EX-99.1 4 tm2330673d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On November 8, 2023, Elutia Inc. (the “Company”) completed the previously announced sale of its Orthobiologics segment (the “Orthobiologics Business”) to Berkeley Biologics, LLC (“Berkeley”). The sale was structured as an asset purchase, which occurred by divestiture of all the Orthobiologics Business assets and liabilities. After the divestiture, the Company will no longer consolidate the Orthobiologics Business into its financial results (the entire transaction is being referred to as the “Sale”).

 

The unaudited pro forma consolidated financial information is based on historical financial statements of the Company as adjusted for the unaudited pro forma effects of the Sale. The unaudited pro forma consolidated financial information should be read in conjunction with:

 

•the historical consolidated financial statements and accompanying notes of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 23, 2023;

 

•the unaudited historical condensed consolidated financial statements and accompanying notes of the Company included in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2023 filed with the SEC on November 14, 2023;

 

The following unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2023 and for the years ended December 31, 2022 and 2021 reflect the Company’s results as if the Sale had occurred as of January 1, 2021 in that they reflect the reclassification of the Orthobiologics Business as discontinued operations for all periods presented. The adjustments in the “Transaction Accounting Adjustments” column in the unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2022 give effect to the Sale and related transactions as if they had occurred on January 1, 2022. The following unaudited Pro Forma Condensed Balance Sheet as of September 30, 2023 presents the financial position of the Company as if the Sale had occurred on September 30, 2023.

 

The unaudited pro forma adjustments and related assumptions are described in the accompanying notes to the unaudited pro forma consolidated financial information. The unaudited pro forma consolidated financial information has been prepared based upon currently available information and assumptions that are deemed appropriate by the Company’s management. The unaudited pro forma consolidated financial information is for informational and illustrative purposes only and is not intended to be indicative of what actual results would have been had the Sale occurred on the dates assumed, nor does such data purport to represent the consolidated financial results of the Company for future periods. The pro forma adjustments are based on currently available information, estimates and assumptions that the Company believes are reasonable in order to reflect, on a pro forma basis, the impact of this disposition on our historical financial information. The actual financial position and results of operations may differ significantly from the unaudited pro forma amounts reflected herein due to a variety of factors.

 

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ELUTIA INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of September 30, 2023

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

 

(UNAUDITED)

 

   Historical   Transaction Accounting
Adjustments		   Pro Forma 
Assets               
Current assets:               
Cash  $14,517   $11,826(b)  $26,343 
Accounts receivable   2,883    —    2,883 
Inventory   6,503    —    6,503 
Receivables of FiberCel litigation costs   7,452    —    7,452 
Prepaid expenses and other current assets   452    —    452 
Current assets of discontinued operations   7,320    (7,320)(a)   - 
Total current assets   39,127    4,506    43,633 
                
Property and equipment, net   175    —    175 
Intangible assets, net   12,520    —    12,520 
Operating lease right-of-use assets and other   155    —    155 
Noncurrent assets of discontinued operations   2,603    (2,603)(a)   — 
Total assets  $54,580   $1,903   $56,483 
                
Liabilities and Stockholders' Deficit               
                
Current liabilities:               
Accounts payable  $2,962   $—   $2,962 
Accrued expenses   10,723    900(c)   11,623 
Payables to tissue suppliers   707    —    707 
Current portion of revenue interest obligation   11,053    —    11,053 
Contingent liability for FiberCel litigation   15,702    —    15,702 
Current operating lease liabilities    399    —    399 
Current liabilities of discontinued operations   3,190    (3,190)(a)   — 
Current portion of long-term debt   —    1,977(d)   1,977 
Total current liabilities   44,736    (313)   44,423 
                
Long-term debt   25,278    (3,955)(d)   21,323 
Long-term revenue interest obligation   5,471    —    5,471 
Warrant liability   7,550    —    7,550 
Other long-term liabilities   433    —    433 
Noncurrent liabilities from discontinued operations   585    (585)(a)   — 
Total liabilities   84,053    (4,853)   79,200 
                
Stockholders’ equity (deficit):               
Class A Common stock   19    —    19 
Class B Common stock   4    —    4 
Additional paid-in capital   136,834    —    136,834 
Accumulated deficit   (166,330)   6,756(e)   (159,574)
Total stockholders’ deficit   (29,473)   6,756    (22,717)
Total liabilities and stockholders' deficit  $54,580   $1,903   $56,483 

 

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

 

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ELUTIA INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2023

(In Thousands, Except Share and Per Share Data)

 

(UNAUDITED)

 

   Historical   Transaction
Accounting
Adjustments		   Pro Forma 
Net sales  $18,870   $—   $18,870 
Cost of goods sold   9,943    —    9,943 
Gross profit   8,927    —    8,927 
Sales and marketing   10,514         10,514 
General and administrative   10,137    —    10,137 
Research and development   3,016    —    3,016 
FiberCel litigation costs, net   7,278    —    7,278 
Total operating expenses   30,945    —    30,945 
Loss from operations   (22,018)        (22,018)
Interest expense   4,285    —    4,285 
Other income, net   (312)   —    (312)
Loss before provision for income taxes   (25,991)   —    (25,991)
Income tax expense   36    —    36 
Net loss from continuing operations  $(26,027)  $—   $(26,027)
Net loss from continuing operations per share - basic and diluted  $(1.58)       $(1.58)
                
Weighted average common shares outstanding - basic and diluted   16,464,262         16,464,262 

 

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

 

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ELUTIA INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Twelve Months Ended December 31, 2022

(In Thousands, Except Share and Per Share Data)

 

(UNAUDITED)

 

   Historical   Orthobiologics
Discontinued
Operations
(Note a)		   Adjusted for
Discontinued
Operations		   Transaction
Accounting
Adjustments		   Pro Forma 
Net sales  $49,187   $(25,338)  $23,849   $—   $23,849 
Cost of goods sold   29,965    (17,755)   12,210    —    12,210 
Gross profit   19,222    (7,583)   11,639    —    11,639 
Sales and marketing   20,195    (2,345)   17,850         17,850 
General and administrative   16,627    (576)   16,051    900(c)   16,951 
Research and development   8,940    (1,213)   7,727    —    7,727 
FiberCel litigation costs, net   5,200    —    5,200    —    5,200 
Total operating expenses   50,962    (4,134)   46,828    900    47,728 
Loss from operations   (31,740)   (3,449)   (35,189)   (900)   (36,089)
Interest expense   5,282    (164)   5,118    —    5,118 
Other income, net   (4,159)   —    (4,159)   —    (4,159)
Loss before provision for income taxes   (32,863)   (3,285)   (36,148)   (900)   (37,048)
Income tax expense   34    —    34    —    34 
Net from continuing operations loss  $(32,897)  $(3,285)  $(36,182)  $(900)  $(37,082)
Net loss from continuing operations per share - basic and diluted  $(2.38)                 $(2.68)
                          
Weighted average common shares outstanding - basic and diluted   13,832,887                   13,832,887 

 

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

 

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ELUTIA INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Twelve Months Ended December 31, 2021

(In Thousands, Except Share and Per Share Data)

 

(UNAUDITED)

 

   Historical   Orthobiologics
Discontinued
Operations
(Note a)		   Adjusted for
Discontinued
Operations		   Transaction
Accounting
Adjustments		   Pro Forma 
Net sales  $47,390   $(26,934)  $20,456   $—   $20,456 
Cost of goods sold   28,368    (17,192)   11,176    —    11,176 
Gross profit   19,022    (9,742)   9,280    —    9,280 
Sales and marketing   18,825    (2,170)   16,655    —    16,655 
General and administrative   13,687    (563)   13,124    —    13,124 
Research and development   9,266    (1,512)   7,754    —    7,754 
FiberCel litigation costs, net   276    —    276    —    276 
Total operating expenses   42,054    (4,245)   37,809         37,809 
Loss from operations   (23,032)   (5,497)   (28,529)   —    (28,529)
Interest expense   5,324    —    5,324    —    5,324 
Other income, net   (3,579)   —    (3,579)   —    (3,579)
Loss before provision for income taxes   (24,777)   (5,497)   (30,274)   —    (30,274)
Income tax expense   55    —    55    —    55 
Net loss from continuing operations  $(24,832)  $(5,497)  $(30,329)  $—   $(30,329)
Net loss from continuing operations per share - basic and diluted  $(2.38)                 $(2.90)
                          
Weighted average common shares outstanding - basic and diluted   10,444,767                   10,444,767 

 

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

 

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ELUTIA INC.

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Orthobiologics Business Discontinued Operations:

 

(a)Reflects the discontinued operations, including associated assets and liabilities and results attributable to the Orthobiologics Business, which were previously included in the Company’s historical financial statements. The Sale is accounted for retrospectively in accordance with ASC 205-20, “Discontinued Operations” for all periods presented.

 

Transaction Accounting Adjustments:

 

(b)Adjustments to cash.

 

(In Thousands)

 

Cash received from sale of Orthobiologics Business at closing  $14,554 
Cash paid in repayment of SWK loan at closing   (1,977)
Cash paid for transaction fees at closing   (750)
Total Pro Forma Adjustment to Cash  $11,826 

 

(c)Costs to complete the sale transaction. Reflects additional estimates of costs to complete the Sale that have not yet been reflected in the historical statements. This adjustment excludes $0.7 million in fees paid at closing. The remainder of the fees are expected to be paid in 2024.

 

(d)Repayment of Debt. The Company is contractually obligated to use a portion of the Sale proceeds to repay $3.9 million of the SWK term loan facility. $2.0 million of the required repayment was paid at closing with the remainder expected to be paid in February 2024 based on a mutual agreement between the parties. The repayment amount is based on the outstanding principal loan balance and the Orthobiologics Business’ portion of the Company’s gross profit for the most recent twelve-month period. The pro forma adjustment is based on the September 30, 2023 principal loan balance, before unamortized discount and deferred financing costs, of $26.1 million.

 

(e)Effect on shareholders’ equity. Reflects the effect on total shareholders' equity of the adjustments described in notes (b) through (d) above.

 

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