Elutia Announces $13.26 Million Registered Direct Offering

Rhea-AI Summary

Elutia has announced a $13.26 million registered direct offering, agreeing to sell 3,175,000 shares of its Class A common stock at $3.40 per share, and 725,000 prefunded warrants at $3.399 per warrant. The prefunded warrants are immediately exercisable at an exercise price of $0.001 per warrant. The gross proceeds, expected to be $13.26 million, will be used for working capital and general corporate purposes. The offering, managed by Lake Street Capital Markets, is set to close around June 18, 2024, pending customary conditions. The securities are offered under an effective SEC shelf registration statement.

Positive

• Elutia is raising $13.26 million, which can enhance its working capital and support general corporate purposes.
• The offering is priced at $3.40 per share, which may indicate confidence in the current stock valuation.
• Prefunded warrants are immediately exercisable, potentially providing additional liquidity quickly.
• The offering is supported by Lake Street Capital Markets, a reputable placement agent.

Negative

• Issuance of 3,175,000 shares and 725,000 prefunded warrants could lead to shareholder dilution.
• The offering expenses and placement agent fees will reduce the net proceeds received by the company.
• The company's reliance on raising funds through equity offerings may indicate cash flow or liquidity concerns.

Insights

Financial Analyst

This news represents a significant capital-raising event for Elutia Inc., amounting to approximately $13.26 million in gross proceeds. A capital raise of this magnitude can have several implications for the company's financial health and strategy. In the short term, the infusion of capital can bolster the company's working capital—the funds necessary for day-to-day operations—thereby providing a cushion against any cash flow constraints.

However, for retail investors, it's essential to consider the potential dilution of existing shares. The issuance of new shares and prefunded warrants increases the total number of shares outstanding, which can dilute the value of existing shares. Investors should also note the very low exercise price of the prefunded warrants ($0.001), which suggests a high likelihood of these warrants being exercised, further increasing the share count.

Long-term, the use of these funds for general corporate purposes can be beneficial if the company's management uses the capital wisely to invest in growth initiatives or to strengthen the balance sheet. Nevertheless, the exact impact will depend on how efficiently and effectively the capital is deployed. Investors should monitor subsequent financial reports and strategic announcements to gauge the actual benefit derived from this capital raise.

Market Research Analyst

From a market perspective, this capital raise signals that Elutia might be gearing up for significant operational or strategic actions. Raising $13.26 million through a direct offering, particularly at a modest discount to the market price, indicates strong investor interest and confidence in the company's future prospects.

The use of Lake Street Capital Markets, LLC as the exclusive placement agent suggests that the company is leveraging established relationships to attract institutional investors, which is generally a positive sign. Institutional participation often brings a level of stability and long-term support to the stock.

Retail investors should be wary of the potential short-term volatility typically associated with such offerings. Historically, stocks can experience pressure post-offering as the market digests the increased share count. Nonetheless, if the raised funds are strategically deployed, this can set the stage for future growth, making the stock potentially more attractive in the long run.

SILVER SPRING, Md., June 17, 2024 (GLOBE NEWSWIRE) -- Elutia Inc. (Nasdaq: ELUT) (“Elutia” or the “Company”) today announced it has entered into a definitive agreement with investors for the purchase and sale of 3,175,000 shares of the Company’s Class A common stock at a purchase price of $3.40 per share and 725,000 prefunded warrants to purchase up to 725,000 shares of the Company’s Class A common stock at a purchase price of $3.399 per prefunded warrant in a registered direct offering. The prefunded warrants are immediately exercisable at an exercise price of $0.001 per each prefunded warrant. The gross proceeds to Elutia from the offering are expected to be approximately $13.26 million, before deducting placement agent fees and other offering expenses payable by Elutia. The offering is expected to close on or about June 18, 2024, subject to customary closing conditions.

Lake Street Capital Markets, LLC is acting as the exclusive placement agent for the offering.

Elutia intends to use the proceeds from the proposed offering for working capital and other general corporate purposes.

The securities are being offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-267197) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on September 8, 2022. The offering of such securities is being made only by means of a prospectus supplement that forms a part of the registration statement. Copies of the prospectus supplement and accompanying base prospectus will be filed with the SEC and will be available free of charge on the SEC's website at http://sec.gov. Electronic copies of the prospectus supplement and accompanying base prospectus may also be obtained, when available, from Lake Street Capital Markets, LLC at 920 Second Avenue South, Unit 700, Minneapolis, MN 55402, or e-mail at prospectus@lakestreetcm.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Elutia

Elutia develops and commercializes drug-eluting biomatrix products to improve compatibility between medical devices and the patients who need them. With a growing population in need of implantable technologies, Elutia’s mission is humanizing medicine so patients can thrive without compromise.

Forward-Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the completion of the Company’s offering and the anticipated use of proceeds therefrom. These statements are based on the Company’s current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements here due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties, including those set forth in the Company’s filings with the SEC. The forward-looking statements in this press release speak only as of the date of this press release. The Company does not undertake any obligation to update or revise these forward-looking statements for any reason, except as required by law.

Contact:
Elutia, Inc.
IR@elutia.com

FAQ

What is the total amount raised by Elutia in the direct offering?

Elutia is raising approximately $13.26 million from the direct offering.

At what price is Elutia selling its Class A common stock in the offering?

Elutia is selling its Class A common stock at $3.40 per share.

How many shares and prefunded warrants is Elutia issuing in the offering?

Elutia is issuing 3,175,000 shares of Class A common stock and 725,000 prefunded warrants.

When is Elutia's offering expected to close?

Elutia's offering is expected to close on or about June 18, 2024.

What will Elutia use the proceeds from the offering for?

Elutia will use the proceeds for working capital and other general corporate purposes.

What is the ticker symbol for Elutia?

The ticker symbol for Elutia is ELUT.