ELUTIA INC. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Use of Proceeds On October 7, 2020, the SEC declared effective our Registration Statement on Form S-1 (File No. 333-248788), as amended, filed in connection with our IPO (the “Registration Statement”). Pursuant to the Registration Statement, we registered the offer and sale of 2,941,176 shares of our Class A common stock and 735,294 shares of Class B common stock with an aggregate offering price of $50.0 million. Piper Sandler & Co., Cowen and Company, LLC, Cantor Fitzgerald & Co. and Truist Securities, Inc. served as underwriters for the offering. On October 13, 2020 we issued and sold 2,941,176 shares of our Class A common stock, consisting of 2,205,882 shares of Class A common stock and 735,294 shares of Class B common stock, at a price to the public of $17.00 per share. Upon completion of the IPO on October 13, 2020, we received net proceeds of approximately $43.0 million, after deducting the underwriting discount of $3.5 million and offering expenses of $3.5 million. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates. The offering terminated after the sale of all securities registered pursuant to the Registration Statement. The net proceeds of approximately $43.0 million from our IPO have been invested in short-term, investment-grade instruments. There has been no material change in the expected use of the net proceeds from our IPO as described in our Prospectus relating to our Registration Statement. Recent Sales of Unregistered Securities Issuance of Capital Stock From July 1, 2020 through the date of this Quarterly Report, we issued an aggregate of 5,039,427 shares of Series A convertible preferred stock at a price per share of  $1.00, for aggregate consideration of approximately $5.0 million to accredited investors pursuant to Section 4(a)(2) of the Securities Act and Rule 506 as a transaction not involving a public offering. The aggregate consideration consisted of approximately $3.0 million in cash proceeds and the conversion of approximately $2.0 million in aggregate principal amount of convertible promissory notes we issued in April 2020 (as described below), together with accrued interest thereon. In September 2020, we issued 375,000 shares of Series A convertible preferred stock to HighCape Capital, L.P. in exchange for the extinguishment of our obligation to pay an advisory fee, pursuant to Section 4(a)(2) of the Securities Act as a transaction not involving a public offering. In September 2020, we issued to Deerfield 18,384,536 shares of our Series A-1 convertible preferred stock in exchange for an equal number of shares of Series A convertible preferred stock, pursuant to Section 4(a)(2) of the Securities Act as a transaction not involving a public offering. Equity Grants From July 1, 2020 through the date of this Quarterly Report, we granted stock options to purchase an aggregate of 588,907 shares of our Class A common stock, with a weighted average exercise price of  $17.00 per share, and restricted stock units covering 147,883 shares of our Class A common stock to our employees and consultants in connection with services provided to the registrant by such parties. From July 1, 2020 through the date of this Quarterly Report, we issued an aggregate of 402 shares of our Class A common stock to our employees and consultants upon their exercise of stock options, for aggregate cash consideration of approximately $2,000. 79 The issuances of the securities described in the preceding paragraphs were deemed to be exempt from registration under either Rule 701 promulgated under the Securities Act, in that such issuances were underwritten compensatory benefit plans and contracts relating to compensation, or pursuant to Section 4(a)(2) of the Securities Act as transactions not involving a public offering. Convertible Promissory Notes In April 2020, we issued approximately $2.0 million in aggregate principal amount of convertible promissory notes to HighCape Partners QP and HighCape Partners, each accredited investors, pursuant to Section 4(a)(2) of the Securities Act as a transaction not involving a public offering. Upon the closing of our Series A convertible preferred stock financing in September 2020, these convertible promissory notes, together with the accrued interest thereon, converted into an aggregate of 2,039,427 shares of our Series A convertible preferred stock. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. Not applicable.