SCHEDULE: RTW Converts $5M Notes to Allurion Shares, Boosting Stake

RTW Investments and its affiliated funds converted $5.0 million in principal amount of notes into 1,492,539 shares of Allurion Technologies, Inc. common stock, increasing their beneficial ownership.

Summary

• RTW Investments, LP and its affiliated funds (RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd.) and Roderick Wong filed an Amendment No. 9 to their Schedule 13D.
• On November 5, 2025, the RTW Funds converted $5.0 million aggregate principal amount of notes into 1,492,539 shares of Allurion Technologies, Inc. common stock.
• This conversion was executed pursuant to the terms of the Amended Note Purchase Agreement.
• RTW Investments, LP and Roderick Wong now beneficially own 4,035,142 shares, representing 43.6% of the class.
• RTW Master Fund, Ltd. beneficially owns 2,147,254 shares, representing 23.2% of the class.
• RTW Innovation Master Fund, Ltd. beneficially owns 1,659,241 shares, representing 17.9% of the class.
• The aggregate percentage of shares is based on 7,762,681 shares outstanding as of August 8, 2025, plus the additional 1,492,539 shares issued from this conversion.
• Remaining principal amount of notes are subject to a beneficial ownership conversion limitation such that the RTW Funds and their affiliates cannot convert notes to the extent it would result in them beneficially owning more than 9.99% of the Issuer's shares, except as described in Item 6.
• Warrants held by the RTW Funds are subject to a Blocker, currently set at 4.99%, which can be increased to 9.99% upon 61 days' prior notice by RTW.

Sentiment

Score: 6

Explanation: The conversion of debt to equity by a major investor is generally a positive sign of confidence and reduces debt burden. However, it also results in shareholder dilution and increases ownership concentration, which can be viewed with mixed sentiment depending on an investor's perspective on corporate control and future growth prospects.

Positives

• RTW Investments, a significant institutional investor, is increasing its stake in Allurion Technologies, indicating continued confidence in the company's long-term prospects.
• The conversion of $5.0 million in notes reduces the company's debt obligations, strengthening its balance sheet and potentially reducing future interest expenses.

Negatives

• The conversion of notes into shares results in the issuance of 1,492,539 new shares, which dilutes the ownership percentage of existing shareholders.
• The increased beneficial ownership by RTW and its affiliates to 43.6% creates a highly concentrated ownership structure, which could limit the influence of other shareholders and raise corporate governance concerns regarding control.

Risks

• Dilution Risk: The conversion of notes into common stock results in the issuance of new shares, which dilutes the ownership percentage of existing shareholders.
• Concentrated Ownership Risk: RTW Investments and its affiliates collectively hold a substantial percentage (43.6%) of the Issuer's common stock, which could give them significant influence over corporate decisions and potentially limit the influence of other shareholders.
• Conversion Limitations: The beneficial ownership conversion limitation on the remaining notes (9.99%) and the warrant blocker (4.99%, adjustable to 9.99%) indicate ongoing restrictions that could affect future capital structure changes or investor flexibility.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance beyond the mechanics of the note conversion and beneficial ownership percentages. However, the continued conversion of debt to equity by a major investor suggests a long-term commitment to the company's future.

Industry Context

This filing reflects a common strategy in the biotechnology or medical device industry (where Allurion Technologies likely operates, given its name) where institutional investors convert debt instruments into equity, often as a show of confidence or to restructure financing. Such conversions can be seen as a positive signal for the company's long-term prospects, especially if the investor is specialized in the sector like RTW Investments. However, it also highlights the reliance on specific investors for financing and the potential for significant ownership concentration.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• Shareholders: Experience dilution due to the issuance of new shares, but may benefit from reduced debt and a strong vote of confidence from a major investor. The increased concentration of ownership by RTW could impact voting power.
• Creditors: Benefit from the reduction of $5.0 million in outstanding debt, which improves the company's balance sheet and potentially its creditworthiness.
• Company (Allurion Technologies): Benefits from debt reduction and strengthened equity base, potentially improving financial stability and reducing interest expenses.

Next Steps

• RTW may increase its warrant blocker to 9.99% upon 61 days' prior notice.
• Further conversions of the remaining principal amount of notes are subject to beneficial ownership limitations.

Key Dates

Recommendation

While the conversion of debt to equity by a significant institutional investor like RTW Investments signals confidence and strengthens the balance sheet by reducing debt, the substantial increase in beneficial ownership to 43.6% introduces significant ownership concentration. This could lead to reduced liquidity for other shareholders and potential governance concerns. The dilution from the issuance of new shares also needs to be considered. Given these mixed signals – a positive vote of confidence balanced by dilution and concentrated ownership – a 'hold' recommendation is appropriate for existing investors to observe how these dynamics play out. New investors should exercise caution due to the high concentration of ownership.

Keywords

Allurion Technologies, RTW Investments, Schedule 13D, Beneficial Ownership, Note Conversion, Common Stock, Equity Stake, Dilution, Corporate Governance, SEC Filing