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Allurion Hints At Possible Revenue Shortfall

Company also waited until markets closed on a holiday weekend to warn of significant shareholder dilution.

January 1, 2024

Three months after going public via a SPAC merger, Allurion Technologies (ALUR), a weight loss balloon maker, hinted at potential trouble with regard to sales targets. After the close on a Friday ahead of New Years, the company revealed it had renegotiated terms with its lenders.

The new credit agreement waived the December 31, 2023 testing of the minimum revenue covenant.

In return, lenders will now require Allurion to hold nearly triple the amount of cash required under the previous agreement. From now until March 31, 2024, Allurion will have to maintain $33.5 million, up from $12.5 million.

The company reported a $44 million pro forma loss in its prospectus.

The new liquidity requirement will taper throughout the year, eventually reverting back to $12.5 million on October 1, 2024 and thereafter.

Even more concerning though, at any time after March 31, 2024, lenders will have the right to convert up to $20 million in company debt into shares of common stock.

Three minutes prior to the disclosure, Allurion filed a Prospectus announcing its intent to sell up to 9.48 million shares, or the equivalent of 19.9% of shares outstanding.

The convertible amount is the equivalent of approximately 12% of Allurion’s current Enterprise Value.

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