Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on February 9, 2023, Compute Health Acquisition Corp.,
a blank check company incorporated as a Delaware corporation (the "Company"),
entered into a business combination agreement (the "Existing Business
Combination Agreement") with Compute Health Corp., a Delaware corporation and
direct, wholly-owned subsidiary of the Company ("Merger Sub I"), Compute Health
LLC, a Delaware limited liability company and direct, wholly-owned subsidiary of
the Company ("Merger Sub II" and, together with Merger Sub I, the "Merger
Subs"), Allurion Technologies Holdings, Inc., a Delaware corporation and direct,
wholly-owned subsidiary of Allurion (as defined below) ("Pubco"), and Allurion
Technologies, Inc., a Delaware corporation ("Allurion" and, collectively with
the Company, the Merger Subs and Pubco, the "Parties"). On May 2, 2023, the
Company entered into that certain Amendment No. 1 to the Business Combination
Agreement (the "BCA Amendment" and, the Existing Business Combination Agreement,
as amended by the BCA Amendment, the "Business Combination Agreement") with the
Merger Subs, Pubco and Allurion, and the applicable Parties entered into certain
related agreements, all as described further below.
Following the date of the execution of the Existing Business Combination
Agreement and prior to the execution of the BCA Amendment, Allurion issued an
aggregate principal amount of $16.75 million of convertible unsecured promissory
notes (the "Bridge Notes") to various investors pursuant to a convertible note
purchase agreement, dated as of February 15, 2023, including a $13 million
Bridge Note (the "HVL Bridge Note") sold to Hunter Ventures Limited ("HVL") on
February 15, 2023. The Bridge Notes were offered in a private placement under
the Securities Act of 1933, as amended (the "Securities Act"). The BridgeNotes
will mature on December 31, 2026, unless earlier repaid or converted in
accordance with their terms, and will accrue interest at a rate of 7.00% per
annum. Among other terms, if Allurion consummates the transactions contemplated
by the Business Combination Agreement on or before August 31, 2023, the Bridge
Notes shall be converted into the number of shares of common stock, par value
$0.0001 per share, of Allurion ("Allurion Common Stock") obtained by dividing
the outstanding balance of the Bridge Notes by the quotient of (a) $217,291,008
and (b) the number of outstanding shares of Allurion Common Stock determined on
a fully-diluted basis, immediately prior to the consummation of the transactions
contemplated by the Business Combination Agreement (such conversion price, the
"Conversion Price"). Certain holders of Bridge Notes (the "Side Letter
Holders"), including RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd. and
RTW Venture Fund Limited (collectively, "RTW"), HVL and Jason Gulbinas, also
entered into letter agreements with Allurion (collectively, the "Side Letters"),
pursuant to which, in the event the Side Letter Holders' Bridge Notes converted
in connection with the consummation of the transactions contemplated by the
Business Combination Agreement, the conversion rate for such Bridge Notes would
be adjusted after the closing date of the Business Combination Agreement to
provide each of the Side Letter Holder with additional shares of common stock,
par value $0.0001 per share, of Pubco ( "Pubco Common Stock"), in the event that
the trading price of the shares of Pubco Common Stock was lower than the
Conversion Price, as adjusted for the Intermediate Merger Exchange Ratio (as
defined in the Business Combination Agreement). We refer to the financing
described in this paragraph as the "Initial Financing."
Following the consummation of the Initial Financing, the Parties determined to
refinance the Initial Financing, as set forth below.
Termination Agreements
Pursuant to termination letter agreements (each, a "Termination Agreement" and,
collectively, the "Termination Agreements"), entered into by Allurion with each
of the Side Letter Holders, the Side Letters were terminated, effective as of
May 2, 2023. In addition, under the Termination Agreements, upon the terms and
subject to the conditions set forth therein, the Side Letter Holders also waived
certain provisions and obligations set forth in their respective Bridge Notes
with respect to proportionate repayment obligations that would otherwise apply
to Allurion under the Bridge Notes. Other provisions of the Side Letter Holders'
Bridge Notes remain unchanged and in full force and effect.
HVL's Termination Agreement also provides, upon the terms and subject to the
conditions set forth therein, Allurion with the right to prepay, in one or more
transactions, all or a portion of the outstanding principal amount, plus accrued
interest, under the HVL Bridge Note, including by way of (a) a $2 million
payment in cash by Allurion to HVL on May 2, 2023, $1.5 million of which is
deemed a prepayment penalty (the "Prepayment") and (b) immediately prior to the
consummation of the transactions contemplated by the Business Combination
Agreement, an additional payment of at least $6 million, up to the
then-outstanding principal amount, plus accrued interest, under the HVL Bridge
Note (the "Additional Payment") (the repayment contemplated by clauses (a) and
(b), the "Repayment") by way of (i) payment in cash by Allurion 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 Allurion.
1
In addition, under HVL's Termination Agreement, upon the terms and subject to
the conditions set forth therein, Pubco has agreed to issue to HVL a number of
shares of Pubco Common Stock equal to (a) (i) the Pubco Share Target (as defined
below) minus (ii) the number of shares of Pubco Common Stock issued to HVL upon
the consummation of the transactions contemplated by the Business Combination
Agreement in exchange for the shares of Allurion Common Stock issued upon
conversion of the HVL Bridge Note pursuant to the terms thereof (and based on
the outstanding principal and accrued interest under such notes as of such time)
(the "Additional Hunter Shares") plus (b) 300,000 shares of Pubco Common Stock
(the "Hunter Closing Shares"). "Pubco Share Target" means a number of shares of
Pubco Common Stock 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 Repayment) divided by (b) $5.00.
In connection with the Prepayment, on May 2, 2023, Allurion and HVL entered into
a written consent to convertible unsecured promissory note prepayment (the
"Prepayment Consent"), pursuant to which HVL consented to the Repayment and
waived each of the prepayment restrictions included in the HVL Bridge Note, to
the extent related to the Repayment.
Copies of each of the Termination Agreements are filed with this Current Report
on Form 8-K as Exhibit 10.1, 10.2 and 10.3, respectively, and is incorporated
herein by reference, and the foregoing description of the Termination Agreements
and the transactions contemplated thereby does not purport to be complete and is
qualified in its entirety by reference thereto.
A copy of the Prepayment Consent is filed with this Current Report on Form 8-K
as Exhibit 10.4 and is incorporated herein by reference, and the foregoing
description of the Prepayment Consent and the transactions contemplated thereby
does not purport to be complete and is qualified in its entirety by reference
thereto.
Backstop Agreement
On May 2, 2023, CFIP2 ALLE LLC ("Fortress") and RTW (together, the "Backstop
Purchasers") entered into a Backstop Agreement with Allurion, Pubco and HVL (the
"Backstop Agreement"). Pursuant to the Backstop Agreement, upon the terms and
subject to the conditions set forth therein, each Backstop Purchaser agreed
that, to the extent any portion of the HVL Bridge Note remains outstanding
following the Determination Date (as defined below), such Backstop Purchaser
will, at a closing to take place at the same time, on the same date and
concurrently with but immediately prior to the closing of the merger of Merger
Sub I with and into Allurion pursuant to the Business Combination Agreement (the
"Intermediate Merger") (the "Backstop Closing" and the date on which such
closing occurs, the "Backstop Closing Date"), purchase up to $2 million
aggregate principal amount (the "Maximum Purchase Amount") of the HVL Bridge
Note from HVL.
As soon as practicable, but in any event within one business day following the
date of the special meeting of stockholders of the Company held for the purpose
of obtaining the approval of the Company's stockholders of the Business
Combination Agreement and the transactions contemplated thereby (such meeting,
the "Special Meeting" and such date, the "Determination Date"), Allurion will
notify HVL and the Backstop Purchasers of, among other things, the Backstop
Closing Date, the amount of principal then outstanding under the HVL Bridge Note
(the "Balance") and, subject to the limitations set forth in the Backstop
Agreement, the amount of the Balance, which may not exceed each Backstop
Purchaser's Maximum Purchase Amount, that Allurion requires each Backstop
Purchaser to purchase from HVL (the "Backstop Purchase Amount").
In connection with the purchase of the aggregate Backstop Purchase Amounts, upon
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
with respect to the Termination Agreements, the Backstop Agreement, the Amended
and Restated RTW Side Letter, the Fortress Side Letter and the BCA Amendment is
incorporated by reference herein. The shares of Pubco Common Stock issuable
pursuant to such agreements will not be registered under the Securities Act, and
will be issued in reliance on the exemption from registration provided by
Section 4(a)(2) of the Securities Act and/or Regulation D promulgated
thereunder, as applicable.
6
Important Information About the Proposed Transactions and Where to Find It
This Current Report on Form 8-K relates to a proposed business combination
between the Company, Allurion and Pubco. Pubco intends to file the Registration
Statement on Form S-4 with the SEC, which will include a document that serves as
a proxy statement and prospectus of the Company and Pubco and a full description
of the terms of the Business Combination Agreement and the Ancillary Documents
(as defined in the Business Combination Agreement) (the "Proposed
Transactions"). The proxy statement/prospectus will be mailed to the Company's
stockholders as of a record date to be established for voting at the Special
Meeting. The Company and Pubco may also file other documents regarding the
Proposed Transactions with the SEC. This Current Report on Form 8-K does not
contain all of the information that should be considered concerning the Proposed
Transactions, including the risk factors and other disclosures set forth in the
Company's filings with the SEC, and is not intended to form the basis of any
investment decision or any other decision in respect of the Proposed
Transactions. The Company's stockholders and other interested persons are
advised to read, when available, the Registration Statement on Form S-4,
including the proxy statement/prospectus and any amendments thereto, and all
other relevant documents filed or that will be filed with the SEC in connection
with the Proposed Transactions, as these materials will contain important
information about Allurion, the Company and the Proposed Transactions. The
Registration Statement on Form S-4, including the proxy statement/prospectus,
and other documents that are filed with the SEC, once available may be obtained
without charge at the SEC's website at www.sec.gov, or by directing a written
request to Compute Health Acquisition Corp., 1100 North Market Street, 4th
Floor, Wilmington, Delaware 19890.
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR
DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS CURRENT REPORT ON FORM 8-K,
PASSED UPON THE MERITS OR FAIRNESS OF THE PROPOSED TRANSACTIONS OR ANY RELATED
TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS
CURRENT REPORT ON FORM 8-K. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A
CRIMINAL OFFENSE.
Participants in the Solicitation
The Company, Allurion, Pubco, certain stockholders of the Company and certain of
the Company's, Allurion's and Pubco's respective directors, executive officers
and other members of management and employees may, under SEC rules, be deemed to
be participants in the solicitation of proxies from the stockholders of the
Company with respect to the Proposed Transactions. A list of the names of such
persons and information regarding their interests in the proposed transaction
will be contained in the Registration Statement on Form S-4 and proxy
statement/prospectus, when available. Stockholders, potential investors and
other interested persons should read the Registration Statement on Form S-4 and
proxy statement/prospectus carefully when they become available and before
making any voting or investment decisions. Free copies of these documents may be
obtained from the sources indicated above, when available.
7
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains certain "forward-looking statements"
within the meaning of the federal U.S. securities laws with respect to the
Company, Allurion and the Proposed Transactions between them, the benefits of
the proposed transaction, the amount of cash the proposed transaction will
provide the Company and Allurion, the anticipated timing of the proposed
transaction, the services and markets of Allurion, the expectations regarding
future growth, results of operations, performance, future capital and other
expenditures, competitive advantages, business prospects and opportunities,
future plans and intentions, results, level of activities, performance, goals or
achievements or other future events. These forward-looking statements generally
are identified by words such as "anticipate," "believe," "expect," "may,"
"could," "will," "potential," "intend," "estimate," "should," "plan," "predict,"
or the negative or other variations of such statements. They reflect the current
beliefs and assumptions of the Company's management and Allurion's management
and are based on the information currently available to the Company's management
and Allurion's management. Forward-looking statements are predictions,
projections and other statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks and
uncertainties. Many factors could cause actual results or developments to differ
materially from those expressed or implied by such forward-looking statements,
including but not limited to: (i) the risk that the proposed transaction may not
be completed in a timely manner or at all, which may adversely affect the price
of the Company's securities; (ii) the risk that the Proposed Transactions may
not be completed by the Company's business combination deadline and the
potential failure to obtain an extension of the business combination deadline if
sought by the Company; (iii) the failure to satisfy the conditions to the
consummation of the Proposed Transactions, including, but not limited to, the
approval of the Business Combination Agreement by the stockholders of the
Company and the stockholders of Allurion, the satisfaction of the Net Closing
Cash amount and the receipt of certain governmental and regulatory approvals;
(iv) changes to the proposed structure of the Proposed Transactions that may be
required, or considered appropriate, as a result of applicable laws or
regulations or as a condition to obtaining regulatory approval of the Proposed
Transactions; (v) the occurrence of any event, change or other circumstance that
could give rise to the termination of the Business Combination Agreement; (vi)
the ability to complete the PIPE Financing, the Fortress Financing and the
Revenue Interest Financing (each as defined in the Business Combination
Agreement); (vii) the Company's ability to acquire sufficient sources of funding
if and when needed; (viii) the effect of the announcement or pendency of the
Proposed Transactions on Allurion's business relationships, operating results
and business generally; (ix) risks that the Proposed Transactions disrupt
current plans and operations of Allurion; (x) the ability of Pubco, following
the consummation of the Proposed Transactions (the "Surviving Corporation"), to
implement business plans, forecasts and other expectations after the completion
of the Proposed Transactions, and identify and realize additional opportunities;
(xi) significant risks, assumptions, estimates and uncertainties related to the
projected financial information with respect to Allurion; (xii) the outcome of
any legal proceedings that may be instituted against Allurion, Pubco or the
Company following the announcement of the Business Combination Agreement or the
Proposed Transactions; (xiii) Allurion's ability to commercialize current and
future products and services and create sufficient demand among health care
providers and patients; (xiv) Allurion's ability to successfully complete
current and future preclinical studies and clinical trials of the Allurion
Gastric Balloon and any other future product candidates; (xv) Allurion's ability
to obtain market acceptance of the Allurion Gastric Balloon as safe and
effective; (xvi) Allurion's ability to cost-effectively sell existing and future
products through existing 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; (xvii) Allurion's ability
to obtain regulatory approval or clearance in the U.S. and certain non-U.S.
jurisdictions for current and future products and maintain previously obtained
approvals and/or clearances in those jurisdictions where Allurion's products and
services are currently offered; (xviii) Allurion's ability to accurately
forecast customer demand and manufacture sufficient quantities of product that
patients and health care providers request; (xix) Allurion's ability to
successfully compete in the highly competitive and rapidly changing regulated
industries in which Allurion operates, and effectively address changes in such
industries, including changes in competitors' products and services and changes
in the laws and regulations that affect Allurion; (xx) Allurion's ability to
successfully manage future growth and any future international expansion of
Allurion's business and navigate the risks associated with doing business
internationally; (xxi) Allurion's ability to obtain and maintain intellectual
property protection for its products and technologies and acquire or license
intellectual property from third parties; (xxii) the ability of Allurion to
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1† Amendment No. 1 to the Business Combination Agreement, dated as of
May 2, 2023, by and among Compute Health Acquisition Corp., Compute
Health Corp., Compute Health LLC, Allurion Technologies Holdings, Inc.
and Allurion Technologies, Inc.10.1†† Side Letter Termination Agreement, dated as of May 2, 2023, by and
among Allurion Technologies, Inc., Romulus Growth Allurion L.P. and
Hunter Ventures Limited.
10.2†† Side Letter Termination Agreement, dated as of May 2, 2023, by and
among Allurion Technologies, Inc., RTW Master Fund, Ltd., RTW
Innovation Master Fund, Ltd. and RTW Venture Fund Limited.
10.3†† Side Letter Termination Agreement, dated as of May 2, 2023, by and
among Allurion Technologies, Inc. and Jason Gulbinas.
10.4 Written Consent to Convertible Unsecured Promissory Note Prepayment,
dated as of May 2, 2023, by and among Allurion Technologies, Inc. and
Hunter Ventures Limited10.5†† Backstop Agreement, dated as of May 2, 2023, by and among Hunter
Ventures Limited, Allurion Technologies Holdings, Inc., Allurion
Technologies, Inc., RTW Master Fund, Ltd., RTW Innovation Master Fund,
Ltd., RTW Venture Fund Limited and Fortress Credit Corp.
10.6†† Amended and Restated RTW PIPE Side Letter Agreement, dated as of May
2, 2023, by and among Compute Health Acquisition Corp., Allurion
Technologies Holdings, Inc., Compute Health LLC, Allurion Technologies,
Inc., RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd. and RTW
Venture Fund Limited.
10.7 Side Letter Agreement, dated as of May 2, 2023, by and between
Allurion Technologies, Inc. and CFIP2 ALLE LLC.
10.8 Contribution Agreement, dated as of May 2, 2023, by and between
Shantanu K. Gaur and Neha Gaur, Trustees of THE SHANTANU K. GAUR
REVOCABLE TRUST OF 2021, and Allurion Technologies Holdings, Inc.
10.9 Contribution Agreement, dated as of May 2, 2023, by and between
Compute Health Sponsor LLC and Allurion Technologies Holdings, Inc.
10.10 RSU Partial Forfeiture and Amendment Agreement, dated as of May 2,
2023, by and between Allurion Technologies, Inc. and Krishna Gupta.
10.11†† Form of Investor Rights Agreement.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish
supplementally a copy of all omitted exhibits and schedules to the SEC upon its
request.
†† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to
furnish supplementally a copy of all omitted exhibits and schedules to the SEC
upon its request.
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