ELUT

I would now like to hand the call over to Bernadine Cherniak. Please go ahead.

Thank you, operator, and thank you all for participating in today's call. Earlier today, Elutia released financial results for the first quarter ended March 31st, 2026. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that do not relate to matters of historical facts or relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation those relating to our operating trends and future financial performance, are based upon our current estimates and various assumptions.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For lists and descriptions of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the SEC, including Elutia's annual report on Form 10-K for the year ended December 31st, 2025, and under subsequent periodic reports on Form 10-Q and 10-K, accessible on the SEC's website at www.sec.gov. Such factors may be updated from time to time in Elutia's other filings with the SEC. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 14th, 2026.

Elutia disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements because of new information, future events, or otherwise. Also during this presentation, we refer to gross margin, excluding intangible asset amortization, which is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is available on the company's financial results released for the first quarter ended March 31st, 2026. This is accessible on the SEC's website and posted on the Investors page of the Elutia website at www.elutia.com. With that, I will turn over the call to Elutia's CEO, Randy Mills.

Thank you, Bernadine. Thank you, everyone, for joining us today. The first quarter of 2026 was an important quarter for Elutia. We continued to sharpen our strategic focus. We advanced our NXT-41 regulatory program. We brought our automated manufacturing platform online, and we further strengthened our confidence in the commercial opportunity ahead of us in breast reconstruction. Here's how we'll spend our time today. I'll walk you through the headlines of the quarter and where we're headed. Matt will take you through the financials and close with a few thoughts on what's ahead. We'll open the line up for questions. Today, Elutia is increasingly becoming a pure-play drug-eluting biomatrix company focused on one of the largest and most underserved opportunities in reconstructive surgery. Four things I would like to highlight from the quarter.

First, our FDA review of NXT-41 is progressing through productive interactions with the agency, and the dialogue has increased our confidence in the planned NXT-41x submission. We continue to anticipate NXT-41 clearance in the fourth quarter of 2026 and NXT-41x clearance in the first half of 2027. Second, we brought our automated manufacturing platform online this quarter. That platform supports a target gross margin in excess of 80% at scale, enabling a differentiated value proposition at competitive pricing. Third, direct surgeon engagement by our commercial team is confirming what we have believed all along, a $1.5 billion U.S. market, postoperative infection rates of 15%-20%, and no meaningful innovation in standard of care.

Fourth, we ended the quarter with a strong balance sheet, $36.5 million in cash in escrow, and we are actively engaged in two strategic processes: the SimpliDerm divestiture we previously announced and a newly disclosed inbound acquisition interest in our cardiovascular product line. It is increasingly clear that within the $1.5 billion breast surgery market, NXT-41x has the potential to be a blockbuster and to meaningfully improve outcomes for women with breast cancer. For anyone new to the Elutia story, here is the short version of what we do. Our approach is simple but differentiated. We combine a proven biologic matrix platform with sustained local antibiotic delivery designed to prevent bacterial colonization and the cascade of complications like infection that can follow. Importantly, we have done this before. Our first-generation drug-eluting product, EluPro, was the first FDA-cleared antibiotic-eluting bioenvelope.

We developed it, we cleared it, we commercialized it. Last October, we sold that business to Boston Scientific for $88 million. That prior success gives us confidence not only in the technology itself, but also in our ability to develop, make, and commercialize differentiated drug-eluting products. NXT-41x takes that same validated platform into a much larger market with a much larger unmet medical need. We believe the opportunity in front of us is transformational for three reasons. One, it's a big market, a $1.5 billion in the U.S. alone. Two, it's a big problem. 15%-20% of patients develop postoperative infection after mastectomy. If anything, that number is conservative. Three, we already have a proven solution. The $88 million that Boston Scientific paid for our first-generation product tells you that it works. Let me put the market into concrete numbers.

Approximately 168,000 breast reconstruction procedures last year were performed in the United States. Biologic mesh is utilized in more than 85% of those implant-based reconstructions. Biologics account for roughly 65% of the total procedural spend, and human biologic mesh today sells for somewhere between $7,500 and $9,500 per breast. Put that all together, you have a $1.5 billion U.S. market opportunity. This is not a market we have to create. It already exists. Biologic matrices are already deeply embedded into the standard of care. Surgeons use them in the vast majority of these procedures. Our job is simpler than building a new category. We just have to give them a better version of what they're already using. In breast reconstruction, the unmet need for this is severe. One in three women suffer a serious complication after reconstruction.

15%-20% develop a postoperative infection. Up to 21% experience implant loss, and the average hospital cost of a single infection ends up being more than $48,000. Remember why this woman is in the operating room in the first place. She was diagnosed with cancer. Her number one goal is to beat that cancer, and when infection takes hold, chemotherapy stops, radiation stops, everything stops until the infection is resolved. This is not a minor complication. This is a cancer treatment derailing event, and the standard of care today does not solve it. NXT-41x is not a passive support mechanism. It is an active partner in recovery. It is easy to use. It fits the surgical workflow the surgeon already knows. It's cost neutral to the hospital.

It replaces legacy products that they're already buying, and it delivers powerful, sustained, uniform antibiotic coverage right at the surgical site where systemic antibiotics struggle to reach. Unlike legacy biologic matrix that have little functional differentiation, our goal is to deliver differentiated functionality at a competitive economic profile. We believe that matters. With that backdrop, let me walk you through the work we did this quarter to advance the program. Let me first start with the FDA review. We continue to have productive interactions with the FDA regarding the NXT-41 submission. As a reminder, NXT-41 is the base biologic matrix, it serves as the foundation for NXT-41x drug-eluting version that will follow. We're not gonna comment on every detail of the review process, what I can say is that our dialogue with FDA has increased our confidence in the planned NXT-41x submission strategy.

The discussions have helped clarify what FDA views as an important from a submission standpoint. We continue to anticipate NXT-41 clearance in the first quarter of 2026 and expect NXT-41x clearance in the first half of 2027. The point I want you to take from this slide is our confidence has increased. Let me shift to manufacturing. One of the most important accomplishments this quarter was bringing our automated manufacturing platform online. We have now installed and operationalized the core automated production equipment intended to support NXT-41x manufacturing at scale. This is strategically important for several reasons. First, the robotic coating system enables precise and reproducible application of the drug-eluting layer onto the biologic matrix. Second, the integrated in-house approach is designed to support scalability, efficiency, and quality control. Third, we believe this process creates a meaningful competitive advantage.

The integrated process supports a targeted gross margin of above 80% at scale. An 80%+ gross margin gives us real pricing room against incumbent products that sell for between $7,500 to over $9,500 per breast while still delivering best-in-class margins. Said differently, NXT-41x is designed to compete both on outcomes and cost. That is a hard combination for an incumbent to respond to. Let me turn to commercialization, which I'm particularly excited about. Our commercial readiness work continues to increase our confidence in the market opportunity. Since joining Elutia, our Chief Commercial Officer, Pete Ligotti, has spent a substantial amount of time in the field speaking directly with surgeons and hospital stakeholders, and the feedback has been remarkably consistent. The clinical need is real, and it is significant.

Surgeons describe postoperative infection and downstream complications as one of the most frustrating challenges they face in breast reconstruction. Second, there remains a clear lack of meaningful innovation anywhere within this category. Third, the commercial opportunity appears to be highly concentrated. Look at this funnel. As we discussed, the U.S. breast reconstruction market is $1.5 billion. There are about 168,000 procedures performed last year. About 1,800 U.S. hospitals perform reconstruction, but only 585 of those hospitals account for 3/4 of the entire market. The top 50 centers alone represent over $300 million in spend. Here's the insight. This is a billion-dollar-plus U.S. market. The real volume is concentrated at a few hundred hospitals.

This is not a market that requires thousands of accounts or a massive sales infrastructure to establish meaningful penetration. We believe targeted engagement with high-volume centers can create substantial leverage. That is exactly the team Pete is putting together. Before Matt walks you through the financials, let me briefly address our strategic process. As we have previously discussed, we continue to evaluate opportunities to further focus the company around NXT-41x and its platform. With SimpliDerm, interest is strong. The process is going well. SimpliDerm is a high-quality business, $2.1 million in revenue in this quarter at a 57% gross margin. We have strong reimbursement coverage with approximately 100 million covered lives across UnitedHealthcare, Anthem, and nine regional plans. It has a differentiated patent-protected manufacturing process. Separately, we have received inbound acquisition interest in our related cardiovascular product line.

For context, that business did $1 million in revenue this quarter at an 85% gross margin. That's up from $300,000 just a year ago. These are strong products with differentiated clinical profiles and attractive gross margins. However, as we evaluate the company strategically, our priority is ensuring that capital, resources, and management attention are aligned with the largest long-term opportunity for value accretion, which is NXT-41x. We are gonna provide further updates on both processes as appropriate. Now, with that, I'd like to turn the call over to Matt.

Okay. Thanks, Randy. I'll begin with a review of our first quarter financial results from continuing operations, which exclude the divested BioEnvelope business that we sold to Boston Scientific in October of last year. Total net sales for the first quarter were $3.1 million compared to $3.0 million in the prior year period, growth of approximately 6% year-over-year. SimpliDerm revenue was $2.1 million compared to $2.6 million a year ago. Cardiovascular revenue was $1.0 million compared to $300,000 in the prior year period. The increase in cardiovascular was primarily driven by our return to direct distribution, also to improved procedural volume. Turning to profitability, GAAP gross margin for the quarter was 58% compared to 47% in the prior year period.

Adjusted gross margin, which excludes amortization of acquired intangible assets, was 67% compared to 56%. The year-over-year improvement reflects favorable product mix and price improvements. Total operating expenses were $8.2 million, essentially flat year-over-year. Inside that number, we reallocated meaningfully. Litigation costs declined by approximately $2 million as we worked through legacy matters. We redeployed that capacity to achieve the substantial R&D progress and commercial readiness for NXT-41x. Net loss for the quarter was $7.5 million compared to a net loss of $3.9 million in the prior year period. Adjusted EBITDA was a loss of $4.4 million compared to a loss of $2.8 million a year ago.

Importantly, the increase in net loss was driven primarily by non-cash items and other expense, specifically the revaluation of warrant liabilities and not by any deterioration in the underlying operating business. From a liquidity perspective, we ended the quarter with $28.5 million in cash on hand, plus the $8 million escrow associated with the BioEnvelope divestiture, which we expect to be released in the fourth quarter of this year. Combined, that represents approximately $36.5 million in cash and escrowed receivables. We believe our current capital position provides the resources necessary to support our planned regulatory and operational milestones. For shares outstanding at quarter end, the company had approximately 44.2 million common shares outstanding and 3.2 million pre-funded warrants, representing 47.4 million common equivalents outstanding. Now let's look ahead at the catalyst calendar.

We continue to actively work towards our strategic transactions, the SimpliDerm and cardiovascular processes that Randy discussed. Each of these would further bolster the balance sheet. We continue to anticipate NXT-41x FDA clearance in the fourth quarter of 2026, and in the first half of 2027, we anticipate FDA clearance of NXT-41x. In the second half of 2027, we anticipate commercialization and a focused NXT-41x soft launch. Overall, we believe the first quarter reflects continued execution against our strategic priorities. We are maintaining financial discipline while investing in the core capabilities required to support the NXT-41x opportunity. Now taking a step back, we believe Elutia today represents a unique combination of attributes. We have an established drug-eluting biomatrix platform.

We have prior experience successfully commercializing and monetizing products developed on this technology, most notably the sale of EluPro to Boston Scientific for $88 million. We have existing GMP manufacturing infrastructure that is now online. We have growing regulatory clarity from our productive dialogue with FDA, and we are pursuing a large market opportunity, $1.5 billion in the U.S., with a meaningful and well-documented unmet medical need. All the pieces are coming together, most importantly, we have a company capable of creating meaningful value for surgeons, for hospitals, for shareholders, and most importantly, for patients. We have the platform, we have the market, we have the team, and we have the resources to make it happen. Operator, we're now ready to open the line for questions.

Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. Please stand by while we compile the Q&A roster. First question comes from the line of Frank Takkinen of Lake Street Capital Markets. Your line is open, Frank.

Great. Thank you for taking the questions. Congrats on all the progress. Was hoping to start with one on the follow-up. I know you said you wouldn't divulge too much detail on it, but I'd be remiss if I didn't ask. Maybe how I will ask is, if I heard you correctly, you said incrementally more confident. Maybe the way for us to understand it is, no surprises with perhaps a more detailed roadmap for 41x. Is that a fair way to think about it and any other detail you would provide?

Yeah. The way I would describe it is, one, you know, anytime that you submit something to FDA, you submit to a particular, you know, a particular group. While it's the same regulatory pathway that we used with EluPro, we went from cardiovascular with EluPro over to plastic and reconstructive surgery. What we found with the review team in plastic reconstructive surgery, which is unique than the one in cardiovascular, is a group that is significantly more collaborative and engaging and very proactive in the review process.

Given how sort of early on we are in the review, we've had a tremendous amount of dialogue back and forth, substantive communication, direct communication with the agency on this, not just the perfunctory type of, you know, letters and initial things that might go back and forth at this stage, but real serious, meaningful conversations in a productive and collaborative fashion. That's obviously, you know, been helpful in 41 and 41 is moving along, you know, the way we anticipated 41 would move along. Sort of keep in mind as we do, I would hope, Frank, that our eye is actually on the prize, and the prize is 41x.

What we're really doing with 41 is making sure that our 41x submission is the highest quality submission we can have it, that it's on time, and most importantly, that 41x gets approved when we anticipate it. The interactions we've had so far in the 41 process have given us a lot of confidence in where we're going with 41x. I hope that adds sort of the color and commentary around what's going on.

No, that's perfect. I appreciate that very much. Maybe on the some of the new commercial comments, thanks for that color. It's very educational. I was hoping to ask about maybe a question that's a little bit too far out right now to be thinking about, but I'm sure you're starting to sketch it up. How do you think about rep hiring? Obviously a very concentrated call point. I think in the past you've used a hybrid of kinda internal as well as 1099s. Maybe talking about that split and when do you start to bring on some of that early talent.

Right. It's certainly a little too early to lay out the full plan. We'll be doing that more now that, now that Pete's on. I do have a couple of comments on it. You know, the first one of the thing Pete's doing is Pete's doing a really nice job of going out and assessing the market both qualitatively and quantitatively, Frank. I mean, it's when you bring a sophisticated guy in-house, right? This is what they do. Quantitatively it's great to know, hey, what's the actual infection rate? Where, you know, where are all the procedures done? How, you know, what are the kinds of infections and complications are they seeing at different hospitals and centers and things like that.

The qualitative side of it is, what do the surgeons think is going on? I mean, there's, you know, anyone that's spent any time with a surgeon is their perception of the problem can oftentimes be very different than the actual problem. The gap between those two is actually where the real marketing plan and genius and opportunity come about and take shape. What we're seeing and what Pete's already uncovered is, when you start looking at the high concentration centers, I think it was 585 account for 75% of the market. Even that ends up being super concentrated, we have $300 million of market opportunity in just 50 accounts. Right? I mean, let's put that into perspective with what we did with EluPro.

We took 12 direct reps with EluPro, paired them up with a handful of 1099s, and in nine months they activated 193 VAC accounts, right? Through submission in 193 accounts. That would be like, I don't know, a $500 million dollars of market opportunity in breast reconstruction, right? It's absolutely incredible what's going on here. Just to go on, I get really excited about this, as you can tell, Frank. Another thing that Pete's uncovered is, if you look at the postoperative complications that are happening, and we mentioned in the press release that he's confirmed, you know, the sort of the market size, and this concentration effect that we're seeing, but also the severity.

It's really interesting because when you look at the complication rates of these high volume centers, they are really high. You know, you're looking easily at 30% complication rates at these high volume centers. It's kinda nice that, you know, the earliest places to go to get some big wins are actually also the ones that need the most help. Intuitively, if you sort of think about it, that's not too surprising because these are the big centers where people are getting referred with the more complicated cases that are, you know, that have the comorbidities that lead to infection, that require the more radical mastectomies, that, you know, and all of those factors that lead to postoperative infection. It's really gratifying to see it come together.

We will have more just to go back to your actual question, Frank. We will have more on the launch structure coming up. I think probably by the next conference call we'll be laying that out a little more clearly with a little more sophistication. Boy, in 60 days, the man has hit the ground running and has, you know, confirmed what we know and then has taken it really to the, to the next level with this. It's super exciting, particularly when you put it in the context of what we were able to accomplish with little old EluPro. Now you talk about game-changing 41x and, you know, we can't wait.

Very helpful. Maybe on just my last one. How do you think about maybe timelines around SimpliDerm and cardiovascular understanding? It's always challenging to predict, but any wide goalposts you'd provide?

Well, you know, we started the SimpliDerm process. You know, we announced that on our last on our last call. Interest was very robust. I think we had something like 38 targets engaged in it. I would say we have confidence. We have pretty good confidence that a transaction is coming together. Frank, I just you know, it's like, it's like, you know, trying to trying to pick the final four or enrollment in the clinical trial, like trying to time, you know, when a deal like a, you know, a divestiture is gonna happen just leads to bad promises and expectations. I will say we are very pleased with how the SimpliDerm process is going.

We're looking, you know, for a high quality deal and we think we're on track to get one. You know, until it's, until it's done, it's not done. On the cardiovascular side, there was pretty much just a lot of surprise from the upside because we got actually a number of inbound requests on the cardiovascular side, and there's high quality interest in that product as well. As we think about strategic positioning of the company, and you could probably tell, right? We are really convinced in the 41x opportunity that lies ahead.

You know, not just the capital that this would add to our balance sheet and strengthen our balance sheet even further than where it is, but also the strategic focus and the alignment and the management attention and all of those other things. These are two great product lines that are used surgically every day, and patients benefit from them any day, every day. They're just not where we're going as a company. It will-- I think both of these will have a meaningful impact to our, to our, you know, to our balance sheet and to our, and to our strategic focus. Did that help?

Yep, very helpful. Thank you. I appreciate the color as always.

All right, then.

Thank you. Ladies and gentlemen, that does end our Q&A session and concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, everyone, and welcome to Elutia Inc. Fourth Quarter 2025 Financial Results Call. At this time, all participants are in a listen-only mode. After this presentation, there will be a question-and-answer session. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 11 again. Please note this conference is being recorded. Now it is my pleasure to turn the call over to Sonali Fonseca. Please proceed.

Thank you, operator, and thank you all for participating in today’s call. Earlier today, Elutia Inc. released financial results for the fourth quarter and full year ended 12/31/2025. A copy of the press release is available on the company’s website. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. All statements contained in this call that do not relate to matters of historical fact or relate to expectations, predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including, without limitation, those relating to our operating trends and future financial performance, are based upon our current estimates and various assumptions. These statements include material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For lists and descriptions of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the SEC, including Elutia Inc.’s Annual Report on Form 10-K for the year ended 12/31/2024, and in our subsequent periodic reports on Forms 10-Q and 10-K, accessible on the SEC website at www.sec.gov. Such factors may be updated from time to time in Elutia Inc.’s other filings with the SEC. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, 03/11/2026. Elutia Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements because of new information, future events, or otherwise. Also, during this presentation, we refer to gross margin excluding intangible asset amortization, which is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is available in the company’s financial results release for the fourth quarter and full year ended 12/31/2025, which is accessible on the SEC’s website and posted on the investors page of the Elutia Inc. website at investors.elutia.com. With that, I will turn the call over to Elutia Inc. CEO, Randy Mills.

Thank you, Sonali. Good evening, and welcome to our fourth quarter 2025 earnings call, from our Gaithersburg, Maryland facility, and I am super glad to be here. Wherever you are, however you may be listening, welcome. We are super glad to have you. I am going to try to keep my comments brief tonight, but on that point, you know I may fail. We have so many exciting things going on in Elutia Inc. right now, and I am eager to share them with you. With that, let us just jump in. Here is a forward-looking statement slide that basically says what Sonali just said. And then really quickly on our conference call, so what is on the agenda today? We are going to go over some of the basics. You may have heard this, but we also have a lot of new callers on the call today, so be patient as we go over things like our mission and what we are good at, where we are headed as a company. We made a couple of announcements in that press release that are kind of important, and so we will be updating some of those things there. Matt is going to then talk about finance topics. And then lastly, we will close the call and take your questions. So let us start out with our mission. Humanizing medicine so patients can thrive without compromise. Humanizing medicine. Humanizing medicine. Every 98 seconds, a woman in this country is diagnosed with an invasive form of breast cancer. That means even if I keep my remarks short today, there will be 18 new cases diagnosed during this call. Three of those are going to die during this call. Ten will have breast reconstruction. And three are going to have a serious complication from that surgery. Who are these people? These are our mothers. These are our wives. These are our friends. And our daughters. You know them. That is humanizing medicine. I am looking around this room right now at a group of brilliant overworked, tired professionals. And the look on every one of their faces is the same. Randy, let us go get at this. So why do we think we can fix this appalling problem? Well, let us look at what we are good at. What we are great at, actually. We are great at combining an optimal biological matrix, and we use the biological matrix to hold an implant in place and regenerate into the patient’s own healthy tissue. That is an essential part of the surgery. But what we do that no one else does is we combine that with powerful antibiotics for sustained antibiotic release that prevents infection and these other complications that we are talking about. Infection is the number one complication of surgery, period. And we have the ability to significantly reduce it. And this is not theoretical. Right? We have already done this. LU Pro, we launched in January. We got it through a 194 VACs in nine months. We got it up to an $18 million run rate because physicians loved it. And most importantly, it worked. So that is what we are doing with 41X in breast reconstruction. We cannot do this without an incredible team and I am super pleased to announce that we have done a great job adding some serious horsepower to our team this last quarter. I would like to welcome Guido Nils as our new board member. He is an operating partner at Edsburg Woodlands and the former Chief Operating Officer of Guiding Corporation. He is also, importantly, a longtime friend and mentor of mine. And we are blessed to have him join the team. I would also like to welcome Pete Ligotti as our new Chief Commercial Officer. Pete joins us with a brilliant 30-year career, including 20 years at Integra. Some more time at NuVasive where he ran a successful business. He is going to be coming in here, and he is going to be spearheading our commercial efforts as we move towards the launch and commercialization of 41X. Welcome to both of these gentlemen, to the Elutia Inc. crew. Okay. So where are we headed? I want to be really clear about all this so everybody understands. We are going to solve a really big problem that exists right down in breast reconstruction, and why this is such a transformational opportunity for us really comes at the intersection of three things. One is, it is a really big market. It is a really big market, and that matters. Breast reconstruction is a $1.5 billion market. But it is also a really big market that is facing an enormous problem. As I said, 15% to 20% of breast reconstruction patients will develop a serious postoperative infection. It is just unacceptable. We can do better. We have to do better. And the good news is that our technology platform is almost purpose built for this specific problem. Our first FDA-cleared drug-eluting bioenvelope turns out to be a really, really great way of addressing breast reconstruction infection. And so that is what we are going to do. So digging in here a little bit, breast reconstruction is a really big market. There are 102,000 breasts reconstructed after mastectomy annually. That means there are a lot of biological meshes that are already being used. Biological meshes are already used in 90% of these surgeries. So what does that mean? It means we do not have to train a surgeon on some brand-new technology to solve their problem. We just take a technology that they are used to, that they are familiar with using, and make it much better so it solves their number one problem. Human ADMs, human acellular dermal products lead this market and they are expensive. We are talking about $7,500 to $9,500 per breast. That makes them 65% or more of the total implant spend during a breast reconstruction procedure. So this is a really, really big market. But it is a market that confronts some very unique challenges. When I talk about the postoperative infection rate being 15% to 20%, people look at me and think, oh, that just could not be. It is. It definitively is. I want to explain just a little bit about why we see such high infection. And I am not going to go through all the slides. Some of you may have seen this. I have a longer series on this. But I do want to show you what is really at the root of this. So in a mastectomy, all of the breast tissue has to get removed. If all of the breast tissue is not removed, the woman’s mastectomy is not complete and they have to go through follow-up and surveillance and mammograms and other types of things and still have the risk for redeveloping breast cancer. So all of this tissue has to be removed. Well, one of the things that you should sort of know about breast tissue is that the blood supply for the anterior, or the front, side of the breast all goes through this breast tissue that has to get cut out. And so when a mastectomy is done and that tissue is removed, the blood vessels and therefore the blood supply for the front half of the breast is removed with it, and that closes off that blood supply. And what does that do? Well, that creates a situation where you have an area of the body that your blood flow cannot reach, where your immune system cannot readily reach, and very importantly, where postoperative antibiotics cannot reach. You can give somebody oral antibiotics or you can give somebody IV antibiotics, but if they do not have a vasculature to a particular area, those antibiotics are not going to flow there. And this is what sets up the very unique problem that we see in breast reconstruction. And that is what leads to these exceedingly high infection rates. As I said, one in three women suffer a serious complication, but 15% to 20% experience infection. This is not one paper. This is not some esoteric citing. This is the registry. This is what all of the data says. In fact, put it into real specific numbers. The registry data says it is 12% to 37%. You want to put the real numbers about it. So when we say 15% to 20%, we are not exaggerating. On that number, if anything, we are being conservative. And this is validated every time we go out and talk, particularly with the academic centers where they really track these numbers very, very closely. That leads up to one in five implant loss, so they have to go back and this whole thing comes out. It leads to a massive economic burden for the hospital, a $48,000 economic burden to the hospital. So the hospital certainly should be highly motivated to address this problem. But I just want to keep in mind and go through our mission here in humanized medicine. We are also talking about a woman that started this journey because she was diagnosed with cancer. Not an augmentation. She was diagnosed with cancer. And the number one goal in that woman’s mind is curing herself from that cancer. And that involves chemotherapy. It involves surgery. It involves radiation sometimes. And when an infection pops up, all of that stops. None of that can go on until that infection is resolved. And so this is a significant problem on so many different fronts. And it is one that, if you cannot tell, we are very, very passionate and committed to solving. So the great thing about this anatomical problem that is set up during the mastectomy is it kind of creates a perfect environment for what we do. So what if we flip the script on this and instead of trying to deliver this antibiotic systemically, we delivered it locally. We actually delivered it where the breast implant and the drain are, through the mesh, which is naturally there anyway to hold the implant in place. Well, the exact opposite would happen. Instead of concentrations being very, very low of antibiotic, the concentrations would be very high. And they would stay high for a long period of time. And then the best part, they would not have any systemic effects. So you could have high therapeutic concentrations of antibiotics right there in the breast site without any of these systemic side effects that you sometimes get when you deliver systemic antibiotics. And this was the concept that we started out with a very long time ago. This was the premise behind EluPro, and when we started using EluPro in humans, we saw it was completely valid. And then we got more data on this specifically in breast reconstruction. So there is some really great data out there on what happens if you deliver antibiotics locally into the breast reconstruction spacers. Two different studies particularly that I will reference here. One of them uses a plaster antibiotic plate. Now that does not sound like a great way to treat a woman who is undergoing breast reconstruction, to put a piece of plaster in her breast. But when the risk of postoperative infection is 15% to 20%, desperate times call for some pretty desperate measures. So they gave this a shot. They impregnated this plaster with this antibiotic and they looked at it in just the general breast reconstruction population. What they saw was a 62% reduction in infection risk. We are talking about going from 12.6% to 4.8%. This is not a small study. We are talking about an n of 593 patients in here. So a significant proof of concept that if you deliver these antibiotics locally, you can do a really, really good job of preventing infection. Another version of this was tried, but in a much, much higher-risk setting. Here, what they were looking at is instead of using these big plates, they used these little plaster beads. Again, they are this plaster material. And they put those into the breast cavity. What they were looking at here were women who had very, very poor, in fact pathologically poor, blood flow to the anterior side of the breast, something we call mastectomy skin necrosis. And this is where there is just literally no blood supply to the front part of the breast, and that front sort of breast tissue starts to die. When that happens, your risk of infection skyrockets. And so here, they saw an 82% reduction in infection. We are talking about going from 36% down to 6%. Again, n of 75 here. You might say, well, I guess maybe this problem is solved. Not really. Even the authors, and these are friends and champions of Elutia Inc. who were behind these studies, will tell you this is a suboptimal solution to a very serious problem. No woman likes that plaster put in there. No plastic surgeon wants to make antibiotic beads off-label in the back part of their surgical center. They do not stay in place. They drop down into the inferior side and into the gutters of the breast. They do not provide uniform coverage, and they elute the antibiotic way, way, way too quickly. But it did show that this concept definitively works. And that is why we created NXT 41X. We are combining these powerful antibiotics, rifampin and minocycline. So these are antibiotics that specifically target the pathogens we know we see in breast infection. And it delivers them in a uniform field for an extended period of time. It might be 30 days. Wow. What is this 30 days about? The drains that are placed at the time of surgery stay in 17 days. And so you want a couple of weeks of extra coverage. That is what that is about. And we combine these powerful sustained antibiotics with an optimal biologic matrix. And that matrix I will refer to as 41. It is just the matrix by itself. And we put those two things together and we made something purpose built for the problem that we are trying to solve, which is postoperative infection in breast cancer surgery. So let us talk about the roadmap and how do we get from here to there. Right now, we have SimpliDerm, which I am going to talk about in just a second, but that is our current product that is used in the breast reconstruction space. It gives us a lot of practical, on-the-floor experience in this space. The real excitement starts with 41 and 41X. So 41 is our base matrix. So when I say NXT 41, I am talking about just the biological matrix alone, without antibiotic. It is a phenomenal matrix in its own right. If we were not a drug-eluting biologics company, we would be talking about this incredible NXT 41, but we cannot leave good enough alone, primarily because it does not solve the biggest problem in breast reconstruction. But what we do is we use 41, from a regulatory standpoint, to set the foundation for 41X. We announced today that we have already submitted to FDA NXT 41. Let me just sort of pause and reality check everybody. We know we are going to get questions from FDA. We know we are going to need to respond to them thoughtfully and professionally, and we know that is probably going to take a little while. So let us be patient. Let us give our incredible R&D team the time to do the professional job they need. If something significant happens, I promise we will update you on it. In the meantime, we expect clearance sometime in 2026 for 41. And that will serve as the platform for NXT 41X, which is the base matrix combined with the rifampin and minocycline. And if we put the timelines together, we expect clearance for NXT 41X towards the end of the first half of 2027. So we are looking at a second-half launch of that product. Okay. What is going on inside the company? Well, you can sort of divide it up into three major workstreams. The first one is obviously development. No surprise here. That group is focused pretty heavily on the approval of a highly differentiated product that significantly improves outcomes in plastic and reconstructive surgery. That starts with our 41 base matrix and rolls seamlessly into our 41X drug-eluting matrix. I said we are here in our beautiful Gaithersburg facility. Well, that allows me to introduce manufacturing, because this is our manufacturing facility here, where we have enough capacity to make 41X for the foreseeable future. I think we have something like $120 million in revenue-generating capacity for 41X with just one shift right now. We have this great manufacturing facility. And then, basically, I could sum up manufacturing’s job right now into two things. One, ensuring adequate supply of perfect quality tissue. And two, driving down cost of goods. So that is what they are working on. And then lastly, we now have Pete Ligotti coming in and heading commercial, building these KOL partnerships. I am going to tell you, we do not have a problem getting a meeting and building strong relationships with our KOLs. We have, and are continuing to build, a very robust KOL team of champions. And there is really no secret to it. We are able to do it not because we have great personalities, but because we are addressing their number one problem and the number one problem that their patients are facing right now. In addition to that, Pete is working on developing health economic models, obviously spending a lot of time on reimbursement strategies, and generally preparing for launch readiness of 41X. So now let us turn a little bit to SimpliDerm. We are exploring SimpliDerm strategic options. We announced that in the press release today. You might ask, well, why now? Well, we have gotten to the point where our confidence with the 41X program really dictates that this is now the time for us to focus all of our time, all of our resources, all of our energy on making sure we do a great job with that platform. SimpliDerm is a great product, and whoever gets this asset is going to get a really, really wonderful product. Acellular dermal matrix that is used in soft tissue reconstruction. It has great handling. It is sterile. It is hydrated and ready to use, which is what the plastic surgeons want. 100 million lives covered is a big deal. Some people think they could introduce their own acellular dermal product really quickly and just get it on the market. It turns out reimbursement in the acellular dermal matrix market is a really big deal. So we have 100 million lives covered across two of the largest payers, Anthem and UnitedHealthcare, as well as nine regional plans. Patent protected, obviously. It is completely standalone. So for us, it is a completely segregable business that does not cause any disruption. And whoever gets it, it is EBITDA accretive. So no incremental capital investment is required. It is really a beautiful plug-and-play technology. We will keep you updated on this, and we will see how that process goes. Lastly, I would not be able to say any of the great things that I am saying today, and we would not have been able to make any of the progress that we are making, without our incredible Elutia Inc. crew. We are proud to be recognized for something we already knew. Elutia Inc. is a great place to work, and we were certified by the Great Place to Work certification. The results, I thought when I saw them, I was really proud. It proved we are a mission-driven organization. We are also a merit-driven organization. 54% women, 62% of our leadership roles are occupied by women. 50% have advanced degrees. We are a brilliant group. Not me. But the team. An entire third of our organization has a doctorate. And we are a committed group. Our average tenure, 6.3 years. The advantages, if you are wondering, so what is the advantage of this Great Place to Work certification? Well, the certification is kind of nice. I guess you can hang it on the wall. But what it means is that, compared to our noncertified peer competitors, we tend to outperform on financial metrics by fourfold. We are able to attract job seekers because of the Great Place to Work certification with a 15 times higher attractiveness, and our turnover of certified workforces is about half that of the regular U.S. workplace. So I am going to end my comments there by thanking this tremendous team for frankly making my job such a joy. And with that, I will stop talking, and I will turn it over to Matt Ferguson.

Okay. Thank you, Randy. And before I start my remarks, I would just like to say I so appreciate the passion and the leadership that you brought to the organization, and I support all of the comments that you just made about our mission and our market, our opportunity, and probably most importantly, our team. And with that, we put out our earnings press release today with quite a bit of detail in it, and we will put out our 10-K in a couple of days. That will have even more detail in it. So I am just going to hit a few highlights and not take very long here. But moving into a summary of our fourth quarter financial results, from a revenue perspective, we did $3.3 million in revenue, and that compares to $2.8 million in the year-ago quarter. That is up 16%. So we were very pleased with that performance. That was really driven by the return to direct distribution for both our cardiovascular and our SimpliDerm product lines, as we have talked about. The return to direct distribution has also had a very positive effect on our gross margins. So on an adjusted basis, which is probably the better indication of how things are really performing from a business perspective, we had an adjusted gross margin for the fourth quarter of 66.8%. That was up 12 points from the prior-year quarter, when it was 56.5%. So really nice results there. Our net loss from continuing operations, so that is excluding the bioenvelope business that was divested on October 1, was $6.5 million, versus $7.2 million a year ago. And then probably a more relevant metric in terms of our operating performance, our adjusted EBITDA, which is a non-GAAP metric but excludes certain noncash, nonrecurring, noncore operational metrics, was a loss of $4.2 million in the quarter compared to $3.4 million in the year-ago quarter. On our balance sheet, a lot has changed in the last quarter. As you know, our total cash on hand plus the $8 million that we have in escrow is $44.4 million. So it puts us in a really nice position from an overall cash point of view. That is after having paid off all of our debt with SWK that took place at the beginning of the fourth quarter as well. That was about $28 million that went to pay off that debt. And then just from a share count point of view, we have 42.8 million common shares outstanding as of the end of the year. In addition to that, there are 4.5 million pre-funded warrants that are outstanding, so a total of 47.3 million. And all of those common shares outstanding now are Class A common shares. So what that means is that all of our Class B common shares, which were held by one entity, were converted during the quarter and sold into the market. So that, as you know, is essentially an overhang that is gone now, and we are very pleased to get that behind us. One of the effects that we have seen as that has gotten behind us is that we recently came back into compliance with all of Nasdaq continued listing requirements. We put out that release at the beginning of last week, and I would just like to thank all of our investors out there who have put their trust and their capital into Elutia Inc. and helped support that return to compliance there. So moving on, just to take a step back and at a big-picture level, 2025, and really all of 2025, represented a real strategic reset for the company. And the biggest event in that really was the $88 million sale of our bioenvelope business to Boston Scientific, which, again, allowed us to pay off all of our outstanding senior debt to SWK, left us with $44.4 million of cash on the balance sheet and in escrow that will come in later this year, and it really allows us to be completely focused and extremely well resourced for the continued development and the launch of NXT 41, which we truly believe will be transformational in the market starting next year. So I guess with that, the last thing I would like to mention is just that we have tried to be very active in getting this story out, which we truly believe in. We have been active in getting it out to investors, and we are going to continue to do that. We have two conferences coming up in the next couple of months. The first will be just next week, the Sidoti Small Cap Conference, which is an online conference, and then in May, we have the LD Micro Conference, which is a live conference in Los Angeles. So if any of you are attending those events, we would very much love to meet with you there. So with that, in summary, before turning it over to questions, I would just like to reiterate the three key points of our story. We have a validated technology platform, as has been proven by the sale of our EluPro product and our bioenvelope business last quarter to Boston Scientific for $88 million. We have a truly blockbuster pipeline underway, which is really starting with NXT 41 and a $1.5 billion market. And then we are in a great position from a resource point of view. We have a fantastic team. We have a great facility that we are sitting in here today. And we have a strong balance sheet, which will take us through that approval and into commercialization. So with that, I will open it up to questions, and back to you, Operator, to start that off. Thanks.

Thank you so much. We will now open for questions. As a reminder, to ask a question, simply press 11 to get in the queue and wait for your name to be announced. To remove yourself, press 11 again. We have a question from the line of Frank Takkinen with Lake Street Capital Markets. Please proceed.

Great. Thanks for taking the questions. Congrats on all the progress. Congrats on 41 submission to the FDA. I was hoping to start with a few questions around that. I know it is a question along the lines of trying to predict the unpredictable, but as you are working internally, what kind of questions are you preparing for from the FDA, and how do you think about the challenges you might have to go through to get it to market, or if it should be a relatively streamlined process? And then secondly, once you do get 41 across the goal line, how quickly can you shift the filing to 41X and resubmit?

Okay. I am just making some notes, Frank. So, Frank, thanks for the questions. I think everyone should view the review process and respect the review process the way we do. The timelines that we have laid out for clearance are fairly conservative. And they are fairly conservative because we want to make sure that we do a really professional job. Now I would say, first and foremost, we submit a high-quality application with everything in it that we think is necessary for a clearance. We do retain a lot of backup data and supporting data on all the necessary points. But as a matter of sort of regulatory strategy and best practices in regulatory science, you do not over answer a question with FDA. You just be prepared to explain the rationale for the things that you did answer. And so that is really the strategy that we have going on. There is no question that biocompatibility for a product like this is a big question in mind, and a big focus right now in the Food and Drug Administration. We know that. We feel pretty good about our product there. We know that when we get into 41X, if we just remember back to the days from EluPro, that things like in vitro elution were a real big point with them. You probably remember the IVE days, Frank. And so we are prepared for any and all of it, but we are prepared for it in a very humble and respectful way. And that is the timelines we have set up that have that in place. And I would just sort of encourage everyone to just keep that in mind. I would not be pulling forward any timelines until we tell you that is probably a good idea. With regards to how fast we roll into 41X, I would say just to keep in mind the whole purpose of 41 is to improve the efficiency of 41X. We have no intention of commercializing 41. It is not a drug-eluting matrix, and so it does not fit with our high-level thesis. So, really, the only reason that we are doing it is for regulatory efficiency. And therefore, the team will learn from the 41 submission. They will call any audibles that they need to as a result of what we learned from the 41 submission. But clearly, their plan is to go pretty efficiently from 41 into 41X. And if at any point we think that that might not, that 41 might no longer serve that purpose, well then we might change the plan. Right? Even pull forward a 41X submission. But right now, we anticipate, in the timelines, an approval pretty efficiently after 41.

Got it. Very helpful color. I was hoping to ask a little bit more about commercial. Appreciate some of the comments you made there. But kind of related to SimpliDerm, I think we have talked about just having experience in that space via SimpliDerm could help the commercial readiness of the organization once 41X is approved. How do you think about balancing that readiness that SimpliDerm could have helped with versus the strategic process? And then at the same time, what are you maybe doing from a commercial readiness perspective in light of that transition that is occurring?

Right. So, Frank, let us go through this with the three things that really help us get ready for 41X. One is just the base understanding of this market, how it works, and that includes the reimbursement. Right? So we have done that. We do know and we do understand how this current market works, how reimbursement works here, who the players are, literally the logistics of a breast reconstruction product. So we think we check that. You will remember, by far, the most important thing in the commercialization of EluPro was the value analysis committees, like the VACs. And I will be completely honest here. We learned more about how to do that with EluPro than probably we learned or are learning from SimpliDerm. My 194 VACs in the time that we did that, I mean, that was so key to the explosive growth of that product. And we feel, and we have a team that understands that. We know what to do from a VAC package standpoint. We feel pretty good about that. The third piece, though, was KOLs, and, you know, key opinion leaders and who are the thought leaders in this space. And here is, Frank, where our thought process has really flipped, and it really started flipping when we were able to go last October to the big plastics and breast meeting in New Orleans and just cold call some of these marquee leaders in the field of plastic and reconstructive surgery and say, hey, would you mind having a conversation with us? We are trying to develop a locally delivering biological matrix for breast reconstruction, you know, deliver antibiotic, try to prevent infection. Our dance card filled. And it filled with some of the brightest, strongest thought leaders in this space, and that continues to this day. We have no problem getting meetings with these KOLs and engaging in very meaningful, very enthusiastic conversations with them on how we can best design, build, and deliver a product that is exactly what we need. And so when that last piece sort of started to happen was when we sort of made the decision we are probably pretty good here and can start moving up, particularly with the progress the R&D team is making with the filings.

Yep. Yep. That is perfectly clear. I got it. One last I wanted to ask, Randy. Obviously, the data is really impressive with plate as well as the powder with 60% and 80% plus reductions. How do you think, and it is a speculative question, but how do you think NXT 41X could compare from an infection reduction perspective in relation to some of these other techniques that are being used today?

Yeah. We would be thrilled with a 50% reduction. Anyone would be thrilled with something like that. We have some advantages, though, over those techniques that are delivering those results. Those advantages are uniform distribution. So as I said, with the plates and the beads, those things have mass to them and they notoriously sort of fall down into the breast gutters and do not provide uniform coverage. The second thing is the teams that were doing that work know that antibiotic comes out of that real fast, and therefore it does not provide a particularly long-term coverage. We targeted this 30 days, and we targeted the 30 days because the drains come out at day 17, and if the drains are still in, particularly with this, there is a pistoning that can happen with the drains from the outside to the inside, you are constantly introducing and have the potential to introduce bacteria back into that surgical field. So we felt pretty strongly that you needed to have antibiotic coverage that persisted after the drains were pulled. So we feel like we have probably built a better solution than the ones you are seeing with these really fantastic results. I cannot knock what they are seeing. But I think I want to caution everyone here again to a little bit of humility and perspective. There is a percentage of these cases that have such severe necrosis. This is where the vasculature to the breast is so compromised that it does not matter what you would put in there. The tissue just dies. And in that case, we can add antibiotics all day long, but we are not going to prevent what ultimately is going to become something more like a gangrenous infection and the complications from those. And that is really just an unsolvable, at least at this time, consequence of the base mastectomy. So does that help?

Yeah. That is perfect. Appreciate the color. Thanks, guys.

Thank you so much. And ladies and gentlemen, this concludes our Q&A session and our conference for today. Thank you for participating. You may now disconnect.