0001558370-23-019243 | 8-K | XBRL Viewer

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Stock-Based Compensation - Mr Lyloyd (Details) - Former President And Chief Executive Officer [Member] $ in Millions	Sep. 30, 2022 USD ($)
Stock-Based Compensation
Period of base salary taken for cash severance	12 months
Percentage of eligible target bonus	100.00%
COBRA benefits period	12 months
Severance costs	$ 1.0

Retirement Plan	12 Months Ended
Dec. 31, 2022
Retirement Plan
Retirement Plan	Note 15. Retirement Plan The Company has a defined contribution savings plan under section 401(k) of the Internal Revenue Code. The plan covers substantially all employees. The Company matches employee contributions made to the plan according to a specified formula. The Company’s matching contributions totaled approximately $0.3 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively.

Retirement Plan

12 Months Ended

Dec. 31, 2022

Retirement Plan

Retirement Plan

Note 15. Retirement Plan

The Company has a defined contribution savings plan under section 401(k) of the Internal Revenue Code. The plan covers substantially all employees. The Company matches employee contributions made to the plan according to a specified formula. The Company’s matching contributions totaled approximately $0.3 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively.

Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Basic	$ (36,182)	$ (30,329)
Net Income (Loss) from Discontinued Operations Available to Common Shareholders, Basic	3,285	5,497
Net loss attributable to common stockholders	$ (32,897)	$ (24,832)
Denominator:
Weighted average common shares outstanding - basic	13,832,887	10,444,767
Weighted average number of common shares, diluted	13,832,887	10,444,767
Net loss per share from continuing operations attributable to commons stockholders - basic (in dollar per share)	$ (2.62)	$ (2.90)
Net loss per share from continuing operations attributable to commons stockholders - diluted (in dollar per share)	(2.62)	(2.90)
Net loss per share from discontinued operations attributable to commons stockholders - basic (in dollar per share)	0.24	0.53
Net loss per share from discontinued operations attributable to commons stockholders - diluted (in dollar per share)	0.24	0.53
Net loss per share - basic (in dollar per share)	(2.38)	(2.38)
Net loss per share - diluted (in dollar per share)	$ (2.38)	$ (2.38)

Divestiture of Orthobiologics Business - Financial results (Details) - Orthobiologics Business - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Net sales	$ 25,338	$ 26,934
Cost of goods sold	17,755	17,192
Gross profit	7,583	9,742
Sales and marketing	2,345	2,170
General and administrative	576	563
Research and development	1,213	1,512
Total operating expenses	4,134	4,245
Interest expense	164
Net income (loss)	$ 3,285	$ 5,497

Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Tax goodwill	$ 2,947	$ 3,267
Net operating loss carryforwards	19,743	14,794
Inventory	491	647
Acquired intangibles	1,452	1,174
Revenue interest obligation	774	1,347
Interest expense	2,533	1,866
Research and development costs	1,749
Operating lease liability	364
FiberCel litigation costs	669
Other	2,045	1,314
Total assets	32,767	24,409
Deferred tax liabilities:
Operating lease right-to-use assets	(350)
Prepaid expenses	(562)	(200)
Total liabilities	(912)	(200)
Total net deferred tax asset	31,855	24,209
Valuation allowance	$ (31,855)	$ (24,209)

Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan	12 Months Ended
	Dec. 31, 2022 shares
Stock-Based Compensation
Offering period	6 months
Price of the common stock purchased as percentage of fair market value of common stock	85.00%
Shares outstanding (in shares)	1.00%
Grant of equity awards authorized	380,997
Awards available for grant	279,345
Shares issued under ESPP	74,408

Property and Equipment

12 Months Ended

Dec. 31, 2022

Property and Equipment

Property and Equipment

Note 7. Property and Equipment

Property and equipment as of December 31, 2022 and 2021 were comprised of the following (in thousands):


	December 31,
	2022		2021
Processing and research equipment	$	(1,000)	$	(985)
Leasehold improvements		613		606
Office equipment and furniture		188		187
Computer hardware and software		1,029		994
		830		802
Less: accumulated depreciation and amortization		(585)		(588)
Property and equipment, net	$	245	$	214

Depreciation and amortization expense on property and equipment totaled approximately $0.1 million in both the years ended December 31, 2022 and 2021. Amounts included within cost of goods sold is not material.

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of reconciliation of the U.S. federal statutory rate to the consolidated effective tax rate


	Years Ended December 31,
	2022		2021
Tax benefit at U.S. statutory rate	21.0	%	21.0	%
State income tax benefit, net of federal benefit	1.9	%	1.6	%
Nondeductible expenses	(0.3)	%	1.6	%
State law changes	0.5	%	0.4	%
Other	0.1	%	0.3	%
Change in valuation allowance	(23.3)	%	(25.1)	%
Income tax expense	(0.1)	%	(0.2)	%

Schedule of components of net deferred income taxes

As of December 31, 2022 and 2021, significant components of the Company’s net deferred income taxes are as follows (in thousands):


	December 31,
	2022		2021
Deferred tax assets:
Tax goodwill	$	2,947	$	3,267
Net operating loss carryforwards		19,743		14,794
Inventory		491		647
Acquired intangibles		1,452		1,174
Revenue interest obligation		774		1,347
Interest expense		2,533		1,866
Research and development costs		1,749		-
Operating lease liability		364		-
FiberCel litigation costs		669		-
Other		2,045		1,314
Total assets		32,767		24,409
Deferred tax liabilities:
Operating lease right-to-use assets		(350)		-
Prepaid expenses		(562)		(200)
Total liabilities		(912)		(200)

Total net deferred tax asset		31,855		24,209
Valuation allowance		(31,855)		(24,209)
Net deferred tax asset, net of valuation allowance	$	—	$	—

Stock-Based Compensation - Option Valuation Assumption (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Weighted-average assumptions were used to determine the fair value of options
Dividend yield assumption to estimate fair value	0.00%
Dividend yield	0.00%
Options to purchase common stock
Weighted-average assumptions were used to determine the fair value of options
Expected term (years)	6 years 6 months	6 years
Risk-free interest rate	2.30%	1.00%
Volatility factor	63.80%	63.60%
Performance Based Options
Weighted-average assumptions were used to determine the fair value of options
Expected term (years)	3 years

Leases - Future cash obligations (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Future minimum lease commitments under non-cancelable operating leases
2023	$ 237
Total minimum lease payments	237
Less: amount of lease payments representing interest	5
Present value of future minimum lease payments	232
Less: current obligations under leases	$ 232

Inventory

12 Months Ended

Dec. 31, 2022

Inventory

Inventory

Note 6. Inventory

Inventory as of December 31, 2022 and 2021 was comprised of the following (in thousands):


	December 31,
	2022		2021
Raw materials	$	652	$	434
Work in process		541		497
Finished goods		3,047		1,855
Total	$	4,240	$	2,786

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stock-Based Compensation
Stock-based compensation expense	$ 3,503	$ 3,388
Orthobiologics Business \| Discontinued Operations, Held-for-sale
Stock-Based Compensation
Stock-based compensation	144	148
Sales and marketing
Stock-Based Compensation
Stock-based compensation expense	1,041	652
General and administrative
Stock-Based Compensation
Stock-based compensation expense	1,922	2,179
Research and development
Stock-Based Compensation
Stock-based compensation expense	466	521
Cost of goods sold
Stock-Based Compensation
Stock-based compensation expense	$ 74	$ 36

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
OPERATING ACTIVITIES:
Net loss	$ (32,897)	$ (24,832)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,733	3,730
(Gain) loss on extinguishment of debt	311	(3,029)
Gain on revaluation of revenue interest obligation	(4,962)
Amortization of deferred financing costs and debt discount	115	121
Interest expense recorded as additional revenue interest obligation or long-term debt	2,908	2,654
Stock-based compensation	3,647	3,535
Changes in operating assets and liabilities:
Accounts receivable	(834)	1,170
Inventory	(498)	563
Receivables of FiberCel litigation costs	(13,813)
Prepaid expenses and other	(1,526)	1,442
Accounts payable and accrued expenses	4,908	(420)
Obligations to tissue suppliers	685	172
Contingent liability for FiberCel litigation	17,360
Deferred revenue and other liabilities	(571)	(552)
Net cash used in operating activities	(21,434)	(15,446)
INVESTING ACTIVITIES:
Expenditures for property, plant and equipment	(540)	(369)
Net cash used in investing activities	(540)	(369)
FINANCING ACTIVITIES:
Proceeds from secondary public offering or private placement, net of offering costs	10,089	13,753
Net borrowings (repayments) under revolving line of credit	(4,763)	(1,751)
Proceeds from stock option exercises	78	26
Proceeds from long-term debt	25,000
Deferred financing costs	(468)
Repayments of long-term debt	(18,615)	(2,778)
Costs related to the extinguishment of debt	(633)
Payments on revenue interest obligation	(2,075)	(2,747)
Payments for taxes upon vesting of restricted stock units	(395)
Proceeds from sales of common stock through Employee Stock Purchase Plan	317	208
Net cash provided by financing activities	8,535	6,711
Net decrease in cash and restricted cash	(13,439)	(9,104)
Cash and restricted cash, beginning of period	30,428	39,532
Cash and restricted cash, end of period	16,989	30,428
Supplemental Cash Flow and Non-Cash Financing Activities Disclosures:
Cash paid for interest	5,480	4,984
Fair value of warrants issued	$ 607
Forgiveness of SBA PPP loan		$ 3,029

Long-Term Debt

12 Months Ended

Dec. 31, 2022

Long-Term Debt

Long-Term Debt

Note 10. Long-Term Debt

On May 31, 2017, Elutia entered into a $12 million term loan facility (the “MidCap Loan Facility”) and an $8.0 million asset-backed revolving line of credit (the “MidCap Credit Facility”), under which the Company’s borrowing capacity was limited by certain qualifying assets, with a financial institution (the “May 2017 Financing”). The MidCap Loan Facility was amended in December 2017, February 2018 and July 2019 (all amendments being considered modifications) such that an additional $1.5 million, $3.0 million, and $3.5 million, respectively were received by the Company bringing the total aggregate principal amount outstanding under the MidCap Loan Facility to $20 million. The borrowings under the MidCap Loan Facility and the MidCap Credit Facility were fully repaid with a portion of the proceeds from the SWK Loan Facility (as defined below) as more fully described below.

On August 10, 2022 (the “Closing Date”), the Company entered into a senior secured term loan facility with SWK Funding LLC, as agent, and other lenders party thereto (the “SWK Loan Facility”) for an aggregate principal amount of $25 million. An initial draw of $21 million drawn was made on the Closing Date with the additional $4 million drawn on December 14, 2022 upon satisfaction of the amended terms enabling such receipt. The SWK Loan Facility also allows for the establishment of a separate, new asset-based revolving loan facility of up to $8 million, which had not been entered into as of December 31, 2022. The SWK Loan Facility matures on August 10, 2027 and accrues interest, payable quarterly in arrears. Principal amortization of the SWK Loan Facility starts on November 15, 2024, which amortization may be extended to November 17, 2025 if certain conditions have been satisfied. Principal payments during the amortization period will be limited based on revenue-based caps. As of December 31, 2022, quarterly principal payments are scheduled to begin on November 15, 2024, in an amount equal to 5% of the Initial Term Loan with the balance paid at maturity. The SWK Loan Facility also includes both 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 December 31, 2022, Elutia was in compliance with its financial covenants under the agreement governing the SWK Loan Facility (the “SWK Loan Facility Agreement”).

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), 4.75% 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 (x) until November 15, 2024 if the conditions to draw the Additional Term Loan have not been met, or (y) if such conditions to draw the Additional Term Loan have been satisfied, until November 17, 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 and prepayment penalties equal to: (i) if such prepayment occurs prior to the first anniversary of the Closing Date, 2% of the aggregate principal amount funded prior to the termination plus remaining unpaid interest payments scheduled to be paid during the first year of the loan or (ii) if such prepayment occurs after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, 2% of the aggregate principal amount funded prior to the termination. The

weighted average interest rate on the SWK Loan Facility was 12.6% for the period from August 10, 2022 through December 31, 2022.

On August 10, 2022, the Company issued to SWK Funding LLC a warrant (the “Warrant”) to purchase, in the aggregate, up to 187,969 shares of Class A common stock of the Company, $0.001 par value per share at an exercise price of $6.65 per share. The Warrant is immediately exercisable for up to 187,969 shares of Class A common stock from time to time on or after the Closing Date. The exercise price and number of shares of Class A common stock issuable upon exercise of the Warrant are subject to adjustment in the event of stock dividends, stock splits and certain other events affecting the Class A common stock. Unless earlier exercised or terminated in accordance with its terms, the Warrant will expire on the seventh anniversary of the Closing Date. Upon issuance, the Company valued the Warrant at approximately $0.6 million using the Black-Scholes model. The recognition of the 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 Company used $16 million of the proceeds of the SWK Loan Facility to repay all outstanding obligations on the MidCap Loan Facility and MidCap Credit Facility. Such payment included (i) $12.8 million to repay all outstanding principal and accrued interest on the MidCap Loan Facility, (ii) $1.7 million to pay the prepayment and exit fees on the MidCap Loan Facility and (iii) $1.5 million to repay the outstanding balance, accrued interest and exit fees on the MidCap Credit Facility. The prepayment fees, payment of unaccrued exit fees and the write-off of unamortized deferred financing costs resulted in a loss to the Company of approximately $1.2 million which has been recorded as other income, net in the accompanying consolidated statements of operations for the year ended December 31, 2022.

The SWK Loan Facility Agreement requires certain mandatory prepayments, subject to certain exceptions, with: (1) 100% of any net casualty proceeds in excess of $250,000 and (2) for non-ordinary course asset sales, an amount equal to the difference between (x) the proportion of divested gross profit (as defined in the SWK Loan Facility Agreement) to the Company’s total gross profit (as defined in the SWK Loan Facility Agreement) multiplied by the outstanding loans under the SWK Loan Facility and (y) the difference between $1,000,000 and the aggregate sale proceeds of any assets previously sold during the fiscal year. No such mandatory prepayments were required during the year ended December 31, 2022.; however, the closing of the divestiture of the Orthobiologics Business on November 8, 2023 triggered the mandatory prepayment of $4.0 million. Of such amount, $2.0 million was paid shortly after closing of the divestiture of the Orthobiologics Business and the remainder is to be paid by the earlier of (i) February 15, 2024 or (ii) two business days following written request by SWK based on mutual agreement between the parties.

Borrowings under the MidCap Loan Facility, as amended, bore interest at a rate per annum equal to the sum of (x) the greater of (i) 2.25% and (ii) the applicable London Interbank Offered Rate for U.S. dollar deposits divided by 1.00 minus the maximum effective reserve percentage for Eurocurrency funding (“LIBOR”) plus (y) 7.25%. The weighted average interest rate on MidCap Loan Facility was 9.5% from January 1, 2022 through August 10, 2022 (the “Repayment Date”) and for the year ended December 31, 2021.

Borrowings under the MidCap Credit Facility bore interest at a rate per annum equal to the sum of (x) the greater of (i) 2.25% and (ii) LIBOR plus (y) 4.95%. The weighted average interest rate on MidCap Credit Facility was 7.2% from January 1, 2022 through the Repayment Date and for the year ended December 31, 2021.

During 2017, the Company restructured certain of its liabilities with a tissue supplier and entered into an unsecured promissory note totaling $2.1 million. The note bears interest at 5% and includes quarterly interest-only payments in 2017 and quarterly interest and principal payments from March 31, 2018 through August 31, 2021. The Company used $1.4 million of the proceeds from the SWK Loan Facility to repay the remaining balance on the promissory note; however the accrued interest on the promissory note was forgiven by the lender. Such forgiveness resulted in a gain to the Company of approximately $0.4 million which has been recorded as other income, net in the accompanying consolidated statements of operations for the year ended December 31, 2022.

In May 2020, Elutia entered into a promissory note with Silicon Valley Bank that provided for the receipt by the Company of loan proceeds totaling approximately $3.0 million (the “PPP Loan”) pursuant to the Paycheck Protection

Program under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). In September 2021, Elutia was notified by the U.S. Small Business Administration that the entire balance of the Company’s PPP Loan and all related accrued interest was forgiven. Such forgiveness resulted in a gain to the Company of approximately $3.0 million which has been recorded as other income, net in the accompanying consolidated statements of operations for the year ended December 31, 2021.

As of December 31, 2022, the contractual maturities of the long-term debt are as follows (in thousands):



Years ending December 31,	Term Loan
2023	$	—
2024		1,263
2025		5,051
2026		5,051
2027		13,890
Total		25,255
Debt Discount		(562)
Deferred Financing Costs		(433)
Total, net		24,260
Current Portion		—
Long-term Debt	$	24,260

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 December 31, 2022 and 2021.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1C
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property and Equipment

Summary of property and equipment

Property and equipment as of December 31, 2022 and 2021 were comprised of the following (in thousands):


	December 31,
	2022		2021
Processing and research equipment	$	(1,000)	$	(985)
Leasehold improvements		613		606
Office equipment and furniture		188		187
Computer hardware and software		1,029		994
		830		802
Less: accumulated depreciation and amortization		(585)		(588)
Property and equipment, net	$	245	$	214

Segment Information - Reconciliation of segment gross profit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of segment gross profit to the consolidated loss from operations
Gross Profit	$ 11,639	$ 9,280
Adjustments:
Sales and marketing	17,850	16,655
General and administrative	16,051	13,124
Research and development	7,727	7,754
FiberCel litigation costs, net	5,200	276
Loss from continuing operations	(35,189)	(28,529)
Interest Expense	5,118	5,324
Other income, net	(4,159)	(3,579)
Loss before provision for income taxes	$ (36,148)	$ (30,274)

Divestiture of Orthobiologics Business

12 Months Ended

Dec. 31, 2022

Divestiture of Orthobiologics Business

Divestiture of Orthobiologics Business

Note 4. Divestiture of Orthobiologics Business

As described in Note 2, on September 17, 2023, the Company executed the Purchase Agreement for the sale of substantially all of its Orthobiologics Business. Accordingly, as initially presented in the Company’s Form 10-Q for the quarter ended September 30, 2023, the Orthobiologics Business is reported herein as discontinued operations in accordance with ASC 205-20 - Discontinued Operations. The related assets and liabilities of the Orthobiologics Business are classified as assets and liabilities of discontinued operations as of December 31, 2022 and 2021 in the consolidated balance sheets and the results of operations from the Orthobiologics Business are reported as discontinued operations in the consolidated statements of operations for the years ended December 31, 2023 and 2022. Applicable amounts in the prior year have been recast to conform to this discontinued operations presentation.

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


	Year Ended December 31,
	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Accounts receivable, net	$	3,056	$	2,638
Inventory		5,812		6,768
Prepaid expenses and other current assets		628		667
Total current assets		9,496		10,073
Property and equipment, net		1,158		986
Operating lease right-of-use assets and other		1,350		—
Total non-current assets		2,508		986
Total assets of discontinued operations	$	12,004	$	11,059


Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	954	$	971
Accrued expenses and other current liabilities		1,273		1,383
Payables to tissue suppliers		2,252		2,122
Current operating lease liabilities		450		—
Total current liabilities		4,929		4,476
Long-term operating lease liabilities		956		—
Total liabilities of discontinued operations	$	5,885	$	4,476

In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations. The following table shows the financial results of the discontinued operations:



	As of December 31,
	2022		2021
Net sales	$	25,338	$	26,934
Cost of goods sold		17,755		17,192
Gross profit		7,583		9,742
Sales and marketing		2,345		2,170
General and administrative		576		563
Research and development		1,213		1,512
Total operating expenses		4,134		4,245
Interest Expense		164		—
Net income (loss)	$	3,285		5,497

Total operating and investing cash flows of discontinued operations for the nine months ended September 30, 2023 and 2022 are comprised of the following:


	Twelve Months Ended
	December 31,
	2022		2021
Significant operating non-cash reconciliation items
Depreciation	$	167	$	120
Stock-based compensation		144		148
Changes in operating assets and liabilities:
Accounts receivable		(417)		1,832
Inventory		956		(1,048)
Prepaid expenses and other		39		(636)
Accounts payable and accrued expenses and other current liabilities		(127)		725
Obligations to tissue suppliers		130		305

Significant investing items
Expenditures for property, plant and equipment		378		255

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 830	$ 802
Less: accumulated depreciation and amortization	(585)	(588)
Property and equipment, net	245	214
Depreciation expense	100	100
Processing and research equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	(1,000)	(985)
Leasehold improvements
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	613	606
Office equipment and furniture
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	188	187
Computer hardware and software
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 1,029	$ 994

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
IPO [Member]
Issuance and offering costs	$ 966
Private Placement [Member]
Issuance and offering costs		$ 247

Net Loss Per Share - Anti-dilutive securities (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Anti-dilutive securities
Anti-dilutive securities	2,425,015	1,622,796
Options to purchase common stock
Anti-dilutive securities
Anti-dilutive securities	1,864,739	1,386,811
Restricted stock units
Anti-dilutive securities
Anti-dilutive securities	372,307	235,985
Class A common stock warrants
Anti-dilutive securities
Anti-dilutive securities	187,969

Commitment and Contingencies

12 Months Ended

Dec. 31, 2022

Commitment and Contingencies.

Commitment and Contingencies

Note 17. Commitment and Contingencies

ViBone Exclusivity Agreement

In August 2018, the Company entered into an agreement with Surgalign Holdings, Inc. (formerly RTI Surgical, Inc.) (“Surgalign Holdings”) for the exclusive distribution in the United States of the Company’s ViBone® cellular bone product. Such agreement includes requirements that Surgalign Holdings purchase certain annual minimum quantities for years 2019 through 2021 and also included an upfront payment of $2.0 million for the exclusivity. As of December 31, 2022 and 2021, the Company’s net accounts receivable from Surgalign totaled $0.8 million and $0.7 million, representing 22% and 21% of total accounts receivable at such dates.

Cook Biotech License and Supply Agreements

Elutia has entered into a license agreement with Cook Biotech (“Cook”) 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 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. Along with this license agreement, Elutia entered into a supply agreement whereby Cook would be the exclusive supplier to Elutia of the licensed porcine tissue. Under certain limited circumstances, Elutia has the right to manufacture the licensed product and pay Cook a royalty of 3% of sales of the Elutia-manufactured tissue. The supply agreement expires on the same date as the related license agreement. No royalties were paid to Cook during the years ended December 31, 2022 and 2021. Elutia has also entered into an amendment to the Cook license agreement (the “Cook Amendment”) in order to add fields of exclusive use. Specifically, the Cook Amendment provides for a worldwide

exclusive license to the porcine tissue for use with neuromodulation devices in addition to cardiovascular devices. The Cook Amendment includes license fee payments of $0.1 million per year in each of the years 2021 through 2026. Such license payments would accelerate if a change in control, as defined, occurs within Elutia. The Company, in its sole discretion, can terminate the license agreement at any time.

Legal Proceedings

From time to time, the Company may be involved in claims and proceedings arising in the course of the Company’s business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. The Company records accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available.

FiberCel Litigation

In June 2021, the Company announced a voluntary recall of a single lot of FiberCel fiber viable bone matrix. Since September 2021, 58 lawsuits (60 plaintiffs) in Indiana, Delaware, Florida, Maryland, Colorado, Michigan, Ohio, Kentucky, Oregon, North Carolina, Louisiana and Illinois have been filed against Elutia Inc., certain Medtronic entities, and others alleging that the plaintiffs were exposed to and/or contracted tuberculosis and/or suffered substantial symptoms and complications following the implantation of FiberCel during spinal fusion operations. Such lawsuits were filed in Indiana state court (collectively, the “Indiana State Complaints”); the Superior Court of the State of Delaware (collectively, the “Delaware State Complaints”); the Circuit Court of Maryland (collectively, the “Maryland State Complaints”); the Court of Common Pleas of Ohio (“Ohio State Complaint”); the Northern District of Ohio (“Ohio Federal Complaint”); the U.S. District Court for the Western District of North Carolina (“North Carolina Federal Complaint”); the U.S. District Court for the Northern District of Florida (“Florida Federal Complaint”); U.S. District Court for the Eastern District of Michigan and the Eastern District of Michigan (collectively “Michigan Federal Complaints.”); the U.S. District Court for the District of Colorado (“Colorado Federal Complaint”); the U.S. District Court for the District of Oregon (“Oregon Federal Complaint”); the Fayette, Kentucky Circuit Court and the U.S. District Court for the Eastern District of Kentucky (collectively, “Kentucky Complaints.”); the U.S. District Court for the Western District of Louisiana (“Louisiana Federal Complaint”) and the Circuit Court of Cook County, Illinois (“Illinois State Complaint”).

Plaintiffs in the Indiana State Complaints allege a cause of action under Indiana’s Product Liability Act, citing manufacturing defects, defective design and failure to properly warn and instruct, and several of the complaints allege loss of consortium. Plaintiffs in these actions assert that the defendants are strictly liable or have breached the duty of care owed to plaintiffs by failing to exercise reasonable care in designing, manufacturing, marketing and labeling FiberCel and are seeking various types of damages, including economic damages, non-economic damages and loss of consortium. Plaintiffs in one of the Indiana State Complaints allege causes of action for product liability, negligence, breach of express and implied warranties, and punitive damages. Each of the plaintiffs in the Delaware State Complaints alleges negligence, breach of implied warranty, breach of express warranty, and medical monitoring and punitive damages, and two also allege loss of consortium. Plaintiffs in the Delaware State Complaints are seeking economic, consequential, and punitive damages. The Maryland State Complaints assert claims of negligence, breach of implied warranty, breach of express warranty, medical monitoring, and loss of consortium. The Florida Federal Complaint contains three strict liability claims for defective design, defective manufacture, and failure to warn. A claim for punitive damages is also pled. The Ohio State Complaint alleges causes of action for product liability and negligence and seeks compensatory damages. The Colorado Federal Complaint asserts causes of action for strict product liability, misrepresentation, negligence, breach of express warranty, and breach of implied warranty of merchantability. The Michigan Federal Complaints assert causes of action for negligence, gross negligence breach of implied warranty, breach of express warranty, intentional infliction of emotional distress, and liability under the res ipsa loquitur doctrine. The Michigan Federal Complaints seek compensatory damages and punitive damages. The North Carolina Federal Complaint alleges causes of action for negligence, defective design, breach of implied warranty, breach of express warranty, and loss of consortium, and seeks both compensatory and punitive damages. The Oregon Federal Complaint asserts strict liability claims for defective design, defective manufacture, and failure to warn, and seeks compensatory damages. The Ohio Federal Complaint asserts strict liability claims for defective manufacturing, inadequate warning, nonconformance with representations, and also alleges loss of consortium and seeks compensatory damages. The Kentucky Complaints assert strict liability claims based on manufacturing defect, design

defect, failure to warn, negligence, breach of implied warranty, breach of express warranty, and seek recovery for medical monitoring, loss of consortium, compensatory damages, and punitive damages. The Louisiana Federal Complaint asserts claims of violation of the Louisiana products liability act, negligence and gross negligence, breach of implied warranty, breach of express warranty and seek recovery for medical monitoring.

In addition to the above, there are 47 claims related to the FiberCel recall that have not yet resulted in a lawsuit. The Company refers to all of the aforementioned litigation, or claim notices, collectively as the “FiberCel Litigation.”

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 26 of the cases was settled for a total of approximately $7.3 million. Settlement agreements have been executed in 20 of those cases and settlements of the remaining six cases are pending finalization of the related settlement agreements. Of these settled matters, 11 cases were both settled and paid as of December 31, 2022 for a total cash outlay of $3.6 million. For the remaining 81 cases for which settlements have not been reached, the Company estimated a probable loss related to each case and has recorded a liability at an estimated amount of $13.7 million bringing the total estimated liability at December 31, 2022 to $17.4 million, which is recorded as Contingent Liability for FiberCel Litigation in the accompanying consolidated balance sheets. Although the Company believes there is a possibility that a loss in excess of the amount recognized exists, the Company is unable to estimate the possible loss or range of loss in excess of the amount recognized at this time. In order to reasonably estimate the liability for the unsettled FiberCel Litigation cases, the Company, along with outside legal counsel, has assessed a variety of factors, including (i) the extent of the injuries incurred, (ii) recent experience on the settled claims, (iii) settlement offers made to the other parties to the litigation and (iv) any other factors that may have a material effect on the FiberCel Litigation. While the Company believes its estimated liability to be reasonable, the actual loss amounts are highly variable and turn on a case-by-case analysis of the relevant facts. As more information is learned about asserted claims and potential future trends, adjustments may be made to this Contingent Liability for FiberCel Litigation as appropriate.

Defense costs are recognized in the accompanying consolidated statements of operations as incurred.

The Company has purchased insurance coverage that, subject to common contract exclusions, provided coverage for the FiberCel Litigation product liability losses as well as legal defense costs. Additionally, the Company has various potential indemnity and/or contribution rights against third party sources with respect to certain product liability losses. When settlements are reached and/or amounts are recorded in the related Contingent Liability for FiberCel Litigation, the Company calculates amounts due to be reimbursed pursuant to the terms of the coverage and related agreements, and pursuant to other indemnity or contribution claims, in respect of product liability losses and related defense costs. The amounts probable of reimbursement or recovery from this calculation are recorded as receivables. The determination that the recorded receivables are probable of collection is based on the terms of agreements reached in respect of indemnity and contribution claims as well as the advice of the Company’s outside legal counsel. These receivables at December 31, 2022 totaled $13.8 million and are recorded as Receivables of FiberCel Litigation Costs in the accompanying consolidated balance sheets.

The indemnity and contribution receivables amount at December 31, 2022 represents amounts that are not believed to be subject to any current dispute. At December 31, 2022, the Company continues to pursue up to $3.8 million or more in additional amounts in respect of such indemnity and contribution claims and as such, has not been reflected as part of this receivable. The Company will vigorously pursue its position with respect to this amount.

As of both December 31, 2022 and December 31, 2021, the Company was not a party to, or aware of, any legal matters or claims with material financial exposure, except for the FiberCel Litigation.

Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update [Extensible Enumeration]	us-gaap:AccountingStandardsUpdate201602Member
Right-of-use assets		$ 226
Lease liabilities		232
Retained earnings	$ (105,091)	$ (137,988)
Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets	600
Lease liabilities	600
Retained earnings	$ 0

- Definition

Indicates amendment to accounting standards.

+ References

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+ Details

Organization and Description of Business

12 Months Ended

Dec. 31, 2022

Organization and Description of Business

Organization and Description of Business

Note 1. Organization and Description of Business

Elutia Inc. (formerly known as Aziyo Biologics, Inc., together with its consolidated subsidiaries, "Elutia” or the “Company”) is a regenerative medicine company, with a focus on patients receiving implantable medical devices. The Company, whose name was changed on September 6, 2023, has developed a portfolio of regenerative products using both human and porcine tissue that are designed to be as close to natural biological material as possible. Elutia’s portfolio of products span the device protection, women’s health and cardiovascular markets. These products are primarily sold to healthcare providers or commercial partners.

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Summary of liabilities measured at fair value on a recurring basis

The following table sets forth by level, within the fair value hierarchy, the liabilities that are measured at fair value on a recurring basis (in thousands):


	Fair Value Measurements at December 31, 2021 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Revenue Interest Obligation*		—		—		19,290		19,290
Total	$	—	$	—	$	19,290	$	19,290


	Fair Value Measurements at December 31, 2022 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Revenue Interest Obligation*		—		—		14,906		14,906
Total	$	—	$	—	$	14,906	$	14,906

*Net Present Value; see discussion of value below

Summary of rollforward of the aggregate fair values of the preferred stock warrant liability and Revenue Interest Obligation

The following table provides a rollforward of the aggregate fair value of the Revenue Interest Obligation categorized with Level 3 inputs for the years ended December 31, 2022 and 2021 (in thousands):


Balance as of January 1, 2021	$	19,383
Payments on Revenue Interest Obligation		(2,747)
Interest accrued to Revenue Interest Obligation		2,654
Balance as of December 31, 2021	$	19,290
Payments on Revenue Interest Obligation		(2,075)
Interest accrued to Revenue Interest Obligation		2,653
Gain on revaluation of revenue interest obligation		(4,962)
Balance as of December 31, 2022	$	14,906

Organization and Description of Business (Details) - shares	Dec. 31, 2022	Dec. 31, 2021
Class A Common stock
Subsidiary, Sale of Stock [Line Items]
Common stock, shares issued	11,823,445	9,245,146
Class B Common stock
Subsidiary, Sale of Stock [Line Items]
Common stock, shares issued	4,313,406	4,313,406

Intangible Assets

12 Months Ended

Dec. 31, 2022

Intangible Assets

Intangible Assets

Note 9. Intangible Assets

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. A substantial portion of the assets acquired consisted of intangible assets related to the acquired products and customer relationships. Management determined that the estimated acquisition-date fair values of the intangible assets related to acquired products and customer relationships were $29.3 million and $4.7 million, respectively.

The components of identified intangible assets as of December 31, 2022 and 2021 are as follows (in thousands):


	December 31, 2022						December 31, 2021
			Accumulated						Accumulated
	Cost		Amortization		Net		Cost		Amortization		Net
Acquired products	$	29,317	$	(16,334)	$	12,983	$	29,317	$	(13,409)	$	15,908
Customer relationships		4,723		(2,637)		2,086		4,723		(2,165)		2,558
Total	$	34,040	$	(18,971)	$	15,069	$	34,040	$	(15,574)	$	18,466

Acquired products and customer relationships are both amortized over a ten-year period. Amortization expense totaled approximately $3.4 million for each of the years ended December 31, 2022 and 2021, which is included in cost of goods sold in the accompanying consolidated statements of operations. Annual amortization expense is expected to be approximately $3.4 million during the years ended December 31, 2023 through 2026 and approximately $1.5 million during the year ended December 31, 2027.

Revenue Interest Obligation - (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	May 31, 2017	May 31, 2017	Dec. 31, 2022	Dec. 31, 2021
Revenue Interest Obligation.
Debt Instrument [Line Items]
Interest expense related to revenue interest obligation			$ 2,700	$ 2,700
Ligand Pharmaceuticals
Debt Instrument [Line Items]
Estimated present value on the acquisition date	$ 27,700	$ 27,700
Annual minimum sale	$ 2,750	$ 2,750
Percentage of future sales		5.00%
Term of agreement	10 years
Cumulative sales of products exceed $100.0 \| Ligand Pharmaceuticals
Debt Instrument [Line Items]
Payments due based on cumulative sales	$ 5,000	$ 5,000
Cumulative sales	100,000	100,000
Cumulative sales of products exceed $300.0 \| Ligand Pharmaceuticals
Debt Instrument [Line Items]
Payments due based on cumulative sales	5,000	5,000
Cumulative sales	$ 300,000	$ 300,000

Divestiture of Orthobiologics Business - Operating and investing cash flows (Details) - Orthobiologics Business - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Significant operating non-cash reconciliation items
Depreciation	$ 167	$ 120
Stock-based compensation	144	148
Changes in operating assets and liabilities:
Accounts receivable	(417)	1,832
Inventory	956	(1,048)
Prepaid expenses and other	39	(636)
Accounts payable and accrued expenses and other current liabilities	(127)	725
Increase (Decrease) in Obligations to Tissue Suppliers, Discontinued Operations	130	305
Significant investing items
Expenditures for property, plant and equipment	$ 378	$ 255

Commitments and Contingencies - ViBone Exclusivity Agreement (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Aug. 31, 2018
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net accounts receivable	$ 3,774	$ 3,358
ViBone Exclusivity Agreement \| Surgalign Holdings, Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront payment recorded as deferred revenue			$ 2,000
ViBone Exclusivity Agreement \| Accounts Receivable \| Customer concentration risk
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net accounts receivable	$ 800	$ 700
Concentration risk (as a percent)	22.00%	21.00%

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Computer hardware and software
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Minimum \| Processing and research equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Minimum \| Office equipment and furniture
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Maximum \| Processing and research equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Maximum \| Office equipment and furniture
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years

Stockholders Equity (Details) $ / shares in Units, $ in Millions	Dec. 08, 2022 USD ($) $ / shares shares	Dec. 01, 2022 USD ($) $ / shares shares
Private Placement [Member]
Stockholders' Equity
Proceeds from issuance of shares \| $	$ 13.8
Price per share (in USD per share) \| $ / shares	$ 4.24
Convertible ratio	1
Class A Common stock
Stockholders' Equity
Shares issued		2,350,000
Price per share (in USD per share) \| $ / shares		$ 4.75
Net proceeds received \| $		$ 10.2
Class A Common stock \| Private Placement [Member]
Stockholders' Equity
Shares issued	2,122,637
Class B Common stock \| Private Placement [Member]
Stockholders' Equity
Shares issued	1,179,244

Commitments and Contingencies - Legal Proceedings (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) case
FiberCel Litigation Product Lability [Member]
Legal Proceedings
Number of lawsuits filed	58
Number of plaintiffs	60
Number of claims not resulted lawsuit yet	47
Number of cases settled \| case	26
Total amount of settlements	$ 7.3
Number of lawsuit settlement agreements executed \| case	20
Cases pending finalization of the related settlement agreements \| case	6
Number of case settled and paid \| case	11
Legal settlement cash outlay	$ 3.6
Number of cases settlement not reached \| case	81
Estimated a probable loss recorded	$ 13.7
Total estimated liability	17.4
Loss contingency receivable	13.8
Additional loss contingency receivable not reflected as receivable	$ 3.8
INDIANA \| FiberCel Litigation Product Lability, Negligence, Breach of Express and Implied warranties, and Punitive Damages [Member]
Legal Proceedings
Number of lawsuits filed	1
DELAWARE \| FiberCel Loss of Consortium [Member]
Legal Proceedings
Number of lawsuits filed	2
FLORIDA \| FiberCel Strict Liability Claims for Defective Design, Defective Manufacture, and Failure to Warn [Member]
Legal Proceedings
Number of lawsuits filed	3

Related Party Transactions (Details) - KeraLink International - USD ($)	12 Months Ended
	Dec. 31, 2018	May 31, 2021
Related Party Transaction [Line Items]
Amount of settlement received	$ 400,000
Shares sale proceeds over which Keralink to pay Aziyo	550,000	$ 550,000
Amount to receive from KeraLink upon sale of shares over $550,000	$ 550,000
Amount remitted from sale of shares		$ 550,000
Period for Keralink to pay Aziyo	3 days

Long-Term Debt - Paycheck Protection Program, CARES Act (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Sep. 30, 2021	May 31, 2020	Dec. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Gain on extinguishment of debt			$ (311)	$ 3,029
PPP loan
Debt Instrument [Line Items]
Proceeds from issuance of debt		$ 3,000
Gain on extinguishment of debt	$ 3,000

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Summary of reconciliation of cash and restricted cash included in the consolidated balance sheets

The following table provides a reconciliation of cash and restricted cash included in the consolidated balance sheets to the amounts included in the statements of cash flows (in thousands).


	December 31,
	2022		2021
Cash	$	16,989	$	30,393
Restricted cash		—		35
Total cash and restricted cash shown in statements of cash flows	$	16,989	$	30,428

Summary of estimated useful lives of the assets


Processing and research equipment		5 to 10 years
Office equipment and furniture		3 to 5 years
Computer hardware and software		3 years

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock Class A Common stock IPO [Member]	Common Stock Class A Common stock Private Placement [Member]	Common Stock Class A Common stock	Common Stock Class B Common stock Private Placement [Member]	Common Stock Class B Common stock	Additional Paid-in Capital IPO [Member]	Additional Paid-in Capital Private Placement [Member]	Additional Paid-in Capital	Accumulated Deficit	IPO [Member]	Private Placement [Member]	Total
Balance at the beginning at Dec. 31, 2020			$ 7		$ 3			$ 101,080	$ (80,259)			$ 20,831
Balance at the beginning (in shares) at Dec. 31, 2020			7,091,960		3,134,162
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Proceeds from stock option exercises								26				26
Proceeds from stock option exercises (in shares)			3,305
Proceeds from sale of common stock through Employee Stock Purchase Plan								208				208
Proceeds from sale of common stock through Employee Stock Purchase Plan (in shares)			27,244
Issuance of common stock, net of issuance costs		$ (2)		$ (1)			$ (13,750)				$ (13,753)
Issuance of common stock, net of issuance costs (in shares)		2,122,637		1,179,244
Stock-based compensation								3,535				3,535
Net loss									(24,832)			(24,832)
Balance at the ending at Dec. 31, 2021			$ 9		$ 4			118,599	(105,091)			13,521
Balance at the ending (in shares) at Dec. 31, 2021			9,245,146		4,313,406
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Proceeds from stock option exercises								78				78
Proceeds from stock option exercises (in shares)			13,887
Additional issuance costs in connection with private placement								(110)				(110)
Proceeds from sale of common stock through Employee Stock Purchase Plan								317				317
Proceeds from sale of common stock through Employee Stock Purchase Plan (in shares)			74,408
Issuance of common stock, net of issuance costs	$ 3					$ 10,196				$ 10,199
Issuance of common stock, net of issuance costs (in shares)	2,350,000
Vesting of restricted stock units, net of shares withheld and taxes paid								(395)				(395)
Vesting of restricted stock units (in shares)			140,004
Issuance of warrants in connection with debt financing								607				607
Stock-based compensation								3,647				3,647
Net loss									(32,897)			(32,897)
Balance at the ending at Dec. 31, 2022			$ 12		$ 4			$ 132,939	$ (137,988)			$ (5,033)
Balance at the ending (in shares) at Dec. 31, 2022			11,823,445		4,313,406

Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Sales and marketing	$ 17,850	$ 16,655
Shipping and handling costs
Disaggregation of Revenue [Line Items]
Sales and marketing	$ 300	$ 300
Minimum
Disaggregation of Revenue [Line Items]
Term of payment	30 days
Maximum
Disaggregation of Revenue [Line Items]
Term of payment	60 days

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash	$ 16,989	$ 30,393
Restricted cash		35
Accounts receivable, net	3,774	3,358
Inventory	4,240	2,786
Receivables of FiberCel litigation costs	13,813
Prepaid expenses and other current assets	2,387	783
Current assets of discontinued operations	9,496	10,073
Total current assets	50,699	47,428
Property and equipment, net	245	214
Intangible assets, net	15,069	18,466
Operating lease right-of-use assets and other	320	76
Noncurrent assets of discontinued operations	2,508	986
Total assets	68,841	67,170
Current liabilities:
Accounts payable	1,374	613
Accrued expenses	8,830	4,991
Payables to tissue suppliers	900	344
Current portion of long-term debt		8,059
Current portion of revenue interest obligation	8,990	2,750
Revolving line of credit		4,763
Contingent liability for FiberCel litigation	17,360
Current operating lease liabilities and other	232	5
Current liabilities held of discontinued operations	4,929	4,476
Total current liabilities	42,615	26,001
Long-term debt	24,260	10,410
Long-term revenue interest obligation	5,916	16,540
Other long-term liabilities	127	698
Noncurrent liabilities of discontinued operations	956
Total liabilities	73,874	53,649
Commitments and contingencies (Note 8)
Stockholders' equity (deficit):
Additional paid-in capital	132,939	118,599
Accumulated deficit	(137,988)	(105,091)
Total stockholders' equity (deficit)	(5,033)	13,521
Total liabilities and stockholders' equity (deficit)	68,841	67,170
Class A Common stock
Stockholders' equity (deficit):
Common stock	12	9
Class B Common stock
Stockholders' equity (deficit):
Common stock	$ 4	$ 4

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2022

Intangible Assets

Summary of components of identified intangible assets

The components of identified intangible assets as of December 31, 2022 and 2021 are as follows (in thousands):


	December 31, 2022						December 31, 2021
			Accumulated						Accumulated
	Cost		Amortization		Net		Cost		Amortization		Net
Acquired products	$	29,317	$	(16,334)	$	12,983	$	29,317	$	(13,409)	$	15,908
Customer relationships		4,723		(2,637)		2,086		4,723		(2,165)		2,558
Total	$	34,040	$	(18,971)	$	15,069	$	34,040	$	(15,574)	$	18,466

Stock-Based Compensation - Randal Mills (Details) - shares		12 Months Ended
	Jun. 21, 2022	Dec. 31, 2022	Oct. 07, 2020
2020 Plan
Stock-Based Compensation
Options granted		1,246,904
Shares reserved for future issuance		656,689	1,636,000
Options to purchase common stock
Stock-Based Compensation
Vesting term		4 years
Restricted stock units \| 2020 Plan
Stock-Based Compensation
Restricted stock units (RSU) granted		586,083
Performance-Based RSU
Stock-Based Compensation
Restricted stock units (RSU) granted		289,282
Dr. Mills
Stock-Based Compensation
Employment agreement initial term	90 days
Dr. Mills \| Options to purchase common stock
Stock-Based Compensation
Options granted	456,278
Time-based awards percentage	60.00%
Performance-based awards percentage	40.00%
Dr. Mills \| Time Based Options \| Tranche one
Stock-Based Compensation
Percentage of vesting	33.00%
Vesting term	49 days
Dr. Mills \| Time Based Options \| Tranche Two
Stock-Based Compensation
Percentage of vesting	66.00%
Vesting term	4 years
Awards that vest on first anniversary	25.00%
Number of quarter of vesting	12
Dr. Mills \| Performance Based Options
Stock-Based Compensation
Share price threshold period	20 days
Dr. Mills \| Restricted stock units
Stock-Based Compensation
Time-based awards percentage	60.00%
Performance-based awards percentage	40.00%
Restricted stock units (RSU) granted	224,734
Dr. Mills \| Performance-Based RSU
Stock-Based Compensation
Share price threshold period	20 days
Dr. Mills \| Time-Based RSU \| Tranche one
Stock-Based Compensation
Percentage of vesting	33.00%
Vesting term	0 years
Dr. Mills \| Time-Based RSU \| Tranche Two
Stock-Based Compensation
Percentage of vesting	66.00%
Vesting term	4 years

Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Restricted stock units
Weighted-Average Grant Date Fair Value
Total fair value of the restricted stock units granted	$ 2.4	$ 1.3
Unrecognized compensation costs	$ 1.4
Weighted-average recognition period	2 years
Restricted stock units \| Minimum
Weighted-Average Grant Date Fair Value
Vesting period	3 years
Restricted stock units \| Maximum
Weighted-Average Grant Date Fair Value
Vesting period	4 years
Restricted stock units \| 2020 Plan
Number of Shares Underlying RSUs
Unvested at the beginning	235,985
Granted	586,083
Vested	(238,617)
Forfeited	(211,144)
Outstanding at the end	372,307	235,985
Weighted-Average Grant Date Fair Value
Unvested at the beginning (in dollars per share)	$ 15.98
Granted (in dollars per share)	4.08
Vested (in dollars per share)	6.64
Forfeited (in dollars per share)	11.40
Unvested at the ending (in dollars per share)	$ 5.90	$ 15.98
Performance-Based RSU
Number of Shares Underlying RSUs
Granted	289,282
Outstanding at the end	209,054
Performance-Based RSU \| Minimum
Weighted-Average Grant Date Fair Value
Vesting period	2 years
Performance-Based RSU \| Maximum
Weighted-Average Grant Date Fair Value
Vesting period	3 years

Leases - Paragraphs (Details)	12 Months Ended
Leases - Paragraphs (Details)	Dec. 31, 2022 USD ($)
Leases
Operating lease cost	$ 400,000
Expenses related to non-lease elements	400,000
Lease payments	400,000
Rent expense	$ 400,000
Production facilities
Leases
Number of leases	1
Administrative and research facility
Leases
Number of leases	1
Administrative facility
Leases
Number of leases	1

Fair Value Measurements - Rollforward of Level 3 (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Interest accrued to Revenue Interest Obligation	$ 2,908	$ 2,654
Revenue Interest Obligation.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at the beginning	19,290	19,383
Payments On Revenue Interest Obligation	(2,075)	(2,747)
Interest accrued to Revenue Interest Obligation	2,653	2,654
Gain on revaluation of revenue interest obligation	(4,962)
Balance at the ending	$ 14,906	$ 19,290

Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Long-Lived Assets
Impairment losses	$ 0	$ 0

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Liquidity

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

On September 17, 2023, the Company executed an Asset Purchase Agreement (the “Purchase Agreement”) with Berkeley Biologics, LLC (“Berkeley”), a Delaware limited liability company and wholly owned subsidiary of GNI Group, Ltd. On November 8, 2023, at the closing (the “Closing”) of the transactions contemplated by the Purchase Agreement (the “Asset Purchase”), Berkeley purchased from the Company substantially all of the assets that are related to (i) the Company’s prior business of researching, developing, administering, insuring, operating, commercializing, manufacturing, selling and marketing the Company’s Orthobiologics products identified in the Purchase Agreement (the “Products”), and (ii) the business of contract manufacturing of particulate bone, precision milled bone, cellular bone matrix, acellular dermis, soft tissue and other products (but excluding the business of contract manufacturing of acellular dermis products for use in the field of breast reconstruction, other than as a supplier to Elutia). The assets sold represent the entirety of the Company’s Orthobiologics segment (the “Orthobiologics Business”). The Purchase Agreement provides for an aggregate purchase price, subject to certain adjustments pursuant to the terms of the Purchase Agreement, of up to $35 million in cash, with approximately $14.6 million, as adjusted, having been paid shortly after Closing and up to $20 million potentially payable after the Closing in the form of earn-out payments (“Earn-Out Payments”). For each of the five years following the Closing, Berkeley would be required to pay to the Company an Earn-Out Payment equal to 10% of the actual revenue earned by Berkeley in the applicable year that is derived from sales of those Products defined as “Earn-Out Products” under the Purchase Agreement, and from any improvements, modifications, derivatives and enhancements related to the Earn-Out Products, with the aggregate amount of Earn-Out Payments capped at $20 million.

The sale of the Orthobiologics Business represents a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, this transaction is accounted for as Discontinued Operations for all periods presented in accordance with Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations. Unless indicated otherwise, the information in the notes to the Condensed Consolidated Financial Statements relates to continuing operations. See Note 4 for further discussion of the divestiture of the Orthobiologics Business.

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 consolidated financial statements are issued. For the year ended December 31, 2022, the Company incurred a net loss of $32.9 million, and as of December 31, 2022, the Company had an accumulated deficit of $138.0 million. In addition, during the year ended December 31, 2022, the Company used $21.4 million of cash in operating activities, and expects to continue to incur cash outflows in 2023. 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. The Company’s inability to achieve and then maintain profitability would negatively affect its business, financial condition, results of operations and cash flows.

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, restructure its Revenue Interest Obligation (as such term is defined, and further described, in Note 11), or pursue asset sale or other transactions. However, such transactions may not be successful and the Company may not be able to raise additional equity or debt, restructure its Revenue Interest Obligation, or sell or license assets on acceptable terms, or at all. As such, based on its current operating plans, the Company believes there is uncertainty as to whether its future cash flows along with its existing cash, issuances of additional equity and cash generated from expected future sales will be sufficient to meet the Company’s anticipated operating needs through twelve months from the financial statement issuance date. Due to these factors, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance of the financial statements.

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. That is, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to current year financial statement presentation. The reclassifications relate to the separate presentation of prior year costs related to the FiberCel Litigation. Such costs were formerly shown as a component of general and administrative expenses in the accompanying consolidated statements of operations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions relating to inventories, receivables, long-lived assets, the valuation of stock-based awards, the valuation of the revenue interest obligation, the contingent liability for the FiberCel Litigation and deferred income taxes are made at the end of each financial reporting period by management. Management continually re-evaluates its estimates, judgments and assumptions, and management's evaluation could change. Actual results could differ from those estimates.

Impact of COVID-19

The Company continues to closely monitor the impact of the COVID-19 pandemic and its variants on its business. In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended various containment and mitigation measures worldwide. Since that time, the number of procedures performed using the Company's products has intermittently decreased, as governmental authorities in the United States have recommended, and in certain cases required, that elective, specialty and other non-emergency procedures and appointments be suspended or canceled in order to avoid patient exposure to medical environments and the risk of potential infection with COVID-19, and to focus limited resources and personnel capacity on the treatment of COVID-19 patients. As a result, beginning in March 2020, a significant number of procedures using the Company's products have intermittently been postponed or cancelled, which has negatively impacted sales of its products. These measures and challenges will likely continue for the duration of the pandemic, which is uncertain, and may reduce the Company's net sales in the future and negatively impact its business, financial condition and results of operations while the pandemic continues.

Net Loss per Share

Our common stock has a dual class structure, consisting of Class A common stock, $0.001 par value per share (the “Class A common stock) and Class B common stock, $0.001 par value per share (the “Class B common stock). Other than voting rights, the Class B common stock has the same rights as the Class A common stock, and therefore both are treated as the same class of stock for purposes of the earnings per share calculation. Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average shares outstanding during the period. For purposes of the diluted net income (loss) per share attributable to common stockholders calculation, stock options, restricted stock units (“RSUs”) and warrants are considered to be common stock equivalents. All common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for both periods presented.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The estimated fair value of financial instruments disclosed in the financial statements has been determined by using available market information and appropriate valuation methodologies. The carrying value of all current assets and current liabilities approximates fair value because of their short-term nature.

Cash and Restricted Cash

The Company maintains its cash balances at banks and financial institutions. The balances are insured up to the legal limit. The Company maintains cash balances that may, at times, exceed this insured limit.

Under the provisions of the Company’s former revolving credit facility, the MidCap Credit Facility (as such term is defined, and further described in Note 10), the Company had a lockbox arrangement with the banking institution whereby daily lockbox receipts were contractually utilized to pay down outstanding balances on the MidCap Credit Facility debt. Lockbox receipts that had not yet been applied to the MidCap Credit Facility were classified as restricted cash in the accompanying consolidated balance sheets. The following table provides a reconciliation of cash and restricted cash included in the consolidated balance sheets to the amounts included in the statements of cash flows (in thousands).


	December 31,
	2022		2021
Cash	$	16,989	$	30,393
Restricted cash		—		35
Total cash and restricted cash shown in statements of cash flows	$	16,989	$	30,428

Accounts Receivable and Allowances

Accounts receivable in the accompanying balance sheets are presented net of allowances for doubtful accounts and other credits. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables.

The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowance for doubtful accounts is recorded to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowance for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. Provisions to the allowance for doubtful accounts are recorded to general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The Company's allowance for doubtful accounts was approximately $0.1 million as of December 31, 2022 and 2021.

Inventories

Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost or net realizable value, with cost determined generally using the average cost method. Inventory write-downs for unprocessed and certain processed donor tissue are recorded based on the estimated amount of inventory that will not pass the quality control process based on historical data. At each balance sheet date, the Company also evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of the Company’s current and future strategic plans, historical sales levels by product, projections of future demand, the risk of technological or competitive obsolescence for products, general market conditions and a review of the shelf life expiration dates for products. To the extent that management determines there is excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products prior to their expiration, the Company adjusts the carrying value to estimated net realizable value.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method over the following estimated useful lives of the assets:


Processing and research equipment		5 to 10 years
Office equipment and furniture		3 to 5 years
Computer hardware and software		3 years

Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the asset.

Repairs and maintenance costs are expensed as incurred.

Leases

In February 2016, the FASB issued ASU No 2016-02 “Leases” to increase the transparency and comparability about leases among entities. Additional ASUs have been issued subsequent to ASU 2016-02 to provide supplementary clarification and implementation guidance for leases related to, among other things, the application of certain practical expedients, the rate implicit in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2016-02 and these additional ASUs are now codified as Accounting Standards Codification Standard 842 - “Leases” (“ASC 842”). ASC 842 supersedes the lease accounting guidance in Accounting Standards Codification 840 “Leases” (“ASC 840”) and requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Company elected to utilize the “package” of expedients, as defined

in ASC 842, which retain the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. Accordingly, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. Elutia adopted the standard in the fourth quarter of 2022 for the full 2022 year resulting in the recognition of a Right-of-use (“ROU”) asset and operating lease liability on the Company’s consolidated balance sheet of approximately $0.6 million as of January 1, 2022. As the ROU asset and the lease payable obligation were essentially the same upon adoption of ASC 842, there was no cumulative effect impact on the Company’s accumulated deficit.

The Company determines if an arrangement contains a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from that lease. For leases with a term greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. 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 combines lease and non-lease elements for office leases.

Long-Lived Assets

Purchased intangible assets with finite lives are carried at acquired fair value, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets.

The Company periodically evaluates the period of depreciation or amortization for long-lived assets to determine whether current circumstances warrant revised estimates of useful lives. The Company reviews its property and equipment and intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Impairment exists when the carrying value of the company’s asset exceeds the related estimated undiscounted future cash flows expected to be derived from the asset. 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. 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 years ended December 31, 2022 and 2021.

Revenue Recognition

The Company’s revenue is generated from contracts with customers in accordance with ASC 606. The core principle of ASC 606 is that the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The ASC 606 revenue recognition model consists of the following five steps: (1) identify the contracts with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

As noted above, the Company enters into contracts to primarily sell and distribute products to healthcare providers or commercial partners which are billed under ship and bill contract terms. Revenue is recognized when the Company has met its performance obligations pursuant to its contracts with its customers in an amount that the Company expects to be entitled to in exchange for the transfer of control of the products to the Company’s customers. For all product sales, the Company has no further performance obligations and revenue is recognized at the point control transfers which occurs either when: i) the product is shipped via common carrier; or ii) the product is delivered to the customer or distributor, in accordance with the terms of the agreement.

A portion of the Company’s product revenue is generated from consigned inventory maintained at hospitals and from inventory physically held by direct sales representatives. For these types of products sales, the Company retains control until the product has been used or implanted, at which time revenue is recognized.

The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of the underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in sales and marketing costs. Shipping and handling costs were approximately $0.3 million for both the years ended December 31, 2022 and 2021.

Contracts with customers state the final terms of the sale, including the description, quantity, and price of each implant distributed. The payment terms and conditions in the Company’s contracts vary; however, as a common business practice, payment terms are typically due in full within 30 to 60 days of delivery. The Company, at times, extends volume discounts to customers.

The Company permits returns of its products in accordance with the terms of contractual agreements with customers. Allowances for returns are provided based upon analysis of the Company’s historical patterns of returns matched against the revenues from which they originated. The Company records estimated returns as a reduction of revenue in the same period revenue is recognized.

Deferred Rent

Prior to the adoption of ASU 2016-02 (as noted above) in the year ended December 31, 2022, the Company recognized rent expense by the straight-line method over the lease term. Funds received from the lessor used to reimburse the Company for the cost of leasehold improvements are recorded as a deferred credit resulting from a lease incentive and are amortized over the lease term as a reduction of rent expense.

Stock-Based Compensation Plans

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

Research and Development Costs

Research and development costs, which include mainly salaries, outside services and supplies, are expensed as incurred.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. At December 31, 2022 and 2021, the Company maintained $17.8 million and $30.9 million, respectively, in bank deposit accounts that are in excess of the $0.25 million insurance provided by the Federal Deposit Insurance Corporation in one federally insured financial institution. The Company has not experienced any losses in such accounts.

Comprehensive Income (Loss)

Comprehensive income (loss) comprises net income (loss) and other changes in equity that are excluded from net income (loss). For the years ended December 31, 2022 and 2021, the Company’s net loss equaled its comprehensive loss and accordingly, no additional disclosure is presented.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the tax consequences on future years for differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts that are more likely than not to be realized.

The Company is subject to income taxes in the federal and state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In accordance with the authoritative guidance on accounting for uncertainty in income taxes, the Company recognizes tax liabilities for uncertain tax positions when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is more likely than not (greater than 50%) of being realized upon settlement. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

Segment Reporting

Operating segments are components of an entity that engage in business activities with discrete financial information available that is regularly reviewed by the chief operating decision maker (“CODM”) in order to assess performance and allocate resources. The Company’s CODM is its President and Chief Executive Officer. As discussed further in Note 19,  the Company has determined in its fourth quarter of 2022 that its operating and reportable segments are consistent with its major product groupings – device protection, women’s health, cardiovascular and orthobiologics prior to its divestiture in November 2023. Segment results for the year ended December 31, 2021 have been restated to conform to the new segment presentation. See Note 19 for further discussion.

Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisLineItems
Gain on revaluation of revenue interest obligation	$ (4,962)
Other (income) expense
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisLineItems
Gain on revaluation of revenue interest obligation	5,000
Fair Value, Recurring
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisLineItems
Liabilities	14,906	$ 19,290
Fair Value, Recurring \| Revenue Interest Obligation.
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisLineItems
Liabilities	14,906	19,290
Fair Value, Recurring \| Level 3
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisLineItems
Liabilities	14,906	19,290
Fair Value, Recurring \| Level 3 \| Revenue Interest Obligation.
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisLineItems
Liabilities	$ 14,906	$ 19,290

Summary of Significant Accounting Policies - Concentration of Credit risk (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Summary of Significant Accounting Policies
Cash in excess of the FDIC insurance	$ 17.8	$ 30.9

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation

Stock-Based Compensation

Note 5. Stock-Based Compensation

In 2015, the Company established the Elutia Inc. 2015 Stock Option/Stock Issuance Plan, as amended (the “2015 Plan”) which provided for the granting of incentive and non-qualified stock options to employees, directors and consultants of the Company. On October 7, 2020, in connection with the Company’s IPO, the Company adopted the Elutia Inc. 2020 Incentive Award Plan (the “2020 Plan”), which authorizes the grant of incentive and non-qualified stock options, restricted stock, restricted stock units and stock appreciation rights to employees, directors and consultants. Shares of Class A common stock totaling 1,636,000 were initially reserved for issuance pursuant to the 2020 Plan. In addition, the shares reserved for issuance under the 2020 Plan will 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 December 31, 2022, the Company had 656,689 shares of Class A common stock available for issuance under the 2020 Plan.

On June 21, 2022, C. Randal Mills, Ph.D., a member of the Board of Directors (the “Board”) of the Company, was appointed as the Company’s Interim President and Chief Executive Officer, succeeding Ronald Lloyd, who stepped down as the Company’s President and Chief Executive Officer and as a member of the Board. In connection with his appointment as the Interim President and Chief Executive Officer, Dr. Mills and the Company entered into an employment agreement for an initial term of 90 days (such period, the “Interim Period”). On August 9, 2022, Dr. Mills was appointed to the role of President and Chief Executive Officer of the Company, thereby ending the Interim Period, and his employment agreement was extended pursuant to the terms thereof.

In accordance with the terms of his employment agreement, Dr. Mills (1) received a stock option award to purchase 456,278 shares of Class A common stock of the Company (the “Option Grant”) on June 21, 2022; three-fifths of such Option Grant is subject to time-based vesting (the “Time-Based Options”) and two-fifths of such Option Grant is subject to performance-based vesting (the “Performance Based Options”) and (2) is eligible to receive 224,734 restricted stock units (the “RSU Grant”); three-fifths of such RSU Grant is subject to time-based vesting (the “Time-Based RSUs”) and two-fifths of such RSU Grant is subject to performance-based vesting (the “Performance-Based RSUs”). One-third of the Time-Based Options vested on August 9, 2022 (end of the Interim Period), and two-thirds of the Time-Based Options vest over a four-year vesting schedule with 25% vesting on the first anniversary of June 21, 2022 and the remaining portion vesting in twelve equal quarterly installments. One-third of the Time-Based RSUs vest on the grant date, and two-thirds of the Time-Based RSUs vest over a four-year vesting schedule in equal annual installments. The Performance-Based Options and Performance-Based RSUs each vest in equal installments upon the achievement of certain share price thresholds for twenty consecutive days of trading at each respective threshold. Pursuant to the terms of the employment agreement, all of these awards were deemed granted on June 21, 2022, for purposes of and in accordance with ASC 718, Accounting for Stock Based Compensation; however, the RSUs had not been legally granted as of December 31, 2022. It is anticipated that such RSUs will be legally granted prior to June 30, 2023, and the vested shares underlying the award will be deemed outstanding as of such time.

In connection with his resignation as President and Chief Executive Officer, Mr. Lloyd and the Company entered into a separation agreement, pursuant to which Mr. Lloyd remained a full-time, non-officer employee of the Company through September 30, 2022 to assist with the transition of his duties to his successor. On September 30, 2022, Mr. Lloyd received: (i) cash severance in an amount equal to his base salary for a period of 12 months and 100% of his annual target bonus and (ii) the COBRA benefits, during the 12-month period following September 30, 2022. The Company recognized Mr. Lloyd’s severance costs totaling approximately $1.0 million over the period from June 21, 2022 through September 30, 2022, and as of December 31, 2022, all such expenses remaining to be paid were included in Accrued Expenses in the accompanying consolidated balance sheets.

Stock Options

The Company’s policy is to grant stock options at an exercise price equal to 100% of the market value of a share of Class A common stock at closing on the date of the grant. The Company’s stock options have contractual terms of seven to 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 years ended December 31, 2022 and 2021 is as follows:


				Weighted-
				Average
		Weighted-		Remaining		Aggregate
		Average		Contractual		Intrinsic
		Exercise		Term		Value
	Number of Shares	Price		(years)		(in thousands)
Outstanding, December 31, 2021	1,386,811	$	13.28		7.8	$	179
Granted	1,246,904	$	5.91
Exercised	(13,887)	$	5.57
Forfeited	(755,089)	$	10.83
Outstanding, December 31, 2022	1,864,739	$	9.41		7.5	$	8
Vested and exercisable, December 31, 2022	723,793	$	11.25		5.0	$	-

As of December 31, 2022, there was approximately $4.1 million of total unrecognized compensation expense related to unvested stock options. These costs are expected to be recognized over a weighted- average period of 2.5 years. The weighted average grant date fair value of options granted during the years ended December 31, 2022 and 2021 were $3.30 and $7.26, respectively. The total intrinsic value of options exercised was not material for both the years ended December 31, 2022 and 2021.

The Company uses the Black-Scholes model to value its stock option grants and expenses the related compensation cost using the straight-line method over the vesting period. The fair value of stock options is determined on the grant date using assumptions for the estimated fair value of the underlying common stock, expected term, expected volatility, dividend yield, and the risk-free interest rate. Before the completion of the Company’s IPO, the Board of Directors determined the fair value of common stock considering the state of the business, input from management, third party valuations and other considerations. The Company uses the simplified method for estimating the expected term used to determine the fair value of options. The expected volatility of the Class A common stock is primarily based on the historical volatility of comparable companies in the industry whose share prices are publicly available. 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. Treasury note auction results with a similar life to that of the option. The period expense is then determined based on the valuation of the options and is recognized on a straight-line basis over the requisite service period for the entire award.

The following weighted-average assumptions were used to determine the fair value of options during the years ended December 31, 2022 and 2021:


	Year Ended
	December 31,
	2022		2021
Expected term (years)	6.2		5.9
Risk-free interest rate	2.3	%	1.0	%
Volatility factor	63.8	%	63.6	%
Dividend yield	—		—

For the Performance-Based Options granted as described above, 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.

Restricted Stock Units

Restricted stock units (“RSUs”) represent rights to receive common shares at a future date. 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 year ended December 31, 2022 is as follows:


		Weighted-
		Average
	Number of Shares	Grant Date
	Underlying RSUs	Fair Value
Unvested, December 31, 2021	235,985	$	15.98
Granted	586,083	$	4.08
Vested	(238,617)	$	6.64
Forfeited	(211,144)	$	11.40
Unvested, December 31, 2022	372,307	$	5.90

The total fair value of the RSUs granted during the year ended December 31, 2022 and 2021 of $2.4 million and $1.3 million, respectively was based on the fair market value of the Company's Class A common stock on the date of grant. The fair value at the time of the grant is amortized to expense on a straight-line basis over the vesting period of three to four years.

During the year ended December 31, 2022, the Company granted 289,282 Performance-Based RSUs, with 209,054 still outstanding at December 31, 2022. All such RSUs, including those granted to Dr. Mills and described above, vest only if or when the Company’s Class A common stock closing price is at or exceeds a defined share price for a defined period of time. As such, all of these awards have been accounted for as market condition awards. Given the nature of these market condition arrangements, an option pricing model, the Monte Carlo model, was used to determine the fair value of these RSUs as well as the expense recognition term of two to three years using the graded vesting method.

As of December 31, 2022, $1.4 million of unrecognized compensation costs related to RSUs is expected to be recognized over a weighted average period of two years.

Employee Stock Purchase Plan

The Company makes shares of its Class A common stock available for purchase under the Elutia Inc. 2020 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for separate six-month offering periods that begin in March and September of each year. Under the ESPP, employees may purchase a limited number of shares of Elutia Class A common stock at 85% of the fair market value on either the first day of the offering period or the purchase date, whichever is lower. 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 equal to the lesser of (i) 1% of the total shares of Class A common stock outstanding on the final day of the immediately preceding calendar year; or (ii) a lesser number of shares determined by the Company’s board of directors. As of December 31, 2022, the total shares of Class A common stock authorized for issuance under the ESPP was 380,997, of which 279,345 remained available for future issuance. During the year ended December 31, 2022, 74,408 shares of Class A common stock were issued under the ESPP.

Stock-Based Compensation Expense

Stock-based compensation expense recognized during the years ended December 31, 2022 and 2021 comprised of the following (in thousands):


	Year Ended
	December 31,
	2022		2021
Sales and marketing	$	1,041	$	652
General and administrative		1,922		2,179
Research and development		466		521
Cost of goods sold		74		36
Total stock-based compensation expense	$	3,503	$	3,388

Stock-based compensation expense included within Discontinued Operations totaled $0.1 million for both the year ended December 31, 2022 and 2021.

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation

Summary of stock options outstanding, exercisable and vested or expected to vest


				Weighted-
				Average
		Weighted-		Remaining		Aggregate
		Average		Contractual		Intrinsic
		Exercise		Term		Value
	Number of Shares	Price		(years)		(in thousands)
Outstanding, December 31, 2021	1,386,811	$	13.28		7.8	$	179
Granted	1,246,904	$	5.91
Exercised	(13,887)	$	5.57
Forfeited	(755,089)	$	10.83
Outstanding, December 31, 2022	1,864,739	$	9.41		7.5	$	8
Vested and exercisable, December 31, 2022	723,793	$	11.25		5.0	$	-

Summary of weighted-average assumptions were used to determine the fair value of options


	Year Ended
	December 31,
	2022		2021
Expected term (years)	6.2		5.9
Risk-free interest rate	2.3	%	1.0	%
Volatility factor	63.8	%	63.6	%
Dividend yield	—		—

Schedule of RSU activity


		Weighted-
		Average
	Number of Shares	Grant Date
	Underlying RSUs	Fair Value
Unvested, December 31, 2021	235,985	$	15.98
Granted	586,083	$	4.08
Vested	(238,617)	$	6.64
Forfeited	(211,144)	$	11.40
Unvested, December 31, 2022	372,307	$	5.90

Schedule of stock-based compensation expense recognized

Stock-based compensation expense recognized during the years ended December 31, 2022 and 2021 comprised of the following (in thousands):


	Year Ended
	December 31,
	2022		2021
Sales and marketing	$	1,041	$	652
General and administrative		1,922		2,179
Research and development		466		521
Cost of goods sold		74		36
Total stock-based compensation expense	$	3,503	$	3,388

Summary of Significant Accounting Policies - Net Loss per Share (Details) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Class A Common stock
Net Loss per Share Attributable to Common Stockholders
Common stock, par value (in dollar per share)	$ 0.001	$ 0.001
Class B Common stock
Net Loss per Share Attributable to Common Stockholders
Common stock, par value (in dollar per share)	$ 0.001	$ 0.001

Revenue Interest Obligation

12 Months Ended

Dec. 31, 2022

Revenue Interest Obligation

Revenue Interest Obligation

Note 11. Revenue Interest Obligation

As part of the CorMatrix asset acquisition described in Note 8, the Company assumed a restructured, long-term obligation (the “Revenue Interest Obligation”) to Ligand Pharmaceuticals (“Ligand”) with an estimated present value on the acquisition date of $27.7 million. Subject to annual minimum payments of $2.75 million per year, the terms of the Revenue Interest Obligation require Elutia to pay Ligand, 5% of future sales of the products Elutia acquired from CorMatrix, including CanGaroo, ProxiCor, Tyke and VasCure, as well as products substantially similar to those products, such as the version of CanGaroo that Elutia is currently developing that is designed to include antibiotics.

Furthermore, a $5.0 million payment will be due to Ligand if cumulative sales of these products exceed $100 million and a second $5.0 million will be due if cumulative sales exceed $300 million during the ten-year term of the agreement which expires on May 31, 2027.

The Company recorded the present value of the estimated total future payments under the Revenue Interest Obligation as a long-term obligation, with the short-term portion as of December 31, 2022 comprised of (i) the 2023 minimum payments, (ii) the first $5.0 million sales milestone payment noted above and (iii) the unpaid portion of the 2022 minimum payments. The short-term portion as of December 31, 2021 was comprised of the 2022 minimum payments. Interest expense related to the Revenue Interest Obligation of approximately $2.7 million was recorded for both the years ended December 31, 2022 and 2021. See Note 12 for discussion of the value of this obligation.

Inventory (Tables)

12 Months Ended

Dec. 31, 2022

Inventory

Summary of inventory

Inventory as of December 31, 2022 and 2021 was comprised of the following (in thousands):


	December 31,
	2022		2021
Raw materials	$	652	$	434
Work in process		541		497
Finished goods		3,047		1,855
Total	$	4,240	$	2,786

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Basis of Presentation and Liquidity

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Use of Estimates

Impact of COVID-19

Net Loss per Share Attributable to Common Stockholders

Net Loss per Share

Fair Value of Financial Instruments

Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets.

Cash and Restricted Cash


	December 31,
	2022		2021
Cash	$	16,989	$	30,393
Restricted cash		—		35
Total cash and restricted cash shown in statements of cash flows	$	16,989	$	30,428

Accounts Receivable and Allowances

Inventories

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method over the following estimated useful lives of the assets:


Processing and research equipment		5 to 10 years
Office equipment and furniture		3 to 5 years
Computer hardware and software		3 years

Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the asset.

Repairs and maintenance costs are expensed as incurred.

Leases

Long-Lived Assets

Purchased intangible assets with finite lives are carried at acquired fair value, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets.

Revenue Recognition

Deferred Rent

Stock-Based Compensation Plans

Research and Development Costs

Research and development costs, which include mainly salaries, outside services and supplies, are expensed as incurred.

Concentration of Credit Risk

Comprehensive Income (Loss)

Income Taxes

Segment Reporting

Income Taxes - Paragraphs (Details) - USD ($) $ in Millions	12 Months Ended
Income Taxes - Paragraphs (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Operating Loss Carryforwards [Line Items]
Increase in deferred tax assets	$ 7.6	$ 6.2
Unrecognized tax benefits	0.0
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	86.9
Net operating loss carryforwards will expire	17.7
Net operating loss carryforwards that have no expiration date	69.3
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards will expire	$ 26.4

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases

Summary of the ROU assets and operating lease liabilities' classification in the balance sheet

The following is a summary of the Company’s ROU assets and operating lease liabilities as of December 31, 2022 (in thousands):


	Classification on the Balance Sheet		December 31, 2022
Assets
Operating leases assets	Operating lease right-of-use assets and other	$	226

Liabilities
Operating leases current liabilities	Current operating lease liabilities and other		232
Operating leases non-current liabilities	Long-term operating lease liabilities		—
Total lease liabilities		$	232

Weighted average remaining lease term			0.6
Weighted average discount rate			7.2%

Schedule of future cash obligations to the operating lease liabilities

The table below reconciles the Company’s future cash obligations to the operating lease liabilities recorded on the balance sheet as of December 31, 2022 (in thousands):


Years ending December 31,
2023	$	237
2024		—
2025		—
Total minimum lease payments		237
Less: amount of lease payments representing interest		(5)
Present value of future minimum lease payments		232
Less: current operating lease liabilities		(232)
Long-term operating lease liabilities	$	—

CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Class A Common stock
Common stock, par value (in dollar per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	11,823,445	9,245,146
Common stock, shares outstanding	11,823,445	9,245,146
Class B Common stock
Common stock, par value (in dollar per share)	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	4,313,406	4,313,406
Common stock, shares outstanding	4,313,406	4,313,406

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Related Party Transactions

Note 18. Related Party Transactions

As part of the contribution of assets transacted from Tissue Banks International, now KeraLink International (“KeraLink”), to Elutia upon formation of the Company, a provision existed which guaranteed a certain level of working capital, as defined, on the opening balance sheet of Elutia. Such guarantee was largely finalized in 2016; however, an additional $0.4 million was received by the Company in connection with a settlement reached in 2018. Furthermore, as part of the 2018 settlement, it was agreed that when KeraLink sells its Elutia common shares for net proceeds greater than

$550,000, KeraLink is obligated to pay Elutia $550,000 within three days of such cash being received. In May 2021, KeraLink sold Elutia common shares for proceeds in excess of $550,000, and as such, remitted $550,000 to Elutia in full satisfaction of the 2018 settlement. Amounts received in connection with this settlement were recorded as other income, net in the accompanying consolidated statements of operations for the year ended December 31, 2021.

Intangible Assets - Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 3,397	$ 3,396
Amortization
Year ended December 31, 2023	3,400
Year ended December 31, 2024	3,400
Year ended December 31, 2025	3,400
Year ended December 31, 2026	3,400
Year ended December 31, 2027	$ 1,500
Acquired products
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period	10 years
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period	10 years

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2022

Long-Term Debt

Summary of contractual maturities of the long-term debt

As of December 31, 2022, the contractual maturities of the long-term debt are as follows (in thousands):



Years ending December 31,	Term Loan
2023	$	—
2024		1,263
2025		5,051
2026		5,051
2027		13,890
Total		25,255
Debt Discount		(562)
Deferred Financing Costs		(433)
Total, net		24,260
Current Portion		—
Long-term Debt	$	24,260

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Stockholders' Equity

Note 14. Stockholders’ Equity

Public Offering of Common Stock

On December 1, 2022, the Company issued and sold 2,350,000 shares of its Class A common stock at a price to the public of $4.75 per share in a registered underwritten public offering, resulting in net proceeds to the Company of approximately $10.2 million, after deducting underwriting discounts and offering expense.

Private Placement of Common Stock

On December 8, 2021, the Company closed on a private investment in public equity (PIPE) financing, thereby receiving net proceeds of approximately $13.8 million, after deducting offering costs. The PIPE investors purchased an aggregate of 2,122,637 shares of the Company’s Class A common stock and an aggregate of 1,179,244 shares of the Company’s Class B common stock (which are convertible on a one-for-one basis into shares of Class A common stock), in each case, at a price of $4.24 per share.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Income Taxes - Rate Reconciliation (Details)	12 Months Ended
Income Taxes - Rate Reconciliation (Details)	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of the U.S. federal statutory rate to the consolidated effective tax rate
Tax benefit at U.S. statutory rate	21.00%	21.00%
State income tax benefit, net of federal benefit	1.90%	1.60%
Nondeductible expenses	(0.30%)	1.60%
State law changes	0.50%	0.40%
Other	0.10%	0.30%
Change in valuation allowance	(23.30%)	(25.10%)
Income tax expense	(0.10%)	(0.20%)

Summary of Significant Accounting Policies - Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash and Restricted Cash
Cash	$ 16,989	$ 30,393
Restricted cash		35
Total cash and restricted cash shown in statements of cash flows	$ 16,989	$ 30,428	$ 39,532

Segment Information

12 Months Ended

Dec. 31, 2022

Segment Information

Segment Information

Note 19. Segment Information

The Company operates in three segments. These segments are based on financial information that is utilized by the Company’s CODM to assess performance and allocate resources. The Company determined its operating and reportable segments to be consistent with its major product groupings – Device Protection, Women’s Health and Cardiovascular.

For the years ended December 31, 2022 and 2021, the Company’s net sales disaggregated by segment were as follows (in thousands):



	Year Ended December 31,
	2022		2021
Net sales:
Device protection	$	9,093	$	7,902
Women's health		7,474		5,046
Cardiovascular		7,282		7,508
Total Net Sales	$	23,849	$	20,456

For the years ended December 31, 2022 and 2021, the Company’s gross profit disaggregated by segment were as follows (in thousands):


	Year Ended
	December 31,
	2022		2021
Gross profit:
Device protection	$	6,114	$	5,761
Women's health		3,137		914
Cardiovascular		5,785		6,001
Gross profit, excluding intangible asset amortization		15,036		12,676
Intangible asset amortization expense		3,397		3,396
Gross profit	$	11,639	$	9,280

The following table is a reconciliation of segment gross profit to the consolidated loss before provision for income taxes for the years ended December 31, 2022 and 2021 (in thousands):


	Year Ended
	December 31,
	2022		2021

Gross profit	$	11,639	$	9,280
Adjustments:
Sales and marketing		(17,850)		(16,655)
General and administrative		(16,051)		(13,124)
Research and development		(7,727)		(7,754)
FiberCel litigation costs		(5,200)		(276)
Loss from operations		(35,189)		(28,529)
Interest expense		5,118		5,324
Other income, net		(4,159)		(3,579)
Loss before provision for income taxes	$	(36,148)	$	(30,274)

During the years ended December 31, 2022 and 2021, the Company did not have any international product sales to specific countries where such country-specific sales represented material product sales, and the Company did not own any long-lived assets outside the United States.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Long-Term Debt - SWK Loan Facility (Details) - USD ($)			5 Months Ended	12 Months Ended
Long-Term Debt - SWK Loan Facility (Details) - USD ($)	Nov. 08, 2023	Aug. 10, 2022	Dec. 31, 2022	Dec. 31, 2022
Long-Term Debt
Deferred financing costs				$ 468,000
SWK Loan Facility
Long-Term Debt
Maximum borrowing capacity		$ 25,000,000
Proceeds from Issuance of Debt		21,000,000
Borrowing capacity		$ 4,000,000
Quarterly principal amortization (percent)			5.00%	5.00%
Interest in-kind spread basis		4.50%
Exit fee (as a percent)		6.50%
Prepayment penalty prior to first anniversary (as a percent)		2.00%
Prepayment penalty after first anniversary (as a percent)		2.00%
Weighted average interest rate			12.60%
Common stock, par value (in dollar per share)		$ 0.001
Exercise price (in dollar per share)		$ 6.65
Maximum shares issuable at closing		187,969
Warrant value		$ 600,000
Deferred financing costs		$ 500,000
Percentage of casualty proceeds in excess of $250,000 to redeem loan balance		100.00%
Casualty proceeds threshold amount in excess of which is used to redeem loan balance		$ 250,000
Threshold amount in excess of which exempted from mandatory prepayment		$ 1,000,000
Mandatory prepayment triggered by divestiture of Orthobiologics Business	$ 4,000,000.0
Repayment of debt triggered by divestiture	$ 2,000,000.0
Number of business days to pay upon request of SWK due to divestiture of the Orthobiologics Business	2
SWK Loan Facility \| Maximum
Long-Term Debt
Warrants issued		187,969
SWK Loan Facility \| SOFR
Long-Term Debt
Basis spread on variable rate		7.75%
Interest in-kind spread basis		4.75%
SWK Loan Facility \| SOFR \| Minimum
Long-Term Debt
Basis spread on variable rate		2.75%
New Asset-Based Revolving Loan Facility
Long-Term Debt
Maximum borrowing capacity		$ 8,000,000

Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

Note 8. Leases

The Company leases one production facility, one administrative and research facility and one administrative facility under non-cancelable operating lease arrangements that expire through July 2023. All leases contain renewal options and escalation clauses based upon increases in the lessors’ operating expenses and other charges.

The following is a summary of the Company’s ROU assets and operating lease liabilities as of December 31, 2022 (in thousands):


	Classification on the Balance Sheet		December 31, 2022
Assets
Operating leases assets	Operating lease right-of-use assets and other	$	226

Liabilities
Operating leases current liabilities	Current operating lease liabilities and other		232
Operating leases non-current liabilities	Long-term operating lease liabilities		—
Total lease liabilities		$	232

Weighted average remaining lease term			0.6
Weighted average discount rate			7.2%

For the year ended December 31, 2022, the Company recognized operating lease cost of approximately $0.4 million and expenses related to non-lease elements such as building maintenance and utilities of $0.4 million. Cash paid for amounts included in the measurement of operating lease liabilities are included in operating cash flows and were approximately $0.4 million for the year ended December 31, 2022.

For the year ended December 31, 2021, the Company recorded rent expense on a straight-line basis over the life of the lease and the difference between the average rent expense and cash payments for rent was recorded as deferred rent and included in accrued liabilities on the balance sheet as of December 31, 2021. Rent expense for the year ended December 31, 2021 was approximately $0.4 million and is included as a component of either cost of goods sold or general and administrative expenses.

The table below reconciles the Company’s future cash obligations to the operating lease liabilities recorded on the balance sheet as of December 31, 2022 (in thousands):


Years ending December 31,
2023	$	237
2024		—
2025		—
Total minimum lease payments		237
Less: amount of lease payments representing interest		(5)
Present value of future minimum lease payments		232
Less: current operating lease liabilities		(232)
Long-term operating lease liabilities	$	—

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 13. Income Taxes

The Company is subject to income taxes in the United States. Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are calculated based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using the enacted income tax rates expected to be in effect during the years in which the temporary differences are expected to reverse.

The reconciliation of the U.S. federal statutory rate to the consolidated effective tax rate is as follows:


	Years Ended December 31,
	2022		2021
Tax benefit at U.S. statutory rate	21.0	%	21.0	%
State income tax benefit, net of federal benefit	1.9	%	1.6	%
Nondeductible expenses	(0.3)	%	1.6	%
State law changes	0.5	%	0.4	%
Other	0.1	%	0.3	%
Change in valuation allowance	(23.3)	%	(25.1)	%
Income tax expense	(0.1)	%	(0.2)	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes as well as net operating loss carryforwards. As of December 31, 2022 and 2021, significant components of the Company’s net deferred income taxes are as follows (in thousands):


	December 31,
	2022		2021
Deferred tax assets:
Tax goodwill	$	2,947	$	3,267
Net operating loss carryforwards		19,743		14,794
Inventory		491		647
Acquired intangibles		1,452		1,174
Revenue interest obligation		774		1,347
Interest expense		2,533		1,866
Research and development costs		1,749		-
Operating lease liability		364		-
FiberCel litigation costs		669		-
Other		2,045		1,314
Total assets		32,767		24,409
Deferred tax liabilities:
Operating lease right-to-use assets		(350)		-
Prepaid expenses		(562)		(200)
Total liabilities		(912)		(200)

Total net deferred tax asset		31,855		24,209
Valuation allowance		(31,855)		(24,209)
Net deferred tax asset, net of valuation allowance	$	—	$	—

The Company did not recognize any deferred benefit for income taxes for the years ended December 31, 2022 and 2021, as the increases to the respective net deferred tax assets of $7.6 million and $6.2 million, respectively, were offset by corresponding increases to the Company’s deferred tax asset valuation allowance due to uncertainty of realizing the deferred tax assets.

The Company evaluates the need for deferred tax asset valuation allowances based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. Valuation allowances are established when necessary to reduce deferred tax assets to amounts that are more likely than not to be realized. Based on the uncertainty of future taxable income generation, as of December 31, 2022 and 2021, the Company has provided valuation allowances against all deferred tax assets.

The Company regularly assesses the realizability of its deferred tax assets. Changes in historical earnings performance and future earnings projections, among other factors, may cause the Company to adjust its valuation

allowance, which would impact the Company’s income tax expense in the period the Company determines that these factors have changed.

The income tax expense for the years ended December 31, 2022 and 2021 relates to current amounts due on certain state tax obligations.

As of December 31, 2022, the Company had net operating loss carryforwards for federal income tax purposes of approximately $86.9 million, comprised of $17.7 million that will expire beginning in 2036 and $69.3 million that have no expiration date. The Company also had state net operating loss carryforwards of approximately $26.4 million that will expire beginning in 2030. Utilization of the net operating loss carryforwards may be subject to an annual limitation under Section 382 of the Code, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization.

As of December 31, 2022, the Company had no unrecognized tax benefits.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Inventory
Raw materials	$ 652	$ 434
Work in process	541	497
Finished goods	3,047	1,855
Total	$ 4,240	$ 2,786

Summary of Significant Accounting Policies - Accounts Receivable and Allowances (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Accounts Receivable and Allowances
Allowance for doubtful accounts	$ 0.1	$ 0.1

Recently Issued Accounting Standards

12 Months Ended

Dec. 31, 2022

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Note 3. Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Disclosure Framework – Measurement of Credit Losses on Financial Instruments, which requires financial assets measured at amortized cost, including trade receivables, be presented net of the amount expected to be collected. The measurement of all expected credit losses will be based on relevant information about the credit quality of customers, past events, including historical experience, and reasonable and supportable forecasts that affect the collectability of the reported amount. In October 2019, the FASB voted to approve a proposal to defer the effective date of ASC 2016-13 for certain entities, including emerging growth companies that take advantage of the extended transition period, to fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements and timing of adoption.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Commitments and Contingencies - License and Supply (Details) - License agreement with Cook Biotech - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cook Biotech License and Supply Agreements
Percentage of royalty on sales	3.00%
Royalty expense	$ 0.0	$ 0.0
License fee payments per year	$ 0.1

Net Loss Per Share Attributable to Common Stockholders (Tables)

12 Months Ended

Dec. 31, 2022

Net Loss Per Share

Schedule of net loss per share attributable to common stockholders


	Year Ended
(in thousands, except share and per share data)	December 31,
	2022		2021
Numerator:
Net loss from continuing operations	$	(36,182)	$	(30,329)
Net income from discontinued operations	$	3,285	$	5,497
Net loss	$	(32,897)	$	(24,832)
Denominator:
Weighted average number of common shares - basic and diluted		13,832,887		10,444,767

Net loss per share from continuing operations attributable to common stockholders - basic and diluted	$	(2.62)	$	(2.90)
Net income per share from discontinued operations attributable to common stockholders - basic and diluted	$	0.24	$	0.53
Net loss per share - basic and diluted	$	(2.38)	$	(2.38)

Schedule of potential common shares excluded from calculation, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders


	December 31,
	2022	2021
Options to purchase common stock	1,864,739	1,386,811
Restricted stock units	372,307	235,985
Class A common stock warrants	187,969	—
Total	2,425,015	1,622,796

Stock-Based Compensation - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Options to purchase common stock
Stock-Based Compensation
Exercise price as a percentage of market value of share of common stock at closing on the date of the grant	100.00%
Vesting period	4 years
Options to purchase common stock \| Minimum
Stock-Based Compensation
Contractual term	7 years
Options to purchase common stock \| Maximum
Stock-Based Compensation
Contractual term	10 years
2020 Plan
Number of Shares
Outstanding at the beginning	1,386,811
Granted	1,246,904
Exercised	(13,887)
Forfeited	(755,089)
Outstanding at the end	1,864,739	1,386,811
Vested and exercisable at the end	723,793
Weighted- Average Exercise Price
Outstanding at the beginning (in dollars per share)	$ 13.28
Granted (in dollars per share)	5.91
Exercised (in dollars per share)	5.57
Forfeited (in dollars per share)	10.83
Outstanding at the end (in dollars per share)	9.41	$ 13.28
Vested and exercisable at the end (in dollars per share)	$ 11.25
Weighted-Average Remaining Contractual Term (years)
Outstanding (in years)	7 years 6 months	7 years 9 months 18 days
Vested and exercisable (in years)	5 years
Aggregate Intrinsic Value
Aggregate Intrinsic Value (in dollars)	$ 8	$ 179
Other Disclosures
Weighted average grant date fair value of options granted	$ 3.30	$ 7.26
2020 Plan \| Options to purchase common stock
Other Disclosures
Total unrecognized compensation expense	$ 4,100
Weighted-average recognition period	2 years 6 months

Document and Entity Information	Nov. 20, 2023
Document and Entity Information
Document Type	8-K
Document Period End Date	Nov. 20, 2023
Entity File Number	001-39577
Entity Registrant Name	ELUTIA INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-4790334
Entity Address State Or Province	MD
Entity Address, Address Line One	12510 Prosperity Drive
Entity Address, Adress Line Two	Suite 370
Entity Address, City or Town	Silver Spring
Entity Address, Postal Zip Code	20904
City Area Code	240
Local Phone Number	247-1170
Title of 12(b) Security	Class A Common Stock, $0.001 par value per share
Trading Symbol	ELUT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001708527
Amendment Flag	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false

Long-Term Debt - MidCap Loan and Credit Facilities (Details) $ in Thousands				1 Months Ended				6 Months Ended	12 Months Ended		19 Months Ended
	Aug. 10, 2022 USD ($)	Aug. 09, 2022	May 31, 2017 USD ($)	Jul. 31, 2022	Jul. 31, 2019 USD ($)	Feb. 28, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jun. 30, 2022	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Aug. 09, 2022
Long-Term Debt
Loss on extinguishment of debt									$ (311)	$ 3,029
May 2017 Financing [Member]
Long-Term Debt
Loss on extinguishment of debt									$ 1,200
MidCap Loan Facility [Member]
Long-Term Debt
Face amount of debt			$ 12,000
Proceeds from Issuance of Debt					$ 3,500	$ 3,000	$ 1,500
Total amount outstanding					$ 20,000
Weighted average interest rate											9.50%
Prepayment amount of loan	$ 16,000
Prepayment of principal and interest	12,800
Prepayment and exit fees paid	1,700
Interest rate			2.25%
Variable rate divider			1.00
MidCap Loan Facility [Member] \| LIBOR
Long-Term Debt
Basis spread on variable rate			7.25%
MidCap Credit Facility [Member]
Long-Term Debt
Maximum borrowing capacity			$ 8,000
Weighted average interest rate		7.20%		7.20%				7.20%		7.20%
Prepayment amount of loan	$ 1,500
Interest rate			2.25%
MidCap Credit Facility [Member] \| LIBOR
Long-Term Debt
Basis spread on variable rate			4.95%

Divestiture of Orthobiologics Business (Tables)

12 Months Ended

Dec. 31, 2022

Divestiture of Orthobiologics Business

Schedules of assets and liabilities, financial results and cash flow reconciliation of the discontinued operations

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


	Year Ended December 31,
	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Accounts receivable, net	$	3,056	$	2,638
Inventory		5,812		6,768
Prepaid expenses and other current assets		628		667
Total current assets		9,496		10,073
Property and equipment, net		1,158		986
Operating lease right-of-use assets and other		1,350		—
Total non-current assets		2,508		986
Total assets of discontinued operations	$	12,004	$	11,059


Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	954	$	971
Accrued expenses and other current liabilities		1,273		1,383
Payables to tissue suppliers		2,252		2,122
Current operating lease liabilities		450		—
Total current liabilities		4,929		4,476
Long-term operating lease liabilities		956		—
Total liabilities of discontinued operations	$	5,885	$	4,476

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



	As of December 31,
	2022		2021
Net sales	$	25,338	$	26,934
Cost of goods sold		17,755		17,192
Gross profit		7,583		9,742
Sales and marketing		2,345		2,170
General and administrative		576		563
Research and development		1,213		1,512
Total operating expenses		4,134		4,245
Interest Expense		164		—
Net income (loss)	$	3,285		5,497

Total operating and investing cash flows of discontinued operations for the nine months ended September 30, 2023 and 2022 are comprised of the following:


	Twelve Months Ended
	December 31,
	2022		2021
Significant operating non-cash reconciliation items
Depreciation	$	167	$	120
Stock-based compensation		144		148
Changes in operating assets and liabilities:
Accounts receivable		(417)		1,832
Inventory		956		(1,048)
Prepaid expenses and other		39		(636)
Accounts payable and accrued expenses and other current liabilities		(127)		725
Obligations to tissue suppliers		130		305

Significant investing items
Expenditures for property, plant and equipment		378		255

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

Retirement Plan (Details) - USD ($) $ in Millions	12 Months Ended
Retirement Plan (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Retirement Plan
Employer matching contributions	$ 0.3	$ 0.4

Segment Information (Tables)

12 Months Ended

Dec. 31, 2022

Segment Information

Schedule of sales information

For the years ended December 31, 2022 and 2021, the Company’s net sales disaggregated by segment were as follows (in thousands):



	Year Ended December 31,
	2022		2021
Net sales:
Device protection	$	9,093	$	7,902
Women's health		7,474		5,046
Cardiovascular		7,282		7,508
Total Net Sales	$	23,849	$	20,456

For the years ended December 31, 2022 and 2021, the Company’s gross profit disaggregated by segment were as follows (in thousands):


	Year Ended
	December 31,
	2022		2021
Gross profit:
Device protection	$	6,114	$	5,761
Women's health		3,137		914
Cardiovascular		5,785		6,001
Gross profit, excluding intangible asset amortization		15,036		12,676
Intangible asset amortization expense		3,397		3,396
Gross profit	$	11,639	$	9,280

The following table is a reconciliation of segment gross profit to the consolidated loss before provision for income taxes for the years ended December 31, 2022 and 2021 (in thousands):


	Year Ended
	December 31,
	2022		2021

Gross profit	$	11,639	$	9,280
Adjustments:
Sales and marketing		(17,850)		(16,655)
General and administrative		(16,051)		(13,124)
Research and development		(7,727)		(7,754)
FiberCel litigation costs		(5,200)		(276)
Loss from operations		(35,189)		(28,529)
Interest expense		5,118		5,324
Other income, net		(4,159)		(3,579)
Loss before provision for income taxes	$	(36,148)	$	(30,274)

Segment Information - Disaggregation (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) segment	Dec. 31, 2021 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments \| segment	3
Total sales	$ 23,849	$ 20,456
Gross profit, excluding intangible asset amortization	15,036	12,676
Intangible asset amortization expense	3,397	3,396
Gross Profit	11,639	9,280
Device Protection
Segment Reporting Information [Line Items]
Total sales	9,093	7,902
Gross profit, excluding intangible asset amortization	6,114	5,761
Women's Health
Segment Reporting Information [Line Items]
Total sales	7,474	5,046
Gross profit, excluding intangible asset amortization	3,137	914
Cardiovascular
Segment Reporting Information [Line Items]
Total sales	7,282	7,508
Gross profit, excluding intangible asset amortization	$ 5,785	$ 6,001

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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+ Details

Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Fair Value Measurements

Note 12. Fair Value Measurements

The following table sets forth by level, within the fair value hierarchy, the liabilities that are measured at fair value on a recurring basis (in thousands):


	Fair Value Measurements at December 31, 2021 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Revenue Interest Obligation*		—		—		19,290		19,290
Total	$	—	$	—	$	19,290	$	19,290


	Fair Value Measurements at December 31, 2022 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Revenue Interest Obligation*		—		—		14,906		14,906
Total	$	—	$	—	$	14,906	$	14,906

*Net Present Value; see discussion of value below

The Company has estimated the value of the Revenue Interest Obligation, including contingent milestone payments and estimated sales-based payments, based on assumptions related to future sales of the acquired products. 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 consolidated statements of operations using the catch-up method. In connection with our estimation at December 31, 2022, it was determined that the estimated future payments, discounted at the original discount rate, had decreased since the prior estimates. Such decrease was primarily the result of anticipated changes to our strategic partnerships relative to sales of both our CanGaroo and cardiovascular product lines that will impact the timing and extent of such sales and, thereby, will reduce expected future payments to Ligand. The change to estimated future payments yielded a reduction to the total Revenue Interest Obligation of approximately $5.0 million for the year ended December 31, 2022 with such amount recognized as a gain in Other income, net in our consolidated statement of operations. There was no change to estimated future payments during the year ended December 31, 2021 and thus, no re-measurement gain or loss was recognized.


Balance as of January 1, 2021	$	19,383
Payments on Revenue Interest Obligation		(2,747)
Interest accrued to Revenue Interest Obligation		2,654
Balance as of December 31, 2021	$	19,290
Payments on Revenue Interest Obligation		(2,075)
Interest accrued to Revenue Interest Obligation		2,653
Gain on revaluation of revenue interest obligation		(4,962)
Balance as of December 31, 2022	$	14,906

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Long-Term Debt - Contractual Maturities of the Long-term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Contractual maturities of the long-term debt
Long-term debt	$ 24,260	$ 10,410
Term Loan Facility
Contractual maturities of the long-term debt
2024	1,263
2025	5,051
2026	5,051
2027	13,890
Total	25,255
Debt Discount	(562)
Deferred Financing Costs	(433)
Total, net	24,260
Long-term debt	$ 24,260

Long-Term Debt - Unsecured PN (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 10, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2017
Debt Instrument [Line Items]
Gain on extinguishment of debt		$ (311)	$ 3,029
Unsecured Promissory Note
Debt Instrument [Line Items]
Face amount of debt				$ 2,100
Interest rate				5.00%
Amount of notes paid	$ 1,400
Gain on extinguishment of debt		$ 400

Net Loss Per Share

12 Months Ended

Dec. 31, 2022

Net Loss Per Share

Net Loss Per Share

Note 16. Net Loss Per Share


	Year Ended
(in thousands, except share and per share data)	December 31,
	2022		2021
Numerator:
Net loss from continuing operations	$	(36,182)	$	(30,329)
Net income from discontinued operations	$	3,285	$	5,497
Net loss	$	(32,897)	$	(24,832)
Denominator:
Weighted average number of common shares - basic and diluted		13,832,887		10,444,767

Net loss per share from continuing operations attributable to common stockholders - basic and diluted	$	(2.62)	$	(2.90)
Net income per share from discontinued operations attributable to common stockholders - basic and diluted	$	0.24	$	0.53
Net loss per share - basic and diluted	$	(2.38)	$	(2.38)

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. 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 attributable to common stockholders:


	December 31,
	2022	2021
Options to purchase common stock	1,864,739	1,386,811
Restricted stock units	372,307	235,985
Class A common stock warrants	187,969	—
Total	2,425,015	1,622,796

Summary of Significant Accounting Policies - Basis of Presentation and Liquidity (Details) - USD ($) $ in Thousands		12 Months Ended
	Sep. 17, 2023	Dec. 31, 2022	Dec. 31, 2021
Basis of Presentation and Liquidity
Net loss		$ 32,897	$ 24,832
Accumulated deficit		137,988	105,091
Cash used in operating activities		$ 21,434	$ 15,446
Orthobiologics Business \| Discontinued Operations, Held-for-sale
Basis of Presentation and Liquidity
Aggregate purchase price	$ 35,000
Purchase price due at closing	14,600
Purchase price due after closing in the form of earn-out payments	$ 20,000
Earn-out period	5 years
Earn-out payments, as a percent actual revenue	10.00%

Divestiture of Orthobiologics Business - Assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Carrying amounts of the major classes of assets included in held for sale:
Total current assets	$ 9,496	$ 10,073
Total non-current assets	2,508	986
Carrying amounts of the major classes of liabilities included in held for sale:
Total current liabilities	4,929	4,476
Orthobiologics Business \| Discontinued Operations, Held-for-sale
Carrying amounts of the major classes of assets included in held for sale:
Accounts receivable, net	3,056	2,638
Inventory	5,812	6,768
Prepaid expenses and other current assets	628	667
Total current assets	9,496	10,073
Property and equipment, net	1,158	986
Operating lease right-of-use assets and other	1,350
Total non-current assets	2,508	986
Total assets held for sale	12,004	11,059
Carrying amounts of the major classes of liabilities included in held for sale:
Accounts payable	954	971
Accrued expenses and other current liabilities	1,273	1,383
Payables to tissue suppliers	2,252	2,122
Current operating lease liabilities	450
Total current liabilities	4,929	4,476
Long-term operating lease liabilities	956
Total liabilities held for sale	$ 5,885	$ 4,476

Leases - ROU asses and liabilities (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Assets
Operating lease right-of-use assets	$ 226
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets, Noncurrent
Liabilities
Current operating lease liabilities	$ 232
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Current
Total lease liabilities	$ 232
Weighted average remaining lease term	2 years 6 months
Weighted average discount rate	7.20%

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 23,849	$ 20,456
Cost of goods sold	12,210	11,176
Gross profit	11,639	9,280
Sales and marketing	17,850	16,655
General and administrative	16,051	13,124
Research and development	7,727	7,754
FiberCel litigation costs, net	5,200	276
Total operating expenses	46,828	37,809
Loss from continuing operations	(35,189)	(28,529)
Interest expense	5,118	5,324
Other income, net	(4,159)	(3,579)
Loss before provision for income taxes	(36,148)	(30,274)
Income tax expense	34	55
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	(36,182)	(30,329)
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	3,285	5,497
Net loss	$ (32,897)	$ (24,832)
Net loss per share from continuing operations attributable to commons stockholders - basic (in dollar per share)	$ (2.62)	$ (2.90)
Net loss per share from continuing operations attributable to commons stockholders - diluted (in dollar per share)	(2.62)	(2.90)
Net loss per share from discontinued operations attributable to commons stockholders - basic (in dollar per share)	0.24	0.53
Net loss per share from discontinued operations attributable to commons stockholders - diluted (in dollar per share)	0.24	0.53
Net loss per share - basic (in dollar per share)	(2.38)	(2.38)
Net loss per share - diluted (in dollar per share)	$ (2.38)	$ (2.38)
Weighted average common shares outstanding - basic	13,832,887	10,444,767
Weighted average common shares outstanding - diluted	13,832,887	10,444,767

Intangible Assets - Components (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	May 31, 2017
Components of identified intangible assets
Cost	$ 34,040	$ 34,040
Accumulated Amortization	(18,971)	(15,574)
Net	15,069	18,466
Acquired products
Intangible Assets
Estimated acquisition-date fair values of the intangible assets related to acquired products and customer relationships			$ 29,300
Components of identified intangible assets
Cost	29,317	29,317
Accumulated Amortization	(16,334)	(13,409)
Net	12,983	15,908
Customer relationships
Intangible Assets
Estimated acquisition-date fair values of the intangible assets related to acquired products and customer relationships			$ 4,700
Components of identified intangible assets
Cost	4,723	4,723
Accumulated Amortization	(2,637)	(2,165)
Net	$ 2,086	$ 2,558