What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-13 · 169 added, 101 removed, 508 unchanged (35% of the section changed)

27 unchanged sentences

Stockholders’ equity (deficit):

Class A Common stock, $ 0.001 par value per share, 200,000,000 shares authorized as of March 31, 2025 and December 31, 2024, and 36,552,348 and 30,897,232 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Class B Common stock, $ 0.001 par value per share, 20,000,000 shares authorized as of March 31, 2025 and December 31, 2024 and 4,313,406 issued and outstanding as of March 31, 2025 and December 31, 2024

Class A Common stock, $ 0.001 par value per share, 200,000,000 shares authorized as of June 30, 2025 and December 31, 2024, and 38,081,935 and 30,897,232 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

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

Additional paid-in capital

6 unchanged sentences

Three Months Ended

Six Months Ended

Cost of goods sold

10 unchanged sentences

Income tax expense

Net loss from continuing operations

Income from discontinued operations

dilutive gain on revaluation of warrant liability

Net loss for diluted earnings per share

Net loss from continuing operations per share - basic

Net loss from continuing operations per share - diluted

Net income from discontinued operations per share - basic and diluted

Net loss per share - basic

7 unchanged sentences

Equity (Deficit)

Balance, March 31, 2025

Issuance of common stock as payment under revenue interest obligation

Issuance of common stock as payment of interest

Exercise of Prefunded Warrants

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

Stock-based compensation

Balance, June 30, 2025

Balance, March 31, 2024

Issuance of common stock in connection with registered direct offering, net of issuance costs of $ 1.1 million

Exercises of Common Warrants and Prefunded Warrants

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

Stock-based compensation

Balance, June 30, 2024

Stockholders'

Equity (Deficit)

Balance, December 31, 2024

Issuance of common stock in connection with registered direct offering, net of issuance costs of $ 1.1 million

Issuance of common stock as payment under revenue interest obligation

Issuance of common stock as payment of interest

Exercise of Prefunded Warrants

Issuance of common stock under Employee Stock Purchase Plan

1 unchanged sentence

Stock-based compensation

Balance, March 31, 2025

Balance, June 30, 2025

Balance, December 31, 2023

Issuance of common stock in connection with registered direct offering, net of issuance costs of $ 1.1 million

Exercises of Common Warrants and Prefunded Warrants

2 unchanged sentences

Stock-based compensation

Balance, March 31, 2024

Balance, June 30, 2024

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

1 unchanged sentence

(In Thousands)

Three Months Ended

Six Months Ended

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

Depreciation and amortization

Gain on sale of Orthobiologics Business

(Gain) loss on revaluation of warrant liability

12 unchanged sentences

INVESTING ACTIVITIES:

Proceeds from sale of Orthobiologics Business

Expenditures for property and equipment

Net cash used in investing activities

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES:

7 unchanged sentences

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

2 unchanged sentences

Cash paid for interest

Fair value of warrants issued

Issuance of common stock as payment under revenue interest obligation

Operating lease right-of-use assets executed

Conversion of Common Warrants and Prefunded Warrants to common stock

9 unchanged sentences

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

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 condensed consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2024.

The financial information as of March 31, 2025 and for the three months ended March 31, 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.

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 (“Annual Report”) for the fiscal year ended December 31, 2024.

The financial information as of June 30, 2025 and for the three and six months ended June 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 condensed consolidated balance sheet data as of December 31, 2024 was derived from audited financial statements but does not include all disclosures required by GAAP.

7 unchanged sentences

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 three months ended March 31, 2025.

There were no earn-out payments earned or paid in the six months ended June 30, 2025.

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.

4 unchanged sentences

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 March 31, 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.

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.

For the three months ended March 31, 2025, the Company incurred a net loss of $ 3.9 million, and as of March 31, 2025, the Company had an accumulated deficit of $ 233.5 million.

In addition, during the three months ended March 31, 2025, the Company used $ 8.9 million of cash in operating activities and expects to continue to incur cash outflows during the remainder of 2025.

For the six months ended June 30, 2025, the Company incurred a net loss of $ 13.5 million, and as of June 30, 2025, the Company had an accumulated deficit of $ 243.1 million.

In addition, during the six months ended June 30, 2025, the Company used $ 17.1 million of cash in operating activities and expects to continue to incur cash outflows from operating activities during the remainder of 2025.

Because of the numerous risks and uncertainties associated with the Company’s commercialization and development efforts, the Company is unable to predict when it will become profitable, and it may never become profitable.

2 unchanged sentences

In order to mitigate the current and potential future liquidity issues caused by the matters noted above, the Company may seek to raise capital through the issuance of common stock or debt such as the offerings described in Note 8, issue common stock to satisfy certain obligations in lieu of cash such as the Ligand amendment described in Note 7 or pursue asset sales or other transactions, such as the sale of the Orthobiologics Business described above.

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

In the future, the Company may also seek to obtain waivers, amendments or other accommodations with lenders or other obligees in order to help manage the Company’s indebtedness and other obligations, such as the May 2025 amendment to the SWK Loan Facility described in Note 6.

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.

As such, based on our current operating plans, we believe there is uncertainty as to whether our future cash flows, along with our existing cash, issuances of additional equity and cash generated from expected future sales will be sufficient to meet our anticipated operating needs through twelve months from the condensed consolidated financial statement issuance date.

13 unchanged sentences

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 attributable to common stockholders calculation, stock options, restricted stock units (“RSUs”) and warrants are considered to be common stock equivalents.

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.

22 unchanged sentences

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.

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.

At each balance sheet date, the

Company also evaluates inventory for excess quantities, obsolescence or shelf-life expiration.

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.

15 unchanged sentences

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

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

In the case 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 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.

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

4 unchanged sentences

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

As of March 31, 2025, the property was not yet made available for use to Elutia by the landlord due to the significant improvement work being performed by the landlord.

Consequently, the Company determined that the lease has not yet commenced for accounting purposes.

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 %.

Long-Lived Assets

5 unchanged sentences

If impairment exists, the carrying value of that asset is adjusted to its fair value.

A discounted cash flow analysis is used to estimate an asset’s fair value, using assumptions that market participants would apply.

A discounted cash flow analysis is used to estimate an asset’s fair value, using assumptions

that market participants would apply.

The results of impairment tests are subject to management’s estimates and assumptions of projected cash flows and operating results.

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 three months ended March 31, 2025 or 2024.

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 six months ended June 30, 2025 or 2024.

Warrant Liability

26 unchanged sentences

The Company accounts for its stock-based compensation plans in accordance with FASB Accounting Standards Codification (“ASC”) 718, Accounting for Stock Compensation .

ASC 718 requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors, including employee stock options and

restricted stock units.

ASC 718 requires the measurement and recognition of

compensation expense for all stock-based awards made to employees and directors, including employee stock options and restricted stock units.

Stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the entire award.

4 unchanged sentences

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

There was one customer that represented 15 % and 17 % of the Company’s net sales for the three months ended March 31, 2025 and 2024, respectively.

Additionally, there was one customer that represented 15 % and 14 % of the Company’s accounts receivable as of March 31, 2025 and December 31, 2024, respectively.

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 June 30, 2025.

Comprehensive Income (Loss)

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

For the three months ended March 31, 2025 and 2024, the Company’s net loss equaled its comprehensive loss and accordingly, no additional disclosure is presented.

For the six months ended June 30, 2025 and 2024, 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.

6 unchanged sentences

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.

The Company is currently evaluating the impact of the OBBBA on its consolidated financial statements.

Recently Issued Accounting Standards

11 unchanged sentences

Early adoption is permitted.

amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2024-03.

6 unchanged sentences

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 March 31, 2025, the Company had 1,746,811 shares of Class A common stock available for issuance under the 2020 Plan.

As of June 30, 2025, the Company had 1,411,696 shares of Class A common stock available for issuance under the 2020 Plan.

Stock Options

1 unchanged sentence

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 three months ended March 31, 2025 is as follows:

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

Number of Shares

1 unchanged sentence

Outstanding, December 31, 2024

Outstanding, March 31, 2025

Vested and exercisable, March 31, 2025

As of March 31, 2025, there was approximately $ 2.7 million of total unrecognized compensation expense related to unvested stock options.

Outstanding, June 30, 2025

Vested and exercisable, June 30, 2025

As of June 30, 2025, there was approximately $ 2.5 million of total unrecognized compensation expense related to unvested stock options.

These costs are expected to be recognized over a weighted-average period of 1.4 years.

3 unchanged sentences

The expected volatility of the Class A common stock is based on the Company’s historical stock data.

The Company uses a zero -dividend yield assumption as the Company has not paid dividends since inception nor does it anticipate paying dividends in the future.

The Company uses a zero -dividend yield assumption as the Company has not paid dividends since inception nor does it

anticipate paying dividends in the future.

The risk-free interest rate approximates recent U.S.

1 unchanged sentence

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.

No options were granted during the three months ended March 31, 2025;

however, the following weighted-average assumptions were used to determine the fair value of time-based options granted during the three months ended March 31, 2024:

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

Six Months Ended

Expected term (years)

4 unchanged sentences

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 March 31, 2025, there were a total of 345,011 stock options outstanding that are market condition stock option awards.

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

Restricted Stock Units

1 unchanged sentence

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 three months ended March 31, 2025 is as follows:

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

Number of Shares

1 unchanged sentence

Unvested, December 31, 2024

Unvested, March 31, 2025

The total fair value of the RSUs granted during the three months ended March 31, 2025 was $ 0.3 million.

Unvested, June 30, 2025

The total fair value of the RSUs granted during the six months ended June 30, 2025 was $ 0.3 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.

1 unchanged sentence

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 March 31, 2025, $ 3.9 million of unrecognized compensation costs related to RSUs is expected to be recognized over a weighted average period of 1.8 years.

As of June 30, 2025, $ 3.3 million of unrecognized compensation costs related to RSUs is expected to be recognized over a weighted average period of 1.6 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 March 31, 2025, there were 252,394 RSUs outstanding that were market condition RSU awards.

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

Employee Stock Purchase Plan

3 unchanged sentences

The ESPP is considered compensatory for purposes of stock-based compensation expense.

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 March 31, 2025, the total shares of Class A common stock authorized for issuance under the ESPP was 1,126,448 , of which 791,675 remained available for future issuance.

During the three months ended March 31, 2025, shares of Class A common stock totaling 31,558 were issued under the ESPP.

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 June 30, 2025, the total shares of Class A common stock authorized for issuance under the ESPP was 1,126,448 , of which 791,675 remained available for future issuance.

During the six months ended June 30, 2025, shares of Class A common stock totaling 31,558 were issued under the ESPP.

Stock-Based Compensation Expense

Stock-based compensation expense recognized during the three months ended March 31, 2025 and 2024 was comprised of the following (in thousands):

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

Three Months Ended

Six Months Ended

Sales and marketing

3 unchanged sentences

Total stock-based compensation expense

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

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

Raw materials

7 unchanged sentences

Principal amortization of the SWK Loan Facility, as amended in September 2024, starts in November 2025.

Principal payments during the amortization period will be limited based on revenue-based caps, although as of March 31, 2025, no such caps are applicable and quarterly principal payments will be in an amount equal to 5 % of the aggregate principal amount funded with the balance paid at maturity.

Principal payments during the amortization period will be limited based on revenue-based caps, although as of June 30, 2025, no such caps are applicable and quarterly principal payments will be in an amount equal to 5 % of the aggregate principal amount funded with the balance paid at maturity.

T he SWK Loan Facility also includes both minimum revenue and liquidity covenants, restrictions as to payment of dividends, and is secured by all assets of the Company, subject to certain customary exceptions.

As of March 31, 2025, Elutia was in compliance with its financial covenants under the agreement governing the SWK Loan Facility (“SWK Loan Facility Agreement”).

As of June 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 take the form of Secured Overnight Financing Rate (“SOFR”) loans and bear 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 has elected the PIK Interest option (as defined below), 3.75 % and the “Term SOFR Rate.” The Company may 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 may be made until November 15, 2025.

(based upon an interest period of 3 months), or (ii) if the Company has elected the PIK Interest option (as defined below), 3.75 % and the “Term SOFR Rate.” The Company may 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 may be made until November 15, 2025.

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

The agreement governing the SWK Loan Facility also includes 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 12.7 % and 13.5 % for the three months ended March 31, 2025 and 2024, respectively.

The weighted average interest rate on the SWK Loan Facility was 12.6 % and 13.6 % for the three and six months ended June 30, 2025 and 2024, respectively .

In May 2025, Elutia entered into an amendment to the SWK Loan Facility.

This amendment, among other things:

(i) allows 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) allows the Company to request that SWK advance a new term loan in the amount of up to $ 5.0 million, which advance will be in the sole and absolute discretion of SWK and (iv) fixed the amount of the minimum liquidity covenant to be $ 8.0 million.

(i) allows 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) allows the Company to request that SWK advance a new term loan in the amount of up to $ 5.0 million, which advance will be 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 amendment, the Company agreed to issue SWK 50,000 shares of its Class A Common Stock in a private placement.

5 unchanged sentences

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 will be recognized as interest expense through the maturity of the loan.

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

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

7 unchanged sentences

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 March 31, 2025 and December 31, 2024.

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 June 30, 2025 and December 31, 2024.

Revenue Interest Obligation

On May 31, 2017, the Company completed an asset purchase agreement with CorMatrix Cardiovascular, Inc.

(“CorMatrix”) and acquired all CorMatrix commercial assets and related intellectual property (the “CorMatrix Acquisition”).

(“CorMatrix”) and acquired all CorMatrix commercial assets and related intellectual property (the “CorMatrix

Acquisition”).

As part of the CorMatrix Acquisition, the Company assumed a restructured, long-term royalty obligation (the “Revenue Interest Obligation”) to Ligand Pharmaceuticals Incorporated (“Ligand”) with an estimated present value on the acquisition date of $ 27.7 million.

3 unchanged sentences

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.

Total payments to Ligand during the three months ended March 31, 2024 were $ 2.6 million comprised of the aforementioned 2023 amounts due.

No payments to Ligand were made in the three months ended March 31, 2025.

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 six months ended June 30, 2025.

Total payments to Ligand during the six months ended June 30, 2024 were $ 5.2 million comprised of the aforementioned 2023 amounts due and a 2024 quarterly minimum payment of $ 1.1 million.

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 three months ended March 31, 2024.

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

Interest expense related to the Revenue Interest Obligation of approximately $ 0.3 million and $ 0.5 million was recorded for the three months ended March 31, 2025 and 2024, respectively.

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.

The 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 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.

After the effects of these corrections, interest expense related to the Revenue Interest Obligation of approximately $( 0.4 ) million and $ 0.4 million was recorded for the three months ended June 30, 2025 and 2024, respectively and approximately ($ 0.1 ) million and $ 0.9 million was recorded for the six months ended June 30, 2025 and 2024, respectively.

Common Stock and Warrants

2 unchanged sentences

The public offering price for each share of Class A Common Stock was $ 2.50 , and the public offering price for each 2025 Prefunded Warrant was $ 2.499 , for aggregate gross proceeds of approximately $ 15.0 million, before deducting offering expenses.

The 2025 Prefunded Warrants have an exercise price of $ 0.001 per share of Class A Common Stock, are exercisable immediately and will expire when exercised in full.

The 2025 Prefunded Warrants have an exercise price of $ 0.001 per share of Class A Common Stock, are exercisable immediately and will expire when exercised

The Company incurred transaction fees, including commissions and legal fees, of approximately $ 1.3 million in connection with the 2025 Registered Offering, of which $ 1.2 million were allocated to the issuance of the common stock.

5 unchanged sentences

On September 21, 2023, the Company sold, in a private offering (“Private Offering”) an aggregate of (i) 6,852,811 units (“Common Units”) each comprised of (a) one share of the Company’s Class A common stock and (b) a warrant (“Common Warrant”) to purchase one and one half shares of Class A Common Stock, and (ii) 503,058 units (the “Prefunded Units”), each comprised of (a) a prefunded warrant (“2023 Prefunded Warrant”) to purchase one share of Class A Common Stock, and (b) a Common Warrant.

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.

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 $ 1.4275 .

5 unchanged sentences

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 March 31, 2025 and December 31, 2024.

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 three months ended March 31, 2025.

Such expenses totaled $ 0.1 million for the six months ended June 30, 2025.

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

1 unchanged sentence

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

A summary of the warrant activity for the three months ended March 31, 2025 is as follows:

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

2023 Prefunded Warrants

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Outstanding, December 31, 2024

Outstanding, March 31, 2025

Outstanding, June 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 three months ended March 31, 2025 (in thousands):

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

2023 Prefunded Warrants

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Gain on revaluation of warrant liability

Warrant liability, March 31, 2025

Warrant liability, June 30, 2025

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 have been recorded as (gain) loss on revaluation of warrant liability in the accompanying condensed consolidated statements of operations for the three months ended March 31, 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 March 31, 2024:

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 $ 2.2 million gain recognized during the three months ended June 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 six months ended June 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 June 30, 2024:

Common stock price

5 unchanged sentences

Cook Biotech License and Supply Agreements

Elutia has entered into a license agreement, as amended, with Cook Biotech (“Cook”), now owned by Evergen, for an exclusive, worldwide license to the porcine tissue for use in the Company’s Cardiac Patch and CanGaroo products, subject to certain co-exclusive rights retained by Cook (the “Cook License Agreement”).

Elutia has entered into a license agreement, as amended, with Cook Biotech (“Cook”), now owned by Evergen, for an exclusive, worldwide license to the porcine tissue for use in the Company’s Cardiac Patch, CanGaroo and EluPro products, subject to certain co-exclusive rights retained by Cook (the “Cook License Agreement”).

The term of such license is through the date of the last to expire of the licensed Cook patents, which is anticipated to be July 2031.

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The supply agreement expires on the same date as the related license agreement.

No royalties were due or paid to Cook during the three months ended March 31, 2025 or 2024.

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

The Cook License Agreement also provides for a worldwide exclusive license to the porcine tissue for use with neuromodulation devices in addition to cardiovascular devices and includes license fee payments of $ 0.1 million per year in each of the years 2021 through 2026.

Such license payments would accelerate if Elutia undergoes a change in control, as defined in the Cook License Agreement.

Such license payments would accelerate if Elutia undergoes a change in control,

as defined in the Cook License Agreement.

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

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

As of March 31, 2025, there were 58 active lawsuits or claims against the Company, including 18 lawsuits or claims where settlements have been reached but had not yet been paid by quarter-end.

As of June 30, 2025, there were 47 active lawsuits or claims against the Company, including 34 lawsuits or claims where settlements have been reached but had not yet been paid by quarter-end.

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.

4 unchanged sentences

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”).

As of March 31, 2025, there were 12 active lawsuits or claims filed or asserted against the Company.

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 June 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.

12 unchanged sentences

The court held a hearing on January 9, 2025, and a decision was rendered by the court on April 8, 2025.

In its decision, the court dismissed the Company’s claim with respect to Medtronic’s failure to obtain insurance coverage, but allowed the Company to continue with its claim that Medtronic breached its indemnity obligations to Elutia.

In its decision, the court dismissed the Company’s claim with respect to Medtronic’s failure to obtain insurance coverage, but allowed the Company to continue with its claim that Medtronic

breached its indemnity obligations to Elutia.

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

2 unchanged sentences

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 52 of the cases has been settled for a total cash outlay of $ 17.5 million.

For the remaining 58 cases, the Company estimated a probable loss related to each case and has recorded a liability at a total estimated amount of $ 14.3 million at March 31, 2025, which is recorded as Contingent Liability for Legal Proceedings in the accompanying condensed consolidated balance sheets.

In total, Elutia’s liability in 63 of the cases has been settled for a total cash outlay of $ 21.5 million, with $ 9.6 million of such total settlement outlays having been paid through insurance proceeds.

For the remaining 47 cases, the Company estimated a probable loss related to each case and has recorded a liability at a total estimated amount of $ 13.3 million at June 30, 2025, which is recorded as Contingent Liability for Legal Proceedings in the accompanying condensed consolidated balance sheets.

Such liability includes $ 11.1 million for which the settlements have been reached but had not yet been paid by quarter-end.

6 unchanged sentences

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 12 of the cases has been settled for a total cash outlay of

approximately $ 1.5 million.

For the remaining 23 cases, which includes unasserted claims that the Company believes are probable of assertion, the Company estimated a probable loss at an estimated amount of $ 3.6 million at March 31, 2025, which is recorded as Contingent Liability for Legal Proceedings in the accompanying consolidated balance sheets.

In total, Elutia’s liability in 12 of the cases has been settled for a total cash outlay of approximately $ 1.5 million.

For the remaining 23 cases (which includes unasserted claims that the Company believes are probable of assertion and excludes one case where the statute of limitations has elapsed), the Company estimated a probable loss at an estimated amount of $ 3.7 million at June 30, 2025, which is recorded as Contingent Liability for Legal Proceedings in the accompanying consolidated balance sheets.

Such liability includes $ 0.1 million for which a settlement has been reached but had not yet been paid by quarter-end.

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 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 March 31, 2025 totaled $ 3.9 million and are recorded as Insurance Receivables of Litigation Costs in the accompanying consolidated balance sheets.

As of March 31, 2025, all amounts recorded as Insurance Receivables of Litigation Costs related 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 June 30, 2025 totaled $ 4.3 million and are recorded as Insurance Receivables of Litigation Costs in the accompanying consolidated balance sheets.

As of June 30, 2025, all amounts recorded as Insurance Receivables of Litigation Costs related 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 March 31, 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 and Medtronic matter.

As of both June 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 and Medtronic matter.

Net Income (Loss) Per Share

Three Months Ended

Six Months Ended

(in thousands, except share and per share data)

Net loss from continuing operations

Income from discontinued operations

dilutive gain on revaluation of warrant liability

3 unchanged sentences

Weighted average number of common shares - diluted

Net loss from continuing operations per share - basic

Net loss from continuing operations per share - diluted

Net income from discontinued operations per share - basic and diluted

Net loss per share - basic

2 unchanged sentences

The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share:

Three Months Ended

Six Months Ended

Options to purchase common stock

5 unchanged sentences

Segment Information

With the divestiture of the Orthobiologics Business, the Company now operates in three segments.

With the divestiture in 2023 of the Orthobiologics Business, the Company now operates in three segments.

The Company determined its operating and reportable segments to be consistent with its major product groupings – Device Protection, Women’s Health and Cardiovascular.

5 unchanged sentences

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

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

Device Protection

3 unchanged sentences

Segment gross profit

The net sales for the three months ended March 31, 2025 include the revenues derived from one customer which represents 15 % of total net sales.

No customer for the three months ended June 30, 2025 represented greater than 10% of total net sales.

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

Device Protection

Women's Health

Cardiovascular

Cost of goods sold, excluding intangible asset amortization

Segment gross profit

The net sales for the six months ended June 30, 2025 include the revenues derived from one customer which represents 11 % of total net sales.

Such customer is included within the Women’s Health segment.

For the three months ended March 31, 2024, the Company’s segment gross profit was comprised of the following (in thousands):

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

Device Protection

3 unchanged sentences

Segment gross profit

The net sales for the three months ended March 31, 2024 include the revenues derived from one customer which represents 17 % of total net sales.

The net sales for the three months ended June 30, 2024 include the revenues derived from one customer which represents 11 % of total net sales.

Such customer is included within the Women’s Health segment.

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, 2025 and 2024, (in thousands):

Additionally, the net sales for the three months ended June 30, 2024 include the revenues derived from another customer which represents 15 % of total net sales.

Such customer is included within the Cardiovascular segment.

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

Device Protection

Women's Health

Cardiovascular

Cost of goods sold, excluding intangible asset amortization

Segment gross profit

The net sales for the six months ended June 30, 2024 include the revenues derived from one customer which represents 14 % of total net sales.

Such customer is included within the Women’s Health segment.

Additionally, the net sales for the three months ended June 30, 2024 include the revenues derived from another customer which represents 11 % of total net sales.

Such customer is included within the Cardiovascular segment.

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

Three Months Ended

Six Months Ended

Segment gross profit

9 unchanged sentences

Loss before provision for income taxes

During the three months ended March 31, 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.

During the six months ended June 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.

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