to Angionas of Elicio’s audited financial statements for the year ended December 31, 2022 were as follows (in thousands, except share and per share amounts):
| | | | | | | | | | | | | | | |
| 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 | | | | |
The Series A and Series B Preferred Shares changed as of October 18, 2022 into 132,387 and 1,927,375 preferred shares (retroactively restated for the reverse recapitalization as described in March 2023. The Notes mature one year from their issuance date and bear simple interestNote 3) due to the antidilutive protection triggered by the Series C shares issued in October 2022 at 1.0% annually from and after the datea price below $1.00.
As a result of the Merger, Agreement based on a principal amount equal to the amount actually advanced by Angion. As of March 31, 2023, Angion has issued an aggregate loan amount of $10 million which is recorded at a fair value4,997,920 shares of $9.68 million in notes receivable included within current assets on the condensed consolidated balance sheet.
The Company has elected the fair value option for recognition of the Notes. As such, the Notes are recognized at their estimated fair value with changes in fair value recognized in the condensed consolidated statements of operations. A loss of $0.4 million was recognizedFormer Elicio preferred stock (retroactively restated for the initial fair value upon the issuancereverse recapitalization as described in Note 3) were converted into 4,997,920 outstanding shares of the Notes, and a gain of $0.1 million was then recognizedFormer Elicio's common stock to be exchanged for the three months ended March 31, 2023 for the change in fair valuesame number of the Notes. Accrued interest for the Notes has been included in the change in fair value of notes receivable in the condensed consolidated statements of operations.
Note 7—Stockholders' Equity
Common Stock
Each share of common stock entitles the holder to one vote on all matters submitted to a voteshares of the Company’s stockholders. Common stockholders are not entitled to receive dividends, unless declared by the board of directors.common stock.
Note 8—Stock-Based Compensation
Stock Options
The fair value2012 Plan and 2022 Plan
Pursuant to the Merger Agreement, the Company assumed the Former Elicio 2022 Equity Incentive Plan and the Former Elicio 2012 Equity Incentive Plan (the “Former Elicio Plans”) and all stock options issued and outstanding under the Former Elicio Plans and each outstanding and unexercised option to purchase Former Elicio common stock was adjusted with such stock options henceforth representing the right to purchase a number of each employee and non-employeeshares of the Company’s common stock. Any restriction on the exercise of any Former Elicio stock option grant was estimatedassumed by the Company will continue in full force and effect and the term, exercisability, vesting schedule, accelerated vesting provisions, and any other provisions of such Former Elicio stock option will otherwise remain unchanged; provided, however, that the Company’s board of directors or a committee thereof will succeed to the authority and responsibility of Former Elicio’s board of directors or any committee thereof with respect to each Former Elicio stock option assumed by the Company.
2015 Plan
In June 2019, Angion approved an Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”) permitting the granting of incentive stock options, non-statutory stock options, restricted stock and other stock-based awards. Following the effectiveness of the 2021 Equity Incentive Plan (“2021 Plan”), the Company ceased making grants under the 2015 Plan. However, the 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it. Shares of common stock subject to awards granted under the 2015 Plan that cease to be subject to such awards by forfeiture or otherwise after the termination of the 2015 Plan will be available for issuance under the 2021 Plan.
2021 Plan and Amendment to 2021 Plan
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
On January 25, 2021, Angion’s board of directors approved the 2021 Plan (“2021 Plan”) which permits the granting of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to employees, directors, officers and consultants. The 2021 Plan provides that the number of shares reserved and available for issuance will automatically increase each January 1 by the lesser of 5% of the Company’s common stock outstanding on the dateimmediately preceding December 31, or such lesser number of grant usingshares as determined by the Black-Scholes option-pricing model based onCompany’s board of directors. On March 17, 2023, Angion’s board of directors approved an amendment to the following assumptions.2021 Plan to increase the cumulative number of shares of common stock reserved for issuance thereunder by 30,113 shares.
As of June 30, 2023, 566,844 shares under the 2021 Plan remain available for future grants.
Stock Options
The following table summarizes information and activity related to the Company’s stock options:
| | | Number of
Stock Options | | Weighted Average
Exercise Price | | Weighted Average
Remaining Contractual Life
(in years) | | Total
Intrinsic Value
(in thousands) | | 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 | Outstanding as of December 31, 2022 | 3,726,247 | | | $ | 6.30 | | | 7.0 | | $ | — | | Outstanding as of December 31, 2022 | 854,076 | | | $ | 5.24 | | | 7.72 | | $ | — | |
| | Options forfeited | (46,561) | | | 6.54 | | | |
| | Outstanding as of March 31, 2023 | 3,679,686 | | | $ | 6.30 | | | 6.9 | | $ | — | | |
| Options granted | | Options granted | 135,526 | | | 10.00 | | |
| Existing Angion Options outstanding | | Existing Angion Options outstanding | 351,656 | | | 62.04 | | |
| Options exercised | | Options exercised | (35,709) | | | 6.99 | | |
| Forfeited (unvested) | | Forfeited (unvested) | (20,292) | | | 30.96 | | |
| Outstanding as of June 30, 2023 | | Outstanding as of June 30, 2023 | 1,285,257 | | | $ | 20.62 | | | 7.68 | | $ | 3,509 | |
| Options vested and exercisable | Options vested and exercisable | 2,599,189 | | | $ | 6.82 | | | 6.2 | | $ | — | | Options vested and exercisable | 558,512 | | | $ | 41.00 | | | 5.59 | | $ | 586 | |
The aggregate intrinsic value in the above table is calculated as the difference between the estimated fair value of the Company's common stock price and the exercise price of the stock options. No135,526 stock options were granted in the threesix months ended March 31,June 30, 2023. The weighted average grant date fair value per share for the stock option grants during the threesix months ended March 31, 2022June 30, 2023 was $1.19.$10.00. As of March 31,June 30, 2023, the total unrecognized compensation related to unvested stock option awards granted was $1.1$2.7 million, which the Company expects to recognize over a weighted-average period of approximately 2.31.4 years.
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ANGION BIOMEDICA CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
Restricted Stock Units (RSUs)
The following table summarizes information and activity related to the Company’s RSUs:
| | | | | | | | | | | | | | | |
| | | | | Number of
Restricted Stock Units | | Weighted
Average Grant
Date Fair Value
Per Share |
| Outstanding at December 31, 2022 | | | | | 16,046 | | | $ | 9.51 | |
| | | | | | | |
| Vested and released | | | | | (244) | | | $ | 9.51 | |
| Outstanding as of March 31, 2023 | | | | | 15,802 | | | $ | 9.51 | |
| | | | | | | |
Performance-based Restricted Stock Units (PSUs)
The Company granted 556,530 PSUs in June 2019. Vesting of the PSUs is dependent upon the satisfaction of both a service condition and a performance condition, an initial public offering or a change of control, as defined in the 2015 Plan. As the IPO occurred in February 2021, the performance condition was met and 185,510 PSUs vested and were released upon the closing of the IPO. Another 185,510 PSUs vested and were released in June 2021 and July 2022 upon the second and third anniversary of the grants, respectively, therefore, as of March 31, 2023, the Company had no PSUs outstanding.
Stock-based Compensation Expense
The following table summarizes total stock-based compensation expense recorded in the condensed consolidated statements of operations (in thousands):
| | | Three Months Ended
March 31, | | | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2023 | | 2022 | | | 2023 | | 2022 | | 2023 | | 2022 |
| Research and development | Research and development | $ | 41 | | | $ | (448) | | | Research and development | $ | 229 | | | $ | 71 | | | $ | 412 | | | $ | 132 | |
| General and administrative | General and administrative | 311 | | | 479 | | | General and administrative | 50 | | | 42 | | | 91 | | | 138 | |
| Total | Total | $ | 352 | | | $ | 31 | | | Total | $ | 279 | | | $ | 113 | | | $ | 503 | | | $ | 270 | |
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
The fair value of each option is estimated on the date of grant using Black-Scholes with the assumptions noted in the table below. The fair value of an award with only a service condition is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Compensation cost of awards that contain a performance condition are recognized when success is considered probable during the performance period. The Company has elected to account for forfeitures as they occur, rather than estimating the number of awards that are expected to vest. 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. The Company uses the simplified method because it does 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 the Company's expectation of not paying dividends in the foreseeable future.
The fair value of each employee and non-employee stock option grant was estimated on the date of grant using Black-Scholes based on the following assumptions.
| | | | | | | | | | | | | | | | | | | | | | | |
| Options | Three months ended June 30, | | Six months ended June 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
| Risk-free interest rate | 3.7% | | 2.3% | | 3.7% | | 2.3% |
| Expected dividend yield | 0.0% | | 0.0% | | 0.0% | | 0.0% |
| Expected term in years (employees) | 6.00 | | 6.54 | | 6.00 | | 6.54 |
| Expected volatility | 71.9% - 72.5% | | 60.3% - 62.1% | | 71.9% - 72.5% | | 60.3% - 62.1% |
In March 2021 and June 2022, certain employees of the Company early exercised options to purchase shares of Common Stock. The shares had not fully vested at the time of exercise and were recorded as an unvested option exercise liability. As the shares vest, the Company recognizes the shares and related expense as issuance of common stock upon settlement of restricted stock on the Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity for the periods ended June 30, 2023 and December 31, 2022.
Employee Stock Purchase Plan
In January 2021, the board of directors of the CompanyAngion approved the Employee Stock Purchase Plan (the “ESPP”). The ESPP was effective on the date immediately prior to the effectiveness of the Company'sAngion's registration statement relating to the IPO. A total of 390,000 shares of common stock were initially reserved for issuance under the ESPP. The offering period and purchase period will bewas determined by the Boardboard of Directors.directors. Pursuant to the Merger Agreement, the Company assumed the ESPP. No offering periods or purchasing periods were active as of June 30, 2023. As of March 31,June 30, 2023, 689,58368,958 shares under the ESPP remain available for purchase and no offerings have been authorized.
Restricted Stock Units
In March 2021, the Company granted an employee restricted stock units (RSUs) with service and performance vesting conditions. The completion of the Merger satisfied the performance vesting criteria and triggered accelerated vesting for all unvested RSUs. As a result, the employee received 41,005 shares on June 1, 2023. To pay for the tax withholdings that were due upon vesting of the RSUs, the employee sold 14,455 shares to the Company, which are held in treasury stock as of June 30, 2023.
Note 9—Warrants
As of March 31, 2023 and December 31, 2022, outstanding warrants to purchase the Company's common stock consisted of the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Classification | | Exercise Price | | Expiration Date | | March 31,
2023 | | December 31,
2022 |
| Warrants issued with conversion of Convertible Notes to Common Stock | Equity | | $ | 8.03 | | | 8/31/23 | | 232,287 | | | 232,287 | |
| Warrants issued with Units in the Equity Offering | Equity | | $ | 8.03 | | | 8/31/23 | | 875,034 | | | 875,034 | |
| Broker Warrants issued with Equity Offering | Equity | | $ | 0.01 | | | 8/31/25 | | 1,297 | | | 1,297 | |
| Consultant Warrants | Liability | | $ | 7.60 | | | 8/31/28 | | 39,505 | | | 39,505 | |
| Total Warrants | | | | | | | 1,148,123 | | | 1,148,123 | |
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ANGION BIOMEDICA CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
In accordance with ASC 815, the warrants classified as liabilities are recorded at fair value at the issuance date, with changes in the fair value recognized in the condensed consolidated statements of operations at the end of each reporting period. Refer to Note 4 for changes in the fair value recognized during the periods reported.
In accordance with ASC 815, the warrants classified as equity do not meet the definition of a derivative and are classified in stockholders' equity in the condensed consolidated balance sheets.
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ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
There was no warrant activity during the threesix months ended March 31, 2023.June 30, 2023, other than the assumption of the previously issued Angion warrants by the Company.
The following table summarizes information regarding Common Stock warrants outstanding at June 30, 2023:
| | | | | | | | | | | | | | |
| 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 | | 5.2 |
| Outstanding at June 30, 2023 | 148,764 | | | $ | 54.19 | | 6.5 |
Note 10—Commitments and Contingencies
Operating Leases
The
In July 2021, the Company leasedsigned an operating lease for office and laboratory space in Uniondale, New York from NovaPark, a related party, under an agreement classified as an operatingBoston, Massachusetts (the “Boston Lease”).The Boston lease expiring on June 20, 2026. The Company's lease did not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Variable expenses generally representcommenced in February 2022 with the Company's share of the landlord's operating expenses, including management fees. The Company did not act as a lessor or have any leases classified as financing leases. In March 2023, the Company entered into a Surrender Agreement with NovaPark LLC which terminated its Uniondale, New York lease. The Surrender Agreement also provided that no other rent or charges would be due from the Company with respect to any period prior to or subsequent to the surrender of the property to NovaPark, thereby relieving the Company of lease payments equal to approximately $3.86 million, plus other amounts for facility fees and utilities with respect to the Property. See Note 15 for additional information.
The Company leased office space in Fort Lee, New Jersey, comprising approximately 2,105 square feet for approximately $0.1 million per year, under a non-cancelable operating lease through March 31, 2022. This arrangement was excluded from the calculation of lease liabilities and right of use assets as its term was less than one year. The lease was subject to charges for common area maintenance and other costs. The Company did not renew the New Jersey lease and it expired on March 31, 2022.
In July 2020, the Company entered into a lease for office furniture in San Francisco, California set to expire in July 2025, with an immaterial annualJanuary 2030. The lease payment.
In February 2021,has rent payments escalating annually, which totals $11.1 million. As a result, at the commencement of the lease the Company entered intorecognized a right-of-use lease asset of $8.0 million with a corresponding lease liability of $8.0 million based on the present value of the minimum rental payments. In addition, the Company will make payments for operating expenses and real estate taxes. In June 2023, the Company changed the bank that secured the letter of credit for the deposit on the lease and has a deposit in the amount of $0.7 million, which was reported as Restricted Cash on the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022.
As part of the Merger Agreement, the Company also assumed a lease for clinical and regulatory space in Newton, Massachusetts (the “Newton lease”), comprising approximately 6,157 square feet for approximately $0.2 million per year, under a non-cancelable operating lease through June 30, 2024. Pursuant to
Lease expense for all leases for the Newton lease,three and six months ended June 30, 2023 was $0.3 million and $0.7 million, respectively, and $0.3 millionand$0.5 million, for the Company had fourthree and six months ended June 30, 2022, respectively. All expenses are included in operating expenses in the accompanying condensed consolidated statements of free rent starting from February 15, 2021 to June 14, 2021. The Company has one option to extend the term of the lease for three years with nine months’ notice. As of April 1, 2023 the Company’s primary business address is associated with the Newton’s lease.
The following table summarizes the components of the Company's operating lease costs (in thousands):
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | |
| 2023 | | 2022 | | | | |
| Operating lease cost | $ | 27 | | | $ | 413 | | | | | |
| Variable lease cost | — | | | 52 | | | | | |
| Short-term lease cost | — | | | 6 | | | | | |
| Total operating lease cost | $ | 27 | | | $ | 471 | | | | | |
The following table summarizes quantitative information about the Company's operating leases (dollars in thousands):
| | | | | | | | | | | |
| Six Months Ended
June 30, |
| 2023 | | 2022 |
| Operating cash flows from operating leases | $ | 648 | | | $ | 489 | |
| Right-of-use assets exchanged for operating lease liabilities | $ | — | | | $ | 8,017 | |
| Weighted-average remaining lease term—operating leases (in years) | 5.9 | | 7.0 |
| Weighted-average discount rate—operating leases | 7.9 | % | | 8.0 | % |
As of June 30, 2023, maturities of lease liabilities were as follows (in thousands):
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| 2023 | | 2022 |
| Operating cash flows from operating leases | $ | 57 | | | $ | 323 | |
| Right-of-use assets exchanged for operating lease liabilities | $ | — | | | $ | — | |
| Weighted-average remaining lease term—operating leases (in years) | 1.2 | | 3.7 |
| Weighted-average discount rate—operating leases | 2.1 | % | | 9.4 | % |
| | | | | | | | |
| Year Ended December 31, | | Amounts |
| | |
| 2023 (remaining six months) | | $ | 751 | |
| 2024 | | 1,427 | |
| 2025 | | 1,349 | |
| 2026 | | 1,383 | |
| 2027 | | 1,425 | |
| Thereafter | | 3,232 | |
| Total | | 9,567 | |
| Less present value discount | | (2,163) | |
| Operating lease liabilities | | 7,404 | |
| Less: operating lease liability, current portion | | (985) | |
| Operating lease liability, noncurrent portion | | $ | 6,419 | |
As of March 31, 2023, maturities of lease liabilities were as follows (in thousands):
| | | | | | | | |
| Year Ended December 31, | | Amounts |
| | |
| 2023 (remaining nine months) | | $ | 173 | |
| 2024 | | 123 | |
| 2025 | | 7 | |
| | |
| | |
| Total | | 303 | |
| Less present value discount | | (6) | |
| Operating lease liabilities | | $ | 297 | |
Financing obligation
In 2021, the Company entered into an immaterial sale and leaseback arrangement with a third-party financing institution as a financing mechanism to fund certain of its capital expenditures primarily related to operating equipment, whereby the physical asset is sold concurrent with an agreement to lease the asset back. The initial leaseback term is 42 months starting from November 2021. The arrangement included a renewal option as well as a repurchase option at fair value with a cap at the end of the term. The arrangement did not qualify as an asset sale as control of the equipment did not transfer to the third party and was accounted for as a failed sale-leaseback. Therefore, the Company accounted for the arrangement as a financing transaction and recorded the proceeds received as a financing obligation. The leased assets were included in property and equipment, net on the condensed consolidated balance sheets and were subject to depreciation.
In March 2023, Angion terminated its sale and leaseback arrangement and exercised its repurchase option to buy back the previously leased assets for $0.2 million.
LitigationLegal Proceedings
From time to time, the Company may be involved in legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of its business or otherwise. Following announcement of the Merger Agreement with Eliciothe Company on January 17, 2023, and the filing of a Registration Statement on Form S-4 on February 13, 2023, a lawsuit was filed in the United States District Court for the Eastern District of New York on February 17, 2023 by a purported stockholder of Angion in connection with the proposed merger between Angion and Elicio.the Company. The lawsuit was captioned Klein v. Angion Biomedica Corp., et al., No. 1:23-cv-01313 (E.D.N.Y.). The Klein complaint named as defendants Angion, and the members of the Angion Board. The Klein complaint alleged claims for violations of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against all defendants, and violations of Section 20(a) of the Exchange Act against the members of the Angion Board. The plaintiff contended that the registration statement on Form S-4 initially filed with the SEC on February 13, 2023 omitted or misrepresented material information regarding the proposed merger between Angion and Elicio,the Company, rendering the registration statement false and misleading. The Klein complaint sought injunctive and declaratory relief, as well as damages. On February 21, 2023, the plaintiff filed a notice of voluntary dismissal of the Klein lawsuit. Although the plaintiffs voluntarily dismissed this case, litigation of this type is prevalent in mergers involving public companies, and other potential plaintiffs may file lawsuits challenging the Merger.
The outcome of any additional future litigation is uncertain. Such litigation, if not resolved, could prevent or delay completion of the Merger and result in substantial costs to Angion,the Company, including any costs associated with the indemnification of directors and officers. One of the conditions to the completion of the Merger is the absence of any lawsuits or order from a governmental entity (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits the consummation of the Merger. Therefore, if a plaintiff were successful in
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ANGION BIOMEDICA CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
obtaining an injunction prohibiting the consummation of the Merger on the agreed-upon terms, then such injunction may prevent the Merger from being completed, or from being completed within the expected timeframe. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is completed may adversely affect Angion’s business, financial condition, results of operations and cash flows.
Indemnification
The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuantmay be exposed to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is minimal.
Note 11—Restructuring and Long-Lived Asset impairment
The Company has incurred restructuring and impairment expenses due to the significant cut in the number of employees from its reductions in force announced in January and July 2022 and its suspension of certain of its operations in deference to its 2022 Strategic Realignment which impacted the use of its leased facilities. In 2022, the Company incurred restructuring and impairment expenses in the amount of $9.2 million. Included in restructuring expenses were $6.2 million one-time termination benefit charges incurred in connection with the reductions in force announced in January and July 2022 and noncash impairment charges of $3.0 millionlitigation in connection with its long-lived assets primarily associatedproducts under development and operations. The Company’s policy is to assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. The Company is not aware of any material legal matters.
License Agreements
In July 2012 and January 2016, Former Elicio licensed certain intellectual property from a university. The license term for both licenses extends until terminated by either party under certain provisions. The Company is 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 its leased facility in Uniondale, New York (See Note 10 for additional information). Of the $6.2 million of termination benefit charges incurred, $1.1 million was paidminimum annual royalty payments commencing in the three monthscalendar year after commercialization. In January 2019, Former Elicio licensed additional intellectual property and terminated a license obtained in July 2012 from the university. No commercialization royalties have been achieved.
Future minimum annual maintenance payments are $0.1 million for the year ended MarchDecember 31, 20222023 and $1.4 million was paid infor each year thereafter. Future minimum annual payments are due until the three months ended March 31, 2023. The Company expects to paytermination of the remaining $0.2 million by the end of September 2023.agreement.
Note 12—11—Income Taxes
The Company’sCompany did not record a provision or benefit for income tax provision was immaterial and the effective tax rate was 0% in each oftaxes during the three and six months ended March 31,June 30, 2023 and 2022. The difference betweenAs of June 30, 2023 and December 31, 2022, the Company's effective tax rate of 0% and the U.S. federal statutory tax rate of 21% is primarily dueCompany continues to net operating losses in this period which are offset by the corresponding valuation allowance. The Company has providedmaintain a full valuation allowance against all of its net deferred tax assets as it is more likely than not such assets would not be realized.
In assessing the realizationin light of deferred tax assets, management considers whether it is more likely than not some portion or allits history of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income in which those temporary differences become deductible. Based on the available objective evidence, management believes it is more likely than not thecumulative net deferred tax assets at March 31, 2023 will not be realizable. Accordingly, management has maintained a full valuation allowance against its net deferred tax assets at March 31, 2023. Each reporting period, management evaluates the need for a valuation allowance on the Company’s deferred tax assets by jurisdiction and adjust the Company’s estimates as more information becomes available.
The Company is required to recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, the position will be sustained upon examination. Tax years starting from 2015 and forward are subject to examination by the U.S. federal and state tax authorities. These years are open due to net operating losses and tax credits remain unutilized from such years. The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of March 31, 2023, there were no accruals for interest and penalties related to uncertain tax positions.losses.
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ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)
Note 13—Employee Benefit Plan
Employee Benefit Plan
The Company sponsors a retirement savings plan intended to qualify for favorable tax treatment under Section 401(a) of the Code, and contains a cash or deferred feature intended to meet the requirements of Section 401(k) of the Code. Participants may make pre-tax and certain after-tax (Roth) salary deferral contributions to the plan from their eligible earnings up to the statutorily prescribed annual limit under the Code. Participants who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up contributions. Participant contributions are held in trust as required by law. No minimum benefit is provided under the plan. An employee’s interest in his or her salary deferral contributions is 100% vested when contributed. Contributions, subject to established limits, are matched at a dollar for dollar rate up to 3% of an individual’s earnings and fifty cents on the dollar on the next 4-5% of earnings.
Note 14—12—Net Loss Per Share
The following table sets forthCompany has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the computationweighted-average number of shares of Common Stock outstanding for the Company’speriod, without consideration for potentially dilutive securities. The Company computes diluted net loss per share of Common Stock after giving consideration to all potentially dilutive shares of Common Stock, including options to purchase Common Stock and Preferred Stock, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential shares of Common Stock and Preferred Stock have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.
Basic and diluted net loss per share attributable to common stockholders which excludes shares which are legally outstanding but subject to repurchase by the Companywas calculated at June 30, as follows (in thousands, except share and per share data):
| | | Three Months Ended
March 31, | | | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2023 | | 2022 | | | 2023 | | 2022 | | 2023 | | 2022 |
| Numerator | Numerator | | | | | Numerator | | | | | | | |
| Net loss | Net loss | $ | (4,537) | | | $ | (14,240) | | | Net loss | $ | (7,559) | | | $ | (7,299) | | | $ | (15,586) | | | $ | (14,359) | |
| Denominator: | Denominator: | | | | | Denominator: | | | | | | | |
| Weighted-average shares used in computing net loss per share, basic and diluted | Weighted-average shares used in computing net loss per share, basic and diluted | 30,114,113 | | 29,959,251 | | Weighted-average shares used in computing net loss per share, basic and diluted | 3,100,957 | | 314,572 | | 1,720,202 | | 313,148 |
| Net loss per share, basic and diluted | Net loss per share, basic and diluted | $ | (0.15) | | | $ | (0.48) | | | Net loss per share, basic and diluted | $ | (2.44) | | | $ | (23.20) | | | $ | (9.06) | | | $ | (45.85) | |
The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share because to do so would be anti-dilutive:
| | | Three Months Ended
March 31, | | Six Months Ended
June 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| Convertible preferred stock | | Convertible preferred stock | — | | | 2,059,762 | |
| Shares issuable upon exercise of stock options | Shares issuable upon exercise of stock options | 3,679,686 | | 5,814,847 | Shares issuable upon exercise of stock options | 1,285,257 | | 8,515 |
| Shares issuable upon the exercise of warrants | Shares issuable upon the exercise of warrants | 1,148,123 | | 1,148,123 | Shares issuable upon the exercise of warrants | 148,764 | | 127,982 |
| Unvested shares under restricted stock unit grants | 15,802 | | 202,650 | |
| Options to purchase Common Stock | | Options to purchase Common Stock | — | | 250,288 |
| | Total | Total | 4,843,611 | | 7,165,620 | Total | 1,434,021 | | 2,446,547 |
Note 15—13—Related Party Transactions
On February 25,The Company paid $0.3 million and $0.7 million for the three and six months ended June 30, 2023, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2022, the Company entered into a Separation Agreementrespectively, for consulting services provided by an entity affiliated with Itzhak D. Goldberg, M.D., who formerly served as Executive Chairman and Chief Scientific Officer and currently serves as a director and Chairman Emeritus on the Company’s former interim chief financial officer and former board of directors. Pursuant to the terms of the Separation Agreement, Dr. Goldberg will receive severance benefits of approximately $1.2 million. As of March 31, 2023, $1.0 million has been paid and the remaining $0.2 million is expected to be paid by the end of September 2023. Under the 2015 Plan and 2021 Plan, Dr. Goldberg has vested his PSUs and stock options and will have the right to exercise vested stock options, so long as he remains in continuous service with the Company as a director on the board of directors.
On March 1, 2022, the Company entered into a Separation Agreement with Elisha Goldberg, former employee and son of Itzhak D. Goldberg, M.D. Pursuant to the terms of the Separation Agreement, as of March 31, 2023, Mr. Goldberg had received severance benefits of approximately $0.5 million. Mr. Goldberg also had the right to exercise vested stock options he received under the 2015 Plan or 2021 Plan for an extended period of 11 months until December 31, 2022. None of the vested stock options were exercised by Mr. Goldberg.
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ANGION BIOMEDICA CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements (Continued)member.
Ohr Investment
In a series of investments in November 2013 and July 2017, the Company invested a total of $150,000 to acquire a membership interest in Ohr Cosmetics, LLC (“Ohr”), an affiliated company.
The Company owns, and the family of the Company's Chairman Emeritus owns, approximately 2.4% and 81.3%, respectively, of the membership interests in Ohr. The Chairman Emeritus' son is the manager of Ohr. In addition, the Company’s President and Chief Executive Officer and director, and Mr. Ganzi, and the Company’s Lead Independent Director, each own approximately 1.6% of the membership interests in Ohr.
In November 2013, the Company granted Ohr an exclusive worldwide license, with the right to sublicense, under the Company's patent rights covering one of the Company's CYP26 inhibitors, ANG-3522, for the use in treating conditions of the skin or hair. Sublicensees may not grant further sublicenses under the Company's patent rights other than to affiliates of such sublicensees and entities with which sublicensees are collaborating for the research, development, manufacture and commercialization of the products. Ohr will pay the Company a royalty at a rate in the low single digits on gross revenue of products incorporating ANG-3522, and milestone payments potentially totaling up to $9.0 million based on achievement of sales milestones. Royalties and milestone payments will be paid until the later of 15 years from the first commercial sale of a licensed product or the last to expire licensed patent rights. The royalty rate is subject to adjustments under certain circumstances. The Company believes the Ohr License was made on terms no less favorable to the Company than those the Company could obtain from unaffiliated third parties. On February 5, 2023, the Company and Ohr executed the First Amendment to the Ohr license agreement. Such amendment allows Ohr access to the Company’s CYP26 inhibitors beyond ANG-3522 for the use in of treating conditions of the skin and hair, eliminates the Company’s obligation to prosecute or maintain the patents rights licensed to Ohr at its principal expense, and allows Ohr to prosecute and maintain such patent rights its sole own expense. No revenue from this license agreement was recognized for the periods presented.
NovaPark Investment and Lease
The Company had a 10% interest in NovaPark. Members of the Company's Chairman Emeritus’ immediate family own a majority of the membership interests of NovaPark. The Company accounted for its aggregate 10% investment in NovaPark under the equity method. In March 2023, Angion entered into a Surrender Agreement with NovaPark which terminated the Agreement of Lease, dated as of June 21, 2011, as amended, of its office and laboratory space in Uniondale, New York for a termination fee of $3.03 million and entered into a Membership Interest Redemption Agreement with NovaPark to relinquish its 10% membership interest in NovaPark, accounted as Investment in Related Parties in the condensed consolidated balance sheets. The net loss resulting from the lease termination and relinquishment of investment in Novapark was immaterial and recognized in research and development expenses in the condensed consolidated statement of operations for the three months ended March 31, 2023.
The following table provides the activity for the NovaPark investment for the three months ended March 31, 2023 and 2022 (in thousands):
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | |
| 2023 | | 2022 | | | | |
| Beginning balance | $ | 724 | | | $ | 723 | | | | | |
| Earnings from equity method investment | — | | | 9 | | | | | |
| Write off of equity method investment | (724) | | | — | | | | | |
| | | | | | | |
| Ending balance | $ | — | | | $ | 732 | | | | | |
The Company leased office and laboratory space in Uniondale, New York from NovaPark under a lease expiring June 20, 2026. As of December 31, 2022, the Company was no longer conducting operations in its leased facility in Uniondale, New York. See Note 11 for additional information regarding the impairment charge the Company recorded in connection with leased facility. Due to the lease termination, no rent expense or variable expenses were recorded for the three months ended March 31, 2023. The Company recorded rent expense for fixed lease payments of $0.3 million and variable expenses related to the lease of $0.1 million in the three months ended March 31, 2022.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-Kaudited financial statements and accompanying notes for the year ended December 31, 2022.2022 and 2021 included in our proxy statement/prospectus/information statement on Form S-4 filed April 26, 2023, as amended (the “Form S-4”). In addition to the historical financial information, this discussion contains forward-looking statements involving risks, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under the section of this Quarterly Report on Form 10-Q titled “Risk Factors,” which you should carefully to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Forward-Looking Statements” at the beginning of this report.
Overview
We had beenare a clinical-stage biopharmaceuticalbiotechnology company focused on the discovery, development, and commercializationdeveloping a pipeline of novel small molecule therapeutics to address chronic and progressive fibrotic diseases, prior to our 2022 Strategic Realignment. Our goal was to transform the treatment paradigmimmunotherapies for patients suffering from these potentially life-threatening conditions for which there are no approved medicines or where existing approved medicines have known limitations. Our product candidates and programs included ANG-3070, a TKI formerly in development as a treatment for fibrotic diseases; a ROCK2 preclinical program targeted towards the treatment of fibrotic diseases; a CYP11B2 preclinical program targeted towards diseases relatedcancer and other diseases. For therapies designed to aldosterone synthase dysregulation;engage the immune system to treat disease, it is critical to target activation to lymph nodes where adaptive immune responses are generated. Our proprietary Amphiphile, or AMP, platform delivers immunotherapeutics directly to the lymph nodes. We believe this site-specific delivery of disease-specific antigens, adjuvants, and a CYP26 (retinoic acid metabolism) inhibitor program targeted towards a numberother immunomodulators will more efficiently educate, activate, and amplify critical immune cells, resulting in induction and persistence of indications, including cancer; and ANG-3777, a HGF mimetic. If we do not completepotent adaptive immunity required to treat many diseases. Our lead product candidate, ELI-002, is currently in phase 1 trials with initial data presented at the merger transaction with Elicio, we could move forward with developing ANG-3070 and conducting further preclinical studies for its ROCK2 program.2023 American Society of Clinical Oncology (ASCO) Annual Meeting.
Our 2022 Strategic Realignment was announced following ouroperations through June 2022 termination1, 2023 have been financed primarily by aggregate net proceeds of our Phase 2 “JUNIPER” dose-finding trial for ANG-3070 in patients with primary proteinuric kidney diseases, specifically FSGS$89.1 million from the issuance of convertible preferred stock, convertible notes, and IgAN. The JUNIPER trial was terminated in the interestsexercise of patient safety based upon a reassessment of the risk/benefit profile of ANG-3070 in patients with established serious kidney disease. We completed the data collection work necessary related to the JUNIPER trial to ascertain whether the drugstock options and common stock warrants. Since inception, we have had any effect, positive or negative, in patients with fibrotic kidney diseases and determined there was no economically-viable path forward for ANG-3070 in primary proteinuric kidney diseases.
On January 17, 2023, we entered into and announced a definitive merger agreement with Elicio under which Elicio will merge with a wholly-owned subsidiary of Angion in an all-stock transaction (“Merger”). Upon completion of the Merger, the combined company will focus on advancing Elicio’s proprietary lymph node AMP technology to develop immunotherapies, with a focus on ELI-002, a therapeutic cancer vaccine targeting mKRAS-driven tumors.
We have currently suspended clinical development activities in anticipation of the announced Merger, do not have any products approved for sale and have not generated any revenue from product sales since our inception and do not expect to generate revenue from product sales unless we successfully develop, and we or our collaborators commercialize, our product candidates, which we do not expect to occur in the near future, if ever.significant annual operating losses. Our net losses were $4.5loss was $7.6 million and $14.2$7.3 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $15.6 million and $14.4 million for the six months ended June 30, 2023 and 2022, respectively. As of March 31,June 30, 2023, we had an accumulated deficit of $258.5 million.$122.6 million and $21.7 million in cash and cash equivalents.
Elicio Operating Company, Inc. (formerly known as “Elicio Therapeutics, Inc.”) was incorporated in Delaware as Vedantra Pharmaceuticals Inc. in August 2011. In December 2018, Former Elicio formed a wholly owned subsidiary, Elicio Securities Corporation, a Massachusetts corporation.
Our 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 unaudited condensed consolidated financial statements, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. Our unaudited condensed consolidated financial statements appearing elsewhere in this 10-Q statement have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Our unaudited condensed 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 we be unable to continue as a going concern.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future.
future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, attorneys and accountants, and incur other increased costs associated with being a public company. In addition, if and when we resumeseek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:
• advance our lead product candidate, ELI-002 to late stage clinical trials;
• advance our preclinical programs to clinical trials;
• expand our pipeline of product candidates;
• seek regulatory approval for our investigational medicines;
• maintain, expand, protect and defend our intellectual property portfolio;
• acquire or in-license technology;
• expand our clinical, scientific, management and administrative teams; and
• operate as a public company.
We believe that our cash on hand will enable us to fund our operations through calendar year 2023 based on our current plan. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured. 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 unaudited condensed consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern.
We have not had any products approved for sale. We do not expect to generate any product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates absent the completion of the announced Merger and ifcandidates. If we seekobtain regulatory approval for any of our product candidates, or those for which we retain the rightexpect to commercialize in the future, we would need to incur additional expenses as we develop and expand our clinical, regulatory, quality, manufacturing and commercialization capabilities, and incur significant commercialization expenses forrelated to product sales, marketing, sales, manufacturing and distributiondistribution. As a result, until such time, if ever, that we were to obtain marketing approval for suchcan generate substantial product candidates.
We have relied on third parties in the conduct of our preclinical studies and clinical trials and for manufacturing and supply of our product candidates. We have no internal manufacturing capabilities, and if we continue to develop product candidates,revenue, we expect to continuefinance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses or similar arrangements. However, we may be unable to relyraise additional funds or enter into such other arrangements when needed or on third parties, many of whom are single-source suppliers, for our preclinical studyfavorable terms, if at all. Any failure to raise capital as and clinical trial materials. In addition, we do notwhen needed could have a marketing or sales organization or commercial infrastructure. Accordingly, ifnegative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are ableunable to develop and obtain approval for one or more product candidates,raise capital, we will incur significant expenses to develop a marketing and sales organization and commercial infrastructure in advance of generating any product sales of wholly-owned product candidates or those for which we retain the right to commercialize.
Furthermore, we would need to make continued investmentdelay, reduce or terminate planned activities to reduce costs.
On January 17, 2023, we entered into a definitive merger agreement (the “Merger Agreement”) with Angion Biomedica Corp (“Angion”), a clinical-stage biotechnology company. In accordance with the terms and conditions of the Agreement and Plan of Merger and Reorganization, by and among Angion, Arkham Merger Sub, Inc., a wholly owned subsidiary of Angion (“Merger Sub”), and Elicio Therapeutics, 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, we completed the Merger in development studies, registration activitiesaccordance with the terms and conditions of the developmentMerger Agreement and changed our name from “Angion Biomedica Corp.” to “Elicio Therapeutics, Inc.” Immediately following the consummation of commercial support functions including quality assurance and safety pharmacovigilance before we would be in a position to sell anythe Merger, there were approximately 9.7 million shares of our product candidates, if approved.
Restructuringcommon stock outstanding on a fully-diluted basis, with Former Elicio equity holders collectively owning approximately 65.2% of Elicio and Long-Lived Asset impairment
We incurred restructuring and impairment expenses due to the significant cutAngion equity holders collectively owning approximately 34.8% of Elicio, in the number of employees from our reductions in force announced in January and July 2022 and suspension of certain of our operations in deference to our 2022 Strategic Realignment which impacted the use of our leased facilities. In 2022, we incurred restructuring and impairment expenses in the amount of $9.2 million. Included in restructuring expenses were $6.2 million one-time termination benefit charges incurred in connection with the reductions in force announced in January and July 2022 and noncash impairment charges of $3.0 million, recorded in the fourth quarter of 2022, in connection with our long-lived assets primarily associated with our leased facility in Uniondale, New York. Of the $6.2 million of termination benefit charges incurred, zero and $3.2 million was reported in operating expenses through our condensed consolidated statements of operations in the three months period ended March 31, 2023, and 2022, respectively. As of March 31, 2023, $1.4 million was paid in the first quarter of 2023 and we expect to pay the remaining $0.2 million of termination benefit charges by the end of September 2023.
License Agreements
License Agreement with Vifor Pharma
In November 2020, we granted Vifor Pharma, an exclusive, global (excluding Greater China), royalty-bearing license, for the commercialization of ANG-3777 in all Renal Indications, beginning with DGF and CSA-AKI. The Vifor License also grants Vifor Pharma exclusive rights, witheach case on a right to sublicense subject to our consent for certain specified conditions, to develop and manufacture ANG-3777 for commercialization in Renal Indications worldwide (excluding Greater China) in cooperation with us or independently. We retain the right to develop and commercialize combination therapy products combining ANG-3777 with our other proprietary molecules, subject to Vifor Pharma's right of first negotiation with respect to global (excluding Greater China) rights to such combination therapy products in the Renal Indications. Although the Vifor License includes additional milestone and royalty objectives, we do not expect to receive any clinical, post-approval, or sales milestones, or royalties, as we do not intend to continue to pursue the clinical development plan for ANG-3777, which had included a Phase 3 study for CSA-AKI and a phase 4 confirmatory study in DGF. We and Vifor continue to discuss the analyses of the results of the clinical trials announced in the fourth quarter of 2021 and the future of the collaboration.fully diluted basis.
Components of Results of Operations
The following discussion summarizes the key factors our management believes are necessary for an understanding of our financial statements.
Revenue
We do not have any products approved for sale and have not generated any revenue from product sales. Our revenue to date primarily has been derived from government funding consisting of U.S. government grants and contracts, and revenue under our license agreements, specifically the Vifor License.
Contract RevenueOperating Expenses
Our license agreements comprise elementsoperating expenses since inception have consisted primarily of upfront license fees, milestone payments based onresearch and development expenses and royalties based on net product sales. The timing of our operating cash flows may vary significantly from the recognition of the related revenue. Income from upfront payments is recognized when we satisfy the performance obligations in the contract, which can result in recognition at either a point in time or over the period of continued involvement. Other revenue, such as milestone payments, are recognized when achieved.general and administrative costs.
Our revenue to date has been generated from payments received pursuant to the Vifor License Agreement. We recognize revenue from upfront payments over the term of our estimated period of performance using a cost-based input method under Topic 606, Revenue from Contracts with Customers.
In addition to receiving an upfront payment, we may also be entitled to milestonesResearch and other contingent payments upon achieving predefined objectives. If a milestone is considered probable of being reached, and if it is probable that a significant revenue reversal would not occur, the associated milestone amount would also be included in the transaction price. We expect any license revenue we generate from any future collaborationDevelopment Expenses
partners, will fluctuate in the future as a result of the timing and amount of upfront, milestones and other collaboration agreement payments and other factors.
Operating Expenses
Research and Development Expenses
To date, ourOur research and development expenses haveconsist primarily related to discovery efforts and preclinical and clinicalof costs incurred for the development of our product candidates. We recognizecandidates and our drug discovery efforts, which include:
• personnel costs, which include salaries, benefits and equity-based compensation expense;
• expenses incurred under agreements with consultants and contract organizations that conduct research and
development activities on our behalf;
• costs related to sponsored research service agreements;
• costs related to production of preclinical and clinical materials, including fees paid to contract manufacturers;
• laboratory and vendor expenses related to the execution of preclinical studies and planned clinical trials; and
• laboratory supplies and equipment used for internal research and development expenses as they are incurred and payments made prior to the receipt of goods or services to be used inactivities.
We expense all research and development costs in the periods in which they are capitalized untilincurred. Costs for certain research and development activities are recognized based on an evaluation of the goods or services are received.progress to completion of specific tasks using information and data provided to us by our vendors and service providers.
Our research and development expenses have consisted primarily of:are not currently tracked on a program-by-program basis. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates. Substantially all our research and development costs are incurred on the development of ELI-002 and ELI-004, an AMP adjuvant that is a significant component of ELI-002, and our preclinical candidates.
▪personnel costs, including salaries, payroll taxes, employee benefitsWe expect our research and stock-based compensation,development expenses to increase substantially for personnelthe foreseeable future as we continue to invest in research and development functions;activities related to developing our product candidates, including investments in conducting clinical trials, manufacturing and otherwise advancing our programs. The process of conducting the clinical research necessary to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.
▪General and Administrative Expenses
Our general and administrative expenses consist primarily of personnel costs, including equity-based compensation, and other expenses for outside professional services, including legal, recruiting, audit and accounting and facility-related costs not otherwise included in research and development expenses. Personnel costs consist of salaries, benefits and equity-based compensation expense, for our personnel in executive and other administrative functions. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory and other fees and services associated with maintaining compliance with Nasdaq Stock Market LLC, or Nasdaq, Marketplace Rules, or the Nasdaq Listing Rules and Securities and Exchange Commission, or SEC, requirements, director and officer insurance costs and investor relations costs associated with medical affairs activities;
▪fees paid to consultants, clinical testing sites and contract research organizations (CROs), including in connection with our preclinical studies and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation, analysis and reporting;
▪contracted research and license agreement fees with no alternative future use;
▪costs related to acquiring, manufacturing and maintaining clinical trial materials and laboratory supplies;
▪depreciation of equipment and facilities;
▪legal expenses related to clinical trial agreements and material transfer agreements; and
▪costs related to preparation of regulatory submissions and compliance with regulatory requirements.
Other than with respect to reimbursable expenses required to be recorded under our government grants and contracts, we do not allocate our expenses by product candidates. A significant amount of our direct research and development expenses include payroll and other personnel expenses for our departments supporting multiple product candidate research and development programs and, other than as specified above, we do not record research and development expenses by product. For the three months ended March 31, 2023, research and development expenses primarily consisted of losses on the termination of lease obligations and associated loss on the disposal of property and equipment (see Note 5 and Note 11 to the condensed consolidated financial statements for additional information) due our suspended clinical development activities in anticipation of the announced Merger. For the three months ended March 31, 2022, research and development expenses were primarily driven by expenses relating to the development of ANG-3777 and ANG-3070.Income (Expense)
For the three and six months ended March 31,June 30, 2023 and 2022, 88%other income and 59%, respectively, of research and development expenses were from external third-party sources and the remaining 12% and 41%, respectively, were from internal sources.
General and Administrative Expenses
General and administrative expenses consistexpense consisted primarily of personnel-related expenses, such as salaries, payroll taxes, employee benefits and stock-based compensation, for personnelinterest income, foreign exchange transaction gains, changes in executive, operational, finance and human resources functions. Other significant general and administrative expenses include insurance costs, accounting and legal services and expenses associated with the Merger and obtaining and maintaining patents.
Other Income (Expense)
Notes Receivable Recorded at Fair Value
As permitted under ASC 825, Financial Instruments, we have elected the fair value option for recognition of ourthe embedded derivative, gain and loss from the settlement of promissory notes, receivable issued to Elicio. Our notes receivable are subject to re-measurement each reporting period withand gains and losses reported throughrelated to the re-measurement of our condensed consolidated statements of operations.warrant liabilities.
Warrant Liability
We have accounted for certain of our freestanding warrants to purchase shares of our common stock as liabilities measured at fair value, in accordance with ASC 815, Derivatives and Hedging. The warrants are subject to re-measurement at each reporting period with gains and losses reported through our condensed consolidated statements of operations.
Foreign Exchange Transaction Gain
Foreign currency transaction gains, primarily related to intercompany loans, are recorded as a component of other income (expense) in our condensed consolidated statements of operations.
Earnings in Equity Method Investment
Earnings in equity method investment represents our 10% interest in NovaPark accounted for under the equity method. We wrote off our investment in NovaPark during the three months ended March 31, 2023. (See Note 15 to our condensed consolidated financial statements for additional information).
Interest Income
Interest income consists of interest earned on our cash and cash equivalents.
Results of Operations
Comparison of the Three Months Ended March 31,June 30, 2023 and 2022
The following table summarizes our results of operations for the periods indicated:
| | | Three Months Ended
March 31, | | | Three Months Ended
June 30, | |
| | 2023 | | 2022 | | $ Change | | % Change | | 2023 | | 2022 | | $ Change | | % Change |
| | | | | | | | | | (In thousands, except percentages) |
| (In thousands, except percentages) | |
| Revenue: | | |
| Contract revenue | $ | — | | | $ | 1,648 | | | $ | (1,648) | | | (100) | % | |
| | Total revenue | — | | | 1,648 | | | (1,648) | | | (100) | % | |
| Operating expenses: | Operating expenses: | | | | | | | Operating expenses: | | | | |
| | Research and development | Research and development | 326 | | | 11,667 | | | (11,341) | | | (97) | % | Research and development | $ | 4,944 | | | $ | 5,041 | | | $ | (97) | | | (2) | % |
| General and administrative | General and administrative | 4,281 | | | 4,466 | | | (185) | | | (4) | % | General and administrative | 2,833 | | | 1,191 | | | 1,642 | | | 138 | % |
| | Total operating expenses | Total operating expenses | 4,607 | | | 16,133 | | | (11,526) | | | (71) | % | Total operating expenses | 7,777 | | | 6,232 | | | 1,545 | | | 25 | % |
| Loss from operations | Loss from operations | (4,607) | | | (14,485) | | | 9,878 | | | (68) | % | Loss from operations | (7,777) | | | (6,232) | | | (1,545) | | | 25 | % |
| Other income (expense), net | 70 | | | 245 | | | (175) | | | (71) | % | |
| Total other income (expense) | | Total other income (expense) | 218 | | | (1,067) | | | 1,285 | | | (120) | % |
| Net loss | Net loss | $ | (4,537) | | | $ | (14,240) | | | $ | 9,703 | | | Net loss | $ | (7,559) | | | $ | (7,299) | | | $ | (260) | | |
Contract RevenueResearch and Development Expenses
Contract revenue decreased by $1.6
Research and development expenses were $4.9 million for the three months ended March 31,June 30, 2023, compared to the same period in 2022. Contract revenue$5.0 million for the three months ended March 31, 2022June 30, 2022. The decrease of $0.1 million was primarily due to accelerationthe GIRF grant offsetting increased manufacturing and clinical trial expenses as the Company focused on ELI-002 clinical development.
General and Administrative Expenses
General and administrative expenses were $2.8 million for the three months ended June 30, 2023, compared to $1.2 million for the three months ended June 30, 2022. The increase of revenue recognition related$1.6 million was primarily due to higher personnel-related costs in support of organizational growth and higher professional fees incurred in connection with the upfront payment we received from Vifor Pharma whenMerger and operating as a public company.
Other Income/(Expense)
Other income/(expense) for the license agreementthree months ended June 30, 2023 was income of $0.2 million compared to expense of $1.1 million for the three months ended June 30, 2022. The decrease of $1.3 million was primarily due to reduced interest expense associated with Viforthe conversion of the convertible notes to preferred stock as part of the Series C Preferred Stock offering.
Pharma was entered into in 2020. We completed our performance obligations under the Vifor License Agreement by the second quarter of 2022 and recognized all deferred revenue asComparison of the endSix Months Ended June 30, 2023 and 2022
The following table summarizes our results of that period.operations for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended
June 30, | | | | |
| 2023 | | 2022 | | $ Change | | % Change |
| | | | | | | |
| (In thousands, except percentages) |
| Operating expenses: | | | | | | | |
| | | | | | | |
| Research and development | $ | 10,428 | | | $ | 9,220 | | | $ | 1,208 | | | 13 | % |
| General and administrative | 5,154 | | | 2,782 | | | 2,372 | | | 85 | % |
| | | | | | | |
| Total operating expenses | 15,582 | | | 12,002 | | | 3,580 | | | 30 | % |
| Loss from operations | (15,582) | | | (12,002) | | | (3,580) | | | 30 | % |
| Other income (expense), net | (4) | | | (2,357) | | | 2,353 | | | (100) | % |
| Net loss | $ | (15,586) | | | $ | (14,359) | | | $ | (1,227) | | | |
Research and Development Expenses
Research and development expenses decreased by $11.3were $10.4 million or 97%, for the threesix months ended March 31,June 30, 2023, compared to $9.2 million for the same period insix months ended June 30, 2022. The net decrease in research and development expensesincrease of $1.2 million was primarily due to a $6.4 million reductionan increase in external costs associated with manufacturing and clinical trial related expenses and R&D consulting and subcontractor expenses as a result of the completion of the ANG-3777 and termination of the ANG-3070 trials, a $4.7 million decrease in salary, bonus, and stock based compensation and related severance due to the reduction in headcount following the reduction in force announced in January 2022, and a decrease of $0.5 million in other operating expenses. These decreases were offset in part by a total increase of $0.3 million from the loss on disposal of property and equipment and losses recognized related to the termination of our Novapark lease obligation and sales lease back arrangement (see Note 5, Note 10 and Note 15 to our condensed consolidated financial statements for additional information).trials.
General and Administrative Expenses
General and administrative expenses decreased by $0.2were $5.2 million or 4%, for the threesix months ended March 31,June 30, 2023, compared to $2.8 million for the same period insix months ended June 30, 2022. The decrease in general and administrative expensesincrease of $2.4 million was primarily due to higher personnel-related costs in support of organizational growth and higher professional fees incurred in connection with the Merger and operating as a net decrease of $1.2 million in personnel-related expenses primarily in salary, bonus, severance and stock-based compensation related to the reduction in force announced in January 2022 and $0.6 million decreases in professional services expense, including audit, consulting and insurance fees. These net decreases were offset by an increase of $1.6 million in legal expenses primarily for Merger related expenses.public company.
Other Income Income/(Expense)
Other expense for the six months ended June 30, 2023 was income (expense) decreased by $0.2of $0.0 million compared to expense of $2.4 million for the threesix months ended March 31, 2023 compared to the same period inJune 30, 2022. The decrease isof $2.4 million was primarily due to a $0.2 million foreign currency transaction loss and a $0.3 million net loss in fair value onreduced interest expense associated with the note receivable due to remeasurement partially offset by a net increase of $0.4 million in interest income earned on our cash and cash equivalents. The remaining net fluctuations of $0.1 million were individually insignificant.convertible notes.
Liquidity and Capital Resources
Sources and Uses of Liquidity
WeOur operations through June 30, 2023 have incurredbeen financed primarily by aggregate net proceeds of $89.1 million from the issuance of common stock, convertible preferred stock, convertible notes, and the exercise of stock options and common stock warrants. Since inception, we have had significant operating losses. Our net loss was $15.6 million and $14.4 million for the six months ended June 30, 2023 and six months ended June 30, 2022, respectively. As of June 30, 2023, we had an accumulated deficit of $122.6 million and $21.7 million in cash and cash equivalents. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Our losses andfrom operations, negative operating cash flows fromand accumulated deficit, as well as the additional capital needed to fund operations since inception, and we anticipate we will incur losses for at least 12twelve months following the issuance date of ourthe unaudited condensed consolidated financial statements. To date,statements, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. The unaudited condensed consolidated financial statements appearing elsewhere in this Form 10-Q have been prepared on a basis that assumes that we havewill continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal
course of business. The unaudited condensed consolidated financial statements do not generatedinclude any revenue from product sales. We have funded our operations primarily through the receipt of grants, the sale of debt and equity securities, and proceeds from license agreements. As of March 31, 2023, we had $29.2 million of cash and cash equivalents and an accumulated deficit of $258.5 million, compared to $50.5 million of cash and cash equivalents and an accumulated deficit of $253.9 million as of December 31, 2022.
On March 10, 2023, Silicon Valley Bank (SVB), at which we maintained cash and cash equivalents in multiple accounts, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The failure of SVB exposed us to liquidity and credit risk prioradjustments relating to the completionrecoverability and classification of recorded asset amounts or the FDIC resolutionamounts and classification of SVB inliabilities that might be necessary should we be unable to continue as a manner that fully protects all depositors. At the end of March 2023, we transferred substantially all of our cash and cash equivalents from SVB to an asset manager.going concern.
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 for at least 12 months, well into 2024, following the issuance date of our condensed consolidated financial statements.through calendar year 2023. 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 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:
▪our ability to complete the Merger or, if the Merger is not completed, identify and consummate another strategic transaction;
▪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 its product candidates;
▪the extent to which COVID-19 may impact our business, and financial condition;
▪the outcome, costs and timing of seeking and obtaining and maintaining FDA and any foreign regulatory approvals;
▪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 itsour 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 or our collaborators can generate significant revenue from sales of product candidates, if ever, we expect to finance our operations through public or private equity offerings or debt financings or other sources of capital, including collaborations, licenses, credit or loan facilities, receipt of research contributions or grants, tax credit revenue or a combination of one or more of these funding sources. 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 raises funds through additional collaborations, or other similar arrangements with third parties, we may have to
relinquish valuable rights to its 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 itself.
Summary Statement of Cash Flows
The following table sets forth a summary of our net cash flow activity for the threesix months ended March 31,June 30, 2023 and 2022 (in thousands):
| | | Three Months Ended
March 31, | | Six Months Ended
June 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| Net cash provided by (used in) | Net cash provided by (used in) | | | | Net cash provided by (used in) | | | |
| Operating activities | Operating activities | $ | (8,079) | | | $ | (15,653) | | Operating activities | $ | (17,614) | | | $ | (9,517) | |
| Investing activities | Investing activities | (10,000) | | | — | | Investing activities | 13 | | | (559) | |
| Financing activities | Financing activities | (3,268) | | | (14) | | Financing activities | 31,552 | | | 1,247 | |
| Effect of foreign currency on cash | Effect of foreign currency on cash | 79 | | | (87) | | Effect of foreign currency on cash | (2) | | | — | |
| Net decrease in cash | $ | (21,268) | | | $ | (15,754) | | |
| Net increase (decrease) in cash | | Net increase (decrease) in cash | $ | 13,949 | | | $ | (8,829) | |
Operating activitiesActivities
For the threesix months ended March 31,June 30, 2023, net cash used in operating activities was $8.1$17.6 million, which primarily consisted of a net loss of $4.5$15.6 million and athe use of cash from the change in net operating assets and liabilities of $4.6$3.2 million which was partially offset by net non-cash charges of $1.0 million. The change in net operating assets and liabilities of $4.6 million was primarily the result of an increase in prepaid expenses of $1.6 million due to prepayment of business insurance and other services in the period, a decrease of $1.8 million in accounts payable due to the timing of vendor payments, the decrease of $1.1 million in accrued expenses due to the suspended clinical development activities in anticipation of the announced Merger and $0.1 million fluctuations that were individually insignificant. The $1.0 million of net non-cash charges primarily included stock-based compensation of $0.4 million, $0.3 million loss on the disposal of property and equipment and a $0.3 million loss from the changes in fair value of the notes receivable during the three months ended March 31, 2023.
For the three months ended March 31, 2022, net cash used in operating activities was $15.7 million, which primarily consisted of a net loss of $14.2 million, partially offset by net non-cash charges of $0.2 million and a use of cash from the change in net operating assets and liabilities of $1.6 million. The net non-cash charges were primarily related to the amortization of operating lease right-of-use assets of $0.2$1.2 million. The use of cash due to the change in net operating assets and liabilities was due to a $1.4 million reduction in deferred research obligation, $1.1 million increase in prepaid expenses, $0.3 million decrease in deferred revenueaccrued expense and accounts payable, and $0.3 million decrease in operating lease. The net non-cash charges were primarily related to $1.1 million of $1.6interest expense related to the accretion of promissory notes payable, $0.5 million of stock-based compensation, $0.4 million decrease in the right of use asset, $0.2 million of depreciation offset by $0.4 million in the fair value of the embedded derivative associated with the promissory notes payable and $0.6 million of gain on the settlement of the promissory notes payable.
For the six months ended June 30, 2022, net cash used in operating activities was $9.5 million, which primarily consisted of a net loss of $14.4 million partially offset by net non-cash charges of $3.1 million and $1.7 million from the change in net operating assets and liabilities. The gain in cash due to revenue recognizedthe change in the period, annet operating assets and liabilities was due to a $1.9 million increase of $1.5in accounts payable and accrued expenses, a $0.1 million decrease in prepaid expenses and other current assetsa $0.2 million decrease in operating lease. The net non-cash charges were primarily duerelated to the prepayment$2.4 million of business insurance,interest expense related to convertible notes, $0.3 million of stock-based compensation and a decrease$0.2 million of $1.3depreciation off set by $0.1 million in accounts payable due to the payment of CRO invoices, partially offset by an increase of $2.0 million in accrued expenses due to timing of invoices, and an increase of $0.2 million in other liabilities, noncurrent, for accrued severance, and a decrease of $0.8 million in grants receivable due to the fulfillmentfair value of the grant contractembedded derivative associated with the U.S. Department of Defense.convertible notes.
Investing activitiesActivities
For the threesix months ended March 31,June 30, 2023, $10 million in cash was used for the bridge loan to Elicio pursuant to Note Purchase Agreement in connection with execution of the Merger Agreement in January 2023.
For the three months ended March 31, 2022, no cash was provided by or used in investing activities.
Financing activities was immaterial.
For the threesix months ended March 31, 2023, the net cash used in financing activities was $3.3 million, consisting primarily of termination fee of $3.0 million for the Novapark lease termination and $0.2 million used to terminate our sale and leaseback arrangement. The remaining $0.1 million net cash used in financing activities was individually insignificant.
For the three months ended March 31,June 30, 2022, net cash used in investing activity was $0.6 million, which was driven by the purchase of fixed assets.
Financing Activities
For the six months ended June 30, 2023, net cash provided by financing activities was immaterial.$31.6 million as a result of the Merger.
For the six months ended June 30, 2022, net cash provided by financing activities was $1.2 million, consisting primarily of proceeds from the issuance of preferred stock.
Critical Accounting Policies and Significant Judgements and Estimates
Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments affecting the reported amounts of assets, liabilities, costs and expenses. We base our estimates on historical experience, known trends and events and various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our AnnualCurrent Report on Form 10-K for the year ended December 31, 2022, which was8-K filed with the SEC on March 17,June 2, 2023. During the threesix months ended March 31,June 30, 2023, except as described in Note 2 to the unaudited interim condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting policies from those previously disclosed.
Emerging Growth Company and Smaller Reporting Company Status
We are a smaller reporting company and an emerging growth company, as defined in 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)(“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 condensed 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 (Exchange Act)(the “Exchange Act”), which means the market value of equity securities held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter andor (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 3. 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.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal accounting and financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2023.
DisclosureOur principal executive officer and principal financial officer, after evaluating the effectiveness of our “disclosure controls and procedures are controls and other procedures designed to ensure information required to be disclosedprocedures” (as defined in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, withinRule 13a-15(e), or Rule 15d-15(e)), with the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on the evaluationparticipation of our disclosure controls and procedures, our President and Chief Executive Officer and our Chief Financial Officermanagement, have each concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting described below.
During the 2022 audit procedures performed around convertible preferred stock, an adjustment in the amount of $843,000, related to the modification of the Series A preferred stock dividend rights, and associated issuance of warrants during 2018 was identified. It was further determined the modification of the dividend rights and the issuance of warrants should have been accounted for as an extinguishment.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be detected on a timely basis. Although the identified adjustment was immaterial to our financial statements, we determined that there was a risk that a similar event could have occurred without being prevented or detected on a timely basis that could have given rise to a potentially material misstatement in our financial statements or disclosures.
Although we have initiated efforts to remediate this material weakness, including enhanced review processes to address infrequent, complex transactions, the material weakness has not been fully remediated as of March 31,June 30, 2023, and continues to be disclosed as a material weakness in the Company’s Form 10-Q for the three and six month periods ended June 30, 2023.
Our remediation efforts are intended to address the identified material weakness. Management is committed to continuous improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting
There wasOther than the material weakness described above, there were no changechanges in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act) that occurred during the quarter ended March 31,June 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitation on the Effectiveness Over Financial Reporting
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable and not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no assurance such improvements will be sufficient to provide us with effective internal control over financial reporting.
Part II OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of its business or otherwise. Following announcement of the merger agreement with Elicio on January 17, 2023, and the filing of a Registration Statement on Form S-4 on February 13, 2023, a lawsuit was filed in the United States District Court for the Eastern District of New York on February 17, 2023 by a purported stockholder of Angion in connection with the proposed merger between Angion and Elicio. The lawsuit was captioned Klein v. Angion Biomedica Corp., et al., No. 1:23-cv-01313 (E.D.N.Y.). The Klein complaint named as defendants Angion, and the members of the Angion Board. The Klein complaint alleged claims for violations of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against all defendants, and violations of Section 20(a) of the Exchange Act against the members of the Angion Board. The plaintiff contended that the registration statement on Form S-4 initially filed with the SEC on February 13, 2023 omitted or misrepresented material information regarding the proposed merger between Angion and Elicio, rendering the registration statement false and misleading. The Klein complaint sought injunctive and declaratory relief, as well as damages. On February 21, 2023, the plaintiff filed a notice of voluntary dismissal of the Klein lawsuit. Although the plaintiffs voluntarily dismissed this case, litigation of this type is prevalent in mergers involving public companies, and other potential plaintiffs may file lawsuits challenging the Merger.
The outcome of any additional future litigation is uncertain. Such litigation, if not resolved, could prevent or delay completion of the Merger and result in substantial costs to Angion,us, including any costs associated with the indemnification of directors and officers. One
Table of the conditions to the completion of the Merger is the absence of any lawsuits or order from a governmental entity (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits the consummation of the Merger. Therefore, if a plaintiff were successful in obtaining an injunction prohibiting the consummation of the Merger on the agreed-upon terms, then such injunction may prevent the Merger from being completed, or from being completed within the expected timeframe. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is completed may adversely affect our business, financial condition, results of operations and cash flows.Contents
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors, described in our Annual Report on Form 10-K for the year ended December 31, 2022,8-K filed on March 17, 2023, as amended on April 28,June 2, 2023 as well as the other information in this Quarterly Report on Form 10-Q, before deciding whether to invest in shares of our common stock. As previously disclosed, weThere have entered into the Merger Agreement with Elicio, and we have discontinued the clinical development of ANG-3070 for all indications and discontinued other development activities pending conclusion of the strategic process, except certain pre-clinical studies of ANG-3777 and certain other pre-clinical development.
Many of the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2022 are, and will be, exacerbated by any worsening of the global business and economic environment. The occurrence of any of the adverse developments describedbeen no material changes in our risk factors from those described in our current report on Form 8-K filed on June 2, 2023, other than the updates to the risk factors set forth below.
We have identified a material weakness in our internal control over financial reporting related to our control environment. If we do not remediate the material weaknesses in our internal control over financial reporting, or if we fail to establish and maintain effective internal control, we may not be able to accurately report our financial results, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our stock.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting in our periodic reports filed with the SEC. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could materiallyresult in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and adverselycorrected on a timely basis.
We have identified a material weakness in our internal control over financial reporting related to our control environment. More specifically, we have determined that we have not maintained adequate formal accounting policies, processes and controls related to complex transactions as a result of a lack of finance and accounting staff with the appropriate GAAP technical expertise needed to identify, evaluate and account for complex and non-routine transactions.
Over the next several months, we plan to implement a number of measures to address the material weakness we have identified. We plan to design additional controls around identification, documentation and application of technical accounting guidance with particular emphasis on complex and non-routine transactions. These controls are expected to include an additional review process to ensure that the correct conclusions are reached with respect to complex and non-routine transactions and avoid the potential for a material misstatement of our financial statements. We intend to complete the implementation of our remediation plan during 2023. However, we cannot assure you that we will be successful in remediating the material weakness we identified or that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.
Any failure to remediate the material weakness we identified or develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our business,operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial condition,statements for prior periods. Any failure to remediate the material weakness we identified or implement and maintain effective internal control over financial reporting could also adversely affect the results of operations or prospects. Inmanagement reports and independent registered public accounting firm audits of our internal control over financial reporting that case,we will eventually be required to include in our periodic reports that will be filed with the tradingSEC. Ineffective disclosure controls and procedures, and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our common stock could decline, and you may lose all or part of your investment.stock.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Use of Proceeds from the Initial Public Offering
On February 9, 2021, we closed our Initial Public Offering of 5,750,000 shares of our common stock at a public offering price of $16.00 per share, which includes the full exercise by the underwriters (Cowen and Company, LLC, Stifel, Nicolaus & Company, Incorporated, H.C. Wainwright & Co., LLC and Oppenheimer & Co. Inc) of their option to purchase an additional 750,000 shares of common stock. All of the shares of common stock issued and sold in our IPO were registered under the Securities Act pursuant to registration statement on Form S-1, as amended (Registration No. 333-252177), which was declared effective by the SEC on February 4, 2021. Aggregate net proceeds to Angion were $85.6 million, after deducting underwriting discounts and commissions of $6.4 million. None of the underwriting discounts and commissions or offering expenses were incurred or paid, directly or indirectly, to any of our directors or officers or their associates or to persons owning 10% or more of our common stock or to any of our affiliates.
Concurrently, we entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Vifor Pharma, pursuant to which we agreed to sell 1,562,500 shares of our common stock to Vifor Pharma at a purchase price of $16.00 per share (the Concurrent Private Placement), equal to the offering price per share in our IPO. All of the shares of common stock issued and sold in our IPO were registered under the Securities Act pursuant to registration statements on Form S-1, as amended (Registration No. 333-252177), which were declared effective by the SEC on February 4, 2021.
The Initial Public Offering and Concurrent Private Placement, which both closed on February 9, 2021, generated aggregate net proceeds of approximately $107.0 million, after deducting the underwriting discounts and commissions, private placement fee and estimated offering expenses of $10.0 million. As of March 31, 2023, we have used approximately $91.9 million of the aggregate net proceeds from our IPO.
There has been no material changes in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on February 5, 2021 pursuant to Rule 424(b)(4), except that given the clinical trial data on ANG-3777 reported in the fourth quarter of 2021, the termination of the JUNIPER trial and the suspension of certain of our clinical development activities as a result of our 2022 Strategic Realignment, we no longer intend to use the Use of Proceeds for the clinical development of ANG-3777 or ANG-3070, or any of our other product candidates if the Merger occurs. We have used proceeds for the 2022 Strategic Realignment.
Recent Sales of Unregistered Securities
There were no unregistered securities sold in three months ended March 31, 2023.None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.During the fiscal quarter ended June 30, 2023, none of our directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Item 6. Exhibits
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Exhibit
Number | | Exhibit
Description | | Incorporated by Reference | | Filed Herewith | |
| | Form | | Date | | Number | | |
| 2.1 | | | | 8-K | | 1/17/2023 | | 2.1 | | | |
| 3.1 | | | | 8-K | | 2/09/2021 | | 3.1 | | | |
| 3.2 | | | | 8-K | | 2/09/2021 | | 3.2 | | | |
| 4.1 | | Reference is made to exhibits 3.1 through 3.2. | | | | | | | | | |
| 4.2 | | | | S-1/A | | 2/01/2021 | | 4.2 | | | |
| 4.3 | | | | S-1 | | 1/15/2021 | | 4.3 | | | |
| 4.4 | | | | S-1 | | 1/15/2021 | | 4.6 | | | |
| 10.1 | | | | S-4 | | 2/13/2023 | | 10.23 | | | |
| 10.2 | | | | 10-K | | 3/17/2023 | | 10.17(a) | | | |
| 10.3 | | | | 10-K | | 3/17/2023 | | 10.18 | | | |
| 10.4 | | | | 10-K | | 3/17/2023 | | 10.19 | | | |
| 31.1 | | | | | | | | | | X | |
| 31.2 | | | | | | | | | | X | |
| 32.1^ | | | | | | | | | | X | |
| 32.2^ | | | | | | | | | | X | |
| 101.INS | | XBRL Instance Document. | | | | | | | | X | |
| 101.SCH | | XBRL Taxonomy Extension Schema Document. | | | | | | | | X | |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document. | | | | | | | | X | |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document. | | | | | | | | X | |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document. | | | | | | | | X | |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document. | | | | | | | | X | |
| 104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | | | | | | | | X | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Exhibit
Number | | Exhibit
Description | | Incorporated by Reference | | Filed Herewith | |
| | Form | | Date | | Number | | |
| 2.1 | | | | 8-K | | 1/17/2023 | | 2.1 | | | |
| 3.1 | | | | 8-K | | 2/09/2021 | | 3.1 | | | |
| 3.2 | | | | 8-K | | 2/09/2021 | | 3.2 | | | |
| 3.43 | | | | 8-K | | 6/02/2023 | | 3.3 | | | |
| 3.4 | | | | 8-K | | 6/02/2023 | | 3.4 | | | |
| 3.5 | | | | 8-K | | 6/02/2023 | | 3.5 | | | |
| 4.1 | | Reference is made to exhibits 3.1 through 3.2. | | | | | | | | | |
| 4.2 | | | | S-1/A | | 2/01/2021 | | 4.2 | | | |
| 4.3 | | | | S-1 | | 1/15/2021 | | 4.3 | | | |
| 4.4 | | | | S-1 | | 1/15/2021 | | 4.6 | | | |
| 10.1+ | | | | 8-K | | 6/02/2023 | | 10.2 | | | |
| 10.2 | | | Form of Indemnification Agreement between Elicio Therapeutics, Inc. and each of its directors and officers. | 8-K | | 6/02/2023 | | 10.8 | | | |
| 10.3 | | | | 8-K | | 6/02/2023 | | 10.13 | | | |
| 10.4 | | | | S-4/A | | 3/29/2023 | | 10.29 | | | |
| 10.5 | | | | S-4/A | | 3/29/2023 | | 10.30 | | | |
| 10.6 | | | | S-4/A | | 3/29/2023 | | 10.31 | | | |
| 10.7 | | | | S-4/A | | 3/29/2023 | | 10.32 | | | |
| 10.8 | | | | S-4/A | | 3/29/2023 | | 10.27 | | | |
| 10.9 | | | | S-4/A | | 3/29/2023 | | 10.28 | | | |
| 10.10 | | | | S-4/A | | 3/29/2023 | | 10.25 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Exhibit
Number | | Exhibit
Description | | Incorporated by Reference | | Filed Herewith | |
| | Form | | Date | | Number | | |
| 10.11 | | | | S-4/A | | 3/29/2023 | | 10.26 | | | |
| 10.12 | | | Note Purchase Agreement, dated Janaury 17, 2023, by and between Elicio Therapeutics and Angion Biomedica Corp., and Form of Promissory Note | 8-K | | 1/17/2023 | | 10.1 | | | |
| 10.13 | | | | S-4/A | | 3/29/2023 | | 10.34 | | | |
| 31.1 | | | | | | | | | | X | |
| 31.2 | | | | | | | | | | X | |
| 32.1^ | | | | | | | | | | X | |
| 32.2^ | | | | | | | | | | X | |
| 101.INS | | XBRL Instance Document. | | | | | | | | X | |
| 101.SCH | | XBRL Taxonomy Extension Schema Document. | | | | | | | | X | |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document. | | | | | | | | X | |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document. | | | | | | | | X | |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document. | | | | | | | | X | |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document. | | | | | | | | X | |
| 104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | | | | | | | | X | |
†Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K.
^ The certification that accompanies this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is not deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
+ Indicated management contract or compensatory plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | | | | |
| | ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC. |
| | | | |
| | By: | | /s/ JAY R. VENKATESAN, M.D.ROBERT CONNELLY |
| Date: | May 10,August 11, 2023 | | | Jay R. Venkatesan, M.D.Robert Connelly
President and Chief Executive Officer and Director (Principal (Principal Executive Officer) |
| | | | | | | | | | | | | | |
| | ANGION BIOMEDICA CORP.ELICIO THERAPEUTICS, INC. |
| | | | |
| | By: | | /s/ GREGORY S. CURHANBRIAN PIEKOS |
| Date: | May 10,August 11, 2023 | | | Gregory S. Curhan Brian Piekos
Chief Financial Officer (Principal Financial and Accounting Officer) |