What changed in this filing

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Item 1. Business

2025-03-11 compared with 2024-03-11 · 193 added, 187 removed, 470 unchanged (45% of the section changed)

At Elutia, our mission is to humanize medicine so that patients can thrive without compromise.

As a commercial-stage company, we seek to leverage our unique understanding of biologics to improve the interaction between implanted medical devices and patients by reducing complications associated with these surgeries.

These complications include device migration, erosion, non-union of implants as well as implant rejection.

In addition, our products are designed to mitigate the formation of scar and fibrotic capsule formation that commonly occurs with device implants and is linked with additional risk factors including infection and capsular contracture.

We are dedicated to supporting patients by providing physicians with a consistent product of uniform material, thus enabling surgeons to focus on achieving successful outcomes for complex procedures.

We estimate that, over the past two years, more than 600,000 surgical procedures were performed per year in the United States in which the patient was implanted with medical devices such as pacemakers, defibrillators, neuro-stimulators or tissue expanders for breast reconstruction.

As a commercial-stage company, we seek to leverage our 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.

These complications include infection, device migration, erosion, implant rejection, non-union of implants, fibrosis and scar formation.

We estimate that more than 700,000 surgical procedures were performed annually in the United States involving the implantation of medical devices such as pacemakers, defibrillators, neurostimulators or tissue expanders for breast reconstruction.

This number has been driven by advances in medical device technologies, reimbursement models focused on patient outcomes, and an aging population with a growing incidence of comorbidities, including diabetes, obesity and cardiovascular and peripheral vascular diseases.

These comorbidities can exacerbate various immune responses and contribute to other complications upon device implant.

Our products are targeted to address unmet clinical needs with the goal of promoting healthy tissue formation and avoiding complications associated with medical device implants, such as scar tissue formation, capsular contraction, erosion, migration and implant rejection.

These products currently focus on our priority markets – Device Protection and Women’s Health.

In Device Protection, we sell CanGaroo, a “first-to-market” biological envelope, protected by a global patent portfolio, that is indicated for use with implantable electronic devices including cardiac and neurostimulator devices.

CanGaroo is designed to create a secure pocket to hold the device and mitigate complications such as device migration and erosion.

The CanGaroo product is a biomatrix comprised of extracellular matrix (“ECM”), which has been shown to

support healthy wound healing.

Because of this inherent ECM trait, CanGaroo may facilitate re-operative procedures by mitigating scar formation and fibrosis.

In addition, the CanGaroo envelope is the only envelope designed for subcutaneous implantable cardiac defibrillators, a growing market.

In Women’s Health, we have developed both patented and proprietary technologies, culminating in the creation of SimpliDerm—a novel biological matrix designed to leverage the inherent science of natural healing processes.

SimpliDerm’s design uses human acellular dermal matrices with heightened structural integrity and superior handling capabilities, which may mitigate inflammation and tissue incorporation, leading to a better healing experience.

We believe that these acellular dermal matrices represent an optimal choice for tissue repair and reconstruction, finding applications in fields such as sports medicine, hernia repair, and trauma reconstruction.

These matrices are also useable in breast reconstruction surgeries, particularly for women undergoing mastectomy as part of cancer treatment.

With respect to pipeline products, we are seeking to pioneer drug-eluting biomatrices (“DEB”), to help solve problems unaddressed by currently available options.

One such product is a version of CanGaroo currently known as CanGarooRM, a first-in-class biomatrix that combines the CanGaroo envelope with antibiotics.

These antibiotics, rifampin and minocycline, have been shown to reduce the risk of infection following surgical implantation of an electronic device.

CanGarooRM will require clearance of an FDA 510(k) submission to be marketed in the United States.

If approved, we anticipate CanGarooRM will be the only drug-eluting biomatrix approved for use with implantable electronic devices, and the first envelope that helps protect against infection, erosion, migration and complications associated with fibrotic tissue formation providing both acute and long-term benefits to the patient.

We also intend to leverage our DEB platform technology by developing and commercializing products for markets with similar unmet needs, such as neurostimulation and breast reconstruction.

We currently focus on our priority markets – Device Protection and Women’s Health.

In Device Protection, we sell EluPro, a unique bioenvelope designed to mitigate complications associated with the implantation of electronic medical devices such as pacemakers, internal defibrillators and neurostimulation devices.

Complications addressed by EluPro include infection, device migration and erosion.

The bioenvelope features a biomatrix comprised of extracellular matrix (“ECM”), which supports healthy wound healing and may facilitate re-operative procedures by reducing scar formation and fibrosis.

Additionally, EluPro is embedded with the powerful antibiotics rifampin and minocycline, which are gradually released into the surrounding tissue over several weeks post-implantation

to provide antimicrobial protection.

EluPro is the only drug-eluting biomatrix (“DEB”) offering in the U.S.

implantable electronic device protection market.

Alongside EluPro, we market the CanGaroo bioenvelope, our first generation product, which uses the same biomatrix but does not contain antibiotics.

In Women’s Health, we have developed both patented and proprietary technologies, culminating in the creation of SimpliDerm—a novel biological matrix that leverages the inherent science of natural healing processes.

SimpliDerm’s design uses human-based hydrated acellular dermal matrix (“HADM”) with heightened structural integrity and superior handling capabilities, which may mitigate inflammation and enhance tissue incorporation, leading to a better healing experience as compared to other human acellular dermal matrices (“ADM”), both lyophilized and pre-hydrated.

We believe that these acellular dermal matrices represent an ideal choice for tissue repair and reconstruction, finding applications in fields such as breast reconstruction, sports medicine, hernia repair and trauma reconstruction.

We also sell legacy products into the Cardiovascular market.

In Cardiovascular, we sell our specialized porcine small intestine submucosa, which is also the tissue used to make CanGaroo, for use as an intracardiac and vascular patch as well as for pericardial reconstruction.

In Cardiovascular, we sell our specialized porcine small intestine submucosa, which is based on the same biomatrix used in EluPro and CanGaroo, for use as an intracardiac and vascular patch as well as for pericardial reconstruction.

In addition, our TYKE product is designed for use in the neonatal patient population.

These cardiovascular products are sold in the United States through an exclusive agreement with LeMaitre Vascular, Inc.

(“LeMaitre Vascular”) and internationally through distributors.

These cardiovascular products are sold in the United States through an exclusive distribution agreement with LeMaitre Vascular.

This agreement also provided LeMaitre with an option to acquire the Cardiovascular product line through March 2026.

Our growth strategy is focused on increasing penetration in the Device Protection and Women’s Health markets.

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Our go-to-market strategy includes a combination of a direct sales force, commercial partners and independent sales agents.

CanGaroo is sold through both our internal sales force and independent sales agents and our commercial partner, Boston Scientific.

As of December 31, 2023, we had 12 direct sales representatives who focus on gaining additional market access and driving market penetration for CanGaroo, not only by selling such product, but also, where appropriate, by managing our commercial partner and providing technical assistance for selling our products.

SimpliDerm is sold through both independent sales agents and our distributor, Sientra Inc.

EluPro and CanGaroo are sold through both our internal sales force and independent sales agents and our commercial partner, Boston Scientific Corporation (“Boston Scientific”).

As of December 31, 2024, we had 11 direct sales representatives and 31 independent sales agents focused on expanding market access and driving market penetration, not only by selling our products, but also, where appropriate, by managing commercial partners and providing technical expertise.

SimpliDerm is sold through both independent sales agents and our distributor, Tiger Aesthetics Medical (“Tiger”).

Through our direct sales force and leveraging our existing commercial partners and sales agents, we believe we can expand our customer base and further strengthen our existing customer relationships and increase penetration in our priority markets.

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however, we continue to have a contract manufacturing relationship with Berkeley under which we receive SimpliDerm.

Sale of Orthobiologics Business

On November 8, 2023, we completed the sale to Berkeley of substantially all of the assets of our Orthobiologics segment (the “Orthobiologics Business”), which were comprised of assets related to our business of (i) researching, developing, administering, insuring, operating, commercializing, manufacturing, selling and marketing our Orthobiologics products, and (ii) contract manufacturing of particulate bone, precision milled bone, cellular bone matrix, acellular dermis, soft tissue and other products.

Discontinued Operations - Sale of Orthobiologics Business

On November 8, 2023, we completed the sale of substantially all of the assets relating to our former Orthobiologics Business to Berkeley.

The Orthobiologics Business was comprised of assets relating to researching, developing, administering, insuring, operating, commercializing, manufacturing, selling and marketing our Orthobiologics products, and the business of contract manufacturing of particulate bone, precision milled bone, cellular bone matrix, acellular dermis, soft tissue and other products.

The assets sold represent the entirety of our Orthobiologics segment.

In the sale, we received approximately $14.6 million, and we may earn up to an additional $20 million, in the aggregate, in the form of earn-out payments.

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).

The purchase agreement contains customary representations, warranties and covenants of the parties, and we, on the one hand, and Berkeley, on the other hand, agreed to customary indemnification provisions for breaches of representations, warranties and covenants, as well as assumed and excluded liabilities and pre-closing items.

There have been no earn-out payments made to date.

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 close.

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.

We recognized a gain of $6.0 million on the sale of the Orthobiologics Business in 2023 and an additional gain of $0.2 million in 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 us.

Should we 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.

Our Competitive Strengths

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Our key competitive strengths are:

Pioneering Technology.

We are developing and commercializing products in the unique and innovative category of DEB.

Our commercial DEB offering, EluPro, is the world’s first and only antibiotic-eluting biologic envelope cleared by the U.S.

Food and Drug Administration, and represents a breakthrough for implantable electronic device procedures.

Through advanced tissue engineering, EluPro integrates clinically proven antibiotics with natural ECM to create a soft, conforming bioenvelope that provides optimal device stability and protection against infection.

We believe that our DEB technology will redefine patient outcomes and procedural success.

Our Integrated Company.

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Commercial Relationships with Major Medical Device Companies.

We have commercial agreements with major medical device companies, including our strategic relationships with Boston Scientific, Sientra and LeMaitre Vascular, which, along with others, we collectively refer to as our commercial partners, to promote or commercialize some of our products.

We have commercial agreements with major medical device companies, including our strategic relationships with Boston Scientific, Tiger and LeMaitre Vascular, which we collectively refer to as our commercial partners, to promote or commercialize some of our products.

These commercial partners use their own network of approximately 1,100 sales representatives, clinical specialists and independent sales agents, including approximately 1,000 of which are focused on our CanGaroo product.

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Executive Management Team with Extensive Experience in Regenerative Medicine.

Our executive management team has extensive experience in the regenerative medicine and medical device industries, spanning R&D, operations, manufacturing and commercial.

This experience allows us to operate with a deep understanding of the

underlying trends in regenerative medicine and the intertwined scientific, clinical, regulatory, commercial and manufacturing functions that drive success in this industry.

Our executive management team has extensive experience in the regenerative medicine and medical device industries, spanning R&D,

operations, manufacturing and commercial.

This experience allows us to operate with a deep understanding of the underlying trends in this industry and the intertwined scientific, clinical, regulatory, commercial and manufacturing functions that drive success.

We believe our team has the necessary experience to lead us through our continued commercial expansion and the development and launch of our pipeline products.

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We believe that the potential for growth in our target market segments presents a long-term opportunity to increase the use of our products.

We plan to continue our growth and accelerate our penetration into our target markets through our direct sales force and by leveraging our relationships with our commercial partners, Boston Scientific, Sientra and LeMaitre Vascular that have well-established and significant infrastructure and experience in our target markets.

We plan to continue our growth and accelerate our penetration into our target markets through our direct sales force and by leveraging our relationships with our commercial partners, Boston Scientific, Tiger and LeMaitre Vascular, each of which have well-established and significant infrastructure and experience in our target markets.

Pipeline of Innovative Drug-Eluting Biologics Products.

In December 2023, we submitted a 510(k) premarket notification to the FDA for our next-generation DEB product, CanGarooRM.

CanGarooRM is tailored for use with cardiac implantable electronic devices (“CIED”), such as pacemakers and internal defibrillators, currently served by only one competitor.

CanGarooRM will require FDA clearance of the 510(k) submission to be marketed in the United States.

The Company anticipates an approval decision in the first half of 2024 and is now preparing for commercial launch.

Furthermore, we intend to leverage our DEB platform technology by developing and commercializing products for markets with similar unmet needs, including neurostimulation, wound care and breast reconstruction.

In June 2024, EluPro was cleared for marketing by the FDA and is the only DEB offering in the U.S.

for use with cardiac implantable electronic devices (“CIED”), such as pacemakers and internal defibrillators.

We are pioneering DEBs to help solve problems unaddressed by available options.

We intend to leverage our DEB platform technology by developing and commercializing products for markets with similar unmet needs, including breast reconstruction and neurostimulation.

Our Proprietary Products/Solutions

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Limitations of Existing Solutions

IEDs are now the standard of care for patients suffering from cardiac arrhythmias and heart failure.

Such devices, CIEDs, are implanted in soft tissue, which is not heavily vascularized, and its implantation may trigger a biologic response that results in inflammation and fibrosis, leading to the device and its wire leads being encased in dense or calcified fibrous material.

CIEDs are used extensively to treat cardiac arrhythmias as well as heart failure.

While these devices are generally well tolerated, they are not free from complications.

In 2015, a group of third-party researchers published a systematic review and meta-analysis of 60 published reports, consisting of 21 prospective, nine case-control and 30 retrospective cohort studies published between 1981 and 2013, each of which examined the rate of infection associated with the implantation of electronic devices.

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Thus, migration and erosion have been shown to be similarly frequent and can both result in infection or require replacement of the device.

Other complications include those associated

with Twiddler’s syndrome, which is a malfunction of a pacemaker due to manipulation of the device by the patient, and discomfort at the implant site.

Other complications include those associated with Twiddler’s syndrome, which is a malfunction of a pacemaker due to manipulation of the device by the patient, and discomfort at the implant site.

Overall, we estimate the rate of complication for CIED placement ranges from 7% to 11%.

As patients with implants live longer, device reoperations are ever more common, including those to replace or upgrade the device, or to replace or revise the wire leads.

The dense, under-vascularized capsule surrounding a device and its wire leads makes replacement or revision more difficult, increases the time needed for the extraction and replacement procedure and progressively increases the risk of infection.

An increasing proportion of these cardiovascular electronic devices, that is, cardioverter/defibrillators, are larger, heavier and more complex and have a greater frequency of complications associated with them than the smaller, less heavy and less complex devices.

Due to an inflammatory response upon device implant, some patients may experience the formation of dense fibrotic tissue surrounding their device.

This dense, under-vascularized capsule surrounding a device and its wire leads makes replacement or revision more difficult, increases the time needed for the extraction and replacement procedure and progressively increases the risk of infection.

For neurostimulator devices, the common location of these devices, which is in the soft tissue of the abdomen or back, increases the risk of migration and erosion and that of patient discomfort when sleeping or sitting.

Victor Parsonnet reported that enclosing pulse generators in a polyester pouch prevented migration and extrusion of the implanted device through the skin.

BARD Vascular Systems manufactured the Parsonnet pouch, which was used in patients with little subcutaneous tissue.

In 2008, TyRx Pharma (“TyRx”) introduced AIGSRX, a synthetic, permanent mesh envelope, which was intended to securely hold either a pacemaker pulse generator or defibrillator and provide a safe space for these implants to be acclimated by the body.

To prevent infections associated with the implantation procedure, the non-resorbable mesh was coated with a bioabsorbable material, which released the antibiotics rifampin and minocycline over a period of approximately one week.

In 2013, TyRx replaced the original product with AIGISRXR, a comparable product with the same two intended uses, but fully bioresorbable.

In 2014, Medtronic acquired TyRx and now sells this fully bioresorbable synthetic product under the name TYRX.

The utilization of TYRX, a synthetic mesh employed as an envelope to deliver antibiotics in surgical procedures, presents several challenges.

Notably, the material's rigidity and limited availability in only two sizes require larger incisions during implantation.

These characteristics can potentially lead to extended surgery times and complications during subsequent device replacements or upgrades.

Fibrotic tissue and scar can also encapsulate these devices.

Device envelopes were originally designed to enhance stability and reduce migration of the implanted devices.

To address the risk of infection, TyRx Pharma (“TyRx”) launched an antibiotic coated, resorbable synthetic envelope in 2013.

In 2014, Medtronic acquired TyRx and now sells this product under the name TYRX ™ .

The utilization of TYRX, a synthetic mesh, presents several challenges.

Notably, the material's rigidity and limited sizes options require larger incisions during surgery or modification of the envelope, which may compromise its ability to stabilize the CIED.

Furthermore, the foreign body response, which can lead to the formation of fibrous capsules around synthetic material, poses significant hurdles.

Excessive scar tissue resulting from this response may complicate device replacement and revision surgeries, highlighting potential issues with long-term outcomes.

We estimate that there is currently a 7 to 11% complication rate with CIED placement.

CanGaroo was designed to mitigate complications deriving from implantable electronic devices and the shortcomings of synthetic envelopes.

We believe that CanGaroo is the only biological product that forms a natural, systemically vascularized pocket that conforms to and securely holds implantable electronic devices.

CanGaroo is cleared for use with pacemaker pulse generators, defibrillators and other cardiac implantable electronic devices as well as vagus nerve stimulators, spinal cord neuromodulators, deep brain stimulators and sacral nerve stimulators.

The CanGaroo Envelope is constructed from perforated, multi-laminate sheets of decellularized, non-crosslinked, lyophilized small intestine submucosa (“SIS”) ECM, derived from porcine small intestinal submucosa, a natural biomaterial, which is rich in natural growth factors, structural proteins and collagens.

The ECM is sewn into the shape of a pouch, into which the device is placed.

We sell the biological envelope in a variety of sizes, which allows it to accommodate all CIED devices commercially available, and it has a shelf life of 30 months.

CanGaroo is soft and pliable and is designed to conform to the implantable device for easy handling and implantation.

The SIS ECM is designed to mitigate the biologic foreign body response that normally occurs around the electronic device.

CanGaroo is remodeled into a surrounding layer of vital, vascularized tissue, potentially reducing the risk of thick capsule formation, migration and erosion of the implantable device through the skin, and complications associated with Twiddler’s syndrome.

CanGaroo may also facilitate the process of implantation and of device removal during its replacement, as well as enhance patient comfort.

Excessive scar tissue resulting from this response may extend surgery times and complicate future device replacement and revision surgeries.

Our Solutions

EluPro was created as a unique bioenvelope designed to secure implanted devices, mitigating complications such as migration and erosion.

The bioenvelope features a biomatrix comprised of ECM, which supports healthy wound healing and may facilitate re-operative procedures by reducing scar formation and fibrosis.

Additionally, EluPro is embedded with the powerful antibiotics rifampin and minocycline, which are gradually released into the surrounding tissue over several weeks post-implantation to provide antimicrobial protection.

This unique combination of drug and biomatrix supports the regeneration of a healthy, vascularized pocket from the patient's own tissue, mitigating a long-term foreign body response.

Alongside EluPro, we continue to market CanGaroo which was designed to mitigate complications deriving from implantable electronic devices and the shortcomings of synthetic envelopes.

Data supports that the biomatrix in our bioenvelope products forms a natural, systemically vascularized pocket that conforms to and securely holds implantable electronic devices.

EluPro and CanGaroo are cleared for use with pacemaker pulse generators, defibrillators and other cardiac implantable electronic devices as well as vagus nerve stimulators, spinal cord neuromodulators, deep brain stimulators and sacral nerve stimulators.

EluPro and CanGaroo are both constructed from perforated, multi-laminate sheets of decellularized, non-crosslinked, lyophilized porcine small intestine submucosa (“SIS”) ECM, a natural biomaterial, which is rich in natural growth factors, structural proteins and collagens.

This creates a soft, conforming envelope with excellent handling features and optimal stability for implantable electronic devices.

The ECM is designed to mitigate the biologic foreign body response that normally occurs around the electronic device.

The biomatrix is remodeled into a surrounding layer of vital, vascularized tissue, potentially reducing the risk of thick capsule formation, migration and erosion of the implantable device through the skin, and complications associated with Twiddler’s syndrome.

Bioenvelopes may also enhance patient comfort and facilitate the process of implantation and of device removal during its replacement.

EluPro has a shelf life of nine months and CanGaroo has a shelf life of 30 months.

Development Pipeline

We have developed a version of the CanGaroo Envelope, called CanGarooRM, that combines the envelope with antibiotics.

These antibiotics, rifampin and minocycline, have been shown to reduce the risk of infection following surgical implantation of an electronic device.

We refer to this combination of biologics with antibiotics as drug-eluting biomatrix, or DEB.

CanGarooRM will require clearance of an FDA 510(k) submission to be marketed in the United States.

We submitted the required 510(k) in April 2022 and, in March 2023, received a Not Substantially Equivalent letter from FDA requiring us to address questions relating to drug testing, primarily a request by FDA to modify an in vitro drug release assay employed as a manufacturing control.

In December 2023, we submitted a 510(k) premarket notification to the FDA for our next-generation DEB product, CanGarooRM.

The Company anticipates an approval decision in the first half of 2024 and is now preparing for commercial launch.

If approved, we anticipate CanGarooRM will be the only drug-eluting biomatrix approved for use with implantable electronic devices, providing both acute and long-term benefits to the patient.

EluPro received clearance by the FDA in June 2024, and we are building on this marketing authorization with stability studies to support a Special 510(k) filing for additional sizes.

We also have ongoing initiatives to extend shelf life and reduce the cost to manufacture EluPro as production volumes increase.

Commercial Approach

We sell CanGaroo in the United States and globally using our direct sales force and our commercial partner, Boston Scientific, which acts as a sales agent and gives us access to approximately 1,000 sales representatives and clinical specialists to further expand our footprint and accelerate our sales.

We sell EluPro and CanGaroo in the United States using our direct sales force and our commercial partner, Boston Scientific, which acts as a sales agent and gives us access to approximately 900 sales representatives and clinical specialists to further expand our footprint and accelerate our sales.

Our primary customers are electrophysiologists, cardiac surgeons and neurosurgeons.

Our direct sales force is focused on gaining additional market access and driving market penetration, not only by selling our products, but also, where appropriate, by managing our commercial partners and providing technical assistance for selling our products.

Our sales team provides the critical knowledge of the advantages that CanGaroo provides for patients over those of our competitors.

Our sales team provides the critical knowledge of the advantages that EluPro and CanGaroo provide for patients over those of our competitors.

We ship the product directly to hospitals.

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ProxiCor PC, ProxiCor CTR, Tyke and VasCure.

The term of the collaboration is three years, and LeMaitre Vascular has the exclusive option to acquire the product line following the first year or under certain other circumstances.

The term of the collaboration is three years, and LeMaitre Vascular has the exclusive option to acquire the product line through March 2026.

Clinical Data

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Pre-clinical Studies

Published pre-clinical data from a rabbit model showed that the CanGaroo Envelope was more successful in providing a barrier surrounding a CIED compared to a pacemaker canister alone.

Recently published data in Frontiers in Drug Delivery by Garrigos et al.

demonstrated that EluPro, the first FDA-cleared antibiotic-eluting biologic envelope, effectively reduces bacterial colonization associated with CIEDs.

Using a well-established rabbit model of CIED infection, the study showed that EluPro achieved complete eradication of methicillin-resistant Staphylococcus aureus (“MRSA”) and other bacterial strains while providing sustained local antibiotic release for over a week with minimal systemic exposure.

None of the animals receiving EluPro exhibited signs of infection, whereas the control group developed infections and associated complications.

These findings highlight EluPro’s potential to address bacterial contamination, a major concern in CIED procedures, and support its role in reducing infection risk for patients receiving implantable devices.

Earlier published pre-clinical data from a rabbit model showed that the CanGaroo Envelope was more successful in providing a barrier surrounding a CIED compared to a pacemaker canister alone.

When implanted with a pacemaker, CanGaroo Envelopes promoted significantly greater stabilization of the device and more vascularized tissue ingrowth within the pocket compared to implantation with only standard fixation methods, such as sutures through the CIED header or no fixation at all.

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To evaluate our CanGaroo Envelope, we have conducted multiple post-market studies and are currently conducting prospective studies that comprise over 2,000 patients in total.

We believe the results from the completed studies provide evidence supporting the safety of the CanGaroo Envelope when used for the implantation of CIEDs in humans.

We believe the results from the completed studies provide evidence supporting the benefits of the biomatrix in EluPro and CanGaroo when used for the implantation of CIEDs in humans.

CARE Study and SECURE Study

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CARE Plus Study

The CARE Plus Study, a single-center, post-market, retrospective cohort study, assessed outcomes in patients undergoing CIED implantation with either a biologic CanGaroo Envelope, Medtronic’s non-biologic TYRX envelope, or no envelope.

The study, published in Cureus in May 2022, included results from 455 patients (165 CanGaroo, 219 TYRX, and 71 no envelope).

Analysis of adverse patient outcomes and events occurring up to 12 months post-implantation revealed that most patients with at least two infection risk factor received an antibacterial envelope (77.9% any envelope vs.

Analysis of adverse patient outcomes and events occurring up to 12 months post-implantation revealed that most patients with at least two infection risk factors received an antibacterial envelope (77.9% any envelope vs.

52.1% no envelope, p<.001).

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The study findings underscore the potential of CanGaroo to enhance CIED implantation outcomes and streamline subsequent reoperative procedures.

Final analysis is underway and will be reported upon completion.

CanGaroo S-ICD Pilot Study

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All patients will be followed for three months postoperatively, and a subgroup of patients aged 65 years or younger at time of enrollment will undergo extended follow-up for up to five years.

EluPro Registry Study

The EluPro Registry Study is a prospective, multi-center, post-market study enrolling up to 100 participants undergoing CIED procedures utilizing the EluPro Antibiotic-Eluting BioEnvelope.

The primary objective is to evaluate

the real-world safety and performance of the bioenvelope.

Data on rates of complications —including infection, hematoma, lead dislodgement, device migration or erosion, and implant site complications—over a 12-month follow-up period will be collected and analyzed.

In addition to standard clinical endpoints, the study incorporates novel patient-centric measures, including post-implant pain and satisfaction, to provide a more comprehensive assessment of patient experience and quality of life following CIED implantation.

By integrating both clinical and patient-reported outcomes, this registry aims to generate real-world evidence on the impact of the EluPro Antibiotic-Eluting BioEnvelope in routine clinical practice, and will offer insights into both safety and patient well-being.

Women’s Health Market

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One of the most common applications of biologic matrices in plastic and reconstructive surgery is breast reconstruction surgery after mastectomy.

Mastectomy is a method of tumor removal for breast cancer in which all breast tissue, including the cancerous cells, is surgically removed.

It is estimated that more than 10% of women will develop invasive breast cancer in their lifetimes, which in 2022, lead to approximately 150,000 post-mastectomy breast reconstructions in the U.S., of which approximately 66% were operations where both breasts were reconstructed.

Breast reconstruction surgery is a surgical procedure generally used to restore a breast to near normal shape and appearance and can be performed using either a prosthetic breast implant, referred to as implant-based reconstruction, or the patient’s own tissue, referred to as autologous reconstruction.

Additional reconstructive surgeries may be required following the initial breast reconstruction, including breast lift, also known as mastopexy, or breast revision surgery, in which the surgeon adjusts the position and shape of the breast.

In 2022, plastic surgeons used human acellular dermal matrices (“HADMs”) in approximately 76,000 women (approximately 125,000 breasts).

Mastectomy is surgical removal of the breast tissue, including the tumor, to treat breast cancer.

It is estimated that more than 10% of women will develop invasive breast cancer in their lifetimes, which in 2022, led to approximately 150,000 post-mastectomy breast reconstructions in the U.S.

Breast reconstruction surgery restores a breast to near normal shape and appearance and can be performed using either a prosthetic breast implant, referred to as implant-based reconstruction, or the patient’s own tissue, referred to as autologous reconstruction.

In 2022, plastic surgeons used ADMs in approximately 76,000 women, reconstructing approximately 125,000 breasts.

About two-thirds of these procedures involved reconstruction of both breasts.

The use of these materials is well-characterized in the clinical literature and recommended by recent U.S.

and European consensus guidelines for certain surgical techniques.

However, as of March 2024, no biologic matrix or any other soft tissue reinforcement material, including our product, had been approved or cleared by the FDA specifically for use in breast reconstruction surgery.

As of January 2025, no biologic matrix or any other soft tissue reinforcement material, including our product, has been approved or cleared by the FDA specifically for use in breast reconstruction surgery.

Limitations of Existing Solutions

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Other major issues are damage to the surrounding soft tissue, altering of the mechanical properties or appearance of the original tissue and increased risk of infection.

HADM products offer an “off the shelf” biologic choice for reconstructive procedures, but they have their own limitations.

ADM products offer an “off the shelf” biologic choice for reconstructive procedures, but they have their own limitations.

The use of harsh chemicals to remove the cells can damage the extracellular matrix.

The products can lack uniformity as determined by pliability in each direction, elasticity and non-uniform thickness.

Such issues can affect how rapidly, and the extent to which the implant is integrated, as well as the resulting tissue strength.

Such issues can affect how

rapidly, and the extent to which the implant is integrated, as well as the resulting tissue strength.

In addition, there is a limited availability in larger sizes for some of these products.

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It is marketed for use for the repair or replacement of damaged or insufficient integumental tissue or for the repair, reinforcement or supplemental support of soft tissue defects or any other homologous use of human integument.

SimpliDerm is a pre-hydrated, HADM manufactured with our patented cell removal technology, a process that maintains the biological and structural integrity of the tissue’s extracellular matrix components and is designed to allow for rapid integration, cellular repopulation and revascularization at the surgical site.

SimpliDerm is a pre-hydrated, human ADM manufactured with our patented cell removal technology, a process that maintains the biological and structural integrity of the tissue’s extracellular matrix components and is designed to allow for rapid integration, cellular repopulation and revascularization at the surgical site.

Its structurally intact extracellular matrix is designed to closely resemble natural, healthy tissue.

Development Pipeline

The clinical literature suggests that greater than 10% of breast reconstruction patients experience a post-operative infection and the treatment for many of these infections will require reoperation to explant the implant.

To address this surgical complication, we are leveraging the technology used in CanGarooRM to develop a DEB version of SimpliDerm (currently called SimpliDermRM) designed to prevent this serious issue.

When developed, SimpliDermRM will require clearance of an FDA premarket approval (“PMA”) submission to be marketed in the United States.

Elutia is leveraging its DEB technology, first developed for EluPro, to create SimpliDermRM, a novel, next generation biomatrix for breast reconstruction.

Clinical literature suggests that more than 10% of breast reconstruction patients experience post-operative infections, often requiring a major surgical procedure to remove the implant.

SimpliDermRM is being developed to address this and other surgical complications by combining the structural benefits of porcine acellular dermis with antibiotic protection.

As a Class III medical device, it will require FDA premarket approval (“PMA”) before commercialization.

To advance this program, Elutia is preparing for an investigational device exemption (“IDE”) which we anticipate submitting by the end of 2025 to initiate a pilot clinical study.

SimpliDermRM is designed to provide soft tissue reinforcement while targeting the high complication rates associated with implant-based breast reconstruction, which range from 26% to 31%.

These complications include capsular contracture, delayed healing, and surgical site infections, some of which may lead to life-threatening sepsis.

While biomaterial matrices are commonly used in reconstructive procedures, no FDA-approved medical device specifically addresses these risks.

Existing options have not sufficiently reduced complication rates, leading to additional surgical interventions and negatively impacting patient quality of life.

By integrating antibiotics within its biologically derived matrix, SimpliDermRM aims to mitigate bacterial colonization, enhance tissue integration, and improve long-term surgical outcomes for breast reconstruction patients.

Commercial Approach

Since its launch in 2019, SimpliDerm has been sold through independent sales agents to plastic and reconstructive surgeons.

In March 2023, we entered into an agreement with Sientra, a medical aesthetics company uniquely focused on plastic surgery, to expand the distribution of SimpliDerm.

Under the agreement terms, Elutia has granted Sientra certain non-exclusive rights in the United States to market, sell and distribute SimpliDerm.

This agreement with Sientra gives us access to approximately 50 sales representatives to further expand our footprint and accelerate our sales.

On February 13, 2024, Sientra reported that it had filed for chapter 11 bankruptcy protection in the Bankruptcy Court for the District of Delaware, and that it received a debtor-in-possession financing from Deerfield Partners.

Sientra also reported that it will seek a sale of its business under Section 363 of the Bankruptcy Code.

While Sientra continues to operate as a debtor-in-possession and we continue to ship product with Sientra as our distribution partner, there can be no assurance that Sientra will be successful in its sale of business transaction or that the potential purchaser of the Sientra business will agree to assume our contracts with Sientra.

We sell SimpliDerm through independent sales agents to plastic and reconstructive surgeons.

Additionally, in March 2023, we entered into an agreement with Sientra, a medical aesthetics company uniquely focused on plastic surgery, to expand the distribution of SimpliDerm.

In April 2024, such agreement was acquired by Tiger in connection with their asset acquisition of Sientra.

Under the agreement terms, Elutia has granted Tiger certain non-exclusive rights in the United States to market, sell and distribute SimpliDerm.

This agreement with Tiger gives us access to approximately 50 sales representatives to further expand our footprint and accelerate our sales.

Clinical Data

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Stained samples of SimpliDerm retained the collagen structure (density and orientation), elastin, blood vessels and basement membrane complex that was observed in the native dermal matrix.

Transmission electron microscopy demonstrated intact collagen fibril structures in native dermis and SimpliDerm, supporting the conclusion that the decellularization process used to produce SimpliDerm did not damage the ultrastructural architecture of the collagen matrix.

Additional testing was performed that compared the properties of SimpliDerm, AlloDerm RTU and DermACELL to native dermis.

Transmission electron microscopy demonstrated intact collagen fibril structures in native dermis and SimpliDerm, supporting the conclusion that

the decellularization process used to produce SimpliDerm did not damage the ultrastructural architecture of the collagen matrix.

Additional testing was performed that compared the properties of SimpliDerm and alternative HADMs, AlloDerm RTU and DermACELL, to native dermis.

These tests included glycosaminoglycan content, matrix protein stability and differential scanning calorimetry.

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Matrix protein stability was evaluated by determining acid-soluble collagen content and by performing collagenase degradation on the product samples.

SimpliDerm was closest

to native dermal matrix in both acid-soluble collagen content and collagenase degradation.

SimpliDerm was closest to native dermal matrix in both acid-soluble collagen content and collagenase degradation.

Differential scanning calorimetry was performed on the samples, and SimpliDerm and AlloDerm RTU were equivalently close to native dermis, while DermACELL showed the largest difference.

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Our products compete primarily with implantable electronic device envelopes and other cardiovascular repair and human-derived acellular dermis products.

The CanGaroo Envelope competes with the synthetic envelope TYRX from Medtronic.

The EluPro and CanGaroo Envelopes compete with the synthetic envelope TYRX from Medtronic.

ProxiCor, Tyke and VasCure compete with bovine pericardium and synthetic patch materials produced by numerous companies, including Gore’s Gore-tex and Terumo’s Vascutek.

SimpliDerm competes primarily against human-derived acellular dermis matrix meshes, including AbbVie’s AlloDerm, MTF’s FlexHD, Stryker’s DermACELL and RTI Surgical’s Cortiva.

SimpliDerm competes primarily against human-derived acellular dermis matrix meshes, including AbbVie’s AlloDerm, MTF’s FlexHD, Stryker’s

DermACELL and Evergen’s (formerly RTI Surgical) Cortiva.

SimpliDerm also competes against animal-derived biological mesh products, such as AbbVie’s Strattice and Integra’s SurgiMend, as well as various synthetic mesh products.

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During this time, private payors have developed policies for coverage based on available data and literature.

Third-party payors generally do not currently cover SimpliDerm or procedures using SimpliDerm.

While there are certain national and regional third-party payors who cover SimpliDerm or procedures using SimpliDerm, the majority do not.

We are aware of several companies that compete, or are developing technologies, in our current and future product areas.

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We have dedicated substantial resources to establishing a multi-faceted sales and marketing organization in the United States.

We sell CanGaroo in the United States using our direct sales force, which as of December 31, 2023, totaled 12 sales representatives, and through our commercial partner, Boston Scientific Corporation (“Boston Scientific”), which acts as a sales agent, marketing CanGaroo and obtaining orders, and gives us access to approximately 1,000 sales representatives and clinical specialists.

Under the terms of this agreement, Boston Scientific receives a commission equal to a specified dollar amount per unit sold.

Our direct sales representatives focus on gaining additional market access and driving market penetration, not only by selling our products, but also, by managing our commercial partnership with Boston Scientific and providing technical assistance for selling our products.

We sell EluPro and CanGaroo in the United States using our direct sales force, which as of December 31, 2024, totaled 11 sales representatives and a network of 31 independent sales agents, and through our commercial partner, Boston Scientific, which acts as a sales agent, marketing EluPro and CanGaroo and obtaining orders, and gives us access to approximately 900 sales representatives and clinical specialists.

Under the terms of this agreement, Boston Scientific receives a commission equal to a specified percentage of the end-user selling price for units they sell.

Our direct sales representatives and distributors focus on gaining additional market access and driving market penetration, not only by selling our products, but also, by managing partnerships and providing technical expertise.

These sales representatives and agents are supported by teams of professionals focused on sales management, sales operations, ongoing training, analytics and marketing.

SimpliDerm, our women’s health product, is sold using independent sales agents and Sientra, who Elutia has granted certain non-exclusive rights in the United States to market, sell and distribute SimpliDerm for select use in reconstruction surgery.

This agreement with Sientra gives us access to approximately 50 sales representatives to further expand our footprint and accelerate our sales.

Under the terms of this agreement, Sientra purchases SimpliDerm through a transfer fee and sells it to the end user hospital or healthcare facility.

Sientra also reported that it will seek a sale of its business under Section 363 of the Bankruptcy Code.

SimpliDerm, our Women’s Health product, is sold using independent sales agents and a partnership with Tiger, who Elutia has granted certain non-exclusive rights in the United States to market, sell and distribute SimpliDerm for select use in reconstruction surgery.

This agreement with Tiger gives us access to approximately 50 sales representatives to further expand our footprint and accelerate our sales.

Under the terms of this agreement, Tiger purchases SimpliDerm through a transfer fee and sells it to the end user hospital or healthcare facility.

Our cardiovascular products, ProxiCor, Tyke and VasCure, are sold in the U.S.

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We have historically focused our market development and commercial activities primarily in the United States.

However, we have obtained marketing registrations, developed commercial and distribution capabilities and are currently selling CanGaroo and cardiovascular products in several countries outside of the United States.

Independent sales agents in Argentina, Australia, the European Economic Area, the European Union, Latin America and Mexico sell our products.

Sales generated in the United States represented greater than 97% of our net sales in 2023 and sales of these products outside of the United States will largely cease after May 2024 due to changes in certain international regulatory rules which require investment by us not warranted by the current level of sales in these markets.

Sales generated in the United States represented greater than 96% of our net sales in 2024.

Sales of our products outside of the United States ceased after May 2024 due to changes in certain international regulatory rules which required investment by us not warranted by the current level of sales in these markets.

Research and Development

Our research and development team has extensive experience in developing regenerative medicine and DEB products and works to design products that are intended to improve patient outcomes, simplify techniques, shorten procedures, reduce hospitalization and rehabilitation times, and, as a result, reduce costs.

We have recruited and retained staff with significant experience and skills, gained through both industry experience and training at leading colleges and universities.

We have recruited and retained staff with significant experience and skills, gained through both industry experience and training at leading colleges and

universities.

In addition to our internal staff, our external network of development laboratories, testing laboratories and physicians aids us in our research and development process.

Manufacturing and Suppliers

We manufacture CanGaroo and our cardiovascular products in our Roswell, Georgia facility and use Cook Biotech Incorporated (“Cook Biotech”) as our sole porcine tissue supplier for these products.

We manufacture CanGaroo and our cardiovascular products in our Roswell, Georgia facility and use Cook Biotech Incorporated (“Cook”), now owned by Evergen, as our sole porcine tissue supplier for these products.

We have significant expansion capabilities in our in-house manufacturing facility.

Cook Biotech has previously successfully expanded and, we believe, is well-positioned to support future expansion.

Cook has previously successfully expanded and, we believe, is well-positioned to support future expansion.

However, they are our sole source, and we cannot guarantee that an interruption in supply will not occur.

If necessary, we could engage an alternate supplier or set-up, validate and gain regulatory authorization to manufacture these products in our own facilities, although it would require significant time, expense and regulatory clearance.

In February 2024, it was announced that Cook Biotech Inc.

was acquired by RTI Surgical.

We do not expect the acquisition to affect our supply agreement with Cook Biotech, which we understand will continue as a subsidiary of RTI Surgical.

We have robust internal compliance processes to maintain the high quality and reliability of our products.

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Our Roswell, Georgia facility is registered with the FDA as a medical device manufacturing establishment.

In addition to Cook Biotech, we use other third-party suppliers to support our internal manufacturing processes.

In addition to Cook, we use other third-party suppliers to support our internal manufacturing processes.

We select our suppliers through a rigorous process to ensure high quality and reliability with the capacity to support our expanding production levels.

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however, we continue to have a contract manufacturing relationship with Berkeley under which we receive SimpliDerm.

At present, Berkeley is our single source of supply for SimpliDerm, but we are evaluating additional options for supply redundancy.

No contracted minimum purchase commitments are defined in the agreement and Berkeley must comply with FDA current Good Tissue Practice (cGTP), American Association of Tissue Banks Standards and all applicable state and local regulations.

At present, Berkeley is our single source of supply for SimpliDerm, but we intend to develop our own in-house capability for the production of SimpliDerm.

To this end, in March 2025, we signed a lease for 26,598 square feet in Gaithersburg, Maryland for purposes of, among other things, the internal production of SimpliDerm.

We expect to be able to internally produce SimpliDerm by the third quarter of 2025.

No contracted minimum purchase commitments are defined in the Berkeley agreement and Berkeley must comply with FDA current Good Tissue Practice (cGTP), American Association of Tissue Banks Standards and all applicable state and local regulations.

Intellectual Property

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As of December 31, 2024, we owned approximately 16 U.S.

patents, seven U.S.

patent applications, six foreign patents (in Australia, Germany, Spain, France, Great Britain and Italy), and four foreign patent applications (in Australia, Canada, and Europe);

patents, eight U.S.

patent applications, six foreign patents (in Australia, Germany, Spain, France, Great Britain and Italy), four foreign patent applications (in Australia, Canada, and Europe) and one Patent Cooperation Treaty application;

and we in-licensed three U.S.

patents, 12 foreign patents (in Australia, Canada, Japan, Denmark, Germany, Great Britain, Ireland, Italy and the Netherlands), and two U.S.

and five foreign patent applications (in Brazil China, Japan as well as an application with the European Patent Office).

and five foreign patent applications (in Brazil China and Japan, as well as an application with the European Patent Office).

Our owned patent portfolio includes 15 U.S.

patents and six U.S.

patent applications that relate to our technology for CanGaroo, including issued claims covering biological envelopes and pending claims covering their use.

patent applications that relate to our technology for EluPro and CanGaroo, including issued claims covering biological envelopes and pending claims covering their use.

In addition, we own one U.S.

patent that relates to our technology for SimpliDerm that claims a method of preparing an acellular dermal matrix.

Excluding any patent term extension, our issued patents relating to our technology for CanGaroo are anticipated to expire starting in 2027, and our issued patent that relates to our technology for SimpliDerm is anticipated to expire in 2033.

Excluding any patent term extension, our issued patents relating to our technology for EluPro and CanGaroo are anticipated to expire starting in 2027, and our issued patent that relates to our technology for SimpliDerm is anticipated to expire in 2033.

There can be no assurance that any pending patent applications will ultimately be issued as patents.

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As with other medical device and regenerative medicine companies, our ability to maintain and solidify our proprietary and intellectual property position for our product candidates will depend on our success in obtaining effective patent claims and maintaining and enforcing claims that are granted.

However, our owned and licensed patents could be invalidated or narrowed or otherwise fail to adequately protect our proprietary and intellectual property position and our pending owned and licensed patent applications, and any patent applications that we may in the future file or license from third parties may not result in the issuance of patents.

However, our owned and licensed patents could be invalidated or narrowed or otherwise fail to adequately protect our proprietary and intellectual property position and our

pending owned and licensed patent applications, and any patent applications that we may in the future file or license from third parties may not result in the issuance of patents.

In addition, the term of individual issued patents depends upon the legal term for patents in the countries in which they are obtained.

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“Risk Factors - Risks Related to Intellectual Property.”

As of December 31, 2023, we had 11 registered trademarks and two pending trademark applications worldwide, including trademark registrations for “Aziyo,” “CanGaroo,” “ProxiCor,” “Tyke,” “VasCure,” “SimpliDerm,” and “SimpliDerm Ellipse,” in the United States, trademark applications for “Elutia,” in Jamaica and the United States, and trademark registrations for CanGaroo in the European Union, United Kingdom and Japan.

As of December 31, 2024, we had nine registered trademarks and ten pending trademark applications worldwide, including trademark registrations for “CanGaroo,” “ProxiCor,” “Tyke,” “VasCure,” “SimpliDerm,” and “SimpliDerm Ellipse,” in the United States, and for “CanGaroo” in the European Union, United Kingdom and Japan.

Trademark applications have been filed for “Elutia” and “EluPro” in the United States, the European Union, United Kingdom and Japan, and for “Elutia” in Jamaica.

We have confidentiality agreements with our employees, consultants, independent sales agents and third-party vendors to maintain the confidentiality of our trade secrets and proprietary information.

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“Risk Factors - Risks Related to Intellectual Property” for additional information regarding these and other risks related to our intellectual property portfolio and their potential effect on us.

License Agreement with Cook Biotech

On May 31, 2017, we entered into a license agreement, which we refer to as the Cook License Agreement, with Cook Biotech under which Cook Biotech granted to us an exclusive worldwide sublicensable license under certain licensed patents to make, have made, use, offer for sale, sell and import CorMatrix ECM for Pericardial Closure, CorMatrix ECM for Cardiac Tissue Repair, CorMatrix ECM for Carotid Repair, CorMatrix ECM for Vascular Repair, TYKE Patch, Pledget and Intracardiac, and CanGaroo ECM Envelope (into which implantable cardiac pacemaker or defibrillator devices are to be inserted).

Cook Biotech retained certain co-exclusive rights to the CorMatrix ECM for Vascular Repair.

License Agreement with Cook

On May 31, 2017, we entered into a license agreement, which we refer to as the Cook License Agreement, with Cook under which Cook granted to us an exclusive worldwide sublicensable license under certain licensed patents to make, have made, use, offer for sale, sell and import CorMatrix ECM for Pericardial Closure, CorMatrix ECM for Cardiac Tissue Repair, CorMatrix ECM for Carotid Repair, CorMatrix ECM for Vascular Repair, TYKE Patch, Pledget and Intracardiac, and CanGaroo ECM Envelope (into which implantable cardiac pacemaker or defibrillator devices are to be inserted).

Cook retained certain co-exclusive rights to the CorMatrix ECM for Vascular Repair.

The Cook License Agreement was amended on December 21, 2017 to expand our field of use for SIS pouch devices to include other implantable electronic cardiac stimulation devices, electronic neurostimulation devices for deep brain stimulation, spinal nerve and sacral nerve stimulation to relieve chronic pain and nerve stimulation to control bladder, digestive, abdomen and bowel movements, and also add additional payment requirements.

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We are subject to a minimum purchase requirement for the SIS ECM for the fields of use added in connection with the December 21, 2017 amendment, or the Subfields, and certain diligence obligations for commercial sales in the Subfields.

The license requires that we order and pay for a minimum of at least $500,000 of SIS ECM per calendar year for use in the Subfields.

Cook Biotech has the right to terminate the license granted to us in the Subfields or convert such license to a non-exclusive license, if we fail to comply with such minimum purchase requirement or diligence obligations.

The license requires that we order and pay for a minimum of at least

$500,000 of SIS ECM per calendar year for use in the Subfields.

Cook has the right to terminate the license granted to us in the Subfields or convert such license to a non-exclusive license, if we fail to comply with such minimum purchase requirement or diligence obligations.

We have the first right, but not the obligation to initiate legal proceedings against any patent infringement in our fields of use by a third-party product that is the same as one of the licensed products.

Under the Cook License Agreement and SIS Material Supply Agreement, Cook Biotech is the exclusive supplier of the SIS ECM used in the licensed products.

Under certain circumstances we will have the right to manufacture the SIS ECM used in the licensed products, provided that in such cases we are required to pay Cook Biotech a low single digit royalty on net sales of the licensed products that include the SIS ECM material manufactured by us and that are covered by a valid enforceable claim of a licensed patent.

As consideration for the license, we paid Cook Biotech a $200,000 license fee in 2018 and a $100,000 license fee in years 2019 through 2022, and are responsible for a yearly license fee of $100,000 until 2026.

Upon a change in control transaction, which includes an acquisition of 50% or more of our then outstanding capital stock, we will be obligated to pay Cook Biotech the total amount of all license fees that have not yet been paid within a specified period after the consummation of such change in control transaction.

Under the Cook License Agreement and SIS Material Supply Agreement, Cook is the exclusive supplier of the SIS ECM used in the licensed products.

Under certain circumstances we will have the right to manufacture the SIS ECM used in the licensed products, provided that in such cases we are required to pay Cook a low single digit royalty on net sales of the licensed products that include the SIS ECM material manufactured by us and that are covered by a valid enforceable claim of a licensed patent.

As consideration for the license, we paid Cook a $200,000 license fee in 2018 and are responsible for a yearly license fee of $100,000 until 2026.

Upon a change in control transaction, which includes an acquisition of 50% or more of our then outstanding capital stock, we will be obligated to pay Cook the total amount of all license fees that have not yet been paid within a specified period after the consummation of such change in control transaction.

The Cook License Agreement continues in effect until the date of expiration of the last to expire of the licensed patents, including any renewals or extensions.

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in 2017 (the “CorMatrix Acquisition”).

Cook Biotech has the right to terminate the Cook License Agreement in its entirety, or convert the exclusive license of any field of use to a non-exclusive license if we fail to make any license fee when due.

In February 2024, it was announced that Cook Biotech Inc.

was acquired by RTI Surgical.

We do not expect the acquisition to affect our supply agreement with Cook Biotech, which we understand will continue as a subsidiary of RTI Surgical.

Cook has the right to terminate the Cook License Agreement in its entirety, or convert the exclusive license of any field of use to a non-exclusive license if we fail to make any license fee when due.

Regulatory Matters

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Class II devices, of moderate risk, require FDA clearance through a 510(k) submission, involving compliance with general controls and potential imposition of special controls, such as performance standards and post-market surveillance.

The Quality System Regulation (“QSR”) is a key aspect of general controls, ensuring adherence to quality standards in

manufacturing processes.

The Quality System Regulation (“QSR”) is a key aspect of general controls, ensuring adherence to quality standards in manufacturing processes.

For the highest-risk Class III devices, PMA is required, encompassing life-sustaining devices, those with new intended uses, or utilizing advanced technology not substantially equivalent to existing devices.

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Certain of our ECM products are subject to premarket notification and clearance under Section 510(k) of the FDCA.

To obtain 510(k) clearance, a product sponsor must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market.

To obtain 510(k) clearance, a product sponsor must submit to the FDA a premarket notification submission

demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market.

A predicate device is a legally marketed device that is not subject to premarket approval, i.e., a device that was legally marketed prior to May 28, 1976 and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process.

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FDA approves the device for commercial distribution if it deems PMA data as valid scientific evidence, ensuring reasonable assurance of safety and effectiveness.

Post-approval conditions, including labeling restrictions, long-term data collection, and additional clinical studies, may accompany PMA approval.

Post-approval conditions, including labeling restrictions and additional clinical studies, may accompany PMA approval.

Post-market surveillance may be required as well.

Non-compliance with approval conditions may lead to adverse enforcement actions, such as withdrawal of approval.

Certain changes to an approved device, affecting safety or effectiveness, necessitate a PMA supplement.

This includes modifications to manufacturing facilities, methods, quality control procedures, or design performance specifications.

PMA supplements typically require information similar to a full PMA but are specific to changes from the original PMA.

Some changes, like alterations leading to a new intended use or significant design changes, mandate submission of a new PMA.

None of our products are currently marketed pursuant to a PMA.

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Clinical studies are typically required to support a PMA and may be necessary for a 510(k) submission.

In the United States, all device-related clinical investigations to determine safety and effectiveness must adhere to FDA's investigational device exemption (“IDE”) regulations.

IDE regulations govern investigational device labeling, restrict

promotion, and outline recordkeeping, reporting, and monitoring responsibilities for sponsors and investigators.

In the United States, all device-related clinical investigations to determine safety and effectiveness must adhere to FDA's IDE regulations.

IDE regulations govern investigational device labeling, restrict promotion, and outline recordkeeping, reporting, and monitoring responsibilities for sponsors and investigators.

If a device presents a "significant risk" as defined by the FDA, an IDE application must be submitted and approved before initiating human clinical studies.

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During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, study monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational devices.

The clinical investigators in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, follow the investigational plan and study protocol, and comply with all reporting and recordkeeping requirements.

The clinical investigators in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, follow

the investigational plan and study protocol, and comply with all reporting and recordkeeping requirements.

After a study begins, we, the FDA or the IRB could suspend or terminate a clinical study at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

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Under the FDCA and its implementing regulations, the FDA is charged with assigning a center with primary jurisdiction, or a lead center, for review of a combination product.

The designation of a lead center generally eliminates the need to receive approvals from more than one FDA component for combination products.

The designation of a lead center generally eliminates the need to receive approvals from more than one FDA center for combination products.

The determination of lead center is based on the “primary mode of action” of the combination product.

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The European Union (“EU”) has adopted specific directives and regulations regulating the design, manufacture, clinical investigation, conformity assessment, labeling and adverse event reporting for medical devices.

We have CE mark

for four of our cardiovascular products and we have had certification for updated labeling of our CanGaroo Envelope to allow for the addition of the antibiotic gentamicin since 2021.

After expiration of our CE mark on May 23, 2024, we no longer intend to maintain our CE mark and will not continue to market our products in the EU.

We formerly had a CE mark for four of our cardiovascular products in the EU and had certification for updated labeling of our CanGaroo Envelope to allow for the addition of the antibiotic gentamicin.

However, with the expiration of our CE mark on May 23, 2024, we no longer maintain our CE mark and do not market our products in the EU.

We will maintain compliance with the transitional Medical Devices Regulation, or MDR, requirements as applicable, including post-market surveillance and vigilance requirements.

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Manufacturers with valid EU certifications can market their devices in the UK under the CE mark during transitional periods.

However, from July 2024, the UK Conformity Assessment (UKCA) mark will be required for medical devices sold in Great Britain.

We do not intend to apply for the UKCA for our cardiovascular and CanGaroo products in the near future.

However, from July 2024, the UK Conformity Assessment (UKCA)

mark will be required for medical devices sold in Great Britain.

We do not intend to apply for the UKCA for our Cardiovascular and Device Protection products in the near future.

Regulations Governing Fraud and Abuse

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A violation of this statute is a felony and may result in fines, imprisonment, and/or exclusion from government sponsored programs.

The HIPAA false statements statute prohibits, among other things, knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation in connection with the delivery of, or payment for, healthcare benefits, items or

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the Anti-Kickback Statute or specific intent in order to violate it to have committed a violation.

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State, local, and foreign laws impact business practices in the medical device and pharmaceutical industries, including state anti-kickback and false claims laws affecting research, distribution, sales, and marketing.

These laws also extend to claims involving healthcare items reimbursed by third-party payors or patients and may restrict payments to healthcare providers and referral sources.

These laws also extend to claims involving healthcare items reimbursed by third-party payors or patients and may restrict payments to

healthcare providers and referral sources.

Additional regulations mandate pharmaceutical companies to comply with industry guidelines and federal guidance, while requiring drug manufacturers to report pricing and marketing information.

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In some countries, government reimbursement is the predominant program available to patients and hospitals.

Our commercial success depends in part on

the extent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for the procedures during which our products are used.

Our commercial success depends in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for the procedures during which our products are used.

Failure by physicians, hospitals, ambulatory surgery centers and other users of our products to obtain sufficient coverage and reimbursement from third-party payors for procedures in which our products are used, or adverse changes in government and private third-party payors’ coverage and reimbursement policies.

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Reimbursement landscape variations exist from payor to payor in the United States.

Third-party payors are increasingly auditing and challenging the prices charged for medical products and services with concern for upcoding, miscoding, using inappropriate modifiers, or billing for inappropriate care settings.

care settings.

Some third-party payors must approve coverage for new or innovative devices or procedures before they will reimburse healthcare providers who use the products or therapies.

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On June 17, 2021, the U.S.

Supreme Court dismissed a challenge asserting the ACA's

unconstitutionality on procedural grounds, affirming its continuation.

Supreme Court dismissed a challenge asserting the ACA's unconstitutionality on procedural grounds, affirming its continuation.

President Biden's executive order, preceding the Supreme Court ruling, initiated a special enrollment period for ACA marketplace health insurance coverage from February 15, 2021, through August 15, 2021, prompting a review of healthcare access policies.

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Human Capital

As of December 31, 2023, we had 54 employees, with nearly 100% of whom were full-time employees.

As of December 31, 2024, we had 51 employees, nearly 100% of whom were full-time employees.

We believe our employee relations are good.

Diversity, Equity and Inclusion

We believe that fostering diversity, equity, and inclusion is a key element to discovering, developing, and bringing transformative products to patients in need.

As of December 31, 2023, 63% of our workforce and 47% of our leadership (at the director level and above) were female.

In addition, as of December 31, 2023, 37% of our workforce were racially or ethnically diverse.

We strive to build a workforce representative of the people we serve and to nurture an inclusive culture where all voices are welcomed, heard, and respected.

Recruiting and Retention

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We benchmark our benefits program against others in our industry to help us make decisions on the size and elements of our compensation program.

Product Recalls

FiberCel Recall

in several patients treated with the product, including some patients that tested positive for tuberculosis (the “FiberCel Recall”).

On June 2, 2021, we issued a voluntary recall pertaining to a single donor lot of our FiberCel Fiber Viable Bone Matrix, a bone repair product formerly distributed by Medtronic PLC, after learning of post-surgical infections reported in several patients treated with the product, including some patients that tested positive for tuberculosis (the “FiberCel Recall”).

After the recall, we worked with the FDA and the U.S.

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Consistent with the FiberCel Recall, after the VBM Recall, we worked with the FDA and CDC to identify and secure all unused product, ascertain the medical status of patients treated with the recalled product, understand whether there is any relationship between the post-surgical infections and the recalled product lot and determine the medical cause of these infections.

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.

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.

Additionally, in August and September 2023, c ell culture testing of the recalled product was conducted by the same lab and showed no presence of MTB.

15 unchanged sentences

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What changed 10-K

Item 1. Business