Full Press Release Details
INDEX TO FINANCIAL STATEMENTS
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
| Page | ||||
| Audited Consolidated Financial Statements as of December 31, 2023 | ||||
| Report of Independent Registered Public Accounting Firm (PCAOB ID: 34) | F-2 | |||
| Consolidated Balance Sheets as of December 31, 2023 and 2022 | F-3 | |||
| Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022 | F-4 | |||
| Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2023 and 2022 | F-5 | |||
| Consolidated Statements of Stockholders Deficit for the Years Ended December 31, 2023 and 2022 | F-6 | |||
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 | F-7 | |||
| Notes to Consolidated Financial Statements | F-8 |
Report of Independent Registered Public Accounting Firm
To the stockholders and the Board of Directors of Allurion Technologies, Inc.
Opinion on the Financial Statements
accompanying consolidated balance sheets of Allurion Technologies, Inc. and subsidiaries (the Company ) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders
deficit, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the financial statements ). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has experienced recurring losses from operations, recurring negative operating cash flows and may be unable to remain in compliance with certain financial covenants required under its term loan, that raise substantial doubt
about its ability to continue as a going concern. Management s plans in regard to these matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
These financial statements are the
responsibility of the Company s management. Our responsibility is to express an opinion on the Company s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
March 26, 2024 (January 8, 2025, as to the effects of the reverse stock split described in Note 1)
We have served as the Company s auditor since 2016.
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 38,037 | $ | 7,685 | ||||
| Accounts receivable, net of allowance of doubtful accounts of $12,671 and $741, respectively | 18,194 | 29,346 | ||||||
| Inventory, net | 6,171 | 3,865 | ||||||
| Prepaid expenses and other current assets | 2,414 | 2,487 | ||||||
| Total current assets | 64,816 | 43,383 | ||||||
| Property and equipment, net | 3,381 | 2,382 | ||||||
| Right-of-use asset | 3,010 | 2,899 | ||||||
| Other long-term assets | 505 | 2,706 | ||||||
| Total assets | $ | 71,712 | $ | 51,370 | ||||
| Liabilities and Stockholders Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 10,379 | $ | 5,809 | ||||
| Current portion of term loan | 38,643 | 53,360 | ||||||
| Current portion of lease liabilities | 908 | 905 | ||||||
| Accrued expenses and other current liabilities | 15,495 | 15,793 | ||||||
| Total current liabilities | 65,425 | 75,867 | ||||||
| Convertible notes payable, net of discounts | 3,103 | |||||||
| Public warrant liabilities | 5,943 | |||||||
| Revenue Interest Financing liability | 36,200 | |||||||
| Earn-out liabilities | 23,990 | |||||||
| Lease liabilities, net of current portion | 2,306 | 2,163 | ||||||
| Other liabilities | 8,335 | 2,551 | ||||||
| Total liabilities | 142,199 | 83,684 | ||||||
| Commitments and Contingencies (Note 16) | ||||||||
| Stockholders deficit: | ||||||||
| Preferred stock, $0.0001 par value 100,000,000 shares authorized as of December 31, 2023; and no shares issued and outstanding as of December 31, 2023 and December 31, 2022 | ||||||||
| Common stock, $0.0001 par value 1,000,000,000 shares authorized as of December 31, 2023; 1,907,529 and 1,083,196 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 2 | 1 | ||||||
| Additional paid-in capital | 143,010 | 99,877 | ||||||
| Accumulated other comprehensive loss | (700 | ) | ||||||
| Accumulated deficit | (212,799 | ) | (132,192 | ) | ||||
| Total stockholders deficit | (70,487 | ) | (32,314 | ) | ||||
| Total liabilities and stockholders deficit | $ | 71,712 | $ | 51,370 |
The accompanying notes are an integral part of these consolidated financial statements.
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue | $ | 53,467 | $ | 64,211 | ||||
| Cost of revenue | 11,970 | 13,485 | ||||||
| Gross profit | 41,497 | 50,726 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 46,857 | 50,405 | ||||||
| Research and development | 27,694 | 16,966 | ||||||
| General and administrative | 46,024 | 15,365 | ||||||
| Total operating expenses: | 120,575 | 82,736 | ||||||
| Loss from operations | (79,078 | ) | (32,010 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | (10,566 | ) | (4,426 | ) | ||||
| Changes in fair value of warrants | 8,364 | (821 | ) | |||||
| Changes in fair value of debt | (3,751 | ) | ||||||
| Changes in fair value of Revenue Interest Financing and PIPE Conversion Option | (2,192 | ) | ||||||
| Changes in fair value of earn-out liabilities | 29,050 | |||||||
| Termination of convertible note side letters | (17,598 | ) | ||||||
| Loss on extinguishment of debt | (3,929 | ) | ||||||
| Other income (expense), net | (643 | ) | (344 | ) | ||||
| Total other income (expense): | (1,265 | ) | (5,591 | ) | ||||
| Loss before income taxes | (80,343 | ) | (37,601 | ) | ||||
| Provision for income taxes | (264 | ) | (143 | ) | ||||
| Net loss | (80,607 | ) | (37,744 | ) | ||||
| Cumulative undeclared preferred dividends | (1,697 | ) | (2,907 | ) | ||||
| Net loss attributable to common shareholders | $ | (82,304 | ) | $ | (40,651 | ) | ||
| Net loss per share | ||||||||
| Basic and diluted | $ | (57.83 | ) | $ | (37.75 | ) | ||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted | 1,423,275 | 1,076,743 |
The accompanying notes are an integral part of these consolidated financial statements.
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(dollars in thousands)
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Net loss | (80,607 | ) | (37,744 | ) | ||||
| Other comprehensive loss: | ||||||||
| Change in fair value of Revenue Interest Financing due to change in credit risk | (700 | ) | ||||||
| Comprehensive loss | $ | (81,307 | ) | $ | (37,744 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT
(dollars in thousands)
| Common Sock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Stockholders Deficit | ||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||
| Balance as of December 31, 2021 | 1,072,294 | 1 | 99,284 | (94,448 | ) | 4,837 | ||||||||||||||||||
| Exercise of stock options | 5,143 | 128 | 128 | |||||||||||||||||||||
| Stock-based compensation expense | 437 | 437 | ||||||||||||||||||||||
| Issuance of Legacy Series A-1 convertible preferred stock for the exercise of warrants | 225 | 24 | 24 | |||||||||||||||||||||
| Issuance of Legacy Series B convertible preferred stock for the exercise of warrants | 42 | 4 | 4 | |||||||||||||||||||||
| Issuance of common stock for the exercise of warrants | 5,492 | |||||||||||||||||||||||
| Net loss | (37,744 | ) | (37,744 | ) | ||||||||||||||||||||
| Balance as of December 31, 2022 | 1,083,196 | 1 | 99,877 | (132,192 | ) | (32,314 | ) | |||||||||||||||||
| Exercise of stock options | 11,943 | 145 | 145 | |||||||||||||||||||||
| Issuance of Series B convertible preferred stock for the exercise of warrants | 342 | 89 | 89 | |||||||||||||||||||||
| Issuance of Series A-1 convertible preferred stock for the exercise of warrants | 20 | 6 | 6 | |||||||||||||||||||||
| Reverse recapitalization, net of transaction costs (Note 3) | 549,435 | 1 | 58,572 | 58,573 | ||||||||||||||||||||
| Recognition of warrant liabilities in connection with the Merger (Note 3) | (13,762 | ) | (13,762 | ) | ||||||||||||||||||||
| Issuance of common stock in connection with vesting of RSU awards | 36,737 | |||||||||||||||||||||||
| Issuance of common stock for the conversion of convertible notes | 132,049 | 25,570 | 25,570 | |||||||||||||||||||||
| Recognition of earn-out liabilities (Note 3) | (53,040 | ) | (53,040 | ) | ||||||||||||||||||||
| Reclassification of Legacy Allurion liabilitiy classified warrants to equity classification | 929 | 929 | ||||||||||||||||||||||
| Derecognition of liabilities associated with the Backstop Shares, Hunter shares, and the additional RTW and Fortress shares and issuance of related shares | 91,508 | 16,098 | 16,098 | |||||||||||||||||||||
| Issuance of common stock for the exercise of warrants | 878 | 46 | 46 | |||||||||||||||||||||
| Stock-based compensation expense | 8,357 | 8,357 | ||||||||||||||||||||||
| Issuance of common stock for commitment shares for equity line financing (Note 12) | 1,421 | 123 | 123 | |||||||||||||||||||||
| Other comprehensive loss | (700 | ) | (700 | ) | ||||||||||||||||||||
| Net loss | (80,607 | ) | (80,607 | ) | ||||||||||||||||||||
| Balance as of December 31, 2023 | 1,907,529 | $ | 2 | $ | 143,010 | $ | (700 | ) | $ | (212,799 | ) | $ | (70,487 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | (80,607 | ) | $ | (37,744 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash lease expense | 824 | 1,104 | ||||||
| Depreciation and amortization | 746 | 895 | ||||||
| Stock-based compensation | 8,357 | 437 | ||||||
| Provision for uncollectible accounts | 12,675 | 436 | ||||||
| Unrealized exchange gain | (180 | ) | (113 | ) | ||||
| Provision for inventory | 1,399 | |||||||
| Change in fair value of warrant liabilities | (8,364 | ) | 820 | |||||
| Change in fair value of derivative liabilities | 1,730 | 19 | ||||||
| Change in fair value of debt | 3,751 | |||||||
| Change in fair value of Revenue Interest Financing and PIPE Conversion Option | 2,192 | |||||||
| Change in fair value of earn-out liabilities | (29,050 | ) | ||||||
| Interest paid on debt recorded at fair value | (1,092 | ) | ||||||
| Non-cash interest expense | 2,083 | 953 | ||||||
| Non-cash termination of convertible note side letters | 16,098 | |||||||
| Loss on extinguishment of debt | 3,929 | |||||||
| Non-cash issuance of common stock for commitment shares | 123 | |||||||
| Debt issuance costs associated with debt recorded at fair value | 1,210 | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (1,318 | ) | (22,817 | ) | ||||
| Inventory | (3,705 | ) | (1,150 | ) | ||||
| Prepaid expenses, other current and long-term assets | 285 | (577 | ) | |||||
| Lease liabilities | (789 | ) | (733 | ) | ||||
| Accounts payable | 4,664 | 3,324 | ||||||
| Accrued expenses and other current liabilities | 1,057 | 8,165 | ||||||
| Net cash used in operating activities | $ | (63,982 | ) | $ | (46,981 | ) | ||
| Investing Activities: | ||||||||
| Purchases of property and equipment | (1,606 | ) | (1,550 | ) | ||||
| Net cash used in investing activities | $ | (1,606 | ) | $ | (1,550 | ) | ||
| Financing Activities: | ||||||||
| Proceeds from issuance of convertible notes - net | 28,700 | 1,103 | ||||||
| Proceeds from term loan - net | 59,780 | 29,850 | ||||||
| Payment of debt issuance costs | (3,450 | ) | (262 | ) | ||||
| Proceeds from Business Combination, net of transaction costs | 61,652 | |||||||
| Proceeds from Revenue Interest Financing | 40,000 | |||||||
| Repayment of 2021 Term Loan | (57,659 | ) | ||||||
| Repayment of Fortress Term Loan | (20,000 | ) | ||||||
| Repayment of promissory note assumed in Business Combination | (2,500 | ) | ||||||
| Proceeds from option and warrant exercises | 213 | 132 | ||||||
| Repayment of convertible notes | (10,750 | ) | ||||||
| Payment of deferred financing costs | (286 | ) | ||||||
| Net cash provided by financing activities | $ | 95,986 | $ | 30,537 | ||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 30,398 | (17,994 | ) | |||||
| Cash and cash equivalents and restricted cash at beginning of period | 8,023 | 26,017 | ||||||
| Cash and cash equivalents and restricted cash at end of period | $ | 38,421 | $ | 8,023 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 8,035 | $ | 3,476 | ||||
| Supplemental cash flow information on non-cash investing and financing activities | ||||||||
| Purchase of property and equipment included in accounts payable | 134 | 13 | ||||||
| Issuance of warrants in connection with financing | 834 | |||||||
| Deferred financing costs in accounts payable and accrued expenses | 580 | 1,919 | ||||||
| Recognition of assumed warrant liability | 13,762 | |||||||
| Recognition of earn-out liabilities | 53,040 | |||||||
| Issuance of common stock upon conversion of convertible notes | 25,569 | |||||||
| Change in fair value of Revenue Interest Financing through OCI | (700 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
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, procedure-less intragastric balloon for weight loss that
does not require surgery, endoscopy, or anesthesia for placement or removal. Allurion sells the Allurion Balloon and related hardware accessories through distributors or directly to health care providers. The Company currently also provides, free of
charge, 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 . Allurion currently markets the Allurion Program in over 50 countries, and the Company operates subsidiaries in the United States, France, the United Arab Emirates, Hong Kong, 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 ). Allurion shares 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. 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, $0.0001 par value per share ( 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 consolidated financial statements have changed. Refer to Note 3, Business
Combination, for further discussion regarding the closing of the Business Combination with Compute Health.
indicated, references in this prospectus to the Company, our, and Allurion refer to the consolidated operations of Allurion Technologies, Inc. and its subsidiaries. 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.
Basis of Presentation
The accompanying consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United
States of America ( US GAAP ) and the rules and regulations of the 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 ).
In connection with the Business Combination, the Company s equity structure has been restated in prior periods to reflect the number of
shares of the Allurion Common Stock, $0.0001 par value per share, issued to Legacy Allurion stockholders. As such, the shares and corresponding capital amounts presented in the consolidated balance sheet and consolidated statement of redeemable
convertible preferred stock and stockholders deficit have been retroactively restated as shares reflecting the Exchange Ratio established in the Business Combination. All then-existing Legacy Allurion redeemable convertible preferred stock and
Legacy Allurion convertible preferred stock were converted into shares of Allurion Common Stock at the closing of the Business Combination.
The consolidated financial statements include Allurion; and its consolidated subsidiaries, Allurion France SAS, and Allurion Middle East, LLC,
which were both incorporated in 2017; Allurion Hong Kong Ltd., which was incorporated in 2019; Allurion UK Ltd., which was incorporated in 2021; Allurion Italy, Srl, Allurion Spain, Srl, Allurion Australia Pty Ltd. and Allurion Mexico S. de R.L de
C.V, which were incorporated in 2022; and Allurion Technologies, LLC, which was incorporated in 2023. The Company s operations are located in Europe, the Middle East, Africa, Latin America, Canada and the Asia-Pacific region, and it operates in
one business segment.
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. Gains (losses) from