Business context and reporting period
This is Aziyo Biologics, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2021—not an Elutia Inc. filing as indicated in the request metadata. Aziyo is a commercial-stage regenerative medicine company selling Core Products and contract-manufactured Non-Core Products.
Financial results and liquidity
Unless otherwise noted, amounts are in U.S. dollars.
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Net sales | $12.884 million | $9.863 million |
| Gross profit / margin | $6.329 million / 49.1% | $5.215 million / 52.9% |
| Operating loss | $3.699 million | $3.182 million |
| Net loss | $5.067 million | $4.560 million |
| Cash used in operating activities | $5.174 million | $3.038 million |
- Core Products generated $10.664 million of sales; Non-Core Products generated $2.220 million.
- Gross margin excluding acquired-intangible amortization, a non-GAAP measure, was 55.7%, versus 61.5%.
- At March 31, cash and restricted cash totaled $30.501 million; revolver availability was $4.5 million. Cash and restricted cash declined $9.031 million during the quarter.
- Debt included $19.8 million under the term loan, $3.45 million under the revolver, and $4.387 million of tissue-supplier and PPP loans. The revenue interest obligation was $19.381 million, including current and long-term portions. These are reported separately in the filing.
- Current assets were $51.908 million and current liabilities $24.771 million. Accumulated deficit was $85.326 million.
- Basic and diluted loss per share was $0.50 in 2021 and $7.03 in 2020; weighted-average shares differed substantially following the 2020 IPO and share restructuring.
Material changes versus the prior comparable period
- Sales rose 30.6%, driven by Core Products growth of 29.5% and Non-Core Products growth of 36.4%.
- Gross margin fell 3.8 percentage points, attributed mainly to product mix and lower product costs in the prior-year period.
- Operating expenses increased: sales and marketing by 4.9%, G&A by 38.3%, and R&D by 31.4%. G&A growth reflected public-company costs, including insurance, legal fees, and stock compensation.
- Net loss widened by $0.507 million, while operating cash use increased by $2.136 million.
Outlook, risks and unusual items
- Management expects operating losses to continue and says IPO proceeds, cash, revolver availability, and expected sales should fund operating and capital needs through 2022. The filing cautions that assumptions may prove incorrect and additional funding may be needed; profitability timing is uncertain.
- COVID-19-related procedure cancellations, facility restrictions, and limits on sales representatives’ access to procedures continued to pose risks to sales and operations.
- The company reported seasonal sales patterns, typically lower in the first quarter and higher in the fourth quarter.
- The term loan’s interest-only period was extended; principal amortization was scheduled to begin August 1, 2021, with maturity in July 2024. The company reported compliance with its minimum net product revenue covenant at March 31.
- Approximately $3.0 million of PPP borrowing remained recorded as debt while forgiveness was under review; repayment commencement was deferred pending the SBA’s evaluation.
- Ligand’s revenue interest obligation requires annual minimum payments of $2.75 million and sales-based payments on specified products. No change in estimated future payments was recorded in the quarter.
- Management reported no material legal proceedings, no material changes to previously disclosed risk factors, and effective disclosure controls.
Important facts for investors to verify
- Confirm the filing’s issuer: the supplied text identifies Aziyo Biologics, Inc. (ticker AZYO), not Elutia Inc.
- Review sales growth and gross-margin deterioration, including the product mix and the sustainability of Core Product and contract-manufacturing demand.
- Track cash burn, revolver availability, upcoming term-loan amortization, and whether management’s stated funding runway through 2022 remains supportable.
- Check the outcome of the PPP forgiveness application and the continuing cost of the Ligand revenue interest obligation.
- Assess the effects of pandemic-related procedure disruptions, commercial-partner dependence, and seasonal demand.