Form 4: RTW Converts $5M Notes to Allurion Stock

RTW Investments and its affiliated funds converted $5 million of convertible notes into Allurion Technologies common stock at $3.35 per share.

Summary

• RTW Investments, LP and its affiliated funds (Master Fund, RTW Innovation, and Other RTW Fund) converted $5.0 million aggregate principal amount of convertible senior secured notes into common stock of Allurion Technologies, Inc. on November 5, 2025.
• The conversion occurred at a floor conversion price of $3.35 per share.
• This transaction resulted in the acquisition of 1,492,539 shares of common stock, specifically 822,722 shares by Master Fund, 631,954 shares by RTW Innovation, and 37,863 shares by an Other RTW Fund.
• Following these conversions, Master Fund beneficially owns 2,147,254 shares, RTW Innovation beneficially owns 1,659,241 shares, and Other RTW Funds beneficially own 228,647 shares.
• The remaining outstanding notes are convertible at a price of $40.50 per share, with additional conversion prices at the Issuer's discretion.
• The convertible notes bear an annual interest rate of 6.0%, payable quarterly in cash or in kind for the first three years, and have a maturity date of April 16, 2031.
• RTW Funds are generally restricted from converting notes if it would result in them beneficially owning more than 9.99% of the Issuer's common stock, unless converted pursuant to a Discretionary Conversion.

Sentiment

Score: 5

Explanation: The conversion reduces debt but causes dilution. It's a pre-arranged financial event, not necessarily indicating new positive or negative operational news. The conversion at a low floor price is part of the original financing agreement.

Positives

• The conversion of $5.0 million in notes reduces Allurion Technologies' debt obligations.
• The transaction was executed at a pre-agreed floor price, providing certainty for the noteholders.

Negatives

• The conversion of notes into common stock at $3.35 per share results in dilution for existing shareholders.
• The existence of remaining notes convertible at a significantly higher price ($40.50) indicates potential future dilution at a different valuation.

Risks

• Future dilution for shareholders from the conversion of the remaining outstanding convertible notes.
• The potential for 'Discretionary Conversions' by the Issuer could impact the timing and terms of future conversions.
• The 9.99% beneficial ownership cap for RTW Funds could influence their ability to convert notes, unless through Discretionary Conversions.

Future Outlook

Remaining outstanding convertible notes are subject to future conversion at a price of $40.50 per share, or other discretionary conversion prices set by the Issuer. The notes will continue to bear 6.0% annual interest until their maturity on April 16, 2031.

Industry Context

This Form 4 filing reports an insider transaction involving the conversion of debt to equity by a significant investor. Such conversions are a common financial mechanism in growth-stage companies, allowing investors to provide capital with an option for equity participation.

Corporate Governance

Related Party Transactions

• The conversion of convertible notes by RTW Investments, LP and its affiliated funds constitutes a related party transaction, as RTW is a 10% owner and has designated directors to the board of Allurion Technologies, Inc.

Stakeholder Impact

• Shareholders: Experience dilution due to the issuance of new common stock.
• Company: Reduces debt burden by $5.0 million, potentially improving the balance sheet.
• Noteholders (RTW Funds): Convert debt into equity, potentially realizing gains if the stock price increases from the conversion price.

Next Steps

• Future interest payments on the remaining convertible notes.
• Potential future conversions of the remaining notes at $40.50 per share or other discretionary prices.

Key Dates

Keywords

Allurion Technologies, ALUR, RTW Investments, Convertible Notes, Stock Conversion, Insider Transaction, Form 4, Beneficial Ownership, Debt Reduction, Share Dilution