markdown [FORWARD-LOOKING STATEMENTS](index=2&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements and key risks concerning operations, product commercialization, and ongoing litigation - The report contains forward-looking statements regarding **results of operations**, **financial position**, **business strategy**, **product expectations**, **sales and marketing growth**, **earnout payments from the Orthobiologics segment sale**, **product development**, **expenses**, **seasonality**, **competitive advantages**, and **ongoing litigation** (FiberCel, VBM, Medtronic)[7](index=7&type=chunk) - Key risks include the ability to successfully commercialize **EluPro**, continue as a **going concern**, achieve **profitability**, manage **product liability claims**, raise **future funds**, ensure **product acceptance**, enhance **product offerings**, and manage dependence on **commercial partners and suppliers**[9](index=9&type=chunk)[10](index=10&type=chunk)[17](index=17&type=chunk) [WEBSITE DISCLOSURE](index=4&type=section&id=WEBSITE%20DISCLOSURE) Elutia Inc. utilizes its Investor Relations website as a primary channel for material financial and company information - Elutia Inc. uses its Investor Relations section on **www.Elutia.com** as a distribution channel for material financial and other important company information, offering email alerts for updates[16](index=16&type=chunk) [TRADEMARKS, TRADE NAMES AND SERVICE MARKS](index=6&type=section&id=TRADEMARKS%2C%20TRADE%20NAMES%20AND%20SERVICE%20MARKS) This section lists proprietary trademarks and service marks protected under intellectual property laws - The report includes proprietary trademarks such as **Elutia®**, **CanGaroo®**, **EluPro®**, **CanGarooRM®**, **ProxiCor®**, **Tyke®**, **VasCure®**, **SimpliDerm®**, and **SimpliDerm Ellipse®**, which are protected under intellectual property laws[19](index=19&type=chunk) [INDUSTRY AND OTHER DATA](index=6&type=section&id=INDUSTRY%20AND%20OTHER%20DATA) Industry and market data in the report are based on management estimates and third-party publications, subject to inherent risks - Industry and market information in the report is based on management's estimates, internal research, and third-party publications, which are believed to be reliable but involve assumptions and limitations subject to various risks[21](index=21&type=chunk) [PART I – FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents Elutia Inc.'s unaudited condensed consolidated financial statements and management's analysis for the quarter [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Elutia Inc.'s unaudited condensed consolidated financial statements for the three months ended March 31, 2025, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes on accounting policies, debt, equity, and contingencies. The company reported a net loss of $3.9 million for the quarter and faces substantial doubt about its ability to continue as a going concern due to accumulated deficits and cash outflows [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Data | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $17,358 | $13,239 | | Total current assets | $30,017 | $26,172 | | Total assets | $39,298 | $36,127 | | Total current liabilities | $36,851 | $37,795 | | Total liabilities | $75,756 | $82,387 | | Total stockholders' deficit | $(36,458) | $(46,260) | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations Data | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net sales | $6,030 | $6,694 | | Gross profit | $2,457 | $2,843 | | Total operating expenses | $10,379 | $11,322 | | Loss from operations | $(7,922) | $(8,479) | | (Gain) loss on revaluation of warrant liability | $(5,187) | $9,637 | | Net loss | $(3,933) | $(17,994) | | Net loss per share - basic | $(0.10) | $(0.75) | | Net loss per share - diluted | $(0.21) | $(0.75) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) Stockholders' Equity Data | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total stockholders' deficit | $(46,260) | $(36,458) | | Issuance of common stock (net) | $12,596 | N/A | | Stock-based compensation | $1,211 | N/A | | Net loss | $(3,933) | N/A | - The company issued **5,520,000 shares** of Class A common stock in a registered direct offering, net of **$1.2 million** issuance costs, contributing **$12.6 million** to equity[32](index=32&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Data | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash used in operating activities | $(8,881) | $(2,641) | | Net cash used in investing activities | $(278) | $(15) | | Net cash provided by (used in) financing activities | $13,278 | $(4,069) | | Net increase (decrease) in cash and cash equivalents | $4,119 | $(6,725) | | Cash and cash equivalents, end of period | $17,358 | $12,551 | - Financing activities provided **$13.3 million** in cash for Q1 2025, primarily from a private placement and warrants, offsetting cash used in operations[35](index=35&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on Elutia Inc.'s accounting policies, debt, equity, and contingencies [Note 1. Organization and Description of Business](index=12&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) - Elutia Inc. is a commercial-stage company focused on improving medical device-patient interaction through biologics and local drug delivery, with products in **Device Protection**, **Women's Health**, and **Cardiovascular** markets[38](index=38&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim information, and the company has evaluated its ability to continue as a **going concern**, noting substantial doubt due to a net loss of **$3.9 million** and an accumulated deficit of **$233.5 million** as of March 31, 2025[39](index=39&type=chunk)[44](index=44&type=chunk) - The company completed the sale of its Orthobiologics Business in November 2023 for approximately **$14.6 million**, with potential earn-out payments up to an additional **$20 million**, while retaining liabilities for FiberCel and VBM litigation[41](index=41&type=chunk) - Revenue is recognized when performance obligations are met and control of products transfers to customers, either upon shipment or delivery/use for consigned inventory[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - One customer accounted for **15%** of net sales and **15%** of accounts receivable as of March 31, 2025[79](index=79&type=chunk) [Note 3. Recently Issued Accounting Standards](index=22&type=section&id=Note%203.%20Recently%20Issued%20Accounting%20Standards) - ASU 2023-09 (Income Tax Disclosures) is effective for fiscal years beginning after **December 15, 2024**, and is not expected to have a material effect on financial condition, results of operations, or cash flows[83](index=83&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for annual reporting periods beginning after **December 15, 2026**, and the company is currently evaluating its disclosure requirements[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Note 4. Stock-Based Compensation](index=24&type=section&id=Note%204.%20Stock-Based%20Compensation) Stock-Based Compensation Data | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Stock Options Outstanding | 3,204,215 | 3,220,991 | | RSUs Unvested | 1,342,766 | 1,417,123 | | Total Stock-Based Compensation Expense (Q1 2025) | $1,211 (in thousands) | N/A | | Total Stock-Based Compensation Expense (Q1 2024) | N/A | $2,197 (in thousands) | - Unrecognized compensation expense for unvested stock options was approximately **$2.7 million**, expected to be recognized over **1.7 years**, and for RSUs was **$3.9 million**, expected over **1.8 years**[88](index=88&type=chunk)[93](index=93&type=chunk) [Note 5. Inventory](index=28&type=section&id=Note%205.%20Inventory) Inventory Breakdown | Inventory Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------ | :----------------------------- | :----------------------------- | | Raw materials | $329 | $440 | | Work in process | $1,060 | $740 | | Finished goods | $2,897 | $2,731 | | Total | $4,286 | $3,911 | [Note 6. Long-Term Debt](index=28&type=section&id=Note%206.%20Long-Term%20Debt) - The company has a **$25 million** SWK Loan Facility maturing in **August 2027**, with principal amortization starting in **November 2025**, bearing interest at SOFR plus an applicable margin (**7.75%** or **3.75%** with PIK option)[99](index=99&type=chunk)[100](index=100&type=chunk) - A **May 2025** amendment to the SWK Loan Facility allowed **100% PIK interest** for **May 2025**, removed mandatory prepayments from non-ordinary course asset sales, and fixed the minimum liquidity covenant at **$8.0 million**[101](index=101&type=chunk)[102](index=102&type=chunk) Long-Term Debt Summary | Debt Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Term Loan Facility, net | $24,262 | $23,853 | | Current Portion | $(2,500) | $(1,250) | | Long-Term Debt | $21,762 | $22,603 | [Note 7. Revenue Interest Obligation](index=30&type=section&id=Note%207.%20Revenue%20Interest%20Obligation) - The company has a Revenue Interest Obligation to Ligand Pharmaceuticals, amended in January 2024, requiring **5%** of future sales of certain products (CanGaroo, ProxiCor, Tyke, VasCure, EluPro) through **May 2027**, subject to annual minimum payments of **$4.4 million**[106](index=106&type=chunk) - In **May 2025**, **$2.2 million** in outstanding royalty obligations to Ligand was satisfied by issuing **1,105,528 shares** of Class A common stock[108](index=108&type=chunk) - A **$1.4 million** gain on revaluation of the Revenue Interest Obligation was recognized in Q1 2024 due to changes in estimated future payments[109](index=109&type=chunk) [Note 8. Common Stock and Warrants](index=32&type=section&id=Note%208.%20Common%20Stock%20and%20Warrants) Equity and Warrant Data | Offering | Date | Gross Proceeds (approx.) | Shares of Class A Common Stock | Prefunded Warrants | | :-------------------- | :----------- | :----------------------- | :----------------------------- | :------------------- | | 2025 Registered Offering | Feb 4, 2025 | $15.0 million | 5,520,000 | 480,000 | | 2024 Registered Offering | June 16, 2024 | $13.3 million | 3,175,000 | 725,000 | | 2023 Private Offering | Sep 21, 2023 | $10.5 million | 6,852,811 (Common Units) | 503,058 (Prefunded Units) | - All Common Warrants from the 2023 Private Offering were exercised by **July 31, 2024**, generating **$13.8 million** in exercise proceeds[117](index=117&type=chunk) Warrant Data | Warrant Type | Warrant Liability, Dec 31, 2024 (in thousands) | Fair Value Upon Issuance (Q1 2025) (in thousands) | Gain on Revaluation (Q1 2025) (in thousands) | Warrant Liability, Mar 31, 2025 (in thousands) | | :-------------------- | :----------------------------------- | :------------------------------------------ | :----------------------------------------- | :----------------------------------- | | 2023 Prefunded Warrants | $13,365 | - | $(4,324) | $9,041 | | 2024 Prefunded Warrants | $2,711 | - | $(877) | $1,834 | | 2025 Prefunded Warrants | - | $1,200 | $14 | $1,214 | | Total | $16,076 | $1,200 | $(5,187) | $12,089 | [Note 9. Commitments and Contingencies](index=36&type=section&id=Note%209.%20Commitments%20and%20Contingencies) - The company has a license and supply agreement with Cook Biotech for porcine tissue, with annual license fees of **$0.1 million** through **2026**[120](index=120&type=chunk) - FiberCel Litigation: **58 active lawsuits** as of March 31, 2025, with **$17.5 million** settled for **52 cases** and an estimated **$14.3 million** liability for the remaining cases. No more insurance coverage is available for FiberCel litigation costs[122](index=122&type=chunk)[126](index=126&type=chunk)[133](index=133&type=chunk) - VBM Litigation: **12 active lawsuits** as of March 31, 2025, with **$1.5 million** settled for **12 cases** and an estimated **$3.6 million** liability for the remaining **23 cases** (including unasserted claims). Insurance coverage remains available for VBM litigation costs[124](index=124&type=chunk)[129](index=129&type=chunk)[133](index=133&type=chunk) - Medtronic Litigation: Elutia sued Medtronic for breach of a supply agreement related to FiberCel. The court dismissed the insurance coverage claim but allowed the indemnity obligation claim to proceed[125](index=125&type=chunk) - Insurance Receivables of Litigation Costs totaled **$3.9 million** as of March 31, 2025, all related to the VBM Litigation[132](index=132&type=chunk)[133](index=133&type=chunk) [Note 10. Net Income (Loss) Per Share](index=41&type=section&id=Note%2010.%20Net%20Income%20(Loss)%20Per%20Share) Net Loss Per Share Data | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(3,933) (in thousands) | $(17,994) (in thousands) | | Net loss for diluted earnings per share | $(9,134) (in thousands) | $(17,994) (in thousands) | | Weighted average common shares outstanding - basic | 38,616,207 | 23,912,326 | | Weighted average common shares outstanding - diluted | 42,913,111 | 23,912,326 | | Net loss per share - basic | $(0.10) | $(0.75) | | Net loss per share - diluted | $(0.21) | $(0.75) | - Potential dilutive securities, including stock options, restricted stock units, and warrants, were excluded from diluted net loss per share calculation as their effect would be anti-dilutive[135](index=135&type=chunk) [Note 11. Segment Information](index=41&type=section&id=Note%2011.%20Segment%20Information) - Elutia operates in three segments: **Device Protection**, **Women's Health**, and **Cardiovascular**, with performance evaluated by the CEO based on segment net sales and gross profit (excluding intangible asset amortization)[136](index=136&type=chunk)[137](index=137&type=chunk) Segment Performance Data | Segment | Net Sales (Q1 2025, in thousands) | Segment Gross Profit (Q1 2025, in thousands) | | :---------------- | :------------------------------ | :------------------------------------------- | | Device Protection | $3,079 | $1,655 | | Women's Health | $2,625 | $1,452 | | Cardiovascular | $326 | $199 | | Total | $6,030 | $3,306 | Segment Performance Data | Segment | Net Sales (Q1 2024, in thousands) | Segment Gross Profit (Q1 2024, in thousands) | | :---------------- | :------------------------------ | :------------------------------------------- | | Device Protection | $2,357 | $1,628 | | Women's Health | $3,567 | $1,567 | | Cardiovascular | $770 | $497 | | Total | $6,694 | $3,692 | - One customer in the Women's Health segment represented **15%** of total net sales in Q1 2025 and **17%** in Q1 2024[138](index=138&type=chunk)[139](index=139&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Elutia Inc.'s financial condition and operational results for the three months ended March 31, 2025, compared to the prior year. It details the company's business overview, the impact of discontinued operations and product recalls, a breakdown of revenue and expenses, and an analysis of liquidity and capital resources, including ongoing concerns about profitability and funding requirements [Overview](index=43&type=section&id=Overview) - Elutia's mission is to humanize medicine by leveraging biologics and local drug delivery to reduce complications with implanted medical devices, focusing on **Device Protection** (EluPro, CanGaroo) and **Women's Health** (SimpliDerm) markets[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - **EluPro**, cleared by the FDA in **June 2024** and fully launched in **January 2025**, is the only drug-eluting biomatrix (DEB) in the U.S. implantable electronic device protection market, designed to mitigate infection and other complications[145](index=145&type=chunk)[153](index=153&type=chunk) - The company utilizes a direct sales force and commercial partners (Boston Scientific for Device Protection, Tiger Aesthetics Medical for Women's Health) for product distribution, and plans to expand DEB offerings and internal production capabilities at a new Gaithersburg, MD facility by **Q4 2025**[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Discontinued Operations – Sale of Orthobiologics Business](index=45&type=section&id=Discontinued%20Operations%20%E2%80%93%20Sale%20of%20Orthobiologics%20Business) - The sale of the Orthobiologics Business to Berkeley Biologics, LLC was completed in **November 2023**, yielding **$14.6 million** upfront and potential earn-out payments of up to **$20 million** over **five years**, with a **$1.5 million** indemnity holdback[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Elutia retained liabilities for the FiberCel and VBM product recalls, which were part of the divested Orthobiologics Business[156](index=156&type=chunk) [Product Recalls](index=47&type=section&id=Product%20Recalls) - Voluntary recalls were issued for **FiberCel** (**June 2021**) and a **VBM product** (**July 2023**) due to post-surgical tuberculosis infections, both of which were part of the divested Orthobiologics Business[157](index=157&type=chunk) [Components of Our Results of Operations](index=47&type=section&id=Components%20of%20Our%20Results%20of%20Operations) - Net sales are generated from **Device Protection**, **Women's Health**, and **Cardiovascular** products, distributed through direct sales, commercial partners, and independent sales agents[158](index=158&type=chunk) - Operating expenses include Cost of Goods Sold (raw materials, processing, manufacturing overhead, intangible amortization), Sales and Marketing (direct sales force, commissions, distribution), General and Administrative (compensation, legal, public company costs), Research and Development (salaries, supplies, clinical studies), and Litigation Costs, net (legal fees, settlement costs offset by insurance)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - Future R&D efforts will focus on expanding **EluPro** offerings, developing new DEB products, and conducting clinical studies to support commercialization[163](index=163&type=chunk) [Results of Operations (Comparison of the Three Months Ended March 31, 2025 and 2024)](index=50&type=section&id=Results%20of%20Operations%20(Comparison%20of%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024)) [Net Sales](index=50&type=section&id=Net%20Sales) Net Sales by Product Category | Product Category | Q1 2025 Net Sales (in thousands) | Q1 2024 Net Sales (in thousands) | Change ($) | Change (%) | | :--------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Device Protection | $3,079 | $2,357 | $722 | 30.6% | | Women's Health | $2,625 | $3,567 | $(942) | (26.4)% | | Cardiovascular | $326 | $770 | $(444) | (57.7)% | | Total Net Sales | $6,030 | $6,694 | $(664) | (9.9)% | - Total net sales decreased by **$0.7 million** (**9.9%**) year-over-year, driven by volume declines in Women's Health and Cardiovascular, partially offset by growth in Device Protection from EluPro's commercial launch[167](index=167&type=chunk) [Cost of Goods Sold](index=52&type=section&id=Cost%20of%20Goods%20Sold) Cost of Goods Sold and Gross Margin | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------------ | :--------------------- | :--------------------- | :--------- | :--------- | | Total Cost of Goods Sold | $3,573 | $3,851 | $(278) | (7.2)% | | Gross margin | 40.7% | 42.5% | (1.8)% | N/A | | Gross margin, excluding intangible asset amortization | 54.8% | 55.2% | (0.4)% | N/A | - Cost of goods sold decreased by **$0.3 million**, with gross margin declining slightly to **40.7%** (from **42.5%**). Women's Health gross margin increased due to fewer non-recurring write-offs, while Device Protection gross margin declined with the addition of EluPro, which currently has a lower margin[169](index=169&type=chunk) [Operating Expenses](index=52&type=section&id=Operating%20Expenses) Operating Expenses Breakdown | Expense Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change ($) | Change (%) | | :------------------------ | :--------------------- | :--------------------- | :--------- | :--------- | | Sales and marketing | $3,031 | $3,309 | $(278) | (8.4)% | | General and administrative | $3,871 | $5,056 | $(1,185) | (23.4)% | | Research and development | $905 | $1,172 | $(267) | (22.8)% | | Litigation costs, net | $2,572 | $1,785 | $787 | 44.1% | | Total operating expenses | $10,379 | $11,322 | $(943) | (8.3)% | - Sales and marketing, G&A, and R&D expenses all decreased, primarily due to lower non-cash equity compensation and reduced legal fees (G&A) and outside testing services (R&D) post-EluPro FDA clearance[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - Litigation costs, net, increased by **44.1%** to **$2.6 million**, mainly because insurance coverage for FiberCel Litigation defense costs was available in Q1 2024 but not in Q1 2025[174](index=174&type=chunk) [Interest Expense](index=54&type=section&id=Interest%20Expense) Interest Expense Summary | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change ($) | Change (%) | | :--------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Interest expense | $1,085 | $1,313 | $(228) | (17.4)% | - Interest expense decreased by **$0.2 million**, primarily due to lower principal outstanding on the SWK debt following mandatory repayments related to the Orthobiologics Business sale[175](index=175&type=chunk) [Other Expense (Income), net](index=54&type=section&id=Other%20Expense%20(Income)%2C%20net) Other Expense (Income) Summary | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change ($) | Change (%) | | :--------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Other expense (income), net | $105 | $(1,443) | $1,548 | NM | - Other expense (income), net, shifted from an income of **$1.4 million** in Q1 2024 (due to a gain on revaluation of the Revenue Interest Obligation) to an expense of **$0.1 million** in Q1 2025 (due to transaction fees for 2025 Prefunded Warrants)[176](index=176&type=chunk)[177](index=177&type=chunk) [Non-GAAP Financial Measures](index=54&type=section&id=Non-GAAP%20Financial%20Measures) - The company presents gross margin, excluding intangible asset amortization, as a non-GAAP measure to provide supplemental information on operating performance by removing amortization expense[178](index=178&type=chunk) Non-GAAP Gross Margin Reconciliation | Metric | Q1 2025 | Q1 2024 | | :------------------------------------------ | :------ | :------ | | Gross margin | 40.7% | 42.5% | | Gross margin, excluding intangible asset amortization | 54.8% | 55.2% | [Seasonality](index=56&type=section&id=Seasonality) - The company historically experiences seasonality with higher sales in the **fourth quarter** (due to hospital budget cycles and patient deductibles) and lower sales in the **first quarter** (due to re-established patient deductibles)[182](index=182&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2025, cash and cash equivalents totaled **$17.4 million**, with an accumulated deficit of **$233.5 million**, indicating substantial doubt about the company's ability to continue as a **going concern** within **one year**[183](index=183&type=chunk)[190](index=190&type=chunk) - The company raised capital through a **$15.0 million** registered direct offering in **February 2025** and a **$13.3 million** registered direct offering in **June 2024**, involving Class A common stock and prefunded warrants[184](index=184&type=chunk)[185](index=185&type=chunk) Cash Flow Summary | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :----------------------- | :--------------------- | :--------------------- | | Operating activities | $(8,881) | $(2,641) | | Investing activities | $(278) | $(15) | | Financing activities | $13,278 | $(4,069) | | Net increase (decrease) in cash | $4,119 | $(6,725) | - Net cash used in operating activities increased to **$8.9 million** in Q1 2025, primarily due to higher trade obligation paydowns and **$3.0 million** in FiberCel settlement payments[193](index=193&type=chunk) - Net cash provided by financing activities was **$13.3 million** in Q1 2025, mainly from the 2025 Registered Offering, contrasting with cash used in Q1 2024 due to debt and revenue interest obligation repayments[196](index=196&type=chunk) - The SWK Loan Facility had **$24.3 million** outstanding as of March 31, 2025, and was amended in **May 2025** to allow PIK interest, remove mandatory prepayments from asset sales, and fix the minimum liquidity covenant at **$8.0 million**[197](index=197&type=chunk)[198](index=198&type=chunk)[208](index=208&type=chunk) - The Ligand Revenue Interest Obligation was further amended in **May 2025**, satisfying **$2.2 million** in royalty obligations through the issuance of **1,105,528 shares** of Class A common stock[209](index=209&type=chunk)[210](index=210&type=chunk) - Future funding requirements are significant due to ongoing commercialization of **EluPro**, product development, clinical activities, and public company operating costs, with potential capital raises through equity, debt, or asset sales[211](index=211&type=chunk)[212](index=212&type=chunk)[214](index=214&type=chunk) [Critical Accounting Policies and Estimates](index=66&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No material changes to critical accounting policies and estimates were reported during the three months ended March 31, 2025, other than those outlined in Note 2[215](index=215&type=chunk) [Recent Accounting Pronouncements](index=68&type=section&id=Recent%20Accounting%20Pronouncements) - Information regarding recently issued accounting pronouncements is detailed in Note 3 to the condensed consolidated financial statements[217](index=217&type=chunk) [JOBS Act](index=68&type=section&id=JOBS%20Act) - As an 'emerging growth company,' Elutia Inc. has elected to use the extended transition period for adopting new or revised accounting standards, which may result in financial statements not being comparable to those of public companies complying with earlier effective dates[218](index=218&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Elutia Inc.'s exposure to market risks, including interest rate risk, credit risk, and foreign currency risk, and their potential impact on the company's financial condition and results of operations - The company's primary market risk exposure is to changes in interest rates, particularly on its variable-rate SWK Loan Facility, though a hypothetical 10% change would not materially affect financial statements[221](index=221&type=chunk) - Credit risk exists as cash balances with financial institutions may exceed federally insured limits, but these institutions are believed to have sufficient assets and liquidity[222](index=222&type=chunk) - Foreign currency risk is currently minimal as business is primarily conducted in U.S. dollars, but exposure could increase with operational growth[223](index=223&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that Elutia Inc.'s management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2025, concluding they were effective, and reported no material changes in internal control over financial reporting during the quarter - The company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2025[226](index=226&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended March 31, 2025[227](index=227&type=chunk) [PART II – OTHER INFORMATION](index=70&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 of the condensed consolidated financial statements for detailed information on legal proceedings, acknowledging the inherent uncertainty of their outcomes - Information regarding legal proceedings, including the FiberCel, VBM, and Medtronic litigations, is detailed in Note 9 to the condensed consolidated financial statements[229](index=229&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report, which could materially and adversely affect its business, financial condition, operating results, and stock price - No material changes to the risk factors disclosed in the Annual Report have occurred[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[231](index=231&type=chunk) [Item 3. Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[232](index=232&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[233](index=233&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended March 31, 2025[234](index=234&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including various agreements, certificates, and certifications - The report includes exhibits such as the Asset Purchase Agreement, Restated Certificate of Incorporation, Amended and Restated Bylaws, various warrant forms (SWK, Common, Prefunded), and certifications[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) [SIGNATURES](index=77&type=section&id=SIGNATURES) This section contains the official signatures of the President, Chief Executive Officer, and Chief Financial Officer - The report is signed by C. Randal Mills, Ph.D., President and Chief Executive Officer, and Matthew Ferguson, Chief Financial Officer, on **May 13, 2025**[244](index=244&type=chunk)
Elutia(ELUT) - 2025 Q1 - Quarterly Report