Elicio Therapeutics Announces $6.0 Million Private Placement Financing
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The private placement of pre-funded warrants by Elicio Therapeutics to an entity controlled by a board member is a strategic move to secure funding for the company's ongoing and future projects. The exercise price of $0.01 per share represents a nominal cost, which could potentially lead to a dilution of the existing shareholders' equity once these warrants are exercised. However, the immediate injection of $6.0 million in gross proceeds before expenses provides Elicio with necessary capital to advance its immunotherapy development pipeline.
Investors should note the beneficial ownership limitation of 19.99%, which serves as a safeguard against excessive dilution and potential shifts in control. The stipulation that stockholder approval is required to exceed this threshold indicates a commitment to maintaining a level of corporate governance. Furthermore, the lack of registration of these securities under the Securities Act presents a limitation on their liquidity, as they cannot be readily sold until the registration statement is filed and effective.
The legal framework surrounding this private placement is noteworthy. Elicio's obligation to file a registration statement for the resale of the shares issuable upon exercise of the warrants is a critical step in complying with the Securities Act of 1933. This move will eventually provide the investors with an exit strategy by enabling the resale of these shares in the public market.
It's important to recognize that the securities being offered are not immediately tradable, which could impact their attractiveness to potential investors. The commitment to register these shares for resale underscores Elicio's intention to adhere to regulatory requirements and enhance the future liquidity of the securities. The explicit statement that this press release does not constitute an offer to sell or a solicitation of an offer to buy ensures that Elicio is not in violation of securities law by prematurely offering unregistered securities.
From a market perspective, the timing and structure of this private placement could be indicative of Elicio's confidence in its development pipeline and its need for quick capital infusion. The biotechnology sector is capital-intensive and companies like Elicio often require substantial funding to progress through clinical trials and regulatory hurdles. The fact that a board member's entity is the investor could signal internal confidence in the company's prospects.
However, the market's reaction to such private placements can be mixed. On one hand, the funding supports research and development efforts, which are essential for long-term growth. On the other hand, potential dilution might concern existing shareholders. Monitoring the company's progress in its clinical trials and the subsequent utilization of the raised capital will be important for assessing the long-term impact of this transaction on the company's valuation and stock performance.
BOSTON, March 18, 2024 (GLOBE NEWSWIRE) -- Elicio Therapeutics, Inc. (Nasdaq: ELTX, “Elicio Therapeutics” or “Elicio”), a clinical-stage biotechnology company developing a pipeline of novel immunotherapies for the treatment of cancer, announced today that it has entered into a subscription agreement to sell pre-funded warrants to purchase up to 1,032,702 shares of its common stock at a purchase price of
Elicio intends to use the net proceeds for the advancement of its development pipeline, as well as for working capital and general corporate purposes.
The securities being issued and sold in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws and may not be reoffered or resold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. As part of the subscription agreement, Elicio has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the "SEC") registering the resale of the shares of common stock issuable upon exercise of the pre-funded warrants (the "Resale Shares").
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of the securities being offered in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offering of the Resale Shares under the resale registration statement will only be by means of a prospectus.
About Elicio Therapeutics
Elicio Therapeutics is a clinical-stage biotechnology company developing a pipeline of novel immunotherapies for the treatment of cancer. By combining expertise in immunology and immunotherapy, Elicio is engineering investigational Amphiphile (“AMP”) immunotherapies intended to precisely target and fully engage the lymph nodes, the site in our bodies where the immune response is orchestrated. Elicio is engineering lymph node-targeted AMPlifiers, immunomodulators, adjuvants, and vaccines for an array of aggressive cancers.
Cautionary Note on Forward-Looking Statements
Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Elicio undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors, including, but not limited to, Elicio’s financial condition, including its ability to obtain the funding necessary to advance the development of ELI-002 and any other future product candidates, and Elicio’s ability to continue as a going concern; estimates regarding future revenue, expenses, capital requirements and need for additional financing; and statements regarding the expected timing for the closing of the private placement and the expected use of proceeds from the private placement.
New factors emerge from time to time, and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks are more fully discussed in the Current Report on Form 8-K that was filed with the SEC on June 2, 2023, under the heading “Risk Factors” in Elicio’s Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and September 30, 2023, and any subsequent reports and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Elicio as of the date of this release. Elicio does not undertake any obligation to update such forward-looking statements to reflect events or circumstances after the date of this release, except to the extent required by law.
Media Contact
Kristin Politi
LifeSci Communications
kpoliti@lifescicomms.com
646-876-4783
Investor Relations Contact
Heather DiVecchia
Elicio Therapeutics
IR@elicio.com
857-209-0153
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