Item 7. 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 consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to the historical financial information, this discussion contains forward-looking statements that involve 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 Annual Report on Form 10-K titled "Risk Factors," which you should read 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 are a clinical-stage biotechnology company advancing novel immunotherapies for the treatment of cancer, including mKRAS-positive pancreatic cancer, CRC, lung cancer and other mKRAS positive cancers. We intend to build on recent clinical successes in the personalized cancer immunotherapy space to develop effective, off-the-shelf immunotherapies. Our proprietary AMP technology aims to enhance the education, activation and amplification of cancer-specific T cells relative to conventional immunotherapy strategies, with the goal of promoting durable cancer immunosurveillance in patients. Recent advances have identified T cell responses as a key component of effective cancer immunotherapy and we believe our AMP technology can generate robust T cell responses in patients that can potentially translate to meaningful clinical benefit.
We believe the therapeutic utility of currently approved and development stage cancer immunotherapies is limited in many cases due to their inability to sufficiently localize to lymph nodes and adequately engage with the critical immune cells responsible for stimulating adaptive immunity.Our AMP technology is specifically intended to localize payloads to lymph nodes leading to the generation of a robust T cell response that we believe is critical to generate an anticancer immune response.
Our lead programs focus on our cancer immunotherapy product candidates, which target biologically validated driver tumor mutations using common and well-characterized neoantigens. This strategy results in an “off-the-shelf” therapeutic option allowing patients to receive treatment without delays due to manufacturing timelines and without the increased costs associated with personalized immunotherapy approaches.
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Our clinical pipeline includes the lymph node targeted cancer immunotherapy ELI-002 7P, currently being evaluated in a Phase 2 study, designed to stimulate an immune response against mKRAS pancreatic ductal adenocarcinoma (“PDAC”), the most common form of pancreatic cancer. The ELI-002 7P formulation is designed to provide broad immune responses targeting seven KRAS mutations that are observed in approximately 88% of PDAC patients and 25% of all solid tumors, thereby increasing the potential patient population for ELI-002 7P beyond PDAC alone. In August 2025, we announced that following the Independent Data Monitoring Committee’s (“IDMC”) pre-specified interim review of unblinded safety and efficacy data in our Phase 2 AMPLIFY-7P study in mKRAS-driven PDAC, the IDMC recommended that the trial continue to the final analysis without modifications. In addition, the IDMC confirmed the favorable safety profile of ELI-002 7P as of such date. We anticipate the final disease-free survival analysis to occur in the first half of 2026. ELI-002 2P (2-peptide formulation) has been studied previously in the Phase 1 (AMPLIFY-201) trial in patients with high relapse risk mKRAS-driven solid tumors, following surgery and chemotherapy. ELI-002 2P and ELI-002 7P also have been studied in patients with mKRAS-positive CRC in Phase 1 studies. The AMPLIFY-201 Phase 1 data for PDAC and CRC was presented at the ESMO Immuno-Oncology Congress 2024 and published in Nature Medicine (Wainberg et al, 2025) and included a 16.3-month median recurrence-free survival and 28.9-month median overall survival for the full study population. In the future, we plan to expand ELI-002 7P to other indications including mKRAS positive lung cancer and other mKRAS positive cancers.
Our preclinical pipeline includes the lymph node targeted immunotherapies ELI-007, currently being evaluated in preclinical studies for the treatment of mutant b-raf murine sarcoma viral oncogene homolog B1-(“BRAF”) driven cancers, and ELI-008, currently being evaluated in preclinical studies for use in the treatment of mutated tumor protein p53 (“TP53”)- expressing cancers. We believe that each of our immunotherapy product candidates, if approved, has the potential to reduce the risk of recurrence of tumors carrying specific oncogenic driver mutations.
Our operations to date have been financed primarily by aggregate net proceeds of $219.7 million from the issuance of common stock, pre-funded warrants, convertible preferred stock, convertible notes, promissory notes, the exercise of stock options and common warrants, the private placement of our securities, at-the-market offerings, and proceeds from the Merger with Angion Biomedica Corp. (“Angion”). Since inception, we have had significant annual operating losses. Our net loss was $39.6 million and $51.9 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $233.7 million and $18.6 million in cash and cash equivalents.
Elicio Therapeutics, Inc. (“Elicio” or the “Company”) was incorporated in Delaware as Vedantra Pharmaceuticals Inc. in August 2011. In 2023, the Company completed a reverse merger transaction with Angion, a clinical-stage biotechnology company, Arkham Merger Sub, Inc., a wholly owned subsidiary of Angion (“Merger Sub”), and Elicio Operating Company, Inc. (“Former Elicio”), pursuant to which Merger Sub merged with and into Former Elicio, with Former Elicio surviving the merger as a wholly owned subsidiary of Angion (the “Merger”). On June 1, 2023, the Company completed the Merger in accordance with the terms and conditions of the Merger Agreement and Angion changed its name from “Angion Biomedica Corp.” to “Elicio Therapeutics, Inc.” Following the Merger, Former Elicio and Elicio Australia Pty Ltd. (“Elicio Pty”), an Australian subsidiary established in August 2019 for the purpose of qualifying for research credits for studies conducted in Australia, became our wholly owned subsidiaries.
We are currently facing substantial doubt about our ability to continue as a going concern, given our cash position and cash runway. As of the filing date of this Annual Report on Form 10-K, we believe that our cash on hand will enable us to fund our operations into the third quarter of 2026 based on our current financial operating plan. This period could be shortened or lengthened if there are any significant increases or decreases in planned or actual spending on development programs or more rapid progress of development programs than anticipated. There is no assurance that financing will be available when needed to allow us to continue as a going concern. 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 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. We plan to address this condition through the sale of our common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions, but there is no assurance these plans will be completed successfully or at all.If we are unable to obtain additional capital when and as needed to continue as a going concern, we might have to further reduce or scale back our operations and/or liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.
Our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K 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 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, 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
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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 seek 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 7P, 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.
As of the filing date of this Annual Report on Form 10-K, we believe that our cash on hand will enable us to fund our operations into the third quarter of 2026 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.
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. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. Any failure to raise capital as and when needed could have a negative 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 unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.
Components of Results of Operations
The following discussion summarizes the key factors our management believes are necessary for an understanding of our financial statements.
Operating Expenses
Our operating expenses since inception have consisted primarily of research and development expenses and general and administrative costs.
Research and Development Expenses
Our research and development expenses consist primarily of costs incurred for the development of our product candidates 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 activities.
We expense all research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and service providers.
Our research and development expenses 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
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product candidates. Substantially all our research and development costs are incurred on the development of ELI-002 7P and our preclinical candidates.
We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development 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. At this time, we cannot reasonably estimate the nature, timing and costs of the efforts that will be needed to complete the development of, or the period, if any, in which material net cash inflows may commence from ELI-002 7P or any of our preclinical candidates. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:
•the scope, rate of progress and expense of our research and development activities;
•clinical trials and early-stage results;
•the terms and timing of regulatory approvals; and
•the ability to market, commercialize and achieve market acceptance for ELI-002 7P, or any of our preclinical candidates that we or our future collaboration partners may develop in the future.
Any of these variables with respect to the development of ELI-002 7P, or any other of our preclinical candidates that we may develop could result in a significant change in the costs and timing associated with the development of such candidates. For example, if the FDA or other regulatory authority were to require us to conduct preclinical and clinical studies beyond those which we currently anticipate will be required for the completion of clinical development or if we experience significant delays in enrollment in any clinical trials, we could be required to expend significant additional financial resources and time on the completion of our clinical development programs.
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 marketing, legal, audit and accounting, facility-related costs not otherwise included in research and development expenses, and recruiting. 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 the Nasdaq Marketplace Rules or the Nasdaq Listing Rules and SEC requirements, accounting and audit fees, director and officer insurance costs and investor relations costs associated with being a public company.
Other Expense
For the years ended December 31, 2025 and 2024, other income and expense consisted primarily of interest income and expense, foreign exchange transaction gains and losses, gain on sale of equipment, grant income, gains and losses related to the re-measurement of our warrant liabilities, and a loss on issuance of the July 2024 Pre-Funded Warrants.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
The following table summarizes our results of operations for the periods indicated:
Year Ended December 31,
(In thousands, except percentages)
Operating expenses:
_______________________
Research and Development Expenses
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Research and development expenses decreased by $8.8 million, or 26.0%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The net decrease in research and development expenses was primarily due to lower clinical costs as patients progressed into the observation phase the Phase 2 study of ELI-002 7P.
General and Administrative Expenses
General and administrative expenses increased by $1.5 million, or 13.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to an increase in headcount for 2025.
Other Expense
Other expense for the year ended December 31, 2025 was $1.9 million compared to other expense of$6.9 million for the year ended December 31, 2024. The decrease of $5.1 million was primarily due to the change in fair value associated with the outstanding liability-classified common warrants and the losses recognized from the March 2024 Offering and the July 2024 Public Offering.
Liquidity and Capital Resources
Sources and Uses of Liquidity
Since inception, we have had significant operating losses. Our net loss was $39.6 million and $51.9 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $233.7 million and $18.6 million in cash and cash equivalents. Our operations through December 31, 2025 have been financed primarily by aggregate net proceeds of $219.7 million from the issuance of common stock, pre-funded warrants, convertible preferred stock, convertible notes, promissory notes, the exercise of stock options and common warrants, the private placement of our securities, at-the-market offerings, and proceeds from the Merger with Angion. Our sources of liquidity for the years ended December 31, 2025 and 2024 are described below.
At-The-Market Equity Programs
In May 2022, we filed a registration statement on Form S-3 (the “Prior Shelf Registration Statement”) with the SEC that registered the offering, issuance, and sale of an amount of common stock, preferred stock, debt securities, and warrants to purchase common stock, preferred stock and/or debt securities, not to exceed an aggregate initial offering price of $100 million. Simultaneously, we entered into an At-the-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated and Virtu Americas LLC, as sales agents, that provided for the issuance and sale of up to $21 million of shares of common stock from time to time in “at-the-market” offerings under the Prior Shelf Registration Statement and related prospectus filed with the Prior Shelf Registration Statement (the “2022 ATM Program"). During the year ended December 31, 2024, we issued and sold a total of 650,179 shares of common stock under the 2022 ATM Program for aggregate net proceeds of $5.4 million after deducting sales commissions. In May 2024, we terminated the 2022 ATM Program.
In June 2024, we filed a registration statement on Form S-3 (the “2024 Registration Statement”) with the SEC that registered the offering, issuance, and sale of an amount of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock and/or debt securities, and/or units consisting of any combination of such securities, not to exceed an aggregate initial offering price of $200 million. Simultaneously, we entered into the Capital on DemandTM Sales Agreement with JonesTrading Institutional Services, LLC, as agent, to provide for the issuance and sale of up to $40 million of shares of common stock from time to time in “at-the-market” offerings under the 2024 Registration Statement and related prospectus filed with the 2024 Registration Statement (the “2024 ATM Program” and, collectively with the 2022 ATM Program, the “ATM Programs”). During the year ended December 31, 2025, we issued and sold 1,717,507 shares of common stock for net proceeds of $16.2 millionunder the 2024 ATM Program. During the year ended December 31, 2024, we issued and sold 53,795 shares of common stock for net proceeds of $0.3 million under the 2024 ATM Program.
Private Placement
In March 2024, we entered into a subscription agreement (the “March Subscription Agreement”) with GKCC, LLC (“GKCC”), an entity controlled by a member of Elicio’s board of directors, providing for the issuance and sale by Elicio to GKCC of pre-funded warrants (the “March 2024 Pre-Funded Warrants”) to purchase up to 1,032,702 shares of common stock, at a purchase price per March 2024 Pre-Funded Warrant of $5.81 (the “March 2024 Offering”). Each March 2024 Pre-Funded Warrant issued and sold in the March 2024 Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the March 2024 Pre-Funded Warrants. The net proceeds from the March 2024 Offering were $6.0 million. Refer to Note 8 for additional information.
Public Offerings
In July 2024, we closed an underwritten public offering (the “July 2024 Public Offering”), consisting of (i) 500,000 shares of common stock (the “July 2024 Shares”), (ii) pre-funded warrants exercisable for 1,800,000 shares of common stock (the “July 2024 Pre-Funded Warrants”), and (iii) common warrants to purchase up to 2,300,000 shares of common stock, (the “July 2024 Common Warrants”). Each July 2024 Pre-Funded Warrant issued and sold in the July 2024 Public Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the
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July 2024 Pre-Funded Warrants. Each July 2024 Common Warrant is exercisable at an exercise price equal to $5.00 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Common Warrants, are immediately exercisable and will expire five years from the issuance date. The net proceeds from the July 2024 Public Offering were $10.9 million after deducting commissions and other transaction costs.
The July 2024 Public Offering consisted of the July 2024 Shares or in lieu thereof, the July 2024 Pre-Funded Warrants, and accompanying July 2024 Common Warrants. Each July 2024 Share and accompanying July 2024 Common Warrant were sold together at a combined offering price of $5.00 per July Share and accompanying July 2024 Common Warrant, and each July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant were sold together at a combined offering price of $4.99 per July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant, which represented the combined purchase price per July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant less the $0.01 per share exercise price for each such July 2024 Pre-Funded Warrant. Refer to Notes 3 and 8 for additional information.
In January 2025, we entered into a securities purchase agreement with certain institutional investors (each an “Investor” and, collectively, the “Investors”), pursuant to which we agreed to issue and sell, in a registered direct offering by Elicio directly to the Investors (the “January 2025 Offering”): (i) an aggregate of 1,261,830 shares of common stock (the “January 2025 Shares”) and (ii) common warrants to purchase up to an aggregate of 1,261,830 shares of common stock (the “January 2025 Common Warrants”). Each January 2025 Share and accompanying January 2025 Common Warrant were sold together at a combined offering price of $7.925. The January 2025 Common Warrants have an exercise price of $7.80 per share, are immediately exercisable and will expire 5 years from the issuance date. The January 2025 Offering resulted in net proceeds of $9.2 million after deducting the placement agent’s fees and related offering expenses.
Senior Secured Convertible Note Financing
In August 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with GKCC pursuant to which we issued a 3% Senior Secured Convertible Promissory Note due February 15, 2026 (the “Convertible Note”) in the principal amount of $20.0 million (the “Convertible Note Financing”). Unless earlier converted in accordance with the terms of the Convertible Note, the Convertible Note would mature on February 15, 2026. Interest on the Convertible Note accrued and was payable quarterly in cash on the principal amount equal to 3% per annum, with an initial interest payment date of June 30, 2025. We received net proceeds of approximately $19.7 million from the Convertible Note Financing, after deducting debt issuance costs. In March 2025, Elicio exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of Elicio’s common stock. In March 2025, we issued 3,500,573 shares of common stock to GKCC in exchange for the principal balance of $20.0 million plus $0.3 million in accrued interest, in satisfaction in full of the Convertible Note. Refer to Note 11 for additional information.
Senior Secured Promissory Note Financing
In June 2025, we entered into a note purchase agreement (the “June 2025 Promissory Note Financing”) with GKCC pursuant to which we issued a Senior Secured Promissory Note due June 3, 2028 (the “June 2025 Promissory Note”) in the principal amount of $10.0 million. In connection with the June 2025 Promissory Note Financing, we issued to GKCC a warrant to purchase an aggregate of 103,225 shares of common stock (the “June 2025 Warrant”). The June 2025 Warrant has an exercise price of $7.75 per share, is immediately exercisable, and expires five years from the date of issuance. We received net proceeds of approximately $9.9 million from the June 2025 Promissory Note Financing, after deducting debt issuance costs. Refer to Note 11 for additional information.
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 from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations for at least twelve months following the issuance of the consolidated financial statements, raise substantial doubt about 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 consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K 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. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. We plan to address this condition through the sale of our common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions. However, there is no assurance that we will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should we be unable to raise this amount of capital our operating plans will be limited to the amount of capital that we can access. We may also consider steps to reduce our operating expenses. There can be no assurances that we will be successful in any of the foregoing.
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Summary Statement of Cash Flows
The following table sets forth a summary of our net cash flow activity for the years ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31,
Net cash provided by (used in)
Investing activities (16) (84)
Effect of foreign currency on cash 48 22
Net (decrease) increase in cash $ (225) $ 5,191
Operating activities
For the year ended December 31, 2025, net cash used in operating activities was $37.0 million, which primarily consisted of a net loss of $39.6 million and a change in net operating assets and liabilities of $3.4 million partially offset by net non-cash charges of $6.1 million. The change in net operating assets and liabilities of $3.4 million was the result of a $1.2 million decrease in the deferred research obligation, a $1.1 million decrease in prepaid expenses and other current assets, a $0.2 million increase in other long-term prepaid assets, a $0.9 million decrease in the operating lease liability, and a net decrease in accounts payable and accrued expenses of $2.4 million. The $6.1 million of net non-cash charges were related to $1.9 million of change in the fair value of warrant liabilities, $2.7 million of stock-based compensation expense, $1.1 million related to amortization of the right-of-use (“ROU”) asset and debt discount, $0.1 million of non-cash interest expense, and $0.2 million of depreciation.
For the year ended December 31, 2024, net cash used in operating activities was $37.1 million, which primarily consisted of a net loss of $51.9 million and a change in net operating assets and liabilities of $3.9 million partially offset by net non-cash charges of $10.9 million. The change in net operating assets and liabilities of $3.9 million was the result of a $0.5 million increase in the deferred research obligation, an $0.8 million decrease in prepaid expenses and other current assets, a $2.2 million decrease in other long-term prepaid assets, a $0.9 million decrease in the operating lease liability, and a net increase in accounts payable and accrued expenses of $1.3 million. The $10.9 million of net non-cash charges were related to $3.9 million of change in the fair value of warrant liabilities, $3.5 million loss on the issuance of the pre-funded warrants and common warrants from the March 2024 Offering and the July 2024 Public Offering, $1.5 million of stock-based compensation expense, $0.9 million related to amortization of the ROU asset, $0.5 million related to issuance costs for the pre-funded warrants and common warrants from the March 2024 Offering and the July 2024 Public Offering, $0.3 million of depreciation, $0.2 million of non-cash interest expense, and $0.1 million of amortization of debt discount.
Investing activities
For the years ended December 31, 2025 and 2024, net cash provided by or used in investing activities was immaterial.
Financing activities
For the year ended December 31, 2025, net cash provided by financing activities was $36.7 million as a result of net cash proceeds of $16.2 million from the issuance of shares of common stock under the 2024 ATM Program, $9.9 million from the June 2025 Promissory Note Financing, $9.2 million from the January 2025 Offering, $1.3 million from the exercise of common warrants, and $0.1 million from the exercise of stock options.
For the year ended December 31, 2024, net cash provided by financing activities was $42.3 million comprised of $19.7 million of net proceeds from the issuance of the Convertible Note, $11.5 million of proceeds from the issuance of common warrants related to the July 2024 Public Offering, $6.0 million of proceeds from the issuance of common warrants related to the March 2024 Offering, net cash proceeds of $4.6 million from the issuance of shares of common stock under the ATM Programs, and $1.1 million from the issuance of shares of common stock related to the July 2024 Public Offering, offset by $0.5 millionof issuance costs for the pre-funded warrants and common warrants.
Future Cash Needs and Funding Requirements
Based on our current operating plan, as of the filing date of this Annual Report on Form 10-K, we believe our cash and cash equivalents will be sufficient to fund our planned operations into the third quarter of 2026. 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:
▪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;
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▪whether we are able to take advantage of any FDA expedited development and approval programs for any of our product candidates;
▪the outcome, costs and timing of seeking, obtaining and maintaining FDA and any foreign regulatory approvals;
▪the costs associated with any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates;
▪the number and characteristics of product candidates we pursue, including product candidates in preclinical development;
▪the ability of our product candidates to progress through clinical development successfully;
▪our need to expand our research and development activities, including to conduct additional clinical trials;
▪market acceptance of our product candidates, including physician adoption, market access, pricing and reimbursement;
▪the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies;
▪our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments potentially required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
▪our need and ability to hire additional personnel, including management, clinical development, medical and commercial personnel;
▪the effect of competing technology, 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 the timing and amount of payments thereunder; and
▪the timing, receipt and amount of sales and general commercial success of any future approved products, if any.
Until such time as we can generate significant revenue from sales of product candidates, if ever, we expect to finance our operations through the sale of our common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. To the extent we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through additional collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Accrued Research and Development Costs
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We incur, and expect to continue to incur, substantial expenses associated with manufacturing and clinical trials. Accounting for clinical trials relating to activities performed by contract research organizations (“CROs”) and other external vendors requires management to make significant estimates in regard to the timing and accounting for these expenses. We estimate costs of research and development activities conducted by service providers, which include the conduct of sponsored research, preclinical studies and contract manufacturing activities. The diverse nature of services being provided under CROs and other arrangements, the different compensation arrangements that exist for each type of service and the lack of timely information related to certain clinical activities complicates the estimation of accruals for services rendered by CROs and other vendors in connection with clinical trials. We record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and include these costs in the accrued expenses on the balance sheets and within research and development expense on the consolidated statements of operations and comprehensive loss. In estimating the duration of a clinical study, we evaluate the start-up, treatment and wrap-up periods, compensation arrangements and services rendered attributable to each clinical trial and fluctuations are regularly tested against payment plans and trial completion assumptions.
We estimate these costs based on factors such as estimates of the work completed and budget provided and in accordance with agreements established with our collaboration partners and third-party service providers. We make significant judgments and estimates in determining the accrued liabilities balances in each reporting period. As actual costs become known, we adjust our accrued liabilities. We have not experienced any material differences between accrued costs and actual costs incurred since our inception.
Our expenses related to clinical trials will be based on estimates of patient enrollment and related expenses at clinical investigator sites as well as estimates for the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that may be used to conduct and manage clinical trials on our behalf. We will accrue expenses related to clinical trials based on contracted amounts applied to the level of patient enrollment and activity. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we will modify our estimates of accrued expenses accordingly on a prospective basis.
Recent Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K for a full description of recent accounting standards.
Emerging Growth Company and Smaller Reporting Company Status
We are a smaller reporting company and an emerging growth company, as defined under the Jumpstart Our Business Startups (“JOBS”) Act. Under the JOBS Act, emerging growth companies can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include presentation of only two years of audited financial statements in a registration statement for an initial public offering, an exemption from the requirement to provide an auditor's report on internal controls over financial reporting pursuant to Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting standards as of public company effective dates.
We will remain an emerging growth company until the earliest of (i) December 31, 2026, (ii) the last day of our first fiscal year in which we have total annual gross revenue of $1.235 billion or more, (iii) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which means the market value of equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" and/or “non-accelerated filer” which may allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply for a period of time with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
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Item 8. Financial Statements and Supplementary Data.
The financial statements of Elicio Therapeutics, Inc., listed below are set forth in Item 8 of this Annual Report for the years ended December 31, 2025 and 2024:
ELICIO THERAPEUTICS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Consolidated Balance Sheets 106
Consolidated Statements of Operations and Comprehensive Loss 107
Consolidated Statements of Stockholders' Equity (Deficit) 108
Consolidated Statements of Cash Flows 110
Notes to Consolidated Financial Statements 112
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Elicio Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Elicio Therapeutics, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses and negative cash flows from operating activities since inception, and has an accumulated deficit as of December 31, 2025, that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidatedfinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits providea reasonable basis for our opinion.
/s/ Baker Tilly US, LLP
Tewksbury, Massachusetts
March 12, 2026
We have served as the Company's auditor since 2019.
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ELICIO THERAPEUTICS, INC.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31,
Assets
Current assets
Restricted cash, current — 1,178
Prepaid expenses and other current assets 748 1,897
Property and equipment, net 295 483
Operating lease, right-of-use assets 4,782 5,706
Restricted cash, noncurrent 704 696
Other long-term prepaid assets 770 600
Liabilities, convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities
Deferred research obligation — 1,169
Operating lease liability, current 1,011 901
Operating lease liability, noncurrent 4,094 5,105
Commitments and contingencies—Note 9
Stockholders' equity (deficit):
Treasury stock, at cost, 14,455 shares outstanding (150) (150)
Accumulated other comprehensive loss (127) (175)
Total stockholders' equity (deficit) 1,636 (11,312)
The accompanying notes are an integral part of these consolidated financial statements.
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ELICIO THERAPEUTICS, INC.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
Year Ended December 31,
Operating expenses:
Other (expense) income
Change in fair value of warrant liabilities (1,915) (3,886)
Loss on issuance of pre-funded warrants — (3,502)
Gain on sale of equipment — 3
Foreign exchange transaction gain — 151
Grant income 415 —
Provision for income taxes — —
Other comprehensive gain:
Foreign currency translation adjustment 48 22
Net loss per common share, basic and diluted $ (2.58) $ (4.25)
The accompanying notes are an integral part of these consolidated financial statements.
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ELICIO THERAPEUTICS, INC.
Consolidated Statements of Stockholders' Equity (Deficit)
(in thousands, except share amounts)
Shares Par Value Shares Amount
Stock-based compensation — — — — 2,697 — — 2,697
Foreign currency translation adjustment — — — — — 48 — 48
The accompanying notes are an integral part of these consolidated financial statements.
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ELICIO THERAPEUTICS, INC.
Consolidated Statements of Stockholders' (Deficit) Equity
(in thousands, except share amounts)
Shares Par Value Shares Amount
Exercise of stock options 9,757 — — — 39 — — 39
Stock-based compensation — — — — 1,452 — — 1,452
Foreign currency translation adjustment — — — — — 22 — 22
The accompanying notes are an integral part of these consolidated financial statements.
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ELICIO THERAPEUTICS, INC.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
Cash flows from operating activities
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of right-of-use assets, operating leases 924 857
Amortization of debt discount 217 75
Non-cash interest expense 107 232
Costs expensed upon the issuance of warrants — 549
Change in fair value of warrant liabilities 1,915 3,886
Loss on issuance of warrants — 3,502
Gain on disposal of property and equipment — (3)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets 1,149 835
Other long-term prepaid assets (170) 2,233
Deferred research obligation (1,169) 475
Operating lease liability (901) (911)
Net cash used in operating activities (36,952) (37,068)
Cash flows from investing activities
Purchases of property and equipment (16) (87)
Proceeds from sale of property and equipment — 3
Net cash used in investing activities (16) (84)
Cash flows from financing activities
Proceeds from the exercise of common stock warrants 1,293 —
Proceeds from June 2025 Promissory Note, net of issuance costs 9,866 —
Proceeds from issuance of common stock warrants from March 2024 Offering — 5,985
Proceeds from issuance of common stock from July 2024 Public Offering — 1,080
Payment of warrant issuance costs — (549)
Proceeds from issuance of Convertible Note, net of issuance costs — 19,727
Proceeds from exercise of stock options 149 39
Net cash provided by financing activities 36,695 42,321
Effect of foreign currency on cash 48 22
Components of cash, cash equivalents and restricted cash:
Total cash, cash equivalents and restricted cash $ 19,267 $ 19,492
The accompanying notes are an integral part of these consolidated financial statements.
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ELICIO THERAPEUTICS, INC.
Consolidated Statements of Cash Flows (continued)
(in thousands)
Supplemental disclosure of noncash investing and financing activities:
Fair value of pre-funded warrants at issuance date $ — $ 13,382
Fair value of common warrants at issuance date $ — $ 6,509
Fair value of common warrants upon settlement $ 2,126 $ —
Accretion of promissory note to face value $ — $ 26
Fair value of common warrants issued with January 2025 Offering $ 9,719 $ —
Fair value of common warrants issued with June 2025 Promissory Note $ 641 $ —
Non-cash vesting of restricted common stock $ — $ 25
The accompanying notes are an integral part of these consolidated financial statements.
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ELICIO THERAPEUTICS, INC.
Notes to Consolidated Financial Statements
Note 1—Description of the Business and Financial Condition
Elicio Therapeutics, Inc. (“Elicio” or the “Company”) is a clinical-stage biotechnology company advancing novel immunotherapies for the treatment of cancer, including mKRAS-positive pancreatic, colorectal cancer, lung cancer and other mKRAS positive cancers. Elicio and its wholly-owned subsidiaries, Elicio Securities Corporation (“ESC”), an investment company, Elicio Operating Company, Inc. (“Former Elicio”) and Elicio Australia Pty Ltd. (“Elicio Pty”), an Australian subsidiary established for the purposes of qualifying for research credits for studies conducted in Australia, are collectively referred to as “Elicio” throughout these consolidated financial statements.
Liquidity and Going Concern
The Company has experienced net losses and negative cash flows from operating activities since inception. As of December 31, 2025, the Company had an accumulated deficit of $233.7 million. The Company expects that its operating losses and negative operating cash flows will continue for the foreseeable future as the Company continues to develop its product candidates. Our sources of liquidity for the years ended December 31, 2025 and 2024 are described below.
At-The-Market Equity Programs
In May 2022, the Company filed a registration statement on Form S-3 (the “Prior Shelf Registration Statement”) with the Securities and Exchange Commission (the “SEC”) that registered the offering, issuance, and sale of an amount of common stock, preferred stock, debt securities, and warrants to purchase common stock, preferred stock and/or debt securities, not to exceed an aggregate initial offering price of $100 million. Simultaneously, the Company entered into an At-the-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated and Virtu Americas LLC, as sales agents, that provided for the issuance and sale of up to $21 million of shares of common stock from time to time in “at-the-market” offerings under the Prior Shelf Registration Statement and related prospectus filed with the Prior Shelf Registration Statement (the “2022 ATM Program"). During the year ended December 31, 2024, the Company issued and sold a total of 650,179 shares of common stock under the 2022 ATM Program for aggregate net proceeds of $5.4 million after deducting sales commissions. In May 2024, the Company terminated the 2022 ATM Program.
In June 2024, the Company filed a registration statement on Form S-3 (the “2024 Registration Statement”) with the SEC that registered the offering, issuance, and sale of an amount of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock and/or debt securities, and/or units consisting of any combination of such securities, not to exceed an aggregate initial offering price of $200 million. Simultaneously, the Company entered into the Capital on DemandTM Sales Agreement with JonesTrading Institutional Services, LLC, as agent, to provide for the issuance and sale of up to $40 million of shares of common stock from time to time in “at-the-market” offerings under the 2024 Registration Statement and related prospectus filed with the 2024 Registration Statement (the “2024 ATM Program” and, collectively with the 2022 ATM Program, the “ATM Programs”). During the year ended December 31, 2025, the Company issued and sold 1,717,507 shares of common stock for net proceeds of $16.2 millionunder the 2024 ATM Program. During the year ended December 31, 2024, the Company issued and sold 53,795 shares of common stock for net proceeds of $0.3 million under the 2024 ATM Program.
Private Placement
In March 2024, the Company entered into a subscription agreement (the “March Subscription Agreement”) with GKCC, LLC (“GKCC”), an entity controlled by a member of Elicio’s board of directors, providing for the issuance and sale by Elicio to GKCC of pre-funded warrants (the “March 2024 Pre-Funded Warrants”) to purchase up to 1,032,702 shares of common stock, at a purchase price per March 2024 Pre-Funded Warrant of $5.81 (the “March 2024 Offering”). Each March 2024 Pre-Funded Warrant issued and sold in the March 2024 Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the March 2024 Pre-Funded Warrants. The net proceeds from the March 2024 Offering were $6.0 million. Refer to Note 8 for additional information.
Public Offerings
In July 2024, the Company closed an underwritten public offering (the “July 2024 Public Offering”), consisting of (i) 500,000 shares of common stock (the “July 2024 Shares”), (ii) pre-funded warrants exercisable for 1,800,000 shares of common stock (the “July 2024 Pre-Funded Warrants”), and (iii) common warrants to purchase up to 2,300,000 shares of common stock, (the “July 2024 Common Warrants”). Each July 2024 Pre-Funded Warrant issued and sold in the July 2024 Public Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Pre-Funded Warrants. Each July 2024 Common Warrant is exercisable at an exercise price equal to $5.00 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Common Warrants, are immediately exercisable and will expire five years from the issuance date. The net proceeds from the July 2024 Public Offering were $10.9 million after deducting commissions and other transaction costs.
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ELICIO THERAPEUTICS, INC.
Notes to Consolidated Financial Statements (Continued)
The July 2024 Public Offering consisted of the July 2024 Shares or in lieu thereof, the July 2024 Pre-Funded Warrants, and accompanying July 2024 Common Warrants. Each July 2024 Share and accompanying July 2024 Common Warrant were sold together at a combined offering price of $5.00 per July Share and accompanying July 2024 Common Warrant. Each July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant were sold together at a combined offering price of $4.99 per July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant, which represented the combined purchase price per July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant less the $0.01 per share exercise price for each such July 2024 Pre-Funded Warrant. The July 2024 Common Warrants have an exercise price of $5.00 per share, are immediately exercisable and will expire five years from the issuance date. Refer to Notes 3 and 8 for additional information.
In January 2025, the Company entered into a securities purchase agreement with certain institutional investors (each an “Investor” and, collectively, the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by Elicio directly to the Investors (the “January 2025 Offering”): (i) an aggregate of 1,261,830 shares of common stock (the “January 2025 Shares”) and (ii) common warrants to purchase up to an aggregate of 1,261,830 shares of common stock (the “January 2025 Common Warrants”). Each January 2025 Share and accompanying January 2025 Common Warrant were sold together at a combined offering price of $7.925. The January 2025 Common Warrants have an exercise price of $7.80 per share, are immediately exercisable and will expire five years from the issuance date. The January 2025 Offering resulted in net proceeds of $9.2 million after deducting the placement agent’s fees and related offering expenses.
Senior Secured Convertible Note Financing
In August 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with GKCC pursuant to which the Company issued a 3% Senior Secured Convertible Promissory Note due February 15, 2026 (the “Convertible Note”) in the principal amount of $20.0 million (the “Convertible Note Financing”). Unless earlier converted in accordance with the terms of the Convertible Note, the Convertible Note would mature on February 15, 2026. Interest on the Convertible Note accrued and was payable quarterly in cash on the principal amount equal to 3% per annum, with an initial interest payment date of June 30, 2025. The Company received net proceeds of approximately $19.7 million from the Convertible Note Financing, after deducting debt issuance costs. In March 2025, Elicio exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of Elicio’s common stock. In March 2025, the Company issued 3,500,573 shares of common stock to GKCC in exchange for the principal balance of $20.0 million plus $0.3 million in accrued interest, in satisfaction in full of the Convertible Note. Refer to Note 11 for additional information.
Senior Secured Promissory Note Financing
In June 2025, the Company entered into a note purchase agreement (the “June 2025 Promissory Note Financing”) with GKCC pursuant to which the Company issued a Senior Secured Promissory Note due June 3, 2028 (the “June 2025 Promissory Note”) in the principal amount of $10.0 million. In connection with the June 2025 Promissory Note Financing, the Company issued to GKCC a warrant to purchase an aggregate of 103,225 shares of common stock (the “June 2025 Warrant”). The June 2025 Warrant has an exercise price of $7.75 per share, is immediately exercisable, and expires five years from the date of issuance. The Company received net proceeds of approximately $9.9 million from the June 2025 Promissory Note Financing, after deducting debt issuance costs. Refer to Note 11 for additional information.
As of December 31, 2025, the Company had $18.6 million in cash and cash equivalents. The Company’s losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations for at least twelve months following the issuance of the consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern. The Company expects to incur substantial expenditures in the foreseeable future for the development of its product candidates and will require additional financing to continue this development. The Company plans to address this condition through the sale of its common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions, but there is no assurance these plans will be completed successfully or at all.If the Company is unable to obtain additional capital when and as needed to continue as a going concern, it may need to further reduce or scale back its operations and/or liquidate its assets, and the values it receives for its assets in liquidation or dissolution could be significantly lower than the values reflected in its financial statements.
The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
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ELICIO THERAPEUTICS, INC.
Notes to Consolidated Financial Statements (Continued)
Note 2—Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Elicio Pty, ESC, and Former Elicio. All significant intercompany balances and transactions have been eliminated.
Segments
Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Chief Executive Officer serves as the CODM. The Company operates as a single operating and reportable segment, reflecting the integrated nature of the Company’s business.
Use of Estimates
The Company’s management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. Significant estimates reflected in these consolidated financial statements include but are not limited to, the accrual of research and development expenses, the valuation of stock-based awards, the valuation of warrants, the valuation of embedded derivatives and convertible debt, and the operating lease right-of-use (“ROU”) assets and operating lease liability.
Foreign Currency Translation and Transactions
The Australian Dollar (“AUD”) is the functional currency for Elicio Pty. Accordingly, nonmonetary assets and liabilities originally acquired or assumed in other currencies are recorded in AUD at the date they were acquired or assumed. As part of the consolidation process, the Elicio Pty results are translated from AUD into the reporting currency of US Dollars using average rates for profit and loss transactions and applicable spot rates for period-end balances. The effect of translating the Company’s functional currency into the Company’s reporting currency is reported separately in Accumulated Other Comprehensive Loss.
Concentrations of Credit Risk and Off-Balance Sheet Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, and restricted cash. At times, cash balances deposited at major financial institutions exceed the federally insured limit. The Company regularly monitors the financial condition of the institutions in which it has depository accounts and believes the risk of loss is minimal. The Company has not experienced any losses in such accounts.
Cash and Cash Equivalents
Cash and cash equivalents are comprised of deposits at major financial banking institutions and highly liquid investments with an original maturity of three months or less at the date of purchase. As of December 31, 2025 and 2024, 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 unused funds received from the Company’s research grant. See Note 10 for further discussion.
Fair Value Measurement
The Company follows the guidance prescribed by ASC Topic 820, Fair Value Measurements, 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 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 measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.
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ELICIO THERAPEUTICS, INC.
Notes to Consolidated Financial Statements (Continued)
Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities at measurement.
Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities 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, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The carrying amounts of financial instruments reflected in the consolidated balance sheets for cash and cash equivalents, non-current restricted cash, accounts payable, and accrued expenses approximate their respective fair values because of the short-term maturity of those financial assets and liabilities.
Property and Equipment
Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of the asset. Upon sale or retirement, the cost and accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is recorded in the consolidated statement of operations and comprehensive loss. Repair and maintenance expenditures are expensed as incurred. Construction in process is not depreciated until the asset is placed into service.
Asset Class Estimated Useful Lives
Equipment 5 years
Furniture and fixtures 3 years
Leasehold improvements Shorter of useful life or lease term
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets, which consist primarily of property and equipment, and ROU assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the years ended December 31, 2025 and 2024, no impairments have occurred.
Debt Issuance Costs
These deferred costs will be amortized and recognized as additional interest expense over the term of the Company’s Convertible Note (as defined below) using the effective interest method. The Company will present debt issuance costs as a direct deduction from the Convertible Note (as defined below) liability on its financial statements. See Note 11 for further discussion of the Company’s accounting for its outstanding debt and related issuance costs.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Deferred tax assets and liabilities 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 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. As of December 31, 2025, there were no accruals for interest or penalties related to uncertain tax provisions.
Research and Development
Research and development costs are charged to expense as incurred and consist of expenses incurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical expenses, stock-based compensation expense, depreciation of equipment, contract services, and other outside expenses. The Company accrues for costs incurred by external service providers, based on estimates of services performed and costs. The Company expenses all
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research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by the Company’s vendors and service providers. 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 grants and research and development refundable tax rebates received by Elicio Pty.
Leases
ASC Topic 842, Leases, (“ASC 842”) requires a lessee to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the consolidated statements of operations and comprehensive loss as well as the reduction of the ROU asset.
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. When the interest rate implicit in lease contracts is not readily determinable, the Company will utilize its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
The Company has elected to combine lease and non-lease components as a single component. Operating leases are recognized on the consolidated balance sheet as ROU lease assets, current lease liabilities and non-current lease liabilities. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis.
Grant Income
Grant funding for research and development received under grant agreements, where there is no obligation to repay and where the funding received is in excess of the costs incurred is recognized as grant income in the period during which the related qualifying expenses are incurred, based on the applicable reimbursement percentage, provided that the grants are fully approved by the granting agencies and the conditions under which the grants were provided have been met. The Company concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit Entities, and that the grants are not within the scope of ASC 606, Revenue from Contracts with Customers, as the organizations providing the grants do not meet the definition of a customer. Expenses for grants are tracked by using a project code specific to the grant.
Stock-Based Compensation
The Company issues stock-based awards to employees and non-employees, generally in the form of stock options. The Company accounts for stock-based awards in accordance with ASC 718, Compensation—Stock Compensation, which requires all stock-based payments to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values. The expense is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The Company has elected to account for option forfeitures as they occur.
The Company uses the Black-Scholes option-pricing model (“Black-Scholes”) to determine the fair value of options granted, which uses as inputs the fair value of the Company’s common stock, assumptions the Company makes for the volatility of its common stock, the expected term of its stock options, the risk-free interest rate for a period that approximates the expected term of its stock options and its expected dividend yield.
Compensation cost of awards that contain a performance condition is recognized when success is considered probable during the performance period.
Prior to the Merger, there was no public market for Former Elicio’s common stock. The estimated fair value of the Company’s common stock underlying Former Elicio’s stock-based awards was determined by Former Elicio’s board of directors as of the grant date of each option grant. To determine the fair value of Former Elicio’s common stock underlying option grants, Former Elicio’s board of directors considered, among other things, input from management and valuations of Former Elicio's common stock prepared by third-party valuation firms and 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 the Company’s common stock is based on the closing stock price on the date of grant as reported on the Nasdaq Capital Market.
Warrants
The Company’s common stock warrants are evaluated pursuant to ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The Company classifies its freestanding warrants as (i)
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liabilities, if the warrant terms allow settlement of the warrant exercise in cash, or (ii) equity, if the warrant terms only allow settlement in shares of common stock. Please refer to Note 8 below for the application to the Company’s pre-funded and common warrants.
Net Loss Per Share
Basic net loss per share of the Company’s common stock is computed by dividing net loss attributable to the Company’s common stockholders by the weighted average number of shares of the Company’s common stock and pre-funded warrants outstanding for the period. Pre-funded warrants are considered outstanding for the purposes of computing basic and diluted net loss per share because shares may be issued for little or no additional consideration and are fully vested and exercisable after the original issuance date of the pre-funded warrants. Diluted net loss per share excludes the potential impact of the Company’s common stock options, warrants and unvested shares of restricted stock because their effect would be anti-dilutive due to the Company's net loss. Since the Company had net losses for the years ended December 31, 2025 and 2024, basic and diluted net loss per common share are the same.
Other Comprehensive Gain (Loss)
Other comprehensive gain (loss) is defined as a change in equity during a period from foreign exchange transactions and other events and circumstances from non-owner sources.
Recently Adopted Accounting Standards During the Period
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). Under the new guidance, public business entities (“PBEs”) are required to disclose an annual tabular effective tax rate reconciliation using both reporting currency amounts and percentages, disaggregated into specified categories as well as the amount of income taxes paid, disaggregated by federal, state and foreign jurisdictions. ASU No. 2023-09 is effective for annual periods beginning after December 15, 2024 and may be applied prospectively or retrospectively. The Company adopted ASU No. 2023-09 on a prospective basis for the year ended December 31, 2025. The Company’s adoption of ASU No. 2023-09 did not have a material impact on its consolidated financial statements. The additional required disclosures have been included in Note 12.
In November 2023, the FASB finalized ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures about reportable segments and the CODM. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 on January 1, 2024. There was no impact on the Company's reportable segments identified and additional required disclosures have been included in Note 16.
Recently Issued Accounting Standards Not Yet Adopted
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Except as noted below, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements and disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 requires enhanced disclosures of disaggregated income statement expenses. Disclosure within the notes to the financial statements for each annual and interim period should include: employee compensation, depreciation, and intangible asset amortization, included in each relevant expense caption; certain amounts that are already required to be disclosed under current U.S. GAAP in the same disclosure as the other disaggregation requirement; a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect that adoption of ASU 2024-03 will have on its consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 clarifies the accounting treatment of whether the settlement of convertible debt should be accounted for as an induced conversion or extinguishment of convertible debt. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025. The Company is evaluating the potential impact the adoption of ASU 2024-04 will have on its consolidated financial statements and related disclosures.
Note 3—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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Level 1 Level 2 Level 3 Total
Money market funds (1) $ 6,245 $ — $ — $ 6,245
Level 1 Level 2 Level 3 Total
___________________
(1) Included in cash, cash equivalents, and restricted cash on the consolidated balance sheets. This balance includes cash requirements settled on a nightly basis.
Cash equivalents at December 31, 2025 and 2024 were held in U.S. Treasury securities.
There were no transfers made among the three levels in the fair value hierarchy during the periods presented.
The fair value of the warrants assumed in the Merger with Angion (the “Angion Warrants”) were classified as Level 3 with key Level 3 inputs of exercise price, term, and volatility. The following table presents a summary of changes in Level 3 in the fair value of the Company’s common stock warrant liabilities (in thousands):
Balance, beginning of the period $ 1 $ 11
Change in fair value — (10)
Balance, end of the period $ 1 $ 1
Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with assets and liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.
The fair value of the Angion Warrants issued by the Company has been estimated using the Black-Scholes option pricing model. The underlying equity included in Black-Scholes was valued based on the equity value implied from sales of preferred and common stock at each measurement date, as applicable. The fair value of the Angion 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 fair value of the Angion Warrant liabilities was estimated using the following assumptions:
Weighted average strike price $ 76.00 $ 76.00
Contractual term (years) 2.7 3.7
Volatility (annual) 67.6 % 74.9 %
Risk-free rate 3.8 % 4.4 %
Dividend yield (per share) 0.0 % 0.0 %
In March 2024, the Company entered into the March Subscription Agreement with GKCC. The March 2024 Offering provided for the issuance and sale of the March 2024 Pre-Funded Warrants. The Company identified these warrants as liabilities and measured them at fair value on March 19, 2024, and subsequently remeasured the fair value of these warrant liabilities on a quarterly basis. The Company was able to calculate the fair value measurement based on directly observable inputs for the asset from active markets, therefore these warrants were classified as Level 2. At the Company’s annual
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Notes to Consolidated Financial Statements (Continued)
stockholder’s meeting in November 2024, the Company obtained stockholder approval (the “Stockholder Approval”) for GKCC, together with its affiliates, to exceed the 19.99% beneficial ownership limitation pursuant to the rules and regulations of the Nasdaq Stock Market LLC (“Nasdaq”). As a result of the receipt of Stockholder Approval, the March 2024 Pre-Funded Warrants were classified as equity at December 31, 2024 and no longer needed quarterly fair value remeasurement.
In July 2024, the Company closed the July 2024 Public Offering, consisting of (i) the July 2024 Shares, (ii) the July 2024 Pre-funded Warrants, and (iii) the July 2024 Common Warrants. Each July 2024 Pre-Funded Warrant issued and sold in the July 2024 Public Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Pre-Funded Warrants. Each July 2024 Common Warrant is exercisable at an exercise price equal to $5.00 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Common Warrants, are immediately exercisable and will expire five years from the issuance date. Upon issuance, the Company identified the July 2024 Pre-Funded Warrants and the July 2024 Common Warrants as liabilities and measured them at fair value on July 1, 2024, and subsequently remeasures the fair value of these warrant liabilities at each reporting period end. The Company is able to calculate the fair value measurement based on directly observable inputs from active markets, therefore these warrants are classified as Level 2. Refer to Note 6 and 8 for further discussion. As a result of obtaining the Stockholder Approval in November 2024, the July 2024 Pre-Funded Warrants and the July 2024 Common Warrants held by GKCC, together with its affiliates, met the equity classification requirements under ASC 815. As such, the Company remeasured the July 2024 Common Warrants held by that shareholder at fair value and recognized the loss from change in fair value on the consolidated financial statements during the year ended December 31, 2024. The remaining liability classified July 2024 Pre-Funded Warrants were exercised in the fourth quarter of 2024, leaving no remaining liability classified July 2024 Pre-Funded Warrants outstanding as of December 31, 2024. The remaining July 2024 Common Warrants not held by GKCC and its affiliates remain liability classified as of December 31, 2024 and the fair value is remeasured in each reporting period. During the year ended December 31, 2025, there were no changes to the equity classification. The Company will re-assess the liability classification for the remaining July 2024 Common Warrants at each period end.
The Company records the fair value remeasurement of the outstanding liability-classified warrants in change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive loss.
Note 4—Balance Sheet Components
Prepaid and Other Current Assets
Prepaid and other current assets consisted of the following (in thousands):
December 31,
Prepaid research and development contract services $ 115 $ 1,206
Advanced professional fees 193 243
Other prepaid expenses and other current assets 73 101
Total prepaid and other current assets $ 748 $ 1,897
Property and Equipment, Net
Property and equipment, net was comprised of the following (in thousands):
December 31,
Less: accumulated depreciation (1,756) (1,552)
Property and equipment, net $ 295 $ 483
Depreciation expense for the years ended December 31, 2025 and 2024 was $0.2 million and $0.3 million, respectively.
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Other long-term prepaid assets
Other long-term prepaid assets consisted of the advance payments for clinical trial services, totaling $0.8 million and $0.6 million as of December 31, 2025 and December 31, 2024, respectively.
Accrued Expenses
Accrued expenses consisted of the following (in thousands):
December 31,
Accrued professional fees $ 818 $ 1,167
Accrued compensation and benefits 2,528 2,312
Accrued research and development 2,298 4,910
Accrued interest 741 —
Other accrued expenses 42 26
Note 5—Research Grant
In September 2022, Former Elicio entered into a grant agreement with the Gastro-Intestinal (“GI”) Research Foundation, 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 grant agreement. The final $0.5 million payment was applied as a credit to the second grant agreement described below.
In September 2023, the Company entered into a second grant agreement with the GI Research Foundation for $3.1 million, with such amount received net of the $0.5 million credit, described above. During the year ended December 31, 2024, the Company incurred $2.2 million in research and development expenses related to this project and completed the development efforts defined in the second grant agreement in the third quarter of 2024.
In August 2024, the Company entered into a third grant agreement with the GI Research Foundation for $1.5 million. During the years ended December 31, 2025 and 2024, the Company incurred $0.8 million and $0.3 million, respectively, in research and development expenses related to this project, all of which were reimbursed from available grant funds. The third grant agreement activities were completed in the second quarter of 2025.
The award money for the three agreements was recorded as contra-expense to offset the research and development costs incurred. Following completion of the third grant agreement with GI Research Foundation, during 2025, the remaining $0.4 million of the grant funds were recognized as grant income, as there were no further conditions to be met.
Note 6—Common Stock and Stockholders' Equity
Authorized Shares
The Company's current Amended and Restated Certificate of Incorporation, as amended, 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.
At-The-Market Equity Programs
During the year ended December 31, 2024, the Company issued and sold a total of 650,179 shares of common stock under the 2022 ATM Program for aggregate net proceeds of $5.4 million after deducting sales commissions. In May 2024, the 2022 ATM Program was terminated by the Company.
During the year ended December 31, 2025, the Company issued and sold 1,717,507 shares of common stock for net proceeds of $16.2 million under the 2024 ATM Program. During the year ended December 31, 2024, the Company issued and sold 53,795 shares of common stock for net proceeds of $0.3 million under the 2024 ATM Program.
Private Placement
In March 2024, the Company closed the March 2024 Offering, which resulted in net proceeds of $6.0 million. The March 2024 Offering providing for the issuance and sale by the Company to GKCC of the March 2024 Pre-Funded Warrants to purchase up to 1,032,702 shares of common stock, at a purchase price of $5.81. Each March 2024 Pre-Funded Warrant issued and sold in the March 2024 Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the March 2024 Pre-Funded Warrants. The net proceeds to the Company from the March 2024 Offering were $6.0 million. Refer to Note 8 for additional information.
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Notes to Consolidated Financial Statements (Continued)
Public Offerings
In July 2024, the Company closed the July 2024 Public Offering, which resulted in gross proceeds of $11.5 million, with net proceeds of $10.9 million to the Company, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The July 2024 Public Offering consisted of (i) 500,000 July 2024 Shares, (ii) the July 2024 Pre-Funded Warrants exercisable for 1,800,000 shares of common stock, and (iii) the July 2024 Common Warrants to purchase up to 2,300,000 shares of common stock. Each July 2024 Share and accompanying July 2024 Common Warrant were sold together at a combined offering price of $5.00. Each July 2024 Pre-Funded Warrant and accompanying July 2024 Common Warrant were sold together at a combined offering price of $4.99, which represented the combined purchase price less the $0.01 per share exercise price for each such July 2024 Pre-Funded Warrant. The July 2024 Common Warrants have an exercise price of $5.00 per share, are immediately exercisable, and will expire five years from the issuance date. Refer to Notes 3 and 8 for additional information.
In January 2025, the Company closed the January 2025 Offering, pursuant to which the Company agreed to issue and sell 1,261,830 January 2025 Shares and the January 2025 Common Warrants to purchase up to an aggregate of 1,261,830 shares of common stock. Each January 2025 Share and accompanying January 2025 Common Warrant were sold together at a combined offering price of $7.925. The January 2025 Common Warrants have an exercise price of $7.80 per share, are immediately exercisable and will expire 5 years from the issuance date. The January 2025 Offering resulted in gross proceeds of $10.0 million, with net proceeds of $9.2 million to the Company after deducting the placement agent’s fees and related offering expenses. The net proceeds were allocated using the relative fair value of the January 2025 Shares and January 2025 Common Warrants. Refer to Note 8 for additional information.
Senior Secured Convertible Note Financing
In August 2024, the Company entered into the Securities Purchase Agreement with GKCC pursuant to which the Company issued the 3% Convertible Note in the principal amount of $20.0 million. Unless earlier converted in accordance with the terms of the Convertible Note, the Convertible Note would mature on February 15, 2026. Interest on the Convertible Note accrued and was payable quarterly in cash on the principal amount equal to 3% per annum, with an initial interest payment date of June 30, 2025. The Company received net proceeds of approximately $19.7 million from the Convertible Note Financing, after deducting debt issuance costs. In March 2025, Elicio exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of Elicio’s common stock. In March 2025, the Company issued 3,500,573 shares of common stock to GKCC in exchange for the principal balance of $20.0 million plus $0.3 million in accrued interest, in satisfaction in full of the Convertible Note. Refer to Note 11 for additional information.
Senior Secured Promissory Note Financing
In June 2025, the Company entered into the June 2025 Promissory Note Financing with GKCC pursuant to which the Company issued the June 2025 Promissory Note in the principal amount of $10.0 million. In connection with the June 2025 Promissory Note Financing, the Company issued to GKCC the June 2025 Warrant to purchase an aggregate of 103,225 shares of the Company’s common stock. The June 2025 Warrant has an exercise price of $7.75 per share, is immediately exercisable, and expires five years from the date of issuance. Refer to Note 11 for additional information.
Note 7—Stock-Based Compensation
2012 Plan and 2022 Plan
As a result of the Merger, the Company assumed the Former Elicio 2012 Equity Incentive Plan and the Former Elicio 2022 Equity Incentive Plan (collectively, the “Former Elicio Plans”) and all stock options issued and outstanding under the Former Elicio Plans. Each outstanding and unexercised option to purchase Former Elicio’s common stock was adjusted with such Company stock options henceforth representing the right to purchase a number of shares of the Company’s common stock based on the exchange ratio established for the Merger. Any restriction on the exercise of any Former Elicio stock options assumed by the Company continued in full force and effect and the term, exercisability, vesting schedule, accelerated vesting provisions, and any other provisions of such Former Elicio stock options otherwise remained unchanged. As of December 31, 2025, 177,671 shares remain available for future grants under the Former Elicio 2022 Equity Incentive Plan.
2015 Plan
In June 2019, Angion’s board of directors 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 Incentive Award Plan (“2021 Plan”), Angion 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.
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Notes to Consolidated Financial Statements (Continued)
2021 Plan
In January 2021, Angion’s board of directors approved the 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 1st by the lesser of 5% of the Company’s common stock outstanding on the immediately preceding December 31st, or such lesser number of shares as determined by the Company’s board of directors. The Company has a policy of issuing shares out of respective plan pools (to the extent available) to satisfy share option exercises and restricted stock vesting. As of December 31, 2025, 460,025 shares remain available for future grants under the 2021 Plan.
2024 Inducement Incentive Award Plan
In February 2024, the Company’s board of directors approved the Company’s 2024 Inducement Incentive Award Plan (the “2024 Inducement Plan”) which permits the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards to employees as an inducement pursuant to Listing Rule 5635(c)(4) of the corporate governance rules of Nasdaq. The 2024 Inducement Plan originally provided for an overall share limit of 500,000 shares of the Company’s common stock. As of December 31, 2025, 10,940 shares remain available for future grants under the 2024 Inducement Plan.
Stock Options
The following table summarizes information and activity related to the Company’s stock options:
The aggregate intrinsic value in the above table is calculated as the difference between the estimated fair value of the Company's common stock and the exercise price of the stock options. The weighted average grant date fair value per share for the stock option grants during the year ended December 31, 2025 was $7.63. As of December 31, 2025, the total unrecognized compensation expense related to unvested stock option awards granted was $5.3 million, which the Company expects to recognize over a weighted-average period of approximately 2.8 years.
Stock-based Compensation Expense
The following table summarizes total stock-based compensation expense recorded in the consolidated statements of operations and comprehensive loss (in thousands):
For the Year Ended December 31,
Research and development $ 1,093 $ 582
General and administrative 1,604 870
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Notes to Consolidated Financial Statements (Continued)
The fair value of each option is estimated on the date of grant using a Black-Scholes option pricing model with the assumptions noted in the table below. The fair value of an award with only a service condition is amortized as compensation expense on a straight-line basis over the requisite service period of the award, 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, using the daily closing prices during the equivalent period of the calculated expected term of stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of the Company’s common stock price becomes available, or until circumstances change, such that the identified entities are no longer comparable 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 weighted average assumptions.
Options For the Year Ended December 31,
Risk-free interest rate 3.7% - 4.4% 3.4% - 4.3%
Expected dividend yield 0.0% 0.0%
Expected term in years 5.0 - 6.1 5.0 - 6.1
In March 2021 and June 2022, certain employees of the Company early exercised stock options. The shares had not fully vested at the time of exercise and were recorded as an unvested option exercise liability. As the shares vested, the Company recognized the shares and related expense as issuance of common stock upon settlement of restricted stock in the consolidated financial statements for the year ended December 31, 2024.
Employee Stock Purchase Plan
In January 2021, the board of directors of Angion approved the Employee Stock Purchase Plan (the “ESPP”). The ESPP was effective on the date immediately prior to the effectiveness of Angion's registration statement relating to Angion’s initial public offering. The offering period and purchase period was determined by Angion’s board of directors. No offering periods or purchasing periods were active as of December 31, 2025. As of December 31, 2025, 275,309 shares remained available for purchase under the ESPP, and no offerings were authorized.
Note 8—Warrants
In accordance with ASC Topic 815, certain of the Company’s outstanding warrants are classified as liabilities and are recorded at fair value at the issuance date, with subsequent changes in the fair value recognized in the consolidated statements of operations and comprehensive loss in each reporting period. Refer to Note 3 for changes in the fair value recognized during the periods reported.
As disclosed in Note 6, in March 2024, the Company entered into the March Subscription Agreement with GKCC, an entity controlled by a member of the Company’s board of directors. Each March 2024 Pre-Funded Warrant issued and sold in the March 2024 Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the March 2024 Pre-Funded Warrants.
Upon issuance, the March 2024 Pre-Funded Warrants were liability classified, with a fair value of $6.6 million, as determined by the Black-Scholes option pricing model as of the grant date. The Company recorded the $0.6 million difference between the proceeds and grant date fair value as a loss on issuance of warrants in the statements of operations and comprehensive loss during the three months ended March 31, 2024. The Company subsequently remeasured the fair value of these warrant liabilities on a quarterly basis. As a result of the receipt of Stockholder Approval in November 2024, as discussed in Note 3, the March 2024 Pre-Funded Warrants were classified as equity at December 31, 2025 and 2024. During the year ended December 31, 2024, the Company recognized a gain of $1.3 million in fair value remeasurement of the March 2024 Pre-Funded Warrants.
As disclosed in Notes 3 and 6, in July 2024, the Company closed its July 2024 Public Offering consisting of (i) the July 2024 Shares, (ii) the July 2024 Pre-Funded Warrants, and (iii) the July 2024 Common Warrants. Each July 2024 Pre-Funded
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Notes to Consolidated Financial Statements (Continued)
Warrant issued and sold in the July 2024 Public Offering is exercisable at an exercise price equal to $0.01 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Pre-Funded Warrants. Each July 2024 Common Warrant is exercisable at an exercise price equal to $5.00 per share, subject to certain adjustments and limitations as provided under the terms of the July 2024 Common Warrants.
Upon issuance, the July 2024 Pre-Funded Warrants and July 2024 Common Warrants were liability classified, with a fair value of $6.8 million and $6.5 million, respectively, measured using the Black-Scholes option pricing model as of the grant date. The Company recorded the $2.9 million difference between the proceeds and the grant date fair value as a loss on the issuance of warrants in the statements of operations and comprehensive loss during the third quarter of 2024. As a result of the receipt of Stockholder Approval in November 2024, certain July 2024 Pre-Funded Warrants and July 2024 Common Warrants held by GKCC and its affiliates were classified as equity. The remaining liability classified July 2024 Pre-Funded Warrants were exercised in the fourth quarter of 2024, leaving no remaining liability classified July 2024 Pre-Funded Warrants outstanding as of December 31, 2024. The remaining July 2024 Common Warrants not held by GKCC and its affiliates remain liability classified as of December 31, 2024 and the fair value is remeasured in each reporting period. During the year ended December 31, 2025, there were no changes to the equity classification. For the years ended December 31, 2025 and 2024, the Company recognized a loss of $0 and $2.4 million in fair value remeasurement of the July 2024 Pre-Funded Warrants, respectively. For the years ended December 31, 2025 and 2024, the Company recognized a loss of $1.9 million and $2.8 million in fair value remeasurement of the July 2024 Common Warrants, respectively.
As disclosed in Note 6, in January 2025, the Company closed the January 2025 Offering, pursuant to which the Company agreed to issue and sell 1,261,830 January 2025 Shares and the January 2025 Common Warrants to purchase up to an aggregate of 1,261,830 shares of common stock. Each January 2025 Share and accompanying January 2025 Common Warrant were sold together at a combined offering price of $7.925. The January 2025 Common Warrants have an exercise price of $7.80 per share, are immediately exercisable and will expire five years from the issuance date. The fair value of the January 2025 Common Warrants, as determined by the Black-Scholes option pricing model, was $9.7 million on the closing date of the January 2025 Offering. The net proceeds were allocated using the relative fair value of the January 2025 Shares and January 2025 Common Warrants.
In June 2025, in connection with the June 2025 Promissory Note Financing, the Company issued to GKCC the June 2025 Warrant to purchase an aggregate of 103,225 shares of the Company’s common stock. The June 2025 Warrant has an exercise price of $7.75 per share, is immediately exercisable and expires five years from the date of issuance. The fair value of the June 2025 Warrant, as determined by the Black-Scholes option pricing model, was $0.6 million at the date of issuance. See Note 11 for further detail regarding the June 2025 Promissory Note Financing.
The following tables summarize information regarding the warrants outstanding and warrant activity at December 31, 2025:
(1) The March 2024 Pre-Funded Warrants and July 2024 Pre-Funded Warrants outstanding as of December 31, 2025 have a perpetual term and are therefore excluded from the calculation of the weighted-average remaining contractual life.
(2) During the fourth quarter of 2024, the Company reclassified the March 2024 Pre-Funded Warrants, the July 2024 Pre-Funded Warrants and the July 2024 Common Warrants held by GKCC and its affiliates from liability to equity classification.
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Notes to Consolidated Financial Statements (Continued)
Warrants Weighted Average Exercise Price Weighted Average Life (years)
Note 9—Commitments and Contingencies
Legal Proceedings
From time to time, the Company may be involved in legal proceedings, or may be subject to various demands, claims and threatened litigation, which arise in the normal course of its business or otherwise.
The outcome of any future litigation is uncertain. Such litigation, if not resolved, could result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers, and could lead to a diversion of management resources among other factors.
The Company may be exposed to litigation in connection with its products 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. As of the time of this report, the Company does not believe it is a party to any claim, proceeding or litigation, the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on its business.
License Agreements
In January 2016, Former Elicio entered into a license agreement to license certain intellectual property rights from MIT, which agreement has been amended from time to time to add additional intellectual property rights to the Company’s license and to adjust fees and milestones and diligence requirements. The Company is required to pay certain license maintenance fees and certain milestone payments upon the occurrence of specific development and commercialization achievements during the term of the agreement, including those related to the making of certain regulatory filings, the initiation of certain clinical trials and the achievement of certain product sales thresholds, and royalty payments based on net sales on certain products over the term of the agreement, with royalty payments commencing in the calendar year of commercialization of such products. Royalty rates range from 0.25% - 2.00%, depending on whether commercial sales relate to a product that is covered by patents under which Elicio licenses rights from MIT or a product that could not have been identified, selected, or determined to have biological activity but for the use or modification of a product covered by the patents, and also on the country the products were sold in. The license term for the license agreement extends until terminated by either party under certain provisions in the agreement. During the year ended December 31, 2024, in accordance with the terms of the license agreement, the Company achieved a milestone related to the ongoing clinical trials and recorded license expense of $0.4 million. No such expenses were recorded during the year ended December 31, 2025. No commercialization royalties have been achieved to date.
The Company would be required to pay a total of up to $26.2 million if all remaining possible clinical development and commercial sales milestones are achieved. The clinical development milestone payments will be recorded when each milestone is achieved, and the commercial sales milestone payments and royalties will be recorded when the sales occur.
For the years ended December 31, 2025 and 2024, the Company recorded an annual license maintenance fee payment of $0.1 million. Future annual license maintenance fee payments will continue to be $0.1 million and are due until the termination of the agreement.
Note 10—Leases
Operating Leases
The Company has an operating lease for office and laboratory space in Boston, Massachusetts (the “Boston Lease”).The Boston Lease commenced in February 2022 with the term set to expire in February 2030. The Boston Lease has rent payments escalating annually, which total $11.1 million in the aggregate. As a result, at the commencement of the Boston Lease, the Company recognized a ROU 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 secured a letter of credit for the $0.7 million deposit on the Boston Lease, which was reported as restricted cash, noncurrent on the consolidated balance sheets as of December 31, 2025 and 2024.
The Company also assumed a lease for clinical and regulatory space in Newton, Massachusetts, comprising approximately 6,157 square feet for approximately $0.2 million per year, under a non-cancelable operating lease that expired on June 30, 2024.
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Notes to Consolidated Financial Statements (Continued)
Lease expense for all leases for the years ended December 31, 2025 and 2024 was $1.4 million and $1.5 million, respectively.
The following table summarizes quantitative information about the Company's operating leases (dollars in thousands):
For the year ended December 31,
Operating cash outflows from operating leases $ 1,350 $ 1,427
Weighted-average remaining lease term—operating leases (in years) 4.1 5.1
Weighted-average discount rate—operating leases 8.0 % 8.0 %
As of December 31, 2025, maturities of lease liabilities were as follows (in thousands):
Year Ended December 31, Amounts
Less present value discount (935)
Operating lease liabilities 5,105
Less: operating lease liability, current portion (1,011)
Operating lease liability, noncurrent portion $ 4,094
Note 11—Debt
Senior Secured Convertible Note Financing
In August 2024, the Company entered into the Securities Purchase Agreement with GKCC pursuant to which the Company issued the 3% Convertible Note in the principal amount of $20.0 million. Unless earlier converted in accordance with the terms of the Convertible Note, the Convertible Note would mature on February 15, 2026. Interest on the Convertible Note accrued and was payable quarterly in cash on the principal amount equal to 3% per annum, with an initial interest payment date of June 30, 2025. The Company received net proceeds of approximately $19.7 million from the Convertible Note Financing, after deducting debt issuance costs.
The Convertible Note included multiple conversion features. The Company evaluated all conversion features included within the Convertible Note, under ASC 815, and determined that the default interest feature met the definition of a derivative, but the value was de minimis. During the years ended December 31, 2025 and 2024, the Company recorded an immaterial amount and $0.1 million of other expense related to the accretion of the discount of Convertible Note debt issuance costs, respectively. During the years ended December 31, 2025 and 2024, the Company recorded accrued interest expense of $0.1 million and $0.2 million related to the interest due on the Convertible Note but not yet payable, respectively.
In March 2025, the Company exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of the Company’s common stock. In March 2025, the Company issued 3,500,573 shares of its common stock to GKCC in exchange for the principal balance of $20.0 million plus $0.3 million in accrued interest, in satisfaction in full of the Convertible Note.
Senior Secured Promissory Note Financing
In June 2025, the Company issued the June 2025 Promissory Note in the principal amount of $10.0 million to GKCC. The June 2025 Promissory Note will mature on June 3, 2028, or such earlier date as the June 2025 Promissory Note is required or permitted to be repaid in accordance with the terms of the June 2025 Promissory Note and is a senior, secured obligation of the Company and its subsidiaries. Interest will accrue and be payable in cash on the principal amount at the rate of the sum of the Prime Rate (as defined in the June 2025 Promissory Note) plus 5.00%, provided that the maximum interest rate shall not exceed 12.5% per annum, with an initial interest payment date of July 1, 2026. As of December 31, 2025, the interest rate was 12.5% per annum. The first 24 months of the June 2025 Promissory Note is an interest only period, with payments towards the principal commencing on July 1, 2027 as shown in the below future principal payments table. The Company may prepay the June 2025 Promissory Note in full at any time, but the payment must include the principal, all accrued unpaid interest, and a prepayment fee in one aggregate payment. If the prepayment occurs during the first, second, or third year of the June 2025 Promissory Note, the prepayment fee will be equal to the outstanding principal balance prepaid multiplied by 3%, 2%, or 1%,
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Notes to Consolidated Financial Statements (Continued)
respectively. The June 2025 Promissory Note is secured by a (i) first priority lien on substantially all assets of the Company and its subsidiaries, pursuant to a security agreement and (ii) first priority lien on intellectual property of the Company, pursuant to an intellectual property security agreement. The June 2025 Promissory Note contains customary terms and covenants and customary events of default. As of December 31, 2025, the Company was in compliance with all covenants.
Additionally, in connection with the June 2025 Promissory Note Financing, the Company issued to GKCC the June 2025 Warrant to purchase an aggregate of 103,225 shares of the Company’s common stock. The June 2025 Warrant has an exercise price of $7.75 per share, is immediately exercisable and expires five years from the date of issuance. GKCC will not have the right to exercise any portion of the June 2025 Warrant if GKCC (together with its affiliates) would beneficially own in excess of 49.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the June 2025 Warrant. The fair value of the June 2025 Warrants, as determined by the Black-Scholes option pricing model, was $0.6 million at the date of issuance, and recorded as a debt discount to the June 2025 Promissory Note.
The Company received net proceeds of $9.9 million from the sale of the June 2025 Promissory Note, after deducting debt issuance costs. The June 2025 Promissory Note included multiple conversion features. The Company evaluated all conversion features included within the June 2025 Promissory Note, under ASC 815, and determined that the default interest feature met the definition of a derivative, but the value was immaterial. The net proceeds were allocated with the June 2025 Warrant using the relative fair value. As of December 31, 2025, the net carrying value of the June 2025 Promissory Note was $9.4 million, which is net of the debt discount of $0.6 million. During the year ended December 31, 2025, the Company recognized $0.2 million in accretion of the debt discount and $0.7 million in accrued interest.
As of December 31, 2025, the future principal payments for the June 2025 Promissory Note were as follows (in thousands):
Fiscal Period ($ in thousands)
Total principal amount $ 10,000
Note 12—Income Taxes
Income (loss) before taxes related to the Company’s United States and foreign operations for the years ended December 31, 2025 and 2024 consists of the following (in thousands):
December 31,
The Company had no income tax expense or benefit due to operating losses incurred for the years ended December 31, 2025 and 2024.
Beginning with the year ended December 31, 2025, the Company adopted ASU 2023-09 on a prospective basis. See Note 2for additional details. A reconciliation between the federal statutory income tax amount and rate to the Company's actual effective amount and rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows (in thousands):
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Notes to Consolidated Financial Statements (Continued)
Year Ended Year Ended December 31, 2025
$ %
US federal statutory income tax rate $ (8,310) 21.0 %
Domestic state and local taxes, net of federal effect — — %
Foreign tax effects 20 (0.1) %
Tax credits:
Research and development credits (1,126) 2.9 %
Nontaxable or nondeductible items:
Nondeductible stock based compensation 310 (0.8) %