SEC Form 424B3 filed by Allurion Technologies Inc.

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-279902

Prospectus Supplement No. 14

(To Prospectus dated October 7, 2024)

 

ALLURION TECHNOLOGIES, INC.

Up to 65,211,325 Shares of Common Stock

 

 

This prospectus supplement no. 14 (this “Prospectus Supplement”) amends and supplements the prospectus dated October 7, 2024 (as supplemented or amended from time to time, the “Prospectus”) which forms part of our Registration Statement on Form S-1 (Registration Statement No. 333-279902). This Prospectus Supplement is being filed to update and supplement the information included or incorporated by reference in the Prospectus with the information contained in our Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2025 (the “10-Q”). Accordingly, we have attached the 10-Q to this Prospectus Supplement.

This Prospectus Supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This Prospectus Supplement should be read in conjunction with the Prospectus, and if there is any inconsistency between the information in the Prospectus and this Prospectus Supplement, you should rely on this Prospectus Supplement.

Our common stock is listed on The New York Stock Exchange (“NYSE”) under the symbol “ALUR” and our public warrants are listed on the NYSE under the symbol “ALUR.WS”. On May 19, 2025, the last quoted sale price for shares of our common stock as reported on the NYSE was $3.06 per share, and the last quoted sale price for our public warrants as reported on the NYSE was $0.0313 per warrant.

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.

 

 

Investing in our securities involves a high degree of risk. Before buying any securities, you should carefully read the discussion of the risks of investing in our securities in “Risk Factors” beginning on page 52 of the Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or determined if the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

The date of this Prospectus Supplement is May 20, 2025.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

OR

 

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from       to      

Commission File Number: 001-41767

 

 

Allurion Technologies, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware		92-2182207
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11 Huron Drive Natick, MA		01760
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (508) 647-4000

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		ALUR		The New York Stock Exchange
Warrants to purchase 0.056818 shares of Common Stock for $202.50 per share		ALUR WS		The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☒
				Emerging growth company		☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No  ☒

As of May 12, 2025, the registrant had 7,457,758 shares of common stock, $0.0001 par value per share, outstanding.

 

Table of Contents

 

				Page
PART I.		FINANCIAL INFORMATION			1
Item 1.		Financial Statements (Unaudited)			1
		Condensed Consolidated Balance Sheets			1
		Condensed Consolidated Statements of Operations			2
		Condensed Consolidated Statements of Comprehensive Income (Loss)			3
		Condensed Consolidated Statements of Stockholders’ Deficit			4
		Condensed Consolidated Statements of Cash Flows			5
		Notes to Unaudited Condensed Consolidated Financial Statements			7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			50
Item 4.		Controls and Procedures			50
PART II.		OTHER INFORMATION			52
Item 1.		Legal Proceedings			52
Item 1A.		Risk Factors			52
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			53
Item 3.		Defaults Upon Senior Securities			53
Item 4.		Mine Safety Disclosures			53
Item 5.		Other Information			53
Item 6.		Exhibits			54
Signatures					56

 

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which are not purely historical, include, but are not limited to, statements regarding the plans, strategies and prospects, both business and financial, of Allurion Technologies, Inc. (“Allurion”, the “Company”, “we”, “our”, or “us”). Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors. Such risks, uncertainties and other factors could cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements

Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “target”, “goal”, “forecasts”, “may”, “will”, “potential”, “should”, “would”, “could”, “future”, “seeks”, “plans”, “predicts”, “propose”, “scheduled”, “anticipates”, “intends”, or similar expressions. Such statements are based on the beliefs and assumptions of the management of Allurion. Although Allurion believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, Allurion cannot assure you that it will achieve or realize these plans, intentions or expectations.

Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about the ability of Allurion to:

 

•

realize the benefits expected from the business combination between Allurion and Compute Health Acquisition Corp. pursuant to that certain Business Combination Agreement, dated as of February 9, 2023, by and among Allurion, Allurion Technologies, LLC, which was previously known as Allurion Technologies Opco, Inc. (formerly Allurion Technologies, Inc.) prior to the consummation of the Business Combination, Compute Health Acquisition Corp., Compute Health Corp., and Compute Health LLC;

 

•

successfully defend litigation that may be instituted against Allurion;

 

•

manage various conflicts of interest that could arise among us and our affiliates, investors, directors, and officers;

 

•

successfully deploy our cash and cash equivalents and proceeds from the Chardan Equity Facility (as defined herein);

 

•

maintain the listing of Allurion securities on the New York Stock Exchange, and the potential liquidity and trading of such securities;

 

•

acquire sufficient sources of funding if and when needed;

 

•

attract and retain key employees, officers, and directors;

 

•

implement and achieve business plans, forecasts, and other expectations, including any financial projections provided to our investors, and identify and realize additional opportunities;

 

•

manage risks associated with the management team of Allurion having limited experience operating as a public company;

 

•

commercialize current and future products and services and create sufficient demand among health care providers and patients for such products, including the recent launch of our compounded GLP-1 program and achieving the expected benefits of such program;

 

•

successfully complete current and future preclinical studies and clinical trials of the swallowable, ProcedurelessTM intragastric balloon for weight loss developed by Allurion (the “Allurion Balloon”) and any other future product candidates;

 

•

obtain market acceptance of the Allurion Balloon as safe and effective in any market in which it is or becomes approved;

 

•

cost-effectively sell existing and future products through distribution arrangements with distributors and/or successfully adopt a direct sales force as part of a hybrid sales model that includes both distributors and a direct sales effort;

 

•

timely collect accounts receivable from our customers;

 

•

obtain regulatory approval or clearance in the United States and certain jurisdictions for current and future products and maintain previously obtained approvals and/or clearances in those jurisdictions where products and services are currently offered;

 

•

successfully resume sales of the Allurion Balloon in any country that suspends sales of our products;

 

ii

•

accurately forecast customer demand and manufacture sufficient quantities of products that patients and health care providers request;

 

•

successfully compete in the highly competitive and rapidly changing regulated industries in which we operate, and effectively address changes in such industries, including changes in competitors’ products and services and changes in the laws and regulations that affect us;

 

•

successfully manage any future international expansion of our business and navigate business, regulatory, political, operational, financial, and economic risks associated with doing business internationally;

 

•

successfully manage any future growth or contraction in Allurion’s business;

 

•

contract with third-party suppliers, manufacturers and providers and monitor such third parties’ ability to perform adequately under those arrangements;

 

•

comply with applicable legal and regulatory obligations;

 

•

obtain and maintain intellectual property protection for our products and technologies and acquire or license (on commercially reasonable terms) intellectual property from third parties;

 

•

sell products, and use proprietary technologies, without infringing, misappropriating, or otherwise violating the proprietary rights or intellectual property of third parties;

 

•

manage the impact of any significant acquisitions, dispositions, and other similar or material transactions;

 

•

implement and maintain effective internal controls; and

 

•

manage the effects of natural disasters, acts of war or terrorism, the spread and/or abatement of infectious diseases, general economic and political conditions such as recessions, interest rates, fuel prices, trade wars, and currency fluctuations, and other events beyond our reasonable control, including with respect to potential operational disruptions, labor disruptions, increased costs, and impacts to demand related thereto, on our ability to implement business plans, forecasts, and other expectations.

We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and in the section entitled “Risk Factors” within our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 27, 2025. These risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q include additional factors that could adversely impact our business and financial performance. Moreover, Allurion operates in very competitive and rapidly changing environments. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q.

We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

 

iii

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share amounts)

 

		March 31, 2025				December 31, 2024
Assets
Current assets:
Cash and cash equivalents		$	20,408			$	15,379
Accounts receivable, net of allowance of doubtful accounts of $6,455 and $6,701, respectively			8,309				7,134
Inventory, net			3,352				3,400
Prepaid expenses and other current assets			1,097				1,243
Total current assets			33,166				27,156
Property and equipment, net			2,297				2,469
Right-of-use asset			1,870				2,079
Other long-term assets			1,081				1,109
Total assets		$	38,414			$	32,813
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable		$	4,976			$	6,572
Current portion of lease liabilities			829				869
Accrued expenses and other current liabilities			10,092				11,422
Total current liabilities			15,897				18,863
Convertible notes payable			30,960				35,710
Warrant liabilities			9,264				4,567
Revenue Interest Financing liability			50,000				49,200
Earn-out liabilities			180				1,090
Lease liabilities, net of current portion			1,186				1,344
Other liabilities			717				17
Total liabilities		$	108,204			$	110,791
Commitments and Contingencies (Note 16)
Stockholders’ deficit:
Preferred stock, $0.0001 par value - 100,000,000 shares authorized as of March 31, 2025; no shares issued and outstanding as of March 31, 2025 and December 31, 2024			—				—
Common stock, $0.0001 par value - 1,000,000,000 shares authorized as of March 31, 2025; 5,963,549 and 2,710,607 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively			5				3
Additional paid-in capital			157,843				152,596
Accumulated other comprehensive income			3,930				8,370
Accumulated deficit			(231,568	)			(238,947	)
Total stockholders’ deficit			(69,790	)			(77,978	)
Total liabilities and stockholders’ deficit		$	38,414			$	32,813

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

 

1

ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except share and per share amounts)

 

		Three Months Ended March 31,
		2025				2024
Revenue		$	5,580			$	9,386
Cost of revenue			1,419				2,520
Gross profit			4,161				6,866
Operating expenses:
Sales and marketing			3,621				6,145
Research and development			2,624				5,725
General and administrative			5,198				6,386
Total operating expenses:			11,443				18,256
Loss from operations			(7,282	)			(11,390	)
Other income (expense):
Interest expense			—				(1,931	)
Changes in fair value of warrants			5,669				3,131
Changes in fair value of debt			6,170				—
Changes in fair value of Revenue Interest Financing and PIPE Conversion Option			2,220				1,490
Changes in fair value of earn-out liabilities			910				14,190
Other income (expense), net			(213	)			172
Total other income:			14,756				17,052
Income before income taxes			7,474				5,662
Provision for income taxes			(95	)			(76	)
Net income		$	7,379			$	5,586
Net income per share
Basic		$	1.54			$	2.92
Diluted		$	0.20			$	2.78
Weighted-average shares outstanding
Basic			4,778,542				1,911,181
Diluted			6,017,438				1,967,885

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

 

2

ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

 

		Three Months Ended March 31,
		2025				2024
Net income		$	7,379			$	5,586
Other comprehensive loss:
Change in fair value of Revenue Interest Financing due to change in credit risk			(3,020	)			(2,200	)
Change in fair value of RTW Convertible Notes due to change in credit risk			(1,420	)			—
Comprehensive income		$	2,939			$	3,386

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

 

3

ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(dollars in thousands, except share amounts)

 

		Common Sock								Additional Paid-in Capital				Accumulated Other Comprehensive Loss				Accumulated Deficit				Stockholders’ Deficit
		Shares				Amount
Balance as of January 1, 2024			1,907,529			$	2			$	143,010			$	(700	)		$	(212,799	)		$	(70,487	)
Exercise of stock options			186				—				9				—				—				9
Issuance of common stock for the exercise of Public Warrants			6				—				—				—				—				—
Issuance of common stock from equity line financing (Note 12)			5,730				—				378				—				—				378
Issuance of common stock in connection with vesting of RSU awards			2,505				—				—				—				—				—
Stock-based compensation expense			—				—				552				—				—				552
Other comprehensive loss			—				—				—				(2,200	)			—				(2,200	)
Net income			—				—				—				—				5,586				5,586
Balance as of March 31, 2024			1,915,956			$	2			$	143,949			$	(2,900	)		$	(207,213	)		$	(66,162	)
Balance as of January 1, 2025			2,710,607			$	3			$	152,596			$	8,370			$	(238,947	)		$	(77,978	)
Exercise of stock options
Issuance of common stock in connection with vesting of RSU awards			3,505				—				—				—				—				—
Issuance of common stock in connection with RTW Private Placement, net of issuance costs			841,751				—				2,500				—				—				2,500
Issuance of common stock in connection with January Public Offering, net of issuance costs			1,240,000				1				1,262				—				—				1,263
Issuance of common stock in connection with February Public Offering and Leavitt Private Placement, net of issuance costs			1,167,686				1				588				—				—				589
Stock-based compensation expense			—				—				897				—				—				897
Other comprehensive loss			—				—				—				(4,440	)			—				(4,440	)
Net income			—				—				—				—				7,379				7,379
Balance as of March 31, 2025			5,963,549			$	5			$	157,843			$	3,930			$	(231,568	)		$	(69,790	)

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

 

4

ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

 

		Three Months Ended March 31,
		2025				2024
Operating Activities:
Net income		$	7,379			$	5,586
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash lease expense			212				199
Depreciation and amortization			203				367
Stock-based compensation			897				552
Provision for uncollectible accounts			72				—
Unrealized exchange (gain) loss			(335	)			314
Provision for inventory			25				209
Change in fair value of warrant liabilities			(5,669	)			(3,131	)
Change in fair value of derivative liabilities			—				62
Change in fair value of debt			(6,170	)			—
Change in fair value of Revenue Interest Financing and PIPE Conversion Option			(2,220	)			(1,490	)
Change in fair value of earn-out liabilities			(910	)			(14,190	)
Change in fair value of Share Obligation			700				—
Non-cash interest expense			—				315
Issuance costs associated with warrants recorded at fair value			1,137				—
Changes in operating assets and liabilities:
Accounts receivable			(883	)			1,673
Inventory			22				330
Prepaid expenses, other current and long-term assets			147				244
Lease liabilities			(199	)			(238	)
Accounts payable			(2,409	)			1,551
Accrued expenses and other current liabilities			(1,468	)			(989	)
Net cash used in operating activities		$	(9,469	)		$	(8,636	)
Investing Activities:
Purchases of property and equipment			—				(104	)
Net cash used in investing activities		$	—			$	(104	)
Financing Activities:
Proceeds from equity offerings, net of issuance costs			14,499				—
Proceeds from option and warrant exercises			—				9
Proceeds from equity line financing			—				378
Net cash provided by financing activities		$	14,499			$	387
Net increase (decrease) in cash and cash equivalents and restricted cash			5,030				(8,353	)
Cash and cash equivalents and restricted cash at beginning of period			15,718				38,421
Cash and cash equivalents and restricted cash at end of period		$	20,748			$	30,068
Supplemental disclosure of cash flow information
Cash paid for interest		$	—			$	1,831
Supplemental cash flow information on non-cash investing and financing activities
Purchase of property and equipment included in accounts payable			—				73
Deferred financing costs in accounts payable and accrued expenses			921				—
Change in fair value of RTW Convertible Notes through OCI			(1,420	)			—
Change in fair value of Revenue Interest Financing through OCI			(3,020	)			(2,200	)

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

 

5

ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES

A reconciliation of the amounts of cash and cash equivalents and restricted cash in the condensed consolidated balance sheets to the amount in the condensed consolidated statements of cash flows is as follows (in thousands):

 

		March 31, 2025				December 31, 2024
Cash and cash equivalents		$	20,408			$	15,379
Restricted cash included in other long-term assets			340				339
Cash and cash equivalents and restricted cash shown in the statement of cash flows		$	20,748			$	15,718

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

 

6

1. Organization and Basis of Presentation

Organization

Allurion Technologies, Inc. (“Allurion” or the “Company”) is a vertically integrated medical device company that is developing, manufacturing, and commercializing innovative weight loss experiences centered around its Allurion^{™ Balloon. The Allurion Balloon is the world’s first and only swallowable, procedureless™ intragastric balloon for weight loss that does not require surgery, endoscopy, or anesthesia for placement. Allurion sells the Allurion Balloon and connected scale through distributors or directly to health care providers.}

The Company also offers tiered access to artificial intelligence (“AI”)-powered remote patient monitoring tools, a mobile app for patients and a clinic dashboard for providers, referred to as the Allurion Virtual Care Suite (“VCS”) and, collectively with the Allurion Balloon, referred to as the “Allurion Program.” The base tier of the VCS is free of charge to those purchasing the Allurion Balloon, as well as customers looking for a weight-loss management platform for patients utilizing other weight loss treatments, including anti-obesity medications and bariatric surgery. More full-scale versions of the VCS are available to health care providers on an upgrade basis. Allurion currently markets the Allurion Program in over 50 countries, and the Company operates subsidiaries in the United States, France, the United Arab Emirates, the United Kingdom, Italy, Spain, Australia and Mexico.

Business Combination Agreement

On February 9, 2023, Allurion Technologies Opco, Inc. (formerly Allurion Technologies, Inc., “Legacy Allurion”) and Allurion Technologies, Inc. (formerly Allurion Technologies Holdings, Inc.) entered into the Business Combination Agreement (as subsequently amended on May 2, 2023, the “Business Combination Agreement”) with Compute Health Acquisition Corp. (“CPUH” or “Compute Health”), Compute Health Corp. (“Merger Sub I”) and Compute Health LLC (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”). Pursuant to the Business Combination Agreement, on August 1, 2023 (the “Closing Date”), the Mergers (as defined below) were consummated in three steps: (a) Compute Health merged with and into Allurion (the “CPUH Merger”), with Allurion surviving the CPUH Merger as a publicly listed entity (the time at which the CPUH Merger became effective, the “CPUH Merger Effective Time”) and becoming the sole owner of the Merger Subs; (b) three hours following the consummation of the CPUH Merger, Merger Sub I merged with and into Legacy Allurion (the “Intermediate Merger” and the time at which the Intermediate Merger became effective, the “Intermediate Merger Effective Time”), with Legacy Allurion surviving the Intermediate Merger and becoming a direct, wholly-owned subsidiary of Allurion; and (c) thereafter, Legacy Allurion merged with and into Merger Sub II (the “Final Merger” and, collectively with the CPUH Merger and the Intermediate Merger, the “Mergers”, and together with all other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with Merger Sub II surviving the Final Merger and remaining a direct, wholly-owned subsidiary of Allurion (the time at which the Final Merger became effective, the “Final Merger Effective Time”). Shares of Allurion’s Common Stock (defined below) began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “ALUR” on August 2, 2023. Upon completion of the Business Combination, Legacy Allurion’s business operations continued as our business operations.

The Business Combination was accounted for as a reverse capitalization in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Under this method of accounting, Compute Health was treated as the “acquired” company for financial reporting purposes and Legacy Allurion was the accounting “acquirer.” Accordingly, the Business Combination was treated as the equivalent of Legacy Allurion issuing stock for the net assets of Compute Health, accompanied by a recapitalization. As a result of the reverse recapitalization, the assets and liabilities of the Company are presented at their historical carrying values, and the assets and liabilities of Compute Health are recognized on the acquisition date and measured on the basis of the net proceeds from the capital transaction, with no goodwill or other intangible assets recorded. This determination is primarily based on the fact that, immediately following the Business Combination, Legacy Allurion stockholders had a majority of the voting power of Allurion, Legacy Allurion controlled the majority of the board seats of Allurion, and Legacy Allurion senior management comprised all of the senior management of Allurion. The equity structure has been restated in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock, par value $0.0001 per share (“Common Stock,” “Allurion Common Stock” or the “Company’s Common Stock”), issued to Legacy Allurion stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Allurion’s convertible preferred stock and Legacy Allurion common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio of approximately 0.9780 (the “Exchange Ratio”) established in the Business Combination. The Exchange Ratio established in the Business Combination is prior to the Reverse Stock Split (as defined below) and did not change as a result of the Reverse Stock Split. As a result of this retrospective application, certain prior period balances within the condensed consolidated financial statements have changed. Refer to Note 3, Business Combination for further discussion regarding the closing of the Business Combination with Compute Health.

Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to the “Company”, “our”, and “Allurion” refer to the condensed consolidated operations of Allurion Technologies, Inc. and its subsidiaries after giving effect to the Business Combination. References to CPUH and Compute Health refer to Compute Health Acquisition Corp. and its subsidiaries prior to the consummation of the Business Combination, and references to “Legacy Allurion” refer to Allurion Technologies, Inc. prior to the consummation of the Business Combination.

 

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Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Any reference in these notes to the applicable accounting guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”), and Accounting Standards Update (“ASU”), of the Financial Accounting Standards Board (“FASB”). They should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2025 (“Annual Report on Form 10-K”). The financial statements as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 presented in this report are unaudited; however, in the opinion of management, such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.

Our foreign operations are subject to exchange rate fluctuations and foreign currency transaction costs. The functional currency for all of our foreign subsidiaries is the United States dollar except Allurion Australia Pty Ltd., which uses the Australian dollar. When remeasuring from a local currency to the functional currency, assets and liabilities are remeasured into U.S. dollars at exchange rates in effect at the balance sheet dates and results of operations transacted in local currency are remeasured into U.S. dollars using average exchange rates for the period presented. A gain from remeasurement of $0.3 million and a loss from remeasurement of $0.3 million for the three months ended March 31, 2025 and 2024, respectively, are recorded in the statements of operations within Other income (expense), net. The Company translates the foreign functional currency financial statements to U.S. dollars for Allurion Australia Pty Ltd. using the exchange rates at the balance sheet date for assets and liabilities, the period average exchange rates for revenues and expenses, and the historical exchange rates for equity transactions. The effects of foreign currency translation adjustments were immaterial for the three months ended March 31, 2025 and 2024.

Reverse Stock Split

The Company held its annual meeting of stockholders on December 16, 2024 (the “Annual Meeting”), and upon the recommendation of the Board of Directors (the “Board”) of the Company, the Company’s stockholders approved a certificate of amendment to the Company’s Amended and Restated Certificate of Incorporation (as amended and restated from time to time, the “Charter”) to effect a reverse stock split of the Company’s Common Stock at a ratio between 1-for-10 and 1-for-25, with the final ratio to be determined by the Board in its sole discretion.

On December 23, 2024, following the Annual Meeting, the Board approved a reverse stock split of the Common Stock at a ratio of 1-for-25 (the “Reverse Stock Split”). Effective as of 12:01 a.m. Eastern Time on January 3, 2025, the Company filed an amendment to its Charter to effectuate the Reverse Stock Split.

As a result of the Reverse Stock Split, every 25 shares of the Company’s Common Stock issued or outstanding were automatically reclassified into one validly issued, fully-paid and non-assessable new share of Common Stock, subject to the treatment of fractional shares as described below, without any action on the part of the holders. Trading of the Common Stock on the NYSE commenced on a split-adjusted basis at market open on January 3, 2025 under the existing trading symbol “ALUR.”

No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive fractional shares as a result of the Reverse Stock Split were automatically entitled to receive an additional fraction of a share of Common Stock to round up to the next whole share.

Proportional adjustments were also made to the number of shares of Common Stock awarded and available for issuance under the Company’s equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding stock options, restricted stock units and other equity securities under the Company’s equity incentive plans. Additionally, all outstanding convertible notes were adjusted in accordance with their terms, which resulted, among other changes to the convertible note terms, in proportionate adjustments being made to the number of shares issuable upon exercise of such convertible notes and to the exercise and redemption prices of such convertible notes. All outstanding warrants were also adjusted in accordance with their terms, which resulted, among other changes to the warrant terms, in proportionate adjustments being made to the number of shares issuable upon exercise of such warrants and to the exercise and redemption prices of such warrants. Specifically, following the effectiveness of the Reverse Stock Split, every 25 shares of Common Stock that may be purchased pursuant to the exercise of public warrants will represent one share of Common Stock that may be purchased pursuant to such warrants. Accordingly, for the Company’s warrants trading under the symbol “ALUR WS” on the NYSE, each whole public warrant following the Reverse Stock Split is exercisable for 0.056818 shares of Common Stock at an exercise price of $202.50 per share, which is based on each public warrant being exercisable for 1.420455 shares of Common Stock before the Reverse Stock Split, adjusted for the 25:1 reverse stock split ratio.

Unless otherwise indicated, all authorized, issued, and outstanding shares and per share amounts contained in the accompanying condensed consolidated financial statements have been adjusted to reflect the 1-for-25 Reverse Stock Split for all periods presented. As a result, net income per share was also retrospectively adjusted for periods ended prior to the Reverse Stock Split.

 

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The Company has evaluated whether there are certain events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.

The Company has incurred recurring losses since inception, anticipates net losses and negative operating cash flows for the near future, and may be unable to remain in compliance with certain financial covenants required under its credit facilities. Through March 31, 2025, the Company has funded its operations primarily with proceeds from the sale of its Common Stock and convertible preferred stock, issuance of convertible notes, issuance of term loans, and funds received upon consummation of the Business Combination. The Company has incurred recurring losses and cash outflows from operating activities since its inception, including losses from operations of $7.3 million and $11.4 million and cash outflows from operating activities of $9.5 million and $8.6 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had an accumulated deficit of $231.6 million. The Company expects to continue to generate operating losses for the foreseeable future.

Until such time as we can generate sufficient revenue to fund operations, we expect to use proceeds from the issuance of equity, debt financings, or other capital transactions to fund our operations and satisfy our liquidity requirements, but the amount and timing of such financings are uncertain. Based on the Company’s recurring losses from operations incurred since inception, its expectation of continuing operating losses for the foreseeable future, the potential need to raise additional capital to finance its future operations, and the potential of being unable to remain in compliance with certain financial covenants under its credit facilities, the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

2. Summary of Significant Accounting Policies

There have been no significant changes to the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” to the consolidated audited financial statements as of and for the year ended December 31, 2024 included in our Annual Report on Form 10-K.

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management considers many factors in selecting appropriate financial accounting policies and controls in developing the estimates and assumptions that are used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ from those estimates.

Risk of Concentration of Credit, Significant Customers and Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable, net. The Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company maintains its cash, cash equivalents and restricted cash with financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Significant customers are those that represent more than 10% of the Company’s total revenue for the three months ended March 31, 2025 and 2024 or its accounts receivable, net balance as of March 31, 2025 and December 31, 2024. The following table presents customers that represent 10% or more of the Company’s total revenue and accounts receivable, net:

 

		Revenue								Accounts Receivable
		Three Months Ended March 31,								March 31,				December 31,
		2025				2024				2025				2024
Customer A			11	%			N/A				13	%			N/A
Customer B			N/A				N/A				10	%			14	%

 

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The Company relies on third parties for the supply of parts and components for its products as well as third-party logistics providers. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers of parts and components to satisfactorily deliver its products to its customers on time, if at all, which could have a material adverse effect on the Company’s operating results, financial condition and cash flows and damage its customer relationships.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging-Contracts in Entity’s Own Equity, which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments. The Company adopted ASU 2020-06 effective January 1, 2024 under the modified retrospective method of transition approach. The adoption of ASU 2020-06 did not have an impact on the Company’s condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an interim and annual basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal periods beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The adoption of this standard did not have a material impact on the Company’s disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

3.Business Combination

As discussed in Note 1, Organization and Basis of Presentation, on August 1, 2023 the Company consummated the Business Combination with Compute Health pursuant to the Business Combination Agreement. The Business Combination was accounted for as a reverse capitalization in accordance with U.S. GAAP. Under this method of accounting, Compute Health, which was the legal acquirer, was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Allurion issuing stock for the net assets of Compute Health, accompanied by a recapitalization.

Upon the closing of the Business Combination, (a) holders of Legacy Allurion common stock received shares of Allurion Common Stock in an amount determined by application of the Exchange Ratio of approximately 0.9780 (the Exchange Ratio established in the Business Combination is prior to the Reverse Stock Split and did not change as a result of the Reverse Stock Split), (b) each then-outstanding share of Legacy Allurion preferred stock was converted into the right to receive shares of Allurion Common Stock equal to the number of shares of Legacy Allurion common stock that would be issued upon conversion of such outstanding share of Legacy Allurion preferred stock based on the applicable conversion ratio multiplied by the Exchange Ratio, (c) each then-outstanding and unexercised Legacy Allurion option was converted into a new Allurion option on the same terms and conditions as were applicable to such Legacy Allurion option based on the Exchange Ratio, (d) each then-outstanding Legacy Allurion warrant was converted into a new Allurion warrant based on the Exchange Ratio (“Rollover Warrant”), (e) each then-outstanding Legacy Allurion restricted stock unit was converted into a rollover restricted stock unit based on the Exchange Ratio, and (f) certain amounts of loans made by Compute Health Sponsor LLC (the “Sponsor”) to CPUH, which balance was $3.7 million at the time of the Business Combination, were converted into 21,023 shares of Allurion Common Stock (as adjusted for the Reverse Stock Split). For periods prior to the Business Combination, the reported share and per share amounts have been retroactively converted by applying the Exchange Ratio. The consolidated assets, liabilities, and results of operations prior to the Business Combination are those of Legacy Allurion.

Further, upon the closing of the Business Combination, each then-outstanding share of Compute Health Class A common stock was canceled and extinguished and was converted into the right to receive 1.420455 shares of Allurion Common Stock. Additionally, the Company assumed 13,206,922 outstanding public warrants to purchase an aggregate 750,394 shares of Allurion Common Stock at $202.50 per share.

In connection with the Business Combination, the Company incurred approximately $22.7 million of transaction costs, consisting of legal and other professional fees, of which $15.2 million was recorded to additional paid-in capital as a reduction of proceeds, $2.5 million was recorded as debt issuance costs in connection with the Fortress Term Loan (as defined below), and $5.0 million was recorded as an expense in general and administrative expenses on the condensed consolidated statement of operations and comprehensive loss. Of the $5.0 million recorded as general and administrative expenses, $3.6 million relates to a one-time insurance payment related to any potential matters that might arise from the period prior to the Business Combination, and as such is not capitalized as an asset. An additional $1.2 million relates to direct costs and fees incurred as part of the Revenue Interest Financing with RTW (as defined below).

 

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The following table reconciles the elements of the Business Combination to the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity:

 

		December 31, 2023
Cash - CPUH trust (net of redemptions)		$	38,395
Cash - PIPE Investors			37,922
Gross Proceeds			76,317
Less: transaction costs paid			(14,665	)
Net proceeds from the Business Combination			61,652
Less: warrant liabilities assumed			(13,762	)
Less: repayment of note assumed in the Business Combination			(2,500	)
Less: accrued transaction costs at December 31, 2023			(580	)
Business Combination, net of transaction costs		$	44,810

The number of shares of Allurion Common Stock outstanding immediately following the consummation of the Business Combination was as follows:

 

		Common Stock
Legacy Allurion Equityholders (1)			1,115,896
CPUH Stockholders (2)			206,628
Shares Issued to PIPE Investors (2)			215,468
Shares issued to RTW and Fortress (3)			76,000
Shares issued to convertible note holders			132,049
CPUH Sponsor Shares (2)			130,509
Side Letter Termination Shares (3)			15,508
Total shares of Common Stock immediately after Business Combination			1,892,058

 

(1)	Consists of Legacy Allurion common stock and Legacy Allurion preferred stock, plus the issuance of Allurion Common Stock in connection with the vesting of RSUs at closing, less the Gaur Trust Contributed Shares (as defined below).

(2)	The CPUH Stockholders shares, PIPE shares, and CPUH Sponsor shares are presented combined within the condensed consolidated statements of stockholders deficit on the “Reverse recapitalization, net of transaction costs” line, which is less the Gaur Trust Contributed Shares.

(3)

The shares issued to RTW and Fortress and the Side Letter Termination shares are presented combined within the condensed consolidated statements of stockholders deficit on the “Derecognition of liabilities associated with the Backstop Shares, Hunter shares, and additional RTW and Fortress shares and issuance of related shares” line.

PIPE Investment

In connection with the execution of the Business Combination Agreement, Allurion and Compute Health entered into subscription agreements, each dated February 9, 2023, with certain accredited investors and qualified institutional buyers (the “PIPE Investors”), pursuant to which, upon the terms and subject to the conditions set forth therein, the PIPE Investors, among other things, purchased an aggregate of 215,468 shares of Allurion Common Stock at a purchase price of $176.00 per share (other than as set forth in the Amended and Restated RTW Side Letter, as defined below), for an aggregate purchase price of $37.9 million, following the CPUH Merger Effective Time (the “PIPE Investment”).

Revenue Interest Financing Agreement, Side Letter and PIPE Conversion Option

On February 9, 2023, concurrently with the execution of the Business Combination Agreement, the Company entered into the Revenue Interest Financing Agreement (as amended, the “Revenue Interest Financing Agreement”) with certain entities that engaged RTW Investments, LP (together with its affiliates, “RTW”) as investment manager (the “Revenue Interest Financing”). Pursuant to the Revenue Interest Financing Agreement, at the closing of the Business Combination, RTW paid Allurion an aggregate of $40.0 million (the “Investment Amount”). In exchange for the Investment Amount, Allurion will remit revenue interest payments on all current and future products, digital solutions and services developed, imported, manufactured, marketed, offered for sale, promoted, sold, tested or otherwise distributed by Allurion and its subsidiaries at a rate up to 6.0% of annual net sales prior to December 31, 2026. On or after January 1, 2027, the Company will remit revenue interest payments at a rate up to 10.0% of annual net sales, and it will continue to make revenue interest payments to RTW until December 31, 2030. The Revenue Interest Financing Agreement was amended pursuant

 

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to the RIFA Amendment (as defined below) on April 14, 2024. The RIFA Amendment, among other things, increased the rate of revenue interest payments to be paid to RTW on all current and future products, digital solutions and services developed, imported, manufactured, marketed, offered for sale, promoted, sold, tested or otherwise distributed by Allurion and its subsidiaries. Refer to Note 9, Revenue Interest Financing, Side Letter, and PIPE Conversion Option below for further discussion on the Revenue Interest Financing.

Additionally, in connection with the Company entering into the Revenue Interest Financing Agreement, the Company, Compute Health, Legacy Allurion, Merger Sub II and RTW entered into a side letter (the “RTW Side Letter”) on February 9, 2023 under which RTW was granted the right to elect to convert up to $7.5 million of its initial PIPE Investment into an additional revenue interest financing by forfeiting a number of shares of Allurion Common Stock acquired by its PIPE Investment. Refer to Note 9, Revenue Interest Financing, Side Letter, and PIPE Conversion Option below for further discussion on the Revenue Interest Financing.

On May 2, 2023, the parties amended and restated the RTW Side Letter (as amended, the “Amended and Restated RTW Side Letter”), in connection with the Backstop Agreement (defined below), pursuant to which, among other things, Allurion issued 10,000 shares of Allurion Common Stock to RTW immediately prior to the Intermediate Merger Effective Time.

On October 22, 2024, funds affiliated with RTW provided notice to the Company of their election under the Amended and Restated RTW Side Letter, to surrender 30,000 shares of Common Stock of the Company representing $7.5 million in consideration for the New RIFA (as defined below).

Fortress Credit Agreement

In connection with the closing of the Business Combination, the Company entered into a term loan facility (the “Fortress Term Loan”) pursuant to a Credit Agreement and Guaranty, dated as of August 1, 2023 (the “Fortress Credit Agreement”), with Fortress Credit Corp. (“Fortress”), as administrative agent for the lenders party thereto from time to time. Under the terms of the Fortress Term Loan, we borrowed $60.0 million, which was used to repay the outstanding principal, accrued and unpaid interest, and other obligations with respect to the 2021 Term Loan (as defined below). Additionally, per the terms of the Fortress Term Loan and Backstop Agreement (as defined below), Allurion issued an aggregate of 38,000 shares of Allurion Common Stock to an affiliate of Fortress pursuant to a subscription agreement between Allurion and such affiliate. Refer to Note 8, Debt for further discussion on the Fortress Term Loan.

Backstop Agreement

On May 2, 2023, CFIP2 ALLE LLC, an affiliate of Fortress Credit Corp., and RTW (collectively, the “Backstop Purchasers”), Legacy Allurion, Allurion and Hunter Ventures Limited (“HVL”) entered into the backstop agreement (the “Backstop Agreement”). Pursuant to the Backstop Agreement, immediately prior to the Intermediate Merger Closing, (a) each Backstop Purchaser purchased $2 million of the aggregate principal amount outstanding of HVL’s Legacy Allurion convertible note issued in February 2023, (b) Allurion canceled the existing HVL Legacy Allurion Convertible Note and issued a new Allurion Convertible Note to HVL for the remaining balance together with all unpaid interest accrued since the date of issuance thereof, (c) Allurion issued new Allurion Convertible Notes to each Backstop Purchaser with an issuance date of August 1, 2023 and an original principal amount of $2 million each and (d) Allurion issued 28,000 shares of Allurion Common Stock to each Backstop Purchaser. Refer to Note 8, Debt for further discussion around the Backstop Agreement.

HVL Termination Agreement

On May 2, 2023, HVL and Legacy Allurion entered into a letter agreement (the “HVL Termination Agreement”), terminating the side letter agreement entered into between Legacy Allurion and HVL in connection with the issuance of HVL’s Legacy Allurion Convertible Note on February 15, 2023. Pursuant to the HVL Termination Agreement, among other things, at the closing of the Business Combination, upon the terms and subject to the conditions set forth therein, Allurion issued to HVL 15,508 shares of Allurion Common Stock. Refer to Note 8, Debt for further discussion regarding the HVL Termination Agreement.

Gaur Contribution Agreement

On May 2, 2023, Shantanu K. Gaur and Neha Gaur, trustees of The Shantanu K. Gaur Revocable Trust of 2021 (the “Gaur Trust”) and Allurion entered into a contribution agreement (the “Gaur Contribution Agreement”), pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, the Gaur Trust contributed to Allurion, as a contribution of capital, 3,170 shares of Allurion Common Stock (the “Gaur Trust Contributed Shares”). The Gaur Trust’s contribution of the Gaur Trust Contributed Shares was effective immediately following the consummation of the Business Combination and the issuance of shares of Allurion Common Stock to the Gaur Trust pursuant to the terms of the Business Combination Agreement.

RSU Forfeiture Agreement

On May 2, 2023, Krishna Gupta, a member of the Company’s Board, entered into a letter agreement with Legacy Allurion (the “RSU Forfeiture Agreement”), pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, Mr. Gupta agreed to forfeit 3,170 restricted stock units of Allurion (the “Forfeited RSUs”). The Forfeited RSUs were terminated and cancelled without consideration therefor immediately following the closing of the Business Combination Agreement.

 

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Sponsor Contribution Agreement

On May 2, 2023, the Sponsor and Compute Health entered into a letter agreement (the “Sponsor Contribution Agreement”) pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, the Sponsor agreed to contribute to Compute Health, as a contribution of capital, 161,379 shares of Compute Health Class A Common Stock (“Sponsor Contributed Shares”). The Sponsor’s contribution of the Sponsor Contributed Shares was made immediately following the CPUH Recapitalization (defined below) and immediately prior to the CPUH Merger Effective Time.

Sponsor Support Agreement

On February 9, 2023, Allurion entered into a support agreement (the “Sponsor Support Agreement”), pursuant to which immediately prior to the CPUH Merger Effective time, (a) the Sponsor recapitalized each of the Sponsor’s 21,442,500 shares of Compute Health Class B Common Stock, and all 12,833,333 of the Sponsor’s warrants to purchase shares of Class A Common Stock, into 2,088,327 shares of Compute Health Class A Common Stock and (b) the additional Class B Holders set forth on Schedule I of the Sponsor Support Agreement recapitalized his or her 30,000 shares of Compute Health Class B Common Stock into 21,120 shares of Compute Health Class A Common Stock (the “CPUH Recapitalization”). Subsequently, at the CPUH Merger Effective Time, each such share of Compute Health Class A Common Stock was converted into shares of Allurion Common Stock at an exchange ratio of 1.420455, prior to giving effect to the Reverse Stock Split.

Conversion of Convertible Notes

In connection with the closing of the Business Combination, outstanding Legacy Allurion Convertible Notes with an aggregate principal amount together with accrued but unpaid interest of approximately $21.8 million were converted into 132,049 shares of Allurion Common Stock with a corresponding recognition of additional paid-in capital (“APIC”) of $25.6 million provided for under the terms of such Legacy Allurion Convertible Notes, and are no longer outstanding. Refer to Note 8, Debt for further information on the Company’s convertible notes.

Public Warrants and Warrant Amendment

In connection with the closing of the Business Combination, the Company assumed 13,206,922 outstanding public warrants (the “Public Warrants”) to purchase an aggregate 750,394 shares of Allurion Common Stock at $202.50 per share following the Warrant Amendment (defined below). The total value of the liability associated with the Public Warrants was $13.8 million measured at fair value based on the public warrant quoted price. The Company concluded the warrants met the definition of a liability based on the settlement provision that allows the warrant holders to net-share settle their warrants in the event of a failed registration statement within 60 days of the Business Combination or any time a registration is not effective. As such, they have been classified as a liability on the balance sheet. See Note 12, Capital Stock and Stockholders’ Deficit and Note 10, Fair Value Measurements for further information on the Public Warrants and Warrant Amendment.

Earn-Out Liabilities

In connection with the closing of the Business Combination, Legacy Allurion equity holders are entitled to receive additional shares of Allurion Common Stock if the share price achieves certain targets (the “Earn-Out Shares”). The Company accounts for the potential issuance of the Earn-Out Shares as a contingent consideration arrangement, which was initially valued and recorded at $53.0 million. See Note 10, Fair Value Measurements for further information on the earn-out liabilities.

4.Revenue

Revenue by geographic region is based on the country in which our customer is located and is summarized by geographic area as follows (in thousands):

 

		Three Months Ended March 31,
		2025				2024
Spain		$	749			$	1,112
Egypt			600				—
France			—				1,671
United Kingdom			81				1,256
All Other Countries			4,150				5,347
Total Revenues		$	5,580			$	9,386

 

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There is currently no revenue generated in the United States from sales of the Allurion Balloon. For the three months ended March 31, 2025, $1.8 million of revenue was generated in five countries included within All Other Countries in the table above, representing approximately 32% of Total Revenues, with each country responsible for approximately 5% to 8% of the total. Remaining revenue was generated by sales in 29 other countries included within All Other Countries. For the three months ended March 31, 2024, $2.9 million of revenue was generated in five countries included within All Other Countries, representing approximately 31% of Total Revenues, with each country responsible for approximately 2% to 9% of the total. Remaining revenue was generated by sales in 38 other countries included within All Other Countries.

5.Inventory

Inventory consists of the following (in thousands):

 

		March 31, 2025				December, 31 2024
Finished goods		$	1,352			$	1,789
Work in progress			1,155				763
Raw materials			845				848
Total Inventory		$	3,352			$	3,400

Inventory is stated net of $1.6 million for the provision for excess and obsolete inventory as of March 31, 2025 and December 31, 2024.

6.Property and Equipment, net

Property and equipment consist of the following (in thousands):

 

		Estimated Useful Life (in Years)				March 31, 2025				December 31, 2024
Computers and purchased software			3			$	618			$	618
Leasehold improvements			Shorter of useful life or lease term				1,943				1,943
Furniture and fixtures			5				291				291
Machinery and equipment			3-5				3,960				3,960
Property and equipment-at cost							6,812				6,812
Less accumulated depreciation and amortization							(4,529	)			(4,357	)
Construction in progress							14				14
Property and equipment-net						$	2,297			$	2,469

Depreciation expense was $0.2 million and $0.4 million for each of the three months ended March 31, 2025 and 2024, respectively, recorded as follows (in thousands):

 

		Three Months Ended March 31,
		2025				2024
Cost of revenue		$	127			$	201
Research and development			55				49
General and administrative			8				64
Sales and marketing			13				53
Total depreciation and amortization expense		$	203			$	367

 

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7.Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

 

		March 31, 2025				December 31, 2024
Marketing reimbursement		$	910			$	821
Accrued compensation			1,524				1,046
Accrued selling and marketing			140				91
Accrued professional fees			729				1,164
Accrued warranty			14				14
Accrued restructuring			2,703				3,165
Other accrued expenses			4,072				5,121
Total accrued expenses and other current liabilities		$	10,092			$	11,422

In November 2024, the Company’s management approved and initiated plans to reduce its cost structure. The Company recorded $3.9 million of restructuring charges and ($0.2) million of restructuring credits, and paid $0.3 million and $0.8 million of restructuring charges during the three months ended March 31, 2025 and the year ended December 31, 2024, respectively, related to this restructuring plan. The restructuring plan initiated during the year ended December 31, 2024 is expected to the be completed during the first half of 2025. Substantially all of the charges represent the severance cost of terminated employees, and are included in cost of revenue and operating expenses in the statement of operations. The following table rolls forward the activity in the restructuring accrual for the November 2024 action through the three months ended March 31, 2025:

 

Accrual at December 31, 2023		$	—
Restructuring charges and related costs			3,953
Cash payments			(788	)
Accrual at December 31, 2024			3,165
Restructuring charges and related costs			(266	)
Cash payments			(196	)
Accrual at March 31, 2025		$	2,703

8.Debt

The components of the Company’s third-party debt consist of the following (in thousands):

 

		March 31, 2025				December 31, 2024
RTW Convertible Notes		$	50,820			$	50,069
Total principal amounts of debt			50,820				50,069
Change in fair value			(19,860	)			(14,359	)
Long-term debt, net of current portion and discounts		$	30,960			$	35,710

Term Loans

2021 Term Loan

In March 2021, the Company entered into a loan and security agreement (as amended, the “2021 Term Loan” and the “2021 Term Loan Agreement”) with Runway Growth Credit Fund, Inc. that provided for borrowings up to $25.0 million.

In December 2021, the 2021 Term Loan Agreement was amended (the “2021 Term Loan Amendment”) to extend the maturity date of the 2021 Term Loan to December 30, 2025 and provide for an additional $20.0 million of borrowings. In December 2021, the Company issued warrants exercisable for 132,979 shares of Legacy Allurion Series C preferred stock as consideration for the 2021 Term Loan Amendment and the draw down related to the 2021 Term Loan Agreement. The fair value of these warrants was determined to be $0.3 million upon issuance and are classified as a warrant liability on the condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024 (see Note 10, Fair Value Measurements). Upon the closing of the Business Combination and after giving effect to the Reverse Stock Split, these warrants were converted into warrants exercisable for 5,203 shares of Allurion Common Stock.

 

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In June 2022, the 2021 Term Loan Agreement was amended to revise definitional terms for certain milestone events, the final payment amount, and certain financial covenants. In September 2022, the 2021 Term Loan Agreement was further amended to, among other things, increase additional borrowing up to $15.0 million.

During June through December of 2022, the Company drew an additional $30.0 million of the 2021 Term Loan and issued warrants exercisable for 88,440 shares of Series D-1 preferred stock. The fair value of these warrants was determined to be $0.8 million upon issuance and are classified as a warrant liability on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 (see Note 10, Fair Value Measurements). Upon the closing of the Business Combination and after giving effect to the Reverse Stock Split, the warrants exercisable for 88,440 shares of Series D-1 preferred stock were converted into warrants exercisable for 3,620 shares of Allurion Common Stock.

On August 1, 2023, the 2021 Term Loan was paid off using the proceeds from the Fortress Term Loan (see below). The total payoff amount was $58.0 million, consisting of $55.0 million repayment of principal, a $1.1 million prepayment fee, and a $1.6 million final payment fee. The prepayment fee was calculated as 2% of the outstanding principal balance as of August 1, 2023. The final payment fee was calculated as 3% of the outstanding principal balance as of August 1, 2023 less the original final payment of $0.1 million. The Company recorded a $3.9 million loss on extinguishment of debt in connection with the 2021 Term Loan repayment.

Fortress Term Loan

On August 1, 2023, the Company entered into the Fortress Term Loan pursuant to the Fortress Credit Agreement with Fortress that provided gross proceeds of $60 million. The Fortress Term Loan had a maturity date of June 30, 2027 and accrued interest per annum at a rate of 6.44% plus the greater of (i) the Wall Street Journal Prime Rate and (ii) 3.0%, which interest was payable in arrears on a monthly basis. The Fortress Term Loan provided for an exit payment equal to 3.0% of the Fortress Term Loan (the “Exit Fee”) due upon prepayment or the maturity date of the Fortress Term Loan, in addition to any early prepayment fee. The Exit Fee is treated as additional interest expense and is accreted over the life of the loan using the effective interest method. Proceeds of the Fortress Term Loan were used, in part, to repay all amounts outstanding under the 2021 Term Loan. In connection with the issuance of the Fortress Term Loan, the Company paid issuance costs of $2.5 million, which were recorded as a debt discount and amortized over the remaining life of the loan.

On December 29, 2023, the Company entered into an amendment to the Fortress Credit Agreement (the “Fortress Amendment”). The Fortress Amendment waived the December 31, 2023 minimum revenue covenant under the Fortress Credit Agreement and modified the minimum liquidity covenant by increasing the minimum liquidity amount from $12.5 million to $33.5 million until March 31, 2024, $23.5 million from April 1, 2024 to June 30, 2024, $16.9 million from July 1, 2024 to September 30, 2024 and $12.5 million on October 1, 2024 and thereafter. The Fortress Amendment also provided that at any time after March 31, 2024, each lender had the right to convert a portion of the outstanding principal amount, not to exceed the lender’s proportionate share of a maximum of $20.0 million in aggregate outstanding principal amount, into shares of Allurion Common Stock at a conversion price based on the 30-day volume weighted average price (“VWAP”) of Allurion Common Stock on the NYSE ending on the trading day immediately preceding the date of exercise of the lender’s conversion right. As part of the Fortress Amendment, the Company prepaid $20.0 million of the principal outstanding under the Fortress Credit Agreement. Additionally, $3.1 million of fees were incurred and considered paid-in-kind and capitalized as an additional debt discount and added to the outstanding principal amount of the loans under the Fortress Amendment. The fees were amortized through interest expense over the remaining life of the loan. The Fortress Amendment was accounted for as a modification under ASC 470, Debt. In connection with the modification and related prepayment, the Company wrote off $0.8 million of the unamortized debt issuance costs, which was recorded within interest expense on the condensed consolidated statement of operations for the year ended December 31, 2023.

The Company assessed the terms and features of the Fortress Credit Agreement in order to identify any potential embedded features that would require bifurcation or any beneficial conversion features. The terms and features assessed included, under certain circumstances, a default interest rate of 3% that would apply to all outstanding obligations during the occurrence and continuance of an event of default. In accordance with ASC 815, Derivatives and Hedging (“ASC 815”), the Company concluded that this feature is not clearly and closely related to the host instrument and represents an embedded derivative (the “Term Loan Derivative Liability”) that is required to be re-measured at fair value on a quarterly basis. At the inception of the Fortress Term Loan, the fair value of the embedded derivative was determined to be immaterial. The Term Loan Derivative Liability was fair valued to zero in connection with the repayment of the Fortress Term Loan, with a corresponding $2.0 million gain recorded in other income, net in the condensed consolidated statement of operations for the year ended December 31, 2024.

On April 16, 2024, the Company repaid all outstanding obligations under the Fortress Term Loan with proceeds from the Amended Note Purchase Agreement (as defined below) with RTW. The total payoff amount was $48.0 million, consisting of $43.1 million repayment of principal, a $2.7 million prepayment fee, a $1.3 million exit fee, $0.6 million of other fees paid directly to Fortress, and $0.3 million of accrued interest. The Company recorded an $8.7 million loss on extinguishment of debt in connection with the Fortress Term Loan repayment in the condensed consolidated statement of operations for year ended December 31, 2024.

 

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Interest expense for the three months ended March 31, 2024 related to the Fortress Term Loan was $1.9 million, consisting of $1.6 million of contractual interest, $0.2 million amortization of the debt discount, and term loan accretion of $0.1 million. The average interest rate during the three months ended March 31, 2024 was 14.94%.

Convertible Notes

2021 Convertible Notes

In December 2021, the Company entered into a convertible note agreement with investors for gross proceeds of $2.0 million with a stated interest rate of 5.0% per annum (the “2021 Convertible Notes”) and a maturity date 36 months from the date of issuance unless previously converted pursuant to their terms of the agreement. No issuance costs were incurred.

The 2021 Convertible Notes provided that, effective upon either a Special Purpose Acquisition Company (i.e. “deSPAC”) transaction, closing of a qualified financing, or closing of a non-qualified financing, all of the outstanding principal and interest would automatically convert into shares of Legacy Allurion common stock or shares of the same class or series of capital stock issued in the qualified financing in an amount equal to the balance of the 2021 Convertible Notes on the date of conversion divided by the capped conversion price, calculated by dividing $600.0 million by the fully diluted capitalization of the Company immediately prior to the conversion of the 2021 Convertible Notes.

On August 1, 2023, in connection with the closing of the Business Combination and after giving effect to the Reverse Stock Split, the outstanding 2021 Convertible Notes were converted into an aggregate 5,345 shares of Allurion Common Stock with a corresponding recognition of APIC of $2.2 million, and are no longer outstanding.

2022 Convertible Notes

In January 2022, the Company entered into a convertible note purchase agreement with investors for gross proceeds of $1.1 million with a stated interest rate of 5.0% per annum (the “2022 Convertible Notes”). The 2022 Convertible Notes were to mature 36 months from the issuance date unless previously converted pursuant to the terms of the agreement. Issuance costs were de minimis. The 2022 Convertible Notes had the same terms as the 2021 Convertible Notes.

On August 1, 2023, in connection with the closing of the Business Combination and after giving effect to the Reverse Stock Split, the outstanding 2022 Convertible Notes were converted into an aggregate 3,329 shares of Allurion Common Stock with a corresponding recognition of APIC of $1.2 million, and are no longer outstanding.

2023 Convertible Notes

Between February and August 2023, the Company entered into a convertible note purchase agreement, and related side letters, for the sale of convertible notes (the “2023 Convertible Notes”) to certain investors for gross proceeds of $28.7 million, with a stated interest rate of 7.0% per annum. The 2023 Convertible Notes provided that they would mature on December 31, 2026 unless previously converted pursuant to the terms of the note purchase agreement. The 2023 Convertible Notes also provided that, effective upon a deSPAC transaction, all of the outstanding principal and interest would automatically convert into a number of shares of Legacy Allurion common stock equal to the balance of the 2023 Convertible Notes on the date of conversion divided by the discounted capped conversion price, calculated by dividing $217.3 million by the fully diluted capitalization of the Company immediately prior to the conversion of the 2023 Convertible Notes.

Additionally, the 2023 Convertible Notes provided that, effective upon the closing of a qualified financing, holders of the 2023 Convertible Notes could optionally accelerate repayment of the principal and interest of the 2023 Convertible Notes or convert all of the outstanding principal and interest into shares of Legacy Allurion common stock or shares of the same class or series of capital stock issued in the qualified financing equal to the balance of the 2023 Convertible Notes on the date of conversion divided by the greater of the capped price or the discounted price. The capped price is calculated by dividing $260.0 million by the fully diluted capitalization of the Company immediately prior to the conversion of the 2023 Convertible Notes, and the discounted price is calculated as 85% of the cash price of the same class or series of capital stock issued in the qualified financing. The 2023 Convertible Notes were accounted for under the fair value option (“FVO”) election of ASC 825 as the notes contain embedded derivatives, including the automatic conversion upon a deSPAC transaction prior to the deSPAC deadline, voluntary conversion upon a qualified financing, automatic repayment upon a sale event, and conversion rate adjustment, which would require bifurcation and separate accounting. These convertible notes are initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

On May 2, 2023 the Company entered into termination agreements (the “Termination Agreements”) with respect to side letters entered into with certain holders of the 2023 Convertible Notes. With respect to the Termination Agreement with HVL, the Company had the right to prepay, in one or more transactions, all or a portion of the outstanding principal amount, plus accrued interest, under such holder’s 2023 Convertible Note (the “HVL Bridge Note”), including by way of (a) a $2.0 million payment in cash by the

 

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Company to HVL on May 2, 2023, $1.5 million of which was deemed a prepayment penalty and recorded as other expense on the income statement, with the remaining $0.5 million recorded as a reduction of the principal amount, (b) immediately prior to the consummation of the transactions contemplated by the Business Combination Agreement, an additional payment of at least $6.0 million, up to the then-outstanding principal amount, plus accrued interest, under the HVL Bridge Note by way of (i) payment in cash by the Company and/or (ii) the sale and transfer of all or any portion of the HVL Bridge Note, equivalent in value to the portion of the additional payment to be repaid pursuant to this clause (b)(ii), to any person or persons designated in writing by the Company. The Termination Agreements were accounted for as a modification of debt and the modified convertible notes continued to be accounted for under the FVO with any change in fair value recognized in other expense on the income statement.

In addition, under the Termination Agreement executed with HVL, the Company agreed to issue to HVL a number of shares of Allurion Common Stock (“PubCo Additional Shares”) equal to (a) the outstanding principal and accrued interest under the HVL Bridge Note immediately prior to the consummation of the transactions contemplated by the Business Combination Agreement (after giving effect to the payment of the repayments) divided by $125.00, plus (b) 12,000 shares of Allurion Common Stock. The PubCo Additional Shares were accounted for as a freestanding financing liability. The liability for the PubCo Additional Shares was initially measured at its issue-date estimated fair value and subsequently remeasured at fair value at each reporting period, with changes in fair value reflected in earnings until the PubCo Additional Shares were issued. A $3.4 million liability was recorded at issuance for the PubCo Additional Shares as Other liabilities on the balance sheet. On August 1, 2023, upon closing of the Business Combination and after giving effect to the Reverse Stock Split, HVL was issued 15,508 PubCo Additional Shares with a corresponding recognition of APIC of $2.7 million, and the liability is no longer outstanding.

Further on May 2, 2023, RTW and Fortress as the Backstop Purchasers entered into the Backstop Agreement with the Company, Legacy Allurion and HVL. Pursuant to the Backstop Agreement, each Backstop Purchaser agreed that to the extent any HVL Bridge Notes remained outstanding prior to the consummation of the Business Combination, such Backstop Purchaser would, at the closing of the Business Combination, purchase up to $2.0 million of the HVL Bridge Notes from HVL in exchange for shares of Allurion Common Stock (the “Base PubCo Shares”, “Backstop Shares” and “Conditional Additional PubCo Shares”). The Base PubCo Shares and Backstop Shares were accounted for as a freestanding financing liability. The Base PubCo Shares and Backstop Shares liability was initially measured at its issue-date estimated fair value and subsequently remeasured at fair value at each reporting period with changes in fair value reflected in earnings until the Base PubCo Shares and Backstop Shares were issued. A $3.3 million liability was recorded at issuance for the Base PubCo Shares and Backstop Shares liability as Other liabilities on the balance sheet. On August 1, 2023, upon closing of the Business Combination, per the terms of the Fortress Term Loan, the Amended and Restated RTW Side Letter and the Backstop Agreement, the Backstop Purchasers were each issued 38,000 shares of Allurion Common Stock with a corresponding recognition of APIC of $13.4 million, and the liability is no longer outstanding.

On August 1, 2023, immediately prior to the closing of the Business Combination, the Company repaid $6.3 million of the HVL Bridge Note, leaving a principal balance of $6.3 million. Each Backstop Purchaser then purchased $2.0 million principal amount of the outstanding portion of the HVL Bridge Note, Allurion canceled the existing HVL Bridge Note and issued a new convertible note to HVL for the remaining balance together with all unpaid interest accrued since the date of issuance of $2.7 million, Allurion issued convertible notes to each Backstop Purchaser with an issuance date of the Closing Date (August 1, 2023) and an original principal amount of $2.0 million each, and Allurion issued 28,000 shares (and after giving effect to the Reverse Stock Split) of Allurion Common Stock to each Backstop Purchaser. Additionally, the outstanding 2023 Convertible Notes were converted into an aggregate 123,376 shares of Allurion Common Stock and (after giving effect to the Reverse Stock Split) with a corresponding recognition of APIC of $22.2 million, and are no longer outstanding.

RTW Convertible Notes

On April 14, 2024, the Company entered into a note purchase agreement (the “Original Note Purchase Agreement”) with RTW as agent for the purchasers (the “Purchasers”) party thereto from time to time (RTW in such capacity, the “Principal Purchaser”), and Acquiom Agency Services LLC (“Acquiom”) as collateral agent for the Purchasers. Subsequently, on April 16, 2024, the Company, the Principal Purchaser, the Purchasers, and Acquiom entered into the First Amendment to the Original Note Purchase Agreement (the Original Note Purchase Agreement as amended, the “Amended Note Purchase Agreement”).

Pursuant to the Amended Note Purchase Agreement, the Company issued and sold $48.0 million of convertible senior secured notes (the “RTW Convertible Notes”). The RTW Convertible Notes bear interest at an annual rate of 6%, which interest is paid quarterly in cash or, at the Company’s option, in kind for the first three years. The RTW Convertible Notes will mature on April 16, 2031 unless previously converted pursuant to the terms of the Amended Note Purchase Agreement. The RTW Convertible Notes are convertible into shares of Allurion Common Stock, at a Purchaser’s election at any time after the earliest of (i) the date on which Stockholder Approval (as defined below) is obtained, (ii) December 31, 2025, (iii) the date of a Fundamental Change Company Notice (as defined in the Amended Note Purchase Agreement), and (iv) the Make-Whole Fundamental Change Effective Date (as defined in the Amended Note Purchase Agreement), subject to certain terms and limitations in the Amended Note Purchase Agreement, based on a conversion rate of 24.6920 shares of Common Stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $40.50 per share, which represents a 35% premium to the lowest price per share in an equity financing for capital raising purposes ending on the date on which the Company has raised aggregate gross offering proceeds of at least $15.0 million (the

 

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“Next Equity Financing”). On July 1, 2024, the Company consummated the Public Offering, as described elsewhere in this Quarterly Report on Form 10-Q, which constituted a Next Equity Financing. The Amended Note Purchase Agreement provides that unless and until requisite approval of the Company’s stockholders is obtained (“Stockholder Approval”), the Company will not deliver Allurion Common Stock upon conversion of the RTW Convertible Notes in excess of 1% of the number of shares of Allurion Common Stock outstanding as of April 14, 2024. Stockholder Approval was obtained at the Company’s Annual Meeting of Stockholders held on December 16, 2024.

On January 7, 2025, the Company and Allurion Technologies, LLC (“Allurion OpCo”) entered into an Omnibus Amendment (the “Omnibus Amendment”) with Allurion Australia Pty Ltd, Allurion France, and RTW to amend the Amended Note Purchase Agreement, the Revenue Interest Financing Agreement, and the New RIFA (collectively, the “Existing Documents”).

The Omnibus Amendment requires, among other things, (i) the Company and Allurion OpCo to maintain certain minimum balances of unrestricted cash in controlled accounts in the U.S. in the amounts corresponding to the calculations set forth therein, and (ii) the Company to receive minimum trailing 12-month consolidated Revenue (as defined in the Amended Note Purchase Agreement) in amounts set forth therein, tested quarterly beginning with the 12-month period ending September 30, 2025. The Omnibus Amendment also requires that (i) Allurion France shall have successfully regained marketing authorization from the Agence Nationale de Sécurité du Médicament (“ANSM”) in France on or prior to December 31, 2025 and (ii) Allurion OpCo shall have received Marketing Authorization from the U.S. Food & Drug Administration for the Commercialization of the Product in the United States no later than June 30, 2026.

Pursuant to the Omnibus Amendment, the investors and the purchasers party thereto will receive a number of shares of the Company’s Common Stock, representing in the aggregate five percent (5%) of the fully-diluted shares outstanding immediately after the closing of the offering and sale of Additional Shares (as defined in the Existing Documents) to be consummated no later than February 15, 2025, in connection with which the Company shall have raised at least $12.0 million aggregate net proceeds (the “Share Obligation”); provided that, in the event the Company cannot issue shares of Common Stock to the Investors and the Purchasers due to applicable law or NYSE listing rules, the Company will instead issue an equivalent (as-converted) number of shares of a newly created series of Series A-1 non-voting preferred stock (the “Series A-1 Preferred Stock”) and the Company shall include a proposal in a definitive proxy statement on Schedule 14A seeking stockholder approval no later than December 31, 2025 to allow the conversion of Series A-1 Preferred Stock into Common Stock; provided further that, each share of Series A-1 Preferred Stock outstanding on December 31, 2026 will, except to the extent prohibited by Delaware law governing distributions to stockholders (including the Delaware General Corporation Law), be redeemed by the Company for cash in an amount equal to the as-converted value of the underlying Common Stock.

The RTW Convertible Notes are accounted for under the FVO election of ASC 825 as the notes contain embedded derivatives, including the conversion upon Stockholder Approval, the conversion upon a Fundamental Change Company Notice, the conversion upon a Make-Whole Fundamental Change, redemption upon the event of default, and redemption upon a Fundamental Change, which would require bifurcation and separate accounting. The RTW Convertible Notes were initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The fair value of the RTW Convertible Notes at issuance was $49.1 million, with a corresponding $1.1 million loss recognized in Other income (expense), net in the condensed consolidated statement of operations. In connection with the issuance of the RTW Convertible Notes and RIFA Amendment (as defined below), we incurred $1.4 million in issuance costs, which were directly expensed through general and administrative expense due to the FVO election of the RTW Convertible Notes and Revenue Interest Financing.

The Share Obligation is accounted for as a liability under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). As the Share Obligation was initiated in exchange for amendments of the Amended Note Purchase Agreement, the Revenue Interest Financing Agreement, and the New RIFA, all of which are accounted for under the FVO election, the liability was recorded at its initial fair value of $1.3 million, with an offset to Other income (expense). The liability will be remeasured at estimated fair value on a recurring basis at each reporting period date until it is settled. The Omnibus Amendment results in a modification of the Amended Note Purchase Agreement, the Revenue Interest Financing Agreement, and the New RIFA.

For the three months ended March 31, 2025, the Company recorded a gain of $6.2 million and a loss of $1.4 million through the condensed consolidated statements of operations and other comprehensive income (loss), respectively.

The Company elected paid in kind interest for the three months ended March 31, 2025 related to the RTW Convertible Notes.

9.Revenue Interest Financing, Side Letter, and PIPE Conversion Option

On February 9, 2023, Legacy Allurion entered into the Revenue Interest Financing Agreement. Pursuant to the Revenue Interest Financing, at the closing of the Business Combination, RTW paid Allurion an aggregate of $40.0 million Investment Amount. In exchange for the Investment Amount, Allurion will remit revenue interest payments on all current and future products, digital solutions and services developed, imported, manufactured, marketed, offered for sale, promoted, sold, tested or otherwise distributed by Allurion and its subsidiaries at a rate up to 6.0% of annual net sales prior to December 31, 2026. On or after January 1, 2027, the Company will remit revenue interest payments at a rate up to 10.0% of annual net sales, and it will continue to make revenue interest payments to RTW until December 31, 2030. Such payments were subsequently modified pursuant to the RIFA Amendment, discussed below.

 

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If RTW has not received aggregate revenue interest payments equal to at least 100% of the Investment Amount by December 31, 2027, the Company must make a cash payment in an amount sufficient to catch RTW up to 100% of the Investment Amount. If RTW has not received revenue interest payments equal to at least 240% of the Investment Amount by December 31, 2030, the Company must make a cash payment in an amount sufficient to catch RTW up to 240% of the Investment Amount. In any event, RTW shall not receive aggregated revenue interest payments in excess of 260% of the Investment Amount. In addition, prior to December 31, 2025, the Company may prepay a pre-specified payment amount (the “Prepayment Amount”) and terminate the Revenue Interest Financing Agreement. The Prepayment Amount shall be an amount equal to 165% of the Investment Amount less the sum of all revenue interest payments made to RTW prior to such date of prepayment.

The Revenue Interest Financing is accounted for under the FVO election of ASC 825 as the Revenue Interest Financing contains embedded derivatives, including the requirements to settle the Revenue Interest Financing prior to maturity upon the occurrence of certain contingent events and our ability to prepay the Revenue Interest Financing, which would require bifurcation and separate accounting. The Revenue Interest Financing was initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Changes in fair value are recorded as a component of Other income (expense) in the condensed consolidated statements of operations. A portion of the estimated change in fair value must be reported in other comprehensive loss to the extent that it is attributable to instrument-specific credit risk. In connection with the issuance of the Investment Amount, we paid $1.2 million in issuance costs in August 2023, which were directly expensed through general and administrative expense due to the FVO election. As of March 31, 2025, the Company has made $4.2 million in royalty payments to RTW. Refer to Note 10, Fair Value Measurements, for additional information regarding the changes in fair value of the Revenue Interest Financing.

Concurrently, and in connection with the Amended Note Purchase Agreement, the Revenue Interest Financing Agreement was amended pursuant to an Omnibus Amendment (the “RIFA Amendment”) by and among the Company, Allurion Opco, Allurion Australia Pty Ltd, a proprietary limited company organized under the laws of Australia and a wholly-owned subsidiary of the Company, the Original RIFA Investors (as defined therein) and RTW, on April 14, 2024. The RIFA Amendment, among other things, increased the rate of revenue interest payments to be paid to RTW on all current and future products, digital solutions and services developed, imported, manufactured, marketed, offered for sale, promoted, sold, tested or otherwise distributed by Allurion and its subsidiaries for net sales less than or equal to $100 million prior to December 31, 2026 from 6% to 12% and increased the rate on net sales less than or equal to $100 million on or after January 1, 2027 from 10% to 12%. Additionally, the Prepayment Amount was modified such that, prior to March 31, 2026, the Company is entitled to settle the Revenue Interest Financing for a prepayment amount that would allow the investors to yield a 20% internal rate of return.

The RIFA Amendment was accounted for as a modification with the change in fair value of the option held by RTW, pursuant to which RTW may elect to convert up to $7.5 million of its initial PIPE subscription into an additional revenue interest financing by forfeiting a number of shares of Common Stock acquired by the PIPE subscription (the “PIPE Conversion Option”). As such, the Revenue Interest Financing and PIPE Conversion Option were remeasured as of April 16, 2024 just prior to the RIFA Amendment, to $33.0 million and $6.6 million, respectively. The Revenue Interest Financing and PIPE Conversion Option were subsequently remeasured as of April 16, 2024 under the terms of the RIFA Amendment, to $39.0 million and $4.6 million, respectively.

In connection with the Company entering into the Revenue Interest Financing, if, at any time beginning 12 months and ending 24 months following the closing of the Mergers, the VWAP per share of Allurion Common Stock is less than $176.00 for the average of 20 trading days within any 30 trading day period (“Stock Price Drop”); and the absolute value of the percentage decrease of such Stock Price Drop measured from a reference price of $250.00 per share of Allurion Common Stock is greater than the absolute value of the percentage decrease in the VWAP of a comparable publicly traded peer index as defined in the Amended and Restated RTW Side Letter over the same time period, then RTW may elect to convert up to $7.5 million of its initial PIPE Investment into additional revenue interest financing to be added to the Investment Amount by forfeiting a number of shares of Allurion Common Stock acquired in the PIPE Investment. Such additions to the Investment Amount would result in proportional increases to the minimum aggregate revenue interest payments described above. The PIPE Conversion Option is accounted for as a derivative under ASC 815. The PIPE Conversion Option was initially measured at its issue-date estimated fair value of $3.3 million within Other liabilities on the condensed consolidated balance sheets with corresponding recognition of expense at inception as there is no right received by the Company that meets the definition of an asset and the transaction did not involve a distribution or a dividend. The PIPE Conversion Option liability is subsequently remeasured at its estimated fair value on a recurring basis at each reporting period date, with a gain or loss recognized within Other income (expense).

On October 22, 2024, funds affiliated with RTW provided notice to the Company of their election of the PIPE Conversion Option under the Amended and Restated RTW Side Letter to surrender 30,000 shares of Common Stock of the Company representing $7.5 million in consideration for an additional Revenue Interest Financing Agreement. Accordingly, on October 30, 2024, the Company and the funds affiliated with RTW entered into the additional Revenue Interest Financing Agreement (the “New RIFA”). The New RIFA has substantially identical terms and conditions as the Revenue Interest Financing Agreement except that the amount of financing provided under the New RIFA is equal to the conversion amount of $7.5 million (the “Additional Investment Amount”). The Additional Investment Amount results in proportional increases to the minimum aggregate revenue interest payments described above.

 

20

The exercise of the PIPE Conversion Option was accounted for as a settlement of the derivative liability. As such, the PIPE Conversion Option was remeasured as of October 30, 2024 just prior to conversion, to $7.4 million. The PIPE Conversion Option was subsequently reclassified as an addition to the Revenue Interest Financing liability upon conversion into the New RIFA. The New RIFA was accounted for under the FVO election, similar to the Revenue Interest Financing. As such, the New RIFA, together with the Revenue Interest Financing was remeasured as of October 30, 2024 to $48.9 million. Additionally, to account for the 30,000 forfeited shares in connection with the exercise of the PIPE Conversion Option, the total shares were valued based on the October 30, 2024 closing share price of $18.25, resulting in a $0.5 million reduction of APIC. As of March 31, 2025, the fair value of the Revenue Interest Financing and New RIFA was $50.0 million.

For the three months ended March 31, 2025, the Company recorded a $2.2 million gain and a $3.0 million loss on the Revenue Interest Financing through the condensed consolidated statements of operations and other comprehensive income (loss), respectively. The changes in fair value were recorded in the Changes in fair value of Revenue Interest Financing and PIPE Conversion Option in the condensed consolidated statement of operations.

10.Fair Value Measurements

The following tables present the fair value hierarchy for the Company’s assets and liabilities that are measured at fair value at issuance date and on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):

 

Fair Value Measurement as of March 31, 2025
		Total Carrying Value				Level 1				Level 2				Level 3
Assets:
Cash equivalents
Money market funds		$	17,115			$	17,115			$	—			$	—
Total assets		$	17,115			$	17,115			$	—			$	—
Liabilities:
Legacy Allurion Common Stock Warrant Liabilities		$	10			$	—			$	—			$	10
Public Warrants			383				383				—				—
Public Offering Warrants			1,231				—				—				1,231
July 2024 Private Placement Warrants			190				—				—				190
January 2025 Warrants			2,530				—				—				2,530
February 2025 Offering Warrants			4,920				—				—				4,920
Revenue Interest Financing			50,000				—				—				50,000
Earn-out Liability			180				—				—				180
RTW Convertible Notes			30,960				—				—				30,960
Success Fee Derivative Liability			14				—				—				14
RTW Share Obligation			700				—				—				700
Total Liabilities		$	91,118			$	383			$	—			$	90,735

 

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Fair Value Measurement as of December 31, 2024
		Total Carrying Value				Level 1				Level 2				Level 3
Assets:
Cash equivalents
Money market funds		$	11,992			$	11,992			$	—			$	—
Total assets		$	11,992			$	11,992			$	—			$	—
Liabilities:
Legacy Allurion Common Stock Warrant Liability		$	41			$	—			$	—			$	41
Public Warrants			396				396				—				—
Public Offering Warrants			3,630				—				—				3,630
July 2024 Private Placement Warrants			500				—				—				500
Revenue Interest Financing			49,200				—				—				49,200
Earn-out Liability			1,090				—				—				1,090
RTW Convertible Notes			35,710				—				—				35,710
Success Fee Derivative Liability			14				—				—				14
Total Liabilities		$	90,581			$	396			$	—			$	90,185

Public Warrants

As a result of the Business Combination on August 1, 2023, the Company recorded a liability for Public Warrants to purchase the Company’s Common Stock. The Public Warrants are traded on the NYSE and are recorded at fair value using the closing price as of March 31, 2025 of $0.029, which is a Level 1 input.

Legacy Allurion Warrants, Public Offering Warrants, July 2024 Private Placement Warrants, January 2025 Warrants, and February 2025 Offering Warrants

The Company has classified the Legacy Allurion Common Stock Warrants, Public Offering Warrants (defined below), July 2024 Private Placement Warrants (defined below), January 2025 Warrants (defined below), and February 2025 Offering Warrants (defined below) within Level 3 of the hierarchy as the fair value is derived using the Black-Scholes option pricing model, which uses a combination of observable (Level 2) and unobservable (Level 3) inputs. See table below for the assumptions used in the pricing model of the Legacy Allurion Common Stock Warrants, Public Offering Warrants, July 2024 Private Placement Warrants, January 2025 Warrants, and February 2025 Offering Warrants:

 

		Measurement Date		Interest Rate				Exercise Price				Estimated Fair Value of Underlying Share Price				Expected Volatility				Expected Life (Years)
Legacy Allurion Series C Preferred Stock warrants (as converted to Common)		March 31, 2025			4.03	%		$	168.25			$	3.21				105.6	%			6.00
Legacy Allurion Other Common Stock		March 31, 2025			3.89	%			26.25				3.21				105.6	%			2.44
Legacy Allurion Series D-1 Preferred Stock warrants (as converted to Common)		March 31, 2025			4.03%-4.11	%			303.50				3.21				105.6	%			6.00-7.46
Public Offering Warrants		March 31, 2025			3.93	%			6.00-30.00				3.21				100.0	%			4.25
July 2024 Private Placement Warrants		March 31, 2025			3.93	%			30.00				3.21				100.0	%			4.25
January 2025 Warrants		March 31, 2025			3.96	%			6.00				3.21				95.0	%			5.01
February 2025 Offering Warrants		March 31, 2025			3.96	%			5.23				3.21				95.0	%			5.01

 

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		Measurement Date		Interest Rate				Exercise Price				Estimated Fair Value of Underlying Share Price				Expected Volatility				Expected Life (Years)
Legacy Allurion Series C Preferred Stock warrants (as converted to Common)		December 31, 2024			4.44	%		$	168.25			$	10.75				90	%			6.25
Legacy Allurion Other Common Stock		December 31, 2024			4.26	%			26.25				10.75				90	%			2.69
Legacy Allurion Series D-1 Preferred Stock warrants (as converted to Common)		December 31, 2024			4.44%-4.5	%			303.50				10.75				90	%			6.25-7.71
Public Offering Warrants		December 31, 2024			4.35	%			30.00				10.75				90	%			4.50
July 2024 Private Placement Warrants		December 31, 2024			4.35	%			30.00				10.75				90	%			4.50

Expected dividend yield for all calculations is 0.00%.

The following table reconciles the changes in fair value for the three months ended March 31, 2025 and 2024 of the warrant liabilities valued using Level 3 inputs:

 

		Preferred Stock Warrants (as converted to Common)				Common Stock Warrants				Public Offering Warrants				July 2024 Private Placement Warrants				January 2025 Warrants				February 2025 Offering Warrants				Total
Balance - January 1, 2024		$	642			$	179			$	—			$	—			$	—			$	—			$	821
Change in fair value			(409	)			(108	)			—				—				—				—				(517	)
Balance - March 31, 2024		$	233			$	71			$	—			$	—			$	—			$	—			$	304
Balance - January 1, 2025		$	32			$	9			$	3,630			$	500			$	—			$	—			$	4,171
Fair value at issuance			—				—				—				—				5,344				5,021				10,365
Change in fair value			(23	)			(8	)			(2,399	)			(310	)			(2,814	)			(101	)			(5,655	)
Balance - March 31, 2025		$	9			$	1			$	1,231			$	190			$	2,530			$	4,920			$	8,881

2019 Term Loan Success Fee Derivative Liability

The derivative liability for the success fee associated with Legacy Allurion’s November 2019 loan and security agreement with Western Alliance Bank (the “2019 Term Loan” and such fee, the “Success Fee”) was recorded at fair value as of March 31, 2025 and December 31, 2024 using the following assumptions: weighted-average probability for the likelihood of a change in control or liquidity event within four years from the initial valuation date of the derivative liability and a market-based discount rate that will increase or decrease each period based on changes in the probability in the future cash flows.

Revenue Interest Financing and PIPE Conversion Option

The Revenue Interest Financing is accounted for using the FVO election. Under the FVO election, the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The fair value of the Revenue Interest Financing was remeasured as of March 31, 2025 using a discounted cash flow (“DCF”) method under the income approach utilizing future revenue projections and a discount rate of 22.8%.

The fair value of the PIPE Conversion Option was accounted for as a derivative under ASC 815. Upon the exercise of the PIPE Conversion Option and resulting New RIFA on October 30, 2024, the PIPE Conversion Option was reclassified as an addition to the Revenue Interest Financing liability, and as such there is no PIPE Conversion Option liability as of December 31, 2024 and March 31, 2025.

 

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Earn-Out Liability

Upon the closing of the Business Combination, the Earn-Out Shares were accounted for as a liability because the triggering events that determine the number of shares to be earned included events that were not indexed to Allurion Common Stock, with the change in fair value recognized in Change in the fair value of earn-out liabilities in the condensed consolidated statement of operations. The estimated fair value of the Earn-Out Shares was determined using a MCSM with the following assumptions at each valuation date:

 

		March 31, 2025				December 31, 2024
Stock Price		$	3.21			$	10.75
Risk-free interest rate			3.9	%			4.3	%
Expected term (in years)			3.3				3.6
Expected volatility			115.0	%			109.0	%

Term Loan Derivative Liability

The Term Loan derivative liability associated with the Fortress Term Loan was derecognized during the second quarter of 2024 as the Fortress Term Loan was repaid on April 16, 2024.

RTW Convertible Notes

The RTW Convertible Notes are accounted for using the FVO election. Under the FVO election, the financial instrument is initially measured at its issue-date estimated fair value and subsequently measured at estimated fair value on a recurring basis at each reporting period date. The fair value of the RTW Convertible Notes was remeasured as of March 31, 2025 using a DCF method under the income approach with a MCSM applied to determine the simulated stock price at each payment date and event that may trigger conversion of the RTW Convertible Notes. The fair value was measured using the $48.0 million principal amount of the RTW Convertible Notes and the following assumptions:

 

		March 31, 2025				December 31, 2024
Stock Price		$	3.21			$	10.75
Risk-free interest rate			4.0	%			4.4	%
Expected term (in years)			6.0				6.3
Expected volatility			92.5	%			90.0	%

Share Obligation

The Share Obligation is accounted for as a liability under ASC 480, with the liability initially measured at its issue-date estimate fair value and subsequently measured at it’s estimated fair value on a recurring basis at each reporting period date. The estimated fair value of the Share Obligation was determined using a MCSM with the following assumptions at the valuation date:

 

		March 31, 2025
Risk-free interest rate			4.0	%
Expected term (in years)			1.8
Expected volatility			167.5	%
Expected market yield			25.9	%

The changes in the fair values of the Success Fee derivative liability, Revenue Interest Financing, PIPE Conversion Option, Earn-out liability, Term Loan Derivative liability, RTW Convertible Notes, and Share Obligation categorized with Level 3 inputs for the three months ended March 31, 2025 and 2024 were as follows:

 

		Success Fee Derivative Liability				Revenue Interest Financing				PIPE Conversion Derivative				Earn-Out Liability				Term Loan Derivative Liability				RTW Convertible Notes				Share Obligation				Total
Balance - January 1, 2024		$	14			$	36,200			$	5,600			$	23,990			$	1,895			$	—			$	—			$	67,699
Change in fair value			—				(3,400	)			1,910				(14,190	)			62				—				—				(15,618	)
Change in fair value - OCI			—				2,200				—				—				—				—				—				2,200
Balance - March 31, 2024		$	14			$	35,000			$	7,510			$	9,800			$	1,957			$	—			$	—			$	54,281
Balance - January 1, 2025		$	14			$	49,200			$	—			$	1,090			$	—			$	35,710			$	—			$	86,014
Fair value upon issuance			—				—				—				—				—				—				1,297				1,297
Change in fair value			—				(2,220	)			—				(910	)			—				(6,170	)			(597	)			(9,897	)
Change in fair value - OCI			—				3,020				—				—				—				1,420				—				4,440
Balance - March 31, 2025		$	14			$	50,000			$	—			$	180			$	—			$	30,960			$	700			$	81,854

 

24

The change in fair value of the Success Fee derivative liability, Revenue Interest Financing, PIPE Conversion Option, Earn-Out liability, Term Loan Derivative liability, RTW Convertible Notes, and Share Obligation at each period is recorded as a component of Other income (expense) in the condensed consolidated statements of operations, with the exception of the changes in fair value associated with the change in credit risk related to the Revenue Interest Financing and RTW Convertible Notes, which is recorded as a component of other comprehensive loss.

11.Income Taxes

The Company recorded income tax expense of $0.1 million for each of the three months ended March 31, 2025 and 2024, representing an effective tax rate of 1.3% in each period. The tax expense recorded relates to the earnings of the Company’s profitable foreign subsidiaries.

As of March 31, 2025 and 2024, the Company maintained a full valuation allowance against its net deferred tax assets as the Company has incurred significant operating losses since inception and has concluded that its net deferred tax asset is not more-likely-than-not realizable.

As of March 31, 2025 and 2024, the Company has not recorded tax reserves for any uncertain tax provisions.

12.Capital Stock and Stockholders’ Deficit

Preferred Equity

On June 28, 2024, the Company entered into a subscription agreement (the “Subscription Agreement”) with RTW, pursuant to which the Company agreed to sell 2,260,159 shares of a newly created series of preferred stock, the Series A non-voting convertible preferred stock, par value $0.0001 per share (“Series A Preferred Stock”), and 90,407 private placement warrants (“July 2024 Private Placement Warrants”) to purchase Common Stock, equal to the per share Public Offering (defined below) price for the shares of Common Stock and Public Offering Warrants (defined below) in the Public Offering (the “July 2024 Private Placement”). The July 2024 Private Placement closed on July 1, 2024 with net proceeds received of $2.5 million after deducting offering costs of $0.2 million.

The July 2024 Private Placement Warrants met the definition of a derivative under ASC 815. The gross proceeds from the July 2024 Private Placement were first allocated to the July 2024 Private Placement Warrants based on their issue-date estimated fair value of $1.7 million. The July 2024 Private Placement Warrants are subsequently remeasured at their estimated fair value on a recurring basis at each reporting period date, with a gain or loss recognized within Other income (expense). The remaining gross proceeds of $1.0 million were allocated to the Series A Preferred Stock. Of the $0.2 million in offering costs, $0.1 million was recorded against the Series A Preferred Stock as a reduction of proceeds and $0.1 million was expensed as general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.

On December 19, 2024, following the Series A Stockholder Approval (as defined below) and after giving effect to the Reverse Stock Split, the 2,260,159 shares of Series A Preferred Stock were converted to 90,407 shares of Common Stock.

Allurion’s Charter authorizes the issuance of up to 100,000,000 shares of Allurion preferred stock. As of March 31, 2025, no shares of Allurion Series A Preferred Stock were outstanding. The rights and preferences of the Series A Preferred Shares are as follows:

Voting Rights

The Series A Preferred Stockholders have no voting rights.

Dividend Rights

The Series A Preferred Stock participates in dividends with Common Stock on an as-converted basis when declared by the Board of Directors. No dividends were declared through March 31, 2025.

Liquidation Preference

In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, payment shall be made to the holders of shares of Series A Preferred Stock on a pari passu basis with all holders of Common Stock. Each Series A Preferred Stock holder shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of Common Stock would receive if such holder’s Series A Convertible Preferred Stock were fully converted to Common Stock plus an additional amount equal to any dividends declared but unpaid to such share.

 

25

Conversion Rights

Each share of Series A Preferred Stock is convertible after the date that the Company’s stockholders approve the conversion of the Series A Preferred Stock into shares of Common Stock in accordance with the listing rules of the NYSE (the “Series A Stockholder Approval”). Upon the Series A Stockholder Approval, each share of Series A Preferred Stock then outstanding shall automatically convert into (i) a number of shares of Common Stock equal to the number of Series A Preferred Stock outstanding at the time of conversion, adjustable for certain dilutive events, and (ii) pre-funded conversion warrants in the form agreed by the holder and the Company, exercisable for a number of shares of Common Stock equal to the number of Series A Preferred Stock outstanding at the time of conversion, adjustable for certain dilutive events. This Series A Stockholder Approval was received on December 16, 2024.

Redemption

Each share of Series A Preferred Stock outstanding on December 31, 2026 (the “Redemption Date”) shall be automatically redeemed by the Company for cash at a redemption price equal to the volume-weighted average price per share of the Common Stock on the NYSE during the twenty consecutive trading day period ending and including the trading day immediately preceding the Redemption Date (the “Redemption Price”). The Series A Preferred Stock is redeemable at a determinable price (the Redemption Price) on a fixed date (the Redemption Date), which results in mezzanine equity classification (outside of permanent equity) on the Company’s condensed consolidated balance sheet.

Common Equity

Allurion’s Charter authorizes the issuance of up to 1,000,000,000 shares of Allurion Common Stock. As of March 31, 2025 and December 31, 2024, 5,963,549 and 2,710,607 shares of Common Stock were issued and outstanding, respectively.

July 2024 Public Offering

On June 28, 2024, the Company entered into an underwriting agreement with Jefferies LLC and TD Securities (USA) LLC, as representative of the several underwriters (the “Underwriters”), pursuant to which the Company agreed to issue and sell 576,261 shares of the Company’s Common Stock and warrants (“Public Offering Warrants”) to purchase up to 576,261 shares of the Company’s Common Stock at an offering price of $30.00 per share and accompanying warrant (the “Public Offering”). The Public Offering closed on July 1, 2024 with net proceeds received of $15.2 million after deducting underwriting discounts of $1.0 million and offering costs of $1.0 million. The Underwriters fully exercised their option for additional Public Offering Warrants, with 86,440 additional Public Offering Warrants issued at closing, for a total of 662,701 Public Offering Warrants. Further, the Underwriters exercised a portion of the option with respect to the Common Stock (the “Share Overallotment”) on July 5, 2024 for net proceeds of $2.2 million, which resulted in the issuance of 77,091 shares of the Company’s Common Stock at an offering price of $30.00 per share.

The Public Offering Warrants met the definition of a derivative under ASC 815 and the Share Overallotment met the requirements for equity classification under ASC 815. The $17.4 million in net proceeds from the Public Offering and exercise of the Share Overallotment were first allocated to the Public Offering Warrants based on their issue-date estimated fair value of $13.2 million. The Public Offering Warrants are subsequently remeasured at their estimated fair value on a recurring basis at each reporting period date, with a gain or loss recognized within Other income (expense). The $0.8 million offerings costs allocated to the Public Offering Warrants were expensed as general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss. The remaining net proceeds of $5.1 million were allocated to Common Stock and APIC.

RTW Private Placement

On January 14, 2025, the Company entered into a subscription agreement (the “RTW Subscription Agreement”) with funds affiliated with RTW, pursuant to which the Company agreed to sell 841,751 shares of Common Stock at a purchase price of $2.97 per share (the “RTW Private Placement”). The RTW Private Placement closed on January 16, 2025 with net proceeds received of $2.5 million.

January 2025 Public Offering and Concurrent Private Placement

On January 24, 2025, the Company entered into a securities purchase agreement (the “January 2025 Securities Purchase Agreement”) with certain accredited investors named therein, pursuant to which the Company agreed to issue and sell 1,240,000 shares of Common Stock (the “January 2025 Offering”) and 1,240,000 accompanying common warrants (the “January 2025 Warrants”) to purchase up to 1,240,000 shares of Common Stock upon exercise of the January 2025 Warrants in a concurrent private placement (the “January 2025 Private Placement”), at an offering price of $6.00 per share and accompanying January 2025 Warrant. The January 2025 Offering and January 2025 Private Placement closed on January 27, 2025 with net proceeds of $5.8 million after deducting placement agent fees of $0.6 million and offering costs of $1.0 million.

Certain purchasers in the January 2025 Offering and January 2025 Private Placement are holders of warrants to purchase Common Stock issued in the Public Offering in July 2024. The exercise price for the Public Offering Warrants initially was $30.00 per share. In consideration for such purchasers’ purchase of securities in the January 2025 Offering and January 2025 Private Placement, we agreed with each such purchaser to seek stockholder approval to reduce the exercise price of the Public Offering Warrants held by such purchasers to $6.00 per share (the “January Warrant Repricing”). Such Public Offering Warrants will become exercisable at the revised exercise price upon the receipt of such stockholder approval, which approval was obtained on April 10, 2025. The Public Offering Warrants were remeasured to account for the incremental fair value, with the $0.5 million loss recognized within Other income (expense).

 

26

The January 2025 Warrants met the definition of a derivative under ASC 815. The $5.8 million in net proceeds were first allocated to the January 2025 Warrants based on their issue-date estimated fair value of $5.3 million. The January 2025 Warrants are subsequently remeasured at their estimated fair value on a recurring basis at each reporting period date, with a gain or loss recognized within Other income (expense). The $0.8 million of offering costs allocated to the January 2025 Warrants were expensed as general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss. The remaining net proceeds of $1.3 million were allocated to Common Stock and APIC.

February 2025 Public Offering and Concurrent Private Placement and Leavitt Private Placement

On February 19, 2025, the Company entered into a securities purchase agreement (the “February 2025 Securities Purchase Agreement”) with certain accredited investors named therein, pursuant to which the Company agreed to issue and sell 900,000 shares of Common Stock (the “February 2025 Offering”), and 1,800,000 accompanying common warrants (the “February 2025 Warrants”) to purchase up to 1,800,000 shares of Common Stock upon exercise of the February 2025 Warrants in a concurrent private placement (the “February 2025 Private Placement”), at an offering price of $5.23 per share and accompanying February 2025 Warrant. The February 2025 Offering and February 2025 Private Placement closed on February 20, 2025 with net proceeds of $3.9 million after deducting placement agent fees of $0.4 million and offering costs of $0.4 million.

Additionally, on February 19, 2025, the Company entered into a subscription agreement (the “Leavitt Subscription Agreement”) with an accredited investor affiliated with Leavitt Equity Partners LLC (collectively, “Leavitt”), pursuant to which the Company agreed to issue and sell 267,686 shares of Common Stock (the “Private Placement Shares”) and common warrants to purchase up to 535,372 shares of Common Stock (the “Leavitt Private Placement Warrants” and together with the February 2025 Warrants, the “February 2025 Offering Warrants”), at a purchase price of $5.23 per share and accompanying Private Placement Warrant (the “Leavitt Private Placement”). The Leavitt Private Placement closed on February 20, 2025 with net proceeds of $1.3 million after deducting placement agent fees of $0.1 million. Leavitt is a holder of Public Offering Warrants with an initial exercise price of $30.00 per share. In consideration for Leavitt’s purchase of securities in the Leavitt Private Placement, we agreed to seek stockholder approval to reduce the exercise price of the Public Offering Warrants held by Leavitt to $6.00 per share (the “February Warrant Repricing”). Such Public Offering Warrants will become exercisable at the revised exercise price upon the receipt of such stockholder approval, which approval was obtained on April 10, 2025. The Public Offering Warrants were remeasured to account for the incremental fair value, with the $0.2 million loss recognized within Other income (expense).

The February 2025 Offering Warrants met the definition of a derivative under ASC 815. The $5.2 million in net proceeds were first allocated to the February 2025 Offering Warrants based on their issue-date estimated fair value of $5.0 million. The February 2025 Offering Warrants are subsequently remeasured at their estimated fair value on a recurring basis at each reporting period date, with a gain or loss recognized within Other income (expense). The $0.4 million of offering costs allocated to the February 2025 Offering Warrants were expensed as general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss. The remaining net proceeds of $0.6 million were allocated to Common Stock and APIC.

The number of shares of Common Stock that have been reserved for issuance upon the potential conversion or exercise, as applicable, of the Company’s securities as of March 31, 2025, is as follows:

 

Outstanding options to purchase Common Stock			252,171
Restricted Stock Units			100,995
Warrants to purchase Common Stock			4,340,343
Shares of Common Stock issued upon the exercise of Public Warrants			750,383
Earn-Out shares			360,000
Convertible Notes			2,570,322
Total			8,374,214

Warrants to Purchase Common Stock

In connection with the closing of the Business Combination, all outstanding warrants to purchase Legacy Allurion preferred stock and Legacy Allurion common stock were converted into Rollover Warrants to purchase Allurion Common Stock using the Exchange Ratio. As of March 31, 2025, there were 14,457 Rollover Warrants outstanding to purchase Common Stock. Upon the closing of the Business Combination, certain Legacy Allurion preferred stock and Legacy Allurion common stock warrants that were converted into Rollover Warrants were determined to be equity classified.

In connection with the Public Offering and July 2024 Private Placement, we issued the Public Offering Warrants and July 2024 Private Placement Warrants. As of March 31, 2025, there were 662,701 Public Offering Warrants and 90,407 July 2024 Private Placement Warrants outstanding to purchase Common Stock. In connection with the January 2025 Public Offering and concurrent

 

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January 2025 Private Placement, and the February 2025 Public Offering and concurrent February 2025 Private Placement and Leavitt Private Placement, we issued the January 2025 Warrants and February 2025 Offering Warrants. As of March 31, 2025, there were 1,240,000 January 2025 Warrants and 2,335,372 February 2025 Offering Warrants outstanding to purchase Common Stock.

 

March 31, 2025
Issuance Date		Remaining Contractual Term (in years)				Underlying Equity Instrument				Balance Sheet Classification				Shares Issuable Upon Exercise of Warrant				Weighted Average Exercise Price
12/1/2014			0.1				Common stock				Equity				77			$	61.00
3/30/2021			6.0				Common stock				Liability				5,203				168.25
9/15/2022			7.5				Common stock				Liability				1,810				303.50
6/4/2022			7.2				Common stock				Liability				1,810				303.50
1/17/2017			1.8				Common stock				Equity				2,934				0.50
8/3/2017			2.3				Common stock				Equity				392				28.25
9/8/2017			2.4				Common stock				Liability				1,151				26.25
6/19/2018			3.2				Common stock				Liability				720				26.25
6/25/2019			4.2				Common stock				Liability				360				26.25
7/1/2024			4.3				Common stock				Liability				753,108				11.42
1/27/2025			4.8				Common stock				Liability				1,240,000				6.00
2/20/2025			4.9				Common stock				Liability				2,335,372				5.23
															4,342,937

 

December 31, 2024
Issuance Date		Remaining Contractual Term (in years)				Underlying Equity Instrument				Balance Sheet Classification				Shares Issuable Upon Exercise of Warrant				Weighted Average Exercise Price
12/1/2014			0.1				Common stock				Equity				209			$	61.00
3/30/2021			6.2				Common stock				Liability				5,203				168.25
9/15/2022			7.7				Common stock				Liability				1,810				303.50
6/4/2022			7.4				Common stock				Liability				1,810				303.50
1/17/2017			2.0				Common stock				Equity				2,934				0.50
8/3/2017			2.6				Common stock				Equity				392				28.25
9/8/2017			2.7				Common stock				Liability				1,151				26.25
6/19/2018			3.5				Common stock				Liability				720				26.25
6/25/2019			4.5				Common stock				Liability				360				26.25
7/1/2024			4.5				Common stock				Liability				753,108				30.00
															767,697

In Compute Health’s initial public offering, it sold units at a price of $10.00 per unit, which consisted of one share of Class A Common Stock, $0.0001 par value, of Compute Health (“Class A Common Stock”) and one-half of a redeemable warrant (each a “Public Warrant”) that entitled the holder to purchase one share of Class A Common Stock of CPUH at a price of $11.50 per share. On July 26, 2023, Compute Health’s Public Warrant holders approved an amendment (the “Warrant Amendment”) to the warrant agreement that governed all Compute Health’s Public Warrants. Per the terms of the Warrant Amendment, upon completion of the Business Combination, each of the outstanding Compute Health Public Warrants became exercisable for 0.056818 shares of the Company’s Common Stock, par value $0.0001 per share, at an exercise price of $202.50 per share and each whole Compute Health Public Warrant was exchanged for 0.6125 (prior to giving effect to the Reverse Stock Split) Allurion Public Warrants in the Business Combination. The Public Warrants will expire August 1, 2030, seven years after the completion of the Business Combination, or earlier upon redemption or liquidation.

The Company may redeem the outstanding Public Warrants for cash at a price of $0.25 per Public Warrant at any time commencing 90 days after the completion of the Business Combination, and provided that the last sales price of the Company’s Common Stock equals or exceeds $316.75 per share for any 20 trading days within a 30-day trading period ending on the third trading day prior to the date on which notice of redemption is given.

The Company may redeem the outstanding Public Warrants for shares of our Common Stock at a price of $2.50 per Public Warrant at any time commencing 90 days after the completion of the Business Combination, and provided that the last sales price of the Company’s Common Stock equals or exceeds $176.00 per share for any 20 trading days within a 30-day trading period ending on

 

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