ELUTIA INC. Fair Value Disclosure
Note 12. Fair Value Measurements
The following tables set 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, 2024 Using: | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: | ||||||||||||
Money market fund | $ | 10,850 | $ | — | $ | — | $ | 10,850 | ||||
Total | $ | 10,850 | $ | — | $ | — | $ | 10,850 | ||||
Liabilities: | ||||||||||||
Warrant liability | $ | — | $ | 16,076 | $ | — | $ | 16,076 | ||||
Total | $ | — | $ | 16,076 | $ | — | $ | 16,076 | ||||
Fair Value Measurements at December 31, 2025 Using: | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: | ||||||||||||
Money market fund | $ | 32,786 | $ | — | $ | — | $ | 32,786 | ||||
Total | $ | 32,786 | $ | — | $ | — | $ | 32,786 | ||||
Liabilities: | ||||||||||||
Warrant liability | $ | — | $ | 3,124 | $ | — | $ | 3,124 | ||||
Total | $ | — | $ | 3,124 | $ | — | $ | 3,124 | ||||
The warrant liability in the tables above consists of the fair value of 2025 Prefunded Warrants, 2024 Prefunded Warrants and 2023 Prefunded Warrants (as defined in Note 14 below) to purchase the Company’s Class A Common Stock. The prior year warrant liability was updated to be presented as a level 2 measurement as there was an observable input in determining its fair value. See Note 14 for discussion of the Company’s valuation methods and related impacts on the consolidated statement of operations relative to the warrant liability.
See Note 11 for discussion of the fair valuation of the Company’s Revenue Interest Obligation.
The following table provides a rollforward of the Revenue Interest Obligation categorized with Level 3 inputs for the years ended December 31, 2025 and 2024 (in thousands):
Revenue Interest Obligation | ||
Balance, January 1, 2024 | $ | 17,101 |
Payments on Revenue Interest Obligation | (7,400) | |
Interest accrued to Revenue Interest Obligation | 1,632 | |
Gain on revaluation of Revenue Interest Obligation | (1,443) | |
Balance, December 31, 2024 | $ | 9,890 |
Payments on Revenue Interest Obligation | (4,400) | |
Interest accrued to Revenue Interest Obligation | 295 | |
Loss on revaluation of Revenue Interest Obligation | 1,443 | |
Balance, December 31, 2025 | $ | 7,228 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 11, 2024 | |
| 2022 | Mar 23, 2023 | |
| 2021 | Mar 8, 2022 | |
| 2020 | Mar 15, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.