What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2025-11-12 · 212 added, 345 removed, 430 unchanged (56% of the section changed)

2 unchanged sentences

(In Thousands, Except for Share and Per Share Data)

September 30,

Current assets:

3 unchanged sentences

Prepaid expenses and other current assets

Current assets of discontinued operations

Divestiture proceeds receivables

Total current assets

2 unchanged sentences

Operating lease right-of-use assets and other

Noncurrent assets of discontinued operations

Liabilities and Stockholders’ Deficit

Liabilities and Stockholders’ Equity

Current liabilities:

1 unchanged sentence

Accrued expenses

Current portion of long-term debt

Current portion of revenue interest obligation

1 unchanged sentence

Current operating lease liabilities

Current liabilities of discontinued operations

Total current liabilities

Long-term debt

Long-term revenue interest obligation

1 unchanged sentence

Long-term operating lease liabilities

Noncurrent liabilities of discontinued operations

Total liabilities

1 unchanged sentence

Stockholders’ equity (deficit):

Class A Common stock, $ 0.001 par value per share, 200,000,000 shares authorized as of September 30, 2025 and December 31, 2024, and 40,198,920 and 30,897,232 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Class B Common stock, $ 0.001 par value per share, 20,000,000 shares authorized as of September 30, 2025 and December 31, 2024, and 2,351,246 and 4,313,406 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Class A Common stock, $ 0.001 par value per share, 200,000,000 shares authorized as of March 31, 2026 and December 31, 2025, and 44,208,236 and 42,784,848 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Class B Common stock, $ 0.001 par value per share, 20,000,000 shares authorized as of March 31, 2026 and December 31, 2025, and no shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ deficit

Total liabilities and stockholders' deficit

Total stockholders’ equity

Total liabilities and stockholders' equity

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of goods sold

4 unchanged sentences

Total operating expenses

Loss from operations

Interest expense, net

(Gain) loss on revaluation of warrant liability

Other expense (income), net

Income (loss) before provision for income taxes

Loss from continuing operations

Interest (income) expense, net

Loss (gain) on revaluation of warrant liability

Other (income) expense, net

Loss from continuing operations before provision for income taxes

Income tax expense

Net income (loss) from continuing operations

Loss from discontinued operations

Net income (loss)

Undistributed net income to participating securities

Net income (loss) attributable to common stockholders

Net income (loss) attributable to common stockholders from continuing operations per share - basic

Net loss per share attributable to common stockholders from continuing operations per share - diluted

Net income (loss) attributable to common stockholders from discontinued operations per share - basic

Net income (loss) attributable to common stockholders from discontinued operations per share - diluted

Net income (loss) attributable to common stockholders per share - basic

Net loss attributable to common stockholders per share - diluted

Net loss from continuing operations

Income (loss) from discontinued operations

dilutive gain on revaluation of warrant liability

Net loss for dilutive earnings per share

Net loss from continuing operations per share - basic

Net loss from continuing operations per share - diluted

Net income (loss) from discontinued operations per share - basic

Net income (loss) from discontinued operations per share - diluted

Net loss per share - basic

Net loss per share - diluted

Weighted average common shares outstanding - basic

5 unchanged sentences

Equity (Deficit)

Balance, June 30, 2025

Issuance of common stock under Employee Stock Purchase Plan

Vesting of restricted stock units, net of shares withheld and taxes paid

Stock-based compensation

Conversion of Class B Common Stock to Class A Common Stock

( 1,962,160 )

Exercise of Prefunded Warrants

Balance, September 30, 2025

Balance, June 30, 2024

Exercises of Common Warrants

Issuance of common stock under Employee Stock Purchase Plan and exercise of stock options

Vesting of restricted stock units, net of shares withheld and taxes paid

Stock-based compensation

Balance, September 30, 2024

Stockholders'

Equity (Deficit)

Balance, December 31, 2025

Issuance of common stock in connection with registered direct offering, net of issuance costs of $ 1.2 million

Issuance of common stock as payment under revenue interest obligation

Issuance of common stock as payment of interest

Conversion of Class B Common Stock to Class A Common Stock

( 1,962,160 )

Exercise of Prefunded Warrants

Exercise of stock options

Issuance of common stock under Employee Stock Purchase Plan

1 unchanged sentence

Stock-based compensation

Balance, September 30, 2025

Warrants exercise, net of administrative costs

Balance, March 31, 2026

Balance, December 31, 2024

Issuance of common stock in connection with registered direct offering, net of issuance costs of $1.2 million

Exercises of Common Warrants and Prefunded Warrants

Issuance of common stock under Employee Stock Purchase Plan and exercise of stock options

Issuance of common stock under Employee Stock Purchase Plan

Vesting of restricted stock units, net of shares withheld and taxes paid

Stock-based compensation

Balance, September 30, 2024

Balance, March 31, 2025

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

(In Thousands)

Nine Months Ended

September 30,

Three Months Ended

Adjustments to reconcile net loss to net cash used in operating activities:

1 unchanged sentence

Gain on sale of Orthobiologics Business

(Gain) loss on revaluation of warrant liability

Gain on revaluation of revenue interest obligation

Loss (gain) on revaluation of warrant liability

Amortization of deferred financing costs and debt discount

1 unchanged sentence

Stock-based compensation

Bad debt expense

Changes in right-of-use assets and lease liabilities and lease incentives received

Changes in operating assets and liabilities:

4 unchanged sentences

Contingent liability for legal proceedings

Other liabilities

Net cash used in operating activities

4 unchanged sentences

FINANCING ACTIVITIES:

Proceeds from private placement and warrants, net of offering costs

Repayments of long-term debt

Proceeds from exercises of Common Warrants and Prefunded Warrants

Payments on revenue interest obligation

Proceeds from direct registered offering and warrants, net of offering costs

Repayments of insurance premium financings

2 unchanged sentences

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

2 unchanged sentences

Cash paid for interest

Issuance of common stock as payment under revenue interest obligation

Additions to operating lease right-of-use assets

Conversion of Common Warrants and Prefunded Warrants to common stock

Conversion of Prefunded Warrants to common stock

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Organization and Description of Business

(together with its consolidated subsidiary, “Elutia” or the “Company”) is a commercial-stage company leveraging its unique understanding of biologics combined with local drug delivery to improve the interaction between implanted medical devices and patients by reducing complications associated with these surgeries.

The Company has developed a portfolio of products using both human and porcine tissue that are designed to be as close to natural biological material as possible.

(together with its consolidated subsidiary, "Elutia” or the “Company”) is a commercial-stage company developing proprietary drug-eluting biomatrix products for use in surgical reconstruction and related applications.

These products are designed to improve the interaction between implanted medical devices and patients.

The Company’s focus is on addressing unmet medical needs and reducing complications associated with surgery, including infection, migration, erosion, implant rejection, and fibrosis.

Elutia’s portfolio of products spans the Women’s Health and Cardiovascular markets.

These products are primarily sold to healthcare providers or commercial partners.

On November 7, 2025, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”), notifying us that, for the last 30 consecutive business days, the closing bid price for our Class A common stock, par value $ 0.001 per share (the “Common Stock”), was below $ 1.00 per share, which is the minimum closing bid price (the “Minimum Bid Price”) required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Notice”).

The Notice provided a compliance period of 180 calendar days from the date of the Notice, or until May 6, 2026 (the “Compliance Period”), to regain compliance with the Minimum Bid Price requirement.

These products are sold to healthcare providers.

Summary of Significant Accounting Policies

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Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K (“2025 Annual Report”) for the fiscal year ended December 31, 2025.

The financial information as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included.

The financial information as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included.

The condensed consolidated balance sheet data as of December 31, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP.

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On September 8, 2025, Elutia executed an Asset Purchase Agreement (the “APA”) with Boston Scientific Corporation (“BSC”), a Delaware corporation, and Cardiac Pacemakers Inc.

(“CPI”), a Minnesota corporation (collectively with BSC, the “Buyers”).

On October 1, 2025, at the closing of the transactions contemplated by the APA, the Buyers purchased from the Company substantially all of the assets that are related to the Company’s business of researching, developing, administering, operating, commercializing, manufacturing, selling and marketing its cardiac implantable electronic device (“CIED”) products, including its CanGaroo®, CanGaroo® RM, EluPro™ and CIED envelope products, including next generation CIED envelope products (collectively the “CIED Business”).

The assets of the CIED Business constitute substantially all of the assets held in Elutia’s Device Protection segment.

The Buyers are only assuming certain liabilities related to performance of the contracts transferred in the APA.

The APA provides for an aggregate purchase price, subject to certain adjustments pursuant to the terms of the APA, of up to $ 88 million in cash,

with $ 80.3 million (which included a preliminary inventory adjustment of $ 0.3 million) that was paid in cash to Elutia at the closing of the transactions and $ 8 million that was deposited at the closing of the transactions in escrow with a bank for twelve months , which is subject to potential reduction in the event of certain post-closing breaches of representations and warranties within the APA by the Company.

The sale of the CIED Business represents a strategic shift that has a major effect on the Company’s operations and financial results.

Consequently, the Company met the held-for-sale criteria of Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations as of September 30, 2025.

(“CPI”), a Minnesota corporation (collectively with BSC, the “ CIED Buyers”).

On October 1, 2025, at the closing of the transactions contemplated by the APA, the CIED Buyers purchased from the Company substantially all of the assets that are related to the Company’s business of researching, developing, administering, operating, commercializing, manufacturing, selling and marketing its cardiac implantable electronic device (“CIED”) products, including its CanGaroo®, CanGaroo® RM, EluPro™ and CIED envelope products, including next generation CIED envelope products (collectively the “CIED Business”).

The assets of the CIED Business constituted substantially all of the assets previously held in Elutia’s Device Protection segment.

The CIED Buyers only assumed certain liabilities related to performance of the contracts transferred in the APA.

The APA provided for an aggregate purchase price, subject to certain adjustments pursuant to the terms of the APA, of up to $ 88.0 million in cash, with $ 80.4 million (which includes an inventory adjustment of $ 0.4 million) that was paid in cash to Elutia at the closing of the transactions or shortly thereafter, and $ 8.0 million that was deposited at the closing of the transactions in escrow with a bank for twelve months , which is subject to potential reduction in the event of certain post-closing breaches of representations and warranties within the APA by the Company.

The Company recognized a gain, net of tax effect and divestiture costs, of $ 76.1 million on the sale of the CIED Business during the fourth quarter of 2025.

Such gain included the recognition of the $ 8.0 million in escrow as a divestiture proceeds receivable on the accompanying balance sheet as of March 31, 2026.

The sale of the CIED Business represented a strategic shift that has a major effect on the Company’s operations and financial results.

Consequently, the Company met the held-for-sale criteria of Accounting Standards Codification

(“ASC”) 205-20, Discontinued Operations .

Accordingly, this transaction is accounted for as Discontinued Operations for all periods presented in accordance with ASC 205-20, Discontinued Operations .

Unless indicated otherwise, the information in the notes to the Condensed Consolidated Financial Statements relates to continuing operations.

Unless indicated otherwise, the information in the notes to the consolidated financial statements relates to continuing operations.

See Note 4 for further discussion of the divestiture of the CIED Business.

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The earn-out payments are equal to 10 % of the actual revenue earned by Berkeley in each of the five years after the closing of the sale from sales of specified Orthobiologics products under the purchase agreement (including improvements, modifications, derivatives and enhancements related to those products).

There were no earn-out payments earned or paid in the nine months ended September 30, 2025 or 2024.

Additionally, the purchase agreement provides for a customary indemnity holdback in the amount of $ 1.5 million to be retained by Berkeley for 24 months after closing.

There were no earn-out payments earned or paid in the three months ended March 31, 2026 or 2025.

In the purchase agreement, the Company has retained the liabilities arising out of the VBM and FiberCel matters, as described in Note 17, both of which products were part of the Orthobiologics Business.

The Company recognized a gain of $ 6.0 million on the sale of the Orthobiologics Business in the fourth quarter of 2023 and an additional gain of $ 0.2 million in the second quarter of 2024 from an adjustment payment related to the final working capital received by Berkeley at the sale date.

The indemnity holdback is available as a source of recovery for Berkeley for claims of indemnification under the purchase agreement, and some or all of the holdback may be retained by Berkeley if Berkeley is successful in asserting a claim or claims for indemnification against the Company.

The Company is aware of certain indemnity-related claims raised, including a claim from a former supplier alleging breach of contract.

Based on the Company’s ongoing assessment of these claims, along with the remaining indemnity holdback of $ 1.5 million, the Company does not consider a loss to be probable or estimable as of September 30, 2025.

Should the Company receive incremental proceeds in the future through an earn-out payment or payment of the holdback amount, an additional gain will be recorded upon the receipt of such amounts.

Additionally, the purchase agreement provided for a customary indemnity holdback in the amount of $ 1.5 million to be retained by Berkeley for 24 months after closing of the transaction.

In March 2026, the indemnity holdback was resolved with Berkeley remitting $ 0.4 million to Elutia.

Such amount was recognized as additional gain in the first quarter of 2026 within income (loss) from discontinued operations in the accompanying condensed consolidated financial statements.

Should the Company receive incremental proceeds in the future through an earn-out payment, an additional gain will be recorded upon the receipt of such amounts.

Since inception, the Company has financed its operations primarily through amounts borrowed under its credit facilities, proceeds from its initial public offering (“IPO”), sales of its products and more recently, the sale of its Orthobiologics and CIED Businesses and proceeds from follow-on offerings and private placements of its common stock and warrants to purchase its common stock.

The Company’s historical cash outflows have primarily been associated with manufacturing and administrative costs, general and marketing, research and development, clinical activity, purchase of property and equipment used in its production activities, litigation defense and settlement costs and investing in its commercial infrastructure.

For the nine months ended September 30, 2025, the Company incurred a net loss of $ 17.4 million, and as of September 30, 2025, the Company had an accumulated deficit of $ 247.0 million.

In addition, during the nine months ended September 30, 2025, the Company used $ 20.0 million of cash in operating activities.

The Company’s historical cash outflows have primarily been associated with manufacturing and administrative costs, sales and marketing, research and development, clinical activity, purchase of property and equipment used in its production activities, litigation defense and settlement costs and investing in its commercial infrastructure.

For the three months ended March 31, 2026, the Company incurred a loss from continuing operations of $ 7.9 million, and as of March 31, 2026, the Company had an accumulated deficit of $ 183.7 million.

In addition, during the three months ended March 31, 2026, the Company used $ 7.8 million of cash in operating activities.

The Company expects to incur operating losses and negative cash flows from operations for the foreseeable future, as the Company advances its development and commercialization of NXT-41 and NXT-41x.

1 unchanged sentence

The future viability of the Company is dependent on its ability to generate cash flows from current or future product sales and/or raise additional capital to finance its operations.

The Company may seek to raise capital through the issuance of common stock or debt such as the offerings described in Note 8 or pursue asset sales or other transactions, such as the sale of the CIED and Orthobiologics Businesses described

The Company may seek to raise capital through the issuance of common stock or debt such as the offerings described in Note 9 or pursue asset sales or other transactions, such as the sale of the CIED and Orthobiologics Businesses described above.

However, such transactions may not be successful, and we may not be able to raise additional equity, refinance our debt instruments, sell assets or obtain waivers or amendments to our obligations on acceptable terms, or at all.

In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.

The Company believes that its existing cash and cash equivalents as of September 30, 2025, along with the proceeds received on October 1, 2025 from the sale of its CIED Business, net of repayment of the SWK debt in conjunction with the sale, will be sufficient to fund its operating expenses and capital expenditure requirements through at least one year after the issuance date of the condensed consolidated financial statements.

If the Company is unable to obtain sufficient funding when needed and/or on acceptable terms, the Company may be required to significantly curtail, delay or discontinue its research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion, commercialization efforts and/or commercial operations, which could adversely affect its business prospects, or the Company may be unable to continue operations.

The Company believes that its existing cash and cash equivalents as of March 31, 2026 will be sufficient to fund its operating expenses and capital expenditure requirements through at least one year after the issuance date of the consolidated financial statements.

commercial supplies, product portfolio expansion, commercialization efforts and/or commercial operations, which could adversely affect its business prospects, or the Company may be unable to continue operations.

Reclassifications

T he Company has determined that its operating and reportable segments are consistent with its major product groupings which in prior periods included Device Protection, Women’s Health and Cardiovascular.

Segment results for the three and nine months ended September 30, 2024, have been recast to conform to the new segment presentation, which now excludes Device Protection due to its divestiture noted above.

Segment results for the three months ended March 31, 2025, have been recast to conform to the new segment presentation, which now excludes Device Protection due to its divestiture noted above.

Refer to the Segment Information in Note 12.

Additionally, certain prior period amounts have been reclassified to conform to current period presentation.

Use of Estimates

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Other than voting rights, the Class B common stock has the same rights as the Class A common stock, and therefore, both are treated as the same class of stock for purposes of the earnings per share calculation.

Basic net loss per share is computed by dividing net loss available to each class of shares by the weighted-average number of shares of common stock and participating securities outstanding during the period.

The Company is also authorized to issue up to 10,000,000 shares of preferred stock with a par value of $ .001 .

No shares of preferred stock have been issued or are outstanding as of March 31, 2026 and December 31, 2025.

During the year ended December 31, 2025, all outstanding shares of Class B common stock were converted to Class A common stock.

Basic net income (loss) per share is computed by dividing net loss available to each class of shares by the weighted-average number of shares of common stock and participating securities outstanding during the period.

Participating securities include common and prefunded warrants.

Net loss is not allocated to participating securities as they do not have an obligation to fund losses.

For purposes of the diluted net loss per share calculation, stock options, restricted stock units (“RSUs”) and warrants are considered to be common stock equivalents.

See Note 10 for further discussion of net loss per share attributable to common stockholders.

For purposes of the diluted net income (loss) per share calculation, stock options, restricted stock units (“RSUs”) and warrants are considered to be common stock equivalents.

In applying the two-class method, the Company has elected an accounting policy to determine whether undistributed earnings are allocated to participating securities by analogy to the ‘control number’ concept in ASC 260.

Accordingly, the Company evaluates income (loss) from continuing operations to determine whether participating securities are allocated earnings.

Participating securities are not allocated losses as they are not contractually obligated to share in losses.

This policy is applied consistently from period to period.

See Note 11 for further discussion of net income (loss) per share attributable to common stockholders.

Fair Value of Financial Instruments

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Cash and Cash Equivalents

The Company maintains its cash balances at banks and financial institutions.

The Company maintains its cash and cash equivalent balances at banks and financial institutions.

The balances are insured up to the legal limit.

The Company maintains cash balances that may, at times, exceed this insured limit.

The Company maintains cash and cash equivalent balances that may, at times, exceed this insured limit.

The Company considers cash on hand, demand deposits in a bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents.

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Account balances are charged off against the allowance when it is probable that the receivable will not be recovered.

Inventory, consisting of purchased materials, direct labor and manufacturing overhead, is stated at the lower of cost or net realizable value, with cost determined generally using the average cost method.

Inventory, consisting of primarily purchased materials, is stated at the lower of cost or net realizable value, with cost determined generally using the average cost method.

At each balance sheet date, the Company also evaluates inventory for excess quantities, obsolescence or shelf-life expiration.

This evaluation includes analysis of the Company’s current and future strategic plans, historical sales levels by product, projections of future demand, the risk of technological or competitive obsolescence for products, general market conditions and a review of the shelf-life expiration dates for products.

To the extent that management determines there is excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products prior to their expiration, the Company adjusts the carrying value to estimated net realizable value.

This evaluation includes an analysis of the Company’s current and future strategic plans, historical sales levels by product, projections of future demand, the risk of technological or competitive obsolescence for products, general market conditions and a review of the shelf-life expiration dates for products.

Property and Equipment

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Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from that lease.

For leases with a term greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

For leases with a term of greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The lease term includes the option to extend the lease when it is reasonably certain the Company will exercise that option.

The Company uses the rate implicit in the lease to discount lease payments to present value unless that rate is not readily determinable.

In the case the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including publicly available data for instruments with similar characteristics, to determine the present value of lease payments.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value.

In the case that the implicit rate is not available, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including publicly available data for instruments with similar characteristics, to determine the present value of lease payments.

The Company combines lease and non-lease elements for office leases.

In March 2025, the Company executed a new lease for 26,598 square feet in Gaithersburg, Maryland.

The lease expires in January 2036 with early termination dates in 2029 and 2033.

Monthly lease payments (including allocation portions of property taxes, insurance and other landlord operating expenses) total approximately $ 75,000 with annual rent escalations of 3 %.

Rent is abated for the first 12 months of occupancy and is discounted at 50 % for months 13 through 18.

The property was made available for use to Elutia by the landlord in May 2025 and at that time, the Company recognized an ROU asset and liability of $ 2.3 million on the Company’s condensed consolidated balance sheet using an incremental borrowing rate of 12.1 %.

The Company moved its executive offices to this new location in May 2025.

The Company is currently using the new facility for administrative purposes along with laboratory space for product development and anticipates using this facility for commercial production of certain new products, to the extent that marketing authorization for such new products is obtained.

As part of the Company’s divestiture of its CIED Business, Elutia’s lease in Roswell, Georgia was assigned to BSC.

See Note 4 for further discussion of the assets and liabilities divested with the sale and their reporting as assets and liabilities of discontinued operations in the accompanying condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

Long-Lived Assets

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Changes in assumptions or market conditions could result in a change in estimated future cash flows and could result in a lower fair value and therefore an impairment, which could impact reported results.

There were no impairment losses for the nine months ended September 30, 2025 or 2024.

There were no impairment losses for the three months ended March 31, 2026 or 2025.

Warrant Liability

1 unchanged sentence

The warrants issued in connection with the September 2023 private placement, June 2024 registered direct offering and 2025 registered direct offering (see Note 8) are classified as liabilities and are recorded at fair value.

The warrants are

subject to re-measurement at each settlement date and at each balance sheet date and any change in fair value is recognized in (gain) loss on revaluation of warrant liability net in the condensed consolidated statements of operations.

The warrants are subject to re-measurement at each settlement date and at each balance sheet date and any change in fair value is recognized in Loss (gain) loss on revaluation of warrant liability in the condensed consolidated statements of operations.

Revenue Recognition

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(1) identify the contracts with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

As noted above, the Company enters into contracts to primarily sell and distribute products to healthcare providers or commercial partners.

Revenue is recognized when the Company has met its performance obligations pursuant to its contracts with its customers in an amount that the Company expects to be entitled to in exchange for the transfer of control of the products to the Company’s customers.

As noted above, the Company enters into contracts to primarily sell and distribute products to healthcare providers.

to the Company’s customers.

For all product sales, the Company has no further performance obligations and revenue is recognized at the point control transfers which occurs either when:

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or ii) the product is delivered to the customer or distributor, in accordance with the terms of the agreement.

A portion of the Company’s product revenue is generated from consigned inventory maintained at hospitals and from inventory physically held by distributors and direct sales representatives.

A portion of the Company’s product revenue is generated from consigned inventory maintained at hospitals and from inventory physically held by distributors and direct sales agents.

For these types of product sales, the Company retains control until the product has been used or implanted, at which time revenue is recognized.

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The Company’s cash balances with individual institutions may at times exceed the federally insured limits.

There was one customer that represented 14 % of the Company’s accounts receivable as of December 31, 2024.

No customer represented greater than 10% of the Company’s accounts receivable as of September 30, 2025.

For the three months ended March 31, 2026, there was one customer that represented 14 % of the Company’s accounts receivable, and during the year ended December 31, 2025, there was one customer that represented 13 % of the Company’s accounts receivable.

Comprehensive Income (Loss)

Comprehensive income (loss) comprises net income (loss) and other changes in equity that are excluded from net income (loss).

For the nine months ended September 30, 2025 and 2024, the Company’s net loss equaled its comprehensive loss and accordingly, no additional disclosure is presented.

For the three months ended March 31, 2026 and 2025, the Company’s net loss equaled its comprehensive loss and accordingly, no additional disclosure is presented.

The Company uses the asset and liability method of accounting for income taxes.

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The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law.

The OBBBA amends U.S.

tax laws, including provisions related to bonus depreciation and deductions for research and development expenses.

Upon adoption, the impact of the OBBBA was not material to the Company’s condensed consolidated financial statements;

however, the Company is assessing the impact of the OBBBA on the projected taxable gain on the sale of its CIED Business in the fourth quarter of 2025.

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures .

This update improves income tax disclosure requirements, primarily through enhanced transparency and decision usefulness of disclosures.

The amendments in this update should be applied prospectively with the option to apply retrospectively and are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company does not expect the adoption of this guidance to have any material effects on its financial condition, results of operations or cash flows.

The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220-40).

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Divestiture of CIED Business

As described in Note 2, o n September 8, 2025, the Company executed the APA for the sale of its CIED Business and the CIED Business met the criteria for held-for-sale classification as of September 30, 2025 and is reported as discontinued operations in accordance with ASC 205-20 - Discontinued Operations .

The related assets and liabilities of the CIED Business are classified as assets and liabilities of discontinued operations as of September 30, 2025 and December 31, 2024 in the condensed consolidated balance sheets and the results of operations from the CIED Business are reported as discontinued operations in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024.

Applicable amounts in the prior year have been recast to conform to this discontinued operations presentation.

The following tables shows the assets and liabilities of the discontinued operations:

September 30,

Carrying amounts of the major classes of assets included in discontinued operations:

Total current assets

Property and equipment, net

Intangible assets, net

Operating lease right-of-use and other assets

Total non-current assets

Total assets of discontinued operations

Carrying amounts of the major classes of liabilities included in discontinued operations:

Current operating lease liabilities

Total current liabilities

Long-term operating lease liabilities

Total liabilities of discontinued operations

As described in Note 2, on October 1, 2025, the Company completed the sale of its CIED Business.

Accordingly, the CIED Business is reported as discontinued operations in accordance with ASC 205-20 - Discontinued Operations and the amounts for the three months ended March 31, 2025 have been recast to conform to this discontinued operations presentation.

In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed are presented in discontinued operations.

Additionally, since the repayment of the Company’s SWK Loan Facility (see Note 7) was deemed to be contractually required as part of the CIED Business sale, interest expense on the repaid SWK Loan Facility is also classified within discontinued operations.

The following table shows the financial results of the discontinued operations:

Three Months Ended

Nine Months Ended

September 30,

The following table shows the financial results of the discontinued operations for the three months ended March 31, 2025:

Cost of goods sold

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Interest expense

Total operating and investing cash flows of discontinued operations for the nine months ended September 30, 2025 and 2024 are comprised of the following:

Nine Months Ended

September 30,

Total operating and investing cash flows of discontinued operations for the three months ended March 31, 2025 are comprised of the following:

Significant operating non-cash reconciliation items

6 unchanged sentences

Expenditures for property and equipment

The divestiture of the CIED Business was completed pursuant to the APA on October 1, 2025.

See Note 2 for discussion of the financial results of discontinued operations recognized for the three months ended March 31, 2026 which relates to the Company’s sale of its Orthobiologics Business.

Stock-Based Compensation

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In addition, the shares reserved for issuance under the 2020 Plan also include shares reserved but not issued under the 2015 Plan as well as an annual increase as set forth in the 2020 Plan.

As of September 30, 2025, the Company had 1,352,707 shares of Class A common stock available for issuance under the 2020 Plan.

As of March 31, 2026, the Company had 810,198 shares of Class A common stock available for issuance under the 2020 Plan.

In March 2026, the Company established the Elutia Inc.

2026 Inducement Award Plan (the “2026 Inducement Plan”) to attract, retain and motivate persons who are expected to make important contributions to the Company.

Shares of Class A common stock totaling 2,000,000 are reserved for issuance pursuant to the 2026 Inducement Plan.

Stock Options

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The Company’s stock options generally have contractual terms of ten years and vest over a four-year period from the date of grant.

A summary of stock option activity under the Company’s 2015 Plan and 2020 Plan for the nine months ended September 30, 2025 is as follows:

A summary of stock option activity under the Company’s 2015 Plan, 2020 Plan and 2026 Inducement Plan for the three months ended March 31, 2026 is as follows:

Number of Shares

1 unchanged sentence

Outstanding, December 31, 2025

Outstanding, September 30, 2025

Vested and exercisable, September 30, 2025

As of September 30, 2025, there was approximately $ 1.8 million of total unrecognized compensation expense related to unvested stock options.

Outstanding, March 31, 2026

Vested and exercisable, March 31, 2026

As of March 31, 2026, there was approximately $ 2.9 million of total unrecognized compensation expense related to unvested stock options.

These costs are expected to be recognized over a weighted-average period of 2.7 years.

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The period expense is then determined based on the valuation of the options and is recognized on a straight-line basis over the requisite service period for the entire award.

The following weighted-average assumptions were used to determine the fair value of time-based options granted during the nine months ended September 30, 2025 and 2024:

Nine Months Ended

September 30,

The following weighted-average assumptions were used to determine the fair value of time-based options granted during the three months ended March 31, 2026:

Expected term (years)

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Dividend yield

There were no options granted during the three months ended March 31, 2025.

The Company has also granted stock options that vest upon the achievement of certain share price thresholds for twenty consecutive days of trading at each respective threshold.

For these stock options, the Company accounted for the awards as market condition awards and used an option pricing model, the Monte Carlo model, to determine the fair value of the respective equity instruments and an expense recognition term of approximately three years .

As of September 30, 2025, there were a total of 345,011 stock options outstanding that are market condition stock option awards.

As of March 31, 2026, there were a total of 345,011 stock options outstanding that are market condition stock option awards.

Restricted Stock Units

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There is no exercise price, and no monetary payment is required for receipt of restricted stock units or the shares issued in settlement of the award.

A summary of the RSU activity under the Company’s 2020 Plan for the nine months ended September 30, 2025 is as follows:

A summary of the RSU activity under the Company’s 2020 Plan for the three months ended March 31, 2026 is as follows:

Number of Shares

1 unchanged sentence

Unvested, December 31, 2025

Unvested, September 30, 2025

The total fair value of the RSUs granted during the nine months ended September 30, 2025 was $ 0.4 million.

Unvested, March 31, 2026

The total fair value of the RSUs granted during the three months ended March 31, 2026 was approximately $ 0.1 million.

For the performance vesting RSUs, the fair value was based on the fair market value of the Company's Class A common stock on the date of grant.

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The respective fair values are amortized to expense on a straight-line basis over the vesting period of generally three to four years .

As of September 30, 2025, $ 2.2 million of unrecognized compensation costs related to RSUs is expected to be recognized over a weighted average period of 1.3 years.

As of March 31, 2026, $ 1.2 million of unrecognized compensation costs related to RSUs is expected to be recognized over a weighted average period of 1.0 years.

The Company has granted RSUs that vest upon the achievement of certain share price thresholds for twenty consecutive days of trading at each respective threshold.

For these RSUs, the Company accounted for the awards as market condition awards and used a Monte Carlo model to determine the fair value of these RSUs as well as the expense recognition term of approximately three years using the graded vesting method.

As of September 30, 2025, there were 252,394 RSUs outstanding that were market condition RSU awards.

As of March 31, 2026, there were 252,394 RSUs outstanding that were market condition RSU awards.

Employee Stock Purchase Plan

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The number of shares reserved under the ESPP will automatically increase on the first day of each fiscal year through January 1, 2030, in an amount as set forth in the ESPP.

As of September 30, 2025, the total shares of Class A common stock authorized for issuance under the ESPP was 1,126,448 , of which 763,965 remained available for future issuance.

During the nine months ended September 30, 2025, shares of Class A common stock totaling 59,268 were issued under the ESPP.

As of March 31, 2026, the total shares of Class A common stock authorized for issuance under the ESPP was 1,554,296 , of which 1,142,972 remained available for future issuance.

Stock-Based Compensation Expense

Stock-based compensation expense recognized during the three and nine months ended September 30, 2025 and 2024 was comprised of the following (in thousands):

Stock-based compensation expense recognized during the three months ended March 31, 2026 and 2025 was comprised of the following (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Sales and marketing

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Total stock-based compensation expense

Stock-based compensation expense included within discontinued operations totaled $ 0.6 million and $ 0.2 million for the three months ended September 30, 2025 and 2024 and totaled $ 0.9 million and $ 0.8 million, respectively for the nine months ended September 30, 2025 and 2024, respectively.

Inventory as of September 30, 2025 and December 31, 2024 was comprised of the following (in thousands):

September 30,

Stock-based compensation expense included within discontinued operations totaled $ 0.1 million for the three months ended March 31, 2025.

Inventory as of March 31, 2026 and December 31, 2025 was comprised of the following (in thousands):

Raw materials

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O n August 10, 2022, the Company entered into a senior secured term loan facility with SWK Funding LLC, as agent, and other lenders party thereto for an aggregate principal amount of $ 25 million, and the Company amended the facility in May 2023, March 2024 and September 2024 (as amended, the “SWK Loan Facility”).

An initial draw of $ 21 million was made in August 2022, and an additional $ 4 million was made on December 14, 2022.

The SWK Loan Facility also allowed for the establishment of a separate, new asset-based revolving loan facility of up to $ 8 million, which was not entered into before termination of the SWK Loan Facility, as described below.

T he SWK Loan Facility also included

both minimum revenue and liquidity covenants, restrictions as to payment of dividends, and was secured by all assets of the Company, subject to certain customary exceptions.

As of September 30, 2025, Elutia was in compliance with its financial covenants under the agreement governing the SWK Loan Facility (“SWK Loan Facility Agreement”).

See below for discussion of an amendment to the minimum liquidity covenant in May 2025.

All of the SWK Loan Facility borrowings took the form of Secured Overnight Financing Rate (“ SOFR ”) loans and bore interest at a rate per annum equal to the sum of an applicable margin of (i) 7.75 % and the “Term SOFR Rate” (based upon an interest period of 3 months), or (ii) if the Company elected the PIK Interest option (as defined below), 3.75 % and the “Term SOFR Rate.” The Company could elect a portion of the interest due, to be paid in-kind at a rate per annum of 4.5 % (“PIK Interest”), and such election could be made until November 15, 2025.

The “Term SOFR Rate” was subject to a floor of 2.75 %.

The agreement governing the SWK Loan Facility also included an exit fee equal to 6.5 % of the aggregate principal amount funded prior to termination plus $ 112,500 .

The weighted average interest rate on the SWK Loan Facility was 12.3 % and 13.5 % for the three months ended September 30, 2025 and 2024 and 12.5 % and 13.5 % for the nine months ended September 30, 2025 and 2024, respectively.

On October 1, 2025, in connection with and through the proceeds of the sale of the Company’s CIED Business described in Note 2, Elutia fully repaid the SWK Loan Facility as required by the terms of the loan agreement.

The outstanding principal, including the accrued exit fee, and accrued interest recognized as of this date totaled approximately $ 26.9 million.

The total payment by the Company to SWK in full satisfaction of the debt was $ 27.8 million, yielding a loss on early repayment of debt of $ 1.3 million (including the write-off of the unamortized debt discount and deferred financing costs of $ 0.4 million) in the fourth quarter of 2025.

The weighted average interest rate on the SWK Loan Facility was 12.7 % for the three months ended March 31, 2025.

On August 10, 2022 (the “Closing Date”), the Company issued to SWK Funding LLC a warrant (“SWK Warrant”) to purchase, in the aggregate, up to 187,969 shares of Class A common stock of the Company, $ 0.001 par value per share at an exercise price of $ 6.65 per share.

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Unless earlier exercised or terminated in accordance with its terms, the SWK Warrant will expire on the seventh anniversary of the Closing Date.

Upon issuance, the Company valued the SWK Warrant at approximately $ 0.6 million using the Black-Scholes model.

The recognition of the SWK Warrant as well as deferred financing costs of approximately $ 0.5 million incurred in securing the SWK Loan Facility served to reduce the recorded value of the associated debt.

The debt discount and deferred financing costs are recognized as interest expense through the maturity of the loan.

In May 2025, Elutia entered into a fourth amendment (the “Fourth Amendment”) to the SWK Loan Facility.

The Fourth Amendment, among other things:

(i) allowed for 100 % of the interest payment due in May 2025 to be paid as PIK Interest, (ii) removed mandatory repayment obligations related to non-ordinary course asset sales, (iii) allowed the Company to request that SWK advance a new term loan in the amount of up to $ 5.0 million, which advance would have been in the sole and absolute discretion of SWK and (iv) fixed the amount of the minimum liquidity covenant to be $ 8.0 million.

In consideration for the Fourth Amendment, the Company agreed to issue SWK 50,000 shares of its Class A Common Stock in a private placement.

In August 2025, the Company entered into a fifth amendment (the “Fifth Amendment”) to the SWK Loan Facility, which, among other things, provided that the following amounts were capitalized into the unpaid principal balance of the SWK Loan Facility:

(i) all accrued and unpaid interest due and owing to the lenders on the payment date in August 2025, (ii) a $ 50,000 amendment fee agreed to by us on June 30, 2025, and (iii) a $ 10,000 amendment fee to be paid pursuant to the Fifth Amendment.

Prior to the May 2025 amendment described above, the SWK Loan Facility Agreement required certain mandatory prepayments, subject to certain exceptions, with:

(1) 100 % of any net casualty proceeds in excess of $ 250,000 and (2) for non-ordinary course asset sales, an amount equal to the difference between (x) the proportion of divested gross profit (as defined in the SWK Loan Facility Agreement) to the Company’s total gross profit (as defined in the SWK Loan Facility Agreement) multiplied by the outstanding loans under the SWK Loan Facility and (y) the difference between $ 1,000,000 and the aggregate sale proceeds of any assets previously sold during the fiscal year.

The closing of the divestiture of the Orthobiologics Business in November 2023 triggered a mandatory prepayment of $ 4.0 million.

Of such amount, $ 2.0 million wa s paid shortly after closing of the divestiture in 2023 and the remainder was paid in February 2024 based on mutual agreement between the parties.

Long-term debt was comprised of the following (in thousands):

September 30,

Term Loan Facility, net of unamortized discount and deferred financing costs

Current Portion

Long-Term Debt

The outstanding principal, including the accrued exit fee, and accrued interest recognized as of this date totaled approximately $ 26.5 million.

The total payment by the Company to SWK in full satisfaction of the debt was $ 27.8 million.

In addition to the above, the Company finances the annual premiums of certain insurance policies through short-term financing arrangements and includes the liabilities associated with such arrangements within accrued liabilities in accompanying consolidated balance sheets.

The fair value of all debt instruments, which is based on inputs considered to be Level 2 under the fair value hierarchy, approximates the respective carrying values as of September 30, 2025 and December 31, 2024.

Revenue Interest Obligation

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Furthermore, a $ 5.0 million payment would be due to Ligand if cumulative sales exceed $ 300 million during the ten-year term of the agreement which expires on May 31, 2027.

In connection with the execution of the Amended Revenue Interest Obligation, the Company made payments totaling $ 3.0 million ( 50 % paid in January 2024 and 50 % paid in April 2024) in satisfaction of all royalty obligations for the first three fiscal quarters of 2023 and made a payment in February 2024 of $ 1.1 million in satisfaction of the royalty obligations for the fourth quarter of 2023.

In May 2025, Elutia entered into a subscription agreement and further amendment to the Amended Revenue Interest Obligation with Ligand.

Through such amendment, $ 2.2 million in outstanding royalty obligations (royalty obligations for the fiscal quarters ended December 31, 2024 and March 31, 2025) owed by Elutia to Ligand under the Amended Revenue Interest Obligation was satisfied by the issuance of 1,105,528 shares of Elutia’s Class A common stock to Ligand in a transaction registered with the Securities and Exchange Commission.

No additional payments to Ligand have been made during the nine months ended September 30, 2025.

Total payments to Ligand during the nine months ended September 30, 2024 were $ 6.3 million comprised of the aforementioned 2023 amounts due and a 2024 quarterly minimum payments of $ 2.2 million.

Through such amendment, $ 2.2 million in outstanding royalty obligations (royalty obligations for the quarters ended December 31, 2024 and March 31, 2025) owed by Elutia to Ligand under the Amended Revenue Interest Obligation was satisfied by the issuance of 1,105,528 shares of Elutia’s Class A common stock to Ligand in a transaction registered with the Securities and Exchange Commission.

An additional cash payment to Ligand of $ 2.2 million was made in October 2025 in satisfaction of the royalty obligation for the quarters ended June 30, 2025 and September 30, 2025.

Moreover, also in October 2025, a further amendment to the Amended Revenue Interest Obligation was executed which eliminated the provision that a $ 5.0 million milestone payment would be due if cumulative sales exceed $ 300 million or the assets related to CanGaroo and any substantially similar products undergo a change of control.

The Company records the present value of the estimated total future payments under both the Revenue Interest Obligation and Amended Revenue Interest Obligation as a long-term obligation, with the short-term portion being recorded as described below.

At each reporting period, the value of the Revenue Interest Obligation is re-measured based on current estimates of future payments, with changes to be recorded in the condensed consolidated statements of operations using the catch-up method.

The Amended Revenue Interest Obligation changed the timing and extent of future payments by the Company to Ligand and such change to the estimated future payments yielded a reduction to the total obligation of approximately $ 1.4 million during the first quarter of 2024.

The resulting gain was recognized as other income in the accompanying condensed consolidated statement of operations.

During the second quarter of 2025, the Company identified and corrected an accounting error related to the January 2024 amendment of the Revenue Interest Obligation.

Company inappropriately recorded a gain instead of accounting for the amendment as a modification.

As a result, the Company recorded a gain of $ 1.4 million recognized in the first quarter of 2024 and overstated interest expense in the subsequent periods.

The Company has determined that the error was not material to the current or any of the prior periods.

However, as of the second quarter of 2025, the revenue interest obligation was understated by $ 0.8 million.

As such, the Company corrected this as an out of period adjustment in June 2025 through a $ 1.4 million increase in “Other expense (income), net” to reverse the original gain and a reduction of $ 0.6 million in “Interest expense, net” to reverse the overstatement of interest expense.

The out of period correction is not material to the condensed consolidated financial statements.

Interest expense related to the Revenue Interest Obligation of approximately $ 0.3 million and $ 0.4 million was recorded for the three months ended September 30, 2025 and 2024, respectively and approximately $ 0.3 million (net of the corrections noted above) and $ 1.3 million was recorded for the nine months ended September 30, 2025 and 2024, respectively.

On October 1, 2025, in connection with sale of the CIED Business described in Note 2, Ligand and the Company further amended the Amended Revenue Interest Obligation.

Such amendment primarily consisted of a consent to the sale of the CIED Business and a release by Ligand of its security and royalty interest in the assets of the CIED Business including the EluPro and CanGaroo products.

The Company’s annual minimum payment requirements of $ 4.4 million per year remain unchanged.

In partial consideration of Ligand entering into the amendment, Elutia paid $ 1.1 million in accrued unpaid royalty obligations to Ligand.

There was no change to estimated future payments during the three months ended March 31, 2026 and 2025, and thus, no re-measurement gain or loss was recognized.

Interest expense related to the Revenue Interest Obligation of approximately $ 0.1 million and $ 0.3 million was recorded for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, the short-term portion of the Amended Revenue Interest Obligation which totals $ 5.5 million is comprised of the annual minimum payments of $ 4.4 million plus the unpaid $ 1.1 million quarterly minimum payment related to the fourth quarter of 2025.

As of December 31, 2025, the short-term portion of the Amended Revenue Interest Obligation is comprised of the annual minimum payments of $ 4.4 million.

Common Stock and Warrants

11 unchanged sentences

The Common Units were sold at a purchase price of $ 1.4275 per unit, and the Prefunded Units were sold at a purchase price of $ 1.4265 per unit, for aggregate gross proceeds of approximately $ 10.5 million, before deducting offering expenses.

Each Common Warrant was exercisable until July 31, 2024, the date which was 30 trading days after the clearance by the FDA of the Company’s EluPro product, at an exercise price per share of

Each Common Warrant was exercisable until July 31, 2024, the date which was 30 trading days after the clearance by the FDA of EluPro, at an exercise price per share of $ 1.4275 .

As discussed below, all Common Warrants were exercised before they expired.

3 unchanged sentences

Warrant Liabilities

The Company has concluded that the outstanding 2025 Prefunded Warrants, 2024 Prefunded Warrants and 2023 Prefunded Warrants do not meet the equity contract scope exception under ASC 815-40 as in the event of a (i) fundamental transaction such as a merger and (ii) failure to timely deliver warrant shares upon exercise, certain provisions of which may require the Company to adjust the settlement value in a manner that is not consistent with a fixed-for-fixed option pricing model.

As a result, the Company allocated a portion of the gross proceeds from the respective offerings to 2025 Prefunded Warrants, 2024 Prefunded Warrants and 2023 Prefunded Warrants based on their fair values and have recorded such amounts as a warrant liability in the accompanying condensed consolidated balance sheet as of September 30, 2025 and December 31, 2024.

The Company has concluded that the 2025 Prefunded Warrants from the 2025 Registered Offering, the 2024 Prefunded Warrants from the 2024 Registered Offering and the Common Warrants and the 2023 Prefunded Warrants from the Private Offering do not meet the equity contract scope exception under ASC 815-40 as in the event of a (i) fundamental transaction such as a merger and (ii) failure to timely deliver warrant shares upon exercise, certain provisions of which may require the Company to adjust the settlement value in a manner that is not consistent with a fixed-for-fixed option pricing model.

As a result, the Company allocated a portion of the gross proceeds from the respective offerings to the related warrants based on their fair values and have recorded such amounts as a Warrant liability in the accompanying consolidated balance sheets as of March 31, 2026 and December 31, 2025.

Additionally, the Company allocated a portion of the transaction fees from the 2024 Registered Offering, 2025 Registered Offering and the Private Offering to the respective warrants and recognized the expense within Other expense (income), net.

Such expenses totaled $ 0.1 million for the nine months ended September 30, 2025.

Such expenses totaled $ 0.1 million for the three months ended March 31, 2025.

As noted above, the last exercise date for the Common Warrants was July 31, 2024.

All Common Warrants outstanding were exercised by such date yielding exercise proceeds of $ 13.8 million in July 2024.

All Common Warrants outstanding were exercised by such date.

Certain of these exercises ultimately resulted in their conversion to 2023 Prefunded Warrants.

A summary of the warrant activity for the nine months ended September 30, 2025 is as follows:

The liability associated with the 2025 Prefunded Warrants, 2024 Prefunded Warrants and 2023 Prefunded Warrants is recorded as Warrant liability in the accompanying consolidated balance sheet as of March 31, 2026 and December 31, 2025.

A summary of the warrant activity for the three months ended March 31, 2026 is as follows:

2023 Prefunded Warrants

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Outstanding, December 31, 2025

Outstanding, September 30, 2025

The valuation of the warrants is adjusted to fair value (Level 3) at each subsequent balance sheet date until the warrants are settled.

The following table provides a rollforward of the aggregate fair value of the warrant liability for the nine months ended September 30, 2025 (in thousands):

( 1,300,000 )

Outstanding, March 31, 2026

The valuation of the warrants is adjusted to fair value at each subsequent balance sheet date until the warrants are settled.

The following table provides a rollforward of the aggregate fair value of the warrant liability for the three months ended March 31, 2026 (in thousands):

2023 Prefunded Warrants

3 unchanged sentences

Warrant liability, December 31, 2025

Fair value upon issuance

Gain on revaluation of warrant liability

Warrant liability, September 30, 2025

Loss on revaluation of warrant liability

Warrant liability, March 31, 2026

The Company has used the price of its Class A Common Stock to estimate the fair value of the 2025 Prefunded Warrants, 2024 Prefunded Warrants and 2023 Prefunded Warrants at each measurement date.

The price of the Company’s Class A Common Stock approximates fair value of the 2025 Prefunded Warrants , 2024 Prefunded Warrants and 2023 Prefunded Warrants due to the exercise price per share of $ 0.001 .

The fair value adjustments, which include a $ 5.1 million gain recognized during the three months ended September 30, 2025, have been recorded as (gain) loss on revaluation of

warrant liability in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2025.

The Company had previously calculated the fair value of the Common Warrants using the Black-Scholes option pricing model with the following inputs as of September 30, 2024:

Common stock price

Expected term (years)

Risk-free interest rate

Volatility factor

Dividend yield

Class B Common Stock

During the third quarter of 2025, 1,962,160 shares of the Company’s Class B common stock were converted by the holder to voting Class A common stock.

As such warrants utilize quoted prices for the Company’s Class A common stock (similar assets in the active market), their fair valuation is deemed to be “Level 2” within the fair value hierarchy.

The fair value adjustments have been recorded as Loss (gain) on revaluation of warrant liability in the accompanying condensed consolidated statements of operations.

Commitments and Contingencies

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Under certain limited circumstances, Elutia has the right to manufacture the licensed product and pay Cook a royalty of 3 % of sales of the Elutia-manufactured tissue.

No royalties were due or paid to Cook during the nine months ended September 30, 2025 or 2024.

The Amended License Agreement includes license fee payments of $ 0.1 million to be paid by the Company in October 2025 and 2026.

No royalties were due or paid to Cook during the three months ended March 31, 2026 or 2025.

The Amended License Agreement includes a final license fee payment of $ 0.1 million to be paid by the Company in October 2026.

The Company, in its sole discretion, can terminate the Amended License Agreement at any time.

7 unchanged sentences

FiberCel Litigation

As previously disclosed, in June 2021, the Company announced a voluntary recall of a single lot of FiberCel fiber viable bone matrix (“FiberCel”).

As previously disclosed, in June 2021, the Company announced a voluntary recall of a single lot of FiberCel fiber viable bone matrix.

Since September 2021, 110 product liability lawsuits or claims have been filed or asserted against the Company involving FiberCel.

As of September 30, 2025, there were 44 active lawsuits or claims against the Company, including 38 lawsuits or claims where settlements have been reached but had not yet been paid by quarter-end and six lawsuits which have not yet been settled or adjudicated.

The lawsuits, which have been filed against Elutia, certain Medtronic entities, and others, allege that the plaintiffs were exposed to and/or contracted tuberculosis and/or suffered

substantial symptoms and complications following the implantation of FiberCel during orthopedic fusion operations.

Such lawsuits were filed in various U.S.

federal courts and in state courts in Indiana, Pennsylvania, Delaware, Florida, Maryland and Ohio.

The Company refers to all of the aforementioned litigation, or claim notices, collectively as the “FiberCel Litigation.”

As of March 31, 2026, four lawsuits or claims are active, 105 have been settled and there is one case where the statute of limitations to file a lawsuit has expired.

Of the 105 cases that have settled, 30 have not yet been fully paid due to one or more scheduled payments being made after March 31, 2026.

The unsettled lawsuits allege that the plaintiffs were exposed to and/or contracted tuberculosis and/or suffered substantial symptoms and complications following the implantation of FiberCel during orthopedic fusion operations.

Such remaining lawsuits were filed in the Superior Court of Marion County, Indiana and the Court of Common Pleas, Philadelphia County.

The Company refers to the aforementioned litigation and claim notices collectively as the “FiberCel Litigation.”

Viable Bone Matrix Litigation

As also previously disclosed, in July 2023, the Company announced a voluntary recall of a single lot of a certain viable bone matrix (“VBM”) product and the market withdrawal of all of its VBM products produced after a specified date (the “VBM Recall”).

Notice of the voluntary recall was issued to centers after the Company learned of post-surgical Mycobacterium tuberculosis (“MTB”) infections in two patients treated with a VBM product from a single donor lot.

Prior to release, samples from this specific lot had tested negative for MTB by an independent laboratory using a nucleic acid test that is designed to specifically detect the MTB organism.

Based on our discussions with the CDC, the Company believes that a total of 36 patients were treated with product from the single donor lot.

As of September 30, 2025, there were 13 active lawsuits or claims filed or asserted against the Company.

The lawsuits, which have been filed against Elutia and others, allege that the plaintiffs were exposed to and/or contracted tuberculosis and/or suffered substantial symptoms and complications following the implantation of VBM during orthopedic fusion operations.

Such lawsuits were filed in various U.S.

federal courts and in the California state court.

Since August 2023, 28 product liability lawsuits or claims have been filed or asserted against the Company involving VBM.

As of March 31, 2026, 10 lawsuits or claims are active, 17 have been settled and one case has been dismissed.

Of the settled cases, thirteen have been fully paid and four have not yet been paid as of March 31, 2026.

Furthermore, there are four potential claims where the statute of limitation to file a lawsuit has expired.

The unsettled lawsuits, which have been filed against Elutia and others, allege that

the plaintiffs were exposed to and/or contracted tuberculosis and/or suffered substantial symptoms and complications following the implantation of VBM during orthopedic fusion operations.

To date, these lawsuits have been filed in California Superior Court, the United States District Court for the Southern District of California, the United States District Court for the Eastern District of Louisiana, the United States District Court for the Western District of Texas, the United States District Court for the Western District of Michigan, the Circuit Court of the State of Oregon and the United States District Court for the Southern District of New York.

The Company refers to all of the aforementioned litigation, or claim notices, collectively as the “VBM Litigation.”

7 unchanged sentences

The counterclaim does not specify the amount of any alleged damages.

On September 19, 2025, Medtronic filed a partial motion to dismiss some of the claims in Elutia’s current complaint.

On October 17, 2025, Elutia filed an opposition to that motion.

The court has not set a hearing or rendered a decision on the partial motion to dismiss.

On September 19, 2025, Medtronic filed a partial motion (“Partial Motion”) to dismiss some of the claims in Elutia’s current complaint.

Elutia filed an opposition to that Partial Motion, and Medtronic filed a reply brief.

The court’s previously set hearing date for the Partial Motion of February 20, 2026 was vacated and has not been rescheduled.

The court’s decision on the Partial Motion to dismiss is expected after the hearing.

Discovery is ongoing in the case.

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On October 21, 2025, Tiger Aesthetics Medical, LLC (“Tiger”) filed an action against Elutia in the Superior Court of the State of Delaware.

The Complaint alleges breach of contract and related claims related to the 2023 distribution agreement (the “Tiger Distribution Agreement”) between the Company and Tiger as well as the August 2025 letter of intent (the “LOI”) for the possible sale by the Company to Tiger of certain assets and rights.

Tiger’s original complaint alleged breach of contract and related claims related to the 2023 distribution agreement (the “Tiger Distribution Agreement”) between the Company and Tiger as well as the August 2025 letter of intent (the “Tiger LOI”) for the possible sale by the Company to Tiger of certain assets and rights.

The complaint does not specify the amount of any alleged damages.

In March 2026, the Superior Court granted Elutia’s motion to dismiss the complaint in part.

On April 15, 2026, Tiger filed an amended complaint asserting three claims relating only to the Tiger LOI.

Elutia has not yet filed a response to the amended complaint.

Given the early stages of this matter and the Company’s intention to vigorously defend against Tiger’s claims, Elutia does not consider a loss to be probable or estimable at this time.

Elutia terminated the Tiger Distribution Agreement effective October 25, 2025.

Additionally, the LOI expired on October 25, 2025.

Additionally, the Tiger LOI expired on October 25, 2025.

Supplier Litigation

In October 2024, a former lab and safety equipment supplier filed a lawsuit in California Superior Court (Contra Costa County) against the Company and two co-defendants.

The complaint alleges breach of contract and related equitable claims based on a 2014 agreement that the supplier claims automatically renewed in 2023 for an 84-month term.

The lawsuit seeks specified damages.

On April 1, 2025, the Company filed an answer denying the allegations in the complaint and asserting affirmative defenses.

The court has set a trial for January 2027.

Given the early stages of this matter and the Company’s intention to vigorously defend the case, we do not consider a loss to be probable or estimable at this time.

Contingent Liability for Legal Proceedings

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Since August 2022, the Company has engaged in a process to negotiate and attempt to resolve many of the cases in the FiberCel Litigation.

In total, Elutia’s liability in 64 of the cases has been settled for a total cash outlay of $ 22.5 million, with $ 9.6 million of such total settlement outlays having been paid through insurance proceeds.

For the remaining 44 cases (which excludes one case that has been dismissed and one case where the statute of limitations has elapsed), the Company estimated a probable loss related to each case and has recorded a liability at a total estimated amount of $ 12.7 million at September 30, 2025, which is recorded within Contingent Liability for Legal Proceedings in the accompanying

condensed consolidated balance sheets.

Such liability includes $ 12.0 million for the 38 cases in which the settlements have been reached but had not yet been paid by quarter-end and $ 0.7 million for the six cases which have not yet been settled or adjudicated.

In total, through March 31, 2026, settlement agreements have been reached in 105 of the cases

and full or partial settlement payments of $ 32.2 million have been made by Elutia, with $ 9.6 million of such total settlement outlays having been paid through insurance proceeds.

As of March 31, 2026, the Company has a total liability for FiberCel Litigation of $ 3.6 million which is recorded within Contingent Liability for Legal Proceedings in the accompanying consolidated balance sheets.

Such liability includes $ 2.7 million for 30 cases in which the settlements have been reached but had not yet been fully paid and $ 0.9 million for the four cases which have not yet been settled or adjudicated and for which the Company has estimated a probable loss.

In order to reasonably estimate the liability for the unsettled FiberCel Litigation cases, the Company, along with outside legal counsel, has assessed a variety of factors, including (i) the extent of the injuries incurred, (ii) recent experience on the settled claims, (iii) settlement offers made to the other parties to the litigation and (iv) any other factors that may have a material effect on the FiberCel Litigation.

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Since June 2023, the Company has also engaged in a process to negotiate and attempt to resolve many of the cases in the VBM Litigation.

In total, Elutia’s liability in 13 of the cases has been settled for a total cash outlay of approximately $ 1.5 million.

For the remaining 21 cases (which includes unasserted claims that the Company believes are probable of assertion and excludes one case that has been dismissed and one case where the statute of limitations has elapsed), the Company estimated a probable loss at an estimated amount of $ 3.7 million at September 30, 2025, which is recorded within Contingent Liability for Legal Proceedings in the accompanying consolidated balance sheets.

In total, through March 31, 2026, settlement agreements have been reached in 17 of the cases and settlement payments of $ 1.5 million have been made by Elutia, all of which has been paid through insurance proceeds.

As of March 31, 2026, the Company has a total liability for VBM Litigation of $ 4.4 million which is recorded within Contingent Liability for Legal Proceedings in the accompanying consolidated balance sheets.

Such liability includes $ 1.5 million for four cases in which settlements have been reached but had not yet been paid and the remaining 14 cases, including unasserted claims that the Company believes are probable of assertion, for which an estimation of probable loss is required as of March 31, 2026.

The expense related to this estimate was recorded within Litigation costs, net in the accompanying consolidated statement of operations, with the entirety of such expense offset by insurance recoveries received or receivable as further described below.

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The Company, however, is unable to estimate the possible loss or range of loss in excess of the amount recognized at this time.

Defense costs for both the FiberCel Litigation and VBM Litigation are recognized in the accompanying condensed consolidated statements of operations as incurred, with the entirety of such expense related to the VBM Litigation offset by the insurance received or receivable as further described below.

Defense costs for both the FiberCel Litigation and VBM Litigation are recognized in the accompanying consolidated statements of operations as incurred, with the entirety of such expense related to the VBM Litigation offset by insurance recoveries received or receivable as further described below.

Receivables of Litigation Costs

The Company has purchased insurance coverage that, subject to common contract exclusions, provided coverage for the FiberCel Litigation and VBM Litigation product liability losses as well as legal defense costs.

When settlements are reached and/or amounts are recorded in the related Contingent Liability for Legal Proceedings, the Company calculates amounts due to be reimbursed pursuant to the terms of the coverage and related agreements, and pursuant to other indemnity or contribution claims, in respect of product liability losses and related defense costs.

The amounts probable of reimbursement or recovery from this calculation are recorded as receivables.

When settlements are reached and/or amounts are recorded in the related Contingent Liability for FiberCel Litigation, the Company calculates amounts due to be reimbursed pursuant to the terms of the coverage and related agreements, and pursuant to other indemnity or contribution claims, in respect of product liability losses and related defense costs.

The probable amounts of

reimbursement or recovery from this calculation are recorded as receivables.

The determination that the recorded receivables are probable of collection is based on the terms of agreements reached in respect of indemnity and contribution claims as well as the advice of the Company’s outside legal counsel.

These receivables as of September 30, 2025 totaled $ 4.6 million and are recorded as Insurance Receivables of Litigation Costs in the accompanying consolidated balance sheets.

As of September 30, 2025, all amounts recorded as Insurance Receivables of Litigation Costs relate to the VBM Litigation, and additional insurance remains available to cover the future cost of the VBM Litigation and related defense costs.

These receivables as of March 31, 2026 totaled $ 5.3 million and are recorded as Insurance Receivables of Litigation Costs in the accompanying consolidated balance sheets.

As of March 31, 2026, all amounts recorded as Insurance Receivables of Litigation Costs relate to the VBM Litigation, and additional insurance remains available to cover the future cost of the VBM Litigation and related defense costs.

Conversely, the Company has no more insurance to cover the cost of the FiberCel Litigation and the related defense costs.

As of both September 30, 2025 and 2024, the Company was not a party to, or aware of, any legal matters or claims with material financial exposure, except for the FiberCel Litigation, VBM Litigation, Medtronic matter and Tiger matter.

As of March 31, 2026 and 2025, the Company was not a party to, or aware of, any legal matters or claims with material financial exposure, except for the FiberCel Litigation, VBM Litigation, and the matters involving Medtronic, Tiger and a former supplier.

Net Income (Loss) Per Share

Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.

Diluted net income (loss) per share is computed by dividing net income (loss), adjusted for gains on the revaluation of warrant liability (see Note 9), by the weighted average number of shares of common stock outstanding during the period, adjusted for the potential dilutive effect of the Company’s prefunded warrants (see Note 9), outstanding stock options, outstanding RSUs, and shares issuable under the ESPP.

The treasury stock method was used to calculate the potential dilutive effect of these common stock equivalents.

Three Months Ended

Nine Months Ended

(in thousands, except share and per share data)

September 30,

Net income (loss) from continuing operations

Undistributed net income to participating securities

Net income (loss) from continuing operations attributable to common stockholders

Loss attributable to common stockholders from discontinued operations

Net income (loss) attributable to common stockholders

dilutive gain on revaluation of warrant liability, net of addback for undistributed net income to participating securities

Net loss attributable to common stockholders for diluted earnings per share

Net loss from continuing operations

Income (loss) from discontinued operations

dilutive gain on revaluation of warrant liability

Net loss for diluted earnings per share

Weighted average number of common shares - basic

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Weighted average number of common shares - diluted

Net income (loss) attributable to common stockholders from continuing operations per share - basic

Net loss per share attributable to common stockholders from continuing operations per share - diluted

Net income (loss) attributable to common stockholders from discontinued operations per share - basic

Net income (loss) attributable to common stockholders from discontinued operations per share - diluted

Net income (loss) attributable to common stockholders per share - basic

Net loss attributable to common stockholders per share - diluted

Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period.

Diluted net loss per share is computed by dividing the net loss, adjusted for gains on the revaluation of warrant liability (see Note 9), by the weighted average number of common shares outstanding for the period, adjusted for the dilutive effect of shares of common stock equivalents resulting from the exercise of the Common Warrants, 2023

Prefunded Warrants, 2024 Prefunded Warrants and 2025 Prefunded Warrants.

The treasury stock method was used to calculate the potential dilutive effect of these common stock equivalents.

Net loss from continuing operations per share - basic

Net loss from continuing operations per share - diluted

Net income (loss) from discontinued operations per share - basic

Net income (loss) from discontinued operations per share - diluted

Net loss per share - basic

Net loss per share - diluted

Certain of the Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive.

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Three Months Ended

Nine Months Ended

September 30,

Options to purchase common stock

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Asset information is not provided as the Company's CODM does not regularly review or utilize detailed asset data to assess segment performance.

For the three months ended September 30, 2025, the Company’s segment gross profit was comprised of the following (in thousands):

Women's Health

Cardiovascular

Cost of goods sold, excluding intangible asset amortization

Segment gross profit

For the nine months ended September 30, 2025, the Company’s segment gross profit was comprised of the following (in thousands):

Women's Health

Cardiovascular

Cost of goods sold, excluding intangible asset amortization

Segment gross profit

For the three months ended September 30, 2024, the Company’s segment gross profit was comprised of the following (in thousands):

For the three months ended March 31, 2026, the Company’s segment gross profit was comprised of the following (in thousands):

Women's Health

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Segment gross profit

For the nine months ended September 30, 2024, the Company’s segment gross profit was comprised of the following (in thousands):

For the three months ended March 31, 2025, the Company’s segment gross profit was comprised of the following (in thousands):

Women's Health

2 unchanged sentences

Segment gross profit

One customer in the Women’s Health segment, Tiger, represented 16 %, 26 %, 21 % and 24 % of total sales for the three months ended September 30, 2025 and 2024 and the nine months ended September 30, 2025 and 2024, respectively.

The distribution agreement with Tiger was terminated by the Company effective in October 2025.

Additionally, another customer in the Women’s Health segment represented 13 %, 9 %, 9 % and 5 % of total sales for the three months ended September 30, 2025 and 2024 and the nine months ended September 30, 2025 and 2024, respectively.

One customer in the Cardiovascular segment, LeMaitre Vascular, represented 0 %, 13 %, 4 % and 16 % of total sales for the three months ended September 30, 2025 and 2024 and the nine months ended September 30, 2025 and 2024, respectively.

The distribution agreement with LeMaitre Vascular was terminated by the Company in April 2025.

The following table is a reconciliation of segment gross profit to the consolidated loss before provision for income taxes for the three and nine months ended September 30, 2025 and 2024, (in thousands):

No customer exceeded 10% of the Company’s total net sales for the three months ended March 31, 2026.

One customer in the Women’s Health segment, Tiger, represented 32 % of total net sales for the three months ended March 31, 2025.

The Company distribution agreement with Tiger was terminated effective October 2025.

The following table is a reconciliation of segment gross profit to the consolidated loss before provision for income taxes for the three months ended March 31, 2026 and 2025, (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Segment gross profit

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Loss from operations

Interest expense, net

(Gain) loss on revaluation of warrant liability

Other expense (income), net

Loss before provision for income taxes

During the nine months ended September 30, 2025 and 2024, the Company did not have any material international product sales, and the Company did not own any long-lived assets outside the United States.

Interest (income) expense, net

Loss (gain) on revaluation of warrant liability

Other (income) expense, net

Loss from continuing operations before provision for income taxes

During the three months ended March 31, 2026 and 2025, the Company did not have any material international product sales, and the Company did not own any long-lived assets outside the United States.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements